Answer:
$8,750
Explanation:
ASSETS = LIABILITIES + PAID IN CAPITAL + RETAINED EARNINGS
beginning of the year:
$11,400 = $5,700 + paid in capital + retained earnings
paid in capital + beginning retained earnings = $5,700
end of the year:
$6,150 = $4,500 + paid in capital + retained earnings
paid in capital + ending retained earnings = $1,650
ending retained earnings = beginning retained earnings + net income - dividends = beginning retained earnings + $3,050 - dividends
paid in capital + beginning retained earnings - $5,700 = 0
paid in capital + beginning retained earnings + $3,050 - dividends - $1,650 = 0
let X = paid in capital
let Y =beginning retained earnings
X + Y - $5,700 = X + Y + $3,050 - dividends
we eliminate X and Y
-$5,700 = $3,050 - dividends
dividends = $5,700 + $3,050 = $8,750
What's the answer to this question?
A recent trend has seen cities opt to leave the stadium management business and either allow the team or a third party (e.g., AEG or SMG) to manage the facility in exchange for a fee.
A. True
B. False
Answer: True
Explanation:
recent trend has seen cities opt to leave the stadium management business and either allow the team or a third party (e.g., AEG or SMG) to manage the facility in exchange for a fee.
This is true. Cities don't really go into Stadium management business and focus on other aspects of business or in certain cases, look out for a third party.
Answer:
true
Explanation:
Import tariffs generally ________ the output of domestic producers of the affected products and also _________ the output of domestic exporters.
Answer:
increase , decrease
Explanation:
Import tariffs are amount levied on the imports of goods. tariffs makes imports more expensive and discourages import.
if an import tariff is in place for a particular good, the import of that good would reduce and this would increase domestic producers to produce more of the good to meet the demand of the good. so output of domestic producers would increase.
Because output is consumed domestically, exports would reduce.
On March 31, year 1, Ashley, Inc.'s bondholders exchanged their convertible bonds for common stock. The carrying amount of these bonds on Ashley's books was less than the market value but greater than the par value of the common stock issued.If Ashley used the book value method of accounting for the conversion, which of the following statements is correct for an effect of this conversion?
A. Stockholders' equity is increased.
B. Additional paid-in capital is decreased.
C. Retained earnings is increased.
D. A loss is recognized
Answer:
A. Stockholders' equity is increased.
Explanation:
In this scenario, the correct statement for an effect of this conversion would be that the Sockholders' equity is increased. In such a situation, a sockholders' equity will always increase since debt is being converted into equity. This applies regardless of the method that was used for accounting the conversion of bonds. While retained earnings would not move at all in a conversion of bonds, and a gain or loss on such a debt would only be recognized under the market value approach.
[The following information applies to the questions displayed below.] Michicot Co. sold a scanner/copier costing $7,500 with a two-year parts warranty to a customer on August 16, 2013, for $15,000 cash. Michicot uses the perpetual inventory system. On November 22, 2014, the scanner/copier requires on-site repairs that are completed the same day. The repairs cost $95 for materials taken from the Repair Parts Inventory. These are the only repairs required in 2014 for this scanner/copier. Based on experience, Michicot expects to incur warranty costs equal to 3% of dollar sales. It records warranty expense with an adjusting entry at the end of each year. 1. How much warranty expense does the company report in 2013 for this copier?
Answer:
Michicot Co.
The warranty expense to recognize in 2013 is $450
The journal entry will be:
December 31, 2013:
Debit Warranty Expense $450
Credit Warranty Liability $450
To accrue the warranty expense for the scanner/copier sold.
Explanation:
a) Data:
August 16, 2013: Sales of scanner/copier = $15,000
Cost of scanner/copier = $7,500
Two-year warranty = 3% of $15,000 = $450
Perpetual inventory system in use
November 22, 2014 on-site repairs' cost = $95
Warranty expires August 15, 2015
b) Warranty expense relates to 2013, therefore, a warranty expense is recognized in 2013 with a Warranty Liability is made for the sum of $450 (3% of $15,000). When the actual liability claim for this customer is received in 2014 for the sum of $95, the Warranty Liability will be credited and Inventory account adjusted with $95.
c) Recognizing the 3% of $15,000 ensures that the accrual concept and the matching principle are followed. The revenue for this warranty relates to 2013 and the expense is also supposed to relate to 2013.
