Answer:
155,000
Explanation:
The computation of the required units of production is shown below:-
Required units of production = Sales units + Ending finished goods - Beginning finished goods
= 160,000 units + 15,000 units - 20,000 units
= 155,000
Therefore for computing the required units of production we simply applied the above formula.
A firm expects to sell 25,200 units of its product at $11.20 per unit and to incur variable costs per unit of $6.20. Total fixed costs are $72,000. The total contribution margin is:
Answer:
The answer is $126,000
Explanation:
Contribution Margin is calculated as selling price minus the variable cost. It measures the ability of the sales price to cover the variable cost incurred on the goods produced.
Selling price per unit - $11.20
Variable cost per unit - $6.20
Contribution margin = $11.20 - $6.20
= $5
Total contribution margin is
$5 x 25,200 units
= $126,000
On July 1, 2021, a company loans one of its employees $20,000 and accepts a ten-month, 9% note receivable. Calculate the amount of interest revenue the company will recognize in 2021 and 2022
Answer:
Interest in 2021=900
Interest in 2022=600
Explanation:
Calculatation of the amount of interest revenue the company will recognize in 2021 2022
Month in 2021 - July To December
Interest in 2021 = 20,000*9%*6/12
Interest in 2021=900
Month in 2022 - January To April
Interest in 2022 = 20,000*9%*4/12
Interest in 2022=600
Therefore the amount of interest revenue the company will recognize in 2021 will be 900 while 2022 will be 600
Answer:
2021:900
2022:600
Explanation:
Month in 2021 - July To December
Interest in 2021 = 20,000x0.0%x(6/12)
Interest in 2021=900
Month in 2022 - January To April
Interest in 2022 = 20,000x0.09x(4/12)
Interest in 2022=600
Therefore the answer for 2021 will be 900 and for 2022 will be 600
First Class, Inc., expects to sell 22,000 pool cues for $12.00 each. Direct materials costs are $4.00, direct manufacturing labor is $6.00, and manufacturing overhead is $0.84 per pool cue. The following inventory levels apply to 2019: Beginning inventory Ending inventory Direct materials 26,000 units 26,000 units Work−in−process inventory 0 units 0 units Finished goods inventory 1,000 units 2,900 units What are the 2019 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?
Answer:
budgeted costs for direct materials
$88,000budgeted direct manufacturing labor
$132,000budgeted manufacturing overhead
$18,480Explanation:
Direct materials costs are $4.00 per pool cue.
Direct manufacturing labor is $6.00 per pool cue.
Manufacturing overhead is $0.84 per pool cue.
total budgeted direct materials = 22,000 x $4 = $88,000
total budgeted direct labor = 22,000 x $6 = $132,000
total budgeted manufacturing overhead = 22,000 x $0.84 = $18,480
The information about the beginning and ending inventories is not relevant to this question since it only deals with budgeted or estimated costs which may or may not differ from actual costs.
Bedford had this info at the end of 2015, its first year of operations: No other permanent or temporary differences exist. The litigation item will be paid in 2018. The depreciation will reverse evenly over the next three years. Tax rate is 30%. Future net income is probable. The 12/31/15 Income Tax Payable is:
Answer: $150,000
Explanation:
Seeing as the litigation expense will only be paid in 2018, it should be added back to income for 2015.
= 900,000 + 100,000
= $1,000,000
As the depreciation will reverse evenly over the next three years and with future income probable, it should be removed from income.;
= 1,000,000 - 300,000
= $700,000
Municipal Bonds have the advantage of being Tax-exempt so their interest income should be removed to calculate how much tax should be paid.
= 700,000 - 200,000
= $500,000
2015 Income Tax Payable = 500,000 * 30%
= $150,000
First, spend a couple of sentences summarizing the Concepts in Action video you watched this week. Then, answer the following. In the Concepts in Action video you watched this week, the speaker mention that for a small business, having payment terms is like using "free money" for a while. What do you think this means
Answer with its Explanation:
Free Money means the money that has to be paid back to the money lender within a reasonable time. The money lender usually is a trader who sells his product at credit allowing his customer a reasonable period to payback. Furthermore, the free money is termed free because they are interest free lendings.
