Answer: False
Explanation:
Monopolies do not produce differentiated products, they produce unique products. This is because they are the only supplier of the goods in question and as such do not need to differentiate their goods to have a sales advantage.
John is evaluating which investment would be best for his company. He wants to determine the future value of a certain investment that has the following information:
PV = $200
INT = 0.1 or 10%
N = 1 (years)
According to this information, what would be the future value of this investment?
a) $110.67
b) $200.50
c) $220
d) None of the above
Answer: $220
Explanation:
The following information can be derived from the question:
PV = $200
INT = 0.1 or 10%
N = 1 (years)
To calculate the future value of this investment, we will use the formula:
FV = PV( 1 + i)^n
FV = $200(1 + 0.1)
FV = $200(1.1)
FV = $220
The future value of this investment would be $220.
There are 300 purely competitive farms in the local dairy market. Of the 300 dairy farms, 298 have a cost structure that generates profits of $24 for every $300 invested. Instructions: Enter your answers as whole numbers. a. What is the percentage rate of return for these 298 dairies
Answer:
8.00%
Explanation:
The return of the 298 diaries can be computed as the profit generated divided by the amount invested initially.
percentage rate of return=profit generated/amount invested
profit generated is $24
amount invested is $300
percentage rate of return=$24/$300
percentage rate of return=8.00%
Dan would like to save $1,500,000 by the time he retires in 30 years and believes he can earn an annual return of 8%. How much does he need to invest in each of the following years to achieve his goal?
a. $13,241
b. $133,239
c. $10,727
d. $52,450
Answer:
$13,241
Explanation:
From the data we were given in the question:
future value = fv = $1,500,000
time = t = 30 year
rate = r = 8%
We are required to find out How much does he need to invest to achieve his goal
solution
future value = principal ( 1+ rate)^(t-1) / rate
1500000 = principal (1 + .08)^(30-1)/ 0.08
we make principal, p, subject of the formula.
principal = 1500000 / ( (1 + .08)^(30-1)/ 0.08 )
Principal = 1,500,000 / 113.2832
principal = 13241.15
so Dan needs to invest $13241
Clark purchased a life insurance policy on himself and made his son, Russ, the beneficiary. Unfortunately, while Clark was taking a vacation with his wife, he was involved in a car accident and passed away. Russ did not find Clark's insurance policy until six months after Clark's death. Russ immediately contacted the insurance company to claim the money. The insurance company refused to pay him, claiming that he failed to notify it of Clark's death within three months of his death as required by the policy. Russ claimed that he was not bound to the time limitations because even though he knew his dad had insurance, he did not agree to that limitation and was not a party to the contract. Russ is a(n):_________.
1. intended creditor beneficiary
2. incidental beneficiary
3. delegatee
4. assignor
5. promisee
6. delegator
7. intended donee beneficiary
8. promisor
Answer: 7. intended donee beneficiary
Explanation:
Intended donee beneficiaries are people who are gifted the benefit of a contract they are not involved in by one of the contracting parties. The person who was involved in the contract that gave the gift does not owe the person that the gift was promised to any debts which makes it like a donation. Russ is an intended donee beneficiary who was meant to receive a benefit from a contract between Clark and the Insurance company even though he was not party to it.
For the following enumerative induction, identify following three components:_______.
(i) target group, (ii) sample, and (iii) relevant property:
University fraternities are magnets for all sorts of illegal activity. Last year several frat brothers were arrested at a frat-house party. And this year a fraternity was actually kicked off campus for violating underage drinking laws.
Answer:
i. Target Group - University Fraternities
The focus of the statement is all University fraternities as the person making the statement did not limit the number of Fraternities included by saying some or most.
ii. Sample - Several Frat Brothers and a Fraternity
In coming to their conclusion, the author of the text used a sample of several frat brothers who were arrested at a frat-house party as well as a fraternity which was kicked off campus for violating underage drinking laws.
iii. Relevant property - Illegal Activity
The relevant property that all University Fraternities seem to have in come is illegal activity and the author gets this from the several frat brothers as well fraternity that were punished for actions contravening the law.
Record the following transactions on the books of Cohen Co. (Omit cost of goods sold entries.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(a) On July 1, Cohen Co. sold merchandise on account to Tracy Inc. for $23,000, terms 2/10, n/30.
(b) On July 8, Tracy Inc. returned merchandise worth $2,400 to Cohen Co.
