Let be the damage incurred (in $) in a certain type of accident during a given year. Possible values are , , , and , with probabilities , , , and , respectively. A particular company offers a deductible policy. If the company wishes its expected profit to be , what premium amount should it charge?
Answers
Full question attached
Answer and Explanation:
Given probability of damages 0, 1000, 5000, 10000 = 0.8, 0.1, 0.08, 0.02 respectively
Also given that company offers a $500 deductible policy
To find premium amount charged
Equation could be given by
A=X+100 where A is premium charged, X is damage incurred
Substituting 0
A=0+100=100
Substituting 1000
A=1000-500+100=600
Substituting 5000
A=5000-500+100=4600
Substituting 10000
A=10000-500+100=9600
premium amount to be charged
=0.8*100+0.1*600+0.08*4600+0.02*9600 = $700
Related Questions
Moon Company sells Product Q at $6 a unit. In 20XO fixed costs are expected to be $200,000 and variable costs are estimated at $4 a unit. How many units of Product Q must Moon sell to generate operating income of $40,000
Answers
Answer:
Break-even point in units= 120,000
Explanation:
Giving the following information:
Selling price= $6
Unitary variable cost= $4
Fixed costs= $200,000
Desired profit= $40,000
To calculate the number of units to be sold, we need to use the following formula:
Break-even point in units= (fixed costs + desired profit)/ contribution margin per unit
Break-even point in units= (200,000 + 40,000) / (6 - 4)
Break-even point in units= 120,000
The Ferre Publishing Company has three service departments and two operating departments. Selected data from a recent period on the five departments follow:
Service Departments Operating Departments
Administration Janitorial Maintenance Binding Printing Total
Costs $77,000 $60,000 $39,000 $255,000 $486,000 $917,000
Number of employees 140 100 400 1,000 500 2,140
Square feet of space occupied 4,500 18,000 15,000 30,000 105,000 172,500
Hours of press time 18,000 38,000 56,000
The company allocates service department costs by the step-down method in the following order: Administration (number of employees), Janitorial (space occupied), and Maintenance (hours of press time).
Required: Assuming that the company uses the direct method rather than the step-down method to allocate service department costs, few much cost would fee assigned to each operating department?
Answers
Answer:
The Ferre Publishing Company
Allocation of service department costs, using the direct method:
Service Departments Operating Departments
Admin. Janitorial Maintenance Binding Printing Total
Costs $77,000 $60,000 $39,000 $255,000 $486,000 $917,000
Admin. (77,000) 51,333 25,667 0
Janitorial (60,000) 13,333 46,667 0
Maintenance (39,000) 12,536 26,464 0
Total $0 $0 $0 $332,202 $584,798 $917,000
Explanation:
a) Data and Calculations:
Service Departments Operating Departments
Admin. Janitorial Maintenance Binding Printing Total
Costs $77,000 $60,000 $39,000 $255,000 $486,000 $917,000
Number
of employees 140 100 400 1,000 500 2,140
Square feet of space
occupied 4,500 18,000 15,000 30,000 105,000 172,500
Hours of press time 18,000 38,000 56,000
Allocation bases:
Administration (number of employees),
Janitorial (space occupied)
Maintenance (hours of press time).
Allocation rate:
Administration = $77,000/1,500 = $51.33
Janitorial = $60,000/135,000 = $0.44
Maintenance = $39,000/56,000 = $0.696
The direct method of allocating costs is relatively straightforward. It only involves the direct allocation of service departments' cost to the operating departments. Service departments' costs are not allocated to any service department, but they are allocated directly to the operating activities.
Olivia, Kyle, and Andy formed a partnership in which they share all things equally. Kyle contributed an asset on which there is a liability of $22,500, which was assumed by the partnership. Kyle's AB in the asset he contributed was $16,000 and the FMV of the asset on the date of contribution was $60,000. What is Kyle's outside basis immediately after the contribution
Answers
Answer:
$1,000
Explanation:
Calculation for Kyle's outside basis immediately after the contribution
Since the Liability of the amount of $22,500 was distributed among the three partners which makes each of one of them to have a liability of
the amount of $7,500 calculated as: ($22,500/3 partners ), that means that Kyle will have a debt relief of the amount of $15,000 calculated as (7,500 * 2 partners)
Hence,
Kyle's outside basis= Asset contributed - Debt relief amount
Kyle's outside basis=16,000 -15,000
Kyle's Outside basis= $1,000
Therefore Kyle's outside basis immediately after the contribution will be $1,000
A retired auto mechanic hopes to open a rustproofing shop. Customers would be local new-car dealers. Two locations are being considered, one in the center of the city and one on the outskirts. The central city location would involve fixed monthly costs of $6,950 and labor, materials, and transportation costs of $30 per car. The outside location would have fixed monthly costs of $4,500 and labor, materials, and transportation costs of $40 per car. Dealer price at either location will be $90 per car.
1. Which location will yield the greatest profit if monthly demand is (1) 200 cars, (2) 300 cars?
2. At what volume of output will the two sites yield the same monthly profit?
Answers
Answer:
1.
(1) Profit - Location B = $5500
(2) Profit - Location A = $11050
2.
x = 245 cars
Explanation:
1.
Profit is the difference between the revenue and the total cost. To determine which location will provide greatest profit, we need to solve the equation for profit for both the locations under different demand scenarios as given in the question.
