Answer:
In what form (type of record) should Joel record these three activities? Joel should record these three activities in the General Journal format as it is standardized.
Journal Entries
S/N Account Titles and Explanation Debit Credit
1. Cash $7,590
Common stock $7,590
(To record the investment)
2. Supplies $920
Cash $290
Account payable $630
(To record the purchase of supplies)
3. No Entries - -
(This is because it is just an receiving of quotation)
Record adjusting journal entries for each of the following for year ended December 31. Assume no other adjusting entries are made during the year.
Salaries Payable. At year-end, salaries expense of $18,000 has been incurred by the company, but is not yet paid to employees.
Interest Payable. At its December 31 year-end, the company owes $375 of interest on a line-of-credit loan. That interest will not be paid until sometime in January of the next year.
Interest Payable. At its December 31 year-end, the company holds a mortgage payable that has incurred $1,000 in annual interest that is neither recorded nor paid. The company intends to pay the interest on January 7 of the next year.
Answer and Explanation:
The Journal entries are shown below:-
1. Salaries expense Dr, $18,000
To salaries payable $18,000
(Being salaries incurred but not paid is recorded)
2. Interest expenses Dr, $375
To Interest payable $375
(Being interest accrued but not paid is recorded)
3. Interest expenses Dr, $1,000
To Interest payable $1,000
(Being interest accrued but not paid is recorded)
Monty Inc. produces organic cranberry juice from cranberries it farmed. Unfortunately, it has been a bad year for cranberries because of severe cold weather. Monty has only 10,000 litres of juice. It usually sells 15,000 litres at $3.10 per litre. The variable costs of farming the cranberries are $0.90 per litre. Monty has loyal customers, but its managers are worried that the company will lose customers if it does not have juice available for sale when people stop by the farm. A neighbour is willing to sell 5,000 litres of extra cranberry juice at $3.00 per litre.
Required:
Using the general decision rule, what is the most per litre that Riverbed's managers would be willing to pay for additional juice?
Answer:
$3.10 per litre
Explanation:
Riverbed will agree to buy the additional cranberries for at most $3.10 per litre since this is their normal selling price. They can buy at this price and accept to not make profit since they are out to satisfy customers now and are not necessarily looking to make profit.
Therefore cost of purchase of extra cranberries would equal selling price at maximum
Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow:
Basic Dominator Total
Units produced 950 500 1,450
Machine-hours 3,200 2,400 5,600
Direct labor-hours 2,700 1,100 3,800
Direct materials costs $9,600 $3,900 $13,500
Direct labor costs 63,700 37,700 101,400
Manufacturing overhead
costs 130,340
Total costs $245,240
Required:
Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor-hours to allocate overhead costs.
Answer:
Tiger Furnishings
The predetermined overhead rate
= $34.30 per direct labor hour
Explanation:
a) Data and Calculations:
Basic Dominator Total
Units produced 950 500 1,450
Machine-hours 3,200 2,400 5,600
Direct labor-hours 2,700 1,100 3,800
Direct materials costs $9,600 $3,900 $13,500
Direct labor costs 63,700 37,700 101,400
Manufacturing overhead costs 130,340
Total costs $245,240
b) Computation of the Predetermined overhead rate
= Total manufacturing overhead costs divided by total direct labor hours
= $130,340/3,800
= $34.30 per direct labor hour
Presented below are a number of balance sheet items for Tamarisk, Inc. for the current year, 2020.
Goodwill $27,340 Accumulated Depreciation-Equipment $292,490
Payroll Taxes Payable 179,931 Inventory 242,140
Bonds payable 302,340 Rent payable (short-term) 47,340
Discount on bonds
payable 15,490 Income taxes payable 100,702
Cash 362,340 Rent payable (long-term) 482,340
Land 482,340 Common stock, $1 par value 202,340
Notes receivable 448,040 Preferred stock, $10 par value 152,340
Notes payable (to
banks) 267,340 Prepaid expenses 90,260
Accounts payable 492,340 Equipment 1,472,340
Retained earnings ? Equity investments (trading) 123,330
Income taxes receivable 99,960 Accumulated Depreciation-Buildings 270,446
Notes payable
(long-term) 1,602,330 Buildings 1,642,330
Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of equity investments (trading) are the same.
Answer:
Tamarisk, Inc.
