Answer:
Total indirect manufacturing cost= $23,750
Explanation:
Giving the following information:
Variable manufacturing overhead $1.25
Fixed manufacturing overhead $ 15,000
Production= 7,000 units are produced
The indirect manufacturing cost is the sum of the total fixed overhead and total variable cost:
Total indirect manufacturing cost= 15,000 + 7,000*1.25
Total indirect manufacturing cost= $23,750
If actual sales totaled $450,000 for the current year (30,000 units at $15 each) and planned sales were $540,000 (45,000 units at $12 each), the difference between actual and planned sales due to the unit price factor is a.$180,000. b.$45,000. c.$90,000. d.$225,000.
Answer:
Option B, $45,000, is the right answer.
Explanation:
Given actual sales = $450000
Actual units that is sold = 30000 units
Actual selling price = $15 per unit
Planned sales = $540000
Planned units = 45000
Planned selling price = $12 per units.
The difference between actual and planned sales due to unit price factor = change in units × change in price
= (45000 – 30000) × (15 – 12)
= $45000
Thus option B is correct.
Sheridan Company has the following information available for September 2020. Unit selling price of video game consoles $400 Unit variable costs $320 Total fixed costs $25,600 Units sold 600 Compute the unit contribution margin.
Answer:
Contribution margin per unit= $80
Explanation:
Giving the following information:
Unitary selling price of video game consoles $400
Unit variable costs $320
To calculate the unitary contribution margin, we need to use the following formula:
Contribution margin= selling price - unitary variable cost
Contribution margin= 400 - 320
Contribution margin= $80
The following equation summarizes the trend of quarterly sales of condominiums over a long cycle. Sales also exhibit seasonal variation.
Ft = 40 - 6.5t + 2t2
Ft = Unit sales
Where t = 0 the first quarter of last year
Quarter Relative
1 .95
2 .90
3 .45
4 1.70
Prepare a forecast of quarterly sales for next year and the first quarter of the year following that.
Quarter Forecast
1
2
3
4
1
Answer:
Quarter: 1-4, 1. Forecast:
128.92, 146.10, 107.40, 280.67, 282.48
Explanation:
The quarterly sales trend for the quarter is represented by the following equation: 1-4, 1. Forecast
What are representatives?The term representative refers that the person who is serving to represent something as we see there are some diplomats are being there who represent the country, and there is someone who represents the states as there are different peoples who are being there in it. As there are different players as we see, they represent the nation as well.
Quarter: 1-4, 1. Forecast
128.92, 146.10, 107.40, 280.67, 282.48
Therefore, the quarter is represented by the following equation: 1-4, 1. Forecast
Learn more about representatives here:
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Quarter: 1-4, 1. Forecast:
128.92, 146.10, 107.40, 280.67, 282.48
Mountain High Ice Cream Company transferred $65,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,500). Mountain High anticipates a $3,500 recourse obligation. The bank charges a 3% fee (3% of $65,000), and requires that amount to be paid at the start of the factoring arrangement.
Required:
Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.
Answer:
Dr Cash 56,550
Dr Receivable from factor 5,500
Dr Loss on sale of receivables 6,450
Cr Accounts receivables 65,000
Cr Recourse liability 3,500
Explanation:
cash = ($65,000 x 90%) - factoring fees = $58,500 - $1,950 = $56,550
factoring fees = $65,000 x 3% = $1,950
loss on sale of receivables (includes factoring fees) = (accounts receivables + recourse liability) - (cash + receivable from factor) = ($65,000 + $3,500) - ($56,550 + $5,500) = $68,500 - $62,050 = $6,450
Product Pricing: Two Products Quality Data manufactures two products, CDs and DVDs, both on the same assembly lines and packaged 10 disks per pack. The predicted sales are 400,000 packs of CDs and 500,000 packs of DVDs. The predicted costs for the year 2014 are as follows:
Variable Costs Fixed Costs
Materials $200,000 $500,000
Other 250,000 800,000
Each product uses 50 percent of the materials costs. Based on manufacturing time, 40 percent of the other costs are assigned to the CDs, and 60 percent of the other costs are assigned to the DVDs. The management of Quality Data desires an annual profit of $100,000.