Let Location A be the central city location.Let Location B be the outskirts locations
The profit equation for Location A = 90 * x - (6950 + 30 * x)
The profit equation for Location B = 90 * x - (4500 + 40 * x)
Where x is the monthly demand in number of cars.
Scenario (1) 200 Cars
Profit - Location A = 90 * 200 - (6950 + 30 * 200)
Profit - Location A = $5050
Profit - Location B = 90 * 200 - (4500 + 40 * 200)
Profit - Location B = $5500
Scenario (2) 300 Cars
Profit - Location A = 90 * 300 - (6950 + 30 * 300)
Profit - Location A = $11050
Profit - Location B = 90 * 300 - (4500 + 40 * 300)
Profit - Location B = $10500
2.
To calculate the output/ demand that will produce the same profit under both locations, we need to equate the two profit equations.
90 * x - (6950 + 30 * x) = 90 * x - (4500 + 40 * x)
90x - 30x - 6950 = 90x - 40x - 4500
60x - 6950 = 50x - 4500
60x - 50x = -4500 + 6950
10x = 2450
x = 2450 / 10
x = 245 cars
which institution offers debt counseling?
select the best answer from the choices provided.
A. a stare or local government
B. nonprofit agency
C. credit union associated with a workplace
D. All answers are correct.
Answers
Answer:
the answer to the question is d
Explanation:
:)
The Valley Wine Company produces two kinds of wine—Valley Nectar and Valley Red. The wines are produced from 64 tons of grapes the company has acquired this season. A 1,000-gallon batch of Nectar requires 4 tons of grapes, and a batch of Red requires 8 tons. However, production is lim- ited by the availability of only 50 cubic yards of storage space for aging and 120 hours of process- ing time. A batch of each type of wine requires 5 cubic yards of storage space. The processing time for a batch of Nectar is 15 hours, and the processing time for a batch of Red is 8 hours. Demand for each type of wine is limited to seven batches. The profit for a batch of Nectar is $9,000, and the profit for a batch of Red is $12,000. The company wants to determine the number of 1,000-gallon batches of Nectar ( x 1 ) and Red ( x 2 ) to produce in order to maximize profit.Formulate a linear programming model for this problem.Solve this model by using graphical analysis.
Answers
Answer:
maximize 9000n + 12000r
constraints:
4n + 8r ≤ 645n + 5r ≤ 5015n + 8r ≤ 120n ≤ 7r ≤ 7n ≥ 0r ≥ 0
using solver, the solution is:
4 1,000 gallon batches of nectar wine and 6 1,000 gallon batches of red wine
maximum profit = (4 x $9,000) + (6 x $12,000) = $108,000
he Lubricant is an expensive oil newsletter to which many oil giants subscribe, including Ken Brown (see Problem 3-17 for details). In the last issue, the letter described how the demand for oil products would be extremely high. Apparently, the American consumer will continue to use oil products even if the price of these products doubles. Indeed, one of the articles in the Lubricant states that the chance of a favorable market for oil products was 70%, while the chance of an unfavorable market was only 30%. Ken would like to use these probabilities in determining the best decision. What decision model should be used
Answers
Answer: Expected Monetary Value decision model
Explanation:
The Expected Monetary Value (EMV) model is a statistical method used to calculate future payoffs that accounts for the risk and probability of different events happening.
It essentially takes the average of the scenarios that could happen based on their probabilities and their expected payoff and then adds them together to give a value that the investor can base their expectations upon.
For instance, in the above question, assuming that Ken Brown in a favorable market, Ken Brown can sell $500,000 worth of oil products but in an unfavorable one, they can only sell $100,000.
Based on the probabilities of the market conditions, EMV would show a value of;
= (500,000 * 70%) + (100,000 * 30%)
= $380,000
You have a total of $289,416 in your retirement savings. You want to withdraw $2,500 from your account at the end of every month for living expenses and expect to earn 4.6 percent per year on your money, compounded monthly. How long will it be until you run out of money
Answers
Answer:
You will be able to withdraw $2,500 for 153 months or 12 years, 9 months. The last withdrawal (154th withdrawal) will be smaller, around $782 only.
Explanation:
We can use the present value of an ordinary annuity formula to determine how long it will take to empty the account.
present value of annuity = payment x [1 - 1/(1 + i)ⁿ] / i
289,416 = 2,500 x [1 - 1/(1 + 0.00383333)ⁿ] / 0.00383333
289,416 / 2,500 = [1 - 1/(1 + 0.00383333)ⁿ] / 0.00383333
115.7664 = [1 - 1/(1 + 0.00383333)ⁿ] / 0.00383333
115.7664 x 0.00383333 = 1 - 1/1.00383333ⁿ
0.443770814 = 1 - 1/1.00383333ⁿ
1/1.00383333ⁿ = 1 - 0.443770814
1/1.00383333ⁿ = 0.556229185
1 / 0.556229185 = 1.00383333ⁿ
1.797820081 = 1.00383333ⁿ
n = log 1.797820081 / log 1.00383333 = 0.254746227 / 0.001661611345 = 153.3128 months
You will be able to withdraw $2,500 for 153 months or 12 years, 9 months. The last withdrawal will be smaller, around $782 only.
Cemptex Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2021 fiscal year was $624,000. Depreciation and amortization expense of $87,000 was included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash:
Decrease in accounts receivable $22,000
Increase in inventories 9,200
Increase prepaid expenses 8,500
Increase in salaries payable 10,000
Decrease in income taxes payable 14,000
Required:
Prepare the operating activities section of the 2011 statement of cash flows.
