Answer:
May 5
Merchandise Inventory $6,000 (debit)
Freight Charges $100 (debit)
Accounts Payable : Archie Co. $6,000 (credit)
Cash $100 (credit)
May 12
Accounts Payable : Archie Co. $2,500 (debit)
Merchandise Inventory $2,500 (credit))
May 14
Accounts Payable : Archie Co. $3,500 (debit)
Discount Received $70 (credit)
Cash $3,430 (credit)
Explanation:
May 5
Recognize the Assets of Merchandise and a Liability : Accounts Payable : Archie Co. as a result of purchase.
Also Recognize the Freight Expenses since this is a F.O.B delivery
May 12
De-recognize the Liability : Accounts Payable - Archie Co. and the Merchandise Inventory asset to the extend of Merchandise returned to Archie Co.
May 14
De-recognize the Liability : Accounts Payable : Archie Co. of $3,500 and the Cash assets to the extend of Payment made to Archie Co less cash discount of $3,430 .
Mason Automotive is an automotive parts company that sells car parts and provides car service to customers. This is Mason's first year of operations and they have hired you as their CPA to prepare the income statement and balance sheet for their company. As such, January 1st , 2018 was the first day that Mason was in business. For the month of January, record all the necessary journal entries for transactions that occurred during the month. In addition, please prepare all necessary adjusting journal entries as of the end of the month.
From the information below, please fill out the "journal entries tab" for all the necessary journal entries. Furthermore, please complete the "T-Accounts" tab for the individual accounts so that the trial balance tab can be updated (automatically). I prepared the first journal entry for you in the journal entries tab and T-Accounts tab. Ensure you label the entries similar to how I have shown in Entry #1.
Once all entries are recored and the T-Accounts tab is updated, please prepare the financial statements (income statement and balance sheet) for the month of January.
Journal Entry #1
Mason Automotive sells 10,000,000 shares at $5 par for $30 on January 1st, 2018.
Journal Entry #2
Ed Mason, the CEO, hires 3,000 employees, whom will receive a combined salary of $12 Million on a monthly basis. The employees started on January 1st and will be paid for the month of January on February 5th. Employee's withholdings are as follows: 10% for federal income taxes 5% for state income taxes and 7% for FICA. Record the necessary entry as of January 1st, 2018.
Journal Entry #3
Mason Automotive issues a bond payable on January 1st, 2018 with a face value of $200 Million at 102. The bond will have a useful life of 5 years and interest is paid out monthly based on a rate of 5% APR. Record the necessary journal entry as of January 1st 2018.
(Note: Assume straight line amortization for the bond discount/premium).
Journal Entry #4
Mason Automotive purchased $80 Million dollars worth of inventory on account on January 2nd, 2018. Mason notes that it will use a perpetual inventory system to track inventory.
Journal Entry #5
Mason Automotive purchases fixed assets of $120 Million that will have a useful life of 10 years and no salvage value on January 2, 2018. $20 million was paid with cash with the remaining balance on account. These assets are depreciated using the straight-line method.
Journal Entry #6
On January 2nd, Mason Automotive shipped an order to Corby Panther Company. The shipping terms were FOB shipping point and the value of the order was $50 Million and the inventory cost was $20 Million. Assume that this sale was made on account.
Journal Entry #7
On January 3rd, Mason Automotive receives $75 Million advance payment from a customer, Michael Scott Paper Company, to manufacture 7,500 cars.
Journal Entry #8
Mason Automotive buys a patent from Apple for $24 Million on January 3rd, 2018. The patent has a legal life of 20 years, but a useful life of 10 years. Record the necessary entry as of January 3rd, 2018. Assume the patent was purchased using cash.
Journal Entry #9
Mason Automotive purchased $2 Million dollars worth of supplies January 4th, 2018. $1.5 Million was paid with cash with the remaining balance on account.
Journal Entry #10
Mason Automotive pre-pays for Rent Expense for the next year of $12 Million and Insurance Expense of $2.4 Million on January 4th, 2018
Journal Entry #11
On January 20th, Mason Automotive decides to purchase 2,000,000 shares of Treasury stock at $25 per share.
Month End Adjusting Entries
There are 10 applicable adjusting entries that need to be made as of the end of the month based on the information provided above. When recording these adjusting entries consider the following facts:
1) Interest expense will be recorded as a operating expense items on the income statement.
2) Record the necessary adjusting entries related to pre-paid expense as separate journal entries.
3) When reviewing the supply room as of the end of the month, Mason Automation noted that it had $1.5 Million worth of supplies still on hand.
4) As of the end of the month, 4,000 cars were completed for Michael Scott Paper Company and the performance obligation had been met on those 4,000 cars. As such, revenue was determined to be earned on those 4,000 vehicles and it was noted that each vehicle costed $8,000 to manufacture.
5) Mason Automation uses the balance sheet approach in estimating the allowance for doubtful accounts as of the end of the period. Based on industry average, Mason noted that it will use 5% of receivables as an estimation.