(a) What price should Quality Data charge for each disk pack if management believes the DVDs sell for 20 percent more than the CDs? Round answers to the nearest cent.
CDs $
DVDs $
(b) What is the total profit per product using the selling prices determined in part (a)? Use negative signs with answers, if appropriate.
CDs $
DVDs $
Answer:
a) $1.85 per CD pack
$2.22 per DVD pack
b) profits for selling CDs = -$30,000
profits for selling DVDs = $130,000
Explanation:
Variable costs Fixed costs
Materials $200,000 $500,000
Other $250,000 $800,000
DVDs:
materials = $700,000 x 50% = $350,000 ($250,000 fixed)
Other = $1,050,000 x 60% = $630,000 ($480,000 fixed)
total = $980,000
CDs:
materials = $350,000 ($250,000 fixed)
Other = $420,000 ($320,000 fixed)
total = $770,000
Expected sales:
CDs 400,000 packs
DVDs 500,000 packs
since the company wants to earn $100,000 in profits, it should charge:
400,000X - $770,000 + 500,000Y - $980,000 = $100,000
400,000X + 500,000Y = $1,850,000
Y = 1.2X (we replace Y)
400,000X + 600,000X = $1,850,000
1,000,000X = $1,850,000
X = $1,850,000 / 1,000,000 = $1.85 per CD pack
Y = $1.85 x 1.2 = $2.22 per DVD pack
profits for selling CDs = ($1.85 x 400,000) - $770,000 = -$30,000
profits for selling DVDs = ($2.22 x 500,000) - $980,000 = $130,000
Bottum Corporation, a manufacturing Corporation, has provided data concerning its operations for May. The beginning balance in the raw materials account was $24,000 and the ending balance was $44,000. Raw materials purchases during the month totaled $71,000. Manufacturing overhead cost incurred during the month was $115,000, of which $2,800 consisted of raw materials classified as indirect materials. The direct materials cost for May was:
Answer:
$48,200
Explanation:
The computation of the direct material cost for the month of May is shown below:
Direct materials cost = Beginning raw materials inventory + purchases made - Ending balance of raw materials - Indirect materials
= $24,000 + $71,000 - $44,000 - $2,800
= $48,200
Hence, the direct material cost for the month of May is $48,200
Which term is defined as the most appealing trade-off or item given up as the result of an
economic decision?
Increasing cost
Opportunity cost
Recycled trade off
Economic trade off
Answer:
it could be the increase in cost due to economical well-being either the increase in debt or credit
You have a portfolio that is equally invested in Stock F with a beta of 1.08, Stock G with a beta of 1.45, and the market. What is the beta of your portfolio
Answer:
1.265
Explanation:
According to the situation, the solution of the beta of portfolio is as follows
Beta portfolio = (weightage of investment F × beta F) + (proportion of investment G ×beta G)
Beta protfolio = (0.5 × 1.08) + (0.5 × 1.45)
= 0.54 + 0.725
= 1.265
Hence, the beta of your portfolio is 1.265 by applying the above formula
Select the type of business that is most likely to obtain large amounts of resources by issuing stock. a. government entity b. partnership c. proprietorship d. corporation
Answer:
d. corporation
Explanation:
A corporation raises its capital by issue of stocks and Stockholders that subscribe for these shares will in turn receive their return in form of dividends.
Partnerships, government entities and sole proprietorship do not raise capital by issuance of stocks.
The type of business that is most likely to obtain large amounts of resources by issuing stock is d. corporation
The following information should be considered:
A corporation raises its capital via issue of stocks and in return the Stockholders get the returns in the form of dividends for subscribing the shares Partnerships, government entities and sole proprietorship do not raise capital via issuance of stocks.learn more: https://brainly.com/question/17429689?referrer=searchResults
On January 1, 2017, Boston Enterprises issues bonds that have a $2,050,000 par value, mature in 20 years, and pay 8% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months
Answer:
Boston will pay (in cash) to the bondholders every six months $125,146.31.
Explanation:
The interest paid in cash PMT, can be calculated as follows :
PV = $2,050,000
N = 20 × 2 = 40
R = 8%
FV = $2,050,000
P/yr = 2
PMT = ?