Answers
Answer:
711,300
Explanation:
Net cash generated from operating activities can be calculated by deducting and adding back the cash and non-cash items respectively from the net income for the year. Such as depreciation will be added back in net income due to it is a non-cash expense
Net Income 624,000
Depreciation and amortization 87,000
Decrease in accounts receivable 22,000
Increase in inventories (9,200)
Increase prepaid expenses (8,500)
Increase in salaries payable 10,000
Decrease in income taxes payable (14,000 )
Net cash generated from operating activities 711,300
Ricky’s Piano Rebuilding Company has been operating for one year. On January 1, at the start of its second year, its income statement accounts had zero balances and its balance sheet account balances were as follows:______
Cash $6,000
Accounts Payable $8,000
Accounts Receivable 25,000
Deferred Revenue (deposits) 3,200
Supplies 1,200
Notes Payable (long-term) 40,000
Equipment 8,000
Common Stock 8,000
Land 6,000
Retained Earnings 9,000
Buildings 22,000
Following are the January transactions:______
A. Received a $500 deposit from a customer who wanted her piano rebuilt in February.
B. Rented a part of the building to a bicycle repair shop; $300 rent received for January.
C. Delivered five rebuilt pianos to customers who paid $14,500 in cash.
D. Delivered two rebuilt pianos to customers for $7,000 charged on account.
E. Received $6,000 from customers as payment on their accounts.
F. Received an electric and gas utility bill for $350 for January services to be paid in February.
G. Ordered $800 in supplies.
H. Paid $1,700 on account in January.
I. Paid $10,000 in wages to employees in January for work done this month.
J. Received and paid cash for the supplies in (g).
1. Prepare an income statement for the month ended and at January 31.
2. Prepare a statement of retained earnings for the month ended and at January 31.
3. Prepare a classified balance sheet for the month ended and at January 31.
4. Prepare a statement of retained earnings for the month ended and at January 31.
Answers
Answer and Explanation:
1. The Preparation of income statement is presented below:-
Ricky's Piano Rebuilding Company
Income Statement
For the Month Ended January 31
Particulars Amount
Rent Revenue $300
Service Revenue $21,500 $21,800
Less: Expenses
Utility Expense $350
Wages Expense $10,000
Total expenses $10,350
Net income $11,450
2. The preparation of retained earnings is prepared below:-Ricky's Piano Rebuilding Company
Retained Earning Statement
For the Month Ended January 31
Particulars Amount
Retained Earnings $9,000
Add:
Net income $11,450
Less:
Dividends $0
Retained earnings, January 31 $20,450
3. The Preparation of balance sheet is presented below:-
Ricky's Piano Rebuilding Company
Budgeted Balance Sheet
As at January 31
Assets Amount
Current Assets:
Cash $14,800
Accounts Receivable $26,000
Supplies $2,000
Total Current Assets $42,800
Equipment $8,000
Building $22,000 $30,000
Land $6,000
Total Assets $78,800
Liabilities and stockholders equity
Liabilities
Current Liabilities
Accounts Payable $6,300
Deferred Revenue $3,700
Utility Payable $350
Total Current Liabilities $10,350
Notes Payable $40,000
Total Stockholders' Equity
Common Stock $8,000
Retained Earnings $20,450
Total Stockholders' Equity $28,450
Total Liabilities and stockholders’
equity $78,800
1. The Preparation of income statement is presented below:-
Ricky's Piano Rebuilding Company
Income Statement
For the Month Ended January 31
Particulars Amount
Rent Revenue $300
Service Revenue $21,500 $21,800
Less: Expenses
Utility Expense $350
Wages Expense $10,000
Total expenses $10,350
Net income $11,450
2. The preparation of retained earnings is prepared below:-
Ricky's Piano Rebuilding Company
Retained Earning Statement
For the Month Ended January 31
Particulars Amount
Retained Earnings $9,000
Add:
Net income $11,450
Less:
Dividends $0
Retained earnings, January 31 $20,450
3. The Preparation of balance sheet is presented below:-
Ricky's Piano Rebuilding Company
Budgeted Balance Sheet
As at January 31
Assets Amount
Current Assets:
Cash $14,800
Accounts Receivable $26,000
Supplies $2,000
Total Current Assets $42,800
Equipment $8,000
Building $22,000 $30,000
Land $6,000
Total Assets $78,800
Liabilities and stockholders equity
Liabilities
Current Liabilities
Accounts Payable $6,300
Deferred Revenue $3,700
Utility Payable $350
Total Current Liabilities $10,350
Notes Payable $40,000
Total Stockholders' Equity
Common Stock $8,000
Retained Earnings $20,450
Total Stockholders' Equity $28,450
Total Liabilities and stockholders’
equity $78,800
Learn more: https://brainly.com/question/14467401?referrer=searchResults
Here are comparative statement data for Duke Company and Lord Company, two competitors. All balance sheet data are as of December 31, 2020, and December 31, 2019.