6) When preparing the balance sheet, close out net income to retained earnings.
Answer:
1) Mason Automotive sells 10,000,000 shares at $5 par for $30 on January 1st, 2018.
Dr Cash 300,000,000
Cr Common stock 50,000,000
Cr Additional paid in capital 250,000,000
2) Ed Mason, the CEO, hires 3,000 employees, whom will receive a combined salary of $12 Million on a monthly basis. The employees started on January 1st and will be paid for the month of January on February 5th. Employee's withholdings are as follows: 10% for federal income taxes 5% for state income taxes and 7% for FICA. Record the necessary entry as of January 1st, 2019.
No journal entry required
Adjusting entry:
January 31, 2018, wages expense
Dr Wages expense 12,000,000
Dr FICA taxes expense 840,000
Cr Federal income taxes withheld payable 1,200,000
Cr State income taxes withheld payable 600,000
Cr FICA taxes withheld payable 840,000
Cr FICA taxes payable 840,000
Cr Wages payable 9,360,000
3) Mason Automotive issues a bond payable on January 1st, 2018 with a face value of $200 Million at 102. The bond will have a useful life of 5 years with an interest payment of 5% (Annual Percentage Rate) due at the end of the month. Record the necessary journal entry as of January 1st, 2018.
Dr Cash 204,000,000
Cr Premium on bonds payable 4,000,000
Cr Bonds payable 200,000,000
(Note: When considering the amortization of the discount or premium, assume the straight line method is used).
Adjusting entry
January 31, 2018, interest expense
Dr interest expense 766,666.66
Dr Premium on bonds payable 66,666.67
Cr Interest payable 833,333.33
4) Mason Automotive purchased $80 Million dollars worth of inventory on January 2nd, 2018. $80 Million was paid with cash with the remaining balance on account. Mason notes that it will use a perpetual inventory system to track inventory.
Dr Inventory 80,000,000
Cr Accounts payable 80,000,000
5) Mason Automotive purchases fixed assets of $120 Million that will have a useful life of 10 years and no salvage value on January 2, 2018. $20 million was paid with cash with the remaining balance on account. These assets are depreciated using the straight-line method.
Dr Fixed assets 120,000,000
Cr Cash 20,000,000
Cr Accounts payable 100,000,000
Adjusting entry:
January 31, 2019, depreciation expense
Dr Depreciation expense 1,000,000
Cr Accumulated depreciation - fixed assets 1,000,000
6) On January 2nd, Mason Automotive shipped an order to Corby Panther Company. The shipping terms were FOB shipping point and the value of the order was $50 Million and the inventory cost was $20 Million. Assume that this sale was made on account.
Dr Accounts receivable 50,000,000
Cr Sales revenue 50,000,000
Dr Cost of goods sold 20,000,000
Cr Inventory 20,000,000
Adjusting entry:
January 31, 2018, allowance for doubtful accounts (5%)
Dr Bad debt expense 2,500,000
Cr Allowance for doubtful accounts 2,500,000
7) On January 3, Mason Automotive receives $75 Million advance payment from a customer, Michael Scott Paper Company, to manufacture 7,500 cars.
Dr Cash 75,000,000
Cr Deferred revenue 75,000,000
Adjusting entry:
January 31, 2019, 4,000 cars were finished and delivered
Dr Deferred revenue 40,000,000
Cr Sales revenue 40,000,000
Dr Cost of goods sold 32,000,000
Cr Inventory: finished cars 32,000,000
8) Mason Automotive buys a patent from Apple for $24 Million on January 3rd, 2018. The patent has a legal life of 20 years, but a the useful life of 10. Record the necessary entry as of January 3rd, 2018. Assume the patent was purchased using cash.
Dr Patent 24,000,000
Cr Cash 24,000,000
Adjusting entry:
January 31, 2018, patent amortization expense
Dr Patent amortization expense 200,000
Cr Patent 200,000
9) Mason Automotive purchased $2 Million dollars worth of supplies on account on January 4, 2018.
Dr Supplies 2,000,000
Cr Cash 1,500,000
Cr Accounts payable 500,000
Adjusting entry
January 31, 2018, supplies expense
Dr Supplies expense 500,000
Cr Supplies 500,000
10) Mason Automotive pre-pays for Rent Expense for the next year of $12 Million and Insurance Expense of $2.4 Million on January 4, 2018.
Dr Prepaid rent 12,000,000
Dr Prepaid insurance 2,400,000
Cr Cash 14,400,000
Adjusting entries:
January 31, 2019, rent expense
Dr Rent expense 1,000,000
Cr Prepaid rent 1,000,000
January 31, 2019, insurance expense
Dr Insurance expense 200,000
Cr Prepaid insurance 200,000
11) On January 20th, Mason Automotive decides to purchase 2,000,000 shares of Treasury stock at $25 per share.
