Answer:
a. Cash receipts from customers.
Statement of cash flows: Operating activity
b. Issuance of common stock for cash
Statement of cash flows: Financing activity
c. Payment of cash dividends
Statement of cash flows: Financing activity
d. Cash purchase of equipment
Statement of cash flows: Investing Activities
e. Cash payments to suppliers
Statement of cash flows: Operating activities
f. Sale of old machine for cash
Statement of cash flows: Investing Activities
Prepaid rent for three months, $3,600. May 5 Received and paid electricity bill, $900. May 9 Received cash for meals served to customers, $2,000. May 14 Paid cash for kitchen equipment, $3,120. May 23 Served a banquet on account, $3,200. May 31 Made the adjusting entry for rent (from May 1). May 31 Accrued salary expense, $1,800. May 31 Recorded depreciation for May on kitchen equipment, $52
Stephen is a new insurance agent with an established company.He is nervous at the idea of making cold calls on the telephone to prospective clients.After thinking through the problem,Stephen decides to ask his supervisor if he can host a small introductory meeting,inviting local business in for coffee and cake to introduce himself.Stephen is exhibiting a high level of hope.
a. True
b. False
Answer:
a. True
Explanation:
It is correct to say that Stephen is exhibiting a high level of hope because he had the idea of organizing a small introductory meeting in order to introduce himself to local companies and thus break the initial nervousness that could occur if he did not previously know his potential client. With this introductory meeting for greater integration between him, who is the new insurance agent and the companies that are his potential clients, there may be greater interaction, greater possibility of closing deals and greater customer satisfaction, lessening insecurity, etc.
Question 1: TimeValueOfMoneyPro110Alt1 An engineer in a developing country observes that his project bank account has grown from 1400000 to 1558869 (local currency units) in 15 days with no deposits or withdrawals being made. He knows that the account earns interest compounded daily. Question 1 What is the daily compound rate of interest earned on the account
Answer: 0.72%
Explanation:
Using the Present value formula:
Present value = Future value / (1 + r)^n
Making r the subject of the formula makes the equation:
r = (Future value / Present value ) ^ 1/n - 1
= (1,558,869/ 1,400,000)¹/¹⁵ - 1
= 0.72%
Determine the gross income of the beneficiaries in the following cases:
1. Justin’s employer was downsizing and offered employees an amount equal to one year’s salary if the employee would voluntarily retire.
2. Trina contracted a disease and was unable to work for six months. Because of her dire circumstances, her employer paid her one-half of her regular salary while she was away from work.
3. Coral Corporation collected $1,000,000 on a key person life insurance policy when its chief executive died. The corporation had paid the premiums on the policy of $77,000, which were not deductible by the corporation.
4. Juan collected $40,000 on a life insurance policy when his wife, Leona, died in 2020. The insurance policy was provided by Leona’s employer, and the premiums were excluded from Leona’s gross income as group term life insurance. In 2020, Juan also collected the $3,500 accrued salary owed to Leona at the time of her death.
Answer:
1. Justin’s employer was downsizing and offered employees an amount equal to one year’s salary if the employee would voluntarily retire.
the compensation is included in Justin's gross income.
2. Trina contracted a disease and was unable to work for six months. Because of her dire circumstances, her employer paid her one-half of her regular salary while she was away from work.
the compensation is included in Trina's gross income.
3. Coral Corporation collected $1,000,000 on a key person life insurance policy when its chief executive died. The corporation had paid the premiums on the policy of $77,000, which were not deductible by the corporation.
the benefits are included in the company's taxable income, but the premiums paid are deductible
4. Juan collected $40,000 on a life insurance policy when his wife, Leona, died in 2020. The insurance policy was provided by Leona’s employer, and the premiums were excluded from Leona’s gross income as group term life insurance. In 2020, Juan also collected the $3,500 accrued salary owed to Leona at the time of her death.
the life insurance policy proceeds are not taxable, but the accrued salaries are taxedAssume that the risk-free rate of interest is 3% and the expected rate of return on the market is 14%. I am buying a firm with an expected perpetual cash flow of $1,000 but am unsure of its risk. If I think the beta of the firm is 0.9, when in fact the beta is really 1.8, how much more will I offer for the firm than it is truly worth
Answer: $3,365.98
Explanation:
Value of firm with beta of 0.9.