Duke Company Lord Company
2020 2019 2020 2019
Net sales $1,866,000 $559,000
Cost of goods sold 1,059,888 297,388
Operating expenses 264,972 78,819
Interest expense 7,464 4,472
Income tax expense 54,114 6,149
Current assets 323,000 $311,200 82,000 $78,300
Plant assets (net) 521,400 501,200 138,300 125,100
Current liabilities 66,000 75,600 36,200 31,000
Long-term liabilities 108,200 90,200 29,000 24,600
Common stock, $10 par 496,000 496,000 122,000 122,000
Retained earnings 174,200 150,600 33,100 25,800
A) Prepare a vertical analysis of the 2020 income statement data for Duke Company and Lord Company.
Condensed Income Statement
For the Year Ended December 31, 2017
Duke Company Lord Company
Dollars % Dollars %
Net Sales 1,849,000 100% $546,000 100%
Cost of Goods Sold 1,063,200 57.5% 289,000 52.9%
Gross Profit $785,800 42.52% 57,000 47%
Operating Expenses 240,000 12.9% 82,000 15%
Income from Operations 545,800 29.5% 175,000 32%
Other Expenses and Loses
Interest Expense 6,800 0.4% 3,600 0.7%
Income Before Income
Tax 539,000 29.2% 171,400 31.4%
Income Tax Expense 62,000 3.4% 28,000 5.1%
Net Income/Loss $477,000 25.8% $143,400 26.3%
B) Compute the 2017 return on assets and the return on common stockholders’ equity for both companies.
Answers
Answer:
See explanation as attached.
Explanation:
a. Please find attached vertical analysis
Note that the percentage for Duke company and lord company were computed as;
(Particular of amount / Sales) × 100
b. Return on assets
• Duke company 57.59%
• Lord company 67.69%
Return on common stockholder equity
• Duke company 72.44%
• Lord company 94.68%
Breakdown of the above answers are attached.
In each of the following cases, calculate the accounting break-even and the cash break-even points. Ignore any tax effects in calculating the cash break-even. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Case Unit Price Unit Variable Cost Fixed Costs Depreciation
1 $3,190 $2,555 $8,080,000 $2,860,000
2 116 69 48,000 290,000
3 25 6 3,100 840
Answers
Answer:
Accounting Breakeven = (Fixed Costs + Depreciation)/ ( Sales price - Variable cost)
Cash Breakeven = Fixed Costs / ( Sales price - Variable cost)
1.
Accounting Breakeven = (8,080,000 + 2,860,000) / (3,190 - 2,555) = 17,228.34
Cash Breakeven = 8,080,000/ (3,190 - 2,555) = 12,724.41
2. Accounting Breakeven = (48,000 + 290,000) / ( 116 - 69) = 7,191.49
Cash breakeven = 48,000/ (116 - 69) = 1,021.28
3. Accounting breakeven = (3,100 + 840) / (25 - 6) = 207.37
Cash breakeven = 3,100/(25 - 6) = 163.16
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:
Fixed Component Per Month Variable Component per Job Actual Total For February
Revenue $276 $33,130
Technician wages $8,300 $8,150
Mobile lab operating expenses $5,000 $34 $9,260
Office expenses $2,500 $3 $2,740
Advertising expenses $1,570 $1,640
Insurance $2,850 $2,850
Miscellaneous expenses $970 $2 $535
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $5,000 plus $34 per job, and the actual mobile lab operating expenses for February were $9,260. The company expected to work 130 jobs in February, but actually worked 138 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February.
Answers
Answer:
I used an excel spreadsheet since there is not enough room here. I ordered the given data:
Fixed Variable Actual Total
Revenue $276 $33,130
Technician wages $8,300 $8,150
Mobile lab operating exp. $5,000 $34 $9,260
Office expenses $2,500 $3 $2,740
Advertising expenses $1,570 $1,640
Insurance $2,850 $2,850
Miscellaneous expenses $970 $2 $535
The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31.On July 31, the company’s Cash account has a $25,199 debit balance, but its July bank statement shows a $27,607 cash balance. Check No. 3031 for $1,530, Check No. 3065 for $541, and Check No. 3069 for $2,298 are outstanding checks as of July 31. Check No. 3056 for July rent expense was correctly written and drawn for $1,260 but was erroneously entered in the accounting records as $1,250. The July bank statement shows the bank collected $9,000 cash on a note for Branch. Branch had not recorded this event before receiving the statement. The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF. The July statement shows a $14 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received. Branch’s July 31 daily cash receipts of $10,132 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.Transaction General journal Debit Credit g. Record the adjusting entry required, if any, related to the July 31 cash balance.Record the adjusting entry required, if any, related to the outstanding checks.Record the adjusting entry required, if any, related to Check No. 3056.Record the adjusting entry required, if any, for the collection of the note by bank for Branch.Record the adjusting entry required, if any, related to the NSF check.Record the adjusting entry required, if any, related to bank service charges.Record the adjusting entry required, if any, related to the July 31 deposit.
Answers
Answer:
Bank account reconciliation:
bank account balance $27,607
- outstanding checks ($4,369)
+ deposits in transit $10,132
reconciled balance $33,370
Cash account reconciliation:
cash account balance $25,199
- error in processing check no. 3056 ($10)
+ collection of note $9,000
- NSF check ($805)
- bank fees ($14)
reconciled balance $33,370
adjusting journal entries:
Dr Rent expense 10
Cr Cash 10
Dr Cash 9,000
Cr Notes receivable 9,000
Dr Accounts receivable 805
Cr Cash 805
Dr Miscellaneous expenses 14
Cr Cash 14
Is the coffee market growing or shrinking and why
Answers
In conclusion, the coffee market is currently experiencing considerable growth in economies around the world, with the rise in urbanization and the demand for quick, quality product fueling the expansion. The market is expected to continue to inflate in the next five years, leaving ample room for returns and profit
The following is a December 31, 2021, post-closing trial balance for Almway Corporation.