Classified Balance Sheet
As of December 31, 2020:
ASSETS:
Current Assets:
Cash $362,340
Equity investments (trading) 123,330
Notes receivable 448,040
Income taxes receivable 99,960
Inventory 242,140
Prepaid expenses 90,260
Total current assets $1,366,070
Equipment 1,472,340
Accumulated
Depreciation (292,490) 1,179,850
Buildings 1,642,330
Accumulated
Depreciation (270,446 ) 1,371,884
Land 482,340
Goodwill 27,340
Total long-term assets $3,061,414
Total assets $4,427,484
LIABILITIES
Current Liabilities
Accounts payable 492,340
Payroll Taxes Payable 179,931
Income taxes payable 100,702
Rent payable (short-term) 47,340
Discount on bonds payable 15,490
Notes payable (to banks) 267,340
Total current liabilities $1,103,143
Bonds payable 302,340
Rent payable (long-term) 482,340
Notes payable (long-term) 1,602,330
Total long-term liabilities $2,387,010
Total Liabilities $3,490,153
EQUITY
Common stock, 400,000 shares authorized
Issued, 202,340 shares at
$1 par value 202,340
Preferred stock, 200,000 shares authorized
Issued, 15,234 shares at
$10 par value 152,340
Retained earnings 582,651
Total Equity $937,331
Total liabilities & Stockholders' equity $4,427,484
Explanation:
a) Data:
Account Title Debit Credit
Cash $362,340
Equity investments (trading) 123,330
Notes receivable 448,040
Income taxes receivable 99,960
Inventory 242,140
Prepaid expenses 90,260
Equipment 1,472,340
Accumulated Depreciation-Equipment $292,490
Buildings 1,642,330
Accumulated Depreciation-Buildings 270,446
Land 482,340
Goodwill 27,340
Accounts payable 492,340
Payroll Taxes Payable 179,931
Income taxes payable 100,702
Rent payable (short-term) 47,340
Discount on bonds payable 15,490
Notes payable (to banks) 267,340
Bonds payable 302,340
Rent payable (long-term) 482,340
Notes payable (long-term) 1,602,330
Common stock, $1 par value 202,340
Preferred stock, $10 par value 152,340
Retained earnings 582,651
Total $4,990,420 $4,990,420
Acklin Company has two products: A and B. Annual production and sales are 600 units of Product A and 900 units of Product B.The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products.Product A requires 0.5 direct labor hours per unit and Product B requires 0.3 direct labor hours per unit.The total estimated overhead cost for the next period is $63,322.The company is now considering switching to an activity-based costing system. The new activity-based costing system would have three overhead activity cost pools- Activity 1, Activity 2, and General Factory-with estimated overhead costs and expected activity as follows:Estimated Overhead Expected Activity (Allocation Base)Activity Pool Cost Product A Product B TotalActivity 1 $18,900 700 200 900Activity 2 15,631 1,000 100 1,100General factory 28,791 300 270 570Total $63,322 (Note: The General Factory activity pool's costs are allocated on the basis of direct labor hours.)1. The overhead cost per unit of Product A under the traditional costing system is closest to:A) $10.50B) $55.55C) $25.26D) $7.112. The overhead cost per unit of Product A under the activity-based costing system is closest to:A) $25.26B) $73.44C) $42.21D) $55.55
Answer:
1. B $55.55
2.
Explanation:
1. The overhead cost per unit of product A under the traditional costing system
Overhead cost per unit = Estimated manufacturing overhead / Direct labor hours
= $63,332 / (570 × 0.5)
= $55.55 per unit
2. Activity rate
Ryan Hope, controller of Hope Inc., provides you with the following information concerning Hope during 2017. (Hope Inc. began operations on January 1, 2017.)
1. Issued 1,000 shares of common stock at $95 per share.
2. Paid $2,600 for each of 12 months to rent office and warehouse space for 2017. The rent was paid on the last day of each month.
3. Made total sales for services of $190,000: $65,000 for cash and $125,000 on account.
4. Purchased land for $32,000.
5. Borrowed $75,000 on December 31. The note payable matures in two years.
6. Salaries and wages totaling $80,000 were paid during the year.
7. Miscellaneous expenses totaling $40,000 were paid during the year.
8. $56,000 was received from customers as payment on account.
9. Declared and paid a dividend of $26,000.
Required:
a. Prepare journal entries for these transactions.
b. Establish T-accounts for each account, and post the journal entries to these T-accounts.
c. Prepare an income statement for 2017.
Answer:
a)
1. Issued 1,000 shares of common stock at $95 per share.
Dr Cash 95,000
Cr Common stock 95,000
2. Paid $2,600 for each of 12 months to rent office and warehouse space for 2017. The rent was paid on the last day of each month.
Dr Rent expense 31,200
Cr Cash 31,200
3. Made total sales for services of $190,000: $65,000 for cash and $125,000 on account.
Dr Cash 65,000
Dr Accounts receivable 125,000
Cr Service revenue 190,000
4. Purchased land for $32,000.
Dr Land 32,000
Cr Cash 32,000
5. Borrowed $75,000 on December 31. The note payable matures in two years.
Dr Cash 75,000
Cr Notes payable 75,000
6. Salaries and wages totaling $80,000 were paid during the year.
Dr Wages expense 80,000
Cr Cash 80,000
7. Miscellaneous expenses totaling $40,000 were paid during the year.
Dr Miscellaneous expense 40,000
Cr Cash 40,000
8. $56,000 was received from customers as payment on account.
Dr Cash 56,000
Cr Accounts receivable 56,000
9. Declared and paid a dividend of $26,000.
Dr Dividends 26,000
Cr Cash 26,000
b)
Cash
debit credit
95,000
31,200
65,000
32,000
75,000
80,000
40,000
56,000
26,000
81,800
Common stock
debit credit
95,000
Rent expense
debit credit
31,200
31,200
Accounts receivable
debit credit
125,000
56,000
69,000
Service revenue
debit credit
190,000
190,000
Land
debit credit
32,000
Notes payable
debit credit
75,000
Wages expense
debit credit
80,000
80,000
Miscellaneous expense
debit credit
40,000
40,000
Dividends
debit credit
26,000
26,000
Retained earnings
debit credit
38,800
26,000
12,800
closing entries
Dr Service revenue 190,000
Cr Income summary 190,000
Dr Income summary 151,200
Cr Rent expense 31,200
Cr Wages expense 80,000
Cr Miscellaneous expense 40,000
Dr Income summary 38,800
Cr Retained earnings 38,800
Dr Retained earnings 26,000
Cr Dividends 26,000
c. Hope, inc.
