Answer:
a. does not shift
b. shifts to the left
c. increases
a. decreases
Explanation:
As a result of the drought affecting the supply of cream, the supply of chocolate would fall. As a result, the supply curve would shift to the left. The demand curve would remain unchanged.
As a result of the leftward shift of the supply curve, the equilibrium price would increase and quantity would fall.
Journal Entries, T-Accounts
Ehrling Brothers Company makes jobs to customer order. During the month of July, the following occurred: Materials were purchased on account for $45,760. Materials totaling $40,880 were requisitioned for use in producing various jobs. Direct labor payroll for the month was $19,200 with an average wage of $12 per hour. Actual overhead of $8,860 was incurred and paid in cash. Manufacturing overhead is charged to production at the rate of $5.40 per direct labor hour. Completed jobs costing $59,000 were transferred to Finished Goods. Jobs costing $58,000 were sold on account for $ 73,750. Make the entry to record the revenue from the sale first, followed by the entry to record the cost of the jobs. Beginning balances as of July 1 were:
Materials Inventory $1,200
Work-in-Process Inventory 3,400
Finished Goods Inventory 2,640
Required:
1. Prepare the journal entries for the preceding events.
a.
b.
c.
d.
e.
f.
g (1).
g (2).
2. Calculate the ending balances of:
a. Materials Inventory $
b. Work-in-Process Inventory $
c. Overhead Control $
d. Finished Goods Inventory $
Answer:
1. Journal Entries
S/n Account Title Debit Credit
a Raw materials inventory $45,760
Accounts payable $45,760
b Work in process inventory $40,880
Raw materials inventory $40,980
c Work in process inventory $19,200
Wages payable $19,200
d Manufacturing overhead $8,860
Cash $8,860
e Work in process inventory $7,406
(19,200 /14*5.40)
Manufacturing overhead $7,406
f Finished goods inventory $59,000
Work in process inventory $59,000
g1) Accounts receivable $73,750
Sales $73,750
g2) Cost of goods sold $58,000
Finished goods inventory $58,000
2. Ending balances
a. Materials Inventory = $ 1,200 + 45,760 - $40,880 = $6,080
b. Work-in-Process Inventory = $ 3,400 + $40,880 + $19,200 + $7,406 - $59,000 = $11,886
c. Overhead Control = $ 8,860 - $7,406 = $1,454
d. Finished Goods Inventory = $2,640 + $59,000 - $58,000 = $3,640
Consider the following independent situations at December 31:
a. On October 1, a business collected $3,000 rent in advance, debiting Cash and crediting Unearned Revenue. The tenant was paying one year's rent in advance. On December 31, the business must account for the amount of rent it has earned.
b. Salaries expense is $1,800 per day-Monday through Friday-and the business pays employees each Friday. This year, December 31 falls on a Thursday.
c. The unadjusted balance of the Office Supplies account is $3,000. Office supplies on hand total $1,900.
d. Equipment depreciation was $500.
e. On April 1, when the business prepaid $4,320 for a two-year insurance policy, the business debited Prepaid Insurance and credited Cash.
Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries.
Answer:
All the entries are made on December 31.
a.
Unearned Rent Revenue 750 Dr
Rent Revenue 750 Cr
b.
Salaries expense 7200 Dr
Salaries Payable 7200 Cr
c.
Supplies expense 1100 Dr
Supplies 1100 Cr
d.
Depreciation expense-Equipment 500 Dr
Accumulated depreciation-Equipment 500 Cr
e.
Insurance expense 1620 Dr
Prepaid Insurance 1620 Cr
Explanation:
a.
The rent received in advance is for one year. On December 31 the 3 months of rent becomes earned. So, we debit the unearned rent revenue account and credit the rent revenue.
b.
The salaries expense per day is $1800 and as the 31 December is a thursday, the salary for 4 days becomes an expense which is still not paid as salaries are paid on friday. So we debit the salaries expense by 1800 * 4 = 7200 and credit the salaries payable by the same amount.
c.
The supplies of 1100 (3000 - 1900) have been consumed and the supplies expense will be recorded for 1100 and the supplies account will be reduced by 1100.
d.
The depreciation on equipment is recorded.
e.
The insurance paid in advance in April of the current year is for 2 years or 24 months. The per month insurance expense is 4320 / 24 = 180
Till 31 December, the 9 months of insurance policy has been consumed and should be recorded as an expense and a reduction in the prepaid asset.
The amount is = 180 * 9 = 1620
Answer: the unadjusted balance of the office supplies account is $3,000 office supplies on hand total
Explanation:
You would like to be a millionaire when you retire in 40 years, and how much you must invest today to reach that goal clearly depends on what rate of return you can earn. First, suppose you can earn 10.4% per year, and calculate how much you would have to invest today. Second, suppose you can only earn half that percentage rate, and calculate how much you would have to invest today. Divide the second by the first, to see how many times more you must invest today at half that annual rate grow it to $1 million over 40 years.
Answer:
1.
PV = $19108.96057 rounded off to $19108.96
So, $19108.96057 have to be invested today at 10.4% p.a. rate for 40 years for it to turn into a million dollars.
2.
PV = $131634.7058 rounded off to $131634.71
So, $131634.7058 have to be invested today at 5.2% p.a. rate for 40 years for it to turn into a million dollars.
3.
Times more investment = 6.888637682 times rounded off to 6.89 times
Explanation:
1.
To calculate how much we need to invest today for it to turn into $1 million in 40 years at 10.4% per annum rate, we will use the Present value of a sum formula as we need to determine the present value of $1 million earned after 40 years from today. The formula for present value of a sum is,
PV = FV / (1+r)^t
Where,
PV is present valueFV is future valuer is the rate of interest or returnt is the time period in yearsPV = 1,000,000 / (1+0.104)^40
PV = $19108.96057 rounded off to $19108.96
So, $19108.96057 have to be invested today at 10.4% p.a. rate for 40 years for it to turn into a million dollars.
2.
