Answer:
a.) was right for me
Explanation:
The other major factor should affect the decision on the number of warehouses that Operating 50 or more warehouses will be expensive.
Option A is an appropriate response.
What is a warehouse?While a warehouse is technically any building that stores physical products for any reason, a distribution center is a type of warehouse that is specifically designed for fulfilling orders for the purpose of distribution to other businesses or consumers.
A warehouse is a structure used to store goods. Manufacturers, importers, exporters, wholesalers, transportation companies, customs, and others use warehouses. They are typically large plain buildings located on the outskirts of cities, towns, or villages.
Some of the Factors to considers on deciding the number of warehouses are-
Customer baseSupplier network Foreign Trade Zones (FTZs)Proximity to transportationBuilding Availability and ExpandabilityLease RatesHence, Option A is an appropriate response.
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Bill and Ted are deciding what musical instruments they want to learn to play for their band. They can pick between the guitar, keyboard, and the drums.They both want to have a good band, but also each has a preference over what toplay. Both like the drums over all else. However, Bill likes the keyboard more thanthe guitar and Ted likes the guitar more than the keyboard. What is crucial is that each chooses a different instrument, otherwise the band is pretty terrible. The actual combination does not affect the quality of the band. One night, Bill and Ted simultaneously reveal to each other what instrument they have bought decided to learn. Since they bought the instrument they are committedto learning it! Given the information above,
1. Does either Bill or Ted have a dominant/dominated strategy? Explain.
2. If Bill picks the keyboard, is it a best response for Ted to pick the drums? Explain.
3. If Ted picks the guitar, is it a best response for Bill to pick the keyboard? Explain.
4. Can there exista Nash equilibrium in which Bill picks the drums and Ted picks the keyboard? Explain.
5. Can there exist a Nash Equlibrium in which Bill picks the guitar and Ted picks the drums? Explain.
Answer:
1. Does either Bill or Ted have a dominant/dominated strategy? Explain.
No, since both like playing the drums. But if both choose the drums, then there is no band.
2. If Bill picks the keyboard, is it a best response for Ted to pick the drums? Explain.
yes, since Ted likes the drums more than the guitar.
3. If Ted picks the guitar, is it a best response for Bill to pick the keyboard? Explain.
No, Bill should pick the drums since he likes them more.
4. Can there exist a Nash equilibrium in which Bill picks the drums and Ted picks the keyboard? Explain.
No, because they both prefer the drums, but Ted doesn't like the keyboard.
5. Can there exist a Nash Equilibrium in which Bill picks the guitar and Ted picks the drums? Explain.
No, because they both prefer the drums, but Bill doesn't like the guitar.
A consumer purchases a lawn mower from a retail store. It contains a tag that says the purchaser should read the instruction book that is included. He reads the book, which contains a warning not to use the mower over gravel or stones or grassy areas mixed with rock or stone. The consumer remembers the warning but when he sees how smoothly the mower operates and how effortlessly it goes over a few small stones mixed in the grass, he decides to continue using the mower in areas filled with loose stones and rocks. One day a rock flies up and shatters the consumers face, causing him to lose an eye and suffer a broken nose and jawbone. He sues the manufacturer for putting out a defective product unreasonably dangerous to the consumer. What defense may give the manufacturer the best chance of having the case dis-missed?
A. Lack of privity.
B. Contributory negligence.
C. Assumption of the risk.
D. Waiver of warranty.
Answer:
B. Contributory negligence
Explanation:
Contributory negligence may be defined as a defense to the tort claim that is based on the negligence of the plaintiff in some law jurisdiction. And if contributory negligence is available defense completely bars the person who files the suit from any recovery if the plaintiff contributes to their own injury and harm from any negligence.
In the context, a person buys a lawn mover form a store. The lawn mover contains a instruction book where it was written that the lawn mover should not be moved over any stones or gravels or areas mixed with grass and stones.
The consumer though remembers the warning but he moves the lawn mover over land filled with loose stones and rocks. Unfortunately, a rock flies and hits him on his face resulting in serious damage of his face. And so the consumer sues the manufacturer for selling a defective lawn mover.
But the court will dis-miss the case as it was a case of contributory negligence of the consumer as the manufacturer warned the consumer with a written instruction not to use the product over areas covered with stones and rocks. Thus the defense that will give the manufacturer the best chance of having dismissing the case by the court is the Contributory negligence of the consumer.
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $165,591 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines:
Activity Cost Cost Driver Cost Assigned Quantity/ Quantity
Pools to Pool Amount /Amount
Consumed Consumed
by Basic by Luxury
Materials
handling Number of moves $3,666 18 moves 60 moves
Quality Number of
inspections $37,125 200 100
inspections inspections
Machine
maintenance Number of
machine hours $124,800 6,000 3,600
machine hours machine hours
Required:
1. Suppose Hazelnut used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.
2. Calculate the activity rates for each cost pool in Hazelnut’s ABC system.
3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system.
4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system.
Answer:
Hazelnut Corp.