First use CAPM to find the required return:
= Risk free rate + beta * (Market return - risk free rate)
= 3% + 0.9 * (14% - 3%)
= 12.9%
Firm Value = Perpertual cashflow / Required return
= 1,000 / 12.9%
= $7,751.94
Value of firm with beta of 1.8.
Required return = 3% + 1.8 * (14% - 3%)
= 22.8%
Value of firm = 1,000 / 22.8%
= $4,385.96
Difference = 7,751.94 - 4,385.96
= $3,365.98
You would be paying $3,365.98 than the firm is worth.
The International Bank for Reconstruction and Development was originally founded with the purpose of:_________
Answer:
Explanation:
This banks original purpose for being founded was to provide money and help pay for the reconstruction of European nations that suffered great losses during the second World War. This bank was founded in 1944, one whole year before the end of the war. The war completely destroyed many European nations as well as their economies so it was very difficult for them to rebuild without the help of the International Bank for Reconstruction and Development.
On January 15, Pinkney, Inc., issued 10,000 shares of $10 par value common stock in exchange for land and a building. Five years ago, the stockholder purchased the land for $40,000 and constructed the building at a cost of $90,000. At the time of the stock issuance, the land and the building had fair market values of $45,000 and $95,000, respectively. Complete the necessary journal entry by selecting the account names and dollar amounts from the drop-down menus.
Answer and Explanation:
The journal entry is shown below:
Land $45,000
Building $95,000
To Common Stock,$10 Par value $100,000 (10,000 shares × $10)
To Paid in capital excess of Par Value, Common Stock $40,000
(Being the shares are issued in exchange for land)
Here land and building is debited as it increased the assets and credited the common stock and paid in capital as it also increased the equity
Which of the following best illustrates Hofstede's definition of collectivism?
a. Managers at Honest Tea expect that all employees will have an interest and part in environmental sustainability
b. The founder of Honest Tea stresses the importance of equality and opportunity
c. An employee of Honest Tea prefers to work alone and puts him- or herself above others
d. The managers of Honest Tea prefer tradition over change
e. Employees in Honest Tea have high levels of anxiety about uncertainty
Answer:
a. Managers at Honest Tea expect that all employees will have an interest and part in environmental sustainability
Explanation:
Analyzing the information about Honest Tea, it is possible to understand that sustainability is an issue that has a lot of weight for the company, and all its processes are managed in an environmentally responsible manner. Therefore, it is correct to say that Honest Tea managers expect all employees to be interested and participate in environmental sustainability, as this is a value that identifies and positions the company in the market, and it is essential that this value is shared by all employees.
Environmental management is a form of management that provides significant advantages to an organization, as it standardizes procedures and policies to reduce environmental impacts, the company operates with a focus on continuous improvement that reduces costs, waste, makes work most satisfactory and sustainability as a shared value.
Spicewood Stables, Inc., was established in Dripping Springs, Texas, on April 1. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions for April are provided for your review.
1. Received contributions from investors and issued $230,000 of common stock on April 1.
2. Acquired a barn for $180,000. On April 2, the company paid half the amount in cash and signed a three-year note payable for the balance.
3. Provided $18,000 in animal care services for customers on April 3, all on credit.
4. Rented stables to customers who cared for their own animals; received cash of $14,000 on April 4 for rent earned this month.
5. On April 5, received $3,350 cash from a customer to board her horse in May, June, and July (record as Deferred Revenue).
6. Purchased and received hay and feed supplies on account on April 6 for $3,800.
7. Paid $2,600 on accounts payable on April 7 for previous purchases.
8. Received $2,040 from customers on April 8 on accounts receivable.
9. On April 9, prepaid a two-year insurance policy for $4,800 for coverage starting in May.
10. On April 28, paid $1,140 in cash for water and utilities used this month.
11. Paid $14,800 in wages on April 29 for work done this month.
12. Received an electric utility bill on April 30 for $1,560 for usage in April; the bill will be paid next month.
Required:
1. Prepare the journal entry for each of the above transactions.
2. Post the transaction activity from requirement 1 to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations.
3. Prepare an unadjusted trial balance as of April 30.
4-a. Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information, calculate preliminary net income and net profit margin.
4-b. Determine whether the net profit margin is better or worse than the 30.0 percent earned by a close competitor.
Answer:
Spicewood Stables, Inc.
1. Journal Entries:
April 1:
Debit Cash $230,000
Credit Common Stock $230,000
To record contributions from investors and issuance of stock.