Half the percentage rate of 10.4% p.a. = 10.4% / 2 = 5.2%
PV = 1,000,000 / (1+0.052)^40
PV = $131634.7058 rounded off to $131634.71
So, $131634.7058 have to be invested today at 5.2% p.a. rate for 40 years for it to turn into a million dollars.
3.
Times more investment = 131634.7058 / 19108.96057
Times more investment = 6.888637682 times rounded off to 6.89 times
Hudson Corporation is considering three options for managing its data processing operation: continuing with its own staff, hiring an outside vendor to do the managing (referred to as outsourcing), or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows:
Demand
Staffing Options High Medium Low
Own staff 650 650 600
Outside vendor 900 600 300
Combination 800 650 500
a) If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data processing operation?
Own staff, Outside vendor, Combination
What is the expected annual cost associated with that recommendation?
Expected annual cost = $
(b) Construct a risk profile for the optimal decision in part (a).
What is the probability of the cost exceeding $700,000?
Probability =
Answer:
Kindly check explanation
Explanation:
Given the data :
______________DEMAND______________
Staffing option __High ___Medium______Low
Own staff ______650_____ 650 _______600
Outside vendor _900_____ 600 _______ 300
Combination ___ 800 _____650_______ 500
a) If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data processing operation?
Expected cost :Σp(x) *x
Expected value for OWN STAFF:
(650*0.2) + (650*0.5) + (600*0.3) = 635
Expected value for OUTSIDE VENDOR:
(900*0.2) + (600*0.5) + (300*0.3) = 570
Expected value for COMBINATION:
(800*0.2) + (650*0.5) + (500*0.3) = 635
The decision alternative which will minimize expected cost is OUTSIDE VENDOR as it has the lowest expected value.
Expected annual cost associated with outside vendor is 570
(b) Construct a risk profile for the optimal decision in part (a).
Risk portfolio for outside vendor:
Demand ____cost ____probability
Low _______900 ______ 0.2
Medium ____600 ______ 0.5
High ______ 500 _______0.3
What is the probability of the cost exceeding $700,000?
Probability : This is the probability associated with the low demand of the optimal risk portfolio = 0.2 (0.2 * 100) = 20%
On September 30, 2021, Athens Software began developing a software program to shield personal computers from malware and spyware. Technological feasibility was established on February 28, 2022, and the program was available for release on April 30, 2022. Development costs were incurred as follows:
September 30 through December 31, 2021 $3,600,000
January 1 through February 28, 2022 1,500,000
March 1 through April 30, 2022 594,000
Athens expects a useful life of four years for the software and total revenues of $7,800,000 during that time. During 2022, revenue of $1,560,000 was recognized.
Required:
a. Prepare a journal entry to record the development costs in each year of 2021 and 2022.
b. Calculate the required amortization for 2022.
Answer:
2021
Dr Research and development expense $3,600,000
Cr Cash $3,600,000
2022
Dr Research and development expense 1,500,000
Dr Software and development costs 594, 000
Cr Cash 2,094,000
B. $148,500
Explanation:
1. Preparation of the journals entry
2021
Dr Research and development expense $3,600,000
Cr Cash $3,600,000
(To record the expenses incurred on research and development)
2022
Dr Research and development expense 1,500,000
Dr Software and development costs 594, 000
Cr Cash 2,094,000
(1,500,000+594,000)
(To record the software development costs incurred)
2.Calculatation for the amortization for 2022
Using percentage of revenues method
Amortization= Current revenue/Total revenue* Software development costs
Amortization=$1,560,000/$7, 800,000*$594,000
Amortization=0.2*$594,000
Amortization=$118,800
Using straight line method
Amortization =1/Useful life* Software devel opment costs
Amortization=1/4*$594,000
Amortization=$148,500
Based on the above calculation Tmte expense amounts under straight-line method is higher . Which means that , the amortization is $148,500.
On January 1, 2020, Pearl Company sold 11% bonds having a maturity value of $400,000 for $415,163, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Pearl Company allocates interest and unamortized discount or premium on the effective-interest basis.
A. Prepare a schedule of interest expense and bond amortization for 2020-2022.
Date Account Titles and Explanation Debit Credit
January 1, 2020 Cash 518,953
Bonds Payable 500,000
Premium on Bonds Payable 18953
B. Prepare the journal entry to record the interest payment and the amortization for 2020.
Schedule of Interest Expense and Bond Premium Amortization
Effective-Interest Method
Date Cash Interest Premium Carrying Amount
Paid Expense Amortized of Bonds
1/1/20
12/31/20 55000
12/31/21 55000
12/31/22 55000
C. Prepare the journal entry to record the interest payment and the amortization for 2022.
Date Account Titles and Explanation Debit Credit
December, 31 51895
Premium on Bonds Payable
Cash
Answer:
I will start with B and C)
The journal entry to record bond issuance:
January 1, 2020, bonds issued at a premium
Dr Cash 415,163
Cr Bonds payable 400,000
Cr premium on bonds payable 15,163
December 31, 2020, first coupon payment
Dr Interest expense 41,616.30
Dr Premium on bonds payable 2,383.70
Cr Cash 44,000
amortization of bond premium = (415,163 x 10%) - 44,000 = 2,383.70
December 31, 2021, second coupon payment
Dr Interest expense 41,277.93
Dr Premium on bonds payable 2,722.07
Cr Cash 44,000
amortization of bond premium = (412,779.30 x 10%) - 44,000 = 2,722.07
December 31, 2023, third coupon payment
Dr Interest expense 41,005.72
Dr Premium on bonds payable 2,994.28
Cr Cash 44,000
amortization of bond premium = (410,057.23 x 10%) - 44,000 = 2,994.28
A) I used an excel spreadsheet to prepare the amortization schedule
Allison and Leslie, who are twins, just received $10,000 each for their 25th birthdays. They both have aspirations to become millionaires. Each plans to make a $5000 annual contribution to her "early retirement fund" on her birthday, beginning a year from today. Allison opened an account with the Safety First Bond Fund, a mutual fund that invests in high quality bonds whose investors have earned 8% per year in the past. Leslie invested in the New-Issue Bio Tech Fund, which invests in small, newly issued bio-tech stocks and whose investors have earned an average of 13% per year in the fund’s relatively short history.
a. If the two women’s funds earn the same returns in the future as in the past, how old will each be when she becomes a millionaire?
b. How large would Allison’s annual contributions have to be for her to become a millionaire at the same age as Leslie, assuming that their expected returns are realized?