1. The amount of overhead assigned to each product line:
Basic = $103,500 (6,000 * $17,25)
Luxury = $62,100 (3,600 * $17.25)
2. Activity Rate based on ABC System:
Overhead Rates :
Materials handling $3,666/78 moves = $47 per move
Quality $37,125/300 inspections = $123.75 per inspection
Machine maintenance $124,800/9,600 m.hours = $13 per machine hour
3. The amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system is:
= $103,596
4. The amount of overhead that Hazelnut will assign to the luxury line if it uses an ABC system is:
= $61,995
Explanation:
a) Data and Calculations:
Total overhead = $165,591
Activity Cost Cost Driver Cost Assigned Quantity/ Quantity
Pools to Pool Amount /Amount
Consumed Consumed
by Basic by Luxury
Materials
handling Number of moves $3,666 18 moves 60 moves
Quality Number of
inspections $37,125 200 100 inspections
Machine
maintenance No. of machine
hours $124,800 6,000 3,600 m.hours
Total overhead costs $165,591
Traditional costing system with machine hours as the cost driver:
Overhead assigned to each product line:
Basic Luxury Total
Machine hours 6,000 3,600 9,600
Overhead rate = $165,591/9,600 = $17.25
Overhead assigned $103,500 $62,100
Overate rate:
Materials handling $3,666 78 moves = $47 per move
Quality $37,125 300 inspections = $123.75 per inspection
Machine maintenance $124,800 9,600 m.hours = $13 per machine hour
Assignment of costs:
Basic Luxury
Materials handling $47 * 18 = $846 $47 * 60 = $2,820
Quality $123.75 * 200 = 24,750 $123.75 * 100 = 12,375
Machine maintenance $13 * 6,000 = 78,000 $13 * 3,600 = 46,800
Total overhead assigned $103,596 $61,995
[The following information applies to the questions displayed below.]
The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system.
April 30 May 31
Inventories Raw materials $ 43,000 $ 52,000
Work in process 10,200 21,300
Finished goods 63,000 35,600
Activities and information for May Raw materials purchases (paid with cash) 210,000
Factory payroll (paid with cash) 345,000
Factory overhead Indirect materials 15,000
Indirect labor 80,000
Other overhead costs 120,000
Sales (received in cash) 1,400,000
Predetermined overhead rate based on direct labor cost 70 %
1. Raw materials purchases for cash.
2. Direct materials usage.
3. Indirect materials usage.
Prepare journal entries for the above transactions for the month of May.
Answer:
A. Dr Raw meat Inventory 120,000
Cr Cash 120,000
B. Dr Indirect Materials $186,000
Cr Raw Materials $186,000
C. Dr Direct Materials $15,000
Cr Raw Materials $15,000
Explanation:
Preparation for the journal entries for the above transactions for the month of May.
Dr Raw meat Inventory 120,000
Cr Cash 120,000
(Being to record Raw materials purchases for cash)
B. Dr Indirect Materials $186,000
Cr Raw Materials $186,000
($201,000 - 15,000)
C. Dr Direct Materials $15,000
Cr Raw Materials $15,000
Lantz Company has provided the following information:
Cash sales totaled $280,000.
Credit sales totaled $488,000.
Cash collections from customers for services yet to be provided totaled $88,000.
A $24,000 loss from the sale of property and equipment occurred.
Interest income was $8,600.
Interest expense was $18,800.
Supplies expense was $350,000.
Rent expense for the store was $38,000.
Wages expense was $48,000.
Other operating expenses totaled $78,000.
Unearned revenue was $3,300.
Required:
How much was Lantz's income before income taxes?
Answer:
The answer is "$272,000"
Explanation:
[tex]\text{Operating revenues}[/tex] [tex]= \$ 280,000 + \$ 488,000 = \$ 786,000[/tex]
[tex]\text{Operating expenses}[/tex] [tex]= \$ 350,000 + \$ 38,000 + \$ 48,000 + \$ 78,000 = \$ 514,000[/tex]
[tex]\text{Operating income = Operating revenues- Operating expenses}[/tex]
[tex]= \$ 786,000 - \$ 514,000\\\\ = \$ 272,000[/tex]
Merv Grazinski, driving his Winnebago, put it on cruise control to go make coffee. The Winnebago went off the road, turned over several times, and left Grazinski paralyzed from the waist down. He brings a product liability lawsuit against Winnebago. Which of the following is the best possible defense for Winnebago to use at trial?
a. Res ipsa loquitur
b. Contributory negligence
c. Assumption of risk
d. Proximate cause
Answer:
B). Contributory negligence
Explanation:
From the question we are informed about Merv Grazinski, who is driving his Winnebago, put it on cruise control to go make coffee. The Winnebago went off the road, turned over several times, and left Grazinski paralyzed from the waist down. He brings a product liability lawsuit against Winnebago. In this case, the best possible defense for Winnebago to use at trial Contributory negligence. Contributory negligence can be regarded as failure of plaintiff to have a tangible care for their own safety. Plantiff compensation could be reduced by Contributory negligence if confirmed that the occurrence of incident is likely as a result of their actions
Selected balance sheet and income statement information from Abbott Laboratories for 2018 follows ($ millions).
Net income $2,368
Net income attributable to Company shareholders 2,368
Net operating profit after tax (NOPAT) 2,940
Net nonoperating expense (NNE) 572
Average net operating assets (NOA) 48,222
Average net nonoperating obligations (NNO) 17,312
Average total equity 30,910
Average equity attributable to Company shareholders 30,711
Compute the following measures a through h.
a. Return on equity = (Net income attributable to Company shareholders/Average equity attributable to Company shareholders)
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer
%
b. RNOA = NOPAT/Average NOA
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
c. Nonoperating return = ROE − RNOA
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
d. NNEP = NNE/Average NNO
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
e. Spread = RNOA − NNEP
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
f. FLEV = Average NNO/Average total equity
Note: Round amount to two decimal places (for example, enter 6.78 for 6.77555).
Answer
g. NCI ratio = (Net income attributable to Company shareholders/Net income)/(Average equity attributable to Company shareholders/Average total equity)
Note: Round amount to two decimal places (for example, enter 6.78 for 6.77555).