Income Statement
For the year ended December 31, 2017
Revenues $190,000
Operating expenses:
Rent expense $31,200Wages expense $80,000Miscellaneous expense $40,000 ($151,200)Net income $38,800
Cash register on January 1 for $5,400. This register has a useful life of 10 years and a salvage value of $400. What would be the depreciation expense for the second-year of its useful life using the double-declining-balance method
Answer:
$800
Explanation:
Double-declining-balance method is also known as reducing balance method.
Depreciation Expense = 2 × SLDP × BVSLDP
Where,
SLDP = 100 ÷ Number of Useful Life
= 100 ÷ 10
= 10 %
Year 1
Depreciation Expense = 2×10%×($5,400 - $400)
= $,1000
Year 2
Depreciation Expense = 2×10%×($5,400 - $400- $,1000)
= $800
Bill and Bob are both 25 years old today. Each wants to begin saving for his retirement. Both plan on contributing a fixed amount each year into brokerage accounts that have annual returns of 12 percent. Both plan on retiring at age 65, 40 years from today, and both want to have $3 million saved by age 65. The only difference is that Bill wants to begin saving today, whereas Bob wants to begin saving one year from today. In other words, Bill plans to make 41 total contributions (t = 1, 2,.. 40).
How much more than Bill will Bob need to save each year in order to accumulate the same amount as Bill does by age 65?
Please find attached full question
Answer and Explanation:
Answer and explanation attached
Suppose that this year's money supply is $400 billion, nominal GDP is $12 trillion, and real GDP is $4 trillion.
The price level is______ , and the velocity of money is______ .
Suppose that velocity is constant and the economy's output of goods and services rises by 3 percent each year. Use this information to answer the questions that follow.
If the Fed keeps the money supply constant, the price level will_______ , and nominal GDP will_______ .
True
False
If the Fed wants to keep the price level stable instead, it should_________ keep the money supply_______ unchanged next year. True False If the Fed wants an inflation rate of 11 percent instead, it should the money supply by % . (Hint: The quantity equation can be rewritten as the following percentage change formula:
Answer:
1. Price Level
= Nominal GDP/Real GDP
= 12 trillion/4 trillion
= $3
b. Velocity
= Price level * Real GDP/ Money supply
= 3 * 4/0.4
= 30
2. If the Fed keeps the money supply constant, the price level will Decrease , and nominal GDP will Remain the same .
The economy rose however money supply was kept constant. This means that prices could not rise and so had to decrease to cater for the increase in output. With lower prices but higher output, the Nominal GDP remained the same.
3. If the Fed wants to keep the price level stable instead, it should keep the money supply unchanged next year. TRUE
4. If the Fed wants an inflation rate of 11 percent instead, it should Increase the money supply by 14%.
(Percentage Change in Money supply) + (Percentage Change in V) = (Percentage Change in Price) + (Percentage Change in GDP).)
V is constant so is 0.
(Percentage Change in M) = (Percentage Change in P) + (Percentage Change in Y).)
= 11% + 3%
= 14%
The price level and velocity are $3 and 30 respectively, if money supply is constant price decreases, if price level is stable the money supply remain unchanged. The money supply rate is 14%
What is GDP?GDP stands for gross domestic product, it is the total value (in monetary terms) of all finished goods and services produced by a country within a specific time period, usually a year.
Given:
Money Supply=$400 billion,
Nominal GDP = $12 trillion
Real GDP = $4 trillion
1.a. Price Level
= Nominal GDP/Real GDP
= 12 trillion/4 trillion
= $3
1.b. Velocity of money supply
= Price level x Real GDP/ Money supply
= 3 x 4/0.4
= 30
The price level is $3, and the velocity of money is 30.
2. On keeping the money supply constant by the Fed, the price level will Decrease, and nominal GDP will remain the same.
3. In order to keep the price level stable instead, the Fed should keep the money supply unchanged next year. TRUE
4. If the Fed wants an inflation rate of 11% instead, it should increase the money supply by 14%.
%ΔM+%ΔV=%ΔP+%ΔY
or
(Percentage Change in Money supply) + (Percentage Change in V) = (Percentage Change in Price) + (Percentage Change in GDP).
V is constant, so is 0.
(Percentage Change in M) = (Percentage Change in P) + (Percentage Change in Y).
= 11% + 3%
= 14%
Therefore, it can be said the above calculation aptly describes the statements.
