Answer:
1.25
Explanation:
1000*(1+x)^8 = 2203.76
(1+x)^8 = 2203.76/1000
(1+x)^8 = 2.20376
Taking root of both side
(1+x)^8^(1/8) = 2.20376^(1/8)
1 + x = 1.10381308235
x = 1.10381308235 - 1
x = 0.10381308235
x = 10.38%..............(Equ 1)
1000*((1+y)^5)*((1+x)^3) = 1990.76
1000*((1+y)^5)*1.344889 = 1990.76
((1+y)^5) = 1.48024
Taking root of both side
((1+y)^5)^(1/5) = 1.48024^(1/5)
1+y = 1.08159937381
y = 1.08159937381 - 1
y = 0.08159937381
y = 18.15995%...........(Equ ii)
J = (((1+y)^1/2)-1)*2
J = (((1+0.08159937381)^1/2) - 1)*2
J = (1.039999698947072 - 1)*2
J = .039999698947072 * 2
J = 0.079999397894144
J = 7.9999%
J = 8%
K = (((1+x)^1/4)-1)*4
K = (((1+0.10381308235 )^1/4)-1)*4
K = 10%
So K/J = 10/8 = 1.25
Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics.
a. The effect of a large government budget deficit on the economy's price level.
b. The effect of government regulation on a monopolist's production decisions.
c. The optimal interest rate for the Federal Reserve to target
Answer:
macroeconomics.
microeconomics.
macroeconomics.
Explanation:
Macroeconomics is a branch of economics that studies the economy as a whole. Macroeconomics studies economic aggregates such as inflation, unemployment, GDP and growth rate.
The government deficit would affect price levels of the whole economy. Thus, it is a macroeconomic topic.
Interest rate would affect the whole economy.
Microeconomics is a branch of economics that studies the decisions individuals and firms make in response to changes in economic factors. These factors include price, resources etc. it studies how firms and individuals allocate and make decisions about resources
Regulation of the monopolist would only affect the monopolist and its customers possibly. This makes it a microeconomic topic
Ralph owns a building that he is trying to lease. Ralph is a calendar-year, cash-method taxpayer and is trying to evaluate the tax consequences of three different lease arrangements. Under lease 1, the building rents for $720 per month, payable on the first of the next month, and the tenant must make a $720 security deposit that is refunded at the end of the lease. Under lease 2, the building rents for $7,920 per year, payable at the time the lease is signed, but no security deposit is required. Under lease 3, the building rents for $720 per month, payable at the beginning of each month, and the tenant must pay a security deposit of $1,440 that is to be applied toward the rent for the last two months of the lease.
Required:
a. What amounts are included in Ralphâs gross income this year if a tenant signs lease 1 on December 1 and makes timely payments under that lease?
b. What amounts are included in Ralphâs gross income this year if the tenant signs lease 2 on December 31 and makes timely payments under that lease?
c. What amounts are included in Ralphâs gross income this year if the tenant signs lease 3 on November 30 and makes timely payments under that lease?
Answer:
a. The amounts that are included in Ralph's gross income this year if a tenant signs lease 1 on December 1 and makes timely payments under that lease
= $8,640
b. The amounts that are included in Ralph's gross income this year if the tenant signs lease 2 on December 31 and makes timely payments under that lease:
= $7,920
c. The amounts that are included in Ralph's gross income this year if the tenant signs lease 3 on November 30 and makes timely payments under that lease:
= $10,080
Explanation:
a) Data and Calculations:
Leases: Lease Payments Security Remarks
Deposit
Lease 1 Monthly rent = $720 $720 Refundable at the lease end
Lease 2 Yearly rent = $7,920 None None
Lease 3 Monthly rent = $720 $1,440 Non-refundable; last months' rent
1) The amounts that are included in Ralph's gross income this year if a tenant signs lease 1 on December 1 and makes timely payments under that lease
= $720 * 12 = $8,640
2) The amounts that are included in Ralph's gross income this year if the tenant signs lease 2 on December 31 and makes timely payments under that lease:
= $7,920
3) The amounts that are included in Ralph's gross income this year if the tenant signs lease 3 on November 30 and makes timely payments under that lease:
= ($720 * 12) + $1,440
= $8,640 + $1,440
= $10,080
b) Since Ralph is a cash-method taxpayer, the amounts of lease rents that are included in his gross income equal the total amounts received in the calendar-year.