Answer
h. ROE = (RNOA + (Spread × FLEV)) × NCI ratio
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
Answer:
a. Return on equity = 7.7%
b. RNOA = 6.1%
c. Nonoperating return = 1.6%
d. NNEP = 3.3%
e. Spread = 2.8%
f. FLEV = 56.01%
g. NCI ratio = 1.01
h. ROE = 7.7%
Explanation:
a. Return on equity = (Net income attributable to Company shareholders/Average equity attributable to Company shareholders)
Return on equity = $2,368 / $30,711 = 0.0771059229592003
To convert to percentage, we multiply by 100 as follows:
Return on equity = 0.0771059229592003 * 100 = 7.71059229592003%
Rounding percentage to one decimal place, we have:
Return on equity = 7.7%
b. RNOA = NOPAT/Average NOA
RNOA = Return on net operating assets = $2,940 / $48,222 = 0.0609680228941147
To convert to percentage, we multiply by 100 as follows:
RNOA = 0.0609680228941147 * 100 = 6.09680228941147%
Rounding percentage to one decimal place, we have:
RNOA = 6.1%
c. Nonoperating return = ROE − RNOA
Nonoperating return = Return on equity (ROE) - RNOA = 7.7% - 6.1% = 1.6%
d. NNEP = NNE/Average NNO
NNEP = Net non-operating expense percent = $572 / $17,312 = 0.0330406654343808
To convert to percentage, we multiply by 100 as follows:
NNEP = 0.0330406654343808 * 100 = 3.30406654343808%
Rounding percentage to one decimal place, we have:
NNEP = 3.3%
e. Spread = RNOA − NNEP
Spread = 6.1% - 3.3% = 2.8%
f. FLEV = Average NNO/Average total equity
FLEV = Financial leverage = $17,312 / $30,910 = 0.560077644775154
To convert to percentage, we multiply by 100 as follows:
FLEV = 0.560077644775154 * 100 = 56.0077644775154%
Rounding percentage to two decimal place, we have:
FLEV = 56.01%
g. NCI ratio = (Net income attributable to Company shareholders/Net income)/(Average equity attributable to Company shareholders/Average total equity)
NCI ratio = ($2,368 / $2,368) / ($30,711 / $30,910) = 1 / 0.993561954060175 = 1.00647976295139
Rounding the amount to two decimal places, we have:
NCI ratio = 1.01
h. ROE = (RNOA + (Spread × FLEV)) × NCI ratio
ROE = (6.1% + (2.8% * 56.01%)) * 1.01 = 0.077449628
To convert to percentage, we multiply by 100 as follows:
ROE = 0.077449628 * 100 = 7.7449628%
Rounding percentage to one decimal place, we have:
ROE = 7.7%
Delicious Catering completed the following selected transactions during May 2016: May 1: Prepaid rent for three months, $1,500 May 5: Received and paid electricity bill, $190 May 9: Received cash for meals served to customers, $2,400 May 14: Paid cash for kitchen equipment, $2,500 May 23: Served a banquet on account, $2,000 May 31: Made the adjusting entry for rent (from May 1). May 31: Accrued salary expense, $1,700 May 31: Recorded depreciation for May on kitchen equipment, $340
Question Completion:
If Delicious Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign.
Answer:
Delicious Catering
Using the Accrual method, Delicious Catering would have recorded for the month a net income of $1,670.
Explanation:
Data and Calculations:
Prepaid Rent for 3 months = $1,500
Rent expense for the month = $500 ($1,500/3)
Utilities expense = $190
Service Revenue:
Cash for meals = $2,400
Credit 2,000
Total $4,400
Salary Expense = !,700
Depreciation expense = $340
Kitchen Equipment = $2,500
Income Statement for the month of May:
Service Revenue $4,400
Expenses:
Rent $500
Utilities expense 190
Salary expense 1,700
Depreciation expense 340
Total expenses $2,730
Net Income $1,670
Mumford Corporation invested $30,000 in marketable securities on December 4. On December 9, it sold some of these investments for $10,000, and on December 18, it sold more of these investments for $5,000. The securities sold on December 9 had cost the company $7,000, whereas the securities sold on December 18 had cost the company $6,000.
a) Record the purchase of marketable securities on December 4.
b) Record the sale of marketable securities on December 9.
c) Record the sale of marketable securities on December 18.
d) Record the necessary fair value adjustment on December 31, assuming that the market value of the company's remaining unsold securities was $20,000.
Answer:
Mumford Corporation
Journal Entries:
a) December 4:
Debit Investment in Marketable Securities $30,000
Credit Cash $30,000
To record the purchase of marketable securities.
b) December 9:
Debit Cash $10,000
Credit Investment in Marketable Securities $7,000
Credit Gain from sale of marketable securities $3,000
To record the sale of investment and the gain arising from the sale.
c) December 18:
Debit Cash $5,000
Debit Loss from sale of securities $1,000
Credit Investment in marketable securities $6,000
To record the sale of marketable securities and the arising loss.
d) December 31:
Debit Investment in Marketable Securities $3,000
Credit Unrealized Gain $3,000
To record the unrealized gain on marketable securities.
Explanation:
a) Investment in marketable securities = $30,000 on December 4
Cost of units sold on December 9 = $7,000; selling price =$10,000
Cost of units sold on December 18 = $6,000; selling price = $5,000
b) Mumford will record an unrealized gain to the value of $3,000 because the value of the marketable securities has increased but the asset is yet to be sold for cash. When the asset is eventually sold, it becomes a realized gain.
By debiting the trade receivables account and crediting the sales account, the journal entry to document such credit value of products and services is passed.