(c) On July 11, Tracy Inc. paid for the merchandise.
Answer:
a.
July 1
Accounts Receivable 23000 Dr
Sales Revenue 23000 Cr
b.
July 8
Sales Return 2400 Dr
Accounts Receivable 2400 Cr
c.
July 11
Cash 20600 Dr
Accounts Receivable 20600 Cr
Explanation:
a.
The sales made on credit are recorded as a debit to the accounts receivable and a credit to sales revenue by the amount of sales assuming we use the gross method to record sale.
b.
The return of sales is recorded as a debit to the sales return account and a credit to the accounts receivable to reduce the amount due from accounts receivable.
c.
The remaining accounts receivable amount after sales return amounted to 23000 - 2400 = 20600
The sales terms were 2/10 which means a 2% discount was allowed if the accounts receivable pay within 10 days of sale. The payment is received after the discount period. Thus, we will not deduct the discount allowed and accounts receivable will pay fill $20600.
Suppose that, during a recession, the government borrows money to provide free movies as a distraction from the poor economy. Which of the following statements are correct?
A. The free movies as a distraction from the poor economy will likely raise interest rates as the government borrows more money to finance the purchase.
B. This policy will likely be accompanied by an impact lag as the policy takes time to make its way to the people.
C. The provision of free movies is an example of an automatic stabilizer.
D. The government is engaging in contractionary fiscal policy.
E. Crowding-out will occur as individuals choose to rely on free movies instead of purchasing their own.
Answer: A. . The free movies as a distraction from the poor economy will likely raise interest rates as the government borrows more money to finance the purchase.
B. This policy will likely be accompanied by an impact lag as the policy takes time to make its way to the people.
E. Crowding-out will occur as individuals choose to rely on free movies instead of purchasing their own
Explanation:
We are informed that during a recession, the government borrows money to provide free movies as a distraction from the poor economy.
The effect of this is that there will be a likely increase in the interest rates because the government borrows more money to finance the purchase of tickets.
Also, due to the free movies, there'll be an impact lag as the policy will take time before it make its way to the people and there will also be crowding-out because the individuals will rely on free movies instead of purchasing their own.
Identify each of the following items as either a capital expenditure (C), an immediate expense (E), or neither (N):
1. Paid property taxes of $75,000 for the first year the new building is occupied.
2. Paid interest on construction note for new plant building, $550,000
3. Repaired plumbing in main plant, paying $270,000 cash.
4. Purchased equipment for new manufacturing plant, $6,000,000; financed with long-term nc
5. Paid dividends of $40,000.
6. Purchased a computer and peripheral equipment for $29,000 cash.
7. Paved a parking lot on leased property for $300,000.
8. Paid $90,000 in cash for installation of equipment in (4).
9. Paid $148,000 to tear down old building on new plant site.
10. Paid $31 ,000 maintenance on equipment in (4) during its first year of use.
Answer:
Options 2, 4, 6, 7, 8, and 9 are capital expenditure.
Options 1, 3, and 10 are the immediate expenses.
Option 5 is Neither.
Explanation:
Capital expenditure is those expenditures that are incurred to maintain the fixed assets. Thus Options 2, 4, 6, 7, 8, and 9 are capital expenditure. While the expenses that are compulsory and immediate in nature are called the immediate expenses. This means if the equipment requires repairing then it will fall in the category of immediate expense because without repairing it won't work. Therefore, a property tax of $75000, repair of the main plant, and maintenance for equipment are immediate expenses.
These statements relate to exchange rates. Label each statement as either True or False. The value of one currency in terms of another currency is called a currency rate. A real exchange rate takes into account differences in countries' price levels. A fried chicken dinner in Tennessee costs $10. Suppose Jared can convert $10 into 7.5 euros. He can purchase the same chicken dinner in Portugal for 7.5 euros. This relationship is called purchasing power parity. After her plane touches down in Moscow, Maggie notices that $1 is worth 25 rubles (Russia's currency). A week later, Maggie returns to the airport to go home and notices that $1 is worth 28 rubles. The ruble has appreciated in value against the dollar. The yen is Japan's currency. In the dollar/yen foreign exchange market, if more yen are being demanded than are being offered, the yen will depreciate in value relative to the dollar.