The name preferred stock is in reference to the fact that:_____.
a. it is a type of corporate debt.
b. it is treated like debt for tax purposes.
c. preferred dividends must be paid in full before any additional interest may be paid.
d. preferred dividends must be paid in full before any common stock dividends can be paid.
e. fixed income traders prefer it to bonds.
Answer: d. preferred dividends must be paid in full before any common stock dividends can be paid.
Explanation:
Preferred stocks will see their dividends paid before those of common shares. Indeed if the company was to liquidated, preferred shareholders get preference over common shareholders.
Preferred dividends have preference over common dividends and so their name reflects this by being called ''preferred'' shares. Some classes of preferred shares such as cumulative shares have an even greater amount of preference as their dividends will always be paid even if it takes years to do so.
What are the arguments for and against the concept of corporate social responsibility? Where do you stand, and why? Give your opinions, specifically, with respect to the text examples.
The transactions completed by PS Music during June 2018 were described at the end of Chapter
1. The following transactions were completed during July, the second month of the business's operations:
July 1. Peyton Smith made an additional investment in PS Music in exchange for common stock by depositing $5,000 in PS Music's checking account.
1 Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750. 1. Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.
2. Received $1,000 on account.
3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months. 3. Paid $250 on account.
4. Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense)
5. Purchased office equipment on account from Office Mart, $7,500.
8. Paid for a newspaper advertisement, $200.
11 Received $1,000 for serving as a disc jockey for a party
13. Paid $700 to a local audio electronics store for rental of digital recording equipment.
14. Paid wages of $1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal:
16. 18. 21. 22. Received $2,000 for serving as a disc jockey for a wedding reception. Purchased supplies on account, $850. Paid $620 to Upload Music for use of its current music demos in making various music sets. Paid $800 to a local radio station to advertise theservices of PS Music twice daily for the remainder of July 23. Served as disc jockey for a party for $2500. Received $750, with the remainder due August 4, 2018
27. Paid electric bill, $915.
28. Paid wages of $1200 to receptionist and part-time assistant.
29. Paid miscellaneous expenses, $540. 30. Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 2018. 31 Received $3,000 for serving as a disc jockey for a party 31. Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July. Paid dividends, $1,250. 31.
Question Completion:
Journalize the transactions.
Answer:
PS Music
Journal Entries:
July 1 Debit Cash $5,000
Credit Common Stock $5,000
To record the additional investment by Peyton Smith.
July 1: Debit Rent Expense $1,750
Credit Cash $1,750
To record the payment of rent for July.
July 1: Debit Prepaid Insurance $2,700
Credit Cash $2,700
To record the prepayment of insurance premium for one year.
July 2: Debit Cash $1,000
Credit Service Revenue $1,000
To record the receipt of cash on account.
July 3: Debit Cash $7,200
Credit Service Revenue $3,600
Credit Unearned Service Revenue $3,600
To record the receipt of service revenue for July and August.
July 3: Debit Accounts Payable $250
Credit Cash $250
To record payment on account.
July 4: Debit Miscellaneous Expense $900
Credit Cash $900
To record the payment contract review by an attorney.
July 5: Debit Office Equipment $7,500
Credit Accounts Payable (Office Mart) $7,500
To record purchase of office equipment on account.
July 8: Debit Advertising Expense $200
Credit Cash $200
To record the payment for a newspaper advertisement.
July 11: Debit Cash $1,000
Credit Service Revenue $1,000
To record the receipt of cash for services.
July 13: Debit Equipment Rental Expense $700
Credit Cash $700
To record the payment for rental of digital recording equipment.
July 14: Debit Wages Expense $1,200
Credit Cash $1,200
To record the payment of wages.
July 16: Debit Cash $2,000
Credit Service Revenue $2,000
To record the receipt of cash for services.
July 18: Debit Supplies $850
Credit Accounts Payable $850
To record the purchase of supplies on account.
July 21: Debit Music Expense $620
Credit Cash $620
To record the payment of cash for uploading music.
July 22: Debit Advertising Expense $800
Credit Cash $800
To record the payment for advertising expense.
July 23: Debit Cash $750
Debit Accounts Receivable $1,750
Credit Service Revenue $2,500
To record service revenue earned for cash and on account.
July 27: Debit Utilities Expense $915
Credit Cash $915
To record the payment of electric bill.
July 28: Debit Wages Expense $1,200
Credit Cash $1,200
To record the payment of wages.
July 29: Debit Miscellaneous Expense $540
Credit Cash $540
To record the payment of miscellaneous expense.