Account Title Debits Credits
Cash $65,000
Investment in equity securities 130,000
Accounts receivable 70,000
Inventory 210,000
Prepaid insurance (for the next 9 months) 8,000
Land 110,000
Buildings 430,000
Accumulated depreciation—buildings $110,000
Equipment 120,000
Accumulated depreciation—equipment 70,000
Patent (net) 20,000
Accounts payable 95,000
Notes payable 160,000
Interest payable 30,000
Bonds Payable 250,000
Common stock 330,000
Retained earnings 118,000
Totals $1,163,000 $1,163,000
Additional information:
The investment in equity securities account includes an investment in common stock of another corporation of $40,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year.The land account includes land which cost $35,000 that the company has not used and is currently listed for sale.The cash account includes $25,000 restricted in a fund to pay bonds payable that mature in 2024 and $33,000 restricted in a three-month Treasury bill.The notes payable account consists of the following:
a $40,000 note due in six months.
a $60,000 note due in six years.
a $60,000 note due in five annual installments of $12,000 each, with the next installment due February 15, 2022.
The $70,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $7,000.The common stock account represents 110,000 shares of no par value common stock issued and outstanding. The corporation has 500,000 shares authorized.
Required:
Prepare a classified balance sheet for the Almway Corporation at December 31, 2021.
Answers
Answer:
Almway Corporation
Classified Balance Sheet
As at December 31, 2021
Assets:
Current Assets:
Cash:
Balance- unrestricted $7,000
Restricted Cash - short-term 33,000
Restricted Cash - long-term 25,000
Short-term Investment 90,000
Accounts receivable 77,000
Less Uncollectible (7,000) 70,000
Inventory 210,000
Prepaid insurance
(for the next 9 months) 8,000 $443,000
Land 110,000
Buildings 430,000
Accumulated
depreciation (110,000) 320,000
Equipment 120,000
Accumulated
depreciation (70,000 ) 50,000
Patent (net) 20,000
Long-term Investment 40,000 $540,000
Total Assets $983,000
Liabilities + Equity:
Current Liabilities:
Accounts payable 95,000
Short-term Notes payable 52,000
Interest payable 30,000 $177,000
Long-term Notes Payable 108,000
Bonds Payable 250,000 $358,000
Total liabilities $535,000
Common stock
500,000 Authorized, no par
110,000 Issued & outstanding 330,000
Retained earnings 118,000 $448,000
Total Liabilities + Stockholders Equity $983,000
Explanation:
a) Data and Calculations:
Almway Corporation
Trial Balance
December 31, 2021:
Account Title Debits Credits
Cash $65,000
Investment in equity securities 130,000
Accounts receivable 70,000
Inventory 210,000
Prepaid insurance
(for the next 9 months) 8,000
Land 75,000
Land (available for sale) 35,000
Buildings 430,000
Accumulated depreciation—buildings $110,000
Equipment 120,000
Accumulated depreciation—equipment 70,000
Patent (net) 20,000
Accounts payable 95,000
Notes payable 160,000
Interest payable 30,000
Bonds Payable 250,000
Common stock 330,000
Retained earnings 118,000
Totals $1,163,000 $1,163,000
Investment in equity securities 130,000
Short-term Investment (90,000)
Long-term Investment (40,000)
Land 110,000
Available for Sale Investment (35,000)
Land balance 75,000
Cash $65,000
Restricted Cash - short-term (33,000)
Restricted Cash - long-term (25,000)
Balance- unrestricted $7,000
Notes payable 160,000
Short-term payable (40,000 +12,000) (52,000)
Long-term payable (60,000 + 48,000) (108,000)
Accounts receivable (70,000 + 7,000) 77,000
Less uncollectible accounts (7,000)
Accounts receivable balance 70,000
Nickleson Company had an unadjusted cash balance of $6,558 as of May 31. The company’s bank statement, also dated May 31, included a $86 NSF check written by one of Nickleson’s customers. There were $1,223 in outstanding checks and $240 in deposits in transit as of May 31. According to the bank statement, service charges were $85, and the bank collected an $1,050 note receivable for Nickleson. The bank statement also showed $18 of interest revenue earned by Nickleson.
Required
Determine the true cash balance as of May 31.
Answers
Answer:
True cash balance $7,455
Explanation:
Calculation to Determine the true cash balance as of May
Unadjusted cash balance of $6,558
Add bank collection note $1,050
Add interest revenue $18
Less NSF check $86
Less service charges $85
True cash balance $7,455
Therefore True cash balance is $7,455
Venture capital (VC) firms are pools of private capital that typically invest in small, fast-growing companies that can't raise funds through other means. In exchange for this financing, VCs receive a share of a company's equity, and the founders of the firm typically stay on and continue to manage the company. A VC firm wants management to focus on improving , while the managers may also act to increase . VC investments have two typical components:_______.
(1) managers maintain some ownership in the company and often earn additional equity if the company performs well;
(2) VCs demand seats on the company's board. Management ownership serves to the alignment of the incentives of managers with the incentives of owners.