Dr Treasury stock 50,000,000
Cr Cash 50,000,000
Closing journal entries:Dr Sales revenue 90,000,000
Cr Income summary 90,000,000
Dr Income summary 71,006,66.66
Cr Wages expense 12,000,000
Cr FICA taxes expense 840,000
Cr interest expense 766,666.66
Cr Depreciation expense 1,000,000
Cr Cost of goods sold 52,000,000
Cr Bad debt expense 2,500,000
Cr Patent amortization expense 200,000
Cr Supplies expense 500,000
Cr Rent expense 1,000,000
Cr Insurance expense 200,000
Dr Income summary 18,993,333.34
Cr Retained earnings 18,993,333.34
Answer:
i think this is correct
Explanation:
Tony, a hateful, disgruntled, business law teacher notices that a student, Peter, who is past the age of majority, has a nice motorcycle that is for sale. Peter has struggled through school, is in his last semester, and needs to pass business law in order to graduate. Tony tells Peter that he would like to see Peter pass and, in the next sentence, says that he wants to buy the motorcycle for $100, a price far below the value of the motorcycle. Peter asks if Tony is serious about the price, and Tony replies, "I have the power here! Take it or leave it!" Tony proceeds to draw up a contract for the sale of the motorcycle for $100 which Peter signs. Peter does some research and finds that Tony has had several arrests for driving under the influence in a nearby town. As an act of revenge, Peter tells Tony that unless Tony sells Peter his new Mustang convertible for $50, he is publishing the facts about the arrests in the school newspaper. Tony reluctantly agreed to the deal. Which of the following is true if Tony seeks to rescind the contract for the sale of the Mustang?
A. Tony may rescind the contract on grounds of duress.
B. Tony may rescind the contract on grounds of misappropriation of name or likeness.
C. Tony may rescind the contract on grounds of fraud.
D. Tony may not rescind the contract because truth is involved.
E. Tony may rescind the contract on grounds of defamation.
Answer: A. Tony may rescind the contract on grounds of duress.
Explanation:
For contracts to be considered enforceable, a key factor is that the parties involved must have entered into the agreement of their own accord and free will. Therefore Duress, which denies a person of that free will, becomes a reason why a contract can be voided.
Tony sold Peter the Mustang convertible because Peter had threatened to release details that Tony would rather were kept private so Tony capitulated and sold the Mustang. Had Peter not threatened him, Tony would not have sold the car. This shows that Tony only sold the car under duress and as such can void the contract.
The following events occur for Morris Engineering during 2018 and 2019, its first two years of operations.
February 2, 2018 Provide services to customers on account for $32,600.
July 23, 2018 Receive $22,500 from customers on account.
December 31, 2018 Estimate that 25% of uncollected accounts will not be received.
April 12, 2019 Provide services to customers on account for $45,600.
June 28, 2019 Receive $6,000 from customers for services provided in 2018.
September 13, 2019 Write off the remaining amounts owed from services provided in 2018.
October 5, 2019 Receive $40,500 from customers for services provided in 2019.
December 31, 2019 Estimate that 25% of uncollected accounts will not be received.
1. Record transactions for each date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.
3. Calculate the net realizable value of accounts receivable at the end of 2018 and 2019.
Answer:
1)
February 2, 2018 Provide services to customers on account for $32,600.
Dr Accounts receivable 32,600
Cr Service revenue 32,600
July 23, 2018 Receive $22,500 from customers on account.
Dr Cash 22,500
Cr Accounts receivable 22,500
December 31, 2018 Estimate that 25% of uncollected accounts will not be received.
Dr Dad debt expense 2,525
Cr Allowance for doubtful accounts 2,525
April 12, 2019 Provide services to customers on account for $45,600.
Dr Accounts receivable 45,600
Cr Service revenue 45,600
June 28, 2019 Receive $6,000 from customers for services provided in 2018.
Dr Cash 6,000
Cr Accounts receivable 6,000
September 13, 2019 Write off the remaining amounts owed from services provided in 2018.
Dr Allowance for doubtful accounts 4,100
Cr Accounts receivable 4,100
October 5, 2019 Receive $40,500 from customers for services provided in 2019.
Dr Cash 40,500
Cr Accounts receivable 40,500
December 31, 2019 Estimate that 25% of uncollected accounts will not be received.
Dr Dad debt expense 2,850
Cr Allowance for doubtful accounts 2,850
Allowance for doubtful accounts = $1,575 (to cancel debit balance) + [($45,600 - $40,500) x 25%] = $1,575 + $1,275 = $2,850
2)
Cash Accounts receivable
Debit Credit Debit Credit
22,500 32,600
6,000 22,500
40,500 45,600
69,000 6,000
4,100
40,500
5,100
Allowance for doubtful accounts
Debit Credit
2,525
4,100
2,850
1,275
3) net realizable value of accounts receivable = $5,100 - $1,275 = $3,825
Proposal preparation is completed by Select one: a. a large team for a simple project. b. a single person when proposing a multimillion-dollar project. c. a proposal manager regardless of the project size. d. one or more people depending upon the requirements of the proposal.