In real life, free money is can be availed by purchasing products from the suppliers if you are acting as a middle man in the distribution channel or you are a small customer and your borrowings doesn't impact the supplier. Almost all of the businesses lend free money in the form of products because allowing credit increases the sales of the organizations.
How have or will external factors result in the overhaul of a traditional industry of your choice (such as retail or any other) as we know it? Please explain and cite examples.
Explanation:
External factors can directly impact the revision of a traditional sector.
Considering the retail sector as an example, we can see how it was impacted by new technologies such as the insertion of commercial activities in an online environment.
New technologies such as the internet are tools for interaction and information exchange where companies can prospect customers and create relationship marketing that promotes greater value and positioning for a company.
For a retailer who wants to remain competitive, it is important to adapt to new ways of making sales, reinventing and updating their payment, delivery, sales and marketing processes and systems.
Suppose a seven-year, $ 1 comma 000$1,000 bond with aa 7.7 %7.7% coupon rate and semiannual coupons is trading with a yield to maturity of 6.45 %6.45%. a. Is this bond currently trading at a discount, at par, or at a premium? Explain. b. If the yield to maturity of the bond rises to 7.36 %7.36% (APR with semiannual compounding), what price will the bond trade for?
Answer:
a. Premium
b. $1,018.34
Explanation:
a. For computing the present value we need to apply the formula which is shown in the attachment below:
Given that,
Future value = $1,000
Rate of interest = 6.45% ÷ 2 = 3.225%
NPER = 7 years × 2 = 14 years
PMT = $1,000 × 7.7% ÷2 = $38.50
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the present value is $1,069.53
Since the present value is more than the face value so the bond is currently sold at a premium
b. For computing the present value we need to apply the formula which is shown in the attachment below:
Given that,
Future value = $1,000
Rate of interest = 7.36% ÷ 2 = 3.68%
NPER = 7 years × 2 = 14 years
PMT = $1,000 × 7.7% ÷2 = $38.50
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the present value is $1,018.34
Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 2/10, net 30, for $9,200. Emma Co. prepaid the $840 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record the payment for the merchandise if Isabella Co. pays within the discount period?
A. Accounts Payable-Emma Co. $15,000
Freight In $750
Cash $14,250
B. Accounts Payable-Emma Co. $15,750
Merchandise Inventory $300
Cash $16,050
C. Accounts Payable-Emma Co. $15,750
Merchandise Inventory $300
Cash $15,450
D. Accounts Payable-Emma Co. $15,000
Freight In $750
Cash $15,750
Answer:
Dr Accounts Payable-Emma Co. $10,040
Cr Merchandise Inventory $184
Cr Cash $9,856
Explanation:
The Journal entry that Isabella Co. will make to record the payment for the merchandise if Isabella Co. pays within the discount period.
Dr Accounts payable-emma Co. $10,040
($9,200+$840)
Cr Merchandise inventory $184
(2%*$9,200)
Cr Cash $9,856
($10,040-$184)
Prepare journal entries to record the following four separate issuances of stock. A corporation issued 8,000 shares of $20 par value common stock for $192,000 cash. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $47,000. The stock has a $1 per share stated value. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $47,000. The stock has no stated value. A corporation issued 2,000 shares of $100 par value preferred stock for $247,000 cash.
Answer:
Journal Entries
1. A corporation issued 8,000 shares of $20 par value common stock for $192,000 cash:
Debit Cash Account $192,000
Credit Common Stock $160,000
Credit Paid-in In Excess of Par $32,000
To record the issue of 8,000 shares of $20 par value.
2. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $47,000. The stock has a $1 per share stated value:
Debit Retained Earnings $4,000
Credit Common Stock $4,000
To record the issue of 4,000 shares of $1 stated value.
3. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $47,000. The stock has no stated value:
Debit Retained Earnings $47,000
Credit Common Stock $47,000
To record the issue of 4,000 shares of no stated value.
4. A corporation issued 2,000 shares of $100 par value preferred stock for $247,000 cash:
Debit Cash $247,000
Credit Preferred Stock $200,000
Credit Paid-in In Excess of Par $47,000
To record the issue of 2,000 shares of $100 par value.
Explanation:
Shares can be issued at par value, above, or below par value. When they are issued at par value, the Cash Account or Retained Accounts or Asset Account is debited, while the Stock account is credited. If they are above par value, the difference in at par and above is credited to the Paid-in In Excess of Par account or Additional Paid-in Capital account. When they are issued below the par value, the difference between cash received and the stock account is debited to Paid-in In Excess of Par account.
The stated value of a share is like the par value. Some shares have no stated value and are recorded at whichever value is prevailing at the time of the issue.
Assessing the communication forms and orientations of coworkers and assessing their sources of identity is an example of which phase of the risk negotiation cycle
Answer:
Attending
Explanation:
There are four steps in the risk negotiation cycle that includes attending, sensemaking, transforming and maintaining.
While assessing and analyzing the forms of communication and the workers orientations with respect to identify the sources reflects the attending phase whether the employees attend the orientations and according to that the analyzed could be done
Therefore this is an attending phase
Which of the following is not a related party for constructive ownership purposes under § 267? a.The taxpayer's grandmother. b.A corporation owned more than 50% by the taxpayer. c.The taxpayer's brother. d.The taxpayer's aunt. e.None of these choices are correct.
Answer:
A). The taxpayer's aunt.
Explanation:
Constructive ownership is demonstrated as the allocation of stock ownership from one to another taxpayer by the integrity of their relationship. For example, the parents own the stocks of their children constructively. As per the section (c) of constructive ownership under § 267, the party that cannot be a related part for constructive ownership purposes would be 'the aunt' of the taxpayer as she is not related to the taxpayer with blood either half or whole. Thus, she would not have any ownership right over the stock or shares and hence, option C is the correct answer.
The most recent financial statements for Fleury Inc., follow. Sales for 2012 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales.
Fleury,Inc.
2011 Income Statement
Sales $751,000
Costs $586,000
Other expenses $22,000
Earnings before interest and taxes $143,000
Interest paid $18,000
Taxable income $125,000
Taxes (40%) $50,000
Net Income $75,000
Dividends $30,000
Addition to retained earnings $45,000
Fleury,Inc
Balance Sheet of December 31,2011
Assets Liabilities and owners' Equity
Current Assets Current liabilities
Cash $21,040 Accounts payable $55,200
Accounts receivable $33,360 notes payable $14,400
Inventory $70,320 Total $69,600
Total $124,720 Long -term debt $134,000
Fixed Assets owners' Equity
Net plant and equipment $240,000 Common Stock and paid-in surplus $120,000
Retained Earnings $41,120
Total Assets $364,720 Total liabilities and owners' Equity $364,720
What is the EFN if the firm was operating at only 80 percent of capacity in 2011? Assume that fixed assets are sold so that the company has a 100 percent asset utilization.
Answer:
Explanation:
Present 20% growth
Sales 751,000 901,200
Cost 586,000 703,200
Other Expenses 22,000 26,400
EBIT 143,000 171,600
Interest paid 18,000 18,000
Taxable income 125,000 153,600
Taxes 50,000 61,440
Net income 75,000 92160
Dividends 30,000 36,864
Transfer to retained Earn 45,000 55,296
The new retained earning = 55,296+41,120 = 96,416
Proforma Balanced sheet
Current asset
Cash = 21040*1.2 25,248
Account receivables 33,360*1.2 40,032
Inventory 70,320*1.2 84,384
Total 149,664
Non current asset
Fixed asset
Plant & equipment 240000*1.2 288,000
Total assets 437,664
Total Liabilities & owners equity
Current liabilities
Accounts payable= 55,200*1.2 66,240
Note payable 14,400
Total current liabilities 80,640
Non current liabilities
Long term debts 134,000
Total non current liabilities 134,000
Shareholders equity
Common stock 120,000
Retained earnings 96,416
Total shareholder equity 216,416
Total liabilities & equities 431,056
EFN = total asset - total liabilities
437,664 - 431,056 =$ 6,608
Carla Vista Company has the following information available for September 2020.