April 2:
Debit Barn $180,000
Credit Cash $90,000
Credit Notes Payable (Long-term) $90,000
To record the acquisition of a barn.
April 3:
Debit Accounts Receivable $18,000
Credit Service Revenue $18,000
To record the provision of animal care services on credit.
April 4:
Debit Cash $14,000
Credit Rent Revenue $14,000
To record the renting of stables to customers for April.
April 5:
Debit Cash $3,350
Credit Deferred Revenue $3,350
To record the receipt of cash from customer in advance.
April 6:
Debit Supplies $3,800
Credit Accounts Payable $3,800
To record the purchase of hay and feed supplies on account.
April 7:
Debit Accounts Payable $2,600
Credit Cash $2,600
To record the payment on account
April 8:
Debit Cash $2,040
Credit Accounts Receivable $2,040
To record the receipt of cash from customers.
April 9:
Debit Prepaid Insurance $4,800
Credit Cash $4,800
To record the prepayment of insurance for 2 years.
April 10:
Debit Utilities Expense $1,140
Credit Cash $1,140
To record the payment for water and utilities.
April 11:
Debit Wages Expense $14,800
Credit Cash $14,800
To record the payment of wages for the month.
April 12:
Debit Utilities Expense $1,560
Credit Utilities Payable $1,560
To record the accrued electric utility bill.
2. T-Accounts:
Cash
Date Account Title Debit Credit
April 1 Common stock $230,000
April 2 Barn $90,000
April 4 Rent Revenue 14,000
April 5 Deferred Revenue 3,350
April 7 Accounts payable 2,600
April 8 Accounts receivable 2,040
April 9 Prepaid Insurance 4,800
April 10 Utilities Expenses 1,140
April 11 Wages Expense 14,800
April 12 Balance $136,050
Totals $249,390 $249.390
Common Stock
Date Account Title Debit Credit
April 1 Cash $230,000
Barn
Date Account Title Debit Credit
April 2 Cash $90,000
April 2 Notes payable 90,000
April 12 Balance $180,000
Notes Payable
Date Account Title Debit Credit
April 2 Barn $90,000
Accounts Receivable
Date Account Title Debit Credit
April 3 Service Revenue $18,000
April 8 Cash $2,040
April 12 Balance $15,960
Service Revenue
Date Account Title Debit Credit
April 3 Accounts receivable $18,000
Rent Revenue
Date Account Title Debit Credit
April 4 Cash $14,000
Deferred Revenue
Date Account Title Debit Credit
April 5 Cash $3,350
Supplies
Date Account Title Debit Credit
April 6 Accounts Payable $3,800
Accounts Payable
Date Account Title Debit Credit
April 6 Supplies $3,800
April 7 Cash $2,600
April 12 Balance $1,200
Prepaid Insurance
Date Account Title Debit Credit
April 9 Cash $4,800
Utilities Expenses
Date Account Title Debit Credit
April 10 Cash $1,140
Wages Expense
Date Account Title Debit Credit
April 11 Cash $14,800
3. Unadjusted Trial Balance as of April 30:
Account Title Debit Credit
Cash $136,050
Common stock $230,000
Barn 180,000
Notes payable 90,000
Accounts receivable 15,960
Service Revenue 18,000
Rent Revenue 14,000
Deferred Revenue 3,350
Supplies 3,800
Accounts payable 1,200
Prepaid Insurance 4,800
Utilities Expenses 1,140
Wages Expense 14,800
Totals $356,550 $356,550
4a.
Service Revenue 18,000
Rent Revenue 14,000
Total revenues $32,000
Utilities Expenses 1,140
Wages Expense 14,800
Total expenses $15,940
Net Income $16,060
Net profit margin = $16,060/$32,000 * 100 = 50.19%
4b. The net profit margin is better than the 30.0% earned by a close competitor.
Explanation:
The adjustment for Electric Utility does not form part of the adjusted trial balance. If we assume that the payment was eventually made on April 30, the Cash Balance will reduce by $1,560 and the total expenses will increase by the same amount with an equal reduction in the net income to $14,500. This will also reduce the net profit margin to 45.31%.
The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $400 per ton. The U.S. is a price-taker in the tomatoes market. If trade in tomatoes is not allowed, the price of tomatoes in the United States:______
a. could increase or decrease or be unaffected; this cannot be determined.
b. will increase, and this will cause consumer surplus to decrease.
c. will be unaffected, and consumer surplus will be unaffected as well.
d. will decrease, and this will cause consumer surplus to increase.