Journal entry based problem:S.no Particular Debit Credit
A. Marketable securities DR 30,000
Cash CR 30,000
B. Cash DR 10,000
Marketable securities CR 7,000
Gain on sale CR 3,000
C. Cash DR 5,000
Loss on sale of Investments DR 1,000
Marketable Securities CR 6,000
D. Marketable Securities DR 3,000
Unrealized holding gain CR 3,000
($30,000 − $7,000 − $6,000 - 20,000)
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a. Performed $29,400 of services on account.
b. Collected $17,500 cash on accounts receivable.
c. Paid $4,400 cash in advance for an insurance policy.
d. Paid $570 on accounts payable.
e. Recorded the adjusting entry to recognize $3,700 of insurance expense.
f. Recorded the adjusting entry to recognize $300 accrued interest revenue.
g. Received $9,500 cash for services to be performed at a later date.
h. Purchased land for $1,560 cash.
i. Purchased supplies for $1,800 cash.
Required:
Record each of the above transactions in general journal form and then show the effect of the transaction in a horizontal statements model. The first transaction is shown as an example. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Transaction Account Titles Debit Credit
a Accounts receivable 29,400
Service revenue 29,400
Show the effect of the transaction in a horizontal statements model. The first transaction is shown as an example. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign.)
Answer:
S/n Account Titles Debit$ Credit$
a. Accounts receivable 29400
Service revenue 29400
b. Cash 17500
Accounts receivable 17500
c. Prepaid insurance 4400
Cash 4400
d. Accounts payable 570
Cash 570
e. Insurance expense 3700
Prepaid insurance 3700
f. Interest receivable 300
Interest revenue 300
g. Cash 9500
Unearned service revenue 9500
h. Land 1560
Cash 1560
i. Supplies 1800
Cash 1800
Asset Liabilities Equity Revenue Expense Net income S.Cash Flow
a. 29400 29400 29400 29400 NA
b. 17500 OA
-17500
c. 4400 OA
-4400
d. -570 -570 OA
e. -3700 -3700 3700 -3700 NA
f. 300 300 300 300 NA
g. 9500 9500 OA
h. 1560 IA
-1560
i. 1800 OA
-1800
Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million. This noncancelable lease had the following terms: Lease payments: $2,466,754 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. Lease term: five years (10 semiannual payments). No residual value; no purchase option. Economic life of equipment: five years. Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually. Fair value of the computers at January 1, 2021: $20 million. Technoid would account for this as:
Answer:
A sales type lease with selling profit.
Explanation:
Technoid Inc. would account for this as a sales type lease with selling profit. In a sales type lease, the fair value of the leased asset at the start of a lease varies from its carrying amount and there is a transfer of ownership by law to the lessee at the end of the lease period. Cost is $12 million and Fair value is $20 million and Present value of minimum lease payment is also $20 million.
For Lone Star Company, it would account for this as a finance lease.
Rugen Inc., a hospitality chain, hired a large number of military veterans in the hope that it would help put the business in a different league altogether compared to its competitors. However, the company soon experienced a backlash and drew flak in the hospitality industry, as it could not efficiently manage and retain these employees. Most of the veterans who joined the organization complained that management did not treat them the way they had expected to be treated. Which of the following things could Rugen Inc. have done differently to avoid these repercussions?
a. It should have followed the standard recruiting procedures to hire these employees to avoid bias.
b. It should have tried to mimic reward and recognition programs that are conducted in the military to acknowledge the employees' contributions.
c. It should have let these members take control over most of its departments, especially security.
d. It should not have mixed these employees with regular employees, as veterans come from a completely different background.
Answer:
b. It should have tried to mimic reward and recognition programs that are conducted in the military to acknowledge the employees' contributions.
Explanation:
In the case described above, Rugen Inc. could have tried to mimic reward and recognition programs that are conducted in the military to acknowledge the employees' contributions.
Brothers Mike and Tim Hargen began operations of their tool and die shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2017, follows:
Account Titles Debit Credit
Cash 10,000
Accounts receivable 9,000
Supplies 18,000
Land
Equipment 85,000
Accumulated depreciation (on equipment) 15,000
Other assets (not detailed to simplify)7,000
Accounts payable
Wages payable
Interest payable
Income taxes payable
Long-term notes payable
Common stock (8,000 shares, $.50 par value) 4,000
Additional paid-in capital 87,000
Retained earnings 23,000
Service revenue
Depreciation expense
Supplies expense
Wages expense
Interest expense
Income tax expense
Remaining expenses (not detailed to simplify)
Totals 129,000 129,000
Transactions during 2017 follow:
a. Borrowed $15,000 cash on a 5-year, 8 percent note payable, dated March 1, 2017.
b. Purchased land for a future building site on March 15, 2017; paid cash, $18,000.
c. Earned $271,000 in revenue. Transactions dated August 30, 2017 , including $56,000 on credit and the rest in cash.
d. Sold 4,000 additional shares of capital stock for cash at $1 market value per share on January 1, 2017.
e. Incurred $128,000 in remaining expenses for 2017, invoices dated October 15, 2017, including $27,000 on credit and the rest paid in cash.
f. Collected accounts receivables on November 10, 2017, $41,000.
g. Purchased other assets on November 15, 2017, $18,000 cash.
h. Purchased supplies on account for future use on December 1, 2017, $30,000.
i. Paid accounts payable on December 15, 2017, $28,000.
j. Signed a three-year $36,000 service contract on December 17, 2017 to start February 1, 2018.
k. Declared and paid cash dividends on December 20, 2017, $28,000.
l. Data for adjusting entries:
m. Supplies counted on December 31, 2017, $21,000.
n. Depreciation for the year on the equipment, $17,000.
o. Interest accrued on notes payable (to be computed).
p. Wages earned by employees since the December 24 payroll but not yet paid, $20,000.
q. Income tax expense, $16,000, payable in 2018.
Required:
1. Prepare journal entries for the transactions.
2. Prepare an income statement.
3. Compute the following ratios:
Current ratio
Total asset turnover
Net profit margin
Answer:
H & H Tool, Inc.
1. Journal Entries:
a. Debit Cash $15,000
Credit Note Payable $15,000
To record the receipt of a 5-year, 8% note payable.
b. Debit Land $18,000
Credit Cash $18,000
To record the purchase of land.
c. Debit Cash $215,000
Debit Accounts Receivable $56,000
Credit Service Revenue $271,000
To record services revenue earned.
d. Debit Cash $4,000
Credit Common Stock $2,000
Credit Additional Capital $2,000
To record the issue of additional shares at $1 each.
e. Debit Remaining expenses $128,000
Credit Cash $101,000
Credit Accounts Payable $27,000
To record the expenses incurred.
f. Debit Cash $41,000
Credit Accounts Receivable $41,000
To record cash collection from customers.
g. Debit Other Assets $18,000
Credit Cash $18,000
To record the purchase of other assets.
h. Debit Supplies $30,000
Credit Accounts Payable $30,000
To record the purchase of supplies on account.
i. Debit Accounts Payable $28,000
Credit Cash $28,000
To record the payment on account.
j. No Journal Required
k. Debit Dividends $28,000
Credit Cash $28,000
To record the payment of dividends.
Adjusting entries:
m. Debit Supplies Expense $27,000
Credit Supplies $27,000
To record supplies used.
n. Debit Depreciation Expense - Equipment $17,000
Credit Accumulated Depreciation - Equipment $17,000
To record depreciation expense.
o. Debit Interest Expense $1,000
Credit Interest Payable $1,000
To record the accrued interest expense for the year.
p. Debit Wages Expense $20,000
Credit Wages Payable $20,000
To record accrued wages.
q. Debit Income Tax Expense $16,000
Credit Income Tax Payable $16,000
To record accrued income tax expense.
2. Income Statement as of December 31, 2017
Service revenue $271,000
Depreciation expense 17,000
Supplies expense 27,000
Wages expense 20,000
Interest expense 1,000
Income tax expense 16,000
Remaining expenses
(not detailed to simplify) 128,000
Total expenses $237,000
Net income $34,000
Retained earnings, January 1, 2017 $23,000
Net income 34,000
Dividends 28,000
Retained earnings, December 31, 2017 $29,000
3. Current Ratio = Current Assets/Current Liabilities
= $137,000/$66,000
= 2.08
Total asset turnover = Total Revenue/Total Assets
= $271,000/$208,000
= 1.3
Net Profit Margin = $34,000/$271,000 * 100
= 12.5%
Explanation:
a) Data and Calculations:
Trial balance on January 1, 2017, follows:
Account Titles Debit Credit
Cash $10,000
Accounts receivable 9,000
Supplies 18,000
Land
Equipment 85,000
Accumulated depreciation (on equipment) $15,000
Other assets (not detailed to simplify)7,000
Accounts payable
Wages payable
Interest payable
Income taxes payable
Long-term notes payable
Common stock (8,000 shares, $.50 par value) 4,000
Additional paid-in capital 87,000
Retained earnings 23,000
Service revenue
Depreciation expense
Supplies expense
Wages expense
Interest expense
Income tax expense
Remaining expenses (not detailed to simplify)
Totals 129,000 129,000
December 31:
Cash balance = $92,000 ($10,000+15,000-18,000+215,000+4,000-101,000+41,000-18,000 -28,000-28,000)
Accounts Receivable = $24,000 (9,000+56,000 -41,000)
Supplies = $21,000 ($18,000 + 30,000 - 27,000)
Land = $18,000
Accumulated Depreciation = $32,000 ($17,000 + 15,000)
Other assets = $25,000 (7,000 +18,000)
Accounts Payable = $29,000 ($27,000 + 30,000 - 28,000)
Wages Payable = $20,000
Interest Payable = $1,000
Income Tax Payable $16,000
Long-term Notes Payable = $15,000
Common stock = $6,000 ($4,000 + 2,000)
Additional capital = $89,000 ($87,000 + 2,000)
Service Revenue = $271,000
Depreciation expense = $17,000
Supplies expense = $27,000
Wages expense= $20,000
Interest expense = $1,000
Income tax expense $16,000
Remaining expenses $128,000
Dividends = $28,000
Adjusted Trial balance on December 31, 2017, follows:
Account Titles Debit Credit
Cash $92,000
Accounts receivable 24,000
Supplies 21,000
Land 18,000
Equipment 85,000
Accumulated depreciation (on equipment) $32,000
Other assets (not detailed to simplify)25,000
Accounts payable 29,000
Wages payable 20,000
Interest payable 1,000
Income taxes payable 16,000
Long-term notes payable 15,000
Common stock (8,000 shares, $.50 par value) 6,000
Additional paid-in capital 89,000
Retained earnings 23,000
Service revenue 271,000
Depreciation expense 17,000
Supplies expense 27,000
Wages expense 20,000
Interest expense 1,000
Income tax expense 16,000
Remaining expenses
(not detailed to simplify) 128,000
Dividends 28,000
Totals 502,000 502,000
Current Assets:
Cash $92,000
Accounts receivable 24,000
Supplies 21,000
Total Current Assets $137,000
Land 18,000
Equipment 85,000
Accumulated Depr. (32,000)
Total long-term assets = $71,000
Total assets = $208,000
Current Liabilities:
Accounts payable $29,000
Wages payable 20,000
Interest payable 1,000
Income taxes payable 16,000
Total current liabilities $66,000
A $200,000 loan amortized over 13 years at an interest rate of 10% per year requires payments of $21,215.85 to completely remove the loan when interest is charged on the unrecovered balance of the principal. If interest is charged on the original principal instead of the unrecovered balance, what is the loan balance after 13 years provided the same $21,215.85 payments are made each year
Answer:
Loan amount = $184,193.95
Explanation:
Interest will remain same each year. Interest per year = 200,000*10% = $20,000
Installment $21,215.85
Less: Interest $20,000
Payment to Principal $1,215.85
Total principal repaid in 13 years = $1,215.85 * 13 years = $15,806.05
So, the principal left = $200,000 - $15,806.05 = $184,193.95
You have researched your dream around-the-world vacation and determined that the total cost of the vacation will be $33,000. You feel you can earn an APR of 10.8 percent compounded monthly and plan to save $395 per month until you reach your goal. How many years will it be until you reach your goal and enjoy your well-deserved vacation
Answer:
Explanation:
What 22
Fairhaven Composite Poles manufactures fishing poles that have a price of $125.00. It has costs of $90. A competitor is introducing a new fishing pole that will sell for $115.00. Management believes it must lower the price to $115.00 to compete in the highly cost-conscious fishing pole market. Marketing department believes that the new price will allow Fairhaven to maintain the current sales level of 200,000 poles per year.