Answer:
d. one or more people depending upon the requirements of the proposal.
Explanation:
A proposal can be defined as a plan or suggestion which are formally written to present an idea to an individual or organization for consideration.
Proposal preparation is completed by one or more people depending upon the requirements of the proposal.
In order to prepare a good proposal, it is very important to make it as formal as possible. The content of the proposal is strictly based on what the initiators wants to do or achieve, as well as how they wish to achieve.
Hence, a proposal is only prepared with regard to the requirements of the proposal and the number of people involved. Proposals are usually used by project managers or contractors seeking for a contract.
Vibrant Company had $970,000 of sales in each of three consecutive years 2016–2018, and it purchased merchandise costing $535,000 in each of those years. It also maintained a $270,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2016 that caused its year-end 2016 inventory to appear on its statements as $250,000 rather than the correct $270,000.
1. Determine the correct amount of the company’s gross profit in each of the years 2016–2018.
2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 2016−2018.
Answer:
Explanation:
From the give information; we are to:
1. Determine the correct amount of the company’s gross profit in each of the years 2016–2018.
The correct amount of the company's gross profit in each of the years 2016 - 2018 can be seen as computed in the table below.
VIbrant Company Income statement
2016 2017 2018
Sales 970,000 970,000 970,000
-
Cost of good
sold:
Beginning 270,000 270,000 270,000
Inventory
+
Purchase 535,000 535,000 535,000
The cost of good
available for sale 805000 805000 805000
is:
-
Ending Inventory 270,000 270,000 270,000
Cost of good sold 535,000 535,000 535,000
Gross Profit 435 000 435000 435000
N:B ;
Gross Profit = Sales - Cost of good sold
Gross Profit = 970000- 535000
Gross Profit = 435000
2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 2016−2018.
For 2016; the comparative income statement is computed as follows:
Debit Credit
Sales 970000
Less:(-)
Cost of good sold
Beginning Inventory 270000
Add Purchase 535000
Cost of goods available 805000
for sale
Less (-)
Ending Inventory 250000
Cost of good sold 555000
Gross profit 415000
For 2017; the comparative income statement is computed as follows:
Debit Credit
Sales 970000
Less:(-)
Cost of good sold
Beginning Inventory 250000
Add Purchase 535000
Cost of goods available 785000
for sale
Less (-)
Ending Inventory 270000
Cost of good sold 515000
Gross profit 455000
For 2018; the comparative income statement is computed as follows:
Debit Credit
Sales 970000
Less:(-)
Cost of good sold
Beginning Inventory 270000
Add Purchase 535000
Cost of goods available 805000
for sale
Less (-)
Ending Inventory 270000
Cost of good sold 535000
Gross profit 435000
yle Co. has $1.1 million of debt, $3 million of preferred stock, and $1.2 million of common equity. What would be its weight on common equity
Answer:
0.22
Explanation:
Calculation for the weight on common equity
Using this formula
Weight of Common equity = Common Equity/(Debt + Preferred Equity+Common Equity)
Where,
Common Equity=1.2
Debt =1.1
Preferred Equity=3
Let plug in the formula
Weight of common equity = 1.2/(1.1+ 3+ 1.2)
Weight of common equity=1.2/5.3
Weight of Common Equity=0.22
Therefore the weight on common equity will be 0.22
Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is $667,000 with 465,000 estimated direct labor hours. It is further estimated that small lamp production will require 299,000 direct labor hours and desk lamp production will need 166,000 direct labor hours. Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to desk lamp production if actual direct hours for the period is 249,000. a.$356,070 b.$800,936 c.$1,000,500 d.$310,930
Answer:
Allocated MOH= $356,070
Explanation:
Giving the following information:
Estimated overhead= $667,000
Estimated direct labor hours= 465,000
Actual direct labor hours for lamp desk= 249,000
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 667,000/465,000
Predetermined manufacturing overhead rate= $1.43 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.43*249,000
Allocated MOH= $356,070
A 30 year $1,000 par 4 3/4% Treasury Bond is quoted at 95-11 - 95-15. The note pays interest on Jan 1st and Jul 1st. A customer buys 1 bond at the ask price. What is the current yield, disregarding commissions
Answer:
4.98%
Explanation:
Calculation for the current yield
First step
Since the the bond was purchased at 95 +15/32nds this means that we have to find the bond percentage.
Calculated as
Bond Percentage = 95 + 15/32nds
Bond percentage =95.46875%
Second step is to multiply the bond percentage by $1,000
95.46875% *$1,000
= $954.6875
The last step is to find the current yield
Current yield=$47.50 /$954.6875
Current yield = 4.98%
Therefore the current yield will be 4.98%
Hicks Health Clubs, Inc., expects to generate an annual EBIT of $750,000 and needs to obtain financing for $1,200,000 of assets. Its tax bracket is 40%. If the firm uses short-term debt, its rate will be 7.5%, and if it uses long-term debt, its rate will be 9%. By how much will their earnings after taxes change if they choose the more aggressive financing plan instead of the more conservative plan
Answer:
Hicks Health Clubs, Inc. earnings after taxes will change by minus $10,800 if they choose the more aggressive financing plan instead of the more conservative plan.