Learn more about GDP here:
https://brainly.com/question/4131508
If the owner contributes 9200 and the owner withdraws 44500, how much is net income
10 characteristics of using ideal chemical sanitizer
Answer:
Characteristics Steam Chlorine Iodophor QUATS* AAS**
Gram-positive bacteria Best Good Good Good Good
Gram-negative bacteria Best Good Good Poor Fair
Spores Good Good Poor Fair Fair
Yeasts and molds Best Good Good Fair Poor
Bacteriophage Best Good Fair Poor Poor
Optimum pH N/A 4-5 3 10 2-2.5
Penetration Poor Good Poor Good Excellent
Corrosive No Yes Slight No Slight
Irritation N/A Yes No No Yes
Hard water affects No No Slight Yes/No Slight
Shelf-life N/A Short Long Long Long
Organic matter affects No Yes Slight Low Slight
Stable in 140°F H2O N/A No No Yes Yes
Leaves residue No No Yes Yes Yes
Flavor/odor No Yes Yes No No
Ease of use Poor Excellent Excellent Foam Foam
Use with detergent No No/yes Yes No/yes No
Maximum use by FDA/USDA None 200 ppm*** 25 ppm**** 200 ppm***** 200-400 ppm
Cost High Low Moderate Moderate Moderate
Where to use Equipment Equipment, floors, walls Rubber, plastic crates Aluminum, walls, floors Stainless steel, CIP
Beaverton Lumber purchased milling equipment for $51,000. In addition to the purchase price, Beaverton made the following expenditures: freight, $3,100; installation, $4,600; testing, $3,600; personal property tax on the equipment for the first year, $1,300. What is the initial cost of the equipment
Answer:
$62,300
Explanation:
Calculation for the initial cost of the equipment
Initial cost of the equipment:
Purchase price$51,000
Freight $3,100
Installation $4,600
Testing $3,600
Total cost $62,300
Therefore the initial cost of the equipment will be $62,300
On March 31, 2021, Chow Brothers, Inc., bought 8% of KT Manufacturing’s capital stock for $51.5 million. KT’s net income for the year ended December 31, 2021, was $80.5 million. The fair value of the shares held by Chow was $36.0 million at December 31, 2021. KT did not declare or pay a dividend during 2021.
Required:
a. Prepare all appropriate journal entries related to the investment during 2021.
b. Assume that Chow sold the stock on January 20, 2022, for $30.5 million. Prepare the journal entries to record the sale.
Answer and Explanation:
a. The Journal entries are shown below:-
Investment - Capital stock Dr, $51.5 million
To Cash $51.5 million
(Being investment is recorded)
Unrealized holding gain or loss Dr, $15.5 million ($51.5 - $36.0)
To Fair value adjustment $15.5 million
(Being fair value adjustment is recorded)
b. Unrealized holding gain or loss Dr, $5.5 million ($51.5 - $30.5 - $15.5)
To Fair value adjustment $5.5 million
(Being fair value adjustment before sale is recorded)
Cash Dr, $30.5 million
Unrealized holding gain or loss Dr, $21 million
To Investment - Capital stock $51.5 million
(Being sale of investment is recorded)
which group will test out new technology but are not usually seen as leaders within an organization
Answer:
Innovators
Explanation:
The reason is that their idea might not be successful in the beginning and also that they are not supported by the company executive directors. This lessens their value as a leader. There are other issues that are also associated with innovators which makes them difficult to get aknowledged as a leader, these as listed below:
They don't have any busines field background so they can't appraise the proposal.They don't have decision making powers.The technology project takes time to reach maturity phase and creates demand. Blockchains were invented in 2008 but today they are valued. So great things take time.Many decision makers don't value them because they feel that the innovators will take away their appreciation.Sometimes their idea actually doesn't work which means they overestimate the favourable facts.The prepaid insurance account had a balance of $3,000 at the beginning of the year. The account was debited for $32,500 for premiums on policies purchased during the year, ending on March 31.Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment:
a. The amount of unexpired insurance applicable to future periods is $4,800
b. The amount of insurance expired during the year is $30,700. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
A. Date Account Title Debit Credit
Insurance expense $30,700
($3000+$32500-$4800)
Prepaid insurance $30,700
B. Date Account Title Debit Credit
Insurance expense $30,700
Prepaid insurance $30,700
Rhianna makes edgy women's custom t-shirts. Rhianna started her business this year, and she uses a normal costing system.The company has two direct cost pools, materials and labor, and one indirect cost pool, overhead. Overhead is charged to jobs on the basis of direct labor cost. The following information is available for the most recent year: Budgeted direct labor costs $ Budgeted overhead costs $ Costs of material actually used $ Actual direct labor costs $ Actual overhead costs $ Rhianna had two jobs in process on December 31 of this year Jobs 75 and 76. There is no finished goods inventory because jobs are sent to customers as soon as they are completed. Direct costs associated with each job are below:________. Job 75 Job 76 Direct materials $ $ Direct labor $ $ Based on this data, the predetermined overhead rate is $ of manufacturing overhead for each dollar of direct labor costs. Required: Round your answer to the nearest dollar. Do not include %, $, etc.in your response. Using this overhead allocation rate and the data above, calculate:______ 1. The total manufacturing cost for Job 75. _____2. The total manufacturing cost for Job 76. ______
Find full question attached
Answer and Explanation:
1. Total manufacturing cost for job 75 and job 76= manufacturing cost for job 75 + manufacturing cost for job 76( being work in progress at end of the year)
= $(35725+49656)
=$85381
2. There is no cost of goods sold since there was no finished products and therefore no sales
A professor decides to run an experiment to measure the effect of time pressure on final exam scores. He gives each of the 400 students in her course the same final exam, but some students have 90 minutes to complete the exam, while others have 120 minutes. Each student is randomly assigned one of the examination times, based on the flip of a coin. Let Y; denote the number of points scored on the exam by the ith student (0
(a) Explain what the term ui represents. Why will different students have different values of ui?