Required:
A. What is the target cost for the new price if target operating income is 25% of sales?
B. What is the change in operating income for the year if only the selling price is changed and costs remain the same?
C. What is the target cost per unit if the selling price is reduced to $110.00 and the company wants to maintain its same income level?
Solution :
a). Statements showing computations
Particulars Amount
Target selling price 115
Target operating income at rate 25% 28.75
Target cost = 115 - 28.75 86.25
b). Statement showing computations
Particulars Existing Proposed Difference
Sales at rate 125 and 115 25000000 22000000 3000000
Cost at 90 18000000 18000000
Target operating income 7000000 4000000 3000000
c).
The current income level 7000000
No. of units 2000000
Income per unit 35
Cost per unit (115-35) 80
Below are Company Y's financial statements:
Income Statement
Balance Sheet
Sales $7,900
Current assets $3,900
Current liabilities $2,100
Costs 5,500
Fixed assets 8,600
Long-term debt 3,700
Taxable income $2,400
Equity 6,700
Taxes (25%) 600
Total $12,500
Total $12,500
Net income $1,800
We assume that Company Y's current liabilities, assets, and costs are proportional to its sales. However, long-term debt and equity are not proportional to sales. We assume that the company's dividend payout ratio is 40 percentage and remains constant. The company's sales are projected to increase by exactly 15% in the next year. What is the external financing needed?
Answer:
Company Y
The external financial needed is:
= $1,290.
Explanation:
a) Data and Calculations:
Company Y's financial statements:
Income Statement
Sales $7,900
Costs 5,500
Taxable income $2,400
Taxes (25%) 600
Net income $1,800
Balance Sheet
Current assets $3,900
Fixed assets 8,600
Total assets $12,500
Current liabilities $2,100
Long-term debt 3,700
Equity 6,700
Total liab. & equity $12,500
Projected Income Statement:
Sales $9,085 ($7,900 * 1.15)
Costs 6,325 ($5,500 * 1.15)
Taxable income $2,760
Taxes (25%) 690
Net income $2,070
Dividends = 40% $828
Retained earnings $1,242
Projected Balance Sheet
Current assets $4,485 ($3,900 * 1.15)
Fixed assets 9,890 ($8,600 * 1.15)
Total assets $14,375
Current liabilities $2,415 ($2,100 * 1.15)
Long-term debt 4,018 ($14,375 - 2,415 - 7,942)
Equity 7,942 ($6,700 + $1,242)
Total liab. & equity $14,375
Working capital = $2,070 ($4,485 - $2,415)
Capital expenditure = $1,290 ($9,890 - 8,600)
External financing needed = Net income minus (working capital plus capital expenditure)
= $2,070 - ($2,070 + 1,290)
= $1,290
Mustang Corporation had 100,000 shares of $2 par value common stock outstanding. On December 31, 2018, the company's board of directors declares a 20 percent stock dividend. This stock dividend will be distributed on January 20, 2019 to the stockholders of record on January 15, 2019. The market price of the company's stock is $10 per share on December 31, 2018.
Required:
Write down the necessary journal entry to record the declaration of the stock dividend.
Answer:
December 31, 2018
Debit : Dividend $40,000
Credit : Shareholders for dividends $40,000
Explanation:
When dividends are declared, we Debit an Equity Element - Dividend and Credit the Liability - Shareholders for dividends.
Calculation of this dividend is made on the stockholders in existence at the on a stated date (January 15 in this case) and at par value ($2) as follows :
Dividend = 100,000 x $2.00 x $0.20 = $40,000
Earnings per share: Group of answer choices will increase if net income increases and the number of shares outstanding decreases. will increase if net income decreases and the number of shares outstanding increases. is defined as the addition to retained earnings divided by the number of shares outstanding. is the total amount of dividends paid per year on a per share basis. must increase at the same rate as the net income.
Answer:
will increase if net income increases and the number of shares outstanding decreases
Explanation:
Earning per share is the part of the profit of an organization that would be distributed for every share of the common stock
It would be increase when the net income would rise and the number of outstanding shares would reduced
Therefore the first option is correct
Beyond-the-Sea Corporation and Homeport Company make a deal for Homeport's products, via e-records. Under the UETA, an e-record is considered sent when it:a.is signed and encrypted, and will be sent without changes.b.is stored in the sender's back-up system.c.is composed on the sender's computer.d.leaves the sender's control.
Answer: d. leaves the sender's control.
Explanation:
Under the Uniform Electronic Transaction Act(UETA), there are three conditions that must be met for an e-record to be considered sent and the relevant one here is that the e-record leaves the control of the sender.
It does this by entering into an information processing system that the sender does not control of.
The other requirements demand that the e-record be properly addressed to a system specified by the recipient and this system must be able to process said e-record.