Answers
Answera dnd Explanation:
A. The incentive conflict in principal-agent relationship as it concerns venture capitalism is conflict between venture capitalists who are the principals and the managers of the business investment who are the agents. The conflict is that venture capitalists are put to increase value of their investment and make profit while salaried managers are only out to feel their pockets through their managerial role in the company as they do not have an interest in the company and are unaffected by the loss or failure of the company. This is known as the principal agent moral hazard issue in venture capitalism
B. By managers maintaining some ownership in the company, there us reduced conflict as managers now see a reason to make sure company succeeds since they have an interest
Venture capitalists aim to have a seat in the board to make sure managers do not take bad decisions since they are able to veto such decisions
Geothermal energy is an example of a natural resource. True or False
please help!!!
Answers
Answer:true
Explanation:
Answer:
True.
Explanation:
The transactions of Spade Company appear below.
A. Kacy Spade, owner, invested $14,250 cash in the company in exchange for common stock.
B. The company purchased office supplies for $413 cash.
C. The company purchased $7,880 of office equipment on credit.
D. The company received $1,681 cash as fees for services provided to a customer.
E. The company paid $7,880 cash to settle the payable for the office equipment purchased in transaction c.
F. The company billed a customer $3,021 as fees for services provided.
G. The company paid $520 cash for the monthly rent.
H. The company collected $1,269 cash as partial payment for the account receivable created in transaction f.
I. The company paid a $1,000 cash dividend to the owner (sole shareholder).
Required:
1. Prepare general journal entries to record the transactions above for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Fees Earned; and Rent Expense. Use the letters beside each transaction to identify entries.
2. Post the above journal entries to T-accounts, which serve as the general ledger for this assignment.
Answers
Answer:
Entries are given
Explanation:
We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.
DEBIT CREDIT
A. Kacy Spade, owner, invested cash in the company
Common stock 14250
Cash 14250
B. The company purchased office supplies
Office supplies 413
Cash 413
C.The company purchased office equipment on credit
Office equipment 7880
Payables 7880
D.The company received $1,681 in cash
Cash 1681
Fees earned 1681
E. The company paid $7,880 cash to settle the payable
Payables 7880
Cash 7880
F. The company billed a customer $3,021 as fees
Receivable 3021
fees earned 3021
G. The company paid $520 cash for the monthly rent.
Rental expense 520
Cash 520
H. The company collected $1,269 cash as partial payment
Cash 1269
Receivables 1269
I. The company paid a $1,000 cash dividend to the owner
Retained earnings 1000
Cash 1000
The Green Giant has a 4 percent profit margin and a 40 percent dividend payout ratio. The total asset turnover is 1.5 times and the equity multiplier is 1.4 times. What is the sustainable rate of growth?
Answers
Answer:
sustainable growth rate = 5.04%
Explanation:
the sustainable growth rate = retention rate x return on equity
retention rate = 1 - dividend payout ratio = 1 - 40% = 60%return on equity = profit margin x asset turnover x equity multiplier = 4% x 1.5 x 1.4 = 0.084 = 8.4%sustainable growth rate = 0.6 x 8.4% = 5.04%
the mathematical explanation on how I determined ROE:
equity multiplier = total assets / equity
1.4 equity = total assets
total assets turnover = net sales / total assets
1.5 = net sales / 1.4 equity
2.1 equity = net sales
profit margin = net profit / net sales
net sales = net profit / 0.04
2.1 equity = net profit / 0.04
2.1 x 0.04 = net profit / equity = ROE = 0.084
Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $25,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to deposit how much money so that you can fund the scholarship forever, assuming that the account will earn 4.50% per annum every year?
a. $111,111
b. $88,889
c. $100,000
d. $133,333
Oops! The bank representative just reported that he misquoted the available interest rate on the scholarship’s account. Your account should earn 3.50%. The amount of your required deposit should be revised to:________
a. $60,715
b. $53,572
c. $71,429
d. $67,858
Answers
Answer:
$555,555.56$714,285.71Explanation:
1. This scholarship is forever so this is a perpetuity. The amount you need to put in is the present value of a perpetuity.
= Perpetuity/ Rate
= 25,000/4.5%
= $555,555.56
2. = Perpetuity/ Rate
= 25,000/3.5%
= $714,285.71
Options are probably for a related question.
Which of the following statements about annuities are true? (Select all that apply.) Check All That Apply The first cash flow of an annuity due is made on the first day of the agreement. The first cash flow of an annuity due is made on the first day of the agreement. The first cash flow of an ordinary annuity is made on the first day of the agreement.
Answers
Answer:
The first cash flow of an annuity due is made on the first day of the agreement. The last cash flow of an ordinary annuity is made on the last day covered by the agreement.Explanation:
The difference between an Annuity due and an Ordinary annuity is the timing in the period it is paid. Annuity dues are paid in the beginning of the period which means that they accrue more interest because they have the rest of the year to build.
Ordinary annuities on the other hand see their cashflows made on the last day of the period which is why the last cash flow of an ordinary annuity is made on the last day covered by the agreement.
The first cash flow of an annuity due is made on the first day of the agreement. Thus, option A is appropriate.
The movement of money within and outside of a business is known as cash flow. Cash received represents inflows, while cash spent represents outflows. A financial statement that describes the sources and uses of a company's cash over time is called a cash flow statement.