Using a financial calculator to enter the above data concerning the bond, the payments (PMT) every six months is $125,146.3062 or $125,146.31.
The Keynesian link between the money market and the goods and services market is __________. Changes in the money market must affect the __________ market before the goods and services market is affected.
Answer:
Indirect; investment.
Explanation:
John Maynard Keynes was a British economist born on the 5th of June, 1883 in Cambridge, England. He was famous for his brilliant ideas on government economic policy and macroeconomics which is known as the Keynesian theory. He later died on the 23rd of April, 1946 in Sussex, England.
The Keynesian link between the money market and the goods and services market is indirect. Changes in the money market must affect the investment market before the goods and services market is affected.
According to the Keynesian Transmission Mechanism, the link between the money market and the goods and services market is indirect; because at first, short-term interest rates are lowered by an increase in the supply of reserves and then with time both the bond and bank loan rates falls. Consequently, this would make investments and aggregate demand (AD curve shifts rightward) to rise or increase as a result of the low cost of capital for investors and by extension it boost the level of production or quantity of output (real gross domestic product or Real GDP).
This ultimately implies that, the interest rates affects the real and costs of capital (monetary changes).
Tristan refuses to let Marla list his property on the MLS, even though Marla told him that more exposure to the property will generate more potential buyers. Which two fiduciary duties are at odds in this situation
Answer: a. Reasonable skill and care and obedience
Explanation:
The Fiduciary responsibility of Reasonable Skill and Care charges that professionals in a contract should give the same level of skill and care that another competent member of the profession will be able to give. Essentially, Professionals should do their best in a contract to execute it. Marla needs to exercise this fiduciary responsibility by listing Tristan's property on the MLS so that it is sold faster.
However, this will go against her other Fiduciary Responsibility to Tristan, that of Obedience. Tristan's wishes as the client are supposed to be listened and adhered to. Marla is supposed to follow Tristan's directives and remain faithful to them. His directive in this scenario is that Marla does not register the property on the MLS and Marla needs to follow this.
The two fiduciary duties are at odds in this situation are therefore those of Reasonable skill and care and Obedience.
Supplies on hand were $900 at the start of the year. At the end of the year, it was determined that $350 of supplies had been used. What is the adjusting entry for supplies
Answer:
the adjusting entry for supplies :
Supplies Expense $350 (debit)
Supplies Account $350 (credit)
Explanation:
The fall in value of supplies on hand is due to utilization of the asset in in the business during the year.
The entry to adjust the utilization of the Supplies is to Debit the Supplies Expense (Expense) and Credit the Supplies Account (Asset) by the amount utilized of $350.
Horton, Reiser, and Associates, a law firm, employs ABC. The following budgeted data for each of the activity cost pools is provided for the year 2016.
Activity Cost Pools Estimated Overhead Expected Use of Cost Drivers per Activity
Researching legal Issues $31,500 900 research hours
Meeting with clients 1,760,000 8,800 professional hours
Preparing legal documents 480,000 30,000 pages
During 2016 the firm worked 660 research hours, prepared 25,000 document pages, and 10,000 professional hours.
Compute the total overhead applied during 2016.
Total overhead applied $_____
Answer:
Total overhead= $2,423,100
Explanation:
Giving the following information:
During 2016 the firm worked 660 research hours, prepared 25,000 document pages, and 10,000 professional hours.
First, we need to calculate the predetermined overhead rate for each activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Researching= 31,500/900= $35 per research hour
Meeting with clients= 1,760,000/8,800= $200 per professional hour
Preparing legal documents= 480,000/30,000= $16 per page
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Researching= 35*660= $23,100
Meeting with clients= 200*10,000=$2,000,000
Preparing legal documents= 16*25,000= $400,000
Total overhead= $2,423,100
Power Manufacturing recorded operating data for its shoe division for the year. Sales $1,500,000 Contribution margin 300,000 Controllable fixed costs 180,000 Average total operating assets 600,000 How much is controllable margin for the year
Answer:
Controllable margin for the year is $120,000.
Explanation:
Controllable margin refers to contribution margin minus controllable fixed costs. Controllable margin is usually employed to assess the performance of managers because all the costs that the profit center manager can control are included in the calculation of controllable margin.
