Answer:
The interest on notes is calculated as follows
Interest payable = Face value of bonds * Interest rate * (Time of maturity / 12 months)
= $695,000 * 6% * 9/12
=$31,275
Cullumber company will pay the face value of the notes as the notes are payable at par, along with interest rate of 6% for the period of 9 months. This will result in outflow of cash, thereby crediting cash account. The liability on account of notes payable and interest payable will be settles, thereby debiting the payable account
General Entry
Date Account Title and Explanation Debit Credit
30 Sep. Notes payable $695,000
Interest payable $31,275
Cash $726,275
(To record the amount to be paid at maturity)
Wanda Sotheby purchased 120 shares of Home Depot stock at $148 a share. One year later, she sold the stock for $140 a share. She paid her broker a commision of $34 when she purchased the stock and a commision of $39 when she sold it. During the 12 months she owned the stock, she received $427 in dividends. Calculate Wanda’s total return on this investment. (A loss should be indicated with a minus sign.)
Answer:
Return on investment = -0.71%
Explanation:
The return on investment is the sum of the dividends earned and capital gains made during the holding period of the investment.
Dividend is the proportion of the profit made by a company which is paid to shareholders.
Capital gains is another type of the return made on an equity investment as a result of increase in the value of the shares. It is difference between the cost of the share and the value at the time of disposal.
Therefore, we can can compute the return on the investment as follows:
Total Return on investment =
(Capital gain/ loss + dividend )/purchase price × 100
Capital loss = (184 -140) × 120 = - 480
Dividend = 427
Commission = 34 + 39 =-73
Net loss on investment = - 480 - 73 + 427= -126
Return on investment = -126 /(148× 120) = -0.71%
Return on investment = -0.71%
The city of New Orleans has 200 advertising companies, 199 of which employ designers of normal ability at a salary of $100,000 a year. The companies that employ normal designers each collect $500,000 in revenue a year, which is just enough to ensure that each earns exactly a normal profit. The 200th company, however, employs Janus Jacobs, an unusually talented designer. Because of Jacobs's talent, this company collects $1,000,000 in revenue a year.
Required:
a. How much will Jacobs earn?
b. What proportion of his annual salary will be economic rent?
c. Will the advertising company for which Jacobs works be able to earn an economic profit?
Answer:
a. Jacob should earn= $100,000 + ($1,000,000 - $500,000)
= $100,000 + $500,000
=$600,000
Hence, Jacob earns $600,000
b. The economic rent is the amount by which payment of Jacob(600,000) exceed the reservation price of the supplier(100,000)
Thus, the economic rent = 600,000 - 100,000 = $500,000
Proportion of Economic rent = Economy rent / Salary of jacob
= $500,000 / $600,000
= 5/6
Hence, the proportion of the economic rent of Jacob is salary is 5/6
c. The advertising company will not be able to make an economic profit because if they withhold some additional revenue made because of hiring Jacob, then he will switch to another advertising company at a higher salary and that company keep on making profit. The company should bid for Jacob until firm are indifferent on paying $600,000 or hiring someone else for $100,000 . Thus, the bidding of Jacob will continue until the salary of Jacob has bid up to a level where no company can make economic profits
Consider a fast food café of your choice. Apply 4 V’s of Operation. Describe each V as ‘High’, ‘Low’ or ‘Moderate’ with one liner reason.\
Answer:
The classification of the particular question is outlined in the following segment including its clarification.
Explanation:
For both the data analysis, the "Jack throughout the Box" Fast foodservice Business throughout Florida, the US should be regarded. The 4Vs including its cafe's business seem to be about the volume, variety, differences, as well as accessibility including its brand operational activities. The 4V high meaning is large, small to medium-sized in terminology.