Answer:
a. If the two women’s funds earn the same returns in the future as in the past, how old will each be when she becomes a millionaire?
Allison:
1,000,000 = 5,000 x [(1 + i)ⁿ - 1 ] / i
200 = [(1 + 8%)ⁿ - 1 ] / 8%
16 = 1.08ⁿ - 1
17 = 1.08ⁿ
n = log 17 / log 1.08 = 1.230448921 / 0.033423755 = 36.81 years
Leslie:
1,000,000 = 5,000 x [(1 + i)ⁿ - 1 ] / i
200 = [(1 + 13%)ⁿ - 1 ] / 13%
26 = 1.13ⁿ - 1
27 = 1.13ⁿ
n = log 27 / log 1.13 = 1.43133764 / 0.053078443 = 26.97 years
b. How large would Allison’s annual contributions have to be for her to become a millionaire at the same age as Leslie, assuming that their expected returns are realized?
1,000,000 = payment x [(1 + i)ⁿ - 1 ] / i
1,000,000 = payment x [(1 + 8%)²⁶°⁹⁷ - 1 ] / 8%
80,000 = payment x [1.08²⁶°⁹⁷ - 1 ]
80,000 = payment x 6.969639658
payment = 80,000 / 6.969639658 = $11,478.36
Faughn Corporation has provided the following data concerning manufacturing overhead for July:
Actual manufacturing overhead incurred $69,000
Manufacturing overhead applied to Work in Process $79,000
The company's Cost of Goods Sold was $243,000 prior to closing out its Manufacturing Overhead account. The company closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true?
A) Manufacturing Overhead account is $233,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000.
B) Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000
C) Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $253,000
D) Manufacturing overhead was underapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $253,000
Faughn Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year:
Raw materials purchased on account $475,000
Raw materials (all direct) requisitioned for use in production $476,000
Direct labor cost $640,000
Manufacturing overhead:
Indirect labor cost $174,000
Other manufacturing overhead costs incurred $498,000
Cost of goods manufactured $1,672,500
Cost of goods sold (unadjusted) $1,469,000
The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is:_____.
A. Finished Goods 1,672,500
Work in Process 1,672,500
B. Work in Process 1,469,000
Finished Goods 1,469,000
C. Finished Goods 1,469,000
Work in Process 1,469,000
D. Work in Process 1,672,500
Finished Goods 1,672,500
Answer: B. Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000
A. Finished Goods 1,672,500
Work in Process 1,672,500
Explanation:
• Based on the scenario in the question, it should be realized that the applied manufacturing overhead is more than the actual manufacturing overhead by:
= $79,000 − $69,000
= $10,000
This implies that $10,000 would be overapplied. The $10000 will then be subtracted from the cost of the goods that were sold and we'll then get adjusted cost of goods sold of:
= $243,000 − $10,000
= $233,000
• The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is:
Finished Goods 1,672,500
Work in Process 1,672,500
You are the owner of a restaurant in a competitive market. You want to improve your restaurant's profile by increasing your quality of service to patrons while also growing profits. In addition to hiring better chefs and changing the menu, you are considering whether to offer a coat check. As one option, you could install hooks for customers to use, which may or may not help your business. Alternatively, you could offer a coat check for a fee, which would increase labor costs but give you a source of revenue in the process. Evaluate the various issues from a business and legal perspective, as well as steps to minimize any liability.
Answer:
Follows are the solution to this question:
Explanation:
Its coat test is a viable and cost-effective alternative also for the cafe. Restaurant visitors have a big issue about managing their clothing in winter. Straps would not even ensure security so its risks will be burglary.
A sitting room with such a guide ensures safety and would be used in the customers. Its restaurateur will be charged with additional costs because an employee has to be recruited. The business prospects would be improved when customers get a guaranteed spot to preserve their jackets. An operator must be careful enough to not exchange or mislocate any clothes. It would be a source of revenue for the business because the service available was being used by other people.Answer:
all of the above
Explanation:
D’Lite Dry Cleaners is owned and operated by Joel Palk. A building and equipment are currently being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company at wholesale rates. The assets, liabilities, and common stock of the business on July 1, 2016, are as follows: Cash, $45,000; Accounts Receivable, $93,000; Supplies, $7,000; Land, $75,000; Accounts Payable, $40,000; Common Stock, $60,000. Business transactionsduring July are summarized as follows:
A. Joel Palk invested additional cash in exchange for common stock with a deposit of $35,000 in the business bank account.
B. Paid $50,000 for the purchase of land adjacent to land currently owned by D’Lite Dry Cleaners as a future building site.
C. Received cash from cash customers for dry cleaning revenue, $32,125.
D. Paid rent for the month, $6,000.
E. Purchased supplies on account, $2,500.
F. Paid creditors on account, $22,800.
G. Charged customers for dry cleaning revenue on account, $84,750.
H. Received monthly invoice for dry cleaning expense for July (to be paid on August 10), $29,500.
I. Paid the following: wages expense, $7,500; truck expense, $2,500; utilities expense, $1,300; miscellaneous expense, $2,700.
J. Received cash from customers on account, $88,000.
K. Determined that the cost of supplies on hand was $5,900; therefore, the cost of supplies used during the month was $3,600.
L. Paid dividends, $12,000.
Required:
1. Determine the amount of retained earnings as of July 1 of the current year.
2. The assets, liabilities, and stockholders’ equity as of July 1 are stated in equation form similar to that shown in this chapter. In tabular form below the equation, indicate increases and decreases resulting from each transaction and the new balances after each transaction. In each transaction row (rows indicated by a letter), you must indicate the math sign (+ or -) in columns effected by the transaction. You will not need to enter math signs in the balance rows (rows indicated by Bal.). Entries of 0 (zero) are not required and will be cleared if entered.
3.a. Prepare an income statement for the month ended July 31, 2016. Refer to the Accounts in the accounting equation grid and to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss has been incurred, enter that amount as a negative number using a minus sign. You will not need to enter colons (:) on the income statement.
3.b. Prepare a retained earnings statement for the month ended July 31, 2016. Refer to the lists of Accounts in the accounting equation grid and to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Enter all amounts as positive numbers. The word "Less" or "Add" is not needed in the Retained Earnings Statement.
3.c. Prepare a balance sheet as of July 31, 2016. Refer to the Accounts in the accounting equation grid and to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading.
4. Prepare a statement of cash flows for July. Enter amounts that represent cash outflows as negative numbers using a minus sign. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. You will not need to enter colons (:) or the word Deduct on the statement.
Labels Cash flows from financing activities, Cash flows from investing activities, Cash flows from operating activities, ExpensesFor the Month Ended July 31, 2016, July 31, 2016
Amount Descriptions Additional investment during July, Cash balance, July 1, 2016, Cash balance, July 31, 2016, Cash payments for expenses and payments to creditors, Cash received from customers, Cash received from issuing common stock, Decrease in retained earnings, Dividends, Increase in retained earnings, Net cash flows from financing activities, Net cash flows from investing activities, Net cash flows from operating activities, Net cash flows used for financing activities, Net cash flows used for investing activities, Net cash flows used for operating activities, Net decrease in cash during July, Net income, Net increase in cash during July. Net loss, Purchase of land, Retained earnings, July 1, 2016, Retained earnings, July 31, 2016, Total assets, Total expenses, Total liabilities and stockholders’ equity, Total stockholders’ equity
Answer:
1) equity = assets - liabilities
equity = $45,000 + $93,000 + $7,000 + $75,000 - $40,000 = $180,000
retained earnings = total equity - common stock = $180,000 - $60,000 = $120,000
2) Since there is not enough room here, I used an excel spreadsheet to prepare the accounting equation.
3a) D’Lite Dry Cleaners
Income Statement
For the month ended July 31, 202x
Revenues $116,875
Expenses:
Dry cleaning expense $29,500 Rent expense $6,000 Wages expense $7,500 Truck expense $2,500 Supplies expense $3,600 Utilities expense $1,300 Miscellaneous expense $2,700 ($53,100)Net income $63,775
3b) D’Lite Dry Cleaners
Balance Sheet
For the month ended July 31, 202x
Assets:
Cash $95,325
Accounts receivable $89,750
Supplies $5,900
Land $125,000
Total assets $315,975
Liabilities:
Accounts payable $49,200
Equity:
Common stock $95,000
Retained earnings $171,775
Total equity = $266,775
Total liabilities and equity $315,975
3c) D’Lite Dry Cleaners
Statement of Owner’s Equity
For the month ended July 31, 202x
Palk, Joel, common stock, beginning balance $60,000
Retained earnings $120,000
Additional common stock issued $35,000
net income $63,775
subtotal $278,775
dividends ($12,000)
Palk, Joel, common stock, ending balance $95,000
Retained earnings $$171,775
On December 31, 2021, the end of the fiscal year, Revolutionary Industries completed the sale of its robotics business for $13.0 million. The robotics business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $9.0 million. The income from operations of the segment during 2021 was $6.0 million. Pretax income from continuing operations for the year totaled $14.0 million. The income tax rate is 25%.
Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions. For example, $4,000,000 rather than $4.)
Barth Interior provides decorating advice to its clients. Three recent transactions of the company include:
a. Providing decorating services of $500 on account to one of its clients.
b. Paying $1,200 for an employee's salary in the current period.
c. Purchasing office equipment for $2,700 by paying cash.
Required: Write a memo to your instructor describing each step of the six-step measurement process presented in Illustration 2-1 in the book specifically for each of the three transactions. To emphasize, your memo should be specific to the three transactions indicated above..
Answer:
Memo Describing Each Step of the Six-Step Measurement Process
To: Ms. Teagantigan, PhD, Financial Accounting
From: Okwukwe Faith, Financial Accounting Student
Subject: The Six-Step Measurement Process
Date: October 11, 2020
Find below the description you requested on the above subject.
1st Step: Identifying the accounts involved using the source documents:
For the provision of decorating services of $500 to a client, the invoice for the service will be reviewed for the accounts involved in the transaction. It will show that Accounts receivable and Service Revenue are involved. A review of the payroll check will also show the payment of salary to an employee, in which Cash Account and Salaries Expense account are involved. Similarly, a review of the purchasing invoice will show that Office Equipment and Cash Account are involved for the purchase of equipment.
2nd Step: Analysis of the impact on the accounting equation: For a) Accounts Receivable and Service Revenue will increase by $500 respectively. Cash Account will decrease while Salaries Expense account will increase by $1,200 for b). For c) Office Equipment will increase and Cash will decrease by $2,700.
3rd Step: Assessing the accounts to be debited or credited: For a) Accounts Receivable will be debited and Service Revenue credited. For b) Salaries Expense will be debited and Cash credited. For c) Office Equipment will be debited and Cash credited.
4th Step: With the above identification, the journal will be recorded for transactions a - c as detailed above.
5th Step: The above transactions will then be posted to the general ledger in their respective accounts.
6th Step: At the end of the period, the accounts will be balance and a list of balances extracted in the Trial Balance.
I hope I have understood the steps enough.
Regards,
Okwukwe Faith
Explanation:
We have detailed above the six-step measurement process for evaluating business transactions and events. These steps help to identify the accounts involved in each business event and determine how the events are recorded in the accounting books.
Liquidity risk would be greatest for an investor whose portfolio was primarily composed of A) ADRs listed on the NYSE B) municipal bond UITs C) Nasdaq stocks D) municipal bonds
Answer: D) municipal bonds
Explanation:
Liquidity risk is the risk that an instrument or security can not be easily sold such that actual hard currency can be recuperated.