Based on the explanation above, controllable margin for this question can therefore be calculated as follows:
Controllable margin = Contribution margin - Controllable fixed costs = $300,000 - $180,000 = $120,000
Therefore, controllable margin for the year is $120,000.
On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $120,000, and its estimated useful life was four years or 1,150,000 cuttings, after which it could be sold for $5,000.
Required
a. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods (round all answers to the nearest dollar):
1. Straight-line.
2. Double-declining balance.
3. Units-of-production. (Assume annual production in cuttings of 280,000; 430,000; 360,000; and 80,000.)
1. Straight-Line
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2. Double-declining balance
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2019 Answer
3. Units of Production
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
b. Assume that the machine was purchased on July 1, 2015. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods:
1. Straight-line.
2. Double-declining balance.
1. Straight-Line
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2019 Answer
2. Double-declining balance (Round answers to the nearest whole number, when appropriate.)
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2019 Answer
Answer:
Explanation:
Depreciation is the systematic allocation of the cost of a machine over its useful lifetime.
There are different types of depreciation like the straight line , double declining and the units of production method.
Workings
Depreciable amount = 120,000-5000 = 115,000
Useful life = 4 years
Depreciation rate = 115000/4 = 25% = 28,750
2015 2016 2017 2018
Straight line depreciation 28,750 28,750 28,750 28,750
Double declining
Double declining rate = 25%*2 = 50%
2015 = 50% * 115,000= 57,500
2016
Opening book value = 115,000-57,500 = 57500
Depreciation = 57,500*50% = 28,750
2017
Opening book value = 57500-28,750 =28750
Depreciation = 50%*28,750 =14,375
2018
Opening book value 28750-14375 = 14375
Depreciation = 14375*50% = 7188
Units of production
2015 = 280000/1150,000*115,000 = 28,000
2016 =430,000/1150000*115000 = 43,000
2017= 360000/1150000*115000 = 36,000
2018 = 80,000/1150000*115000 = 8000
B
IF the machine was bought on July 1, 2015
Straight line depreciation
2015 = (25%*115000 ) /2 = 14,375
2016 =25%* 115,000 = 28,750
2017 = 25%*115000 = 28750
2018 = 25%*115,000 =28750
2019 =(25%*115000)/2 = 14,375
Double declining method
2015
(115,000*50,000)/2 =28750
2016
Opening book value =115,000-28750 =86250
Depreciation = 50%*86250 = 43,125
2017
Opening book value =86250-43125 =43125
Depreciation = 43,125*50% = 21,563
2018
Opening book value
43125-21563 =21562
Depreciation = 21562*50% =10,781
2019
Opening book value = 21562-10781 =10781
Depreciation = 50%*10781 = 5391
Answer:
um... im actually finna work this out its interesting
Explanation:
Suppose the demand for macaroni is inelastic, the supply of macaroni is elastic, the demand for cigarettes is inelastic, and the supply of cigarettes is elastic. If a tax were levied on the sellers of both of these commodities, we would expect that the burden of Group of answer choices
Answer:
This question is incomplete, the options are missing. The options are the following:
a) Both taxes would fall more heavily on the buyers than on the sellers.
b) The macaroni tax would fall more heavily on the sellers than on the buyers and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers.
c) The macaroni tax would fall more heavily on the buyers than on the sellers and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers.
d) Both taxes would fall more heavily on the sellers than on the buyers.
And the correct answer is the option A: Both taxes would fall more heavily on the buyers than on the sellers
Explanation:
To begin with, in this situation due to the fact that the demand for both products are inelastic and the supply of both as well are elastic then the change in the price that would happen because of the tax would have an impact that the buyers will feel more than the sellers because they are the one that no matter how much the price changes then the they will keep to consuming the same amount in both cases and that is because their demand are inelastic and therefore that the variation in the price does not change dramastically the variation in the quantity demanded.