An annuity's first cash flow is made on the initial day of the contract. An annuity with cash flows or payments that start at the start of the period is said to be due. An annuity in arrears is another name for a due annuity. The cash flows start in years one through five. And at time 0 (right now), the very first cash flow happens.
Thus, option A is correct.
Learn more about the Cash Flow here:
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Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Third Bank purchased the equipment at a cost of $1,000,000. Chance elected the short-term lease option. Appropriate adjusting entries are made annually.
Related Information:
Lease term 1 year (4 quarterly periods)
Quarterly lease payments $40,000 at Jan. 1, 2018, and at Mar. 31, June 30, and Sept. 30.
Economic life of asset 5 years
Interest rate charged by the lessor 8%
Required:
Prepare appropriate entries for Chance from the beginning of the lease through December 31, 2018.
Answers
Answer:
Since this is a short lease, you do not need to make any journal entries regarding right of use asset or lease liabilities. You only record the total lease payment as an expense in your income statement (similar to renting an office).
January 1, 2018, first lease payment to Third Bank Leasing
Dr Lease expense 40,000
Cr Cash 40,000
March 31, 2018, second lease payment to Third Bank Leasing
Dr Lease expense 40,000
Cr Cash 40,000
June 30, 2018, third lease payment to Third Bank Leasing
Dr Lease expense 40,000
Cr Cash 40,000
September 30, 2018, fourth lease payment to Third Bank Leasing
Dr Lease expense 40,000
Cr Cash 40,000
The following is a payroll sheet for Otis Imports for the month of September 2020. The company is allowed a 1% unemployment compensation rate by the state; the federal unemployment tax rate is 0.8% and the maximum for both is $7,000. Assume a 10% federal income tax rate for all employees and a 7.65% FICA tax on employee and employer on a maximum of $128,400. In addition, 1.45% is charged both employer and employee for an employee’s wages in excess of $128,400 per employee.
Name Earnings to Aug. 31 September Earnings Income Tax Withholding FICA Unemployment Tax State Federal
B.D. Williams $ 6,800 $ 800
D. Raye 6,500 700
K. Baker 7,600 1,100
F. Lopez 13,600 1,900
A. Daniels 116,900 13,000
B. Kingston 121,900 16,000
Instructions
a. Complete the payroll sheet and make the necessary entry to record the payment of the payroll.
b. Make the entry to record the payroll tax expenses of Otis Imports.
c. Make the entry to record the payment of the payroll liabilities created. Assume that the company pays all payroll liabilities at the end of each month.
Answers
Answer:
a) I used an excel spreadsheet since there is not enough room here.
September 30, 202x, wages expense
Dr Wages expense 33,500
Cr Federal income tax withholdings payable 3,350
Cr FICA taxes (withholdings) payable 2,722.25
Cr Wages payable 27,427.75
b) September 30, 202x, payroll taxes expense
Dr FICA taxes expense 2,722.25
Dr FUTA tax expense 5.60
Dr SUTA tax expense 7
Cr FICA taxes withholdings payable 2,722.25
Cr FUTA taxes payable 5.60
Cr SUTA taxes payable 7
c) September 30, 202x, payment of payroll liabilities
Dr Wages payable 27,427.75
Dr Federal income tax withholdings payable 3,350
Dr FICA taxes withholdings payable 5,444.50
Dr FUTA taxes payable 5.60
Dr SUTA taxes payable 7
Cr Cash 36,234.85
Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $800,000 of manufacturing overhead for an estimated allocation base of $500,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:
Purchase of raw materials $510,000
Direct labor cost $90,000
Manufacturing overhead costs:
Indirect labor $170,000
Property taxes $48,000
Depreciation of equipment $260,000
Maintenance $95,000
Insurance $7,000
Rent, building $180,000
Required:
1) Compute the predetermined overhead rate for the year.
2) Compute the amount of underapplied or overapplied overhead for the year.
3) Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.
4) Compute the unadjusted cost of goods sold for the year.
5) Identify the options available for disposing of underapplied or overapplied overhead?
6) Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $8,500 in direct materials and $2,700 in direct labor cost and the company priced its jobs at 25% above the job's cost according to the accounting system?
7) Direct materials made up $24,000 of the $70,000 ending Work in Process inventory balance. Supply the information missing below:
Beginning Ending
Raw Materials $20,000 $80,000
Work in Process $150,000 $70,000
Finished Goods $260,000 $400,000
Answers
Answer:
Gitano Products
1. Predetermined overhead rate
= $1.60
2. Overapplied overhead for the year
= $40,000
3. Schedule of Cost of Goods Manufactured for the year:
Direct raw materials $510,000
Direct labor cost $90,000
Manufacturing overhead costs: $760,000
Cost of Goods Manufactured $1,360,000
4. Unadjusted Cost of Good Sold for the year:
Direct raw materials $510,000
Direct labor cost $90,000
Manufacturing overhead applied $800,000
Cost of Goods Sold $1,400,000
5) The overapplied overhead can be deducted from the adjusted Cost of Goods Sold to arrive at a cost of goods sold that is equal to $1,360,000. If there were inventories, the overapplied overhead can be allocated to the cost of goods sold, finished goods inventory, and work in process.