Answer:
Exchange Rates
Labelling each statement as either True or False:
1. The value of one currency in terms of another currency is called a currency rate.
True
2. A real exchange rate takes into account differences in countries' price levels.
True
3. A fried chicken dinner in Tennessee costs $10. Suppose Jared can convert $10 into 7.5 euros. He can purchase the same chicken dinner in Portugal for 7.5 euros. This relationship is called purchasing power parity.
True
4. After her plane touches down in Moscow, Maggie notices that $1 is worth 25 rubles (Russia's currency). A week later, Maggie returns to the airport to go home and notices that $1 is worth 28 rubles. The ruble has appreciated in value against the dollar.
False
5. The yen is Japan's currency. In the dollar/yen foreign exchange market, if more yen are being demanded than are being offered, the yen will depreciate in value relative to the dollar.
True
Explanation:
1. The meaning of currency rate can be illustrated with the US dollar exchange rate or currency rate with the Swiss francs. The rate tells the value of the dollar in relation to the Swiss francs.
2. Price levels in Country A and Country B determine the exchange rates between Country A's currency and Country B's. The price levels of these two countries are influenced by their economies' inflation and interest rates.
3. Purchasing Power Parity measures the prices of goods and services in different countries based on their dollar prices. It is a way of equalizing prices of goods and services in other countries with the dollar.
4. When US dollar increases in its rate relative to another Japanese yen, the US dollar has depreciated in value. But, the US dollar appreciates when the rate reduces relative to the Japanese yen.
5. Higher demand for the dollar by Japanese businesses than its supply depreciates a Japan's yen since according to the law of supply and demand, "the price (rate) goes up with increasing demand." The reverse is the case with higher supply than demand.
Ravelo Corporation has provided the following data from its activity-based costing system: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembly $ 514,520 52,000 machine-hours Processing orders $ 62,263 1,900 orders Inspection $ 85,589 1,910 inspection-hours Data concerning the company's product L19B appear below: Annual unit production and sales 590 Annual machine-hours 1,150 Annual number of orders 230 Annual inspection hours 180 Direct materials cost $ 53.74 per unit Direct labor cost $ 26.45 per unit According to the activity-based costing system, the unit product cost of product L19B is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
Unitary cost= $131.02
Explanation:
Giving the following information:
L19B:
Annual unit production and sales 590
Annual machine-hours 1,150
Annual number of orders 230
Annual inspection hours 180
Direct materials cost $ 53.74 per unit
Direct labor cost $ 26.45 per unit
First, we need to calculate the predetermined overhead rate for each activity:
Assembly= 514,520/52,000= $9.9 per machine-hour
Processing orders= 62,263/1,900= $32.77 per order
Inspection= 85,589/1,910= $44.81per inspection-hour
Now, we can calculate the total allocated overhead cost for product L19B:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Assembly= 9.9*1,150= 11,385
Processing orders= 32.77*230= 7,537.1
Inspection= 44.81*180= 8,065.8
Total= 29,987.9
Finally, the cost per unit:
Unitary overhead= 29,987.9/590= 50.83
Unitary cost= 53.74 + 26.45 + 50.83
Unitary cost= $131.02
The Pandora Company made the following errors on 12/31/19: Recorded the expiration of prepaid insurance by debiting Sales Revenue and crediting Depreciation Expense for $12. Recorded the issuance of 10-year bonds at par value by debiting Unearned Revenue and crediting Common Stock for $13. 12/31/19 Total Stockholders’ Equity is in error by:
Answer:
Total Stockholders’ Equity is in error by: $25.
Explanation:
It is important to remember that Stockholders’ Equity consist of Retained Profit and Common Stock and effect on the errors on these elements ultimately affects Stockholders’ Equity.
The correct entry for expiration of prepaid insurance
Insurance Expense $12 (debit)
Prepaid Insurance $12 (credit)
Effect on net profit of the error : overstatement of profit by $12
Effect on common stock of the error : none
The correct entry for Issuance of bonds :
Investments in Bonds $12 (debit)
Cash $12 (credit)
Effect on net profit of the error : none
Effect on common stock of the error : overstatement by $13
Conclusion :
Total Effect on Stockholders’ Equity = Overstatement of $25.
Travers Company is contemplating the acceptance of a special order has the following unit cost behavior, based on 10,000 units (the total capacity of their factory). Travers Company is presently manufacturing 7000 units in their factory.