Unit selling price of video game consoles $410
Unit variable costs $328
Total fixed costs $36,900
Units sold 600
1. Compute the unit contribution margin.
2. Prepare a CVP income statement that shows both total and per unit amounts.
3. Compute Carla Vista’ break-even point in units.
4. Prepare a CVP income statement for the break-even point that shows both total and per unit amounts.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Unit selling price of video game consoles $410
Unit variable costs $328
Total fixed costs $36,900
Units sold 600
First, we need to determine the unitary contribution margin:
Unitary contribution margin= 410 - 328= $82
Contribution margin income statement:
Sales= 600*410= 246,000
Total variable cost= 600*328= (196,800)
Total contribution margin= 49,200
Fixed costs= (36,900)
Net operating income= $12,300
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 39,200/82
Break-even point in units= 478 units
Finally, the income statement for the break-even point:
Sales= 478*410= 195,980
Total variable cost= 478*328= (156,784)
Total contribution margin= 39,196
Total fixed costs= (39,200)
Net operating income= (4)
Carter Co. acquired drilling rights for $18,550,000. The oil deposit is estimated to produce a total of 74,200,000 gallons. During the current year, 6,000,000 gallons were drilled. Record the journal entry on December 31 to recognize the depletion expense for the year. In your journal entry be sure to clearly indicate what accounts/amounts you are debiting and what accounts/amounts you are crediting.
Journal
Date Description Post. Ref. Debit Credit
Answer:
Depletion expenses Dr $1,500,000
To Accumlated depletion $1,500,000
(Being the depletion expense is recorded)
Explanation:
The journal entry is shown below:
Depletion expenses Dr $1,500,000
To Accumlated depletion $1,500,000
(Being the depletion expense is recorded)
For recording this we debited the depletion expense as it increased the expense and credited the accumulated depletion as it reduced the assets
The computation is shown below:
The purchase price is
= Aquired value ÷ estimated production
= $18,550,000 ÷ 74,200,000
= $0.25 per gallons
Now depletion allowance is
= current year production × purchase price
= 6,000,000 × $0.25
= $1,500,000
The appropriate journal entry to record the transaction is:
Debit Depletion expense $1,500,000
Credit Accumulated depletion $1,500,000
First step is to calculate the depletion rate
Depletion rate = Cost/Estimated size
Depletion rate = $18,550,000/74,200,000
Depletion rate = $0.25 per gallon
Second step is to calculate the depletion expense
Depletion expense = Depletion rate × Quantity extracted
Depletion expense = $0.25 × 6,000,000 gallons
Depletion expense = $1,500,000
Third step is to prepare the journal entry for Carter Co.
December 31
Debit Depletion expense $1,500,000
Credit Accumulated depletion $1,500,000
Learn more here:https://brainly.com/question/16922056
company's retained earnings have a financing cost associated with them because retained earnings belong to which of the following? a. The common stockholders b. The company's long-term debt holders c. The preferred stockholders d. The company
Answer:
a. The common stockholders.
Explanation:
A company's retained earnings have a financing cost associated with them because retained earnings belong to the common stockholders.
Retained earnings can be defined as the accumulated profits or net income generated by an organization but are not distributed or given as dividends to the stockholders, rather are reinvested in to the business.
Generally, retained earnings are used to pay off debts, used for capital expenditures and working capitals.
Retained earnings represents the total stockholders' equity reinvested back into the company.
A stock has a variance of 0.02468, a current price of $28 a share, and an average rate of return of 14.4 percent. How is the coefficient of variation (CoV) computed
Answer: 1.09
Explanation:
Coefficient of Variation (CoV) is calculated by the formula;
= [tex]\frac{Standard Deviation}{Expected Return}[/tex]
The Variance is given. Standard Deviation is;
= √Variance
= √0.02468
= 0.15709869509
Coefficient of Variation is therefore;
= [tex]\frac{0.15709869509}{0.144}[/tex]
= 1.09096316037
= 1.09
intext:"Pelcher Co. maintains a $400 petty cash fund. On January 31, the fund is replenished. The accumulated receipts on that date represent $110 for office supplies, $140 for merchandise inventory, and $70 for miscellaneous expenses. There is a cash overage of $4. Based on this information, the amount of cash in the fund before the replenishment is"
Answer:
$84
Explanation:
Calculation for the amount of cash in the fund before the replenishment for Pelcher Co.
Petty Cash $400
Less : Office Supplies ($110)
Less: Merchandise Inventory ($140)
Less :Miscellaneous ($70)
Add Cash Overage $4
Cash in Fund $84
Therefore the amount of cash in the fund before the replenishment for Pelcher Co will be $84
Mr. White contracts with his wife Ms. White to watch their kids, Joe and Jimmy, one night for $50. What is the status of the contract between Mr. White and Ms. White?
Answer:
There is no any form of contract between Mr. Smith and Ms. White
Explanation:
Based on the information given there is no contract between Mr. Smith and Ms. White reason been that Ms. White gave inadequate consideration .
Based on this inadequate consideration is not void because it can tend to make a contract between two parties unenforceable because of lack procedure defect when bargaining between two parties .
Tucker Company makes chairs. Tucker has the following production budget for January - March.
January February March
Units Produced 9666 11971 9743
Each chair produced uses 4 board feet of wood. Management wants ending inventory levels of raw materials to equal 20% gf the production needs (in wood) for the next month.
How many board feet of wood does Tucker need to purchase in February? Round your answer to the nearest whole number.
Answer: 46,101 board feet of wood
Explanation:
Purchases can be calculated using the formula;
Purchases = Total Production Needs + Ending Inventory - Beginning Inventory
Total Production Needs
= Units produced * boards required per unit
= 11,971 * 4
= 47,884 units needed.
Ending Inventory.
This should be 20% of production needs for the next month
= 20% * (9,743 * 4)
= 7,794 units
Beginning Inventory
This will be the ending inventory of January. The ending inventory of January is 20% of February needs.
= 20% * 47,884
= 9,577 units.
Purchases for February = 47,884 + 7,794 - 9,577
= 46,101 board feet of wood
National Chemical Company manufactures a chemical compound that is sold for $55 per gallon. A new variant of the chemical has been discovered, and if the basic compound were processed into the new variant, the selling price would be $78 per gallon. National expects the market for the new compound variant to be 8,300 gallons initially and determines that processing costs to refine the basic compound into the new variant would be $157,700. Required: a. What would be the effect on total profit if National produces the new compound variant?
Answer:
National Chemical Company
New Variant of a Chemical Compound:
The effect on total profit if National produces the new compound variant is that total profit increases by $33,200
Explanation:
a) Data:
Selling price of old chemical = $55
Selling price of fined chemical = $78
Initial demand for the new compound = 8,300 gallons
Refining costs for the new compound = $157,700
b) Calculations:
Profit from new fined chemical = $23 ($78 - 55)
Differential Sales revenue = $190,900 ($23 x 8,300)
Differential processing costs $157,700
Effect on total profit = $33,200
c) Refining a chemical always add some value to the chemical. The additional value added is the differential sales revenue that National generates minus the additional processing costs involved to get the chemical refined.
OPR finds its cases through all of the following except which one? A. The investigation division of OPR.