(b) Explain why E(ui|X;) = 0 for this regression model.
(c) Are the other assumptions among SLR.1-SLR.4 satisfied? Explain why.
(d) The estimated model is Y; = 49+0.24X;.
i. Based on the estimated model, predict the average score of students given 90 minutes. Repeat for 120 minutes and 150 minutes.
ii. Compute the average predicted gain in score for a student who is given an additional 10 minutes on the exam.
Answer:
Kindly check explanation
Explanation:
The regression model :
Y; = Bo + BiX; + ui
ui in the regression model represents other underlying factors aside the model variables which may affect the final exam score of student. These factor will almost likely vary from student to student and may include factors such as ; rate of assimilation, natural brilliance, psychological factors and so on.
E(ui|X) = 0 ; because ui and Xi are independent.
The estimated model is Y; = 49+0.24X;.
i. Based on the estimated model, predict the average score of students given 90 minutes.
X = 90 minutes
Y; = 49+0.24(90)
Y = 70.6
Repeat for 120 minutes and 150 minutes.
X = 120 minutes
Y; = 49+0.24(120)
Y = 77.8
X = 150 minutes
Y; = 49+0.24(150)
Y = 85
ii. Compute the average predicted gain in score for a student who is given an additional 10 minutes on the exam.
Gain in score for student Given additional 10 minutes :
Gain in score for X = 10
0.24X
= 0.24(10)
= 2.4
Presented below is income statement information of the Schefter Corporation for the year ended December 31, 2021.
Sales revenue $504,000
Salaries expense 80,300
Interest revenue 6,600
Advertising expense 11,250
Gain on sale of investments 8,900
Cost of goods sold 277,200
Insurance expense 13,850
Interest expense 3,800
Income tax expense 39,500
Depreciation expense 23,000
Required:
1. Prepare the necessary closing entries at December 31, 2013.
2. Record the closure of revenue accounts.
3. Record the closure of expense accounts.
4. Record the transfer of the net profit.
Answer:
Explanation:
Please see attached sheet
Megan Company has fixed costs of $747,040. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products follow:
Product Selling Price Variable Cost per Unit Contribution Margin per Unit
Yankee $310 $140 $170
Zoro 500 340 160
The sales mix for products Yankee and Zoro is 10% and 90%, respectively. Determine the break-even point in units of Yankee and Zoro.
Answer:
Yankee= 464
Zoro= 4,176
Explanation:
To calculate the break-even point in units, we need to use the following formula:
Break-even point (units)= Total fixed costs / Weighted average contribution margin
Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)
Weighted average contribution margin= 170*0.1 + 160*0.9
Weighted average contribution margin= $161
Break-even point (units)= 747,040 / 161
Break-even point (units)= 4,640 units
Now, for each product:
Yankee= 4,640*0.1= 464
Zoro= 4,640*0.9= 4,176
Assume you are given a minimization linear program that has an optimal solution. The problem is then modified by changing a greater-than-or-equal-to constraint in the problem to a less-than-or-equal-to constraint. Is it possible that the modified problem is infeasible? Answer yes or no and justify. a. Yes, it is possible that the modified problem is infeasible. Modifying one constraint as described could cause the regions to produce alternate optimal solutions. b. Yes, it is possible that the modified problem is infeasible. Modifying one constraint as described could cause the regions to no longer overlap. c. No, it is not possible that the modified problem is infeasible. Modifying one constraint as described will result in an unbounded solution. d. No, it is not possible that the modified problem is infeasible. Modifying one constraint as described has no effect on the feasible region of the other constraints. e. No, it is not possible that the modified problem is infeasible. Modifying one constraint as described will result in alternate optimal solutions.
Answer:
a. Yes, it is possible that the modified problem is infeasible. Modifying one constraint as described could cause the regions to produce alternate optimal solutions.
Explanation:
Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted trial balance includes the following account information:
November 30
Debit Credit
Supplies $1,000
Prepaid Insurance 4,000
Salaries Payable $9,000
Deferred Revenue 1,000
The following information is known for the month of December:
1. Purchases of supplies during December total $2,500.
2. Supplies on hand at the end of December equal $2,500.
3. No insurance payments are made in December.
4. Insurance cost is $1,000 per month.
5. November salaries payable of $9,000 were paid to employees in December.
6. Additional salaries for December owed at the end of the year are $14,000.
On November 1, a tenant paid Golden Eagle $1,500 in advance rent for the period November through January, and Deferred Revenue was credited for the entire amount.
Required:
Complete 4 adjusting entries on December 31st. There should be an adjusting entry for each of the following accounts; supplies, prepaid insurance, salaries payable, and unearned revenue.
Answer:
Given Below
Explanation:
Golden Eagle Company
General Journal
Adjusting Entries December 31st
Sr. No Particulars Debit Credit
1. Supplies Expense $ 1000 Dr.
Supplies Account $ 1000 Cr.