Direct Materials $5
Direct Labor $10
Variable Overhead $7
Fixed Overhead $6
Poppins Company wants to purchase 2,000 units at a special unit price of $36. The normal price per unit is $40. In addition, a special stamping machine will have to be purchased for $6250 in order to stamp the company’s logo on the product.
Required:
What is the amount of the incremental income (loss) from accepting the order?
Answer:
The amount of the incremental income from accepting the order is $21,750 .
Explanation:
Incremental analysis of Accepting Special Order
Hint : Consider Incremental Amounts Only
Sales (2,000 units × $36) $72,000
Less Expenses
Direct Materials ($5 × 2,000) ($10,000)
Direct Labor ($10 × 2,000) ($20,000)
Variable Overhead ($7 × 2,000) ($14,000)
Special stamping machine ($6250)
Incremental income/ (loss) $21,750
Note : There is excess capacity of 3,000 units (10,000 units - 7,000 units) to meet the Special Order. Hence
Fixed Overheads will be the same whether or not the special order is accepted, hence they are not included in the analysis.
Conclusion :
The amount of the incremental income from accepting the order is $21,750 .
Show your work. Suppose rRF = 6%; rM = 10%; and rA = 14% Calculate Stocks A’s beta. If Stock A’s beta were 2.0, then what would be A’s new required rate of return?
Answer:
Stock A's beta= 2
The new required rate of return = 14%
Explanation:
The risk free return is 6%
The return of market portfolio is 10%
The return of security A is 14%
(A) The beta of stock A can be calculated as follows
Return of security A= Risk free return+ beta(return of market portfolio-risk free return)
14%= 6% + beta(10%-6%)
14%=6% + 4%beta
14%-6%= 4%beta
8%= 4%beta
beta= 8%/4%
beta= 2
(B) Stock A's required rate of return can be calculated as follows
Required rate of return= 6% + 2(10%-6%)
= 6% + 2(4%)
= 6% + 8%
= 14%
Hence the Stock A's beta is 2 and the required rate of return for A is 14%
Under the antiboycott law, U.S. companies are forbidden to participate in any unauthorized foreign boycott. Which situation brought about the antiboycott law in the U.S.?
Answer: The Boycott of Israel by the Arab League
Explanation:
The Arab League since 1948 has mandated that all it's members boycott any trade with Israel as well as boycotting any companies that are trading with Israel in protest of what they view as the formation of an illegal country on lands belonging to Palestine.
The United States seeing how this could affect Israel, passed some anti-boycott laws in the '70s amongst them the Export Administration Act (EAA) to ensure that its companies still traded with Israel.
a sole proprietor with a tentative loss may deduct which of the following for qualified business use of home expenses?
Complete Question:
A sole proprietor with a tentative loss may deduct which of the following for qualified business use of home expenses?
a. depreciation
b. mortgage interest
c. rent
d. Utilities
Answer:
b. mortgage interest
Explanation:
The sole proprietor with a tentative loss may deduct expenses for mortgage interest, mortgage insurance premiums, and real estate taxes under the normal rules. The sole proprietor is not allowed to deduct other expenses that are normally tax-exempt expenses, including depreciation, rent, and utilities. The amount to be deducted for mortgage interest should not exceed the percentage for business use.
Murray Company reports net income of $687,500 for the year. It has no preferred stock, and its weighted-average common shares outstanding is 250,000 shares. Compute its basic earnings per share.
Answer:
Its basic earnings per share is $2.75
Explanation:
Basic Earnings Per Share (BEPS) = Earnings Attributable to Holders of Common Stocks ÷ Weighted Average of Common Stocks Outstanding
= $687,500 ÷ 250,000 shares
= $2.75
Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $138,500, allowance for doubtful accounts of $1,005 (credit) and sales of $1,095,000. If uncollectible accounts are estimated to be 6% of accounts receivable, what is the amount of the bad debts expense adjusting entry
Answer:
The amount of uncollectible accounts is calculated as follows:
Amount of uncollectible accounts to be adjusted = 6% * Account receivables
= 6% * $138,500
=$8,310
Therefore, amount of uncollectible accounts is $8,310.