Volume: The amount including its corporation that has made the drinks sector profitable in designed to offer the sector people good of profits. In such a product, the need for another quantity is strong regarding the market pricing and therefore profits.Variety: Again for F and B platforms the range of foods the company has seems to be of significant importance. Taking into consideration the need for other sales on either the road carrier as well as selecting the enterprise must have ample choices in their beverages.Variation: Variations throughout the numerous perspectives including its deal in the reduced variety establishments need modifications that fit the Florida information of the product. For a company like Jack throughout the Box, this varying want is medium through business objectives.Visibility: The visibility of something like the company for something like the coffee shop on the roadside that is created to give the company's productivity. The prominence including its company is important for its somewhat cafe, which then in terms of improvement is taken into consideration to have been medium.Before telling her employees she would have to layoff half of the workforce, Alissa took them all to lunch at the most expensive restaurant in town. Alissa's attempt to handle the potential conflicts generated by her news is best described as
Answer:
Strategic
Explanation:
laying off half of the Employees means relieving them of their duties as staff of the organization. By taking them to lunch at the most expensive restaurant in town, Alissa aimed at being strategic with whatever conflict that may however occur when the employees hear of her intention. Layoffs can be demoralizing and damaging to these Employees so Alissa has to try the best way she can to be strategic as she deals with them
For many types of service organizations such as hospitals, banks and airlines, the primary cost of operations is:
Answer:
This question is incomplete, the options are missing. The options are the following:
a) Labour costs.
b) Coping with obsolescence that results from the rapid pace of technological change.
c) Insurance and legal expenses.
d) Establishing and maintaining a presence on the Internet.
And the correct answer is the option A: Labour costs.
Explanation:
To begin with, most of those organizations that work in the services industry tend to have not so many costs as the ones that work for the production industry where the companies have to deal with so many commodities, materials and more. Therefore that, althought that the services companies still have to deal with marketing expenses like publicity and others like insuraces, the most important cost for the companies in the services industry are the labour costs due the big amount of employees that those kind of companies hire in the market.
Requirement 2. How will Bargain Central Furniture, Inc. report treasury stock on its balance sheet as of December 31, 2016? Bargain Central Furniture, Inc. will report treasury stock ▼ on the balance sheet as ▼ to total stockholders' equity.
Answer:
Treasury stock is a contra equity account that decreases stockholders' equity. It is generally reported at the end of the stockholders' equity section on the balance sheet with a negative amount (treasury stock has a debit balance and it is reported in the credit side). In this case, the balance of treasury stock = ($3,600)
Explanation:
Some information was missing and I decided to look it up. Hopefully it will be the same exact question, but if not, you can use it as an example and just adjust the numbers.
Bargain Central Furniture, Inc., completed the following treasury stock transactions:
a. purchased 1,300 shares of the company's $1 par common stock as treasury stock, paying cash or $6 per share.
b. sold 700 shares of the treasury stock for cash of $9 per share.
The journal entries should be:
Dr Treasury stock 7,800
Cr Cash 7,800
Dr Cash 6,300
Cr Treasury stock 4,200
Cr Additional paid in capital 2,100
Treasury stock balance $3,600
The following information pertains to Carla Vista Company.
1. Cash balance per bank, July 31, $7,738.
2. July bank service charge not recorded by the depositor $48.
3. Cash balance per books, July 31, $7,774.
4. Deposits in transit, July 31, $3,110.
5. $2,426 collected for Carla Vista Company in July by the bank through electronic funds transfer. The collection has not been recorded by Carla Vista Company.
6. Outstanding checks, July 31, $696.
Prepare a bank reconcilliation at July 31 2017.
Journalize the adusting entries at July 31 on the books of Carla Vista company.
Answer:
Bank account reconciliation:
Bank account balance $7,738
+ Deposits in transit $3,110
- Outstanding checks $696
Reconciled bank account $10,152
Cash account reconciliation:
Cash account balance $7,774
+ Note (or account) collected $2,426
- Bank fees $48
Reconciled cash account $10,152
Adjusting journal entries:
July 31, 202x, bank fees expense
Dr Bank fees expense 48
Cr Cash 48
July 31, 202x, bank fees expense
Dr Cash 2,426
Cr Notes (or accounts) receivable 2,426
A _______ structure provides an organization with the most flexibility, but easier to operate. functional product matrix geographic product team
Answer:
product team.
Explanation:
A product team structure can be defined as a team whose main objectives are to develop problems and solutions for a product line.
This team is responsible for implementing strategic and marketing actions to ensure functionality, the inclusion of benefits and acceptance of the product in the market, therefore it must be formed by trained professionals with a strategic vision aligned with the organizational values and objectives.
This type of team structure allows greater flexibility in the work, due to the fact that it is carried out by a multifunctional team where there is the possibility of sharing innovative ideas for the success in the development of a product.