Answer:
B
Explanation:
The US does not produce tomatoes efficiently. This is because the price of tomatoes in the US is higher when compared with the rest of the world.
The best option for US is to import tomatoes.
If trade is not allowed, the price of tomatoes would increase and consumer surplus would decrease
Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.
Consumer surplus = willingness to pay – price of the good
If trade is allowed price would decrease and consumer surplus would increase
In Los Angeles County, the median price rose 0.5% to $618,000 in June and sales fell 12.1%.
In Orange County, the median price slipped 0.3% to $738,000 and sales fell 9.4%.
In Riverside County, the median price climbed 5.3% to $399,000 and sales fell 4%.
In San Bernardino County, the median price rose 1.5% to $340,000 and sales fell 11.4%.
In Ventura County, the median price dropped 5.7% to $580,000 and sales rose 1.6%.
In San Diego County, the median price rose 2.6% to $590,000 and sales fell 7.4%.
1. The price elasticity of demand in San Bernardino County is ____. Give your answer in two decimals.
2. Holding the price elasticity of demand constant, sales in San Bernardino County would fall by __% if prices increased by 2%. Give your answer to two decimals.
3. Assume that no other factors influence the demand or supply of housing. In ___ County, the law of demand appears to be violated. Choices: San Diego, Riverside, Orange and Los Angeles
Answer:
Part 1 : -7.6
Part 2: 15.2%
Part 3: Orange County
Explanation:
Part 1. Price Elasticity:
The formula for Price Elasticity is:
Price Elasticity = Percentage Change in Quantity Demanded divided by the percentage change in price.
So,
We need percentage change in price and percentage change in quantity demanded in order to solve for price elasticity of demand in San Bernardino County.
So,
As we know that,
In San Bernardino County, the median price rose 1.5% to $340,000 and sales fell 11.4%.
Hence,
The Percentage Change in Price = 1.5
The Percentage Change in Quantity Demanded = -11.4
Just Plugging in these values in the Price Elasticity formula, we get:
Price Elasticity of Demand = -11.4 / 1.5
Price Elasticity of Demand = -7.6
Part 2: Condition Given: If Price increased by 2%
So,
In this we are asked to find the percentage change in quantity demanded.
Therefore, we will use the same formula of Plasticity of demand.
Price Elasticity of Demand = Percentage Change in Quantity Demanded divided by the percentage change in price.
Making Percentage Change in Quantity Demanded as subject:
Percentage Change in Quantity Demanded = Price Elasticity multiplied by the percentage change in price.
Here,
Percentage Change in price = 2%
Price Elasticity of Demand = -7.6
Just plugging in these values in to the formula:
Percentage Change in Quantity Demanded = -7.6 x 2
Percentage Change in Quantity Demanded = -15.2
Therefore, Holding the price elasticity of demand constant, sales in San Bernardino County would fall by _15.2_% if prices increased by 2%.
Part 3:
To solve this part, first we need to understand the law of demands:
Law of demands says that the relationship of change in price and change in quantity demanded is inversely proportional keeping all other factors constant. So, if price goes high, quantity demanded will go down and vice versa.
And here,
In _Orange__ County, the law of demand appears to be violated.
Celine Dion Company issued of 10% 20 -year bonds on January 1, 2014, at Interest is payable semiannually on July 1 and January 1. Dion Company uses the straight-line method of amortization for bond premium or discount.
Instructions:
Prepare the journal entries to record: The issuance of the bonds.
Answer:
Dr Cash $612,000
Cr bonds payable $600,000
Cr premium on bonds payable $12,000
Explanation:
The face value of $600,000 and price factor of 102% are missing from the question:
Proceeds from bond issuance=face value*price factor
Proceeds from bond issuance=$600,000*102%
Proceeds from bond issuance=$612,000
The cash received would be debited to cash account while bonds payable and premium on bonds payable are credited with $600,000 and $12000 respectively
On January 1, Gucci Brothers Inc. started the year with a $696,000 balance in Retained Earnings and a $602,000 balance in common stock. During the year, the company reported net income of $109,000, paid a dividend of $14,400, and issued more common stock for $30,000. What is total stockholders' equity at the end of the year?