Bad debt Expenses = Opening balance of allowance for doubtful account (Credit balance) - Uncollectible account
Bad debt Expenses = $8,310 - $1,005
Bad debt Expenses = $7,305
The journal entry to record allowance for bad debts is as follows:
Account Titles and Explanation Debit Credit
Bad debt Expenses $7,305
Allowance for doubtful account $7,305
(To record adjusting entry for bad debt)
Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $600,700 and has $350,700 of accumulated depreciation to date, with a new machine that has a purchase price of $484,500. The old machine could be sold for $62,600. The annual variable production costs associated with the old machine are estimated to be $155,100 per year for eight years. The annual variable production costs for the new machine are estimated to be $102,300 per year for eight years. a.1 Prepare a differential analysis dated May 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) May 29 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effects (Alternative 2) Revenues: Proceeds from sale of old machine $ $ $ Costs: Purchase price Variable productions costs (8 years) Profit (Loss) $ $ $ a.2 Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. b. What is the sunk cost in this situation
Answer:
1.Incremental loss $300
2.Alternative II Replacing the Old Machine is beneficial because we have Incremental Profit of $300
2b.$250,000
Explanation:
1. Preparation of the differential analysis dated May 29
Differential Analysis
Continue with old machine (Alternative I ) or Replace old machine (Alternative II )
Continue with Replace the Differential effect
Old Machine Old Machine
Alternative 1 Alternative 2 Alternative 2
Revenue:
Revenue from Sale of Old Machine
$0 $62,600 $62,600
Cost:
Purchase Cost
$0 $484,500 $484,500
Variable Production (8 Years)
$1,240,000 $818,400 -$422,400
Profit / (Loss) ($1,240,000) ($1,240,300) -$300
Incremental loss = $300
2. Calculation to Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine.
Alternative II Replacing the Old Machine is not beneficial because we have Incremental loss of $300
2b. Calculation for the sunk cost in this situation
The Sunk Cost will be the Book Value of Old Machine = $600,700-$350,700
= $250,000
Variable production workings
($155,100×8=1,240,800)
($102,300×8= 818,400)
michael's Inc. just paid $2.75 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 5.9 percent. If you require a rate of return of 10.1 percent, how much are you willing to pay today to purchase one share of the company's stock?
Answer:
$69.33
Explanation:
Calculation for how much are you willing to pay today to purchase one share of the company's stock
Using this formula
P(0)=[Annual dividend *(Increase in future dividend)]/ (Rate of return- Increase in future dividend)
Let plug in the formula
P(0)=[$2.75*(1+0.059)]/(0.101-0.059)
P(0)=$2.75*1.059/0.042
P(0)=$2.91225/0.042
P(0)=$69.33
Therefore the amount you are willing to pay today to purchase one share of the company's stock will be $69.33
write an essay about Reception and basic etiquette of
an organisation and briefly explain everything that has
to do with the reception of the organisation
Answer:
The reception of the organization is the first place that a visitor sees. It is first observation of any visitor and then a perception is created about the whole organizations. The staff at reception must be well dress according to the organization rules.
Explanation:
The staff should be polite and speak gently to every one. There should be a culture of greeting every one in the organization this is the basic and an important etiquette. The workplace of every individual should be clean and the files and papers should be arranged properly. Everyone should speak politely to each other so that the other staff working in office does not gets irritated.
"Reception and Basic Etiquette of an organization"
Reception
The reception office is characterized as the office within the organization where all guests to the organization are received.
Reception office is additionally that specific room in an organizations premises or building where callers to that organization would to begin with call and make request within the course of going to the organization.
Basic Etiquette
Keep the reception zone clean and organized. Create a wonderful, unwinding environment. Offer complimentary refreshments. Provide a clear activity stream. Avoid excessively solid scents or fake fragrances. Educate your client. Choose the proper staff.Learn more about "Etiquettes":
https://brainly.com/question/25300800?referrer=searchResults
The Library is a new bar in town. Unlike the other bars in town, it charges no cover charge. The new bar has also priced its beer at $3 less per pitcher than its competition. Given what you know about pricing strategies, which pricing strategy is the owner of the new bar using
Answer: B. Penetration pricing
Explanation:
Penetration pricing is a strategy that is used by new companies in a market to capture market share from more established competitors. The process is for the new company to charge a lesser price than the amount that the other companies are charging which will bring people to the new firm for patronage.
It will thus capture market share and due to the high demand, be able to make profits due to Economies of Scale.
By charging less than its competitors, the new bar's owner is most likely pursuing a Penetration Strategy.
A merger where one company purchases another as a way to reduce competition, is an example of a type of market activity that governments pass laws against. These types of regulations are described as ______________.