Reno contributed $104,000 in cash plus equipment valued at $27,000 to the RD Partnership. The journal entry to record the transaction for the partnership is:
Answer:
Debit cash $104,000; debit equipment $27,000; credit Reno, Capital $131,000.
Explanation:
In this scenario, Reno contributed $104,000 in cash plus equipment valued at $27,000 to the RD Partnership. The journal entry to record the transaction for the partnership is debit cash $104,000; debit equipment $27,000; credit Reno, capital $131,000.
In Financial accounting, debit refers to an entry made which would either increase an expense or asset account; therefore, decreasing an equity or liability account. Credit refers to an entry made which would either increase an equity or liability account; therefore, decreasing an expense or asset account.
Generally, debit is an accounting entry which is made to the left of an account while credit is an accounting entry which is made to the right of an account. The standard rule is that, when a credit decreases an account, the opposite account should be increased with a debit.
Hence, in this case the RD Partnership will debit the cash received, $104,000 plus equipment valued at $27,000. Also, the opposite account or receivable account (Reno, capital) would be credited with $131,000 ($104,000+$27,000 = $131,000).
What information is needed to set up sales tax in QuickBooks Online for a client who only does business in their home state? Select the 4 options you think apply.
Answer:
The answer is below
Explanation:
While different state has different requirements and rates for reporting sales tax. Sales tax items are simply used to know specific rates charged to your customers and the tax authority vendor to which you remit the sales tax.
Hence the information that is needed to set up sales tax in QuickBooks Online for a client who only does business in their home state includes the following: information that is needed to set up sales tax in QuickBooks Online for a client who only does business in their home state includes the following:
1. The company's address
2. Start date of the current tax period.
3. Estimated periodic time to file a tax return
4. Start date of collecting sales tax for the agency
5. Tax rates authority charges.
6. Sales tax item.
7. Sales tax name for the sales tax item
On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $120,000 in cash for the property. According to appraisals, the land had a fair value of $85,400 and the building had a fair value of $54,600. On September 1, Tristar signed a $42,000 noninterest-bearing note to purchase equipment. The $42,000 payment is due on September 1, 2022. Assume that 9% is a reasonable interest rate. On September 15, a truck was donated to the corporation. Similar trucks were selling for $2,700. On September 18, the company paid its lawyer $4,000 for organizing the corporation. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $17,000 and $600 in freight charges also were paid. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $5,700 normal cash price. The supplier agreed to accept 200 shares of the company's no-par common stock in exchange for the equipment. The fair value of the stock is not readily determinable. On December 10, the company acquired a tract of land at a cost of $22,000. It paid $3,000 down and signed a 11% note with both principal and interest due in one year. Eleven percent is an appropriate rate of interest for this note.
Required:
Prepare journal entries to record each of the above transactions.
Answer and Explanation:
The Journal entries is shown below:-
1. Land Dr, $73,200 (($85,400 ÷ (85,400 + 54,600)) × $120,000)
Building Dr, $46,800 ($54,600 ÷ (85,400 + 54,600)) × $120,000
To Cash $120,000
(Being cash paid is recorded)
2. Equipment Dr, $38,532.06 ($42,000 × 0.91743)
Discount on Note Payable Dr, $3,4687.94 ($3,780 × 0.91743)
To Note Payable $42,000
(Being equipment is recorded)
3. Truck Dr, $2,700
To Sales revenue $2,700
(Being truck is recorded)
4. Organisation cost Exp enses Dr, $4,000
To Cash $4,000
(Being cash paid is recorded)
5. Maintenance Equipment Dr, $17,600
To Cash $17,600
(Being cash paid is recorded)
6. Office Equipment Dr, $5,700
To Common Stock $5,700
(Being office equipment is recorded)
7. Land Dr, $22,000
To Cash $3,000
To Note Payable $19,000
(Being cash paid is recorded)
Ivanhoe provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation $1,500 per month Advertising $350 per month Insurance $2,770 per month Weed and feed materials $17 per lawn Direct labor $9 per lawn Fuel $2 per lawn Ivanhoe charges $70 per treatment for the average single-family lawn. Correct answer. Your answer is correct. Determine the company’s break-even point in number of lawns serviced per month. Break-even point Entry field with correct answer 110 lawns LINK TO TEXT LINK TO TEXT Incorrect answer. Your answer is incorrect. Try again. Determine the company’s break-even point in dollars.