July 30: Debit Cash $500
Debit Accounts Receivable $1,000
Credit Service Revenue $1,500
To record service revenue earned for cash and on account.
July 31: Debit Cash $3,000
Credit Service Revenue $3,000
To record the receipt of cash for services.
July 31: Debit Music Expense $1,400
Credit Cash $1,400
To record the payment of royalties.
July 31: Debit Dividends $1,250
Credit Cash $1,250
To record the payment of dividends to the stockholder.
Explanation:
Journal entries are the first records made to record business transactions as they occur on a daily basis. They identify the accounts involved in each transaction and the ones to be debited and credited respectively.
Journal entries are the first records made to record business transactions as they occur on a daily basis. They identify the accounts involved in each transaction and the ones to be debited and credited respectively.
What are business's operations?Business operations is a term used to define a broad range of activities. In essence, it refers to everything a firm does day-to-day to keep running and making money. Those activities, therefore, can differ hugely from one company to the next.
Business operations also include the technologies, systems, processes, equipment, and workflows essential to deliver value to customers. Planning operations management allows decision-makers to supervise business activities and assign responsibilities to authorized individuals.
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Shlee Corporation issued a 4-year, $60,000, zero-interest-bearing note to Garcia Company on January 1, 2020, and received cash of $60,000. In addition, Shlee agreed to sell merchandise to Garcia at an amount less than regular selling price over the 4-year period. The market rate of interest for similar notes is 12%. Prepare Shlee Corporation's January 1 journal entry.
Answer:
January 1, 2020
Dr Cash $60,000
Dr Discount on Bonds Payable $21,869
Cr Notes Payable $60,000
Cr Unearned Sales Revenue $21,869
Explanation:
Preparation of Shlee Corporation's January 1 journal entry
First step is to calculate Find the Present value (PV) using financial calculator
N = 4 years
I/Y% = 12$
FV = $60,000
PMT = 0
PV =?
Hence,
PV =$38,131
Second step is to calculate the Discount on Bonds Payable for January 1, 2020
Discount on Bonds Payable =$60,000 −$38,131 Discount on Bonds Payable =$21,869
Now let prepare the Journal entry
January 1, 2020
Dr Cash $60,000
Dr Discount on Bonds Payable $21,869
($60,000 −$38,131)
Cr Notes Payable $60,000
Cr Unearned Sales Revenue $21,869
($60,000 −$38,131)
When the company is hosting an event, managers should assign event preparations to a ________. Preparations include trucking in different kinds of equipment and setting it up over several acres; installing sufficient security, first aid, and portable restrooms throughout the course; and having food and drink delivered, as well as marketing the event and enrolling participants. Hiring team members who are diverse in terms of gender and race is likely to_____________ the team's productivity.
Answer:
Cross functional team / will increase
Explanation:
A cross functional team can be defined as a team formed by people with different areas of expertise, as is the case of a team specialized in the organization of business events.
Cross functional teams have the advantages of making work more effective and more productive by the possibility that each person is responsible for a different area and therefore the work takes place in a much more flexible, dynamic and creative way, since there is greater autonomy, greater capacity to communication and lower hierarchy in these teams, and the greater the diversity of professionals, the more the teams will be innovative and productive.
Starbucks opened its first store in Seoul, Korea in October 2002. The price of a tall vanilla latte is 3,000 Korean Won. In New York City, the price of a tall vanilla latte is $3.00. The exchange rate between Korean Won and U.S. dollars is Won 1,150/$. According to purchasing power parity, is the Korean Won overvalued or undervalued
Answer:
The Korean Won is undervalued
Explanation:
The Korean Won is undervalued if we determine this measure by comparing the prices of the vanilla latte at a Korean Starbucks and at an American Starbucks.
If purchasing power parity was perfectly equal, the latte at the Seoul Starbucks would be priced at $3,450, because the exchange rate is 1,150/$ and $3 x 1,1150 = 3,450, $3 being the price of the latte in New York City.
We can see that the latte in Seoul only costs 3,000 Won, so, under this comparison, the Won is undervalued by 450 Won.
A business owner is aware that the Department of Labor has created rules
that require overtime pay for employees. When he works his employees more
than 40 hours in one week, he makes sure that he works them less than 40
hours the following week. The business owner feels that it is fair to average
the number of hours worked over the two weeks covered by the pay period
and use that number for calculating overtime pay. A representative of the
Department of Labor informs him that their regulations do not permit this,
Which of the following is true in this situation?