Explanation:
Note: I experienced a difficulty submitting the explanation here. Kindly find attached the full answer and explanation in the attached Microsoft word document.
In the United States, the standard methodology for consumers with respect to privacy is to _______________, whereas in the EU it is to ______________.
Answer:
In the United States, the standard methodology for consumers with respect to privacy is opt-out with respect to the United States and her Privacy Law, whereas in the EU it is opt-in.
Explanation:
Privacy laws are laws that provide protection and regulation against storing, using data that might be considered private to an individual or any organisation. such laws act as a guard against any usage of information by governments, public or private organisations, or even other individuals in any part of the world without the owner of such data giving their consent.
Privacy laws, rules, and policies are different from one country to another which all depends on their legal framework and cultural sensitivities in such a nation.
In the United States, the standard methodology for consumers with respect to privacy is opt-out with respect to the United States and her Privacy Law, whereas in the EU it is opt-in.
Opting-out laws cover a spectrum that consists of methods used by an individual to avoid receiving unsolicited service information. When receiving unsolicited service information as a result of data collection a consumer might seek an out way to stop it and to opt-out require affirmative steps to prevent unsolicited service and products. Under opt-out a user can be signed up much more easily.
Opt-In is when an individual chooses to join or participate in something and acknowledging interest in a product or service. Opt-in is used under European data protection rules which grant individuals more control of their data when the person agrees to receive the specified services.
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 8%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock fund (S) 20 % 30 % Bond fund (B) 12 15 The correlation between the fund returns is 0.10. a-1. What are the investment proportions in the minimum-variance portfolio of the two risky funds. (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.) a-2. What is the expected value and standard deviation of the minimum variance portfolio rate of return? (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.)
The expected value and standard deviation of the minimum variance portfolio rate of return are 16.20% and 42.61% respectively.
The same old deviation of a portfolio measures how a good deal of the funding returns deviate from the suggestion of the opportunity distribution of investments. placed certainly, it tells traders how a good deal the investment will deviate from its anticipated return.
The same old deviation of the portfolio is usually the same to the weighted average of the same old deviations of the property in the portfolio. A high fashionable deviation in a portfolio indicates a high hazard as it suggests that the profits are especially volatile and unstable.
calculation:-
Weight of Stock =( (17%-5.6%)*40%^2 - (8%-5.6%)*(46%*40%*0.16))/((17%-5.6%)*40%^2 + (8%-5.6%)*46%^2 - (17%-5.6%+8%-5.6% )*(46%*40%*0.16))
Weight of Stock = 0.9106
Weight of Bond = 1- 0.9106= 0.0894
Portfolio invested in the stock = 91.06%
Portfolio invested in the bond = 8.94%
The expected return of portfolio = Weight of Stock* E(rs) + Weight of Bond *E(rb)
Expected return of portfolio = 91.06%*17 +8.94%*8
Expected return of portfolio = 16.20%
The standard deviation of Portfolio = (Weight of Stock^2 * SD of Stock^2 + Weight of Bond^2 * SD of Bond^2 + 2* weight of Stock*Weight of Bond* COV(S, B))^(1/2)
Standard deviation of Portfolio = (0.9106^2*46%^2 + 0.0894^2*40%^2 + 2*0.9106*0.0894*(46%*40%*0.16))^(1/2)
Standard deviation of Portfolio = 42.61%
Learn more about the Standard deviation of a Portfolio here:-https://brainly.com/question/17191184
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The difference between Karson's behavior at the end of the 12 weeks versus the promise to cure Karson of ADHD can be described as the measure of the:________.
A. expectation interest.
B. reliance interest.
C. restitution interest.
D. All of these are correct.
Answer:
A. Expectation interest.
Explanation:
Expectation interest is explained as the party of interest being in a good position in the point or financial angles during a business dealing. Here he/she is said to have a good stance of a deal or a contract been contacted for. Sometimes, it is seen to be triggered by net profits and losses less any costs or losses, which are sometimes tool in weighing the reasonable measure of damages. Therefore, when no contracts are be agreed on, determination must be made as to whether or not one party benefited from contact with the other party.