Answer:
Explanation:
To start with, we need to get the value for total fixed cost and total variable cost
Total fixed costs = Depreciation + Advertising + Insurance
= $1,500 + $350 + $2,770
= $4,620
Total variable costs per unit = Weed and feed materials + Direct labor + Lawn Fuel
= $17 + $9 + $2
= $28 per lawn
We also need to compute the contribution margin ratio
= Sales per unit - Variable cost per unit / Sales per unit
= (70 - 28) / 70
= 0.6
= 60%
Therefore;
1. Break even sales
The original cost of the machine was $1,800,000. The machine has a class life of 15 years, but after 13 years, the firm has decided to sell the machine for $320,000. If Monster Potato has a marginal tax rate of 21%, what is the tax effect associated with the decision?
Answer: $16,800 tax payment.
Explanation:
Annual depreciation on machine = [tex]\frac{1,800,000}{15}[/tex]
= $120,000
Accumulated Depreciation in 13 years;
= 120,000*13
= $1,560,000
Book Value at 13 years
= 1,800,000 - 1,560,000
= $240,000
Company sold it at a higher price than its book value so there will be a capital gain of;
= 320,000 - 240,000
= $80,000
Tax is charged on the marginal gain;
= 80,000 * 21%
= $16,800
Required: 1. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the gross method of accounting for cash discounts is used. 2. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021, assuming that the gross method of accounting for cash discounts is used.
Answer:
Check Explanation section.
Explanation:
(1). The Gross method: in this kind of method, the sales and the cash are separately recorded.
Date: November 17, 2021.
Account titles and Explanation:
• Account receivable:
Lf = 0, Debit ($) = 42,000(100 units × 600 × 70% = 42,000). Credit ($). = 0.
• Sales revenue:
Lf = 0, Debit($) = 0, Credit ($) = 42,000(100 units × 600 × 70% = 42,000).
NB: the account receivable is debited in order to record sales.
Date: November 26, 2021.
Account titles and Explanation:
• cash:
Lf = 0, debit($) = 41,160( 42,000 × 98%), Credit ($) = 0.
• Sales discount:
Lf = 0, debit($) = 840( 42,000 × 2%). Credit ($) = 0.
• Account receivable:
Lf = 0, Debit($) = 0, credit ($) = 42,000.
(2). Date: November 17, 2021.
Account titles and Explanation:
• Account receivable:
Lf = 0, Debit ($) = 42,000(100 units × 600 × 70% = 42,000). Credit ($). = 0.
• Sales revenue:
Lf = 0, Debit($) = 0, Credit ($) = 42,000.
Date: December 15, 2021.
Account titles and Explanation:
• cash:
Lf = 0, debit($) = 42,000, Credit ($) = 0.
• Sales discount:
Lf = 0, debit($) = 42,000, Credit ($) = 0.
• Account receivable:
Lf = 0, Debit($) = 0, credit ($) = 42,000.
Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches
Branch Company provided the following information:
Standard fixed overhead rate
(SFOR) per direct labor hour $5.00
Actual fixed overhead $305,000
BFOH $300,000
Actual production in units 16,000
Standard hours allowed for
actual units produced (SH) 64,000
Required
Enter amounts as positive numbers and select Favorable (F) or Unfavorable(U).
Using the columnar approach, calculate the fixed overhead spending and volume variances.
1 2 3
Spending Volume
Answer:
Fixed Overheads Spending Variance = $5,000 Unfavorable(U).
Fixed Overheads Spending Variance = $20,000 Favorable (F).
Explanation:
Fixed Overheads Spending Variance = Actual Fixed Overheads - Budgeted Fixed Overheads
= $305,000 - $300,000
= $5,000 Unfavorable(U).
Fixed Overheads Spending Variance = Fixed Overheads at Actual Production - Budgeted Fixed Overheads
= ($5.00 × 64,000) - $300,000
= $320,000 - $300,000
= $20,000 Favorable (F)
A company requisitioned $40,000 of materials during the year and incurred direct labor charges of $50,000. If the company began the year with a work-in-process inventory balance of $15,000 and applied overhead of $60,000, what is the ending balance of work-in-process inventory assuming no goods were moved to finished goods inventory for the year? g
Answer:
$165,000
Explanation:
The computation of the ending balance of work-in-process inventory is shown below:-
Ending balance of work-in-process inventory = Beginning + Direct material + Direct labor + Overhead applied
= $15,000 + $40,000 + $50,000 + $60,000
= $165,000
Therefore for computing the ending balance of work-in-process inventory we simply applied the above formula.