Answer:
B) antitrust laws
Explanation:
Antitrust laws refer to the laws with respect to the competition and it is established by the U.S government. The motive of this to secure the consumers from that business practices who are dealing in predatory and if this law does not exist then the consumers would not gain i.e from the competition arise in the market place
Therefore according to the given situation, when the government passes the law against so this reflect the antitrust laws
The process of bond valuation is based on the fundamental concept that the current price of a security can be determined by calculating the present value of the cash flows that the security will generate in the future.
There is a consistent and predictable relationship between a bond’s coupon rate, its par value, a bondholder’s required return, and the bond’s resulting intrinsic value. Trading at a discount, trading at a premium, and trading at par refer to particular relationships between a bond’s intrinsic value and its par value. This also results from the relationship between a bond’s coupon rate and a bondholder’s required rate of return.
Remember, a bond’s coupon rate partially determines the interest-based return that a bond (might/will)...........pay, and a bondholder’s required return reflects the return that a bondholder(would like/is obligated).............to receive from a given investment.
Answer:
Remember, a bond’s coupon rate partially determines the interest-based return that a bond WILL pay, and a bondholder’s required return reflects the return that a bondholder WOULD LIKE to receive from a given investment.
Explanation:
When a bond is issued, a contract is formed between the issuer and the bondholder. The coupon rate is fixed and it must be paid by the bondholder regardless of the market price of the bond.
On the other hand, the bondholder's expected return is what determines the market price of the bond. if the expected return is higher than the coupon rate, then the bond will be sold at a discount. If the coupon rate is higher than the expected return, then the bond will be sold at a premium.
rojects A and B are mutually exclusive and have an initial cost of $78,000 each. Project A provides cash inflows of $32,000 a year for three years while Project B produces a cash inflow of $44,400 a year for two years. Which project(s) should be accepted if the discount rate is 10 percent
Answer:
Project A should be accepted.
Explanation:
The initial investment of project A = $78000
The initial investment of project B = $78000
The cash inflows of project A = $32000
The time period for project A = 3 years
The cash inflow of project B = $44400
The time period for project B = 2 years.
Interest rate (r ) = 10%
Now find the net present value of both project and then decide which one has to accept.
The net present value of project A:
[tex]=\frac{A(1-(1+r)^{-n})}{r} - \text{initial investment} \\= \frac{32000(1-(1+0.1)^{-3})}{0.1} - 78000 \\= 79579.26 – 78000 \\= $1579.26[/tex]
The net present value of project B:
[tex]=\frac{A(1-(1+r)^{-n})}{r} - \text{initial investment} \\= \frac{44400(1-(1+0.1)^{-2})}{0.1} - 78000 \\= - 942.14[/tex]
Project A should be accepted because project B has a negative net present value.
Exercise 11-1 Compute the Return on Investment (ROI) [LO11-1] Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 17,800,000 Net operating income $ 5,000,000 Average operating assets $ 35,800,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.)
Answer:
1. 28.09 %
2.0.50 times
3.13.97 %
Explanation:
Margin = Profit / Sales × 100
= $ 5,000,000 / $ 17,800,000 × 100
= 28.09 % (2 decimal places.)
Turnover = Sales / Total Assets
= $ 17,800,000 / $ 35,800,000
= 0.50 times (2 decimal places.)
Return on investment = Divisional Profit Contribution / Assets employed in the division × 100
= $ 5,000,000 / $ 35,800,000 × 100
= 13.97 % (2 decimal places.)
Nidal Company reported inventory in the 2020 year-end balance sheet, using the FIFO method, as $185,000. In 2021, the company decided to change its inventory method to average cost. If the company had used the average cost method in 2020, ending inventory would have been $171,000. What adjustment would Nidal make for this change in inventory method
Answer:
Dr Retained earnings $14,000
Cr Inventory $14,000
Explanation:
There is a need to make adjustment to the inventory . Therefore,
Adjusted inventory
= New method of $171,000 - Old method of $185,000
= $14,000 decrease
It is to be noted that a lower inventory will have high costs associated with goods sold hence reduces profit/net income for the previous year by $14,000.
Also, the net income reports to retained earnings account hence decreases retained earnings.
Having made the above adjustment, we can assume that the average cost method was used for 2020 books.
Answer:
Dr Retained earnings for $14,000
Cr Inventory for $14,000
Explanation:
Calculation of the adjustment that Nidal would make for this change in inventory method
Based of the information given the adjustment will records the decrease in inventory of $14,000 which is calculated as ( Inventory of $185,000 − Ending inventory of $171,000) as well as the decrease in retained earnings, just as if average cost had been used in 2020.]