Answer:
See below
Explanation:
Given the above information, we will first calculate the common stock
Common stock = Balance in common stock + Common stock issued
= $602,000 + $30,000
= $632,000
Retained earnings
= Balance in retained earning + Net income - dividend paid
= $696,000 + $109,000 - $14,400
= $790,600
Total stockholder equity
= Common stock + retained earning
= $632,000 + $790,600
= $1,422,600
Hoffman Corporation issued $60 million of 5%, 20-year bonds at 102. Each of the 60,000 bonds was issued with 10 detachable stock warrants, each of which entitled the bondholder to purchase, for $20, one share of $1 par common stock. At the time of sale, the market value of the common stock was $25 per share and the market value of each warrant was $5. Prepare the journal entry to record the issuance of the bonds.
Answer:
Date Account titles and Explanation Debit Credit
Cash (60,000*102%) $61,200,000
Discount on bonds payable $1,800,000
(63,000,000-61,200,000)
Bond payable (Face value) $60,000,000
Equity stock warrants outstanding $3,000,000
(60,000 bonds * 10 warrants * $5)
(To record the issue of shares and the share warrants)
Constable Co. reported the following information at December 31, Year 1:
Accounts Payable $4,540
Accounts Receivable 9,390
Cash 23,890
Common Stock 90,400
Equipment 49,900
Inventory 31,600
Notes Payable due December 31, Year 3 2,540
Retained Earnings, December 31, Year 1 14,130
Wages Payable 3,170
What is the amount of current liabilities on the classified balance sheet?
Answer:
The amount of Current liabilities is $7,710
Explanation:
The amount of current liabilities on the classified balance sheet is seen below;
Constable Corp.
Balance sheet as at December 31, year 1.
Current liabilities
Accounts payable $4,540
Wages payable $3,170
Total $7,710
Tardis Intertemporal(TI) has 16,800,000 shares issued and outstanding and is trading at $83.20 per share. The company issues 2,400,000 new shares with a subscription price of $52.00. Under the terms of the offering, 7 rights are required to subscribe to one new share at the subscription price, and each shareholder is issued one right for each share owned.
If all the shares offered are taken up then Tardis Intertemporal(TI) will raise _____________
and, after the capital infusion, the market capitalization of the company will be ______________
After the new shares are issued the market price should be ______________
The fair market value of the right should thus be __________
Answer:
If all the shares offered are taken up then Tardis Intertemporal(TI) will raise = $52 x 2,400,000 = $124,800,000
and, after the capital infusion, the market capitalization of the company will be = ($83.20 x 16,800,000) + $124,800,000 = $1,397,760,000 + $124,800,000 = $ 1,522,560,000
After the new shares are issued the market price should be = $1,522,560,000 / (16,800,000 + 2,400,000) = $1,522,560,000 / 19,200,000 = $79.30
The fair market value of the right should thus be = ($83.20 - $52) / (7 + 1) = $31.20 / 8 = $3.90
On December 31, 2018 Dean Company changed its method of accounting for inventory from weighted average cost method to the FIFO method. This change caused the 2018 beginning inventory to increase by $960,000. The cumulative effect of this accounting change to be reported for the year ended 12/31/18, assuming a 40% tax rate, is Group of answer choices
Answer:
$576,000
Explanation:
Calculation for what The cumulative effect of this accounting change to be reported for the year ended 12/31/18, assuming a 40% tax rate, is
Accounting change cumulative effect= ($960,000 × (1 - .40)
Accounting change cumulative effect= ($960,000×0.6)
Accounting change cumulative effect= $576,000
Therefore The cumulative effect of this accounting change to be reported for the year ended 12/31/18, assuming a 40% tax rate, is $576,000
John, Lesa, and Trevor form a limited liability company. John contributes 60 percent of the capital, and Lesa and Trevor each contribute 20 percent. Nothing is decided about how profits will be divided. John assumes that he will be entitled to 60 percent of the profits in accordance with his contribution. Lesa and Trevor, however, assume that the profits will be divided equally. A dispute over the profits arises, and ultimately a court has to decide the issue. What law will the court apply
Answer: State Law.
Explanation:
This dispute falls under the jurisdiction of state law and so that is what the court will use. This is unless the company established a profit-sharing agreement as per the Uniform Limited Liability Company Act (ULLCA) and the state that they are in is one of the 19 states and District that enacted the UCCLA.
As the company never established a profit agreement principle, this falls under State law which normally calls for the division of profits equally amongst partners.
For each of the following accounts, indicate the effect of a debit or a credit on the account and the normal balance.