On May 1, Soriano Co. reported the following account balances along with their estimated fair values:
Carrying Amount Fair Value
Receivables $ 143,600 $ 143,600
Inventory 76,400 76,400
Copyrights 136,000 577,000
Patented technology 913,000 753,000
Total assets $ 1,269,000 $ 1,550,000
Current liabilities $ 197,000 $ 197,000
Long-term liabilities 676,000 658,300
Common stock 100,000
Retained earnings 296,000
Total liabilities and equities $ 1,269,000
On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $141,000 to an investment banking firm.
The following information was also available:
• Zambrano further agreed to pay an extra $85,000 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $42,500.
• Soriano has a research and development project in process with an appraised value of $244,000. However, the project has not yet reached technological feasibility and the project’s assets have no alternative future use.
Prepare Zambrano’s journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Receivables (Dr.) $143,600
Inventory (Dr.) $76,400
Copyrights (Dr.) $577,000
Patented Technology (Dr.) $913,000
Goodwill (Dr.) $32,800
Current Liability (Cr.) $197,000
Long term liability (Cr.) $658,300
Cash (Cr.) $845,000
Contingent Consideration (Cr.) $42,500
Professional Fee Expense (Dr.) $141,000
Cash (Cr.) $141,000
Paid of Investment banking firm
Explanation:
Total of Assets 1,710,000
Total of Liabilities 855,300
Net Assets 854,700
Total Fair value of identifiable Assets 854,700
Fair value of contingent Liability 42,500
Consideration Paid as Cash 845,000
Good will $32,800
You can now sell 40 cars per month at $20,000 per car, and demand is increasing at a rate of 3 cars per month each month. What is the fastest you could drop your price before your monthly revenue starts to drop
Answer:
More than $1500 price per car per month has to be dropped.
Explanation:
Given:
price per car = $20,000
car sale per month = 40
rate of increase in demand = 3
Solution:
Revenue R = Price × Quantity = P * Q
From the above given data
P = 20,000
Q = 40
R = P*Q
dQ/dt = 3
We have to find the rate at which the price is to be dropped before monthly revenue starts to drop.
R = P*Q
dR/dt = (dP/dt)Q + P(dQ/dt)
= (dP/dt) 40 + 20,000*3 < 0
= (dP/dt) 40 < 60,000
= dP/dt < 60000/40
= dP/dt < 1,500
Hence the price has to be dropped more than $1,500 before monthly revenue starts to drop.
Answer:
For the monthly revenue starts to drop, the price of the car has to drop more than $1500
Explanation:
Given that:
Price of a car = $20,000
quantity = 40
demand rate = 3
the fastest you could drop your price before your monthly revenue starts to drop can be calculated by using the formula
R = P × Q
i.e themontly revenue function R is the product of the price per unit P times the number of units sold Q
Differentiating with respect to time; we have :
[tex]\dfrac{dR}{dt}=(\dfrac{dP}{dt} )Q+P(\dfrac{dQ}{dt})[/tex]
[tex](\dfrac{dP}{dt} )40+20000 \times 3<0[/tex]
[tex](\dfrac{dP}{dt} )40+60000 <0[/tex]
[tex](\dfrac{dP}{dt} )40 <-60000[/tex]
[tex](\dfrac{dP}{dt} ) <\dfrac{-60000}{40}[/tex]
[tex](\dfrac{dP}{dt} ) <-1500[/tex]
Therefore; For the monthly revenue starts to drop, the price of the car has to drop more than $1500
A 7X Corp.just paid a dividend of $2.30 per share. The dividend are expected to grow at 23 percent for the next eight years and then level off to a growth rate of 7 percent indefinitely. If the required return is 15 percent, what is the price of the stock today?
Answer:
Price of stock=$ 77.88
Explanation:
The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.
The price of the stock will the sum of the present value of the growing annuity and the growing perpetuity
Present value of dividend from year 1 to 8
The PV of the growing annuity = A/r-g) ( 1- (1+g)/(1+r)^n )
A- dividend payable now , r- required of return, g-growth rate, number of years
PV = (2.30×1.23)/(0.15-0.23)× (1- (1.23/1.15)^8) = 25.199
PV of Dividend from year 9 and beyond:
P = D× g/(r-g)
This will be done in two steps:
Step 1: PV(in year 8)of dividend = 2.30× 1.23^8×1.07/(0.15-0.07) = 161.16
Step 2 : PV in year 0 = 161.16× 1.15^(-8)= 52.684
PV of Dividend from year 9 and beyond = 52.684
Price of stock = 25.19 + 52.68= 77.88
Price of stock=$ 77.88
A pension plan is obligated to make disbursements of $1.8 million, $2.8 million, and $1.8 million at the end of each of the next three years, respectively. Find the duration of the plan's obligations if the interest rate is 9% annually.