Therefore the adjustment that Nidal would make for this change in inventory method will be:
Dr Retained earnings for $14,000
Cr Inventory for $14,000.
Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $84, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $145 million, a coupon rate of 5 percent, and sells for 95 percent of par. The second issue has a face value of $130 million, a coupon rate of 4 percent, and sells for 107 percent of par. The first issue matures in 24 years, the second in 9 years. Both bonds make semiannual coupon payments
a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g. .1616.)
b. What are the company's capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g. 1616.)
c. Which are more relevant, the book or market value weights?
Answer:
(a). Book value of equity is (6,000,000 * $5) = $30,000,000
Book value of debts ($145,000,000 + $130,000,000) = $275,000,000
Total book value of the corporation ($30,000,000 + $275,000,000) = $305,000,000
Weight equity ($30,000,000 / $305,000,000) = 0.0984
Weight debts ($275000000 / $305000000) = 0.9016
Equity / Value = 0.0984
Debt / Value = 0.9016
(b). Market value of equity is (6,000,000 * $84) = $504,000,000
Market value of debts ($145,000,000 * 0.95) + ($130,000,000 * 1.07)
= ($137,750,000 + $139,100,000)
= $276,850,000
Total market value of the corporation ($504,000,000 + $276,850,000) = $780,850,000
Weight equity ($504,000,000 / $780,850,000) = 0.6455
Weight debts ($276850000 / $780850000) = 0.3545
Equity / Value = 0.6455
Debt / Value = 0.3545
(C). Answer is Market value . As we know that market value weights are more relevant because such weights are on the basis of the prevailing market prices, hence such weights will show more accurate picture of the capital structure.
Journalize the entry to record the receipt of payment of the note at maturity.
Cash 60,900
Notes Receivable 60,000
Interest Revenue 3,600
Answer:
Journal entry:
Debit Cash Account $63,600
Credit Notes Receivable $60,000
Credit Interest Revenue $3,600
To record the settlement of notes receivable and interest.
Explanation:
On maturity of the note, the customer is expected to settle account by paying for both the Notes and the Interest Due. The customer will pay $63,600 to settle the two accounts. Cash balance will increase to $124,800 from $60,900 by this transaction.
You have just deposited $5,000 into an account that promises to pay you an annual interest rate of 5.3 percent each year for the next 4 years. You will leave the money invested in the account and 10 years from today, you need to have $7,990 in the account. What annual interest rate must you earn over the last 6 years to accomplish this goal?
Answer:
An interest rate of 4.5% needs to be earned over the last 6 years to accomplish this goal
Explanation:
Firstly, we calculate the interest value on the $5000 deposited at interest of 5.3% for 4 years
We can use the compound interest formula to know the value of the amount
A =I(1 + r)^nt
Where A is the amount which we want to calculate
I is the amount deposited = 5.3% = 5.3/100 = 0.053
n is the number of times per year in which interest is compounded = 1 (annually)
t is the number of years = 4
Plugging the values, we have ;
A = 5000(1 + 0.053)^(4)(1)
A = 5000(1.053)^4
A = $6147.29 which is approximately $6147
Now we want to know the amount of annual interest to be earned over the next 6 years
In this case our A = $7,990
I = $6147
n = 1
t = 6
r = ?
Substituting the values, we have ;
7990= 6147(1 + r)^6
divide both side by 6147
1.3 = (1+r)^6
1+ r = 1.045
r = 1.045-1
r = 0.045 which is same as 4.5%
A company had the following cash flows for the year: (a) Purchased inventory, $60,000 (b) Sold goods to customers, $90,000 (c) Received loan from a local bank, $150,000 (d) Purchased land, $180,000 (e) Purchased treasury stock, $40,000 (f) Paid dividends, $10,000 (g) Sold delivery truck, $30,000 What amount would be reported for net investing cash flows on the Statement of Cash Flows
Answer:
($150000)
Explanation:
The computation of the net investing cash flows is shown below;
Purchase of land ($180,000)
Sale of delivery truck $30,000
Net Cash used in Investing activities ($150000)
The purchase of land is an outflow of cash and the sale of delivery truck is a inflow of cash so it would be shown in a negative and positive amount
Thus all other values would be ignored