Answer:
Explanation:
1
Units %Material
Units completed & Transferred 289,000 100 289,000
Units of ending WIP 68,000 75 51,000
Equivalent units of production 340,000
% Conversion EUP Conversion
Units completed & transferred out 100 289,000
Units of ending WIP 25 17,000
Equivalent units of production 306,000
2
Material Conversion
Beginning WIP 20,000 6,200
Added cost in June 214,600 131,500
Total 234,600 137,700
Equivalent unit of production 340,000 306,000
Cost /equivalent unit 0.69 0.45
3
EUP Cost/ EUP Total
Material 51,000 0.69 35,190
Conversion 17,000 0.45 7,650
Total cost of ending WIP 42,840
for materials ,conversion
4
EUP Cost / EUP Total
Material 289,000 0.69 199,410
Conversion 289,000 0.45 130,050
Total cost of units transferred out 329,460
5
Reconciliation report
Cost of beginning WIP 20,000 6,200 26,200
Cost added in the month 214,600 131,500 346,100
Total 372,300
Cost of units transferred out 329,460
Cost of ending WIP 42,840
Total 372,300
On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $54,480. Calvin Co. has one recorded asset, a specialized production machine with a book value of $10,000 and no liabilities. The fair value of the machine is $78,000, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin’s total acquisition date fair value is $90,800.
At the end of the year, Calvin reports the following in its financial statements:
Revenues 65,550 Machine 13,590 Common stock 10,000
Expenses 29,250 Other assets 27,710 Retained earnings 31,300
Net income 36,300 Total assets 41,300 Total equity 41,300
Dividends paid 5,000
Required:
Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin’s machine (net of accumulated depreciation), and the process trade secret.
Answer:
Beckman noncontrolling interest in subsidiary income $10,520
Calvin Machine (net of accumulated depreciation) $71,200
Explanation:
To calculate noncontrolling interest in subsidiary's income;
Revenue $65,550
Expenses $39,250 (29,250 + $6,800 + $3,200)
Net Income $26,300
Noncontrolling percentage = 40%
NonControlling Income = $10,520
Depreciation of Machine = [tex]\frac{Fair value of Machine - Book value}{estimated useful life}[/tex]
[tex]\frac{78,000 - 10,000}{10 years}[/tex] = 6,800 per annum
Amortization of trade secrets = [tex]\frac{Fair Value Total - Machine value}{Useful life}[/tex]
Amortization of trade secrets = [tex]\frac{90,800 - 78,000}{4 years}[/tex]
= 3,200
Sterling Hotel uses activity-based costing to determine the cost of servicing customers. There are three activity pools: guest check-in, room cleaning, and meal service. The activity rates associated with each activity pool are $8.00 per guest check-in, $20.00 per room cleaning, and $4.00 per served meal (not including food). Julie Washington visited the hotel for a 7-night stay. Julie had 6 meals in the hotel during the visit. Determine the total activity-based cost for Washington's visit during the month. Round your answer to the nearest cent.
Answer:
Total cost= $172
Explanation:
Giving the following information:
guest check-in= $8 per guest check-in
room cleaning= $20 per room
meal service= $4 per served meal
Julie Washington visited the hotel for a 7-night stay. Julie had 6 meals in the hotel during the visit.
To calculate the total cost, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
guest check-in= 8*1= 8
room cleaning= 20*7= 140
meal service= 4*6= 24
Total cost= $172
King enterprises has an Total Asset Turnover ratio of 5.0, Profit margin of 3%, and a ROE equals to 18%. What is the firm's equity mulitplier (Total Asset/Equity)? Use DuPont Analysis.
Answer: 1.2
Explanation:
The DuPont Analysis is a method of calculating the Return on Equity by using various other ratios. It shows the relatiosnhips between variables in a firm and can help the firm know which areas to target to improve ROE.
Using the DuPont Analysis, the Return on Equity is;
ROE = Profit Margin * Asset Turnover * Equity Multiplier
18% = 3% * 5 * Equity Multiplier
18% = 0.15 * Equity Multiplier
Equity Multiplier = 18%/0.15
Equity Multiplier = 1.2
New Era Cleaning Service, Inc. opened for business on July 1, 2010. During the month of July, the following transactions occurred:
July 1: Issued $18,000 of common stock for $18,000 cash.
July 1: Purchased a truck for $11,000. Paid $4,000 in cash and borrowed the remainder (long term) from the bank.
July 3: Purchased cleaning supplies for $900 on account.
July 5: Paid $1,800 on a one-year insurance policy, effective July 1.