After significant market research Dan is evaluating his business compared another local business offering a similar service. His observations tell him that the other business offers lower prices but that his own services are higher quality and result in greater customer satisfaction. What activity is Dan engaging in with his market research?
A. Qualitative analysis
B. Forecasting
C. Competitive analysis
D. Secondary research
Competitive analysis is an activity is Dan engaging in with his market research. Hence, option C is correct.
A comparative analysis contrasts the advantages and disadvantages of your business with those of your rivals' products, services, and marketing plans.
A competitive analysis is a strategy that involves looking into your primary competitors to find out more about their products, sales, and marketing plans. A competitive market study can help businesses create stronger corporate strategies, fend off competitors, and increase market share, among other benefits.
A company's competitive position can be evaluated using the SWOT analysis, which is also used to develop strategic planning. It represents advantages, dangers, opportunities, and weaknesses. The SWOT analysis analyzes both internal and external factors as well as the current condition and any predicted future events.
Thus, option C is correct.
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Bryant Co. has $2.7 million of debt, $1 million of preferred stock, and $2.1 million of common equity. What would be its weight on preferred stock
Answer:
0.172
Explanation:
The computation of the weight on the preferred stock is shown below:
Weight on preferred stock is
= Preferred stock ÷(Debt + preferred stock + common equity)
= $1 million ÷ ($2.7 million + $1 million + $2.1 million)
= $1 million ÷ $5.8 million
= 0.172
By applying the above formula we can easily determine the weight on preferred stock
Norred Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.05 Direct labor $ 3.70 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 121,500 Sales commissions $ 1.50 Variable administrative expense $ 0.45 Fixed selling and administrative expense $ 44,550 If 8,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:
Answer:
$134,300
Explanation:
From the question above, we are required to total amount of indirect manufacturing costs that was incurred by Norred corporation with the information that was provided
The first step is to calculate the total variable manufacturing overhead costs
= Variable manufacturing overhead × Units produced
= $1.60 per unit × 8,000 units
= $12,800
Therefore, the total amount of indirect manufacturing costs can be calculated as follows
= Total variable manufacturing costs + Fixed manufacturing overhead
= $12,800 + $121,500
= $134,300
Hence the total amount of indirect manufacturing costs is closest to $134,300
Craigmont Company's direct materials costs are $3,700,000, its direct labor costs total $7,630,000, and its factory overhead costs total $5,630,000. Its conversion costs total:
Answer:
$13,260,000
Explanation:
Craigmont's company has a direct material cost of $3,700,000
Its direct labor cost is $7,630,000
Its factory overhead cost is $5,630,000
Therefore, the conversion costs can be calculated as follows
Conversion costs= Direct labor+Factory overhead
= $7,630,000+$5,630,000
= $13,260,000
Hence the conversion costs total is $13,260,000
The Grange is a firm in a monopolistically competitive market that sells farm implements. The firm collected the data below to determine the profit-maximizing price and quantity at which to sell. Using the data, what is the profit-maximizing price and quantity at which the Grange company should sell its product?
Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost
2 $21 $42 $21 $0 $30
4 $18 $72 $15 $64 $2
6 $16 $96 $2 $72 $4
8 $14 $112 $8 $88 $8
10 $12 $120 $4 $108 $10
2 $10 $120 $0 $32 $12
4 $8 $112 $4 $160 $14
Answer:
The profit-maximizing price is $14, and the profit-maximizing quantity is 8.
Explanation:
This is because for a monopolistically competitive firm, the profit-maximizing quantity occurs where marginal revenue equals marginal cost. What the firm does is looking for the point in the demand curve that is exactly above the marginal cost-marignal revenue intersection, and charges the corresponding price and quantity.
We can see that for the quantity of 8, and the price of $14, both marginal revenue and marginal cost are $8, meaning that these are the quantity and price that are profit-maximizing.