Debit Effect Credit Effect Normal Balance
a. Accounts Payable
b. Advertising Expense
c. Service Revenue
d. Accounts Receivable
e. Retained Earnings
f. Dividends
Answer:
a. Accounts Payable
Accounts payable have a credit balance and will increase under credit effect and decrease under debit effect.
b. Advertising Expense
Advertising expense has a debit balance and will increase in case of debit effect and decrease in case of credit effect.
c. Service Revenue
Service revenue will be credited and will increase in case of credit effect and decrease in case of debit effect.
d. Accounts Receivable
Accounts receivables will be debited and increase under debit effect and decrease under credit effect.
e. Retained Earnings
Retained earnings will be credited and will increase in case of credit effect and decrease in case of debit effect.
f. Dividends
Dividends will be debited which will lead to an increase in it under debit effect and decrease under credit effect.
Implied interest rate and period Consider the case of the following annuities, and the need to compute either their expected rate of return or duration. Joshua inherited an annuity worth $6,830.77 from his uncle. The annuity will pay him eight equal payments of $1,100 at the end of each year. The annuity fund is offering a return of ______.
Answer:
6.00%
Explanation:
Rate of return can be calculated using RATE function in excel or I/Y on calculator or using the formula for annuity
Annuity Rate = RATE(nper=8, pmt=1100, pv=-6,830.77, fv = 0, 0)
Annuity Rate = 0.06000118
Annuity Rate = 6.00%
Magazine sells subscriptions for $60 for 30 issues. The company collects cash in advance and then mails out the magazines to subscribers each month. Apply the revenue recognition principle to determine a. when Seacoast Magazine should record revenue for this situation. b. the amount of revenue Seacoast Magazine should record for five issues.
Answer:
a. Revenue is earned when when service or product are delivered to client. Thus Seacoast Magazine should recognize the revenue when it mails the magazines to its subscribers.
b. Total amount received is $60 for 30 issues.
Amount for 1 issues = Total cost / Number of issues of magazines = $60/30 = $2 per issue
Amount of 5 issues = $2 * 5 = $10
Therefore, Seacoast Magazine should record revenue $10 for 5 issues.
Below are the transactions for Salukis Car Cleaning for June, the first month of operations.
June 1 Obtain a loan of $53,000 from the bank by signing a note.
June 2 Issue common stock in exchange for cash of $23,000.
June 7 Purchase car wash equipment for $58,000 cash.
June 10 Purchase cleaning supplies of $6,300 on account.
June 12 Wash 330 cars for $10 each. All customers pay cash.
June 16 Pay employees $730 for work performed.
June 19 Pay for advertising in a local newspaper, costing $330.
June 23 Wash 430 cars for $10 each on account.
June 29 Pay employees $780 for work performed.
June 30 A utility bill of $1,230 for the current month is paid.
June 30 Pay dividends of $430 to stockholders.
1. Record each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. & 3. Post each transaction to the appropriate T-accounts and calculate the balance of each account.
4. Prepare a trial balance for June.
Answer:
Part 1
June 1
Debit : Cash $53,000
Credit : Bank Note $53,000
June 2
Debit : Cash $23,000
Credit : Common Stock $23,000
June 7
Debit : Equipment $58,000
Credit : Cash $58,000
June 10
Debit : Supplies $6,300
Credit : Account Payables $6,300
June 12
Debit : Cash $3,300
Credit : Service Revenue $3,300
June 16
Debit : Salaries $730
Credit : Cash $730
June 19
Debit : Advertising $330
Credit : Cash $330
June 23
Debit : Trade Receivables $4,300
Credit : Service Revenue $4,300
June 29
Debit : Salaries $780
Credit : Cash $780
June 30
Debit : Utility Bill $1,230
Credit : Cash $1,230
June 30
Debit : Dividends $430
Credit : Cash $430
Part 2 & 3
Cash : Debit Side - $53,000 + $23,000 + $3,300, Credit Side - $58,000 + $730 + $330+ $780+ $1,230+$430 = $17,800 (debit)
Bank Note : Debit Side - Credit Side - $53,000 = $53,000 (credit)
Common Stock : Debit Side - Credit Side - $23,000 = $23,000 (credit)
Equipment : Debit Side - $58,000 Credit Side - = $58,000 (debit)
Supplies : Debit Side - $6,300 Credit Side - = $6,300 (debit)
Accounts Payable : Debit Side - Credit Side - $6,300 = $6,300 (credit)
Service Revenue ; Debit Side - Credit Side - $3,300 + $4,300 = $7,600(credit)
Salaries : Debit Side - $730 + $780 Credit Side - = $1,510 (debit)
Advertising : Debit Side - $330 Credit Side - = $330 (debit)
Accounts Receivables : Debit Side - $4,300 Credit Side - = $4,300 (debit)
Utility Bill : Debit Side - $1,230 Credit Side - = $1,230 (debit)
Dividends : Debit Side - $430 Credit Side - = $430 (debit)
Part 4
Trial Balance as at 30 June
Debit Credit
Cash $17,800
Bank Note $53,000
Common Stock $23,000
Equipment $58,000
Supplies $6,300
Accounts Payable $6,300
Service Revenue $7,600
Salaries $1,510
Advertising $330
Accounts Receivables $4,300
Utility Bill $1,230
Dividends $430
Totals $89,900 $89,900
Explanation:
The Accounting Process starts with recording transactions in the Journals. The Journals are then posted to the Account Affected and the balances of those Accounts are determined. The trial Balance is then prepared by extracting these balance to find the Debit and Credit Totals to check mathematical accuracy.