Answer:
1.9516 years.
Explanation:
So, the best and fastest way to solve this question is to use excel. So the first step is to calculate the Present Value of Cash Flow for the three cash flows and sum them up.
(A).
(1). For cash flow = $1,800,000, time = 1.
Present Value of Cash Flow:
$1,800,000 / (1 + 9%)^1
= 1651376.14678899082.
(2). For cash flow = $2,800,000, time = 2.
= $2,800,00/ (1 + 9%)^2.
= 2356703.98114636815.
(3). For cash flow = $2,800,000, time = 3.
= $1,800,000 / (1 + 9%)^3.
= 1389930.26410991568.
Thus, 1651376.14678899082 + 2356703.98114636815 + 1389930.26410991568.
= 5398010.39204527465.
(B). Also, 1651376.14678899082 ×( time = 1) = 1651376.14678899082.
2356703.98114636815 × (time= 2 ) = 4,713,407.9622927363.
1389930.26410991568 × (time = 3) = 4169790.79232974704.
Thus, 4169790.79232974704 + 1651376.14678899082 + 4,713,407.9622927363.
= 10534574.90141147416.
Hence, duration = 10534574.90141147416/ 5398010.39204527465.
= 1.95156625058292731
Approximately 1.9516 years.
Consider the corporate valuation model, if the WACC increases what happens to the present value of the firm. Group of answer choices It is indeterminant the present value will stay the the present value will decrease The corporate valuation model doesn't depend the WACC The present value will increase
Answer:
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a company sells 600 bottles of a dietary supplement per week at$ 100 per bottle. The supplement is ordered from a supplier who charges fixed cost of $30 per order, and $ 50 per bottle. The annual inventory holding cost is 40%. Assume the company operates 50 weeks in a year. What is the optimal number of bottles company should order?
Answer:
the economic order quantity or optimal quantity = 300 bottles per order
Explanation:
economic order quantity (EOQ) = √[(2SD) / H]
S = cost per order = $30D = annual demand = 600 x 50 weeks = 30,000H = holding costs = $50 x 40% = $20EOQ = √[(2 x $30 x 30,000) / $20] = √($1,800,000 / $20) = √90,000 = 300
This means that the company must make 2 orders per week and 100 orders per year. This happens because the holding costs per unit are too high, therefore, in order to reduce costs you must have a small inventory.
Nichols Enterprises has an investment in 31,500 bonds of Elliott Electronics that Nichols accounts for as a security available for sale. Elliott bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $10 per bond, but Nichols believes the market has not appreciated the full value of the Elliott bonds and that a more accurate price is $23 per bond. Nichols should carry the Elliott investment on its balance sheet at:
Answer: $315,000
Explanation:
From the question, we are informed that Nichols Enterprises has an investment in 31,500 bonds of Elliott Electronics that Nichols accounts for as a security available for sale. Elliott bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $10 per bond, but Nichols believes the market has not appreciated the full value of the Elliott bonds and that a more accurate price is $23 per bond.
To get the amount that Nichols should carry on the balance sheet as Elliott investment, we multiply the bond invested by the price per bond. This will be:
= 31,500 × $10
= $315,000
What is the payback period for the above set of cash flows? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Answer: 2.74 years
Explanation:
Payback Period is a method of capital budgeting that works by checking how long the project will take to repay the investment outlay.
The formula is;
Payback Period = Year before Payback Period occurs + [tex]\frac{Cash remaining}{Cashflow in year payback happens}[/tex]
Initial Outlay = $4,650
First Year = $1,350
Second Year = $2,450
Third Year = $1,150
First year + second year = 1,350 + 2,450 = $3,800
Remaining till repayment = 4,650 - 3,800 = $850
Third year amount of $1,150 is higher than $850 so amount will be repaid in 3rd year.