The following information is taken from the financial statements of Clybourn Company for the current year: Current Assets $ 400,000 Total Assets 895,000 Cost of Goods Sold 655,000 Gross Profit 205,000 Net Income 125,000 The gross profit percentage for the current year rounded to the nearest whole percent is closest to:
Answer: 24%
Explanation:
The following information can be gotten from the question:
Current Assets = $ 400,000
Total Assets = 895,000
Cost of Goods = Sold 655,000
Gross Profit = 205,000
Net Income = 125,000
Gross profit percent will be:
Gross profit/(Gross profit + cost of goods sold) × 100
= 205,000/(205,000 + 655,000) × 100
= 205000/860,000 × 100
= 23.8%
= 24%
If Treasury bills are currently paying 6.5 percent and the inflation rate is 1.3 percent, what is the approximate and the exact real rate of interest
Answer:
the approximate real interest rate = nominal rate - inflation rate = 6.5% - 1.3% = 5.2%
the exact real interest rate is calculated using the following formula:
(1 + nominal interest rate) = (1 + real interest rate) (1 + expected rate of inflation)
(1 + 0.065) = (1 + real interest rate) x (1 + 0.013)
1 + real interest rate = (1 + 0.065) / (1 + 0.013) = 1.065 / 1.013 = 1.05133
real interest rate = 1.05133 - 1 = 0.05133 = 5.13%
________ refers to the idea that policy-makers have formulated and implemented policy that addresses problems in an optimal or efficient manner.
Answer:
Rationality.
Explanation:
Rationality refers to the idea that policy-makers have formulated and implemented policy that addresses problems in an optimal or efficient manner.
This ultimately implies that, policy-makers act rationally in order to achieve best goals, objectives and interests of the people effectively and efficiently.
For instance, in a bid to mitigate or eliminate global warming, policy-makers developed and enacted the pollution prevention act. This would limit or regulate the amount of pollutants that is being emitted by an organization in a particular geographical location as well as improving environmental sanitation and reducing environmental degradation.
Wren Pork Company uses the relative market value method/Value basis method of allocating joint costs in its production of pork products. Relevant information for the current period follows:
Product Pounds Price/lb.
Loin chops 3,080 $5.40
Ground 10,200 2.20
Ribs 4,120 5.05
Bacon 6,160 3.70
The total joint cost for the current period was $45,400. How much of this cost should Wren Pork allocate to Loin chops?
A. $0.
B. $6,443.
C. $9,134.
D. $11,350.
E. $45,400.
Answer:
C. $9,134
Explanation:
Product Pounds Price/Ib Total Value
Loin chops 3,080 $5.40 $16,632
Ground 10,200 $2.20 $22,440
Ribs 4,120 $5.05 $20,806
Bacon 6,160 $3.70 $22,792
$82,670
The Total Joint cost = $45,400
Hence Joint cost to Lopin chops = $45,400 * $16,632 / $82,670
Joint cost to Lopin chops = $9,134
On September 3, 20X8, Jackson Corporation purchases goods for a U.S. dollar equivalent of $17,000 from a Swiss company. The transaction is denominated in Swiss francs (SFr). The payment is made on October 10. The exchange rates were
Answer:
A.
DR Foreign Currency Transaction loss 1,000
CR Accounts Payable (SFr) $1,000
Explanation:
When the transaction was agreed on September 3, 20X8, the exchange rate was;
$0.85 : 1 franc
Therefore the $17,000 was valued at;
= 17,000/0.85
= 20,000 francs
When the transaction was paid for however, on October 10, the Franc had gained on the dollar by;
= 0.9 - 0.85
= $0.05
This means that the dollar got weaker by $0.05 so the company made a loss of
= 20,000 francs * 0.05
= 1,000 francs
This will be recorded as;
DR Foreign Currency Transaction loss 1,000
CR Accounts Payable (SFr) $1,000
Smathers Corp. stock has a beta of .89. The market risk premium is 7.20 percent and the risk-free rate is 2.93 percent annually. What is the company's cost of equity
Answer: 9.31%
Explanation:
Given: Smathers Corp. stock has a beta of 0.89.
⇒ Beta = 0.89
Risk-free rate = 2.93 percent
Market risk premium = 7.20 percent
Formula: Cost of Equity = [ Risk free rate + (Beta) × ( Market risk premium) ]
Substitute all values, we get
Cost of Equity = [ 2.9 + (0.89) × ( 7.20) ]%
= [2.9+6.41]%
= 9.31%
Hence, the company's cost of equity is 9.31%.
Assume Strands, a local hair salon, provides cuts, perms, and hairstyling services. Annual fixed costs are $150,000, and variable costs are 40 percent of sales revenue. Last year's revenues totaled $300,000.
(a) Determine its break-even point in sales dollar
(b) Determine last year's margin of safety in sales dollars.
(c) Determine the sales volume required for an annual profit of $80,000.
Round your answer to the nearest dollar.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Annual fixed costs are $150,000, and variable costs are 40 percent of sales revenue. Last year's revenues totaled $300,000.