Classify the following investments. Each case is independent of the other.
Investment Classifications
(a) A bond that will mature in 4 years was bought 1 month ago when the price dropped. As soon as the value increases, which is expected next month, it will be sold. select an Investment Classification
(b) 10% of the outstanding stock of Farm-Co was purchased. The company is planning on eventually getting a total of 30% of its outstanding stock. select an Investment Classification
(c) Bonds were purchased in December of this year. The bonds are expected to be sold in January of next year. select an Investment Classification
(d) Bonds that will mature in 5 years are purchased. The company would like to hold them until they mature, but money has been tight recently and they may need to be sold. select an Investment Classification
(e) Preferred stock was purchased for its constant dividend. The company is planning to hold the preferred stock for a long time. select an Investment Classification
(f) A bond that matures in 10 years was purchased. The company has committed the money for an expansion project planned 10 years from now.
Answer:
(d) Bonds that will mature in 5 years are purchased. The company would like to hold them until they mature, but money has been tight recently and they may need to be sold. select an Investment Classification.
Explanation:
Select the best opening for a letter from a local nonprofit organization that refuses a request for a charitable donation.
A. The services you provide for homeless families in our community are necessary and important.
B. This is to inform you that your kind letter of May 14 has been directed to me for reply.
C. We have received your letter requesting a donation to your annual fund-raiser.
D. Although we admire what your organization does for our community, unfortunately we are unable to donate to your fund-raiser at this time.
Answer:
B. This is to inform you that your kind letter of May 14 has been directed to me for reply.
Explanation:
According to the given options, the option B should be selected for refusing the request for a charitable donation as letter of may 14 would be directed to me for reply as it represent the declination of request made for charitable donation
So the option b is correct
and, the rest of the options are incorrect
A rational buyer will: buy a product until the marginal benefit of consuming the product is less than the price of the product. buy the product only when the marginal benefit of consuming the product is twice as much as the price of the product. not consider costs versus benefits when purchasing a product. keep buying a product until marginal benefit equals price.
Answer:
keep buying a product until marginal benefit equals price
Explanation:
A rational consumer would continue to consume a product until the marginal benefit of the last unit consumed equal marginal cost. At this point, utility is maximised.
For example, if the price of a bottle of water is $4. The utility you derive from the first bottle is 6. So you consume one more bottle, the utility you derive from the second bottle is 5. you buy a third bottle. The utility you derive from the 3rd bottle is 4. At this point utility is maximised and you should stop consuming more water
If you consume a 4th bottle, the utility you would derive from it would be 3 utils. This doesn't make sense because you are paying more for the bottle when compared to the utility you would derive from it
Question 3: Cost terminology in manufacturing firms a) Direct materials include all materials and components only raw materials such as steel and glass only major materials and components Correct: Your answer is correct. Direct labor includes all production labor including supervisors and maintenance staff only managers who directly supervise the production process only hourly production workers (aka assembly workers) Correct: Your answer is correct. Manufacturing overhead includes only big items that cannot be traced (e.g., factory rent) only non-manufacturing costs only small items that are not worth tracing (e.g., glue, grease) both big items that cannot be traced (e.g., factory rent) and small items that are not worth tracing (e.g., glue, grease) Correct: Your answer is correct. b) Classify the following items as direct materials (DM), direct labor (DL), or manufacturing overhead (OH) for a car assembly plant: Rent for the factory building DL DM OH Correct: Your answer is correct. Cost of engines used in production DL DM OH Correct: Your answer is correct. Depreciation on production equipment DL DM OH Correct: Your answer is correct. Cost of lubricant used in production DL DM OH Correct: Your answer is correct. Production supervisor's salary DL DM OH Correct: Your answer is correct. Assembly workers' wages DL DM OH Correct: Your answer is correct.