The supplies that were at the end of Nov have been used and new supplies purchased are still on hand.
2. Insurance Expense $ 1000 Dr.
Prepaid Insurance 1,000 Cr.
Insurance cost is $1,000 per month. Insurance of $1000 expired during the month of December.
3. Salaries Expense $ 14000 Dr.
Salaries Payable $ 14000 Cr.
Salaries for December owed for December are $14,000.
4. Unearned Revenue $ 500 Dr.
Revenue Earned $ 500 Cr.
Defered Revenue earned at the end of December.
Griffin Service Company, Inc., was organized by Bennett Griffin and five other investors. The following activities occurred during the year:
a. Received $77,000 cash from the six investors; each investor was issued 9,100 shares of common stock with a par value of $0.10 per share.
b. Purchased equipment for use in the business at a cost of $25,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months).
c. Signed an agreement with a cleaning service to pay $190 per week for cleaning the corporate offices next year.
d. Received an additional contribution from investors who provided $3,700 in cash and land valued at $22,000 in exchange for 1,700 shares of stock in the company.
e. Lent $3,200 to one of the investors, who signed a note due in six months.
f. Bennett Griffin borrowed $7,700 for personal use from a local bank, signing a one-year note.
Required:
For each transactions, record the effects of the transaction in the appropriate T-accounts.
Answer:
Griffin Service Company, Inc.
T-accounts:
Cash Account
Account Title Debit Credit
Common Stock $5,460
Paid-in Capital In Excess $71,540
Equipment $6,250
Paid-in Capital In Excess $3,700
Notes Receivable $3,200
Common Stock
Account Title Debit Credit
Cash $5,460
Land 170
Paid-in Capital In Excess
Account Title Debit Credit
Cash $71,540
Cash $3,700
Land $21,830
Equipment
Account Title Debit Credit
Cash $6,250
Notes Payable $18,750
Notes Payable
Account Title Debit Credit
Equipment $18,750
Notes Receivable
Account Title Debit Credit
Cash $3,200
Explanation:
Journal Entries:
a. Debit Cash Account $77,000
Credit Common Stock $5,460
Credit Paid-in Capital In Excess $71,540
To record the issue of 9,100 shares with a par value of $0.10 to each investor.
b. Debit Equipment $25,000
Credit Cash $6,250
Credit Notes Payable $18,750
To record the purchase of equipment with cash and note payable.
c. No journal entry required
d. Debit Cash $3,700
Debit Land $22,000
Credit Common Stock $170
Credit Paid-in Capital In Excess $25,530
To record the receipt of cash and land for 1,700 shares.
e. Debit Notes Receivable $3,200
Credit Cash Account $3,200
To record the lending of money to one of the investors.
f. No journal entry required.
Transactions c and f do not require journal entries. Services for c will be received next year. The transaction in f does not affect the company as a legal entity.
Suppose you own a small company that is contemplating construction of a suburban office block. The cost of buying the land and constructing the building is $700,000. Your company has cash in the bank to finance construction. Your real estate adviser suggests that you rent out the building for two years at $30,000 a year and predicts that at the end of that time you will be able to sell the building for $840,000.
Thus there are now two future cash flows--a cash flow of C1 = $30,000 at the end of year 1 and a further cash flow of C2 = ($30,000 + 840,000) = $870,000 at the end of the second year.
Required:
a. Calculate the NPV of the office building venture at interest rates of 5, 10, and 15%.
b. At what discount rate (approximately) would the project have a zero NPV?
Answer:
NPV when discount rate is 5% = $117,687.08
NPV when discount rate is 10% = $46,281
NPV when discount rate is 15% = $-16,068.05
B. 13.65%
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated with a financial calculator
Cash flow in year 0 = $-700,000.
Cash flow in year 1 = $30,000
Cash flow in year 2 = ($30,000 + 840,000) = $870,000
NPV when discount rate is 5% = $117,687.08
NPV when discount rate is 10% = $46,281
NPV when discount rate is 15% = $-16,068.05
To determine which discount rate that would give the project a zero NPV, we are supposed to calculate the Internal rate of return
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated using a financial calculator
Cash flow in year 0 = $-700,000.
Cash flow in year 1 = $30,000
Cash flow in year 2 = ($30,000 + 840,000) = $870,000
IRR = 13.65%
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
On January 1, Skysong, Inc. had 90,500 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred.
Apr1. Issued 21,000 additional shares of common stock for $19 per share.
June15. Declared a cash dividend of $1 per share to stockholders of record on June 30.
July10. Paid the $1 cash dividend. Dec.1Issued 2,500 additional shares of common stock for $18 per share.
December15. Declared a cash dividend on outstanding shares of $4.30 per share to stockholders of record on December 31.
Prepare the entries, on each of the three dividend dates. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.