What is the proper adjusting entry at December 31. the end of the accounting period, if the balance in the prepaid insurance account is dollar 7, 750 before adjustment, and the unexpired amount per analysis of policies is. dollar 3, 250?
A. Debit Insurance Expense, dollar 3, 250; credit Prepaid Insurance. dollar 3, 250.
B. Debit Prepaid Insurance; dollar 4, 500; credit Insurance Expense, dollar 4, 500.
C. Debit Insurance Expense, dollar 4, 500; credit Prepaid Insurance, dollar 4, 500.
D. Debit Insurance Expense, dollar 7, 750; credit Prepaid Insurance, dollar 7, 750.
E. Debit Cash, dollar 7, 750; Credit Prepaid Insurance, dollar 7, 750.
Answer:
C. Debit Insurance Expense, dollar 4, 500; Credit Prepaid Insurance, dollar 4, 500
Explanation:
Date Account Title Debit Credit
Dec 31 Insurance expense $4,500
Prepaid insurance $4,500
($7,750-3,250)
Option C is correct.
Meginnis Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 5.20 Direct labor $ 3.75 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 2.60 Fixed selling expense $ 0.50 Fixed administrative expense $ 0.40 Sales commissions $ 1.50 Variable administrative expense $ 0.50 If 6,000 units are produced, the total amount of direct manufacturing cost incurred is closest to
Answer:
$53,700
Explanation:
Direct manufacturing cost = (Direct material per unit + Direct labor per unit) * Units produced
=($5.20 + $3.75) * 6,000 units
=$8.95 * 6,000
=$53,700
The total amount of direct manufacturing cost incurred is closest to $53,700
Using the following end-of-year information, calculate the number of days' sales in receivables for Year 2. Year 2: Sales are $82,500; average accounts receivable is $11,000. Year 1: Sales are $78,000; average accounts receivable is $10,000. a.48.7 b.46.8 c.7.8 d.7.5
Answer:
Days in Receivables:
Year 2:
= Average Receivables/Sales x 365 days
= $11,000/$82,500 x 365 days
= 48.67
= 49 days
Year 1:
= Average Receivables/Sales x 365 days
= $10,000/$78,000 x 365 days
= 46.79
= 47 days
Explanation:
a) Data:
Sales & Receivables
Year 2: Sales are $82,500; average accounts receivable is $11,000.
Year 1: Sales are $78,000; average accounts receivable is $10,000
b) he days' sales in receivables for company A measures the efficiency of credit collection by showing the number of days it takes company A to receive cash from its credit customers. It is an efficiency ratio that measures management's ability to manage credit policies.
produces sports socks. The company has fixed expenses of $ 80 comma 000 and variable expenses of $ 0.80 per package. Each package sells for $ 1.60. Read the requirementsLOADING.... Requirement 1. Compute the contribution margin per package and the contribution margin ratio. Begin by identifying the formula to compute the contribution margin per package. Then compute the contribution margin per package. (Enter the amount to the nearest cent.)
Answer:
Instructions are below.
Explanation:
Giving the following information:
Unitary variable expenses= $ 0.80
Selling price per unit= $ 1.60
First, we need to calculate the unitary contribution margin:
Unitary contribution margin= selling price - unitary variable cost
Unitary contribution margin= 1.6 - 0.8
Unitary contribution margin= $0.8
Now, the contribution margin ratio:
contribution margin ratio= contribution margin / sellig price
contribution margin ratio= 0.8/1.6
contribution margin ratio= 0.5
After owning a Maplewood Company bond for five years, Michelle exercised an option that allowed her to exchange her bond for 20 shares of the company stock. Michelle owned a
Answer: B. convertible bond.
Explanation:
A Convertible bond is as the name implies, a fixed income asset. However, it also has a hybrid function in that it can be converted into shares or equity in the company that issued the bond.
In the agreement, when this can be done is up to the bondholder but there might be only specific times in which they can convert the bond. As a result of its ability to be convertible to stock, the price of this bond is quite susceptible to interest rate changes as well as the price of the stock that it can be converted into. If for instance interest rates fall or the stock price rises, these are both incentives to convert the bonds to stock.
Michelle was able to exchange her bond for shares so what she owned was a convertible bond.
Process costing typically uses only one Work in Process Inventory account, while job order costing typically uses a separate Work in Process Inventory account for each department.
a. True
b. False
Answer:
False.
Explanation:
Process costing typically uses only one Work in Process Inventory account, while job order costing typically uses a separate Work in Process Inventory account for each department. This is simply a false statement.
Process costing can be defined as a cost accounting method used for assigning manufacturing or production costs to the units of goods produced by a business firm over a specific period of time. It is mostly used by firms that produce a large quantity of homogeneous or similar products on a continuous basis. Process costing typically uses more than one Work in Process Inventory account because costing at each stage of production or manufacturing process.
Job order costing can be defined as a cost accounting method used to determine and accumulation of the cost of manufacturing each product or a single unit of production. Job costing order typically uses only one Work in Process Inventory account for each product.
In conclusion, Process costing typically uses a separate Work in Process Inventory account for each department while job order costing typically uses only one Work in Process Inventory account for each product.
The economic prosperity enjoyed by _____ during the 1980s and 1990s strained the world trading system and created the demand for increased protectionist measures.
Answer: Japan
Explanation:
The economic prosperity enjoyed by Japan during the 1980s and 1990s strained the world trading system and created the demand for increased protectionist measures.
This was due to the fact that the trade that took place between the United States and Japan between these years brought about some deficits in trade for United States while bringing prosperity for Japan and this led to some trade restrictions.
Michelle Townsend owns stock in National Computers. Based on information in its annual report, National Computers reported after-tax earnings of $7,436,000 and has issued 2,860,000 shares of common stock. The stock is currently selling for $39 a share.
a. Calculate the earnings per share for National Computers. (Round your final answer to 2 decimal places.) Earnings per share
b. Calculate the price-earnings (PE) ratio for National Computers.
Answer:
Earnings per share=2.6
Price earning ratio= 15
Explanation:
Michelle Townsends owns a stock in National computers
The National computers reported an after-tax earnings of $7,436,000
They issued 2,860,000 common shares
The stock is currently selling at $39 per share
(A) The earnings per share of National computers can be calculated as follows
= After-tax earnings/number of stock
= 7,436,000/2,860,000
= 2.6
(B) The price earning ratio of national computers can be calculated as follows
Price warning ratio= stock price/earnings per share
= 39/2.6
= 15
Hence the earning per share and price earning ratio of national computers are 2.6 and 15 respectively
In each part that follows, use the economic data given to find national saving, private saving, public saving, and the national saving rate.
a.
Household saving 200
Business saving 400
Government purchases of goods and services 160
Government transfers and interest payments 110
Tax collections 195
GDP 2500
b.
GDP 6,150
Tax collections 1,425
Government transfers and interest payments 400
Consumption expenditures 4,520
Government budget surplus 100
c.
Consumption expenditures 4,300
Investment 1,000
Government purchases 1,000
Net exports 6
Tax collections 1,575
Government transfers and interest payments 500
Answer:
a. Public saving = Tax collections - Government purchases - Transfers and interest payments
=195 - 160 - 110
= -75
Private saving = Household saving + business saving
= 200 + 400
= 600
National saving = Private saving + public saving
= 600-75
= 525
National saving rate = National saving/GDP
= 525/2500
=0.21
= 21%
b. Private sector disposable income = GDP - Taxes + Transfers
= 6150 - 1425 + 400
= 5125
Private sector savings = Disposable income - consumption
= 5125 - 4520
= 605
Public savings = Govt budget surplus = 100
National savings = Private savings + Govt savings
= 605 + 100
= 705
National savings rate = National savings / GDP
= 705 / 6,150
= 0.1146
=11.46%
c. GDP = Consumption + investment + Government purchase + Net Export
= 4,300 + 1,000 + 1,000 + 6
= 6,306
Govt savings = Taxes - Transfers - Govt purchases
= 1,575 - 500 - 1,000
= 75
Private sector disposable income = GDP - Taxes + Transfers
= 6,306 - 1,575 + 500
= 5,231
Private sector savings = Disposable income - consumption
= 5,231 - 4,300
= 931
National savings = Private savings + Government savings
= 931 + 75
= 1,006
National savings rate = National savings / GDP
= 1,006 / 6,306
=0.1595
= 15.95%
A. Public saving =-75, Private saving, National saving= 525, National saving rate=21% B. Private sector disposable income=5125,C. GDP= 6,306, Govt savings=75
Calculation of Gross domestic productA. Public saving is = Tax collections - Government purchases - Transfers and also interest payments
Then =195 - 160 - 110
= -75
After that Private saving is = Household saving + business saving
= 200 + 400
Thus, = 600
Then National saving is = Private saving + public saving
= 600-75
Therefore, = 525
After that National saving rate = National saving/GDP
= 525/2500
=0.21
Thus, = 21%
B. Private sector disposable income is = GDP - Taxes + Transfers
= 6150 - 1425 + 400
= 5125
After that Private sector savings = Disposable income - consumption
= 5125 - 4520
= 605
Then Public savings = Govt budget surplus = 100
National savings = Private savings + Govt savings
= 605 + 100
= 705
Now, National savings rate = National savings / GDP
= 705 / 6,150
= 0.1146
=11.46%
C. GDP is = Consumption + investment + Government purchase + Net Export
Then = 4,300 + 1,000 + 1,000 + 6
= 6,306
After that Govt savings = Taxes - Transfers - Govt purchases
= 1,575 - 500 - 1,000
= 75
Now, Private sector disposable income = GDP - Taxes + Transfers
= 6,306 - 1,575 + 500
= 5,231
Then Private sector savings = Disposable income - consumption
= 5,231 - 4,300
= 931
Now, National savings = Private savings + Government savings
= 931 + 75
= 1,006
Then National savings rate = National savings / GDP
= 1,006 / 6,306
=0.1595
Therefore, = 15.95%
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You are given three options. You may have the balance in an account that has been collecting 5 percent interest for 20 years, the balance in an account that has been collecting 10 percent interest for 10 years, or the balance in an account that has been collecting 20 percent interest for five years. Each account had the same original balance. Which account now has the lowest balance
Answer:
Third account has the lowest balance that is 2.49P.
Explanation:
First option,
Given interest rate = 5%
Time period = 20 years
Let the initial amount ( present value ) = P
First Account,
Given interest rate (n )= 5%
Time period (n ) = 20 years
Let the initial amount ( present value ) = P
Now find the Future value = PV(1+ r)^n
= P ( 1 + 5%)^20
= 2.65P
Second account:
Given interest rate (n ) = 10%
Time period (n ) = 100 years
Let the initial amount ( present value ) = P
Now find the Future value = PV(1+ r)^n
= P ( 1 + 10%)^10
= 2.59P
Thirs account:
Given interest rate (n ) = 20%
Time period (n ) = 5 years
Let the initial amount ( present value ) = P
Now find the Future value = PV(1+ r)^n
= P ( 1 + 20%)^5
= 2.49P
RPJ co has net income of $2,937, a profit margin of 6.3 percent, a retention ratio of 45 percent, total assets of $52,800, and total debt of $24,300. Assets, current liabilities, and costs are proportional to sales. The company maintains a constant dividend payout ratio and debt-equity ratio and is operating at full capacity. What is the maximum dollar Increase In sales that can be sustalned next year assuming no new equity is Issued?
a. $2151.
b. $1,211.
c. $2.804.
d. $2.267.
e. $1,667.
Answer:
d. $2.267.
Explanation:
We have to calculate first sustainable growth rate
For sustainable growth rate, we need ROE & Retention Ratio
Total Assets 52,800
Less: Total debt 24,300
Total Equity 28,500
ROE= Net income / Equity
ROE= 2937 / 28500 * 100
ROE= 10.305%
Retention Ratio = 45 %
Hence, Sustainable Growth Rate = (ROE * b) / (1-ROE*b)
Sustainable Growth Rate = (10.31% * 0.45)/(1-{10.31% * 0.45})
Sustainable Growth Rate = 4.863%
Profit Margin = Net Income / Sales * 100
6.3 = 2,937 / Sales * 100
Sales = $46,619
Therefore Maximum dollar increase in sales = Sales * Sustainable growth rate
= $46,619 * (4.863%)
= $2,267.08
Therefore, Maximum dollar increase = $2267.08
Suppose that purely competitive firms producing cashews discover that P exceeds MC.
a. Is their combined output of cashews too little, too much, or just right to achieve allocative efficiency?
b. In the long run, what will happen to the supply of cashews and the price of cashews?
1. Supply will increase and the price of cashews will increase.
2. Supply will increase and the price of cashews will decrease.
3. Supply will decrease and the price of cashews will decrease.
4. Supply will decrease and the price of cashews will increase.
Answer:
a. Too Little
b. 2. Supply will increase and the price of cashews will decrease.
Explanation:
a. Output is always maximised when Marginal Revenue equals Marginal Cost because at this point it is argued that all resources are being utilised. In a purely competitive market, the Price is equal to the Marginal Revenue. If the price is larger than the Marginal Cost that means that Marginal Revenue is larger than Marginal Cost. The firms are therefore not utilising enough resources to produce as much as they can which should change.
b. In the long run in a purely competitive market, more firms will enter the market as they will see it as a chance to make economic profits. As this happens the Supply will increase due to the larger number of firms and the price will decrease as a result as well.
Product differentiation is a key component of monopolistic competition. Given the following scenarios, label them accordingly by how products are differentiated.
GrrrArg! Productions attempts to carve out a niche in the crowded zombie film industry by specializing in movies featuring only finger -puppet zombies._______
Jay is a Korean pop star, and as such, he has long, flowing hair. One day, he decides to retire from the singing industry and walks to the local Products right outside his apartment, despite it being more expensive than the Supercuts 10 minutes away.________
Wayne is a beginning photographer. He is in the market to buy a new camera lens and notes that certain lenses take clearer pictures but they become exponentially more expensive to purchase as the sharpness of the image increases. He chooses to start with the lowest grade lens (i.e. the cheapest)._________
The video game industry caters to a wide array of people, with games like Final Fantasy to appeal to the role playing type, Tekken for those who like fighting games, Halo for the first person shooters, and Super Mario for the adventurous.__________
Answer:
1. differentiated by style or type
2. differentiated by Location
3. differentiated by quality
4.differentiated by style or type
Explanation:
For creating a monopoly in a market place first thing the firm should do is to introduce their unique product so the chances of the competition could be less
Here are the cases given, based on this, the type of product differentiation is as follows
a. In the first case, the differentiation in the product is done by style or by type
b. In the second case, the differentiation in the product is done by location as the two locations are given in the question
c. In the third case, the differentiation in the product is done by quality as the discussion is for the cameral lens i.e cheap and expensive one
d. In the fourth case, the differentiation in the product is done by style or by type as the different person has different playing roles
The goal of collaborative planning, forecasting, and replenishment (CPFR) is to improve operational efficiency and manage inventory.
a. True
b. False
Answer:
Option "a" = true.
Explanation:
"The goal of collaborative planning, forecasting, and replenishment (CPFR) is to improve operational efficiency and manage inventory"
The statement given above is right or CORRECT and TRUE(option a).
The concept of "Collaborative Planning, Forecasting and Replenishment" was first brought into limelight in the year 1995. Collaborative Planning, Forecasting & Replenishment make sure that a terminology or say a concept in commerce which is know as "Integration of supply chain" is improving greatly.
The collaborative planning, forecasting, and replenishment (CPFR) helps to improve operational efficiency by reducing costs such as that of logistics, transportation and many more.
Suppose you have $1,500 and plan to purchase a 5-year certificate of deposit (CD) that pays 3.5% interest, compounded annually. How much will you have when the CD matures
Answer:
$ 1,781.53
Explanation:
The future value of the 5-year CD can be determined by using the future value formula stated below:
FV=PV*(1+r)^n
FV is the future value which is expected future amount after 5 years
PV is the initial amount used in purchasing the CD i.e $1500
r is the rate of return on the CD on an annual basis which is 3.5%
n is the number of years the investment would last which is 5 years
FV=$1500*(1+3.5%)^5
FV=$1500*1.187686306
FV=$ 1,781.53
The formula for the simple deposit multiplier is :______
a. Simple Deposit Multiplier = 1/RR
b. Simple Deposit Multiplier = 1/1-RR
c. Simple Deposit Multiplier = -RR/1-RR
d. Simple Deposit Multiplier = (1-RR)/RR
If the required reserve ratio is 0.15, the maximum increase in checking account deposits that will result from an increase in bank reserves of $5,000 is $________
The formula for the simple deposit multiplier is:
B. Simple Deposit Multiplier = 1 / (1 - RR)
Where RR is the required reserve ratio.
How to explainIn your example, the required reserve ratio is 0.15, which means that banks are required to keep 15% of their deposits in reserve. This means that for every $1 in deposits, banks can lend out $0.85.
The maximum increase in checking account deposits is therefore equal to the simple deposit multiplier times the initial increase in bank reserves. In your example, the initial increase in bank reserves is $5,000. So, the maximum increase in checking account deposits is:
$5,000 * 1.176 = $5,882.35
Therefore, the maximum increase in checking account deposits that will result from an increase in bank reserves of $5,000 is $5,882.35
Option B is correct.
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You would like to have $50,000 in 15 years. To accumulate this amount you plan to deposit each year an equal sum in the bank, which will earn 7% interest annually. Your first payment will be made at the end of the year.
Required:
A) How much must you deposit annually to accumulate this amount?
B) If you decide to make a lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be?
C) At the end of five years, you will receive $10,000 and deposit this in the bank towards your goal of $50,000 at the end of 15 years. In addition to this deposit, how much must you deposit in equal annual deposits in order to reach your goal?
Answer:
ah
Explanation:
._.
A food truck operator originally produced hamburgers and hotdogs. To serve the tastes of their various customers, the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well. Since the new products were introduced, average costs rose dramatically. The vendor is experiencing
Answer:
Diseconomies of scope
Explanation:
Diseconomies of scope is when average cost increases as a result of joint production of goods and services.
A bridge on a prominent public roadway in the city of Springfield, Ohio, was deteriorating and in need of repair. The city posted notices seeking proposals for an artistic bridge design and reconstruction. Bridges by Madison LLC, owned and managed by Madison Mason and his wife, May Mason, decided to submit a bid for a decorative concrete project that incorporated artistic metalwork. They contacted Pablo Hand, a local sculptor who specialized in large-scale metal designs, to help them design the bridge. The city selected their bridge design and awarded them the contract for a commission of $184,000. Bridges by Madison and Hand then entered into an agreement to work together on the bridge project. Bridges by Madison agreed to install and pay for concrete and structural work, and Hand agreed to install the metalwork at his expense. They agreed that overall profits would be split, with 25 percent to Hand and 75 percent going to Bridges by Madison. Hand designed numerous metal pig sculptures that were incorporated into colorful decorative concrete forms designed by May Mason, while Madison Mason performed the structural engineering. The group worked together successfully until the completion of the project. Suppose Hand had entered into an agreement to rent space in a warehouse that was close to the bridge so that he could work on his sculptures near the location at which they would eventually be installed. He entered into the contract without the knowledge or consent of Bridges by Madison. In this situation, would a court be likely to hold that Bridges by Madison was bound by the contract that Hand entered? Help please here is the multiple choices
Answer:
Bridges by Madison and Hand
Agreement by Hand for a Warehouse:
1. Yes - when they agreed to work together, this implied that they would agree to be liable for each other's contracts.
Explanation:
This is especially as far as this joint project is concerned. Since the purpose of the warehouse was to further and fulfill the project, the agreement entered into by hand for a warehouse affects Bridges by Madison.
In a joint venture, every aspect of the project's lifetime is shared: shared profits, shared losses, shared rewards, shared risks, shared obligations and responsibilities, shared rights and privileges until the end of the project, which also ends the joint venture, unless there is a binding agreement to the contrary. In such a case, Hand would not have been a joint-venturer but a sub-contractor.
A parent company exchanges 5,000 shares of its $2 par value common stock, with a market value of $10/share, for all of the shares owned by the subsidiary's shareholders, resulting in a $50,000 total purchase price. On the acquisition date, the subsidiary reported a book value of Stockholders' Equity of $37,500, comprised of $15,000 of Common Stock and $22,500 of Retained Earnings. An examination of the subsidiary's balance sheet revealed that book values were equal to fair values for all assets except for PPE (net), which has a book value of $20,000 and a fair value of $32,500.
a. Prepare the entry that the parent makes to record the investment.
b. Prepare the [E] and [A] consolidation entries.
Answer:
a. The entry that the parent makes to record the investment
Investment in Subsidiary $50,000 (debit)
Common Stocks $50,000 (credit)
b. Consolidation Entries
Common Stock (Subsidiary) $15,000 (debit)
Retained Earnings (Subsidiary) $35,000 (debit)
Investment in Subsidiary $50,000 (credit)
Explanation:
The entry that the parent makes to record the investment
Investment in Subsidiary $50,000 (debit)
Common Stocks $50,000 (credit)
Recognize the Investment in Subsidiary and recognize the Equity element : Common Stocks
Consolidation Entries
Common Stock (Subsidiary) $15,000 (debit)
Retained Earnings (Subsidiary) $35,000 (debit)
Investment in Subsidiary $50,000 (credit)
Eliminate Common Items and recognize Goodwill or Gain on Bargain Purchase if any.
The profit leverage effect (ratio) is calculated by A. dividing 1.0 by the profit margin. B. dividing pretax earnings by the cost of goods sold. C. dividing sales by the cost of goods sold. D. none of the above
Answer:
D. none of the above
Explanation:
The profit leverage effect shows that in order to increase net profits, it is better and more efficient to reduce operating expenses rather than increasing total net sales revenue. I.e. a $1 decrease in costs increases operating profits by $1, which is much more than the increase resulting from increasing sales by $1.
On December 1, 2018, ABC signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2019. ABC records the appropriate adjusting entry for the note on December 31, 2018. What amount of cash will be needed to pay back the note payable plus any accrued interest on June 1, 2019?
Answer:
$315,000 will be needed to pay back
Explanation:
When the note payable is signed, the entries would be as follows :
Cash $300,000 (debit)
Note Payable $300,000 (credit)
Interest that accrues over the period of the over the note receivable is
Interest expense $15,000 (debit)
Note Payable $15,000 (credit)
Interest expense = $300,000 × 5%
= $15,000
On June 1, 2019 the Note Payable plus Interest that needs to be paid would be :
Note Payable $315,000 (debit)
Cash $315,000 (credit)
The amount of cash should be $315,000 will be needed to payback.
Calculation of the amount of the cash needed:At the time When the note payable is signed, the entries should be
Cash $300,000 (debit)
Note Payable $300,000 (credit)
Interest that accrues over the period of the over the note receivable should be
Interest expense $15,000 (debit)
Note Payable $15,000 (credit)
here,
Interest expense = $300,000 × 5%
= $15,000
On June 1, 2019, the Note Payable plus Interest that needs to be paid should be
Note Payable $315,000 (debit)
Cash $315,000 (credit)
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2. You are considering entry into a market in which there is currently only one producer (incumbent). If you enter and the incumbent prices low (fights) then you will both lose 10 million. If you enter and the incumbent accommodates than you both will earn 3 Million. If you stay out of the market you will earn nothing and the incumbent will earn 7 million. What is the best strategy for you as the entrant in the market.
Answer: a. You should enter if you expect the incumbent to accommodate
Explanation:
If you expect the incumbent to be accommodating then it is best to enter the market because you will earn 3 million along with the incumbent.
This will be a gain for the both of you that has a chance of success because fighting you will be to the detriment of the incumbent as they will then stand to lose 10 million like you will as well.
The option of the incumbent being accommodating is the best option for the both of you.
A financial asset is liquid: Group of answer choices if it can be readily exchanged for another asset or good. if it is held by the public and earning interest. only if it takes the form of cash. if it can be carried easily from one place to another.
Answer:
if it can be readily exchanged for another asset or good
Explanation:
An asset is liquid if it can be easily be exchanged for another asset or good or converted to cash. cash ( currency) is the most liquid asset.
an house for example is less liquid when compared to cash. this is because before it can be converted to cash or exchanged for another asset, it must first be valued, then we have to find a buyer and this process can range from days to years. this makes a house less liquid when compared with a house.
On January 1, 2012 Johnson Company issued bonds with a face value of $750,000. The bonds carry an interest rate of 8% payable each January 1.
Required:
a. Prepare the journal entry for the issuance assuming the bonds are issued at 96.
b. Prepare the journal entry for the issuance assuming the bonds are issued at 103.
Answer:
a.
January 1 Cash 720000 Dr
Discount on Bonds Payable 30000 Dr
Bonds Payable 750000 Cr
b.
January 1 Cash 772500 Dr
Bonds Payable 750000 Cr
Premium on Bonds Payable 22500 Cr
Explanation:
a.
When the bonds are issued at 96, this means that they are issued at 96% of the face value of the bond which is 750000 * 0.96 = 720000
So, the cash received from issuing the bonds is 720000. As the face value of the bonds is 750000 which will be recorded as bonds payable, the difference between the cash received and the face value is the discount amount which will be debited.
b.
When the bonds are issued at 103, this means that they are issued at 103% of the face value of the bond which is 750000 * 1.03 = 772500
So, the cash received from issuing the bonds is 772500. As the face value of the bonds is 750000 which will be recorded as bonds payable, the difference between the cash received and the face value is the premium amount which will be credited.