Answer: See explanation
Explanation:
1. Dr Deferred revenue 2,000
Cr. Rent revenue 2,000
2 Dr. Insurance expense 6,600
Cr. Prepaid insurance 6,600
3 Dr Salaries expense 3,000
Cr Salaries payable 3,000
4 Dr Interest expense 250
Cr Interest payable 250
5 Dr Supplies expense 3,900
Cr Supplies. 3900
N. B:
Rent revenue for December was calculated as:
= $4,000 x 1/2
= $2,000
Insurance expense for the current year was calculated as:
= $13,200 x 6/12
= $6,600
Interest expense:
= $15,000 x 10% x 2/12
= $15000 × 0.1 × 2/12
= $250
Supplies expense:
= $1,000 + $3,400 - $500
= $3,900
Dixon Shuttleworth has been offered the choice of three retirement-planning investments. The first investment offers a 5 percent return for the first 5 years, a 10 percent return for the next 5 years, and a 20 percent return thereafter. The second investment offers 10 percent for the first 10 years and 15 percent thereafter. The third investment offers a constant 12 percent rate of return. Determine, for each of the given number of years, which of these investments is the best for Dixon if he plans to make one payment today into one of these funds and plans to retire in the following number of years.
a. 15 years
b. 20 years
c. 30 years
Answer:
a. If you plan to retire in 15 years, you should accept the third investment plan.
b. If you plan to retire in 20 years, you should accept the first investment plan.
c. If you plan to retire in 30 years, you should accept the first investment plan.
Explanation:
Assuming that Dixon invests $100 today:
1) value of first investment offer:
15 years
$100 x 1.05⁵ = $127.63
$127.63 x 1.1⁵ = $205.55
$205.55 x 1.2⁵ = $511.47
20 years
$100 x 1.05⁵ = $127.63
$127.63 x 1.1⁵ = $205.55
$205.55 x 1.2¹⁰ = $1,272.69
30 years
$100 x 1.05⁵ = $127.63
$127.63 x 1.1⁵ = $205.55
$205.55 x 1.2²⁰ = $7,880.16
2) value of second investment offer:
15 years
$100 x 1.1¹⁰ = $259.37
$259.37 x 1.15⁵ = $521.69
20 years
$100 x 1.1¹⁰ = $259.37
$259.37 x 1.15¹⁰ = $1,049.31
30 years
$100 x 1.1¹⁰ = $259.37
$259.37 x 1.15²⁰ = $4,245.06
3) value of third investment offer:
15 years
$100 x 1.12¹⁵ = $547.36
20 years
$100 x 1.12²⁰ = $964.63
30 years
$100 x 1.12³⁰ = $2,995.99
Griffin Service Company, Inc., was organized by Bennett Griffin and five other investors. The following activities occurred during the year:
a. Received $77,000 cash from the six investors; each investor was issued 9,100 shares of common stock with a par value of $0.10 per share.
b. Purchased equipment for use in the business at a cost of $25,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months).
c. Signed an agreement with a cleaning service to pay $190 per week for cleaning the corporate offices next year.
d. Received an additional contribution from investors who provided $3,700 in cash and land valued at $22,000 in exchange for 1,700 shares of stock in the company.
e. Lent $3,200 to one of the investors, who signed a note due in six months.
f. Bennett Griffin borrowed $7,700 for personal use from a local bank, signing a one-year note.
Required:
For each transactions, record the effects of the transaction in the appropriate T-accounts.
Answer:
Griffin Service Company, Inc.