6) Job 215:
Direct materials $8,500
Direct labor 2,700
Overhead 13,600 ($1.60 * $8,500)
Total cost $24,800
Markup 25% 6,200
Price to customer $31,000
7) Beginning Ending
Raw Materials $20,000 $80,000
Work in Process $150,000 $70,000
Finished Goods $260,000 $400,000
If direct materials made up $24,000 of the $70,000 ending Work in Process inventory balance, then the balance is made up of $7,600 direct labor and $38,400 Overhead. The overhead = $24,000 * $1.60 = $38,400. The direct labor = $70,000 - ($24,000 + 38,400) = $7,600.
Explanation:
Estimated Manufacturing overhead = $800,000
Estimated direct materials = $500,000
Computation of Predetermined overhead rate
= $800,000/$500,000
= $1.60 per direct material
b) Data
Actual Expenses:
Purchase of raw materials $510,000
Direct labor cost $90,000
Manufacturing overhead costs:
Indirect labor $170,000
Property taxes $48,000
Depreciation of
equipment $260,000
Maintenance $95,000
Insurance $7,000
Rent, building $180,000
Total overhead $760,000
Total manufacturing cost $1,360,000
c) Computation of Overapplied overhead:
Estimated overhead minus actual overhead
= $800,000 - $760,000
= $40,000
Owens Corporation uses a process costing system. For March, the beginning work in process inventory consisted of 60,000 units that were 60% complete with respect to processing. The ending work in process inventory for the month consisted of units that were 20% complete with respect to processing. A summary of unit and cost data for the month follows:
Units Processing Cost
Work-in-process inventory, March 1 60,000 $ 35,000
Units started into production and costs incurred during the month 190,000 $ 700,000
Units completed and transferred out 200,000
Assuming that Owens Corporation uses the FIFO method, which of the following is closest to the cost per equivalent unit for processing cost for March?
A) $3.23
B) $3.98
C) $4.02
D) $4.22
Answers
Answer:
C) $4.02
Explanation:
The computation of cost per equivalent unit for processing cost for March is shown below:-
As we know that
Beginning work in process inventory units + Units started into production = Ending work in process inventory units + Units completed and transferred out
60,000 + 190,000 = Units in ending work in process inventory + 200,000
Units in ending work in process inventory is
= 60,000 + 190,000 - 200,000
= 50,000
To complete the beginning work in process inventory:-
Processing: 24,000
60,000 units ×(100% - 60%) a
Units started and completed 140,000
(200,000 − 60,000) b
Ending work in process inventory Processing:
50,000 units × 20% c 10,000
Equivalent units of production 174,000
Cost added throughout the period e 7,00,000
Equivalent units of production f 174,000
Cost per equivalent unit e ÷ f $4.02
A seller uses a perpetual inventory system, and on April 17, a customer returns $1,000 of merchandise previously purchased on credit on April 13. The seller's cost of the merchandise returned was $480. The merchandise is not defective and is restored to inventory. The seller has not yet received any cash from the customer. Complete the two journal entries (the first for the revenue part of the transaction and the second for the cost part) to record the sales return transaction by selecting the account names and dollar amounts from the drop-down menus.
Date Account Title Debit Credit April 17
Answers
Answer:
Date Accounts Titles and Explanation Debit Credit
Apr 17 Sales return and allowances a/c $1,000
Account receivable a/c $1,000
Merchandise inventory a/c $480
Cost of goods sold a/c $480
(To record sales return)
Drake Appliance Company, an accrual basis taxpayer, sells home appliances and service contracts. Determine the effect of each of the following transactions on the company's 2020 gross income assuming that the company uses any available options to defer its taxes.
a. In December 2019. the company received a $1,200 advance payment from a customer for an appliance that Drake special ordered from the manufacturer. The appliance did not arrive from the manufacturer until January 2019, and Drake immediately delivered it to the customer. The sale was reported in 20IS for financial accounting purposes.
b. In October 2019. the company sold a 6-month service contract for $240. The company also sold a 36-month service contract for $1,260 in July 2019.
Answers
Answer:
The correct solution is:
(a) $1200
(b) $330
Explanation:
(a)
The advance payment was issued throughout 2019, but perhaps the items were not shipped in 2019. The products will be shipped in 2020 as well as revenues for financial accounting requirements will be published in 2020. Thus, $1200 would include total sales for 2020.
So,
The $1200 total is reflected in the taxable profits for 2020.
(b)
The service contract, for 6 months will be:
⇒ [tex]Gross \ income=240\times \frac{3}{6}[/tex]
[tex]=120[/tex] ($)
The service contract, for 36 months will be:
⇒ [tex]Gross \ income = 1260\times \frac{6}{36}[/tex]
[tex]=210[/tex] ($)
In 2020, the total gross income included will be:
[tex]=120+210[/tex]
[tex]=330[/tex] ($)
So,
The amount $330 seems to be included throughout 2020 gross income.
Grady is a member of a large family and received the following payments this year. For each payment, determine whether the payment constitutes realized income and determine the amount of each payment Grady must include in his gross income. (Leave no answer blank. Enter zero if applicable.)
A gift of $60,000 of Ford Motor Bonds. Grady received the bonds on October 31, and he received $1,800 of semiannual interest from the bonds on December 31.
Answers
Answer:
Since Grady received the $60,000 gift, he does not owe any taxes on that transaction. When a gift is made, the receiving party pays no taxes, but the giving party has to pay taxes if it exceeds the $15,000 annual threshold or the $11.4 million lifetime exclusion.
But Grady must include the interests that he earned from the bonds as part of his gross income ($1,800). Interests are taxed as ordinary income.