Answer:
Kenji's alfalfa opportunity cost:
each bushel of Alfalfa cost 4 bushel of barley.
Lucia's alfalfa opportunity cost:
each bushel of Alfalfa cost 5 bushel of barley.
Explanation:
the opportunity cost is based on the output resinged when chosing a particular good.
In this case, the opportunity cost of barley is the Alfalfa and, for th Alfalfa the Barley that the farmer could have made.
Kenji's:
20 Barley / 7 alfalfa = 4 barley
each bushel of Alfalfa cost 4 bushel of barley.
Lucia's:
40 barley / 8 alfalta = 5 barly
each bushel of Alfalfa cost 5 bushel of barley.
DISCLAMER:
The table suggest two different names
I will assume the top value are from Lucia as those gives the absolute advantage stated in the question.
"Lucia has an absolute advantage in the production of barley, and Lucia has an absolute advantage in the production of alfalfa"
and the bottom from Kenji.
Both friends agree that the demand and supply for hybrid cars will increase. For each of the following situations, determine whether the demand curve or the supply curve increases by dragging the item to the appropriate category.
a. The government gives consumers a subsidy to buy hybrid cars.
b. More automobile producers start producing hybrids.
c. The price of non-hybrid cars falls.
d. The price of batteries for hybrid cars rises.
e. Gasoline prices rise.
Answer:
1. The subsidy will work as a motivating factor for the consumers as the product will be purchased at a lower cost. Thus. it will increase the demand curve.
2. This will increase the supply curve due to increase in the suppliers throughout the market.
3. It will increase the demand curve as the consumers will face lower pressure on their pocket while purchasing cars.
4. This will decrease demand as the price of cars rises due to increase in the cost of production.
5. Increase in price of gasoline will decrease demand for cars as the consumers have to face high pressure on their pockets for using he cars.
The explanation to each part should be explained below:
The following information should be considered:
A) A government subsidy is equal to a reduction in price for consumers. A decline in prices increases demand. The demand curve increase.
b)More producers result in more output, which is an increase in supply. The supply curve increases.
c). Non-hybrid cars should be the substitutes goods for hybrid vehicles. In the case the price of non-hybrid cars falls, their demand will increases. Consequently, the demand for hybrid cars reduces. Both The demand curve and supply curve will not increase.
d). An increase in production cost results in a price rise. Consequently, it reduces the demand for hybrid cars. Both the demand and curve curves will not increase.
e). An increase in gasoline price will make non-hybrid cars less desirable however will increase the demand for hybrid cars. The demand curve for hybrid cars increases.
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There are numerous definitions of insurance. based on the definition stated in the text, indicate whether each of the following guarantees is considered insurance.
a. The manufacturer guarantees a new television against defects for 90 days.
b. The manufacturer guarantees a new set of radial tires against road defects for 50,000 miles.
c. A builder of new homes gives a 10-year guarantee against structural defects in the home.
d. A cosigner of a note agrees to pay the loan balance if the original debtor defaults on the payments.
e. A large group of homeowners agrees to pay for losses to homes that are damaged or destroyed by fire during the year.
Answer: See explanation
Explanation:
Insurance is an arrangement whereby an economic entity like the individual or firm undertakes and agree to provide compensation for losses, damages or death to the insured.
a. The manufacturer guarantees a new television against defects for 90 days.
This is simply a guarantee and it's not an insurance. There are no pooling of losses even though risks are being transferred to the manufacturer.
b. The manufacturer guarantees a new set of radial tires against road defects for 50,000 miles.
This is also a guarantee and it's not an insurance. There are no pooling of losses even though risks are being transferred to the manufacturer. In a scenario whereby the tires are stolen, they won't be replaced.
c) A builder of new homes gives a 10-year guarantee against structural defects in the home.
This is just a guarantee and not an insurance. Even though risk are being transferred to the builder once there are structural defects, the owner of the home will bear the loss in case of fire.
d. A cosigner of a note agrees to pay the loan balance if the original debtor defaults on the payments.
This is not an insurance. This is just explaining that the consigner bears the risk of payment if the original debtor defaults.
e. large group of homeowners agrees to pay for losses to homes that are damaged or destroyed by fire during the year.
This is an insurance as losses are being pooled. The firm of insurance that'll be utilized here is the fire insurance.
Statements a,b,c, and d are guarantees and statement e represents insurance.
What are a guarantee and insurance?Insurance refers to the protection from the financial loss that the insurance holder otherwise would suffer. Insurance is a type of indemnity where one party promises to indemnify the insurer in case of loss.
Whereas gurantee can be defined as contract in which one party agrees to act on behalf of the other party in case of defaults by other party.
Therefore the statement a, b , c, and d are guarantee and the statement e represents insurance.
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The 2021 income statement of Anderson Medical Supply Company reported net sales of $12 million, cost of goods sold of $5.5 million, and net income of $835,000. The following table shows the company's comparative balance sheets for 2021 and 2020: ($ in thousands) 2021 2020Assets Cash$440 $520 Accounts receivable 840 570 Inventory 1,250 1,050 Property, plant, and equipment (net) 3,100 2,820 Total assets$5,630 $4,960 Liabilities and shareholders’ equity Current liabilities$1,100 $970 Bonds payable 1,550 1,550 Common stock 1,700 1,700 Retained earnings 1,280 740 Total liabilities and shareholders' equity$5,630 $4,960 Required:Calculate Anderson's turnover ratios for 2021. (Use 365 days a year. Round your answers to 2 decimal places.)Inventory turnover ratio timesReceivables turnover ratio timesAverage collection period days Asset turnover ratio times
Answer:
Inventory turnover ratio = cost of goods sold / average inventory = $5,500,000 / [($1,250,000 + $1,050,000)/2] = 4.78 times
Receivables turnover ratio = net sales / average accounts receivable = $12,000,000 / [($840,000 + $570,000)/2] = 17.02 times
Average collection period days = 365 / receivables turnover ratio = 365 / 17.02 = 21.45 days
Asset turnover ratio = net sales / average total assets = $12,000,000 / [($5,630,000 + $4,960,000)/2] = 2.27 times
Elvera Easton traded in copying equipment with an adjusted basis of $10,000 for other copying equipment valued at $6,000. She also received $2,500 in cash, and her mortgage of $3,000 on the traded copying equipment was wiped out. What is her recognized gain on this exchange, if any
Answer:
It would be $0
What kind of system is the United States economy based on?
Answer:
capitalism
Explanation:
usa mainly runs on capitalism
During 2017, its first year of operations as a delivery service, Concord Corporation entered into the following transactions:
1. Issued shares of common stock to investors in exchange for $181,000 in cash.
2. Borrowed $54,000 by issuing bonds.
3. Purchased delivery trucks for $60,000 cash.
4. Received $17,000 from customers for services performed.
5. Purchased supplies for $5,800 on account.
6. Paid rent of $4,800.
7. Performed services on account for $11,000.
8. Paid salaries of $29,300.
9. Paid a dividend of $10,700 to shareholders.
Required:
Using the following tabular analysis, show the effect of each transaction on the accounting equation.
If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place ( ) around the amount.
Transaction Assets = Liabilities + Stockholders' Equity
1
2
3
4
5
6
7
8
9
Answer:
Concord Corporation
Transaction Assets = Liabilities + Stockholders' Equity
1 Assets (Cash +$181,000) = Liabilities + Stockholders' Equity (Common Stock +$181,000)
2 Assets (Cash +$54,000) = Liabilities (Bonds Payable +$54,000) + Equity
3 Assets (Delivery Trucks +$60,000, Cash - $60,000) = Liabilities + Equity
4 Assets (Cash + $17,000, Accounts Receivable -$17,000) = Liabilities + Equity
5 Assets (Supplies + $5,800) = Liabilities (Accounts Payable +$5,800) + Equity
6 Assets (Cash - $4,800) = Liabilities + Equity (Retained Earnings -$4,800)
7 Assets (Accounts Receivable + $11,000) = Liabilities + Equity (Retained Earnings + $11,000)
8 Assets (Cash - $29,300) = Liabilities + Equity (Retained Earnings + $29,300)
9 Assets (Cash - $10,700) = Liabilities + Equity (Retained Earnings + $10,700)
Explanation:
In accordance with the accounting equation, Assets are always equal to Liabilities + Equity with each given business transaction. The accounting equation reflects the double-entry system of accounting. It shows that two or more accounts are involved in any transaction and each transaction that is properly recorded keeps the equation in balance at all times.
Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 2,900 tires to the Nixon Car Company for $40 each. The terms of the sale were 2/10, n/30. Harwell uses the net method of accounting for cash discounts.
Required:
1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23, 2021.
2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on August 15, 2021.
Answer:
1. July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
July 23
Dr Cash 113,680
Cr Accounts Receivable 113,680
2. July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
Aug 15
Dr Cash 116,000
Cr Accounts Receivable 113,680
Cr Sales discount forfeited 2,320
Explanation:
1.Preparation of the journal entries to record the sale on July 15 and payment on July 23, 2021.
July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
July 23
Dr Cash 113,680
Cr Accounts Receivable 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
2.Preparation of the journal entries to record the sale on July 15 and payment on August 15, 2021.
July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
Aug 15
Dr Cash 116,000
($40*2,900)
Cr Accounts Receivable 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
Cr Sales discount forfeited 2,320
(40*2,900*2%)
The most recent financial statements for Summer Tyme, Inc., are shown here:______.
Income Statement Balance Sheet
Sales $3,700 Current assets $4,200 Current liabilities $970
Costs 1,800 Fixed assets 5,700 Long-term debt 3,500
Taxable
income $1,900 Equity 5,430
Taxes (34%) 646 Total $9,900 Total $9,900
Net income $1,254
Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 50 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 25 percent.
Required:
What is the external financing needed? (Do not round your intermediate calculations.)
EFN = needed new long-term debt and/or external equity
Answer: $1,448.75
Explanation:
Sales are to increase by 25% along with Assets, costs and current liabilities.
Sales (3,700 * 1.25) $4,625
Less: Costs ( 1,800 * 1.25) $2,250
Taxable Income $2,375
Tax (2,375 * 34%) $807.50
Net Income $1,567.50
Addition to retained earnings = Net Income - Dividends
= 1,567.50 - ( 1,567.50 * 50%)
= $783.75
Equity = 5,430 + 783.75 = $6,213.75
Assets = 9,900 * 1.25 = $12,375
Total Liability = Long term debt + Current liability
= 3,500 + (970 * 1.25)
= $4,712.50
Assets = Liability + Equity
12,375 ≠ 4,712.50 + 6,213.75
External financing needed = 12,375 - 4,712.50 - 6,213.75
= $1,448.75
Bintu has a comparative advantage in the production of:______.
a. bowls and Juba has a comparative advantage in the production of cups.
b. cups and Juba has a comparative advantage in the production of bowls.
c. both goods and Juba has a comparative advantage in the production of neither good.
d. neither good and Juba has a comparative advantage in the production of both goods.
Answer:
b. cups and Juba has a comparative advantage in the production of bowls.
Explanation:
A company or country could said to have a comparative advantage if t produces a good or service with the lowest possible opportunity costs.
Bintu's opportunity cost of 1 unit of Bowls.
Bintu can produce 2 Bowls or 8 cups.
Therefore; 2 Bowls = 8 cups
We need to make it 1 Bowl, so we divide both sides by 2.
2 Bowls / 2 = 1 Bowl
8 cups / 2 = 4 cups
Hence, 1 bowl = 4 cups
Juba's opportunity cost of 1 unit of Bowls.
Juba can produce 4 Bowls or 6 cups.
Therefore; 4 Bowls = 6 cups
We need to make it 1 Bowl, so we divide both sides by 4.
4 Bowls / 4 = 1 Bowl
6 cups / 4 = 1.5 cups
Hence, 1 bowl = 1.5 cups
We now need to calculate the opportunity cost of 1 unit of cups from Bintu and Juba. This is just the same process as before, but with 1 unit of cup instead.
Bintus's opportunity cost of 1 unit of cups
Bintu can produce 8cups or 2 bowl.
Therefore, 8 cups = 2 bowls.
We need to make it 1 cup, so we divide both sides by 8.
8 cups / 8 = 1 cup
2 bowls /8 = 0.25 bowls.
Hence, 1 cup - 0.25 bowls
Juba's opportunity cost of 1 unit of cups.
Juba can produce 6 cups or 4 bowls.
Therefore, 6 cups = 4 bowls.
We need to make it 1 cup, so we divide both sides by 6.
6 cups /6 = 1 cup
4 bowls / 6 =0.67 bowl
Hence, 1 cup = 0.67 bowl
Now comparative advantage is when either of these two can produce a good with the lowest possible opportunity cost.
From the calculation above, the opportunity cost for bowl is 4 in Bintu and 1.5 in Juba. So since Juba has the lowest opportunity cost for bowls, it, therefore, Juba has a comparative advantage in the production of bowls. In the same way, since cost for Cups in Bintu is 0.25 and that of Juba is 0.67, then Bintu has a comparative advantage in the production of cups
What is the difference between ordinal utility and cardinalutility?
Ordinal utility refers to
A. satisfaction when consumers are , while cardinal utility is satisfaction when consumers are .
B. a ranking of market baskets based on , while cardinal utility is a ranking of market baskets based on .
C. a ranking where the intensity of preferences is quantified, while cardinal utility is a number that by itself has no meaning.
D. an interpersonal comparison of satisfaction, while cardinal utility is a ranking of market baskets using arbitrary numerical values.
E. a ranking of market baskets in order of most to least preferred, while cardinal utility indicates how much one market basket is preferred to another.
Answer:
E. a ranking of market baskets in order of most to least preferred, while cardinal utility indicates how much one market basket is preferred to another.
Explanation:
Ordinal utility can be defined as an economic concept in which the consumer chooses a product or service from the market based on preferences in relation to another at a comparative level, but not exactly quantified.
In cardinal utility, on the other hand, the consumer is able to quantify the benefits perceived in a product or service with specific values, and this measure is beneficial to specify, for example, a choice based on price and utility for the consumer, which helps in the purchase decision process .
Use the information below for 3M Company to answer the requirements (perform these computations from the perspective of a 3M shareholder).
($millions) 2015 2014
Sales $31,718
Net income consolidated 5,787
Net income attributable to
3M shareholders 5,779
Assets 33,395 $31,886
Total equity 11,747 13,142
Equity attributable to 3M
shareholders 11,708 13,109
A. Compute return on equity (ROE).
B. Compute the DuPont model component measures for profit margin, asset turnover, and financial leverage.
C. Compute ROA.
The EZ Lawn Corporation manufactures lawn equipment such as lawn mowers, blowers, and trimmers. The lawn equipment is assembled in the U.S. at a facility in Florida, but the firm outsources inputs from a number of countries, each with varying degrees of economic stability. Given the importance of the firm's sourcing activities, EZ Lawn managers are discussing methods which might reduce the currency risk faced by EZ Lawn. Which of the following would most likely minimize the currency risk of EZ Lawn?
a. Concentrate all of the EZ Lawn outsourcing to one or two neighboring nations.
b. Re-locate a team of EZ Lawn managers overseas to stay abreast of currency changes.
c. List EZ Lawn stock on foreign stock exchanges to offset any currency losses.
d. Assign an EZ Lawn manager the task of monitoring currency fluctuations.
Answer:
c. List EZ Lawn stock on foreign stock exchanges to offset any currency losses.
Many foreign companies do this and list their stocks as ADRs in the US, so this is a method that actually works. The problem is that will listing American stocks in foreign markets help? Probably you could list some stocks in European, Japanese or even Canadian markets. But most foreign exchange markets pose a higher risk than a currency exchange risk.
Explanation:
Currency risk refers to the possibility that a company that engages in international trade losses money due to variations in the exchange rate between their domestic currency and a foreign currency. The best way to protect a company are currency hedged funds that trade currency exchange futures, but this option isn't included in the list.
a. Concentrate all of the EZ Lawn outsourcing to one or two neighboring nations. ⇒ This will increase the risk since it is similar to investing all your money in one single stock, it can be great or it can be a disaster.
b. Re-locate a team of EZ Lawn managers overseas to stay abreast of currency changes. ⇒ You can do this from anywhere in the world, you do not need to relocate someone.
d. Assign an EZ Lawn manager the task of monitoring currency fluctuations. ⇒ Similar to option B, it just takes a few seconds to do it and anyone can do it. It is something so basic that every company should do it. It is like telling someone that they shouldn't forget to keep breathing. It can help you deal with currency fluctuations, but it doesn't protect you from them.
A risk analyst gives Oracle Corporation, the enterprise software and database management firm, a CAPM equity beta of 1.2. As of May 2011, the risk free rate is 4.0 percent, the market risk premium is 6%, the analyst is forecasting for Oracle to have EPS of $2.17 per share and P/E ratio to be 20, for the fiscal year ending May 31, 2012. The company is expected to pay $0.24 in dividends per share for the fiscal year.
The equity cost of capital for Oracle is:__________The value per share of equity for Oracle in May 2011 is:________
Answer:
Cost of equity = 11.20%, Value of Equity = $39.25
Explanation:
a. Cost of equity = Rf + B(Rm-Rf)
Cost of equity = 4% + 1.2(6%)
Cost of equity = 4% + 7.20%
Cost of equity = 11.20%
b. P/E ratio = 20
Market Price / EPS = 20
Market Price = EPS * 20
-->P1 = $2.17 * 20 = $43.40
DPS1= $0.24
Value of Equity = P1/Cost of Equity + DPS1/Cost of equity
Value of Equity = $43.40/1.1120 + $0.24/1.1120
Value of Equity = $39.03 + $0.22
Value of Equity = $39.25
You may worry that the indirect organizational strategy is unethical and manipulative, but the alternative—breaking the news bluntly—can cause pain and hard feelings.
Fill in the blank with the most appropriate answer.
Your goal in using the indirect strategy is to be______________.
Printing and copying costs have skyrocketed at your company, and the company will begin charging employees for all hard copies of documents related to internal use. The message informing employees of this change uses an indirect approach and focuses on the environmental benefits of going paperless.
Is the sender using an indirect approach in an ethical or unethical manner?
a. Ethical
b. Unethical
At some point, everyone will have to deliver bad news. The bad feelings associated with this type of message can be alleviated if the receiver knows the reason for the bad news, feels the news is revealed sensitively, thinks the matter is treated seriously, and believes that the decision is fair. When applying these strategies, make sure to follow the writing process and determine whether to use a direct or an indirect pattern in your message. Determine what strategy should be used in the following situation?
You are demoting an employee to avoid laying them off.
a. Indirect
b. Direct
Question attached
Answer and Explanation:
Ethical: it is ethical to reduce the emotional impact of a bad news by making use of an indirect approach which is less harsh and blunt unlike the direct approach. In situations such as communicating that a person has lost his job, it is important that the manager communicates using indirect approach
Direct: you are communicating facts to someone that has less time. Therefore the direct approach would be most appropriate as it goes straight to the point without delays
Intend to deceive:your boss is extremely busy therefore in this case it would be important to use the direct approach and move straight to the point from the beginning not hiding the bad news at the end of the mail
Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $23 million and taxable income of $29 million for the year ended December 31, 2021. The 2021 tax rate is 25%. The only difference between accounting income and taxable income is estimated product warranty costs. Assume that expected payments and scheduled tax rates (based on recently enacted tax legislation) are as follows:
2022 $4 million 30%
2023 1 million 30%
2024 1 million 30 %
2025 2 million 25%
Required:
a. Determine the amounts necessary to record Allmond’s income taxes for 2021 and prepare the appropriate journal entry.
b. What is Allmond’s 2021 net income?
Answer:
$15.75 million
Explanation:
The Income tax necessary to record in almond's income taxes for 2021 can be calculated by reversing all the warranty cost in 2022 and onwards. The warranty cost will be recorded as a deferred tax asset.
Requirement A
Warranty costs reversing in:
Date Amount Tax rate Tax
2022 $4m x 30% = $1.2 Deferred tax Assets
2023 $1m x 30% = $0.3 Deferred tax Assets
2024 $1m x 30% = $0.3 Deferred tax Assets
2025 $2m x 25% = $0.5 Deferred tax Assets
Total deferred tax amount $2.3 Deferred tax Assets
Income tax Payable = Taxabe income x tax rate
Income tax Payable = $29m x 25%
Income tax Payable = $7.25m
Accounting Entry:
DEBIT CREDIT
Income tax expense $7.25
Deferred tax asset $2.3
Income taxes payable $9.55
Requirement B
Net income for 2021 = Pretax income - Income tax expense
Net income for 2021 = $23M - $7.25
Net income for 2021 = $15.75 million
Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming year:
Direct materials used 50,000
Direct Labor costs 70,400
Wages of factory janitors 39,500
Sales supervisor salary 51,500
Utilities for factory 16,100
Rent on factory building 13,800
Advertising expense 5,830
The company estimates that direct labor hours will be worked in the upcoming year, while machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be:________
a. $154 46
b. $1869
c. $7921
d. $43.38
The company has the following estimated costs for the upcoming year: Direct materials used $50,800 Direct labor costs $70,000 Wages of factory janitors $39,500 Sales supervisor salary $51,600 Utilities for factory $16,100 Rent on factory building $13,200 Advertising expense $5130 The company estimates that 1420 direct ...Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming year: Direct materials used $50,800 Direct labor costs $70,000 Wages of factory janitors $39,500 Sales supervisor salary $51,600 Utilities for factory $16,100 Rent on factory building $13,200 Advertising expense $5130 The company estimates that 1420 direct labor hours will be worked in the upcoming year, while 1400 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be (Round your answer to the nearest cent.)
Borges Machine Shop, Inc., has a 1-year contract for the production of gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow: General-Purpose Equipment (GPE) Flexible Manufacturing System (FMS) Dedicated Machine (DM) Annual contracted units Annual fixed cost Per unit variable cost Based on the cost, the process that is best suited for the current contracted volume is __________.
Answer:
All the numbers are missing, so I looked for a similar question.
The contract includes the production of 225,000 gear housings during 1 year.
We are also given the estimated costs of each alternative. We must choose the alternative that minimizes our total costs.
total costs for general purpose equipment (GPE) = $125,000 + (225,000 x $15) = $3,500,000total costs for flexible manufacturing system (FMS) = $200,000 + (225,000 x $14.50) = $3,462,500total costs for dedicated machine (DM) = $525,000 + (225,000 x $13.50) = $3,562,500For the current volume, the best option is flexible manufacturing system with a total cost of $3,462,500.
As total volume increases, the DM option becomes more attractive, but in order for it to cost less than FMS, total output should be higher than 325,000 units per year.
525,000 + 13.5x = 200,000 + 14.5x
x = 325,000 units
GPE is only attractive when the total units are lower (below 150,000 units per year):
125,000 + 15x = 200,000 + 14.5x
0.5x = 75,000
x = 150,000
Eaton Co. sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year, or three-year period. Cash receipts from contracts are credited to Unearned Service Revenue. This account had a balance of $3,800,000 at December 31, 2014 before year-end adjustment. Service contract costs are charged as incurred to the Service Contract Expense account, which had a balance of $900,000 at December 31, 2014. Service contracts still outstanding at December 31, 2014 expire as follows:
During 2015 $960,000
During 2016 1,140,000
During 2017 700,000
What amount should be reported as Unearned Service Revenue in Eaton's December 31, 2014 balance sheet?
a. $2,900,000.
b. $2,800,000. (Correct answer: $960,000 + $1,140,000 + $700,000 = $2,800,000.)
c. $1,900,000.
d. $1,000,000.
Answer:
b. $2,800,000.
Explanation:
Since the contracts are accepted on cash basis, receipts are recorded in Unearned Service Revenue. In this case, the contracts outstanding as on 31st December 2014 is recorded in unearned service revenue as those cash is received in advance and will be credited to unearned service revenue
Unearned service revenue in Eaton's December 31, 2014 Balance sheet = $960,000 + $1,140,000 + $700,000 = $2,800,000
The going concern assumption of GAAP implies that the firm: __________
a. Will continue to operate and that all assets should be recorded at their cost rather than at their liquidation value.
b. Will continue to operate and its assets should be recorded at historical cost.
c. Is going under and needs to be liquidated at historical cost.
d. Is going under and needs to be liquidated at liquidation value.
Answer:
correct option is (a)
Explanation:
Anxiety is a financially stable accounting term for a company to fulfill its obligations and continue its business for the future.So, One of the key assumptions under GAAP is the going concern assumption that will continue to operate and that all assets should be recorded at their cost rather than at their liquidation valueKlingon Widgets, Inc., purchased new cloaking machinery three years ago for $5.4 million. The machinery can be sold to the Romulans today for $7.6 million. Klingon's current balance sheet shows net fixed assets of $4.2 million, current liabilities of $850,000, and net working capital of $144,000. If all the current accounts were liquidated today, the company would receive $965,000 cash.
a. What is the book value of Klingon's total assets today? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
b. What is the sum of the market value of NWC and the market value of fixed assets? (Do not round Intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
a. Book value of total assets
b. Sum of market value of NWC and fixed assets
Answer:
a. $5,194,000
b. $7,715,000
Explanation:
a. Book Value of assets = Book value of fixed assets + book value of current assets
Book Value of assets = Book value of fixed assets + (Current Liabilities + Net working capital)
Book Value of assets = $4,200,000 + ($850,000 + $144,000)
Book Value of assets = $5,194,000
b. Sum of market value = $7,600,000 + ($965,000 - $850,000)
Sum of market value = $$7,600,000 + $115,000
Sum of market value = $7,715,000
Kirk, Spock and Bones were partners in a company that sold TV memorabilia, aptly named Memorabilia Partnership. The memorabilia business was not as popular as it had once been, so Kirk decided to withdraw from the partnership and duly notified the other members. Memorabilia Partnership was an at-will partnership and the members agreed to dissolve the partnership and parted amicably. They posted a notice in the local newspaper of the dissolution of Memorabilia Partnership. Ed decided that he would like to host a Star Trek convention. Part of Ed’s idea was to put a piece of TV memorabilia in the hands of the first 500 people at the convention. Ed had, in the past, conducted business with Memorabilia Partnership several times to buy memorabilia for special events. Ed did not see the newspaper notice and was not informed of the dissolution of Memorabilia Partnership. Ed approached Kirk to make a deal. Ed placed an order, gave a substantial down payment to Kirk, and received a receipt on Memorabilia Partnership stationery from him. Kirk left the country with the down payment. Spock and Bones, the other former members of Memorabilia Partnership, failed to honor the contract. Ed sued the other former members of Memorabilia Partnership. Discuss Spock and Bone’s potential liability.
Answer:
In this case, Spock and Bone's potential liability is nothing and they cannot be held responsible for non honoring of contract of Memorabilia Partnership with Ed. This is because, Memorabilia Partnership was dissolved and Spock and Bone's cannot be held responsible for Kirk's actions. Since Kirk fled the country with down payment money, hence he is liable for suitable punishment and fine but since Spock and Bones were not involved in this crime, hence they cannot be held liable for anything.
Bridgeport Architects incorporated as licensed architects on April 1, 2022. During the first month of the operation of the business, these events and transactions occurred:
Apr. 1 Stockholders invested $19,980 cash in exchange for common stock of the corporation.
1 Hired a secretary-receptionist at a salary of $416 per week, payable monthly.
2 Paid office rent for the month $999.
3 Purchased architectural supplies on account from Burmingham Company $1,443.
10 Completed blueprints on a carport and billed client $2,109 for services.
11 Received $777 cash advance from M. Jason to design a new home.
20 Received $3,108 cash for services completed and delivered to S. Melvin.
30 Paid secretary-receptionist for the month $1,664.
30 Paid $333 to Burmingham Company for accounts payable due.
Required:
Journalize the transactions.
Sales and Cash Receipts Transactions
Sourk Distributors is a retail business. The following sales, returns, and cash receipts occurred during March 20--. There is an 8% sales tax.
1. Sale on account No. 33C to Donachie & Co., $1,700 plus sales tax.
3. Sale on account No. 33D to R. J. Kibubu, Inc., $2,190 plus sales tax.
5 Donachie & Co. returned merchandise from Sale No. 33C for a credit (Credit Memo No. 66), $40 plus sales tax.
7 Cash sales for the week were $3,140 plus sales tax.
10 Received payment from Donachie & Co. for Sale No. 33C less Credit Memo No. 66.
11 Sale on account No. 33E to Eck Bakery, $1,230 plus sales tax.
13 Received payment from R. J. Kibubu for Sale No. 33D.
14 Cash sales for the week were $4,100 plus sales tax.
16 Eck Bakery returned merchandise from Sale No. 33E for a credit (Credit Memo No. 67), $34 plus sales tax.
18 Sale on account No. 33F to R. J. Kibubu, Inc., $2,580 plus sales tax.
20 Received payment from Eck Bakery for Sale No. 33E less Credit Memo No. 67.
21 Cash sales for the week were $2,510 plus sales tax.
25 Sale on account No. 33G to Eck Bakery, $2,010 plus sales tax.
27 Sale on account No. 33H to Whitaker Group, $2,070 plus sales tax.
28 Cash sales for the week were $3,420 plus sales tax.
Required:
Record the transactions in the general journal.
Answer and Explanation:
Answer and explanation attached
Flint Hills, Inc. has prepared a year-end 2021 trial balance. Certain accounts in the trial balance do not reflect all activities that have occurred. The Supplies account shows a balance of $820, but a count of supplies reveals only $350 on hand. Flint Hills initially records the payments of all insurance premiums as expenses. The trial balance shows a balance of $560 in Insurance expense. A review of insurance policies reveals that $195 of insurance is unexpired. Flint Hills employees work Monday through Friday, and salaries of $3,800 per week are paid each Friday. Flint Hills' year-end falls on Tuesday. On December 31, 2021, Flint Hills received a utility bill for December electricity usage of $330 that will be paid in early January of 2022.
Required: Prepare adjusting journal entries, as needed, for the above items. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. The Supplies account shows a balance of $680, but a count of supplies reveals only $280 on hand.
2. Flint Hills initially records the payments of all insurance premiums as expenses. The trial balance shows a balance of $490 in Insurance expense. A review of insurance policies reveals that $160 of insurance is unexpired.
3. Flint Hills employees work Monday through Friday, and salaries of $3,100 per week are paid each Friday. Flint Hills' year-end falls on Tuesday.
4. On December 31, 2018, Flint Hills received a utility bill for December electricity usage of $260 that will be paid in early January of 2019.
Event General Journal Debit Credit
1
2
3
4
Answer to Question 1
1. Dr Supplies expense 470
Cr Supplies 470
2. Dr Prepaid insurance 195
Cr Insurance expense 195
3. Dr Salaries expense 1,520
Cr Salaries payable 1,520
4. Dr Utilities expense 330
Cr Utilities payable 330
Answer to Question 2
1. Dr Supplies expense 400
Cr Supplies 400
2.Dr Prepaid insurance 160
Cr Insurance expense 160
3. Dr Salaries expense 1,240
Cr Salaries payable 1,240
4. Dr Utilities expense 260
Cr Utilities payable 260
Explanation:
QUESTION 1
Preparation of Journal entries
1. Based on the information given we were told that the company Supplies account shows a balance amount of $820 while the count of supplies shows only the amount of $350 on hand which means that the Journal entry will be:
Dr Supplies expense 470
Cr Supplies 470
(820-350)
2. Based on the information given we were told that the company trial balance reveal a balance of the amount of $560 in Insurance expense in which a review of the insurance policies shows that the amount $195 of insurance is unexpired which means that the Journal entry will be:
Dr Prepaid insurance 195
Cr Insurance expense 195
3. Based on the information given we were told that the company employees work from Monday through Friday in which salaries of the amount of $3,800 per week are paid each Friday while the company year-end falls on Tuesday which means that the Journal entry will be:
Dr Salaries expense 1,520
Cr Salaries payable 1,520
[(3,800÷5days)*2]
4. Based on the information given we were told that the company received a utility bill of the amount of $330 in December that will be paid in early January of 2022 which means that the Journal entry will be:
Dr Utilities expense 330
Cr Utilities payable 330
QUESTION 2
1. Based on the information given we were told that the company Supplies account shows a balance amount of $680 while the count of supplies shows only the amount of $280 on hand which means that the Journal entry will be:
Dr Supplies expense 400
Cr Supplies 400
(680-280)
2. Based on the information given we were told that the company trial balance reveal a balance of the amount of $490 in Insurance expense in which a review of the insurance policies shows that the amount $160 of insurance is unexpired which means that the Journal entry will be:
Dr Prepaid insurance 160
Cr Insurance expense 160
3. Based on the information given we were told that the company employees work from Monday through Friday in which salaries of the amount of $3,100 per week are paid each Friday while the company year-end falls on Tuesday which means that the Journal entry will be:
Dr Salaries expense 1,240
Cr Salaries payable 1,240
[(3,100÷5days)*2]
4. Based on the information given we were told that the company received a utility bill of the amount of $260 in December that will be paid in early January of 2022 which means that the Journal entry will be:
Dr Utilities expense 260
Cr Utilities payable 260
Pinkie Copy Center sells laser printers and supplies. Pinkie Copy Center started the year with 90 containers of ink (average cost of $9.20 each, FIFO cost of $8.80 each, LIFO cost of $7.90 each). During the year, Pinkie Copy Center purchased 720 containers of ink at $10.10 and sold 630 units for $22.00 each. Pinkie Copy Center paid operating expenses throughout the year, a total of $4,000. Pinkie Copy Center's income statement-excluding the effects of income tax under each of the average-cost, FIFO, and LIFO inventory costing methods- is given.
Pinkie Copy Center is a corporation subject to a 40% income tax. Compute the company's income tax expense under the average-cost, FIFO, and LIFO inventory costing methods. Which method would you select to (a) maximize income before tax and (b) minimize income tax expense?
Pinkie Print Supplies, Inc.
Income Statement
Year Ended December 31
Average Cost FIFO LIFO
Sales revenue $13,860 $13,860 $13,860
Cost of goods sold 6,300 6,246 6,363
Gross profit $7,560 $7,614 $7,497
Operating expenses 4,200 4,200 4,200
Net income before
tax $3,360 $3,414 $3,297
Income tax expense
Answer:
A) FIFO costing method
B) LIFO cost method
Explanation:
Pinkie copy center income tax expense ending December 31
Average cost FIFO LIFO
Sales revenue 13860 13860 13860
Cost of goods sold 6300 6246 6363
Gross profit 7560 7614 7497
Operating expense 4000 4000 4000
Net income before tax 3560 3614 3497
Income tax expense 1424 1446 1399
Net income 2136 2168 2098
The following data are taken from the unadjusted trial balance of the Westcott Company at December 31, 2017. Complete the work sheet following adjustment. Use the following adjustment information to complete the work sheet.
A. Depreciation on equipment, $3.
B. Accrued salaries, $6.
C. The $12 of unearned revenue has been earned.
D. Supplies available at December 31, 2017, $15.
E. Expired insurance, $15.
WESTCOTT COMPANY
Partial Work Sheet
For the Year Ended December 31
Unadjusted Trial Adjusted Trial
Balance Adjustments Balance
Account Title Dr. Cr. Dr. Cr. Dr. Cr.
Cash 35 35
Accounts receivable 30 30
Supplies 42
Prepaid insurance 36 18 18
Equipment 54 54
Accumulated
depreciation-Equip 31 14
Accounts payable 5
Salaries payable 15
Unearned revenue 23 23
Common stock 15
Retained earnings 35
Dividends 26 26
Revenue 170 23 173
Depreciation expense-Equip 14 14
Salaries expense 33 15
Insurance expense 15
Supplies expense
Utilities expense 23
Totals $279 279 67 $70 177 $173
Find full question attached
Answer and Explanation:
Find full answer and explanation attached
Horizon Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows: March April MayExpenses $125,800 $117,000 $106,500Depreciation, insurance, and property taxes represent $27,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June, 65% of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May.
Answer:
Depreciation, insurance, and property taxes represent $27,000 of the estimated monthly expenses so will have to be removed to find out how much is due in the month.
March April May
March Expenses :
Paid in March $73,112
Paid in April $25,688
April Expenses :
Paid in April $66, 600
Paid in May $23,400
May Expenses :
Paid in May $58,830
Total Cash Payment $73,112 $92,288 $82,230
Working
March Expenses
Paid in March ((125,800 - 27,000)* 74%) = $73,112
Paid in April ((125,800 - 27,000)*26%) = $25,688.
April Expenses
Paid in April ((117,000 - 27,000)*74%) = $66, 600
Paid in May ((117,000 - 27,000)*26%) = $23,400
May Expenses
Paid in May ((106,500 - 27,000)*74%) = $58,830
"The Total Cash Payment of March, April, and May $73,112; $92,288 and $82,230 To understand the calculations, check below"
Calculation of Depreciation, insurance, and property taxesComputation of Depreciation, insurance, and also property taxes represent $27,000 of the estimated monthly expenditures so will have to be withdrawn to find out how much is due in the month.
March April May
March Expenses:
Paid in March $73,112
Paid in April $25,688
April Expenses:
Paid in April $66, 600
Paid in May $23,400
May Expenses:
Paid in May $58,830
Total Cash Payment $73,112 $92,288 $82,230
Working Note:
March Expenses are:
Paid in March ((125,800 - 27,000)* 74%) is = $73,112
Paid in April ((125,800 - 27,000)*26%) is = $25,688.
April Expenses are:
Paid in April ((117,000 - 27,000)*74%) is = $66, 600
Paid in May ((117,000 - 27,000)*26%) is = $23,400
May Expenses are:
Then Paid in May ((106,500 - 27,000)*74%) is = $58,830
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https://brainly.com/question/17218734
You need to save a total of $7,500 in order to buy a new motorcycle. You are starting with savings of $4,000 but will make no additional contributions. How long do you need to wait in order to reach your goal? In excel, compute the number of years required for annual interest rates of 2% to 10%, in two percent increments. What accurately depicts this calculation?
Answer:
You do not need an excel spreadsheet to calculate this, you need to use the the future value formula:
future value = present value x (1 + r)ⁿ
present value = $4,000
future value = $7,500
so, (1 + r)ⁿ = $7,500 / $4,000 = 1.875
now we replace r:
for 2%)
1.02ⁿ = 1.875
n = log 1.875 / log 1.02 = 31.74 years
for 4%)
1.04ⁿ = 1.875
n = log 1.875 / log 1.04 = 16.03 years
for 6%)
1.06ⁿ = 1.875
n = log 1.875 / log 1.06 = 10.79 years
for 8%)
1.08ⁿ = 1.875
n = log 1.875 / log 1.08 = 8.17 years
for 10%)
1.1ⁿ = 1.875
n = log 1.875 / log 1.1 = 6.6 years
The higher the interest rate, the shorter it will take for you account to increase in value and the shorter you will have to wait in order to buy your motorcycle.
On November 1, Year 1, Black Lion Company forecasts the purchase of raw materials from an Argentinian supplier on February 1, Year 2, at a price of 200,000 Argentinian pesos. On November 1, Year 1, Black Lion pays $1,200 for a three-month call option on 200,000 Argentinian pesos with a strike price of $0.35 per peso. The option is properly designated as a cash flow hedge of a forecasted foreign currency transaction. On December 31, Year 1, the option has a fair value of $900. The following spot exchange rates apply:
Date U.S dollar per Argentinian Peso
Nov 1,Year 1 $ 0.35
Dec,31 Year 1 0.30
February 1 Year2 0.36
What is the net impact on Black Lion Company’s Year 2 net income as a result of this hedge of a forecast foreign currency purchase? Assume that the raw materials are consumed and become a part of cost of goods sold in Year 2.
a. A $70,000 decrease in net income.
b. A $70,900 decease in net income.
c. A $71,100 decrease in net income.
d. A $72,900 decrease in net income.
Answer:
Option B: 70,900 decrease in net income
Explanation:
Net impact on black lion company's year 2 net income as a result of this hedge of a forecast foreign currency purchase can be calculated by summing up the Option expense, cost of goods sold and adjustment to net income in year 2 .
NET IMPACT ON YEAR NET INCOME
Option expenses (900)
Cost of goods sold (72,000)
Adjustment to Net Income 2000
Decrease in Net Income (70,900)
Working
DEBIT CREDIT
Option expense 900
Foreign currency Option 1100
(0.35 - 0.36) x 200,000 = 2000
2000 - 900 = 1100
Accumulated other comprehensive income 2000
DEBIT CREDIT
Foreign currency 72,000
(200,000x0.36)
Cash 70,000
(200,000x0.35)
Foreign currency option 2,000
DEBIT CREDIT
Cost of goods sold 72,000
Foreign currency 72,000
DEBIT CREDIT
Accumulated other comprehensive income 2000
Adjustment to Net Income 2000
Using the code letters below, indicate how each of the items listed would be handled in preparing a bank reconciliation. Enter the appropriate code letter in the space to the right of each item. Code A Add to cash balance per books B Deduct from cash balance per books C Add to cash balance per bank D Deduct from cash balance per bank E Does not affect the bank reconciliation Items 1. Outstanding checks select an code 2. Bank service charge select an code 3. Check for $320 correctly written and paid by the bank but incorrectly entered in the cash payments record for $230 select an code 4. Deposit in transit select an code 5. Bank returns customer deposited check marked NSF select an code 6. Bank collects notes receivable and interest for depositor select an code 7. Bank debit memorandum for check printing fees select an code 8. Petty cash custodian has $86 in paid petty cash vouchers that have not been reimbursed. select an code 9. Bank charged a check against the company, which should have been charged to another company. select an code 10. A check for $236 was correctly paid by the bank but was incorrectly entered in the cash payments records for $263
Answer and Explanation:
The matching is as follows
1. D. Subtract from cash balance per bank
2. B. Subtract from cash balance per books
3. B.Subtract from cash balance per books
4. C. Add to cash balance per bank
5. B. Subtract from cash balance per books
6. A. Add to cash balance per books
7. B. Subtract from cash balance per books
8. E. Does not affect the bank reconciliation
9. C. Add to cash balance per bank
10. A. Add to cash balance per books