T-accounts:
Cash Account
Account Title Debit Credit
Common Stock $5,460
Paid-in Capital In Excess $71,540
Equipment $6,250
Paid-in Capital In Excess $3,700
Notes Receivable $3,200
Common Stock
Account Title Debit Credit
Cash $5,460
Land 170
Paid-in Capital In Excess
Account Title Debit Credit
Cash $71,540
Cash $3,700
Land $21,830
Equipment
Account Title Debit Credit
Cash $6,250
Notes Payable $18,750
Notes Payable
Account Title Debit Credit
Equipment $18,750
Notes Receivable
Account Title Debit Credit
Cash $3,200
Explanation:
Journal Entries:
a. Debit Cash Account $77,000
Credit Common Stock $5,460
Credit Paid-in Capital In Excess $71,540
To record the issue of 9,100 shares with a par value of $0.10 to each investor.
b. Debit Equipment $25,000
Credit Cash $6,250
Credit Notes Payable $18,750
To record the purchase of equipment with cash and note payable.
c. No journal entry required
d. Debit Cash $3,700
Debit Land $22,000
Credit Common Stock $170
Credit Paid-in Capital In Excess $25,530
To record the receipt of cash and land for 1,700 shares.
e. Debit Notes Receivable $3,200
Credit Cash Account $3,200
To record the lending of money to one of the investors.
f. No journal entry required.
Transactions c and f do not require journal entries. Services for c will be received next year. The transaction in f does not affect the company as a legal entity.
Record adjusting journal entries for each of the following for year ended December 31. Assume no other adjusting entries are made during the year.
Salaries Payable. At year-end, salaries expense of $18,000 has been incurred by the company, but is not yet paid to employees.
Interest Payable. At its December 31 year-end, the company owes $375 of interest on a line-of-credit loan. That interest will not be paid until sometime in January of the next year.
Interest Payable. At its December 31 year-end, the company holds a mortgage payable that has incurred $1,000 in annual interest that is neither recorded nor paid. The company intends to pay the interest on January 7 of the next year.
Answer and Explanation:
The Journal entries are shown below:-
1. Salaries expense Dr, $18,000
To salaries payable $18,000
(Being salaries incurred but not paid is recorded)
2. Interest expenses Dr, $375
To Interest payable $375
(Being interest accrued but not paid is recorded)
3. Interest expenses Dr, $1,000
To Interest payable $1,000
(Being interest accrued but not paid is recorded)
Suppose you own a small company that is contemplating construction of a suburban office block. The cost of buying the land and constructing the building is $700,000. Your company has cash in the bank to finance construction. Your real estate adviser suggests that you rent out the building for two years at $30,000 a year and predicts that at the end of that time you will be able to sell the building for $840,000.
Thus there are now two future cash flows--a cash flow of C1 = $30,000 at the end of year 1 and a further cash flow of C2 = ($30,000 + 840,000) = $870,000 at the end of the second year.
Required:
a. Calculate the NPV of the office building venture at interest rates of 5, 10, and 15%.
b. At what discount rate (approximately) would the project have a zero NPV?
Answer:
NPV when discount rate is 5% = $117,687.08
NPV when discount rate is 10% = $46,281
NPV when discount rate is 15% = $-16,068.05
B. 13.65%
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated with a financial calculator
Cash flow in year 0 = $-700,000.
Cash flow in year 1 = $30,000
Cash flow in year 2 = ($30,000 + 840,000) = $870,000
NPV when discount rate is 5% = $117,687.08
NPV when discount rate is 10% = $46,281
NPV when discount rate is 15% = $-16,068.05
To determine which discount rate that would give the project a zero NPV, we are supposed to calculate the Internal rate of return
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated using a financial calculator
Cash flow in year 0 = $-700,000.
Cash flow in year 1 = $30,000
Cash flow in year 2 = ($30,000 + 840,000) = $870,000
IRR = 13.65%
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
StorSmart Company makes plastic organizing bins. The company has the following inventory balances at the beginning and end of March: Beginning Inventory Ending Inventory Raw materials $ 29,700 $ 25,600 Work in process 22,400 46,100 Finished goods 78,300 69,800 Additional information for the month of March follows: Raw materials purchases $ 41,600 Indirect materials used 1,200 Direct labor 62,900 Manufacturing overhead applied 36,700 Selling, general, and administrative expenses 24,300 Sales revenue 237,000 Required: 1. Based on the above information, prepare a cost of goods manufactured report. 2. Based on the above information, prepare an income statement for the month of March.