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 150,000 / [(300,000*0.6)/300,000]
Break-even point (dollars)= $250,000
Now, we can determine the margin of safety:
Margin of safety= (current sales level - break-even point)
Margin of safety= 300,000 - 250,000= $50,000
Finally, the sales dollar required to reach $80,000 profit:
Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio
Break-even point (dollars)= (150,000 + 80,000) / 0.6
Break-even point (dollars)= $383,333.33
Which of the following are functions of the Federal Reserve? Check all that apply. Maintaining federal government checking accounts and gold Maintaining and circulating currency Ensuring all banks make a profit Making a profit for the federal government Being the lender of last resort for banks
Answer:
1. Maintaining federal government checking accounts and gold.
2. Maintaining and circulating currency.
3. Being the lender of last resort for banks
Explanation:
The Federal Reserve System (the 'Fed) was created by the Federal Reserve Act, passed by Congress in 1913. The Fed began operations in 1914. It was founded by President Woodrow Wilson under the Federal Reserve Act, which was aimed at backing each banks in order to put a definitive end to the bank panics of the 1800s.
The following are functions of the Federal Reserve;
1. Maintaining federal government checking accounts and gold.
2. Maintaining and circulating currency.
3. Being the lender of last resort for banks.
Additionally, it comprises of twelve (12) Federal Reserve Bank regionally across the United States of America and seven (7) board of governors.
Because you can adapt to your audience while you are speaking, don't worry about analyzing the audience for an oral presentation.
A. True
B. False
Answer:
B. False.
Explanation:
This statement is false, due to the fact that a good oral presentation must be prepared before the presentation in accordance with all the procedures to be covered in the presentation. Therefore, the ideal is to know your audience before the presentation, so that there is a preparation aligned with their values and behaviors, in order to retain the attention and interaction of the participants, which makes the presentation more interesting and effective.
Scripting the presentation also avoids possible unforeseen events, in addition to being ideal to also be open to interactions, to provide important and impactful information, to prepare supporting material such as slides, and to always practice before the presentation, to be prepared and interacted on the subject addressed.
Nicolas Enterprises sells a product for $67 per unit. The variable cost is $33 per unit, while fixed costs are $231,200. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $73 per unit.
Answer:
a)Break-even point = 6,800 units
b) Break-even point =5780 units
Explanation:
Break-even point is the level of activity that achieves no profit or loss. At this level profit is zero because the the total revenue is equal to total cost.
The break-even point is calculated as
Units to achieve target profit = (Total general fixed cost for the period)/ contribution per unit
Contribution per unit = Selling Price - Variable cost
Contribution per unit = 67 - 33 = 34
Fixed cost =231,200
So the units requited to achieve break-even point:
Break-even point = 231,200/34 = 6,800 units
Break-even point = 6,800 units
b) If the selling price wete increased to 73
The break-even point = 231,200/ (73- 33) = 5,780 units
Break-even point =5780 units
T-Shirt Enterprises is selling in a purely competitive market. It is producing 3,000 units, selling them for $2.00 each. At this level of output, the average total cost is 2.50 and the average variable cost is $2.20. Based on these data, the firm should
Answer:
shutdown in the short run
Explanation:
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
A firm should shut down in the short run if price is less than average variable cost.
for T-Shirt Enterprises, price is $2 which is less than average variable cost
Because orders in organizational buying are typically much larger than in consumer buying, buyers must often __________ when the order is above a specific amount, such as $5,000.
Answer:
get competitive bids from at least three prospective suppliers
Explanation:
In these specific situations, organizational buyers must often get competitive bids from at least three prospective suppliers. This is because due to the fact that the purchasing amounts are very large there can also be large amounts of money saved by saving a couple of percentages on a purchase. Also since the seller can make large profits from a large order like this one, most suppliers place competitive bids in order to win the transaction.
Activity-Based Costing: Factory Overhead Costs
The total factory overhead for Bardot Marine Company is budgeted for the year at $1,039,600, divided into four activity pools: fabrication,, $448,000; assembly, $180,000; setup, $222,600; and inspection, $189,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows:
Fabrication Assembly Setup Inspection
Speedboat 7,000 dlh 22,500 dlh 50 setups 88 inspections
Bass boat 21,000 7,500 370 612
28,000 dlh 30,000 dlh 420 setups 700 inspections
Each product is budgeted for 5,000 units of production for the year.
a. Determine the activity rates for each activity.
Fabrication $ per direct labor hour
Assembly $ per direct labor hour
Setup $ per setup
Inspection $ per inspection
b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.
Speedboat $ per unit
Bass boat $ per unit
Answer:
Instructions are below.
Explanation:
Giving the following information:
Estimated factory overhead:
fabrication, $448,000
assembly, $180,000
setup, $222,600
inspection, $189,000
Fabrication Assembly Setup Inspection
Speedboat 7,000 dlh 22,500 dlh 50 setups 88 inspections
Bass boat 21,000 7,500 370 612
28,000 dlh 30,000 dlh 420 setups 700 inspections
Each product is budgeted for 5,000 units of production for the year.