Answer:
The investigation division of OPR.
Explanation:
OPR stands for Office of Professional Responsibility. It is a section of department of justice whose task is to monitor any misconduct in the government departments. It is responsibility of OPR to find any allegations that result in misconduct in department of attorney. The OPR finds its cases through all except the own division. There will be chance of familiarity and self review threats in such monitoring.
Builtrite bonds have the following: 5 ½% coupon, 11 years until maturity, $1000 par and are currently selling at $1054. If you want to make an 5% return, what would you be willing to pay for the bond?
Answer:
$1,041.53
Explanation:
The price that a rational investor would pay for the bond yearning for 5% rate of return can be determined using excel pv function below:
=-pv(rate,nper,pmt,fv)
rate is the yield expected by the investor
nper is the number of annual coupons remaining i.e 11
pmt is the amount of annual coupon=face value*coupon rate=$1000*5.5%=$55
fv is the face value of $1000
=-pv(5%,11,55,1000)=$1,041.53
Game Depot manufactures video games that it sells for $39 each. The company uses a fixed manufacturing overhead allocation rate of $6 per game. Assume all costs and production levels are exactly as planned. The following data are from Game Depot's first two months in business during 2018: EEB
Read the requirements.
Requirement 1. Compute the product cost per game produced under absorption costing and under variable costing. October 2018 AbsorptionVariable costing costing Total product cost per game
Answer:
Using variable cost per unit method $20.15 per game
Using absorption costing $17 per game
Explanation:
Cost per game is ;
overhead allocation rate is $6
variable cost is $11
Fixed manufacturing overheads 16,200
Fixed selling and administrative cost 8,500
units sales in month of October is 1,700 units
Production units 2,700 units
Total Fixed Overheads 16,200 + 8,500 = 24,700
Overhead rate = 24,700/ 2700 = 9.15
Total cost per unit (Variable + Fixed) = $20.15 / unit
When you work within an organization youre typically taught to
Correct question;
When you work within an organization, you're typically not taught to
A. follow a supervised plan for managing your time.
B. act as your own supervisor.
C. act in ways that are derived from established procedures
D. identify yourself with your job or position.
Answer:
B. act as your own supervisor.
Explanation:
This is the case in most organisations today, because by providing supervisors for employees, the organization can achieve quality job performance.
Spervisors are needed in order to ensure job tasks are done properly. So as the saying goes, "when one works within an organization, you're typically not taught to act as your own supervisor.
Tailoring movies slightly to appeal to different markets, such as editing Iron Man 3 for China, best reflects which kind of international strategy?
Answer:
Transnational strategy
Explanation:
This best explains transnational strategy. A transnational strategy is a well defined set of actions undertaken by a company to have operations in markets internationally or abroad. It applies to all methods and structures that a business would use to start functioning in other countries even as they continue operating centrally at a particular location. Large fast food restaurant use this strategy
On January 1, 2020, Piper Corp. purchased 40% of the voting common stock for of Betz, Inc. for $2,000,000 and appropriately accounts for its investment by the equity method. During 2020, Betz reported earnings of $720,000 and paid dividends of $240,000. Ignore the dividend-received deduction. Piper's current enacted income tax rate is 21%. The increase in Piper's deferred income tax liability for this temporary difference is
Answer:
$57,600
Explanation:
The computation of the increase in Piper's deferred income tax liability for this temporary difference is shown below:-
Purchase of voting Common stock of Betz inc. by Piper Corp.= ( Betz's reported earnings - Betz Paid Dividends ) × (Percentage of the voting Common stock of Betz inc.)
= ($720,000 - $240,000) × 40%
= $480,000 × 40%
= $192,000
Now, the rise in Piper's deferred income tax liability for this temporary difference is
Purchase of voting Common stock of Betz inc. by Piper Corp. × enacted tax rate
= $192,000 × 30%
= $57,600
Four reasons why firms strategically keep dogs in their business portfolio
Answer:
Keeping Dogs in Business Portfolio
Four Reasons:
1. Dogs may be complementing or boosting the sales of other star products. They are good companions.
2. Dogs may be new products. It will take time for them to become star performers. They learn about their environment well, but it takes some time.