ADRs on the NYSE can be easily sold and so can NASDAQ stocks. Municipal bond Unit Investment Trust (UITs) can be redeemed in a non-complicated manner so are liquid as well.
Municipal bonds will prove to be the least liquid as the market for municipal bonds is not a heavily traded one.
Pro forma balance sheet Peabody & Peabody has 2019 sales of $10 million. It wishes to analyze expected performance and financing needs for 2021, which is 2 years ahead. Given the following information, respond to parts a and b.
1. The percent of sales for items that vary directly with sales are as follows: Accounts receivable, 12% Inventory, 18% Accounts payable, 14% Net profit margin, 3%
2. Marketable securities and other current liabilities are expected to remain unchanged.
3. A minimum cash balance of $480,000 is desired.
4. A new machine costing $650,000 will be acquired in 2020, and equipment costing $850,000 will be purchased in 2017. Total depreciation in 2017 is forecast as $290,000, and in 2017 $390,000 of depreciation will be taken.
5. Accruals are expected to rise to $500,000 by the end of 2017.
6. No sale or retirement of long-term debt is expected.
7. No sale or repurchase of common stock is expected.
8. The dividend payout of 50% of net profits is expected to continue.
9. Sales are expected to be $11 million in 2017 and $12 million in 2017.
10. The December 31, 2017, balance sheet follows
Peabody & Peabody Balance Sheet December 31, 2017 ($000)
Assets:
Cash 400
Marketable securities 200
Accounts receivable 1200
Inventories 1800
Total current assets 3600
Net fixed assets 4000
Total assets 7600
Liabilities and Stockholders equity:
Accounts payable 1400
Accruals 400
Other current liabilities 80
Total current liabilities 1880
Long-term debt 2000
Total liabilities 3880
Common equity 3720
Total liabilities and stockholders’ equity $7,600
Required:
a. Prepare a pro forma balance sheet dated December 31, 2017.
b. Discuss the financing changes suggested by the statement prepared in part a.
Answer:
Peabody & Peabody
a. Peabody & Peabody
Pro Forma Balance Sheet
December 31, 2021 ($000)
Cash 480
Marketable securities 200
Accounts receivable 1,440
Inventories 2,160
Total current assets 4,280
Net fixed assets 4,820
Total assets 9,100
Liabilities and Stockholders equity:
Accounts payable 1,680
Accruals 500
Other current liabilities 80
Total current liabilities 2,260
Long-term debt 2,000
Total liabilities 4,260
Common equity 3,900
Total liabilities and stockholders’ equity $8,160
Required Finance 940
b. From the statement prepared in part a, it is clear that Peabody & Peabody requires new financing of $940,000 for 2020 to meet the projected assets base.
Explanation:
a) Data and Calculations:
2019 Sales = $10 million
Pro Forma Balance Sheet
December 31, 2017 ($000)
Assets:
Cash 400
Marketable securities 200
Accounts receivable 1,200
Inventories 1,800
Total current assets 3,600
Net fixed assets 4,000
Total assets 7,600
Liabilities and Stockholders equity:
Accounts payable 1,400
Accruals 400
Other current liabilities 80
Total current liabilities 1,880
Long-term debt 2,000
Total liabilities 3,880
Common equity 3,720
Total liabilities and stockholders’ equity $7,600
Purpose: To analyze expected performance and financing needs for 2021.
1. Percent of Sales ($12 million)
Accounts receivable, 12% $1,440
Inventory, 18% $2,160
Accounts payable, 14% $1,680
Net profit margin, 3% $360
2. Market securities $200
3. Cash balance (desired minimum) $480
4. Net fixed assets 4,000
New equipment in 2020 650
Depreciation, 2020 (290)
New equipment in 2021 850
Depreciation, 2021 (390)
Net fixed assets $4,820
5. Accruals $500
8. Dividend payout = 50% of $360 = $180
Retained Earnings (current) = $180
Common Equity:
2019 3,720
Income 180 (Retained Earnings)
2020 3,900
Duc has been employed by Longbow Corporation for 25 years. During that time, he bought an annuity at a cost of $50 per month ($15,000 total cost). The annuity will pay him $200 per month after he reaches age 65. When Duc dies, his wife, Annika, will continue to receive the annuity until her death. Duc turns 65 in April 2019 and receives 8 payments on the contract. Annika is age 60 when the annuity payments begin.
Required:
a. How much gross income does Duc have from the contract in the current year?
b. Assume that Duc dies on April 2, 2025. How does Annika account for the contract in 2025?
c. Assume the same facts as in part b and that Annika dies on August 4, 2032. How does the executor of Annika's estate account for the contract in the year of her death?
Answer:
a. How much gross income does Duc have from the contract in the current year?
According to the IRS, Duc's life expectancy is 90 years and 8 months, or 310 more months. This means that Duc can discount from his monthly income $15,000 / 310 = $48.39 (which we must round down to $48).
Duc received 8 x $200 = $1,600
deductions = 8 x $48 = $384
taxable income = $1,216
b. Assume that Duc dies on April 2, 2025. How does Annika account for the contract in 2025?
Annika should account for the contract in the same way as Duc did, and will also be able to discount $48 per month form her gross income. Since Annika will still file her taxes as married during 2025, she will report net income from this contract = ($200 - $48) x 12 months = $1,824
c. Assume the same facts as in part b and that Annika dies on August 4, 2032. How does the executor of Annika's estate account for the contract in the year of her death?
Both Duc and Annika received [(2032 - 2019) x 12] + 4 = 160 payments in total, so her estate is entitled to a tax deduction = (310 - 160) x $48 = $7,200
Since she died on August, her estate must also report income = ($200 - $48) x 8 = $1,216
WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process. Budgeted data for the next month is as follows: Product X Product Y Product Z Units produced 1,800 2,300 3,300 Per unit sales value at split-off $ 16.00 $ 19.00 $ 18.00 Added processing costs per unit $ 3.00 $ 5.00 $ 5.00 Per unit sales value if processed further $ 20.00 $ 20.00 $ 25.00 The cost of the joint raw material input is $71,000. Which of the products should be processed beyond the split-off point
Answer:
Product X and Product Z should be processed beyond the split-off point because their Profits beyond split-off point are greater than Profits at split-off point.