Answer:
1. a. Only major materials and components.
Only the major materials and components are include as direct materials because these are the materials that directly needed for production.
b. Only hourly production workers (aka assembly workers).
The direct labor has to be those people who are directly involved in production which in this case is the assembly workers. Managers and Supervisors are not integral so are not direct labor.
c. Both big items that cannot be traced (e.g., factory rent) and small items that are not worth tracing (e.g., glue, grease).
All other items involved in production should be included as manufacturing overheads including big items and small items that cannot be traced.
2.
Rent for the factory building ⇒ Manufacturing Overhead (OH).
Cost of engines used in production ⇒ Direct materials (DM).
Depreciation on production equipment ⇒ Manufacturing Overhead (OH).
Cost of lubricant used in production. ⇒ Manufacturing Overhead (OH).
Production supervisor's salary. ⇒ Manufacturing Overhead (OH).
Assembly workers' wages. ⇒ Direct Labor.
HELP A company can have a competitive advantage if it
produces a comparable product at the same cost as others in the market.
builds the best reputation for quality of all companies in the market.
has about the same manufacturing costs as other companies in the market.
All of the above.
Learning Objective 15-C2: Explain job cost sheets and how they are used in job order costing. Skip to question In a job order costing system, the costs of producing each job are accumulated on a separate job cost sheet. Costs of direct materials, direct labor, and overhead applied are accumulated separately on the job cost sheet and then added to determine the total cost of a job. Job cost sheets for jobs in process, finished jobs, and jobs sold make up subsidiary records controlled by general ledger accounts.
Answer:
Job Cost Sheets:
In a job order costing system, the costs of producing each job are accumulated on a separate job cost sheet.
Explanation:
A job cost sheet is used in a job order costing system to record all manufacturing costs related to each job. The costs that are recorded in the job cost sheet include direct material, direct labor, and manufacturing overhead costs. Since these job costs are traceable to their respective jobs, the actual direct material and labor costs are used.
On November 30, the end of the first month of operations, Weatherford Company prepared the following income statement, based on the absorption costing concept:
Weatherford Company Absorption Costing Income Statement For the Month Ended November 30
Sales (3,300 units) $125,400
Cost of goods sold:
Cost of goods manufactured (3,900 units) $105,300
Inventory, November 30 (500 units) (13,500)
Total cost of goods sold 102,500
Gross profit $44,500
Selling and administrative expenses 25,730
Income from operations $18,770
Assume the fixed manufacturing costs were $28,800 and the fixed selling and administrative expenses were $12,600.
Required:
Prepare an income statement according to the variable costing concept.
Answer:
See below
Explanation:
Income statement according to variable costing .
Sales
$125,400
Less:
Variable cost of goods sold
Beginning inventory
$0
Variable cost of goods manufactured
($50,000)
Ending inventory
($13,500)
Variable cost of goods sold
($63,500)
Manufacturing margin
$64,000
Less:
Variable selling and administrative expenses
($25,730)
Contribution margin
$35,270
Less:
Fixed costs
Fixed manufacturing cost
($28,800)
Selling and administrative expenses
($12,600)
Income from operations
$3,000
The accounting staff at Valencia Manufacturing, Incorporated has provided the following data for the month of July. The balance in the Work in Process inventory account was $31,000 at the beginning of the month and $21,500 at the end of the month. During the month, the Corporation incurred direct materials cost of $56,800 and direct labor cost of $30,700. The actual manufacturing overhead cost incurred was $53,900. The manufacturing overhead cost applied to Work in Process was $52,800. The cost of goods manufactured for July was:
Answer:
the cost of goods manufactured is $149,800
Explanation:
The computation of the cost of goods manufactured is given below:
= Opening work in process + total manufacturing cost - ending work in process
= $31,000 + ($56,800 + $30,700 + $52,800) - $21,500
= $31,000 + $140,300 - $21,500
= $149,800
hence, the cost of goods manufactured is $149,800