Answer:
the buisness owner must comply to the department of labor regulations
Explanation:
In Year 1, Lee Inc. billed its customers $62,000 for services performed. The company collected $51,000 of the amount billed. Lee incurred $39,000 of other operating expenses on account. Lee paid $31,000 of the accounts payable. Lee acquired $40,000 cash from the issue of common stock. The company invested $21,000 cash in the purchase of land. Required (Hint: Identify the six events described in the paragraph and record them in general ledger accounts under an accounting equation before attempting to answer the questions.) Use the preceding information to answer the following questions: What amount of revenue will Lee report on the Year 1 income statement
Answer and Explanation:
LEE INC.
Effect of events on the general ledger accounts
Event Cash Account land Account Common stock Retained
receivable Payable Earnings
Sales
on account 62,000 62,000
collected 51,000 -51,000
Expenses 39,000 -39,000
Account
Payable -31,000 -31,000
Issue of stock 40,000 40,000
Purchase land -21,000 21,000
Totals 39,000 11,000 21,000 8,000 40,000 23,000
The computation of the amount of revenue recognized would be equivalent to the service performed i.e. $62,000
A vacant lot acquired for $500,000, on which there is a balance owed of $300,000, is sold for $660,000 in cash. The seller pays the $300,000 owed. What is the effect of these transactions on the total amount of the seller's (1) assets, (2) liabilities, and (3) stockholders' equity
Answer: See explanation
Explanation:
The effect of these transactions on the total amount of the seller's
(1) assets will be:
= Sales - (Aquisition value + Balance Owed)
= $660,000 - ($500,000 + $300,000)
= $660,000 - $800,000
= -$140,000
Decreased $140,000
2. Liabilities: Decreased by $300,000. This is because the seller paid the $300,000 owed.
3. Stock holder's Equity will be gotten by subtracting the acqusition value from the sales value. This will be:
= $660,000 - $500,000
= $160,000.
Increased by $160,000
5. Calculating tax incidence Suppose that the U.S. government decides to charge beer consumers a tax. Before the tax, 30 billion cases of beer were sold every year at a price of $5 per case. After the tax, 25 billion cases of beer are sold every year; consumers pay $7 per case (including the tax), and producers receive $4 per case.
Answer:
The amount of the tax on a case of beer is $3 per case.
Of this amount, the burden that falls on consumers is $2 per case,
and the burden that falls on producers is $ per case.
Explanation:
First, we need to calculate the total amount of tax on one case
Amount of tax = Price by the consumer including tax - Producer receives
Where
Price by the consumer including tax = $7
Producer receives = $4
Placing values in the formula
Amount of tax = $7 - $4
Amount of tax = $3
Burden on consumer = Price paid by consumer before tax - Price paid by consumer after tax = $7 - $5 = $2
Burden on Producer = Total tax - Burden on consumer = $3 - $2 = $1
When overhead is underapplied: A. Cost of Goods Sold is understated B. Work in Process inventory is overstated C. Finished Goods inventory is overstated D. Gross Profit is understated
Answer:
A
Explanation:
Overhead cost is the cost involved in the daily operations of a business. It is the cost that is not directly attached to the production of goods and services. e.g. administrative costs
Overhead is underapplied when the amount budgeted for as overhead is less than the actual overhead incurred. This leads to cost of goods sold been understated. To correct for this, cost of goods sold should be adjusted retroactively. This reduces the amount of net income reported
A project manager is considering how to structure a project team that will not directly disrupt ongoing operations. The project needs to be done quickly and a high level of motivation will be needed in order to do that. For this situation, the ______ organization would be the best choice. Group of answer choices weak matrix strong matrix projectized functional balanced matrix
Answer: Projectized
Explanation:
With regards to the information given in the question, the projectized organization would be the best choice.
A projectized organization structure is simply one whereby the decisions regarding the project will be made by the project manager and everything regarding the project will be reported to the project manager.
Since the project needs to be done quickly and a high level of motivation will be needed in order to do that, the projectized structure will be ideal.