Explanation:
Note: The data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
The explanation to the answer is now given as follows:
Also note: See the attached excel file for the calculation of the Profit at split-off point and profit Profit beyond split-off point.
In the attached excel file, the share cost of joint raw material input is calculated as follows:
Units produced of Product X = 1,800
Units produced of Product Y = 2,300
Units produced of Product Z = 3,300
Total units = Units produced of Product X + Units produced of Product Y + Units produced of Product Z = 1,800 + 2,300 + 3,300 = 7,400
Share of cos joint raw material input = (Units of a Product / Total unit) * Cost of the joint raw material input …. (1)
Using equation (1), we have:
Product X share of cost of joint raw material input = (1,800 / 7,400) * $71,000 = $17,270
Product Y share of cost of joint raw material input = (2,300 / 7,400) * $71,000 = $22,068
Product Z share of cost of joint raw material input = (3,300 / 7,400) * $71,000 = $31,662
Decision Rule:
A product should be processed beyond the split-off point if its Profit beyond split-off point is greater than Profit at split-off point.
From the attached excel file, only Product X and Product Z meet this requirement as determined as follows:
For Product X
Profit at split-off point = $11,530
Profit beyond the split-off point = $13,330
Since Profit beyond split-off point is greater than Profit at split-off point, Product X should be processed beyond the split-off point.
For Product Y
Profit at split-off point = $21,632
Profit beyond the split-off point = $12,432
Since Profit beyond split-off point is less than Profit at split-off point, Product X should NOT be processed beyond the split-off point.
For Product Z
Profit at split-off point = $27,738
Profit beyond the split-off point = $34,338
Since Profit beyond split-off point is greater than Profit at split-off point, Product Z should be processed beyond the split-off point.
Based on the analysis above, only Product X and Product Z should be processed beyond the split-off point since their Profits beyond split-off point are greater than Profits at split-off point.
On June 30, 2012, Oriole Company issued 12% bonds with a par value of $770,000 due in 20 years. They were issued at 98 and were callable at 103 at any date after June 30, 2020. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the entire issue on June 30, 2021, and to issue new bonds. New 10% bonds were sold in the amount of $1,000,000 at 102; they mature in 20 years. Oriole Company uses straight-line amortization. Interest payment dates are December 31 and June 30.Instructions:
a. Prepare journal entries to record the redemption of the old issue and the sale of the new issue on June 30, 2021.
b. Prepare the entry required on December 31, 2021, to record the payment of the first 6 months' interest and the amortization of premium on the bonds.
Answer:
A. OLD BOND REDEMPTION :
June 30, 2021
Dr 12% Bonds payable 770,000
Dr Loss on retirement of bonds 31,570
Cr Cash 793,100
Cr Discount on bonds 8,470
NEW BOND ISSUE:
June 30, 2021
Dr Cash 1,020,000
Cr 10% Bonds payable 1,000,000
Cr Premium on bonds 20,000
B. Dec 31, 2021
Dr Interest expense 49,500
Dr Premium on bonds payable 500
Cr Cash 50,000
Explanation:
a. Preparation of the journal entries to record the redemption of the old issue and the sale of the new issue on June 30, 2021.
OLD BOND REDEMPTION :
June 30, 2021
Dr 12% Bonds payable 770,000
Dr Loss on retirement of bonds 31,570
Cr Cash 793,100
(103*770,000)
Cr Discount on bonds 8,470
(To record redemption of old bonds)
NEW BOND ISSUE:
June 30, 2021
Dr Cash 1,020,000
(1,000,000 * 102/100)
Cr 10% Bonds payable 1,000,000
(1,000,000 * 100/100)
Cr Premium on bonds 20,000
(1,000,000 * 2/100)
(To record issue of new bonds at premium)
CALCULATION for unamortized discount :
Discount at the time of issue 15,400
(2%*770,000)
Less: Discount amortised till june 30, 2021 (15,400 / 40 * 18) (6,930)
Unamortized discount 8,470
We made use of 18 because the interest was been given twice in a year which is December 31 and June 30
CALCULATION for loss on redemption :
Redemption of bonds 793,100
(103*770,000)
Less: Carrying value (761,530)
(770,000 - 8,470)
Loss on redemption 31,570
b. Preparation of the entry required on December 31, 2021, to record the payment of the first 6 months' interest and the amortization of premium on the bonds.
Dec 31, 2021
Dr Interest expense 49,500
(50,000-500)
Dr Premium on bonds payable 500
(20,000 / 40)
Cr Cash 50,000
(1,000,000 * 10% * 6/12)
(To record the interest expense for 6 months)
answer:
Credit Card Interest Charges January-June 2012
The bank that issues Card X
✔ exceeded
the legal interest rate for five of the six months.
Because of this, the bank that issues Card X is likely to be investigated by the
✔ CFPB
.
If steak and potatoes are complements, when the price of steak goes down, the demand curve for potatoes:
Answer:
Shift to the left
Explanation:
Demand curve is essential in economics, because it allows to know the relationship between the price of a particular goods/service and quantity demanded all in that price graphically
Since complementary goods are used along with each other, they also shift demands curve to the left because any fall at the price of one of the complement goods, the demands of first one increases, then the other one.
Therefore, If steak and potatoes are complements, when the price of steak goes down, the demand curve for potatoes Shift to the left
Presented below is information related to Windsor Company.
Oct. 1 Diane Lexington begins business as a real estate agent with a cash investment of $16,800 in exchange for common stock.
2 Hires an administrative assistant.
3 Purchases office furniture for $2,500, on account.
6 Sells a house and lot for N. Fennig; bills N. Fennig $3,400 for realty services performed.
27 Pays $1,100 on the balance related to the transaction of October 3.
30 Pays the administrative assistant $2,650 in salary for October.
Required:
Journalize the transactions.