_______________ of well-to-do individuals often put their own money into small new companies at an early stage of development, in exchange for owning some portion of the firm. Group of answer choices
Answer: C. A Network
Explanation:
One of the ways of raising capital is through the use of Angel Investors. These are usually well off individuals with excess cash for investment who look for companies to invest in at an early stage because they are trying to gain a positive return when the companies become successful.
To make their funds more substantial and their services easier to reach, Angel investors form networks to enable them achieve their mission of putting their own money into small new companies at an early stage of development, in exchange for owning some portion of the firm.
g The aggregate supply curve shifts A. rightward if the money wage rate falls. B. leftward if the aggregate demand curve shifts leftward. C. rightward if potential GDP decreases. D. leftward if potential GDP increases. E. rightward if the money wage rate rises.
Answer:
The correct option to the question above is option A "rightward if the money wage rate falls."
Explanation:
The aggregate supply curve is a graphical illustration of how the total quantity of goods and services is available for a given price and time.
When the aggregate supply curve shifts to the right, it increases. While, when the aggregate supply curve shifts to the left, it decreases.
An increase in the aggregate supply curve shows a fall in price, which makes a high price level resulting in a greater supply of real GDP.
Money wages is the amount of money paid in wages. Money wages is indirectly proportional to real wages. The aggregate supply curve decreases if the money wage rate increases and the aggregate supply curve increases when the money wage rate falls.
Aggregate supply is affected by GDP. When A GDP decreases, it also decreases aggregate supply.
Barry Cuda currently has $35,000 in his Roth IRA which has been earning 7%. Barry is planning on depositing $5500 annually for the next 40 years into this IRA. Assuming Barry's IRA continues earning 7% annually, what will Barry's IRA be worth at the end of 40 years?
Answer:
Total worth of worth of investment= $1,622,099.14
Explanation:
The total amount available in his account would be determined as follows:
The value of the existing current amount in 40 years time
FV = PV × (1+r)^ n
FV- future value
PV- current amount in account
r- interest rate
n- number of years
FV = 35,000 × (1.07)^(40=
FV= 524,106.02
The value of the new annual deposit of 5,500 in 40 years time
This represents an annuity. An annuity is series of constant but equal amount occurring for a certain number of years .
FV= A×( (1+r) -1)/r
FV - future value
R - interests rate
n- number of years
A- annual deposit
FV = 5,500 × ((1+0.07)^40 -1)/0.07
FV= 1,097,993.12
Total worth of worth of investment
= 524,106.02 + 1,097,993.12 = 1,622,099.14
Total worth of worth of investment= $1,622,099.14
Tracy Company, a manufacturer of air conditioners, sold 200 units to Thomas Company on November 17, 2021. The units have a list price of $450 each, but Thomas was given a 30% trade discount. The terms of the sale were 3/10, n/30. Required: 1. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the gross method of accounting for cash discounts is used. 2. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021, assuming that the gross method of accounting for cash discounts is used.
Answer and Explanation:
The Journal entries is shown below:-
1. a. Tracy Company Dr, $63,000 ($450 × 70% × 200)
To Sales $63,000
(Being sales is recorded)
b. Cash Dr, $61,110 ($63,000 - ($63,000 × 3%)
Sales discount $1,890 Dr, ($63,000 × 3%)
To Tracy Company $63,000
(Being cash and sales discount is recorded)
2. a Tracy Company Dr, $63,000 ($450 × 70% × 200)
To Sales $63,000
(Being sales is recorded)
b. No Journal entry is required
c. Cash Dr, $63000
To Tracy Company $63,000
(Being cash is recorded)
Rainbow Paints Inc. is a leading paints company in Pakistan. In June 2019, the higher management of the company deliberated and decided upon the production targets for the year 2020. The procurement department was directed to order the supplies of required chemicals and raw materials from Chinese company i.e. XingPe Chemicals for the target production. The supplies were expected to arrive in January-February 2020 but unexpected situation halted the normal operations in China due to the spread of a novel virus. The situation created panic at Rainbow Paints Inc. as lack of supplies meant falling short of the targets and plunging in losses. The supplier was contacted but they were of the view that they cannot send the supplies as per the contract due to the lockdown. Now, conflict aroused between the parties as Rainbow Paints Inc. wanted the raw materials which the XingPi Chemicals cannot process due to restrictions from their respective government. It resulted in losses for Rainbow Paints Inc. Rainbow Paints Inc. decided to consult an International arbitrator for the resolution of the dispute. During negotiations, the Rainbow Paints Inc. maintained that they faced losses due to lack of supplies which did not reach them at the promised time. So, the supplier must not only compensate for it but also return their payments. While XingPe Chemicals insisted that they couldn’t move ahead due to unexpected and unavoidable pandemic situation, so the losses must be shared. They also reiterated the resolve to provide supplies in the future without any delays if the situation permits. They insisted on keeping the contract intact while finding a middle ground for the current dispute. Requirement: After analyzing the case, Identify the approaches to negotiation maintained by both the parties in conflict i.e. Rainbow Paints Inc. and XingPi Chemicals and explain them as per the scenario.