Date Account Titles and Explanation Debit Credit
June15
July10
Dec15
Answer:
No. of shares outstanding = A
Par Value (at $5) = B
Additional Paid in capital in excess of Par = C
Dividend = D
A B(A*$5) C D
Jan 1 balance 90,500 $452,500 $0
shares
Add: Issued Apr 1 21,000 $105,000 $294000
shares
June 30 Balance 111,500 $557,500 $294,000 $111,500
shares [111,500 shares x $1]
Add: Dec 1 Issued 2,500 shares $12,500 $32,500
Dec 31 Balance 114,000 $570,000 $326,500 $490,200
[114,000 shares x $4.3]
Journal Entries based on above
Date Accounts Titles Debit Credit
15-Jun Dividends $111,500
Dividends payable $111,500
10-Jun Cash $111,500
Dividends $111,500
15-Dec Dividends $490,200
Dividends payable $490,200
On September 1, Pat Hopkins established Ona Cloud Corporation (OCC) as a provider of cloud computing services. Pat contributed $14,000 for 1,400 shares of OCC. On September 8, OCC borrowed $36,500 from a bank, promising to repay the bank in two years. On September 10, OCC wrote a check for $22,500 to acquire computer equipment. On September 15, OCC received $1,450 of supplies purchased on account and, on September 16, paid $2,500 for September rent. Through September 22, OCC provided its customers $11,550 of services, of which OCC collected $6,900 in cash. On September 28, OCC paid $695 for Internet and phone service this month. On September 29, OCC paid wages of $5,450 for the month. Finally, on September 30, OCC submitted its electricity meter reading online and determined that the total charges for the month will be $645. This amount will be paid on October 14 through a preauthorized online payment.
Required:
a. Indicate the accounting equation effects of the September events.
b. Prepare journal entries to record the September events described above.
c. Using your answer to requirement 1 or 2, calculate OCC's preliminary net income for September. Is OCC profitable, based on its preliminary net income?
d. Identify at least two adjustments that OCC will be required to make before it can prepare a final income statement for September.
Answer:
a) I used an excel spreadsheet since there is not enough room
b)
On September 1, Pat Hopkins established Ona Cloud Corporation (OCC) as a provider of cloud computing services. Pat contributed $14,000 for 1,400 shares of OCC.
Dr Cash 14,000
Cr Common stock 14,000
On September 8, OCC borrowed $36,500 from a bank, promising to repay the bank in two years.
Dr Cash 36,500
Cr Notes payable 36,500
On September 10, OCC wrote a check for $22,500 to acquire computer equipment.
Dr Equipment 22,500
Cr Cash 22,500
On September 15, OCC received $1,450 of supplies purchased on account and,
Dr Supplies 1,450
Cr Accounts payable 1,450
on September 16, paid $2,500 for September rent.
Dr Rent expense 2,500
Cr Cash 2,500
Through September 22, OCC provided its customers $11,550 of services, of which OCC collected $6,900 in cash.
Dr Cash 6,900
Dr Accounts receivable 4,650
Cr Service revenue 11,550
On September 28, OCC paid $695 for Internet and phone service this month.
Dr Internet and phone expenses 695
Cr Cash 695
On September 29, OCC paid wages of $5,450 for the month.
Dr Wages expense 5,450
Cr Cash 5,450
Finally, on September 30, OCC submitted its electricity meter reading online and determined that the total charges for the month will be $645. This amount will be paid on October 14 through a preauthorized online payment.
Dr Utilities expense 645
Cr Accounts payable 645
c) preliminary net income = $2,260, so the company seems to be profitable
d) OCC must adjust depreciation expense (equipment), interest expense on the bank loan and supplies expense.
The Polaris Company uses a job-order costing system. The following transactions occurred in October:
a. Raw materials purchased on account, $210,000.
b. Raw materials used in production, $191,000 ($152,800 direct materials and $38,200 indirect materials).
c. Accrued direct labor cost of $49,000 and indirect labor cost of $21,000.
d. Depreciation recorded on factory equipment, $104,000.
e. Other manufacturing overhead costs accrued during October, $129,000.
f. The company applies manufacturing overhead cost to production using a predetermined rate of $7 per machine-hour. A total of 76,100 machine-hours were used in October.
g. Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h. Jobs that had cost $450,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 32% above cost.
Required:
a. Prepare journal entries to record the transactions given above.
b. Prepare T-accounts for Manufacturing Overhead and Work in Process.
Answer:
Journal entries are given below
Explanation:
We should always record the assets and expenses on the debit side of the account and liabilities and capital on the credit side of the account.
a. Raw materials purchased
Account DEBIT CREDIT
Raw material 210,000
Payables 210,000
b. Raw materials used in production
Account DEBIT CREDIT
Work in process inventory 152,800
Manufacturing Overhead 38,200
Raw material 191,000
c. Accrued direct labor cost
Account DEBIT CREDIT
Work in process 49,000
Manufacturing Overhead 21,000
Wages payable 70,000
d. Depreciation recorded on factory equipment
Account DEBIT CREDIT
Depreciation 104,000
Accumulated depreciation 104,000
e. Other manufacturing overhead
Account DEBIT CREDIT
Manufacturing Overhead 129,000
Account payable 129,000
f. The company applies manufacturing overhead cost to production
Account DEBIT CREDIT
Work in process inventory 532,700
(76,100 x $7)
Manufacturing Overhead 532.700
g. Job cost sheets were completed
Account DEBIT CREDIT
Finished goods inventory 513,000
Work in process inventory 513,00
h. Job cost sheets were shipped to customers
Account DEBIT CREDIT
Cost of goods sold 450,000
Finished goods inventory 450,000
1. Consumer markets consist of
individuals that buy goods and services to resell.
companies that produce products to sell to consumers.
households that buy goods for personal consumption.
government agencies that buy goods to produce public services.