First, we need to calculate the predetermined overhead rate for each activity using the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
fabrication= 448,000/28,000= $16 per direct labor hour
assembly= 180,000/30,000= $6 per direct labor hour
setup= 222,600/420= $530 per setup
inspection= 189,000/700= $270 per inspection
Now, we can allocate overhead to each product line:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Speed boat:
Allocated MOH= 7,000*16 + 22,500*6 + 50*530 + 88*270= $297,260
Bass boat:
Allocated MOH= 21,000*16 + 7,500*6 + 370*530 + 612*270= $742,340
Finally, the unitary overhead cost:
Speed boat= 297,260/5,000= $59.45
Bass boat= 742,340/5,000= $148.47
Which of the following companies use a mass customization approach? Dell Align Technology Arnold Palmer hospital Frito-Lay Dell and Align Technology
Answer: Dell and Align technology
Explanation:
Mass customization, is used in marketing and it is a term that describes using computer aided manufacturing systems that are flexible in order make custom output.
Align Technology and Dell uses mass customization method. This brings about efficiency and low cost.
Baj Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 534,000 Estimated activity level from the beginning of the year 30,000machine-hours Actual total fixed manufacturing overhead $ 487,000 Actual activity level 27,400machine-hours The predetermined overhead rate per machine-hour would be closest to:__________
A) $17.80
B) $19.49
C) $16.23
D) $17.77
Answer:
A) $17.80
Explanation:
The computation of the predetermined overhead rate per machine hour is shown below:
= Estimated total fixed manufacturing overhead from the beginning of the year ÷ estimated activity level from the beginning year machine hours
= $534,000 ÷30,000 machine hours
= $17.80
We simply applied the above formula so that the predetermined overhead rate could come
Playtown Corporation purchased 75 percent of Sandbox Corporation common stock and 40 percent of its preferred stock on January 1, 20X6, for $270,000 and $80,000, respectively. At the time of purchase, the fair value of the common shares of Sandbox held by the noncontrolling interest was $90,000. Sandbox's balance sheet contained the following balances:
Preferred Stock ($10 par value) $200,000
Common Stock ($5 par value) 150,000
Retained Earnings 210,000
Total Stockholders' Equity $560,000
Required
Give the eliminating entries needed to prepare a consolidated balance sheet immediately after Clayton purchased the Topple shares.
Answer:
Elimination Journal.
Retained Earnings $210,000 (debit)
Common Stock $ 150,000 (debit)
Investment in Sandbox Corporation $270,000 (credit)
Non-Controlling Interest $90,000 (credit)
Explanation:
When dealing with consolidation of Financial Statements, the Equity and Retained Earning in the Subsidiary has to be eliminated from the records whilst the Investment in Subsidiary and the Non-Controlling Interest in Subsidiary are recognized.
Elimination of the common items in consolidation is done by the use of Pro-forma Journals.
Goodwill or Gain on Bargain Purchase are also recognized on the date of acquisition of subsidiary.
Goodwill is the excess of Purchase Price and Non-Controlling interest over the Net Assets Acquired.While Gain on Bargain Purchase is the excess of Net Assets Acquired over Purchase Price and Non-Controlling interest.
Elimination Journal.
Retained Earnings $210,000 (debit)
Common Stock $ 150,000 (debit)
Investment in Sandbox Corporation $270,000 (credit)
Non-Controlling Interest $90,000 (credit)
Land Services, Inc. owns 35% of voting stock of World Investments, Inc. During the year 2018, World Investments, Inc. earned profits of $300,000. Under the equity method, which of the following journal entries will Land Services record?
A) Long-term Investments—Grey Investments Inc.: 250,000
Cash: 250,000
B) Cash: 75,000
Dividend Revenue: 75,000
C) Cash: 75,000
Long-term Investments—Grey Investments Inc.: 75,000
D) Long-term Investments—Grey Investments Inc.: 75,000
Revenue from Investments: 75,000
The correct question is:
Glitter Services Inc. owns 30% of voting stock of Grey Investments Inc. During the year 2015, Grey Investments Inc. earned profits of $250,000. Under the equity method, which of the following journal entries will Glitter Services record?
Answer:
D) Debit Long-term Investments—Grey Investments Inc.: 75,000
Credit Revenue from Investments: 75,000
Explanation:
Equity method is used in accounting to treat a companie's investment in associate companies. Usually equity accounting is used when a company owns 20 to 50% of shares in an associate company.
In this case Glitter Services, Inc. owns 30% of voting stock of World Investments, Inc.
Grey Investments, Inc. earned profits of $250,000.
So the value of investment is 0.3 * 250,000 = $75,000
So this amount is Debited from Long Term Investment account and credited to Revenue from Investments
The manufacturer Mike and Ike, the fruit-flavored chewy candies, has changed its packaging and developed contests all geared to 12- to 17-year-olds. What type of market segmentation identifies its market
Answer:
Demographic
Explanation:
A market is segmented so as to narrow down a large market into a narrow base, or a target market. This helps the organization to be better focused on providing its services to these target groups of people. A market can be segmented on the basis of demography, psychography, behavior, and geography. Demography deals more with statistical data of the population being studied and would typically include; age, gender, race, income levels, etc.
So, when the manufacturer Mike and Ike changes its packaging and developed contests all geared to 12-17-years-old, he has segmented the market according to demography and age.
Answer:
im sorry
Explanation: