Answer:
$1,943,618.62
Explanation:
the current market price of the bond = present value of the face value + present value of coupon payments
present value of face value = $2,084,300 / (1 + 11%)¹³ = $536,736.96
present value of coupon payments = $208,430 x 6.7499 (annuity factor, 11%, 13 years) = $1,406.881.66
market value of the bonds = $1,943,618.62
the journal entry to record the issuance of the bonds:
Dr Cash 1,943,618.62
Dr Discount on bonds payable 140,681.38
Cr Bonds payable 2,084,300
The stock in Bowie Enterprises has a beta of .85. The expected return on the market is 11.50 percent and the risk-free rate is 2.85 percent. What is the required return on the company's stock?
Answer:
10.203%
Explanation:
The stock in Bowie's enterprises has a beta of 0.85
The expected return on the market is 11.50%
The risk free rate is 2.85%
Therefore, the required return on the company's stock can be calculated as follows
Required return= Risk free rate+beta(market rate-risk free rate)
= 2.85+0.85(11.50-2.85)
= 2.85+ 0.85(8.65)
= 2.85+7.3525
= 10.203%
Hence the required rate in the company's stock is 10.203%
Building Supplies is considering a merger with Tools and More. Building's total operating costs of producing services are $4 million for a sales volume of $20 million. Tools' total operating costs of producing services are $1 million for a sales volume of $5 million. Suppose that synergies in the production process result in a cost of production for the merged firms totalling $4.8 million with total sales remaining unchanged. Calculate the total average cost for the merged firm.
Answer:
We generally calculate total average cost by dividing total cost / total output units.
In this case, we are not given the output units, but instead we are given the output value, so we should find a percentage from total revenue.
total costs = $4,800,000
total revenue = $20,000,000 + $5,000,000 = $25,000,000
average total cost = ($4,800,000 / $25,000,000) x 100 = 19.2%
This means that for every $100 of revenue, the merged company will spend $19.20.
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.40 10.43 Palm Coal .36 2.6 6 13.90 –.24 56.66 34.27 Lake Lead Grp 2.39 5.8 10 41.28 –.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.24 13.95 DR Dime .80 5.2 6 15.43 –.26 35.00 20.74 Candy Galore .32 1.5 28 ?.18 Find the quote for the Lake Lead Group. Assume that the dividend is constant.
Answer:
6.974% and 4.218%
Explanation:
The computation is shown below:
Here we use the 52-week low stock price
The Highest dividend yield is
= Dividend ÷ Stock price
= 2.39 ÷ 34.27
= 6.974%
The Lowest dividend yield is
= Dividend ÷ Stock price
= 2.39 ÷ 56.66
= 4.218%
We simply applied the above formula so that we can determine highest and lowest dividend yield
Suppose Nash received a lease incentive of $5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected
Answer:
The Lease liability will not be affected.
The $5,000 has to be included in the Right of Use Asset
Explanation:
Initial Measurement
Lease Liability : Measured as Present Value of Contract payments which incur from commencement date
Right of Use Asset : Measured at Amount Initially measured for Lease Liability add lease payments at and before commencement date
Thus,
The Lease liability will not be affected.
The $5,000 has to be included in the Right of Use Asset
Required information
Hart Company made 3,260 bookshelves using 22,260 board feet of wood costing $298,284. The company's direct materials standards for one bookshelf are 8 board feet of wood at $13.30 per board foot.
AQ = Actual Quantity
SQ = Standard Quantity
AP = Actual Price
SP = Standard Price
1) Compute the direct materials price and quantity variances and classify each as favorable or unfavorable.
2) Hart applies management by exception by investigating direct materials variances of more than 5% of actual direct materials costs. Which direct materials variances will Hart investigate further?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Production= 3,260 bookshelves using 22,260 board feet of wood costing $298,284.
The company's direct materials standards for one bookshelf are 8 board feet of wood at $13.30 per board foot.
First, we need to calculate the direct material price and quantity variance, using the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
actual price= 298,284/22,260= $13.4
Direct material price variance= (13.3 - 13.4)*22,260
Direct material price variance= $2,226 unfavorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
standard quantity= 8*3,260= 26,080
Direct material quantity variance= (26,080 - 22,260)*13.3
Direct material quantity variance= $50,806 favorable
Finally, we need to calculate which of the variations should be looked at:
Price= (13.4/13.3)-1]*100= 0.75% is between the standards
Quantity= (22,260/26,080)-1]*100= 14.65% It should be studied further.
Classify each of the following based on the macroeconomic definitions of saving and investment.
a. Saving Investment Kate purchases stock in Pherk, a pharmaceutical company.
b. Hubert purchases a new condominium in Houston.
c. Clancy purchases a certificate of deposit at his bank.
d. Eileen borrows money to build a new lab for her engineering firm.
Answer:
a. Savings
b. Investment
c. Savings
d. Investment
Explanation:
Remember,
In macroeconomics, we often see Investments as purchases made with the aim of producing more goods or more wealth in the future. The examples are;
- Kate purchases stock in Pherk, a pharmaceutical company.
-Hubert purchases a new condominium in Houston.
While, Savings refers to the extra money a households have left after paying all their other expenses. Examples here are:
- Clancy purchases a certificate of deposit at his bank.
- Eileen borrows money to build a new lab for her engineering firm.
If you are spending more than you make you have a ___________:
Tracker
Statistic
Overflow
Deficit
For the past week, a company's common stock closed with the following prices: $61.50, $62.00, $61.25, $60.875, and $61.50. What was the price range
Answer:
$1.125
Explanation:
price range is the difference between the highest and lowest price
highest price = $62
Lowest price = $60.875
$62 - $60.875 = $1.125
Finder Technologies Inc. has manufacturing units in Canada. The country's stable economic and political environment helps the firm gain competitive advantage by lowering production costs and improving product quality. Other things being equal, the benefits realized from such a strategy can be typically referred to as
Answer:
Location Economies
Explanation:
Location economies is a phenomenon which helps the organization gain advantage due to its location which means it enjoys favorable PESTLE factors of a country. Favorable PESTLE factors include political, economical, social, technological, legal and environmental factors.
In the question, it is clear that the Canadian economic policies and stable political environment has led the industries to grow due to business easing policies of the country. Hence Finder Technologies Inc. has enjoyed Location Economies phenomenon.
The Walthers Company has a semi-annual coupon bond outstanding. An increase in the market rate of interest will have which one of the following effects on this bond?
a. increase the coupon rate.
b. decrease the coupon rate.
c. increase the market price.
d. decrease the market price.
e. increase the time period.
Answer:
The answer is D.
Explanation:
An increase in the market rate of interest of a bond will decrease the market price of the bond. Market rate of interest of a bond is inversely related to the market price of the bond.
For example, A bonds is issued with a higher interest rate, the price of existing bonds will fall because the demand for this bond falls.
An electric power plant uses solid waste for fuel in the production of electricity. the cost Y in dollars per hour to produce electricity is Y=11+0.4X+0.29X2, where X is in megawatts. Revenue in dollars per hour from the sale of electricity is 16X−0.2X2. Find the value of X that gives maximum profit. (Round to two decimal places.)
Answer:
The value of X that gives maximum profit is 15.92.
Explanation:
Before answering the question, Y and Revenue (R) given in the question are first correctly restated as follows:
Cost = Y = 11 + 0.4X + 0.29X^2 .......................................... (1)
Revenue = R = 16X − 0.2X^2 .............................................. (2)
Differentiating each of equations (1) and (2) with respect to X to obtain marginal cost (MC) and marginal revenue (MR), we have:
dY/dX = MC = 0.4 + 0.58X .................................................. (4)
dR/dX = MR = 16 - 0.4X ....................................................... (5)
In production theory, profit is maximized when MR = MC. Therefore, we equate equations (4) and (5) and solve for X as follows:
0.4 + 0.58X = 16 - 0.4X
0.58X + 0.4X = 16 - 0.4
0.98X = 15.6
X = 15.6 / 0.98
X = 15.92
Therefore, the value of X that gives maximum profit is 15.92.
It costs a bakery $3 to sell a single cake. This bakery makes $7 in revenue from each cake it sells. Assume this bakery sells 25 cakes. What is its total profits
Answer:
$100
Explanation:
The revenue is the total amount the company receives for the sale of products and the profit is the amount left after the costs are subtracted. Because of that, to calculate the profit you have to subtract the costs from the revenue generated:
Profit= Revenue-costs
Profit= (7*25)-(3*25)
Profit=175-75
Profit= 100
According to this, the total profit is $100.
the insured dies 6 months after the policy issue date upon death of the insured it is determined that the insured made a material misstatement on the application what is the most likely course of action for the insurer
Answer:
Rescind the policy
Explanation:
In this scenario the insuredad a misstatement on the application and dies after 6 months. To avoid any legal issues with the beneficiaries the best line of action of the insurer is to rescind the policy.
The reason for rescinding the policy should be stated as misstatement in the application.
Rescinded insurance policy will make it as if the agreement between the insurance company and policy makers was never made. Since the policy was not cancelled, the policy holder or his beneficiary will get back any premiums that have already been paid.
On the other hand if the policy were to be cancelled the only money returned to the policy holder will be the balance in the remaining portion of the term.
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.90 per stone for quantities of 600 stones or more, $9.30 per stone for orders of 400 to 599 stones, and $9.80 per stone for lesser quantities. The jewelry firm operates 108 days per year. Usage rate is 26 stones per day, and ordering costs are $46.
a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost.
b. If annual carrying costs are 20 percent of unit cost, what is the optimal order size?
c. If lead time is 5 working days, at what point should the company reorder?
Answer:
MOST LIKELY it's B
Explanation:
if not I'm really sorry I tried
Veronica Mars, a recent graduate of Bell’s accounting program, evaluated the operating performance of Dunn Company’s six divisions. Veronica made the following presentation to Dunn’s board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $26,500." The Other Five Divisions Percy Division Total Sales $1,663,000 $100,000 $1,763,000 Cost of goods sold 978,100 76,800 1,054,900 Gross profit 684,900 23,200 708,100 Operating expenses 529,000 49,700 578,700 Net income $155,900 $ (26,500 ) $129,400 In the Percy Division, cost of goods sold is $60,500 variable and $16,300 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Division’s fixed costs will be eliminated if the division is discontinued. Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your answer.
Forten company current year income statement, comparative balance sheets and additional information follow. For the year all sales are credit sales. all credits to accounts recievable reflect cash reciepts from customers. all purchases of inventory are on credit. all debits to account payable reflectr cash payments for inventory and other expenses are paid in advance and are initially debited to prepaid expenses.
Assets 2013 2012
Cash $70,944 $72,000
Accounts receivable 79,125 61,125
Merchandise inventory 259,906 230,800
Prepaid expenses 1,600 2,100
Equipment 162,600 120,000
Accum- depreciation - Equipment (53,800) (60,000)
Total assets $520,375 $426,025
Liabilities and Equity
Accounts payable $58,075 $111,200
Short-term notes payable 10,000 6,000
Long-term notes payable 24,175 43,000
Common stock, $5 par value 167,500 150,000
Paid-in capital excess of par,
common stock 52,500 0
Retained earnings 206,025 115,825
Total liabilities and equity $520,375 $426,025
FORTEN COMPANY Income Statement For Year Ended December 31, 2013
Sales $635,000
Cost of goods sold 306,000
Gross profit 329,000
operating expenses
Depreciation expense $20,000
Other expenses 128,300 148,300
Other gains (losses)
Loss on sale of equipment (4,500)
Income before taxes 176,200
Income taxes expense 31,000
Net income $145,200
Additional information on Year 2013 transactions:
a. The loss on the cash sale of equipment was $4,500 (details in b)
b. Sold equipment costing $45,800 with accumulated depreciation of $26,200, for $15,100 cash.
c. Purchased equipment costing $88,300 by paying $63,000 cash and signing a long-term note payable for the balance.
d. Borrowed $4,000 cash by signing a short-term note payable.
e. Paid $44,125 cash by signing a short-term note payable.
f. Issued 3,500 shares of common stock for $20 cash per share.
g. Declared and paid cash dividends of $53,000.
Required
Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign)
Answer:
Forten Company
Statement of Cash Flows
For the year ended December 31, 2013
Cash flow from operating activities:
Net income $145,200
Adjustments to net income:
+ Depreciation expense $20,000+ Loss on sale of equipment $4,500+ Decrease in prepaid expenses $500- Increase in accounts receivable $18,000- Increase in merchandise inventory $29,106- Decrease in accounts payable $53,125 -$75,231Net cash flow from operating activities $69,969
Cash flow from investing activities:
Cash inflow from sale of equipment $15,100
Cash outflow from purchase of equipment -$63,000
Net cash flow from investing activities -$47,900
Cash flow from financing activities:
Cash inflow from issuance of common stock $70,000
Cash inflow from bank's short term notes payable $4,000
Cash outflow from bank's short term notes payable -$44,125
Cash outflow from dividends -$53,000
Net cash flow from financing activities -$23,125
Net cash decrease -$1,056
Cash balance December 31, 2012 $72,000
Cash balance December 31, 2013 $70,944
Assume that on September 30, 2017, AirUS, an international airline based in Germany, purchased a Jumbo aircraft at a cost of euro 42,500,000 (euro is the symbol for the euro). AirUS expects the plane to remain useful for five years (5,000,000 miles) and to have a residual value of euro 4,250,000. AirUS will fly the plane 350 comma 000 miles during the remainder of 2017.
Requried:
a. Compute AirUS's depreciation on the plane for the year ended December 31, 2017, using the straight-line method.
b. Compute AirUS's depreciation on the plane for the year ended December 31, 2017, using the units-of-production method.
c. Compute AirUS's depreciation on the plane for the year ended December 31, 2017, using the double-declining method
Answer:
A.7,650,000
B.2,677,500
C.17,000,000
Explanation:
DATA:
purchase cost = 42,500,000
Useful life = 5 years
Estimated useful life in miles = 5,000,000 miles
Salvage value = 4,250,000
Actual useful life in miles = 350,000miles
Solution
A. Depreciation (straight-line)= [tex]\frac{Cost-residualvalue}{Usefullife}[/tex]
Depreciation( straight-line)= [tex]\frac{42,500,000-4,250,000}{5}[/tex]
Depreciation( straight-line)= 7,650,000
B Depreciation (units of production)= (cost-Salvage value) x [tex]\frac{Actualunits}{Estimatedunits}[/tex]
Depreciation (units of production)= (42,500,000-4,250,000)x[tex]\frac{350,000}{5,000,000}[/tex]
Depreciation (units of production) = 2,677,500
C. Depreciation (Double declining) = 2 x cost x depreciation rate
Depreciation (Double declining) = 2 x 42,500,000 x 0.2(w)
Depreciation (Double declining) = 17,000,000
Working
Depreciation Rate = 1/Useful
Depeciation Rate = 1/ 05 = 0.2
All of the following statements related to U.S. GAAP and IFRS are true except: Multiple Choice The closing process for merchandisers is the same under both systems. U.S. GAAP offers little guidance about the presentation order of expenses. Accounting for basic inventory transactions is the same under the two systems. Neither system requires separate disclosure of items when their size, nature, or frequency are important. Neither system defines operating income.Incorrect
Answer:
Neither system requires separate disclosure of items when their size, nature, or frequency are important.
Explanation:
IFRS is an acronym for International Financial Reporting Standards, it comprises of a set of accounting standards or rules issued by the International Accounting Standards Board (IASB). The International Financial Reporting Standards ensures that statement of income, when reported by accountants is consistent, transparent and comparable globally.
On the other hand, GAAP is an acronym for Generally Accepted Accounting Principles, it comprises of the accounting standard, procedures and principles used by public institutions in the United States of America. The U.S GAAP is issued by the Financial Accounting Standards Board (FASB) and adopted by the U.S. Securities and Exchange Commission (SEC).
Generally, there are some similarities in the operations of both governmental agencies and these are;
1. The closing process for merchandisers is the same under both systems.
2. U.S. GAAP offers little guidance about the presentation order of expenses.
3. Accounting for basic inventory transactions is the same under the two systems.
4. Neither system defines operating income.
However, the statement that neither system requires separate disclosure of items when their size, nature, or frequency are important is incorrect or false because all disclosure of items are presented together.
Generic Inc. issued bonds in 1988 that will mature 16 years from the date of issue. The bond pays a 14.375 percent coupon and the interest is paid semiannually. Its current price is $1,508.72. What is the effective annual yield on the bonds?
Answer:
8.93%
Explanation:
If we want to determine the effective annual yield on the bonds we must calculate the yield to maturity of the bonds:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM = {71.875 + [($1,000 - $1,508.72)/32]}/ [($1,000 + $1,508.72)/2]
YTM = 55.9775 / 1,254.36 = 0.04463 x 2 semiannual coupons = 8.93%
Coyote Loco, Inc., a distributor of salsa, has the following historical collection pattern for its credit sales.
80 percent collected in the month of sale.
10 percent collected in the first month after sale.
5 percent collected in the second month after sale.
4 percent collected in the third month after sale.
1 percent uncollectible.
The sales on account have been budgeted for the last seven months as follows:
June $126,500
July 154,000
August 179,000
September 208,000
October 233,000
November 258,000
December 220,500
Required:
1. Compute the estimated total cash collections during October from credit sales.
2. Compute the estimated total cash collections during the fourth quarter from sales made on account during the fourth quarter.
Answer:
80 perent...
Explanation:
1. The estimated total cash collections during the month of October from credit sales are $222,310.
2. The estimated total cash collections during the fourth quarter of the year from sales made only on account during the fourth quarter are $835,870 ($166,400 + $207,200 + $240,100 + $222,170).
Data and Calculations:
Cash Collections from Credit Sales
June Jul Aug Sept Oct. Nov. Dec.
Credit Sales:
$126,500 $ 154,000 $179,000 $208,000 $233,000 $258,000 $220,500
Cash Collections:
80% $166,400 $186,400 $206,400 $176,400
10% 17,900 20,800 23,300 25,800
5% 7,700 8,950 10,400 11,650
4% 5,060 6,160 7,160 8,320
Total collections $222,310
June Jul Aug Sept Oct. Nov. Dec.
Credit Sales:
$126,500 $ 154,000 $179,000 $208,000 $233,000 $258,000 $220,500
Cash Collections:
80% $166,400 $186,400 $206,400 $176,400
10% 20,800 23,300 25,800
5% 10,400 11,650
4% 8,320
Total collections $166,400 $207,200 $240,100 $222,170
Thus, cash collections in October alone are $222,310 while for the fourth quarter based on fourth quarter credit sales only are $835,870.
Learn more: https://brainly.com/question/22850167
income effects depend on the income elasticity of demand for each good that you buy. if one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy
Answer:
it would have a positive income elasticity and it is a normal good
Explanation:
Income elasticity of demand measures the responsiveness of quantity demanded to changes in income.
Normal goods are goods that are goods whose demand increases when income increases and falls when income falls
Inferior goods are goods whose demand falls when income rises and increases when income falls.
A fund earned a net investment income (i.e. Ending Balance Starting Balance + Deposits/Withdrawals)) of 9200 during 1999. The beginning and ending balances of the fund were 100000 and 129200, respectively. A deposit was made at time K during the year. No other deposits or withdraws were made. The fund earned 8% in 1999 using the dollar-weighted method. Determine then date corresponding to time K
(a) April 1 (b) May 1 (c) July 1 (d) Sept. 1 (e) Oct. 1
Answer:________
Answer:
k = April 1 ( A )
Explanation:
Given data :
net investment income : $9200
Beginning balance = $100000
ending balance = $129200
deposit made
no withdrawals
interest earned = 8%
net investment ( $9200) = [ending balance - (starting balance + deposits/withdrawals )]
9200 = 129200 - 100000 - deposits
deposit = 129200 -100000 - 9200 = 20000
8% interest was earned on starting balance
= 8% of $100000 = $8000
interest earned on the deposit made = net income - interest earned on beginning balance = 9200 - 8000 = $1200
using the dollar-weighted method
assuming the deposit was made for Y months
interest earned on deposit = deposit * interest rate * (y/12)
1200 = 20000 * 8% * ( y /12 )
hence ( y/12) = 0.75 hence y = 9 months from December 31
which makes K = April 1
Because Toyota's investment eventually increases the level of R&D spending for his given level of sales revenue what would the effect on Toyota's return on invested capital (ROIC)?
Available Options Are:
a. Increasing ROIC by increasing return on sales
b. Decreasing ROIC by increasing return on sales
c. Decreasing ROIC by decreasing return on sales
d. Increasing ROIC by decreasing return on sales
Answer:
Option C. Decreasing ROIC by decreasing return on sales
Explanation:
The return on sales would be reduced as the research expenses have increased substantially. The implications of increased research expenses on the ROIC can be understood by analyzing the ROIC formula which is given as under:
ROCI = Operating Income (1 - Tax Rate) / Book Value of Invested Capital
As revenue expenditure (Research and Development expenses) of the company has increased, this would decrease the operating income of the company which means that the numenator would be decreased and as a result the ROCI would decrease.
During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 48,000 mini refrigerators, of which 44,000 were sold. Operating data for the month are summarized as follows:
1. Sales $8,800,000.00
2. Manufacturing costs:
3. Direct materials $3,360,000.00
4 Direct labor 1,344,000.00
5 Variable manufacturing cost 816,000.00
6 Fixed manufacturing cost 528,000.00 6,048,000.00
7 Selling and administrative expenses:
8 Variable $528,000.00
9 Fixed 352,000.00 880,000.00
Required:
Prepare an income statement based on the absorption costing concept.
Answer:
Income statement based on the absorption costing concept
Sales $8,800,000.00
Less Cost of Sales
Opening Stock $0
Add Cost of Goods Manufactured $6,048,000.00
Less Closing Stock ($504,000.00) ($5,544,000.00)
Gross Profit $3,256,000.00
Less Expenses :
Selling and administrative expenses:
Variable ($528,000.00 )
Fixed ($352,000.00)
Net Income / (Loss) $2,376,000
Explanation:
Absorption Costing Concept
Product Cost = All Manufacturing Cost (Fixed and Variable)
Period Cost (Expense) = All Non - Manufacturing Costs
Production Cost Schedule - To determine Cost of Goods Sold
Direct materials $3,360,000.00
Direct labor $1,344,000.00
Variable manufacturing cost $816,000.00
Fixed manufacturing cost $528,000.00
Total Manufacturing Cost $6,048,000.00
Closing Stock = 4,000 units × ($6,048,000.00/48,000)
= $504,000.00
Vaughn Company uses a periodic inventory system. For April, when the company sold 450 units, the following information is available. Units Unit Cost Total Cost April 1 inventory 330 $22 $7,260 April 15 purchase 380 26 9,880 April 23 purchase 290 29 8,410 1,000 $25,550 Required:Compute the April 30 inventory and the April cost of goods sold using the FIFO method.
Answer:
Ending inventory= $15,170
COGS= $10,380
Explanation:
Giving the following information:
Units sold= 450
April 1 inventory= 330 units for $22
April 15 purchase= 380 units for $26
April 23 purchase= 290 units for $29
First, we need to calculate the number of units in ending inventory:
Ending inventory units= 1,000 - 450= 550 units
Now, to calculate the ending inventory under the FIFO (First-in, first-out) method, we need to use the cost of the last units incorporated into inventory.
Ending inventory= 290*29 + 260*26= $15,170
COGS= 330*22 + 120*26= $10,380
Sunland Company purchases $50,400 of raw materials on account, and it incurs $61,300 of factory labor costs. Journalize the two transactions on March 31, assuming the labor costs are not paid until April.
No. Date Account Titles and Explanation Debit Credit
a) Mar. 31
b) 31
Answer:
A. Mar 31
Dr Raw materials $50,400
Cr Account pay $50,400
B. 31
Dr Factory labour $61,300
Cr Factory wages $61,300
Explanation:
Preparation of the Journal entries for Sunland Company
A. Since we were told that the company purchases the amount of $50,400 of raw materials on account this means that the transaction will be recorded as:
Mar 31
Dr Raw materials $50,400
Cr Account pay $50,400
B. Based on the information given we were told that the company incurs the amount of $61,300 of factory labor costs this means that the transaction will be recorded as:
31
Dr Factory labour $61,300
Cr Factory wages $61,300
a. Equipment with a book value of $79500 and an original cost of $169000 was sold at a loss of $33000.
b. Paid $106000 cash for a new truck.
c. Sold land costing $310000 for $420000 cash yielding a gainof $11000.
d. Long term investments in stock were sold for $95600 cash yielding a gain of $17000.
Required:
Use the above information to determine this company's cash flows from investing activities.
Answer:
Cash flow from Investing activities refers to cash transactions related to Fixed Assets as well as transactions related to the ownership of other company securities.
Cash-flow from Investing Activities
Sale of equipment (79,500 - 33,000).......................... $46,500
Purchase of New Truck ................................................... ($106,000)
Sale of Land.........................................................................$420,000
Sale of Long-term investments.......................................$95,600
Net cash provided by investing activities ...................$456,100
Muriel is giving a speech to the community's business leaders. She begins by stating, "Our community has been strong in the face of adversity, but we now face the most serious challenge in years. The tax base is shrinking and will be 30 percent smaller in three years." What is she doing
Answer:
Setting the mood and tone of her speech.
Explanation:
Muriel's approach to her speech prepares the mind of her listeners who are made up of business leaders who are known to usually have negative views about increasing taxes.
Thus, Muriel may be able to reach the emotions of her listeners towards accepting her point of view. This is evident by the the statement "Our community has been strong in the face of adversity, but we now face the most serious challenge in years", in which it likens the decreasing tax revenues to an adversity that should be overcomed; thus employing more support.
The company estimates future uncollectible accounts. The company determines $14,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) Record bad debts at the end of January.
Answer:
Bad debt expense = $4,690
Explanation:
Entry DEBIT CREDIT
Bad debt Expense $4,690
Allowance for doubtful debt $4,690
In Order to record bad debt expense, we need to go through some minor workings.
Workings
Receivables on January 31 past due = $14,000 x 30% = $4,200
Receivable not past due = ($14,000 x 70%) x5% = $490
Bad debt expense = Receivables on January 31 past due + Receivable not past due
Bad debt expense = $4,200 + $490
Bad debt expense = $4,690
Statfeld Company's income statement for the current month shows that the company sold 300,000 units of its product and earned a net operating income of $450,000, Management is very pleased with the result and believes the company's financial position is strong because sales would have to go down by 40% from the current level before losses would occur. Management further believes that if the company runs a new TV commercial at a cost of $50,000 per month, sales volume next month could grow by 20% from the current sales level without the need to lower the sales price. If this action is taken, what will be the increase decrease in the next month's net operating income from the current month?
a. Increase of $175,000
b. Increase of $40,000
c. Increase of $225,000
d. Decrease by $50,000
e. None of the above.
Answer:
b. Increase of $40,000
Explanation:
Incremental Analysis of the Operating Profit arising from new TV commercial
Hint : Consider Incremental amounts Only
Operating Income ( $450,000 × 20 %) $90,000
Less Cost of new TV commercial ($50,000)
Incremental Income / (loss) $40,000
Conclusion :
There will be an increase in next month's net operating income from the current month of $40,000 .