Worthy Ships initially issued 320,000 shares of $1 par stock for $1,600,000 in 2021. In 2023, the company repurchased 32,000 shares for $320,000. In 2024, 16,000 of the repurchased shares were resold for $256,000. In its balance sheet dated December 31, 2024, C. Worthy's treasury stock account shows a balance of: Multiple Choice $0 $320,000 $64,000 $160,000
Answer:
$160,000
Explanation:
The calculation of the treasury stock is seen below
Treasury stock account balance on December 31, 2024 balance sheet
= Number of shares in treasury stock × Cost per share
= (32,000 - 16,000) × ($320,000 ÷ 32,000)
= 16,000 × $10
= $160,000
Therefore, for computing the treasury account stock balance, we simply make use of the above.
Jaworskiâs Ski Store is completing the accounting process for its first year ended December 31, 2018. The transactions during 2018 have been journalized and posted. The following data are available to determine adjusting journal entries:
a. The unadjusted balance in Supplies was $840 at December 31, 2018. The unadjusted balance in Supplies Expense was $0 at December 31, 2018. A year-end count showed $110 of supplies on hand.
b. Wages earned by employees during December 2010, unpaid and unrecorded at December 31, 2010, amounted to $3,700. The last paychecks were issued December 28; the next payments will be made on January 6, 2011. The unadjusted balance in Wages Expense was $40,000 at December 31, 2010.
c. A portion of the store's basement is now being rented for $1100 per month to K. Frey. On November 1, 2010, the store collected six months' rent in advance from Frey in the amount of $6,600. It was credited in full to Unearned Rent Revenue
when collected. The unadjusted balance in Rent Revenue was $0 at December 31, 2010.
d. The store purchased delivery equipment at the beginning of the year. The estimated depreciation for 2010 is $3,000, although none has been recorded yet.
e. On December 31, 2010, the unadjusted balance in Prepaid Insurance was $4,800. This was the amount paid in the middle of the year for a two-year insurance policy with coverage beginning on July 1, 2010. The unadjusted balance in Insurance Expense was S800, which was the cost of insurance from January 1 to June 30, 2010.
f. Jaworski's store did some ski repair work for Frey. At the end of December 31, 2010, Frey had not paid for work completed amounting to S750. This amount has not yet been recorded as Repair Shop Revenue. Collection is expected
during January 2011.
Required:
Earlier in 2010, Jaworski's store had already provided, recorded, and collected cash for $5,000 of repair services for other customers.
a. For each of the items listed above, indicate the account names and adjusted balances that should be reported on
b. For each situation, prepare the adjusting journal entry that should be recorded for Jaworski's at December 31, 2010.
Answer:
Jaworski's Ski Store
1. Indication of the account names and the adjusted balances that should be reported on:
a. Supplies Expense $730 and Supplies $110
b. Wages Expenses $43,700 and Wages Payable $3,700
c. Unearned Rent Revenue $4,400 and Rent Revenue $2,200
d. Depreciation expense $3,000 and Accumulated Depreciation - Equipment $3,000
e. Prepaid Insurance $3,600 and Insurance Expense $2,000
f. Accounts Receivable $750 and Repair Shop Revenue $5, 750
2. Adjusting Journal Entries at December 31, 2010:
a. Debit Supplies Expense $730
Credit Supplies $730
To record supplies expense for the year.
b. Debit Wages Expenses $3,700
Credit Wages Payable $3,700
To record accrued wages expense.
c. Debit Unearned Rent Revenue $2,200
Credit Rent Revenue $2,200
To record rent revenue earned.
d. Debit Depreciation expense $3,000
Credit Accumulated Depreciation - Equipment $3,000
To record depreciation expense for the year.
e. Debit Insurance Expense $1,200
Credit Prepaid Insurance $1,200
To record insurance expense from July 1 to December 31, 2010.
f. Debit Accounts Receivable $750
Credit Repair Shop Revenue $750
To record shope repairs on account.
Explanation:
Journal entries are also used to adjust accounts to reflect the accrual concept and matching principle of accounting. They ensure that transactions are recorded in the period in which they occur instead of when cash is exchanged. Transactions recorded with adjusting journal entries include prepaid expenses, accrued expenses, unearned revenue, accrued revenue, and adjustments for depreciation expenses.
On June 1, 2019, Splish Company sold $3,720,000 in long-term bonds for $3,262,800. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method.
Required:
Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31.
Answer:
For second period
Cash interest = $3,720,000 * 8% = $297,600
Interest expenses = 3,262,800 * 10% = $326,280
Discount = $326,280 - $297,600 = $28,680
For third period
Cash interest = $3,720,000 * 8% = $297,600
Interest expenses = $3,291,480 * 10% = $329,148
Discount = $329,148 - $297,600 = $31,548
Effective interest amortization table
Annual period Cash int. Interest exp Discount Carrying amount
6/1/19 $3,262,800
5/31/20 $297,600 $326,280 $28,680 $3,291,480
5/31/21 $297,600 $329,148 $31,548 $3,323,028
5/31/22 $297,600 $332,303 $34,703 $3,357,731
5/31/23 $297,600 $335,773 $38,173 $3,395,904
Oriole Company purchases Pharoah Company for $4350000 cash on January 1, 2021. The book value of Pharoah Company's net assets reported on its December 31, 2020 financial statement was $3750000. An analysis indicated that the fair value of Pharoah's tangible assets exceeded the book value by $630000, and the fair value of identifiable intangible assets exceeded book value by $335000. What amount of gain or goodwill is recognized by Oriole
Answer:
32,000
Explanation:
on paper and on edge 2021
Mallory Industries has the following cost information for the year just ended:
Direct materials $6.00 per unit
Direct labor $2.00 per unit
Variable manufacturing overhead $1.50 per unit
Fixed manufacturing overhead $40,000
Variable selling and administrative cost $3.00 per unit
Fixed selling and administrative cost $50,000
During the year, Mallory produced 10,000 units, out of which 9,100 were sold for $50 each. What is net income under absorption costing?