Answer:
1. Cost of goods Manufactured Report
Beginning raw materials inventory $29,700
Add: Raw materials purchases $41,600
Less: Indirect materials ($1,200)
Less: Ending raw materials inventory ( $25,600)
Direct materials used in production $44,500
Direct labor $62,900
Manufacturing overhead $36,700
Total current manufacturing costs $144,100
Add: Beginning work in process inventory $22,400
Less: Ending work in process inventory ($46,100)
Cost of goods manufactured $120,400
2. Income Statement for March
Sales revenue $237,000
Less: Cost of goods sold
Cost of goods manufactured $120,400
Add: Beginning finished goods inventory $78,300
Less: Ending finished goods inventory $69,800
Cost of goods sold ($128,900)
Gross profit $108,100
Less:
Operating expenses (selling & administrative expenses) ( $24,300 )
Net operating income $83,800
Journalize the following transactions that occurred in for , assuming the perpetual inventory system is being used. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. estimates sales returns at the end of each month.
Sep. 3: Purchased merchandise inventory on account from Silton Wholesalers, S7,500.
4 Paid freight bill of $50 on September 3 purchase.
4 Purchase merchandise inventory for cash of $2,000
6 Retuned $1,100 of inventory from Soptember 3 purchase.
8 Sold merchandise inventory to Houston Company, S6,100, on account.
13 After negotiations, received a S100 allowance from Tristan Wholesalers.
15 Sold merchandise inventory to Jex Company, $2,900, on account.
22 Made payment, less allowance, to Tarin wholesalers for good purchased on
September 9.
23 Jex Company returned $500 of the merchandise sold on September 15.
Cost of goods, $230.
29 Received payment from Smede, less discount.
30 Received payment from Jex Company, less return.
Answer:
Journal Entries:
Sep. 3:
Debit Inventory $7,500
Credit Accounts Payable (Silton Wholesalers) $7,500
To record the purchase of merchandise on account.
Sep. 4:
Debit Freight on Inventory $50
Credit Cash Account $50
To record freight on purchase.
Sep. 4:
Debit Inventory $2,000
Credit Cash Account $2,000
To record the purchase of merchandise for cash.
Sep. 6:
Debit Accounts Payable (Silton Wholesalers) $1,100
Credit Inventory $1,100
To record the return of inventory.
Sep. 8:
Debit Accounts Receivable (Houston Company) $6,100
Credit Sales Revenue $6,100
To record the sale of merchandise on account.
Sep. 13:
Debit Accounts Payable (Tristan Wholesalers) $100
Credit Inventory $100
To record the allowance received.
Sep. 15:
Debit Accounts Receivable (Jex Company) $2,900
Credit Sales Revenue $2,900
To record the sale of merchandise on account.
Sep. 22:
Debit Accounts Payable (Tarin Wholesalers) $
Credit Cash $
For alleged goods purchased on September 9 (not in the records).
Sep. 23:
Debit Inventory $230
Debit Sales Revenue $270
Credit Accounts Receivable (Jex Company) $500
To record inventory returned and the corresponding profit on sales.
Sep. 29:
Debit Cash Account $
Credit Accounts Receivable (Smede) $
To record receipt from Smede (not in the records).
Sep. 30:
Debit Cash Account $2,400
Accounts Receivable (Jex Company) $2,400
To record receipt from Jex Company in full settlement.
Explanation:
Company B uses the journal entries to initially record business transactions as they occur on a daily basis. They show the accounts to be debited and the ones to be credited.
Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows:
Activity Activity Rate
Fabrication $28 per machine hour
Assembly $20 per direct labor hour
Setup $75 per setup
Inspecting $30 per inspection
Production scheduling $12 per production order
Purchasing $8 per purchase order
The activity-base usage quantities and units produced for each product were as follows:
Elliptical
Activity Base Machines Treadmills
Machine hours 700 600
Direct labor hours 182 64
Setups 20 15
Inspections 10 16
Production orders 30 20
Purchase orders 56 75
Units produced 400 250
Required:
Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for each product. Complete the Activity Tables for elliptical machines and treadmills. If required, round per-unit answers to the nearest cent.
Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for elliptical machines product. Complete the Activity Table for elliptical machines. If required, round per-unit answers to the nearest cent.
Elliptical Machines
Activity Activity- Base Usage X Activity Rate = ActivityCost
Fabrication
Assembly
Setup
Inspecting
Production scheduling
Purchasing
Total activity cost
Number of units /
Activity cost per unit
Use the activity rate and usage information to calculate the total activity cost and activity cost per unit for treadmill product. Complete the Activity Table for treadmills. If required, round per-unit answers to the nearest cent.
Treadmills
Activity Activity- Base Usage X Activity Rate = ActivityCost
Fabrication
Assembly
Setup
Inspecting
Production scheduling
Purchasing
Total activity cost
Number of units /
Activity cost per unit
Answer:
Elliptical machines
Activity Activity
Activity Usage Rate Cost
Fabrication 700 28 19600
Assembly 182 20 3640
Setup 20 75 1500
Inspecting 10 30 300
Product Scheduling 30 12 360
Purchasing 56 8 448
Total 25848
Activity cost per unit = Total Activity cost / Number of Units = $25,848 / 400
Activity cost per unit = $64.62
Treadmills
Activity Activity
Activity Usage Rate Cost
Fabrication 600 28 16800
Assembly 64 20 1280
Setup 15 75 1125
Inspecting 16 30 480
Product Schedulling 20 12 240
Purchasing 75 8 600
Total 20525
Activity cost per unit = Total Activity cost / Number of Units = $20525 / 250
Activity cost per unit = $82.1
Which CRM method measures the frequency of a customer’s purchase and records the customer’s last visit?
decision tree
B.
web analytics
C.
RFM analysis
D.
loyalty programs
Answer:
RFM analysis
Explanation:
An RFM analysis evaluates clients and customers by scoring them in three categories: how recently they've made a purchase, how often they buy, and the size of their purchases.
Answer:
Its C
Explanation: I got it right so you should too
For each scenario, decide whether it creates a producer or a consumer surplus. Then, calculate the ensuing surplus.
Alice is willing to spend $30 on a pair of jeans, and has a coupon for $10 off which she found online. She selects and purchases a pair of jeans which cost $35 pre-discount.
Alice's____________ surplus:
Jeff finds some steaks for $16 for which he would have been willing to pay $20 . The butcher notices the meat is near the expiration date and gives him an extra 75 % off.
Jeff's________ surplus
Nicole has a hockey puck from the 2018 Winter Olympic Games and puts it up for sale on eBay. She will only sell the puck if the winning bid is greater than or equal to $500 . After bidding closes, the last bid stands at $501.
Nicole's____________ surplus
Answer:
Alice's consumer surplus = $5
Jeff's consumer surplus = $16
Nicole's producer surplus = $1
Explanation:
Consumer surplus is the difference between the willingness to pay of a consumer and the price of a good.