Answer:
Date Account Titles Debit Credit
Oct 1 Cash $16,800
Common Stock $16,800
Oct 2 No journal entry - -
Oct 3 Office Furniture $2,500
Accounts Payable $2,500
Oct 6. Accounts Receivable $3, 400
Service Revenue $3,400
Oct 27 Accounts Payable $1,100
Cash $1,100
Oct 30 Salaries Expense $2,650
Cash $2,650
1. Purchased raw materials on account $49,400.
2. Raw Materials of $41,300 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $8,000 was classified as indirect materials.
3. Factory labor costs incurred were $65,200.
4. Time tickets indicated that $54,600 was direct labor and $10,600 was indirect labor.
5. Manufacturing overhead costs incurred on account were $84,900.
6. Manufacturing overhead was applied at the rate of 150% of direct labor cost.
7. Goods costing $96,300 were completed and transferred to finished goods.
8. Finished goods costing $80,700 to manufacture were sold.
Required:
Record the transactions.
Answer and Explanation:
The journal entries are shown below:
1. Raw material inventory A/c Dr.$49,400
To accounts payable $49,400
(To record raw material purchased)
2. Work in process inventory A/c Dr. $33,300
Manufacturing overhead A/c Dr. $8,000
To Raw material inventory Cr. $41,300
(To record the raw material requisitioned is recorded)
3. Factory payroll A/c Dr.$65,200
To cash $65,200
(To record factory labor cost incurred)
4. . Work in process inventory A/c Dr. $54,600
Manufacturing overhead A/c Dr. $10,600
To factory payroll Cr. $65,200
(To record the direct labor and indirect labor is recorded)
5. Manufacturing overhead A/c Dr. $84,900
To accounts payable Cr. $84,900
(To record the manufacturing overhead is recorded)
7. Work in process inventory A/c Dr. $81,900 ($54,600×150%)
To Manufacturing overhead Cr. $81,900
(To record the applied manufacturing overhead is recorded)
8. Finished goods inventory A/c Dr. $96,300
To Work in process inventory Cr. $96,300
(To record the transferred goods are recorded)
9. Cost of goods sold A/c Dr. $80,700
To finished goods inventory Cr. $80,700
(To record the cost of goods sold is recorded)
Peanut Company acquired 90 percent of Snoopy Company’s outstanding common stock for $270,000 on January 1, 20X8, when the book value of Snoopy’s net assets was equal to $300,000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of December 31, 20X8, are as follows:
Peanut Company Snoopy Company
Debit Credit Debit Credit
Cash $158,000 $80,000
Accounts Receivable 165,000 65,000
Inventory 200,000 75,000
Investment in Snoopy
Stock 319,500 0
Land 200,000 100,000
Buildings and
Equipment 700,000 200,000
Cost of Goods Sold 200,000 125,000
Depreciation Expense 50,000 10,000
Selling & Administrative
Expense 225,000 40,000
Dividends Declared 100,000 20,000
Accumulated
Depreciation 450,000 20,000
Accounts Payable 75,000 60,000
Bonds Payable 200,000 85,000
Common Stock 500,000 200,000
Retained Earnings 225,000 100,000
Sales 800,000 250,000
Income from Snoopy 67,500 0
Total $2,317,500 $2,317,500 $715,000 $715,000
Required:
A. Prepare any equity method entry(ies) related to the investment in Snoopy Company during 20X8.
B. Prepare a consolidated worksheet on the acquisition date, January 1, 2018.
Answer:
Investment in Snoopy co : 270000
Cash : 270000
Initial investment in snoopy co
investment in snoopy co : 67500
income from snoopy co : 67500
Peanut co's 90% share of snoopy co's 20x8 income
Cash : 18000
investment in snoopy co : 18000
Explanation: prepare any equity method entriesInvestment in Snoopy co : 270000
Cash : 270000
Initial investment in snoopy co
investment in snoopy co : 67500
income from snoopy co : 67500
Peanut co's 90% share of snoopy co's 20x8 income
Cash : 18000
investment in snoopy co : 18000
attached below are the equity entries
without copying and pasting answer!
what are the duties of a plumber, and why is it difficult?
Answer:
Explanation:
The work of a plumber is to repair pipes.
Answer:
A plumber's duty is to install, repair, and maintain pipes, and fixtures in commercial and residential structures.
It is difficult because it is sometimes very dangerous and you have to work in extreme and critical conditions. And most of the time you inhale dangerous chemicals. Plumbers are dealing with anxious situations such as water pouring through ceilings, gas leaks, and pipes bursting in subzero temperatures.
Explanation:
hope this helps :))
Based on what we have learned about shortages and surpluses in a market, which one do you think is more harmful to the overall economy: a shortage or a surplus of a good? Provide a detailed explanation to demonstrate your thinking.
Answer:
A surplus of a good
Explanation:
Although we think that having a lot of something sounds like a good idea that is not always the case. Sometimes its better to have less of an item but therefore sell it for. For example when there was a shortage of hand sanitzer, masks and toilet paper people bought more of it for a higher price because they were afraid not to have enough. A surplus can take up a lot of storage and use up a lot of money. For example if a car manafacturer has a surplus of cars they are just sittinng there taking up space in a lot that needs to be payed for and mantained. I find it is especially bad if there are lot of that item and people are not interested in purchasing it. The company would be losing money because they would be most likely selling it at a lower price. Therefore the economy would be losing money while during a shortage they would be gaining money.
South Texas Luxury Apartments reports pretax financial income of $68,400 for 2019. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by $17,000. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $21,000. 3. Fines for pollution appear as an expense of $10,300 on the income statement. South Texas Luxury Apartments tax rate is 40% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2019.
Required:
Prepare a reconciliation between Financial Income and Taxable Income and then prepare the journal entry to record income taxes.