The organization would be the best choice is Projectized
The following information should be considered:
A projectized organization structure is simply one whereby the decisions regarding the project will be made by the project manager and everything regarding the project will be reported to the project manager. Since the project needs to be done quickly and a high level of motivation will be needed in order to do that, the projectized structure will be ideal.Learn more: brainly.com/question/16911495
On January 1, Year 1, a contractor began work on a $3.2 million construction contract that is expected to be completed in 3 years. The contractor concludes that it is appropriate to recognize revenue over time using the input method based on costs incurred (cost-to-cost method). At the inception date, the estimated cost of construction was $2.4 million. The following data relate to the actual and expected construction costs:
Year 1 Year 2 Year 3
Costs incurred $720,000 $1,170,000 $1,110,000
Expected future costs $1,680,000 $810,000 $0
For this long-term construction contract, the contractor needs to calculate the estimated dollar values of the revenue and gross profit (loss) to be recognized each year. Complete the contractor's long-term construction contract using the information above. Write the appropriate amounts in the associated cells. Indicate losses by using a leading minus (-) sign. Round all amounts to the nearest dollar. If no entry is necessary, enter a zero (0).
Revenue Gross profit (loss)
Year 1
Year 2
Answer:
Revenue Costs Incurred Gross profit (loss)
Year 1 $768,000 $720,000 $48,000
Year 2 $1,248,000 $1,170,000 78,000
Year 3 $1,184,000 $1,110,000 74,000
Total $3,200,000 $3,000,000 $200,000
Explanation:
a) Data and Calculations:
Construction contract = $3.2 million
Completion period = 3 years
Estimated cost of construction = $2.4 million
Construction costs:
Year 1 Year 2 Year 3 Total Costs
Costs incurred $720,000 $1,170,000 $1,110,000 $3 million
% of annual costs to total 24% 39% 37% 100%
Expected future costs $1,680,000 $810,000 $0
Annual Revenue $768,000 $1,248,000 $1,184,000 $3.2 million
Revenue Calculation:
Costs incurred/Total costs * $3,200,000
Revenue Costs Incurred Gross profit (loss)
Year 1 $768,000 $720,000 $48,000
Year 2 $1,248,000 $1,170,000 78,000
Year 3 $1,184,000 $1,110,000 74,000
Total $3,200,000 $3,000,000 $200,000
b) The revenue for each year is based on the costs incurred, as determined by the contractor.
The account balances of Paradise Travel Service for the year ended May 31, 20Y6, follow:
Fees earned $900,000
Office expense 300,000
Miscellaneous expense 15,000
Wages expense 450,000
Accounts payable 18,000
Accounts receivable 38,000
Cash 52,000
Common Stock 100,000
Land 450,000
Supplies 3,000
$10,000 of dividends were paid during the year. Retained earnings as of June 1, 20Y5, were $300,000. Prepare a balance sheet as of May 31, 20Y6. When entering assets, enter them in order of liquidity.
Answer:
Paradise Travel Service
Balance Sheet as of May 31, 20Y6:
Assets:
Cash $52,000
Accounts receivable 38,000
Supplies 3,000
Land 450,000
Total assets $543,000
Liabilities and Equity:
Accounts payable 18,000
Common Stock 100,000
Retained Earnings 425,000
Total liabilities and
equity $543,000
Explanation:
a) Data and Calculations:
Paradise Travel Service
Income Statement for the year ended May 31, 20Y6:
Fees earned $900,000
Office expense 300,000
Miscellaneous expense 15,000
Wages expense 450,000
Total expenses 765,000
Net Income $135,000
Statement of Retained Earnings for the year ended May 31, 20Y6:
Retained Earnings, June 1, 20Y5 $300,000
Net Income 135,000
Dividends 10,000
Retained Earnings, May 31, 20Y6 $425,000
b) The balance sheet shows the balances of assets, liabilities and equity at the end of an accounting period. It derives its name from the accounting equation, which states that assets = liabilities + equity. This equation implies that the two sides always balance each other.
A researcher wants to understand how customers' social interaction with online retailers impact their loyalty to online retailers. This researcher understands that extraneous variables such as gender and age could influence the result, but these variables cannot be eliminated and their effects cannot be canceled out in this case. In order to deal with extraneous variables, which of the following techniques this researcher can choose?
a. Randomization
b. Inclusion
c. Statistical Control
d. Elimination
e. Induction
f. Manipulation
Answer:
Option A, Randomization
Explanation:
Extraneous variables can be taken care of through randomization or random sampling. In random sampling, the extraneous variables are not deleted instead their equal distribution is ensured. Random sampling increases the external validity and generalize the population.
Hence, option A is correct
The LFH corporation makes and sells a single product, product t. each unit of product t requires 1.5 direct labor-hours at a rate of 10.50 per direct labor hour the company has budgeted to produce 28,000 units of Product T in June. The finished goods inventories on June 1 and June 30 were budgeted at 800 and 600 units, respectively. Budgeted direct labor costs for June would be:_____.
a. $294,000.
b. $441,000.
c. $444,150.
d. $437,850.