Consumer surplus = willingness to pay - price of the good
Producer surplus is the difference between the price of a good and the least price the producer is willing to accept
Producer surplus = price of the good - least price the producer is willing to accept
Alice's consumer surplus = $30 - ($35 - $10) = $5
Jeff's consumer surplus = $20 - [$16 - (0.75 x $16)] = $16
Nicole's producer surplus = $501 - $500 = $1
Given the following owner’s income and expense estimates for an apartment property, formulate a reconstructed operat-ing statement. The building consists of 10 units that could rent for $550 per month each. Owner’s Income Statement Rental income (last year) Less: Operating & Capital Expenses Power Heat Janitor Water Maintenance Capital Expenditures Management Depreciation (tax) Mortgage payments $ 2,200 1,700 4,600 3,700 4,800 2,800 3,000 5,000 6,300
Estimating vacancy and collection losses at 5 percent of potential gross income, reconstruct the operating state-ment to obtain an estimate of NOI. Assume an above-line treatment of CAPX. Remember, there may be items in the owner’s statement that should not be included in the recon-structed operating statement. Using the NOI and an Ro of 11.0 percent, calculate the property’s indicate market value. Round your answer to the nearest $500.
Answer:
$363,000
Explanation:
Calculation for the property’s indicate market value.
First step
Operating Statement
PGI: $66,000
(10 units x $550 x 12 month )
Less: Vacancy Loss(3,300)
(5%*66,000)
EGI:62,700
Less: Operating Expenses
Power$2,200
Heat1,700
Janitor4,600
Water3,700
Maintenance4,800
Management3,000
Reserve for CAPX2,800
Total Operating Expenses$22,800
Net Operating Income$39,900
(62,700-22,800)
Second step is to find the property’s indicate market value.
Using this formula
Market Value=NOI/ Ro
Let plug in the formula
Market Value=$39,900/11.0%
Market Value=$363,000
Therefore the property’s indicate market value is
$363,000
The payroll of YellowCard Company for September 2013 is as follows.
Total payroll was $464,000, of which $118,000 is exempt from Social Security tax because it represented amounts paid in excess of $128,400 to certain employees. The amount paid to employees in excess of $7,000 (the maximum for both federal and state unemployment tax) was $418,000. Income taxes in the amount of $86,000 were withheld, as was $8,500 in union dues. The state unemployment tax is 3.5%, but Sandhill Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee’s wages to $128,400 and 1.45% in excess of $128,400. No employee for Sandhill makes more than $135,000. The federal unemployment tax rate is 0.8% after state credit.
Required:
Prepare the necessary journal entries if:
a. The wages and salaries paid.
b. The employer payroll taxes are recorded separately.
Answer:
a. FICA tax is 7.65% on an employee’s wages to $128,400 and 1.45% in excess of $128,400.
FICA Tax payable = [(464,000 - 118,000) * 7.65%] + (118,000 * 1.45%)
= $28,180
DR Wages and Expenses $464,000
CR Withholding Taxes Payable $86,000
FICA Tax $28,180
Union Dues $8,500
Cash $341,320
b. The amount paid to employees in excess of $7,000 (the maximum for both federal and state unemployment tax) was $418,000.
Federal Unemployment Tax = (464,000 - 418,000) * 0.8% = $368
State Unemployment tax = (464,000 - 418,000) * (3.5% - 2.3%) = $552
DR Payroll Tax expense $29,100
CR FICA Tax Payable $28,180
Federal Unemployment Tax $368
State Unemployment Tax $552
Complete the steps in the measurement of external transactions.
The following information applies to the questions displayed below.
Buckeye Incorporated had the following balances at the beginning of November.
BUCKEYE INCORPORATED
Trial Balance
November 1
Accounts Debits Credits
Cash $1,200
Accounts Receivable 400
Supplies 500
Equipment 7,400
Accounts Payable $1,000
Notes Payable 2,000
Common Stock 5,000
Retained Earnings 1,500
Totals $9,500 $9,500
The following transactions occur in November.
November 1 Issue common stock in exchange for $11,000 cash.
November 2 Purchase equipment with a long-term note for $1,500 from Spartan Corporation.
November 4 Purchase supplies for $1,100 on account.
November 10 Provide services to customers on account for $7,000.
November 15 Pay creditors on account, $1,200.
November 20 Pay employees $1,000 for the first half of the month.
November 22 Provide services to customers for $9,000 cash.
November 24 Pay $600 on the note from Spartan Corporation.