(50 points) (GradPoint)
Given the following owner’s income and expense estimates for an apartment property, formulate a reconstructed operat-ing statement. The building consists of 10 units that could rent for $550 per month each. Owner’s Income Statement Rental income (last year) Less: Operating & Capital Expenses Power Heat Janitor Water Maintenance Capital Expenditures Management Depreciation (tax) Mortgage payments $ 2,200 1,700 4,600 3,700 4,800 2,800 3,000 5,000 6,300
Estimating vacancy and collection losses at 5 percent of potential gross income, reconstruct the operating state-ment to obtain an estimate of NOI. Assume an above-line treatment of CAPX. Remember, there may be items in the owner’s statement that should not be included in the recon-structed operating statement. Using the NOI and an Ro of 11.0 percent, calculate the property’s indicate market value. Round your answer to the nearest $500.
Answer:
$363,000
Explanation:
Calculation for the property’s indicate market value.
First step
Operating Statement
PGI: $66,000
(10 units x $550 x 12 month )
Less: Vacancy Loss(3,300)
(5%*66,000)
EGI:62,700
Less: Operating Expenses
Power$2,200
Heat1,700
Janitor4,600
Water3,700
Maintenance4,800
Management3,000
Reserve for CAPX2,800
Total Operating Expenses$22,800
Net Operating Income$39,900
(62,700-22,800)
Second step is to find the property’s indicate market value.
Using this formula
Market Value=NOI/ Ro
Let plug in the formula
Market Value=$39,900/11.0%
Market Value=$363,000
Therefore the property’s indicate market value is
$363,000
Maggie’s Skunk Removal Corp.’s 2018 income statement listed net sales of $13.8 million, gross profit of $8.70 million, EBIT of $6.9 million, net income available to common stockholders of $4.5 million, and common stock dividends of $2.5 million. The 2018 year-end balance sheet listed total assets of $53.8 million and common stockholders' equity of $22.3 million with 2.0 million shares outstanding.
1. Calculate the profit margin.
2. Calculate the basic earnings power.
3. Calculate the return on assets.
4. Calculate the return on equity.
5. Calculate the dividend payout.
Answer: See explanation
Explanation:
1. Calculate the profit margin
Profit Margin = (Net Income/Net Sales) × 100
Profit Margin = (4,500,000/13,800,000) × 100
Profit Margin = 3.26 × 100
Profit margin = 32.6%
2. Calculate the basic earnings power.
Gross Profit Margin:
= Gross Profit/Net Sales × 100
= (8,700,000/13,800,000) × 100
= 6.304 × 100
= 63.04%
3. Calculate the return on assets.
Return on assets= Net income/Total asset
= 4,500,000/53,800,000
= 0.0836
= 8.36%
4. Calculate the return on equity.
Return on equity = Net income/Equity
= 4,500,000/22,300,000
= 0.2017
= 20.17%
5. Calculate the dividend payout.
Dividend payout = Dividend/Net income
= 2,500,000/4,500,000
= 0.556
= 55.6%
Boston’s Dairy has just opened its main yogurt factory in upstate Massachusetts. This main factory can produce 3,500 boxes of yogurt monthly (each box contains twelve 6-oz cups). Due to overwhelming demand for the company’s product, Boston’s Dairy has signed a contract to rent a new factory, which can produce up to 8,000 boxes per month. The monthly total fixed costs are $40,000 in the main factory and $16,000 in the new factory. The variable production cost of yogurt is $4.50 per box in the main factory. The variable production cost in the new factory is $6.0 per box as materials have to be redistributed from the main factory. The average selling price is $15, and the variable selling expense is $1 per box, which is the same for all factories. In addition, Boston’s Dairy plans to pay its sales force $0.80 per box as added bonus for every box sold above the break-even point. How many boxes does the company have to produce and sell in order to earn a net operating income of $10,000 per month (round all decimal up to one box)
Answer:
7,733 units
Explanation:
Breakeven point is one where revenue equals the cost.
In the main Factory:
Fixed cost = $40,000
Variable cost = $19,250 [($4.5 + $1.0) * 3,500 boxes]
Total cost = $59,250 [$40,000 + $19,250]
Revenue = $52,500 [3,500 * $15]
Net profit or loss : $52,500 - $59,250 = - 6,750 Loss
In the new Factory:
The break even point will be achieved when the loss of $6,750 in the main factory is covered by the new factory.
Fixed cost : $16,000
Variable cost : $6.0 + $1.0 = $7
Selling price = $15
16,000 + 6,750 + 7x = 15x
solving for x we get:
x = 2,844.
In the new factory 2,844 units needs to be produced in excess to achieve the breakeven point.
Total units required to produce 3,500 + 2,844 = 6,344.
If the company adds bonus of $0.80 for its sales force on each box sold above the breakeven then the cost will be increased.
Contribution Margin : 15 - [ 6 + 1 + 0.80 ] = $7.20
Box required to sell to produce net operating income of $10,000
10,000 / 7.20 = 1,389 units
Total units 7,733 [6,344 + 1,389]