3. Dogs may have marginal prices that are better than the marginal cost of new products. As always, most pet owners prefer Dogs to Cats as they are easier to relate with.
4. Dogs have been developed unlike new products that are still undergoing development, which will take some time to go to market. Humans are more accustomed to petting dogs than cats.
Explanation:
Dogs are in one of the quadrants of the BCG Growth-Share Matrix that discusses how an entity's products can be categorized according to their market share. Dogs are always at the center of divestiture. But, some entities still find it difficult to let go of their cherished and sensitive companions due to the reasons enumerated above.
On November 1, Bahama Cruise Lines borrows $3.5 million and issues a six-month, 9% note payable. Interest is payable at maturity. Record the issuance of the note and the appropriate adjustment for interest expense at December 31, the end of the reporting period.
Answer:
Bahama Cruise Lines
Journal Entries:
November 1:
Debit Cash Account $3,500,000
Credit 9% Notes Payable $3,500,000
To record the issue of a six-month note payable.
December 31:
Debit Interest Expense $52,500
Credit Interest Payable $52,500
To record the interest expense for the period.
Explanation:
a) With Bahama Cruise Lines borrowing $3.5 million on November 1 and issuing a six month, 9% note payable, the accounting entries are a debit to the Cash account for the cash received and a credit to the Note Payable account to establish the liability in the accounts.
b) Bahama Cruise Lines will accrue interest on the Note Payable for 2 months for the ending in order to comply with the accrual concept and the matching principle of generally accepted accounting principle. The accrual basis for accounting for transactions requires that expenses are recognized when incurred and not when cash is paid. The amount of the interest for the year is calculated as $52,500 ($3.5 million * 9%)/12 * 2. This also accords with the matching principle which requires that expenses are matched to the revenues of the same period.
Larned Corporation recorded the following transactions for the just completed month.
a. $85,000 in raw materials were purchased on account.
b. $83,000 in raw materials were used in production. Of this amount, $73,000 was for direct materials and the remainder was for indirect materials.
c. Total labor wages of $120,500 were paid in cash. Of this amount, $102,800 was for direct labor and the remainder was for indirect labor.
d. Depreciation of $195,000 was incurred on factory equipment.
Record the above transactions in journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
a. $85,000 in raw materials were purchased on account.
Dr Raw materials inventory 85,000
Cr Accounts payable 85,000
b. $83,000 in raw materials were used in production. Of this amount, $73,000 was for direct materials and the remainder was for indirect materials.
Dr Work in process 73,000
Dr Manufacturing overhead 10,000
Cr Raw materials inventory 85,000
c. Total labor wages of $120,500 were paid in cash. Of this amount, $102,800 was for direct labor and the remainder was for indirect labor.
Dr Work in process 102,800
Dr Manufacturing overhead 17,700
Cr Cash 120,500
d. Depreciation of $195,000 was incurred on factory equipment.
Dr Manufacturing overhead 195,000
Cr Accumulated depreciation - factory equipment 195,000
A country in South America is experiencing high inflation, around 15% annually, and high unemployment, around 25%. According to the AD/AS model, which of the following is most likely to explain this outcome?
a. A positive real shock
b. A positive aggregate demand shock
c. A negative aggregate demand shock
d. A negative real shock
Answer:
The correct answer is the option D: A negative real shock
Explanation:
To begin with, in the case presented where the economy has suffered from high inflation and unemployment rates then the most likely situation that could have happened before to explain this outcome is that the country and its economy were harmed badly by a negative real shock. This tend to happen when the aggregate supply is low and this one tends to decline rapidly affecting the economy in its whole due to the fact that the sellers are now producing less of the products and services and therefore the consumption and the real GDP decreases dramastically.