Answer:
Pretax financial income for 2017 $68,400
Excess Depreciation tax -$17,000
Excess rent collected $21,000
Nondeductible fines $10,300
Taxable income $82,700
Enacted tax rate 40% 0.4
Income tax payable $33,080
Date Account Title Debit Credit
Income Tax expense $31,480
Deferred tax asset $8,400
(21,000*40/100)
Income tax payable $33,080
Deferred tax liability $6,800
(17,000*40/100)
Cost of Goods Sold, Cost of Goods Manufactured
Glenville Company has the following information for April:
Cost of direct materials used in production $52,000
Direct labor 67,000
Factory overhead 21,000
Work in process inventory, April 1 38,000
Work in process inventory, April 30 48,000
Finished goods inventory, April 1 22,000
Finished goods inventory, April 30 17,000
Required:
a. For April, determine the cost of goods manufactured.
b. For April, determine the cost of goods sold.
Answer:
cost of goods manufactured= $130,000
COGS= $135,000
Explanation:
To calculate the cost of goods manufactured, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 38,000 + 52,000 + 67,000 + 21,000 - 48,000
cost of goods manufactured= $130,000
Now, we can determine the cost of goods manufactured:
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 22,000 + 130,000 - 17,000
COGS= $135,000
Home Inspirations Mary works for her father in a family-owned business called Home Inspirations, a bedding company that has been in operation since the 1800s. When her father retires, Mary plans on taking over the business. Mary is aware of many things about the company that she likes, and a few things that she does not. She has particularly noted that when the economy has low unemployment and high total income, sales are great. However, any other time, sales are not so good. Currently, all of the bedding items are created in one place and everyone works on various tasks every day. Mary is thinking about streamlining the production process so that individuals would be responsible for only one task. She believes that if production would increase, she could sell her products at a lower price and increase revenue. She knows that most bedding products available in the market are very similar in nature and satisfy the same need. However, if she were able to lower prices, this might give her company the competitive advantage that it needs. She would then be able to invest money in differentiating her products by providing unique features, building the brand name, and offering services such as free delivery. She is also considering selling her products on the Internet. Mary knows that her father does not like change very much, but she feels these changes are important for the future of the company.
Refer to Home Inspirations.Mary noticed that when sales were up,the economy was in a
A) depression.
B) peak period.
C) grace period.
D) recession.
E) stagnant mode.
Answer:
Option B (peak period) is the correct choice.
Explanation:
The time throughout the day as well as a period where this production is at its peak for items and/or services. A peak seems to be the tallest structure of such a global economy between some of the completion of economic growth as well as the beginning of a recession. Hailey found that perhaps the economy must have been at a peak time although profits were up.The remaining four options are not aligned with the situation in question. So, the solution above is the right one.
The following information pertains to Blue Flower Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.
Assets:
Cash and short-term investments $45,000
Accounts receivable (net) 30,000
Inventory 25,000
Property, plant and equipment 210,000
Total Assets $310,000
Liabilities and Stockholders' Equity Current liabilities $60,000
Long-term liabilities 95,000
Stockholders' equity—common 155,000
Total Liabilities and Stockholders' Equity $310,000
Income Statement
Sales revenue $121,000
Cost of goods sold 66,000
Gross margin 55,000
Operating expenses 30,000
Net income $25,000
Number of shares of common stock 6,000
Market price of common stock $20
Dividends per share on common stock 0.50
Cash provided by operations $40,000
What is the current ratio for this company?
a. 1.25
b. 1.50
c. 0.67
d. 1.00
Answer:
Blue Flower Company
Current Ratio = Current Assets/Current Liabilities
= $100,000/$60,000
= 1.67 : 1
This ratio implies that Blue Flower Company can pay its current or short-term liabilities 1.67 times, using its current assets, made up of cash, receivables, and inventory, including short-term investments.
Explanation:
a) Data and Calculation:
Cash and short-term investments $45,000
Accounts receivable (net) 30,000
Inventory 25,000
Total current assets $100,000
Current liabilities = $60,000
b) Blue Flower's Current Ratio is a financial measure of the company's ability to settle maturing current liabilities (obligations) with its current assets without resorting to sale of long-term assets.
Splish Corporation had income from continuing operations of $10,703,000 in 2020. During 2020, it disposed of its restaurant division at an after-tax loss of $205,000. Prior to disposal, the division operated at a loss of $322,000 (net of tax) in 2020 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Splish had 10,000,000 shares of common stock outstanding during 2020. Prepare a partial income statement for Splish beginning with income from continuing operations. (Round earnings per share to 2 decimal places, e.g. 1.48.)
Answer and Explanation:
The Preparation of partial income statement for Splish is shown below:-
Splish Corporation
Partial income statement
For the year 2020
Particulars Amount
Income from operations $10,703,000
Less:
Discontinued operations:
Loss from operations $322,000
Loss from disposal $205,000 $527,000
Net income $10,176,000
Earnings per share:
Income from continuing
operations 1.07
($10,703,000 ÷ 10,000,000)
Less:
Discontinued operations, net of tax 0.05
($527,000 ÷ 10,000,000)
Net income 1.02
($10,176,000 ÷ 10,000,000)
What microeconomic factors point to the fact that your business should be successful? No
Answer:
your cute
Explanation:
because u cute
Use the following data to determine the total amount of working capital.
Windsor, Inc. Balance Sheet December 31, 2022
Cash $129200 Accounts payable $153500
Accounts receivable 122600 Salaries and wages payable 28400
Inventory 209300 Note payable (due 2025) 268000
Short-term investments 86400 Total liabilities $449900
Land (held for future use) 255000 Land 289000
Buildings $338500 Common stock $355500
Less: Accumulated depreciation (60200) 278300 Retained earnings 771000
Franchise 206600 Total stockholders' equity $1126500
Total assets $1576400 Total liabilities and stockholders' equity $1576400
Answer:
$279,200
Explanation:
The computation of working capital is shown below:-
As we know that
Working capital = Current assets - Current liabilities
where,
Current assets = cash balance + account receivable + Inventory
= $129,200 + $122,600 + $209,300
= $461,100
And,
Current liabilities = Account payable + Salaries & wages payable
= $153,500 + $28,400
= $181,900
now we will put the values of the above working capital formula
= $461,100 - $181,900
= $279,200