Answer:
b. $441,000
Explanation:
Calculation for Budgeted direct labor cost
Using this formula
Budgeted direct labor cost= Budgeted production * hours per unit * rate per hour
Let plug in the formula
Budgeted direct labor cost= 28,000 * 1.5 * 10.50
Budgeted direct labor cost= 441,000
Therefore the Budgeted direct labor costs for June would be 441,000
Jamie is considering leaving her current job, which pays $75,000 per year, to start a new company that develops applications for smartphones. Based on market research, she can sell about 50,000 units during the first year at a price of $4 per unit. With annual overhead costs and operating expenses amounting to $145,000. Jamie expects a profit margin of 20 percent. This margin is 5 percent larger than that of her largest competitor, Apps. Inc.
a. If Jamie decides to embark on her new venture, What will her accounting cost be during the first year of operation? Her implicit costs? Her opportunity costs?
Accounting costs: $_____
Implicit costs: $_____
Opportunity costs: $_____
b. Suppose that Jamie's estimated selling price is lower than originally projected during the first year. How much revenue would she need in order to earn positive accounting profits? Positive economic profits?
Revenue needed to earn positive accounting profits: $______
Revenue needed to earn positive economic profits:
Answer:
Follows are the solution to the given points:
Explanation:
For point A:
Cost with accounting=The actual manufacturing expenditures or spendings that appear on expensive sports or record of a company= [tex]\$ 145,000[/tex]
[tex]\text{Costs = gross pay} = 50000 \times 4 - 1.2 \times1,45,000 = 26000\\\\{ total \ cost = 120 \% \ of\ 145,000}[/tex]
Cost opportunity=75,000
Total revenue required besides positive accounting benefits=cost of accounting =145000
Income to create positive economic benefits=cost of accounts + implied cost
[tex]= 145000+26000=171000[/tex]
For point B:
Income required to make positive profit in accounts = 145,000 more than the accounting costs
Revenue necessary to earn positive profit = 220,000 more than opportunity cost
Catherine inherited a lot of money and decided to start a business. She has purchased a building, bought tools and machinery, and hired employees. Her main problem is that she has no business experience, no ideas, and no experience creating products. Which category of economic resource does she require?
A.
labor
B.
entrepreneurial ability
C.
land
D.
capital
Catherine inherited a lot of money and decided to start a business. She has purchased a building, bought tools and machinery, and hired employees. Her main problem is that she has no business experience, no ideas, and no experience creating products. The category of economic resource she requires is Entrepreneurial ability.
What is Entrepreneurship?
The process in which a person decides to start a new business or venture with a unique idea is called Entrepreneurship. The person who generates the idea and starts the business is known as Entrepreneur.
Characteristics of Entrepreneur:InnovationPassionSelf ConfidenceCreativityLeadershipRisk TakingDecision makingCommunicationHence option B is the correct answer,
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Hubbard, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2015. 1/1/15 12/31/15 Projected benefit obligation $11,400,000 $11,760,000 Pension assets (at fair value) 6,000,000 6,900,000 Accumulated benefit obligation 2,400,000 2,760,000 Net (gains) and losses -0- 240,000 The service cost component of pension expense for 2015 is $890,000 and the amortization of prior service cost due to an increase in benefits is $180,000. The settlement rate is 10% and the expected rate of return is 8%. What is the amount of pension expense for 2015?
a. $1,766,000
b. $1,730,000
c. $1,658,000
d. $1,490,000
Answer:
b. $1,730,000
Explanation:
Pension expense = $ervice cost component + Opening projected benefit obligation*settlement rate - Opening pension assets*Expected rate of return + Amortization of prior service cost
= $890,000 + ($11,400,000*0.10) - ($6,000,000*0.08) + $180,000
= $890,000 + $1,140,000 - $480,000 + $180,000
= $1,730,000
Please match term with the correct definition.
The difference between the amount the government collects and how much it spends is known as the:_______
When the preceding term is combined with all of the privately held savings from across the country, it is known as the:__________
If the government spends more money than it takes in through taxes, it will experience a:_________
a. Budget surplus
b. National savings
c. Capital inflow
d. Budget deficit
e. Budget balance
Answer:
Budget balance, National savings, Budget deficit
Explanation:
The difference between the amount the government collects and how much it spends is known as the Budget balance.
When the preceding term is combined with all of the privately held savings from across the country, it is known as the National savings.
If the government spends more money than it takes in through taxes, it will experience a Budget deficit.
Understanding preference assumptions
Complete the following table by identifying which assumption each given scenario references.
Assumptions
Scenario Complete Transitive
Tastes Tastes Monotonicity Convexity Continuity
Your niece Latasha says she
can't compare her two favorite
TV shows, Dora the Explorer
and Sesame Street, because
they are so different, even though
they are on at the same time and
she needs to choose.
Jake usually buys three pounds
of ham and two pounds of turkey
each week at the grocery store.
When the grocery store had only
1.99 pounds of turkey available,
he didn't feel that worse off.
Your brother would prefer to have
two computers and a video game
console, rather than one computer
and a video game console, because
he loves technology.
Frances is indifferent between having
only two scoops of ice cream or having
only four cookies for dessert, but she
would prefer to have one scoop of ice
cream and two cookies because she
likes variety in her diet.
Dmitri prefers burgers over hot dogs
and hot dogs over chicken. However,
when faced with a choice between
burgers and chicken, he chooses
chicken.
Answer:
Understanding Preference Assumptions
Identifying the assumption for each scenario:
Scenario Preference Assumption
1. Your niece Latasha says she
can't compare her two favorite
TV shows, Dora the Explorer
and Sesame Street, because
they are so different, even though
they are on at the same time and
she needs to choose. Continuity
2. Jake usually buys three pounds
of ham and two pounds of turkey
each week at the grocery store.
When the grocery store had only
1.99 pounds of turkey available,
he didn't feel that worse off. Complete taste
3. Your brother would prefer to have
two computers and a video game
console, rather than one computer
and a video game console, because
he loves technology. Monotonicity
4. Frances is indifferent between having
only two scoops of ice cream or having
only four cookies for dessert, but she
would prefer to have one scoop of ice
cream and two cookies because she
likes variety in her diet. Convexity
5. Dmitri prefers burgers over hot dogs
and hot dogs over chicken. However,
when faced with a choice between
burgers and chicken, he chooses
chicken. Transitive tastes
Explanation:
A. Complete taste: As Jake's preferences are inclined towards ham, she is able to compare and rank ham and turkey.
B. Continuity: There are sudden jumps in Latasha's taste. She wants her two favorite TV shows, Dora the Explorer and Sesame Street, equally.
C. Transitive tastes: For example, Dmitri prefers burgers over hot dogs
and hot dogs over chicken, but still chooses chicken.
D. Monotonicity: More computers are better for my brother.
E. Convexity: Averages of (ice cream and cookies) are better than only ice cream or only cookies For Frances.
Sunland Company's account balances at December 31, 2020 for Accounts Receivable and the related Allowance for Doubtful Accounts are $924000 debit and $1970 credit, respectively. From an aging of accounts receivable, it is estimated that $40900 of the December 31 receivables will be uncollectible. The necessary adjusting entry would include a credit to the allowance account for:_______
a. $42870.
b. $1970.
c. $38930.
d. $40900.
Answer:
c. $38930
Explanation:
Calculation for what the necessary adjusting entry would include a credit to the allowance account for:
Using this formula
Credit to the allowance account =Accounts receivable-Allowance for Doubtful Accounts (Credit)
Let plug in the formula
Credit to the allowance account=$40900-$1970
Credit to the allowance account= $38930
Therefore The necessary adjusting entry would include a credit to the allowance account for $38930
Damon Industries manufactures 20,000 components per year. The manufacturing cost of the components was determined as follows:
Direct materials $100,000
Direct labor 160,000
Variable manufacturing overhead 60,000
Fixed manufacturing overhead 80,000
An outside supplier has offered to sell the component for $17. If Damon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $10,000. If Damon purchases the component from the supplier instead of manufacturing it, the effect on income would be:
a. a $30,000 increase.
b. a $50,000 decrease.
c. a $70,000 increase.
d. a $10,000 decrease.
Answer:
d. a $10,000 decrease.
Explanation:
The computation of the impact on the income is given below:
In case of making the product
= Direct material + direct labor + variable manufacturing overhead + rented
= $100,000 + $160,000 + $60,000 + $10,000
= $330,000
And, in case of buying the product
= 20,000 × $17
= $340,000
So there is a decrease of $10,000
Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company's records show the following accounts and amounts for the month of August.
Cash $ 25,420 C. Camry,
Withdrawals $6,070
Accounts receivable 22,430
Consulting fees earned 27,070
Office supplies 5,330
Rent expense 9,630
Land 44,070
Salaries expense 5,670
Office equipment 20,080
Telephone expense 950
Accounts payable 10,550
Miscellaneous expenses 570
Use the above information to prepare an August statement of owner's equity for Help Today. The owner's capital account balance at July 31 was $0, and the owner invested $102,600 cash in the company on August 1.
Answer:
See below
Explanation:
Equity is calculated as
= Assets[ Fixed + Current] - Liabilities
= [$25,420 + $22,430 + $44,070 + $20,080] - [ $6,070 + $10,550]
= $112,000 - $16,620
= $95,380
Referring to the information below, indicate the income statement and balance sheet impacts in each case a through e if Walker Corp. failed to record the necessary adjusting entries.
a. Interest expense of $120 for the month of December 2020 will be paid in January 2021.
b. Unbilled revenue for services performed in December 2020 is $400. The company will prepare and forward invoices for this amount in January 2021 to customers with a 30-day collection term.
c. $1,200 cash was received in advance on November 30, 2020, for future services to be performed by Walker Corp. and was recorded as deferred service revenue. The services were performed on December 20, 2020.
d. Walker Corp. acquired a two-year insurance policy on January 1, 2020, for $3,840 cash that was recorded initially as prepaid insurance.
e. Depreciation on equipment is $4,800 for 2020.
Answer:
a.
Income Statement : Expenses - Interest Expense, will understated and Income overstated by $120
Balance Sheet : Liabilities - Interest Payable, will be understated by $120
b.
Income Statement : Income - Revenue Earned, will understated and Income understated by $400
Balance Sheet : Assets - Accounts Receivables, will be understated by $400
c.
Income Statement : Income - Revenue Earned , will be
understated and Income understated by $1,200
Balance Sheet : Liabilities - Deferred Service Revenue, will be overstated by $1,200
d.
Income Statement : Expenses - Insurance Expense, will be understated and Income overstated by $1,920
Balance Sheet : Assets - Prepaid, will be overstated by $1,920
e.
Income Statement : Expenses - Depreciation Expense, will be understated and Income overstated by $4,800
Balance Sheet : Assets - Equipment, will be understated by $4,800
Explanation:
So, the catch with this question is to make sure you understand what the adjusting entry should have been in the first place.
After that we then be able to tell the effect is that adjusting entry is not recorded.
Here are the adjusting entries should have been recorded :
a.
Debit : Interest Expense $120
Credit : Interest Payable $120
b.
Debit : Accounts Receivable $400
Credit : Revenue Earned $400
c.
Debit : Deferred Service Revenue $1,200
Credit : Revenue Earned $1,200
d.
Debit : Insurance Expense $1,920
Credit : Prepaid Insurance $1,920
e.
Debit : Depreciation Expense $4,800
Credit : Accumulated Depreciation $4,800
Then, see the effect discussed above.
One way to make ratio analysis more meaningful is to compare the ratios of one firm to those of other firms in the same industry. True Or False
Avery Corporation's target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from reinvested earnings is 11.25%, and the tax rate is 25%. The firm will not be issuing any new common stock. What is Avery's WACC
Answer:
8.15%
Explanation:
The computation of the weighted average cost of capital as follows;
= After Cost of debt × weightage of debt + cost of preferred stock × weight of preferred stock + cost of common equity × weight of equity
= 6.50% × (1 - 0.40) × 35 ÷ 100 + 6% × 10 ÷ 100 + 11.25% × 55 ÷ 100
= 1.37% + 0.60% + 6.19%
= 8.15%
Rosita purchased 300 shares of a stock for $37 a share. Today, the stock is selling for $41 a share. The initial margin requirement is 70 percent and the maintenance margin is 30 percent. Rosita had to pay _____ in cash to purchase the stock and must have at least _____ in equity today.
Answer: $7,770; $3,690
Explanation:
Rosita purchased 300 shares of a stock for $37 a share. Today, the stock is selling for $41 a share. The initial margin requirement is 70 percent and the maintenance margin is 30 percent. Rosita had to pay $7,770 in cash to purchase the stock and must have at least $3,690 in equity today.
Amount Rosie had to pay in cash:
= Number of shares * Value of shares * Initial margin requirement
= 300 * 37 * 70%
= $7,770
Least amount to have in equity:
= Number of shares * current value of shares * maintenance margin
= 300 * 41 * 30%
= $3,690