July 12: Billed customers $4,800 for cleaning services.
July 18: Paid $1,500 of the amount owed on the truck.
July 18: Paid $500 of the amount owed on cleaning services.
July 20: Paid $1,700 for employee salaries.
July 21: Collected $1,200 from customers billed on July 12.
July 25: Billed customers $1,900 for cleaning services.
July 31: Paid gas and oil for the month on the truck, $500.
July 31: Paid a $800 dividend.
Please complete the following tasks: Post the July transactions to the general journal and the general ledger "T" account
repare an unadjusted trial balance; Post the following adjustments:
(a) Earned but unbilled fees at July 31 were $1,400
(b) Depreciation for the month was $200
(c ) One-twelfth of the insurance expired
(d) An inventory count showed $300 of cleaning supplies remaining on July 31
Answer:
New Era Cleaning Service, Inc.
a) General Journal:
July 1:
Debit Cash Account $18,000
Credit Common Stock $18,000
To record the issue of common stock for cash.
July 1:
Debit Truck $11,000
Credit Cash $4,000
Credit Bank Loan $7,000
To record the purchase of a truck.
July 3:
Debit Supplies $900
Credit Accounts Payable $900
To record the purchase of cleaning supplies on account.
July 5:
Debit Prepaid Insurance $1,800
Credit Cash Account $1,800
To record the payment of insurance for a year.
July 12:
Debit Accounts Receivable $4,800
Credit Service Revenue $4,800
To record services rendered on account.
July 18:
Debit Bank Loan $1,500
Credit Cash Account $1,500
To record payment on bank loan.
July 18:
Debit Accounts Payable $500
Credit Cash Account $500
To record payment on account.
July 20:
Debit Salaries $1,700
Credit Cash Account $1,700
To record payment of salaries.
July 21:
Debit Cash Account $1,200
Credit Accounts Receivable $1,200
To record receipt of cash on account.
July 25:
Debit Accounts Receivable $1,900
Credit Service Revenue $1,900
To record services rendered on account.
July 31:
Debit Automobile Fuel $500
Credit Cash Account $500
To record payment for gas and oil for the month.
July 31:
Debit Dividends $800
Credit Cash Account $800
To record payment for dividends.
b) General Ledger "T-account":
Cash Account
July 1 Common Stock $18,000 July 1 Truck $4,000
July 21 Accounts Receivable 1,200 July 5 Insurance 1,800
July 18 Bank Loan 1,500
July 18 Accounts Payable 500
July 20 Salaries 1,700
July 31 Automobile Fuel 500
July 31 Dividend 800
July 31 Balance c/d 8,400
19,200 19,200
Balance b/d 8,400
Common Stock
July 1 Cash account $18,000
Bank Loan
July 18 Cash 1,800 July 1 Truck $7,000
July 31 Balance c/d 5,200
7,000 7,000
Balance b/d 5,200
Truck
July 1 Cash $4,000 July 31 Balance c/d $11,000
July 1 Bank loan 7,000
11,000 19,200
Balance b/d 11,000
Supplies
July 3 Cash 900
Accounts Payable
July 18 Cash 500 July 3 Supplies 900
July 31 Balance c/d 400
900 900
Balance b/d 400
Prepaid Insurance
July 5 Cash 1,800
Service Revenue
July 31 Balance c/d 6,700 July 12 Accounts Receivable $4,800
July 25 Accounts Receivable $1,900
6,700 6,700
Balance b/d 6,700
Accounts Receivable
July 12 Service Revenue $4,800 July 21 Cash $1,200
July 25 Service Revenue 1,900 July 31 Balance c/d 5,500
6,700 6,700
Balance b/d 5,500
Salaries
July 20 Cash $1,700
Automobile Fuel
July 31 Cash $500
Dividend
July 31 Cash $800
Trial Balance as of July 31:
Description Debit Credit
Cash $8,400
Common Stock $18,000
Bank Loan 5,200
Truck 11,000
Supplies 900
Accounts Payable 400
Prepaid Insurance 1,800
Service Revenue 6,700
Accounts Receivable 5,500
Salaries 1,700
Automobile Fuel 500
Dividends 800
Total
c) Adjusting Journal Entries at July 31:
a) Debit Accounts Receivable $1,400
Credit Service Revenue $1,400
To record unbilled fees.
b) Debit Depreciation Expense $200
Credit Accumulated Depreciation $200
To record depreciation expense for the month.
c) Debit Insurance Expense $150
Credit Prepaid Insurance $150
To record a month's insurance expense.
d) Debit Supplies Expense $300
Credit Supplies $300
To record supplies expense.