Answer:
Results are below.
Explanation:
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
First, we need to calculate the unitary cost value:
Unitary cost= (6 + 2 + 1.5) + 40,000/10,000
Unitary cost= $13.5
Now, the income statement:
Sales= 9,100*50= 455,000
COGS= (13.5*9,100)= (122,850)
Gross profit= 332,150
Total administrative costs= (3*9,100) + 50,000= (77,300)
Net operating income= 254,850
The distance between defects in an automated weaving process at Craft Mills, Inc. is exponentially distributed. On average there are 0.025 defects per foot. Use the random number 0.749 to simulate the distance between two defects. Give your answer to 3 decimal places. (Note: For this problem, the average (represented by tau) would be the average distance (in feet) between defects.)
Answer:
55.292 feets
Explanation:
Given that :
Average defect per foot, λ = 0.025
Random number generated = 0.791
Distance between two defects :
b(x) = 1 - e^-λx = random number
1 - e^-λx = 0.749
e^-λx = 0.749 - 1
λ = 0.025
e^-0.025x = - 0.251
Take the In of both sides ;
-0.025x = - ln(0.251)
0.025x = In(0.251)
x = In(0.251) / 0.025
x = 1.382302 / 0.025
x = 55.29209
x = 55.292 feets
Hence, distance between two defects is 55.292 feets
Select the correct answer.
Prontas Inc. has bought back 2,000 of its stock from its shareholders at par value of $5. How will this transaction be recorded in the journal of Prontas Inc.?
A.
Treasury Stock Account (Debit) $10,000 Common Stock Account (Credit) $10,000
B.
Cash Account (Debit) $10,000 Common Stock Account (Credit) $10,000
C.
Cash Account (Debit) $10,000 Treasury Stock Account (Credit) $10,000
D.
Treasury Stock Account (Debit) $10,000 Cash Account (Credit) $10,000
If Prontas Inc. has bought back 2,000 of its stock from its shareholders at par value of $5. This transaction will be recorded in the journal of Prontas Inc. as: D. Treasury Stock Account (Debit) $10,000 Cash Account (Credit) $10,000.
What is journal entry?Journal entry is used by companies to post their business transaction. The appropriate journal entry to record this transaction is Treasury Stock Account (Debit) $10,000 Cash Account (Credit) $10,000 which is calculated as :
Prontas Inc. entry
Debit: Treasury Stock $10,000
(2,000 x $5)
Credit: Cash $10,000
(2,000 x $5)
Therefore the correct option is D.
Learn more about journal entry here:https://brainly.com/question/28390337
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) It can be supposed that an increase in the importance of fitness and wellness in people's lives prompted Apple to include features like the built-in compass and always-on workout apps. That increased importance in fitness is part of the __________________ societal force. a not selected option a economic b not selected option b natural c selected option c cultural d not selected option d demographic e not selected option e political
Answer:
C. Cultural.
Explanation:
Culture can be defined as the general way of life of a group of people living together in a particular location or society.
Basically, culture comprises of beliefs, values, behaviors, language, dressing, cuisine, music, symbols, arts, social habits, knowledge, customs, laws pertaining to a particular group of people living together in a society.
This ultimately implies that, culture are acquired and passed from one generation to another.
A cultural trait can be defined as the smallest characteristics of human activity (actions) that is mainly acquired socially and transmitted from one generation to another through various modes of communication. Thus, these unique behavioral informations or characteristics and beliefs acquired by people socially are transmitted from one individual or group of people to another.
Basically, cultural traits play a significant role in the way of life of a group of people in that it is a unique collection of various cultural elements that are closely related such as behaviors and beliefs.
Hence, it can be supposed that an increase in the importance of fitness and wellness in people's lives prompted Apple to include features like the built-in compass and always-on workout apps. Thus, that increased importance in fitness is part of the cultural societal force because it is a unique assortment of behaviors that distinguish the people.
School Days Centers specialize in helping students with difficulties. With locations around the country, each center consists of a manager and several tutors and counselors. The counselors and tutors have a great deal of flexibility to design programs specifically for individual students. In fact, these first-line employees are considered to be the key people in the organization, and the manager's main function is to assist these employees in matters such as scheduling and securing necessary materials. This type of arrangement suggests that School Days is an inverted organization.
a. True
b. False
Answer:
This type of arrangement suggests that School Days is an inverted organization.
a. True
Explanation:
An inverted organization gives the customer-facing employees more flexibility and power to lead the organization, with the center line managers playing a supporting role. This type of organization inverts or reverses the traditional and classical pyramid of hierarchical organizations where leadership is from the top. This implies that the counselors and tutors play more leadership roles, especially in designing suitable programs for their students instead of the organization handling the design of programs and making the front-line employees to comply.
Waupaca Company establishes a $350 petty cash fund on September 9. On September 30, the fund shows $144 in cash along with receipts for the following expenditures: transportation costs of merchandise purchased, $42; postage expenses, $50; and miscellaneous expenses, $102. The petty cashier could not account for a $12 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory. Prepare:
a. the September 9 entry to establish the fund.
b. the September 30 entry to reimburse the fund
c. An October 1 entry to increase the fund to $395.
Solution :
Date Account Debit Credit
Sept 9 Petty cash $ 350
Cash $ 350
Sept 30 merchandise purchased $ 42
postage expenses $ 50
miscellaneous expenses $ 102
Cash shortage $ 12
Cash (350-42-50-102)=156-144=12 $ 206
Oct 1 Petty cash 45
Cash (395-350) $ 45