Answer and Explanation:
According to the given situation, The Strategic Negotiation or Distributive Negotiation is also known as Win-lose strategy, was introduced by Rainbow Paints Inc. They say they should be liable for the losses, and they will refund the advance payment. Therefore they support a hard-line strategy.
XingPe Chemicals embraces a resolution of the conflict on this subject. So, they are required to handle the part of loss and want to compensate for the remaining loss by a rainbow. They are justifying to wait on pandemic grounds which is a matter of force measure. They do promise to honor all future contracts.
Categorize each transaction according to the U.S. account to which it belongs and the direction the money flows.
Account
Direction of flow
An Australian company buys steel from a U.S. firm.
The Federal Reserve buys $2$2 billion worth of euros.
Profits are earned by a U.S. based mining company operating
in Mexico.
An English company purchases a U.S.
confectionary manufacturer.
Financial account
Payment from foreigners
Factor income
Payment to foreigners
Payment from foreigners
Current account
Financial account
Current account
Answer:
1. An Australian company buys steel from a US Firm
Account: Current Account
Direction of Flow: Payment to foreigners
2. The federal reserve buys $252 billion worth euros
Account: Financial Account
Direction of Flow: Payment to foreigner
3. Profit earned by a US based mining company operating in Mexico
Account: Current account
Direction of Flow: Payment from foreigners
4. An English company buy a US confectionary manufacturer
Account: Financial Account
Direction of Flow: Payment from Foreigners
Lena plans to invest 7,200 dollars in 6 year(s) and 7,500 dollars in 5 year(s). She expects to earn 15.6 percent, compounded quarterly. How much money does Lena expect to have in 11 years
Answer:
The expected amount is $34154.83
Explanation:
Lena invested the amount = $7200
$7200 invested for time period = 6 years
Second amount invested = $7500
$7500 invested for the time period = 5 years.
The expected interest rate = 15.6 %
Total amount = A=P(1+r/400)^4n
A=future value
P=present value
r=rate of interest
n=time period.
Hence
A=7200(1+15.6/400)^(4*6) + 7500(1+15.6/400)^(4*5)
= 18034.5636 + 16120.2664
= $34154.83
Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 72,700 Estimated variable manufacturing overhead $ 3.30 per machine-hour Estimated total fixed manufacturing overhead $ 838,730 The predetermined overhead rate for the recently completed year was closest to:
Answer:
The predetermined overhead rate for the recently completed year was closest to: $11.54 per machine-hour
Explanation:
Predetermined Overheads = Budgeted Fixed Overheads / Budgeted Activity
= $ 838,730 / 72,700
= $11.536864 or $11.54 per machine-hour.
Future deductible amounts would be caused by Select one: a. Estimated Expenses and Prepaid Expenses b. Estimated Expenses, but not Prepaid Expenses c. Prepaid Expenses, but not Estimated Expenses d. Neither Estimated Expenses nor Prepaid Expenses
Answer:
The correct answer is:
Estimated Expenses, but not Prepaid Expenses (b.)
Explanation:
An estimated expense is a forecast of the amount of costs that will be incurred in future, to fulfil a transaction. An example might be an amount forecasted to cover a warranty cost for a purchased product under warranty in case a fault develops. Estimated expenses are not debited at the time of projection, but at a certain time in the future, hence they are called Future deductible amounts. On the other hand, Prepaid Expense is a type of expenditure that has not been recorded yet by a company as an expense, but the amount has been paid in advance for the good or service, even though the product has not been consumed at the time of payment.