Payback Period = Year before Payback Period occurs + [tex]\frac{Cash remaining}{Cashflow in year payback happens}[/tex]
Payback Period = 2 + [tex]\frac{850}{1,150}[/tex]
Payback Period = 2.74 years
A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be: A. Debit Treasury Stock $27,500; credit Cash $27,500. B. Debit Cash $27,500; credit Common Stock $27,500. C. Debit Common Stock $27,500; credit Cash $27,500. D. Debit Cash $27,500; credit Paid-in Capital in Excess of Par Value, Common Stock $2,500; credit Common Stock $25,000. E. Debit Treasury Stock $2,500; debit Paid-in Capital in Excess of Par Value, Treasury Stock $25,000; credit Common Stock $27,500.
Answer:
B. Debit cash $27,500 ; Credit common stock $27,500
Explanation:
The journal entry to record the transaction is;
Cash account Dr $27,500
(2,500 shares × $11)
To Common stock account Cr $27,500
Cash is an asset hence debited because it decreases as it was used to pay for bills while common stock is credited because it increases shareholder's equity.
Two firms examined the same capital budgeting project which had an IRR of 16%. One firm accepted the project but the other rejected it. One of the firms must have made an incorrect decision.
Discuss the validity of this statement.
Answer:
the statement is not valid. A company can reject the 16% IRR project if it is less than its discount rate. the discount rate is the minimum acceptable rate at which a project can be accepted. so, if 16% is less than than the discount rate, the project would be rejected.
on the other hand, if the discount rate is less than 16%, the project should be accepted because the return of the project would be greater than the discount rate.
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
The Grondas, who owned a party store along with land, fixtures, equipment, and a liquor license, entered into a contract to sell their liquor license and fixtures to Harbor Park Market in an agreement that was expressly conditioned on approval by the Grondas' attorney. The Grondas submitted the contract to their attorney but before the attorney had approved it, they received a second, better offer and submitted that contract to the attorney as well. The attorney reviewed both agreements and approved the second one. Harbor Park Market sued the Grondas for breach of contract. Will their suit succeed?
Answer:
No the suit will not succeed as their is no agreement
Explanation:
The contract was conditional contract. As the condition explicitly said that, the right to agree on terms and conditions is explicitly attorney's right. When the attorney has not agreed on the terms and conditions of Harbor Park, the company hasn't formed any contract. Furthermore, there is no limitation on Grondas to consider other available options and attorney is also not obliged to agree to Harbor's offer.
Thus the suit that says Grondas has breached the contract is meaningless and will not succeed in the court.
Brodrick Company expects to produce 20,000 units for the year ending December 31. A flexible budget for 20,000 units of production reflects sales of $400,000; variable costs of $80,000; and fixed costs of $150,000. The company instead produces and sells 26,000 units for the year. Assume that actual sales are $480,000, actual variable costs for the year are $112,000, and actual fixed costs for the year are $145,000.
Prepare a flexible budget performance report for the year.
Answer:
Flexible budget performance report for the year
Sales ($400,000 / 20,000 × 26,000) $520,000
Less Variable Costs ($80,000 / 20,000 × 26,000) ($104,000)
Less Fixed costs ($150,000)
Budgeted Income / (Loss) $266,000
Explanation:
A flexed Budget is a Master Budget that has been adjusted to the Actual number of units produced and sold instead of Budgeted Units.
Note : Fixed Costs will the the same under the Master Budget and the Flexed Budget.
Epic Company earned net income of $784,000 this year. The number of common shares outstanding during the entire year was 420,000, and preferred shareholders received a $28,000 cash dividend. Compute Epic company's basic earning per share.
Answer:
The answer is $1.8/share
Explanation:
Basic Earnings Per Share (EPS)= (Net income - preferred shars) ÷ weighted number of outstanding shares
Net income - $784,000
Preferred shares - $28,000
Weighted number of outstanding shares - 420,000 shares
($784,000 - $28,000) ÷ 420,000 shares
= $756,000 ÷ 420,000 shares
= $1.8 per share.
This means that each shareholder has $1.8 per share from the net income of $784,000