Explanation:
Journal entries initially record transactions on a day-to-day basis. From the journal, the transactions are posted to the ledger accounts (e.g. T-accounts) and a trial balance is extracted to check if the two sides are in agreement. At the end of the accounting period, adjusting entries are recorded in the general journal to ensure that accounts are based on the accrual concept and not on cash basis.
From past experience, the company has learned that 25% of a month’s sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 15% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $340,000, and March sales totaled $370,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. 2. What is the accounts receivable balance on June 30th?
Part of the Question:
Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below:
April May June Total
Budgeted sales (all on account) $310,000 $510,000 $160,000 $980,00
Answer:
1. A Schedule of Expected Cash Collections from Sales:
April May June Total for the
Quarter
25% sales month $77,500 $127,500 $40,000 $245,000
60% 2nd month 222,000 186,000 306,000 714,000
15% 3rd month 51,000 55,500 46,500 153,000
Total cash collections $350,500 $369,000 $392,500 $1,112,000
2. Accounts Receivable balance on June 30th:
Total beginning balance $328,500
Total quarter sales $980,000
Total due from customers $1,308,500
Cash receipts for quarter $1,112,000
Balance on June 30th $196,500
Explanation:
a) Data and Calculations:
Feb. Mar. April May June Total for the
Quarter
Sales $340,000 $370,000 $310,000 $510,000 $160,000 $980,00
Cash:
25% sales month $77,500 $127,500 $40,000 $245,000
60% 2nd month 204,000 222,000 186,000 306,000 714,000
15% 3rd month 51,000 55,500 46,500 153,000
Total cash collections $350,500 $369,000 $392,500 $1,112,000
b) Account Receivable balance
April 1, Beginning balance $51,000 from February
April 1, Beginning balance $277,500 from March
Total beginning balance $328,500
Total quarter sales $980,000
Total due from customers $1,308,500
Cash receipts for quarter $1,112,000
Balance on June 30th $196,500
c) The accounts receivable balance is the difference between the beginning balance of $328,500, the sales on account for the quarter of $1,308,500, and the cash receipts from customers for the quarter of $1,112,000. This gives a balance of $196,500, which represents 75% of June sales of $120,000 and 15% of May Sales of $76,500.
1. Total cash collections is = $1,112,000
2. Accounts Receivable balance on June 30th $196,500
Calculation of Cash collections from sales
Silver Company makes a creation that is very popular as a Mother’s Day gift. Therefore, peak sales occur in May of each year, as indicated in the company’s sales budget for the second quarter given downward:
April May June Total
Budgeted sales (all on account) $310,000 $510,000 $160,000 $980,00
Calculation of
1. A Schedule of Expected Cash Collections from Sales:
April May June Total for the
Quarter
25% sales month $77,500 $127,500 $40,000 $245,000
60% 2nd month 222,000 186,000 306,000 714,000
15% 3rd month 51,000 55,500 46,500 153,000
The Total cash collections $350,500 $369,000 $392,500 $1,112,000
2. Accounts Receivable balance on June 30th:
The Total beginning balance is $328,500
Then Total quarter sales $980,000
After that Total due from customers was $1,308,500
Then Cash receipts for the quarter of $1,112,000
The Balance on June 30th is $196,500
a) Now Data and also Calculations:
Feb. Mar. April May June Total for the
Quarter
Sales $340,000 $370,000 $310,000 $510,000 $160,000 $980,00
Cash:
25% sales month $77,500 $127,500 $40,000 $245,000
60% 2nd month 204,000 222,000 186,000 306,000 714,000
15% 3rd month 51,000 55,500 46,500 153,000
Total cash collections $350,500 $369,000 $392,500 $1,112,000
b) Now Account Receivable balance are:
April 1, Beginning balance $51,000 from February
April 1, Beginning balance $277,500 from March
The Total beginning balance is $328,500
Total quarter sales $980,000
Total due from customers $1,308,500
Cash receipts for quarter $1,112,000
Therefore, the Balance on June 30th $196,500
c) When The accounts receivable balance is the dissimilarity between the beginning balance of $328,500, Then the sales on account for the quarter of $1,308,500, and the cash receipts from customers for the quarter of $1,112,000. This gives a balance of $196,500, which represents 75% of June sales of $120,000 and also 15% of May Sales of $76,500.
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Prepare journal entries to record the following four separate issuances of stock.
1. A corporation issued 8,000 shares of $20 par value common stock for $192,000 cash.
2. A corporation issued 4,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $33,000. The stock has a $1 per share 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 $33,000. The stock has no stated value.
4. A corporation issued 2,000 shares of $75 par value preferred stock for $183,000 cash.
Answer:
1.
DR Cash $192,000
CR Common stock. $160,000
CR Paid-in capital in excess of par value - Common stock $32,000
Working
Common Stock = $20 * 8,000
= $160,000
Paid-in capital in excess of par value - Common stock = 192,000 - 160,000
= $32,000
2
DR Organization expenses $33,000
CR Common stock, $4,000
CR Paid-in capital in excess of stated value - common stock $29,000
Working
Common Stock = 1 * 4,000
= $4,000
Paid-in capital in excess of stated value, common stock = 33,000 - 4,000
= $29,000
3
DR Organization expenses $33,000
CR Common stock $33,000
4
DR Cash $183,000
CR Preferred stock $150,000
CR Paid-in capital in excess of par value - preferred stock $33,000
Working
Preferred Stock = 75 * 2,000
= $150,000
Paid-in capital in excess of par value - preferred stock = 183,000 - 150,000
= $33,000
Which of the following is the easiest but least accurate of the commonly used methods for allocating support department costs to production departments?
A. Sequential method
B. Activity-based management method
C. Reciprocal services method
D. Direct method
Answer:
D. Direct method
Explanation:
Cost allocation in financial accounting can be defined as the process of identifying, gathering and assigning of cost across multiple cost objects such as products, inventory or departments.
There are various types of cost allocation methods and these are;
1. Sequential method.
2. Activity-based management method.
3. Reciprocal services method.
4. Direct method.
The direct method is an allocation method for cost, where costs of the production service department are directly allocated to the production (operating) department of a firm or business entity using appropriate allocation base and then allocated to the product itself.
Generally, the direct method is the easiest (simplest) but least accurate of the commonly used methods for allocating support department costs to production departments.
Suppose that on January 1, the cost of borrowing French francs for the year is 18%. During the year, U.S. inflation is 5%, and French inflation is 9%. At the same time, the exchange rate changes from FF 1 = $0.15 on January 1 to FF 1 = $0.10 on December 31. What was the real U.S. dollar cost of borrowing francs (real interest rate in U.S.) for the year?
Answer:
-25.08%.
Explanation:
Given that, during the year, the franc devalued by (0.15 - 0.10)/0.15 = 33.33%.
Then, the nominal dollar cost of borrowing French francs, therefore, was 0.18(1 - 0.3333) - 0.3333 = -21.33%.
Thus, for each dollar's worth of francs borrowed on January 1, it cost only $1 - $0.2133 = $0.7867 to repay the principal plus interest.
Also, with U.S. inflation of 5% during the year, the real dollar cost of repaying the principal and interest is $0.7867/1.05 = $0.7492.
Subtracting the original $1 borrowed, it shows that the real dollar cost of repaying the franc loan is -$0.2508 or a real dollar interest rate of -25.08%.
The Suds Corporation has just suffered significant losses of revenue for three quarters in a row, and the shareholders are furious. Much of the loss can be attributed to the board's decision to change from their traditional lager beer to a lighter and smoother brew. Unfortunately, the new recipe alienated current customers and failed to bring in new customers. Although Suds has announced that it will return to its original product, the shareholders are claiming the board violated its fiduciary duty of care, and they are suing the directors personally for their significant losses. What must the shareholders prove to win their lawsuit
Answer and Explanation:
The fiduciary duty of care also called duty of care is the fudicaiary responsibility that requires board directors of a company to act and make decisions in good faith, having the best interest of the company in mind. This duty(whether written or implied) makes board directors responsible in ensuring that decisions made for the company are sound, ethical and legal.
In the above example, board directors of the suds corporation may have not performed this duty as required but this would depend on thorough investigation to ascertain the method and process by which the decision was arrived on. For instance, we are sure the decision was legal and also ethical(as they were only out to improve on company products and increase revenue likewise), we are not sure however of the soundness of this decision. This leads us to investigate the processes and results obtained from enquiring/researching on this new product decided on by the board. Therefore was it sound according to these results and processes. This is where evidence of a breach of duty by the board may be found
A small Canadian firm that has developed some valuable new medical products using its unique biotechnology know-how is trying to decide how best to serve the European Union. Its choices are given below. The cost of investment in manufacturing facilities will be a major one for the Canadian firm, but it is not outside its reach. If these are the firm's only options, which one would you advise it to choose? Why?
a. Manufacture the product at home and let foreign sales agents handle marketing.
b. Manufacture the product at home and set up a wholly owned subsidiary in Europe to handle marketing.
Answer:
Correct Answer:
a. Manufacture the product at home and let foreign sales agents handle marketing.
Explanation:
For the small Canadian company, manufacturing the product at home (Canada) would afford them the opportunity to protect their new medical product from piracy. Also, they would be able to receive tax incentives from their government as well file for patent of their new innovation.
The foreign agent would strictly be focused on the marketing of the finished product without having access to the detailed information of the product.
A machine costing $57,000 with a six-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.
Answer:
$9,000
Explanation:
The computation of the depreciation expense using the straight-line method is shown below;
= (Purchase value of machinery - residual value) ÷ (estimated useful life)
= $54,000 ÷ 6 years
= $9,000
The depreciation cost is the cost which is come after considering the salvage value and the same is to be considered
Hence, the depreciation expense is $9,000
Consider the market for minivans (Some would describe a minivan as a family car). Looking at the two statements, which one is true and which one is false? Then again, are they both true or both false? Statement 1: People decide to have fewer children. The demand curve for minivans will shift to the right. Statement 2: The stock market crashes lowering people’s wealth (Hint: Minivan would be considered a normal good). The demand curve for minivans will shift to the right.
Answer:
both statements are false
Explanation:
if People decide to have fewer children, there would be less demand for minivans as a result the demand curve would shift to the left.
also, if The stock market crashes lowering people’s wealth and minivans are normal goods, the demand for minivans would fall and the demand curve would shift to the left.
A leftward shift signifies a fall in demand while a rightward shift signals a rise in demand
Normal goods are goods that are goods whose demand increases when income increases and falls when income falls
On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $14,238 each December 31 for 10 years. The required general journal entry to record the payment on the note on December 31, Year 2 is:
Answer:
Computation of the interest expense using the equation as shown below:
Interest expense for year 1 = Notes payable * Interest rate
= $100,000 * 10%
= $7,000
Notes payable reduction in Year 1 = $14,238 - $7,000
= $7,238
General journal entry
Item Debit Credit
Notes payable $7,745
Interest expense $6,493
Cash $14,238
Workings
Interest expense = ($100,000 - $7,238) * 7%
= $92,762 * 7%
=$6,493
Business level strategy addresses two related issues: what businesses should a corporation compete in and how can these businesses be managed so that they create synergy.
Answer:
This statement is false, because it is the CORPORATE level strategy that addresses these two related issues.
Explanation:
The corporate level strategy can be defined as the strategy whose focus is to create synergy to effectively manage its competing business units and which constitute the organizational whole. Therefore, at this strategic level, the focus is to establish a focus to maximize profitability and positioning in a diverse organization.
Kipling Company has sales of $1,500,000 for the first quarter of 2016. In making the sales, the company incurred the following costs and expenses.
Variable Fixed
Product costs $500,000 $550,000
Selling expenses 100,000 75,000
Administrative expenses 80,000 67,000
Calculate net income under CVP for 2016.
Answer:
Kipling Company
Cost volume profit (CVP) Income Statement
Revenue $1,500,000
Variable costs ($680,000)
Contribution margin $820,000
Fixed costs ($692,000)
Net income $128,000
Explanation:
Variable Fixed
Product costs $500,000 $550,000
Selling expenses $100,000 $75,000
Administrative expenses $80,000 $67,000
In order to prepare a CVP income statement we must first determine the total variable and total fixed costs. It is very similar to a variable costing income statement.
Baxter Company produces Frisbees using a threeminusstep sequential process that includes molding, coloring and finishing. At what stage would the sets be allocated Manufacturing Overhead?
The options are:
A) When the Frisbees are in WIP InventoryWIP Inventory-Molding
B) When the Frisbees are in WIP InventoryWIP Inventory-Finishing
C) When the Frisbees are in WIP InventoryWIP Inventory-Coloring
D) All of the above
Answer:
D) All of the above
Explanation:
Manufacturing overhead is defined as all manufacturing cost incurred in producing a good that cannot be traced directly to the product in an economically feasible way.
For example processes in Work In Process stage of manufacturing such as labour and utility expenses are manufacturing overhead costs. Work in process is the manufacturing stage where goods are converted from raw goods to partially finished goods.
So all the options given which are on the WIP are correct.
Suppose investors can earn a return of 2% per 6 months on a Treasury note with 6 months remaining until maturity. The face value of the T-bill is $10,000. What price would you expect a 6-month maturity Treasury bill to sell for?
Answer:
Price of treasury bill = $9,803.92
Explanation:
The price of the treasury note would be the present value of the future receivable on maturity discounted at the rate of return of 2% per six-month.
The formula is FV = PV × (1+r)^(n)
PV = Present Value- ?
FV - Future Value, - 10,000
n- number of years- 1/2
r- interest rate - 2%
PV = 10,000 × (1.02)^(-1)
PV = 9,803.92
Price of treasury bill = $9,803.92
Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and desired investment is $6 billion. Net foreign lending would be equal to
Answer:
Net foreign lending would be equal to $4 billion.
Explanation:
This can be computed using the formula for computing the total output of an open economy as follows:
Y = C + G + I + NX .................................. (1)
Where;
Y = Total Output = $35 billion
C = Desired consumption = $15 billion
G = Government purchases = $10 billion
I = Desired investment = $6 billion
NX = Net foreign lending = ?
Substituting the values into equation (1) and solve for NX, we have:
$35 = $15 + $10 + $6 + NX
$35 - $15 - $10 - $6 = NX
NX = $4 billion
Therefore, net foreign lending would be equal to $4 billion.
Fit-for-Life Foods reports the following income statement accounts for the year ended December 31
Gain on sale of equipment $ 6,250 Depreciation expense—Office copier $ 500
Office supplies expense 700 Sales discounts 16,000
Insurance expense 1,300 Sales returns and allowances 4,000
Sales 220,000 TV advertising expense 2,000
Office salaries expense 32,500 Interest revenue 750
Rent expense—Selling space 10,000 Cost of goods sold 90,000
Sales staff wages 23,000 Sales commission expense 13,000
Prepare a multiple-step income statement.
Answer:
Fit-for-Life Foods
Multiple-step income statement, for the year ended December 31
Sales 220,000
Less Sales returns and allowances (4,000)
Net Revenue 216,000
Less Cost of goods sold (90,000)
Gross Profit 126,000
Less Operating Expenses :
General and Administrative Expenses
Gain on sale of equipment ( 6,250)
Office supplies expense 700
Depreciation expense—Office copier 500
Insurance expense 1,300
Office salaries expense 32,500 (28,750)
Selling and Distribution Expenses
TV advertising expense 2,000
Sales discounts 16,000
Sales commission expense 13,000
Sales staff wages 23,000
Rent expense—Selling space 10,000 (64,000)
Operating Income / (Loss) 33,250
Less Non - Operating Expenses
Interest revenue 750
Net Income / (Loss) 34,000
Explanation:
A multiple-step income statement shows separately profit generated from Primary Activities of the Company (Operating Profit) and profits that included Secondary Activities of the Company (Net Profit)
he inventory of Marigold Corp. was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first 2 months of the year are obtained: Sales Revenue $55,000, Sales Returns and Allowances $1,100, Purchases $33,500, Freight-In $1,500, and Purchase Returns and Allowances $1,600. Determine the merchandise lost by fire, assuming: A beginning inventory of $21,500 and a gross profit rate of 40% on net sales.
Answer:
$22,560
Explanation:
The computation of the inventory lost is shown below:
To beginning inventory $21,500 By net sales($55,000 - $1,100) $53.900
To net purchases
($33,500 - $1,600) $31,900 By merchandise lost(balance) $22,560
To freight $1,500
To gross profit
($53,900 × 40%) $21,560
Total $76,420 Total $76,420
Jamison Company purchased the assets of Booker Company at an auction for $4,200,000. An independent appraisal of the fair value of the assets is listed below:
Land $1,425,000
Building 2,100,000
Equipment 1,575,000
Trucks 2,550,000
Assuming that specific identification costs are impracticable and that Jamison allocates the purchase price on the basis of the relative fair values, what amount would be allocated to the Trucks?
A. $1,400,000
B. $2,100,000
C. $2,520,000
D. $2,550,000
Answer:
A. $1,400,000
Explanation:
Amount to be allocated = Auction price / Total individual price * Truck price
Auction price = $4,200,000
Total individual price = $1,425,000 + $2,100,000 + 1,575,000 + $2,550,000 = $7,650,000
Truck price = $2,550,000
Amount to be allocated = ($4,200,000 / $7,650,000) * $2,550,000
Amount to be allocated = $1,400,000
1. On January 1, 2020, Scottsdale Company issued its 12% bonds in the face amount of $3,000,000, which mature on January 1, 2032. The bonds were issued for $$3,408,818 to yield 10%. Scottsdale uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. The 12/31/23 Premium on Bond Payable balance is:
Answer:
Premium ob bonds payable = $320,090.44 (credit balance)
Explanation:
January 1, 2020
Dr Cash 3,408,818
Cr Bonds payable 3,000,000
Cr Premium on bonds payable 408,818
January 1, 2021
Dr Interest expense 340,881.80
Dr Premium on bonds payable 19,118.20
Cr Cash 360,000
($3,408,818 x 0.1) - $360,000 = -$19,118.20
January 1, 2022
Dr Interest expense 338,969.98
Dr Premium on bonds payable 21,030.02
Cr Cash 360,000
($3,389,699.80 x 0.1) - $360,000 = -$21,030.02
January 1, 2023
Dr Interest expense 336,866.98
Dr Premium on bonds payable 23,133.02
Cr Cash 360,000
($3,368,669.78 x 0.1) - $360,000 = -$23,133.02
December 31, 2023
Dr Interest expense 334,553.68
Dr Premium on bonds payable 25,446.32
Cr Interest payable 360,000
($3,345,536.76 x 0.1) - $360,000 = -$25,446.32
"According to Google's 2013 Study on the Incremental Clicks Impact of Mobile Search Advertising, the vertical with the highest CTR was"
The available options are:
a)Classified and Local
b) Education and Government
c)Media and Entertainment
d)Technology
Answer:
a)Classified and Local
Explanation:
Google's 2013 Study on the Incremental Clicks Impact of Mobile Search Advertising, was conducted from March 2012 to April 2013, on more than 300 U.S. AdWords accounts from 12 verticals.
The results, which shows the verticals range from 82 percent incremental clicks in the general service industry to 97 percent in the classified ad vertical.
This infographic provides details on the 12 different verticals which are:
1. Classified and Local - 97
2. Business and Industrial - 94%
3. Education and Government - 94%
4. Technology - 90%
5. Finance - 87%
6. Automative - 86%
7. Consumer Packaged Goods - 86%
8. Media and Entertainment - 86%
9. Retail - 86%
10. Travel - 85%
11. Healthcare - 83%
12. Service in all Veriticals - 82%
Hence, the right answer is CLASSIFIED AND LOCAL with 97%
g If the inflation rate is larger than the nominal interest rate: Group of answer choices the real interest rate is negative the real interest rate is larger than the nominal interest rate. the real interest rate is zero. Not enough information is given. unemployment rises.
Answer: the real interest rate is negative
Explanation:
The real interest rate is the rate of interest that is received or expected to be received by a lender, saver or an investor after due to inflation. Real interest rate is gotten when the inflation rate is deducted from the nominal interest rate.
A negative real interest rate simply implies that means that inflation rate is more than nominal interest rate.
Explain how self and social awareness can help you know your personal strengths and limitations and help you be more successful at work
Suppose Ningbo Steel had sales revenue of $11,000 sales revenue, cost of goods sold of $5,000, operating expenses of $3000, interest expense of $1,000, a tax rate of 20%, and 1,000 shares of common stock outstanding. Based on this information, net profit after tax was:_________.
A. $1,600
B. $500
C. $1,000
D. $0
Answer:
A. $1,600
Explanation:
Ningbo Steel
Income Statement
Sales Revenue $11,000
Less Cost of goods sold $5,000
Gross Profit $6,000
Less Operating Expense $3,000
Earning Before Interest and Taxes $3,000
Less Interest Expense $1,000
Earning before Tax $2,000
Less Tax Expenses (2,000 *20%) $400
Net Profit after tax $1,600
You own two different energy drink brands with similar elasticities: "Blue Cow" and "600 minute energy." If you reduce the price on "Blue Cow", you can only increase your total sales if
Answer: b. Prices for “600 minute energy” are reduced
Explanation:
The drinks have similar elasticities so they are substitutes. This means that reducing the price of one will cause people to demand less of the other drink. By reducing the price of "Blue Cow", there will be less demand for "600 minute energy".
To increase total sales therefore, the effects of the decrease in the price of Blue Cow must be counteracted. To do so, the price of 600 minute energy must be reduced as well. This way people will demand the two drinks more. This reduction will draw in people buying other drinks apart from these 2 thereby increasing total sales.
Which of the following will cause an increase in the supply of a product?
A.)production increases
B.)establishment of new companies
C.)both a and b
D.)neither a or b
Answer:
C.)both a and b
Explanation:
when production increases more unit of goods will be produced. when more number of goods will be produced, more will be available for supply in market.Hence, we can say that production increase cause an increase in the supply of a product.
When new company companies establishes for production of a same same type of product, the production of product will increase when product production is measured altogether for the product and hence number of product in the market will increase and hence the supply of product will increase. Hence, we can say that establishment of new companies cause an increase in the supply of a product.
Thus, option C both a and b is the correct answer.
Ben has $500 in his savings account and the bank pays an interest rate of 10 percent a year. The inflation rate is 6 percent a year. The government taxes the interest that Ben earns on his deposit at 20 percent. Calculate the nominal after-tax interest rate and the real after-tax interest rate that Ben earns.
Answer:
Nominal after-tax interest rate = 8%Real After-Tax Interest Rate = 2%Explanation:
The Nominal rate is 10%
Inflation rate is 6%
And Tax rate is 20%
Nominal after-tax interest rate
= Nominal rate (1 - tax rate)
= 10% ( 1 - 0.2)
= 8%
Real After-Tax Interest Rate
= Nominal after-tax interest rate - inflation rate
= 8% - 6%
= 2%
Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 5%. For example, if a hospital buys supplies from Worley that had cost Worley $100 to buy from manufacturers, Worley would charge the hospital $105 to purchase these supplies.
For years, Worley believed that the 5% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown below:
Activity Cost Pool (Activity Measure) Total Cost Total Activity
Customer deliveries (Number of deliveries) $ 500,000 5,000 deliveries
Manual order processing (Number of manual orders) 248,000 4,000 orders
Electronic order processing (Number of electronic orders) 200,000 12,500 orders
Line item picking (Number of line items picked) 450,000 450,000 line items
Other organization-sustaining costs (None) 602,000
Total selling and administrative expenses $ 2,000,000
Worley gathered the data below for two of the many hospitals that it serves—University and Memorial (both hospitals purchased a total quantity of medical supplies that had cost Worley $30,000 to buy from its manufacturers):
Activity
Activity Measure University Memorial
Number of deliveries 10 25
Number of manual orders 0 30
Number of electronic orders 15 0
Number of line items picked 120 250
Required:
Compute the total revenue that Worley would receive from University and Memorial.
Answer is complete and correct
Total Revenue
University $ 31,500
Memorial $ 31,500
Answer:
Worley CompanyComputation of Total Revenue from University and Memorial:
Total Cost = $38,541.00
Mark-up (5%) $1,927.05
Total Revenue $40,468.05
Explanation:
a) Data and Calculations:
Activity Cost Pool (Activity Measure) Total Cost Total Activity
Customer deliveries (Number of deliveries) $ 500,000 5,000 deliveries
Manual order (Number of manual orders) 248,000 4,000 orders
processing
Electronic order (Number of electronic orders) 200,000 12,500 orders
processing
Line item picking (Number of line items picked) 450,000 450,000 line items
Other organization-sustaining costs (None) 602,000
Total selling and administrative expenses $ 2,000,000
Data on University and Memorial Hospitals:
Activity Measure University Memorial
Number of deliveries 10 25
Number of manual orders 0 30
Number of electronic orders 15 0
Number of line items picked 120 250
Activity Rates:
Customer deliveries (Number of deliveries) $ 500,000/5,000 = $100
Manual order (Number of manual orders) 248,000/4,000 = $62
processing
Electronic order (Number of electronic orders) 200,000/12,500 = $16
processing
Line item picking (Number of line items picked) 450,000/450,000 = $1
Other organization-sustaining costs (None) 602,000
Cost of Selling and Administrative Expenses to the two hospitals:
Activity Measure University Memorial Total Total Cost
Number of deliveries 10 25 35 $3,500
Number of manual orders 0 30 30 $1,860
Number of electronic orders 15 0 15 $240
Number of line items picked 120 250 370 $370
Total Selling and Administrative Expenses $5,970
Cost of medical supplies = $30,000
Selling and administrative expenses = $5,970
Fixed costs = $2,571
($5,970/$1,398,000 x $602,000)
Total Cost = $38,541
Mark-up (5%) $1,927.05
Selling price $40,468.05
b) The case stated that both University and Memorial had purchased a total quantity of medical supplies that had cost Worley $30,000 to buy from its manufacturers. This implies that each hospital did not buy supplies that had cost Worley $30,000 for each. Based on this assumed fact from the case, the total revenue that Worley would collect from the two hospitals after keying in the selling and distribution and head office fixed costs, to get a total cost of $38,541.00 and adding the 5% markup, the revenue that Worley would receive would be $40,468.05 ($38,541 x 1.05).