November 26 Collect $5,000 on account from customers.
November 28 Pay $1,200 to the local utility company for November gas and electricity.
November 30 Pay $3,000 rent for November.
Post each transaction to the appropriate T-accounts and calculate the balance of each account at November 30.
Cash Accounts Receivable
Beg, Bal. Beg. Bal.
November 1 12,800
November 22 10,800
November 26 5,000
End. Bal.
End. Bal.
Supplies Equipment
Beg. Bal. Beg Bal
End. Bal. End. Bal.
Answer:
November 1 Issue common stock in exchange for $11,000 cash.
Dr Cash 11,000
Cr Common stock 11,000
November 2 Purchase equipment with a long-term note for $1,500 from Spartan Corporation.
Dr Equipment 1,500
Cr Notes payable 1,500
November 4 Purchase supplies for $1,100 on account.
Dr Supplies 1,100
Cr Accounts payable 1,100
November 10 Provide services to customers on account for $7,000.
Dr Accounts receivable 7,000
Cr Service revenue 7,000
November 15 Pay creditors on account, $1,200.
Dr Accounts payable 1,200
Cr cash 1,200
November 20 Pay employees $1,000 for the first half of the month.
Dr Wages expense 1,000
Cr cash 1,000
November 22 Provide services to customers for $9,000 cash.
Dr Cash 9,000
Cr Service revenue 9,000
November 24 Pay $600 on the note from Spartan Corporation.
Dr Notes payable 600
Cr Cash 600
November 26 Collect $5,000 on account from customers.
Dr Cash 5,000
Cr Accounts receivable 5,000
November 28 Pay $1,200 to the local utility company for November gas and electricity.
Dr Utilities expense 1,200
Cr Cash 1,200
November 30 Pay $3,000 rent for November.
Dr Rent expense 3,000
Cr Cash 3,000
Cash Common stock
debit credit debit credit
1,200 5,000
11,000 11,000
1,200 16,000
1,000
9,000
600
5,000
1,200
3,000
19,200
Accounts receivable Supplies
debit credit debit credit
400 500
7,000 1,100
5,000 1,600
2,400
Equipment Accounts Payable
debit credit debit credit
7,400 1,000
1,500 1,100
8,900 1,200
900
Notes Payable Service revenue
debit credit debit credit
2,000 7,000
1,500 9,000
600 16,000
2,900 6,000 closed
Retained Earnings Wages expense
debit credit debit credit
1,500 1,000
10,800 closed 1,000
12,300
Utilities expense Rent expense
debit credit debit credit
1,200 3,000
closed 1,200 closed 3,000
net income for the month = $16,000 - $5,200 = $10,800, so retained earnings should increase by $10,800
Megan Company has fixed costs of $747,040. The unit selling price, variable cost per unit, and contribution margin per unit for the company’s two products follow:
Product Selling Price Variable Cost per Unit Contribution Margin per Unit
Yankee $310 $140 $170
Zoro 500 340 160
The sales mix for products Yankee and Zoro is 10% and 90%, respectively. Determine the break-even point in units of Yankee and Zoro.
Answer:
Yankee= 464
Zoro= 4,176
Explanation:
To calculate the break-even point in units, we need to use the following formula:
Break-even point (units)= Total fixed costs / Weighted average contribution margin
Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)
Weighted average contribution margin= 170*0.1 + 160*0.9
Weighted average contribution margin= $161
Break-even point (units)= 747,040 / 161
Break-even point (units)= 4,640 units
Now, for each product:
Yankee= 4,640*0.1= 464
Zoro= 4,640*0.9= 4,176
Consider the following case of Happy Turtle Transportation Company:
Suppose Happy Turtle Transportation Company is considering a project that will require $300,000 in assets.
The project is expected to produce earnings before interest and taxes (EBIT) of $55,000.
Common equity outstanding will be $30,000 shares.
The company incurs a tax rate of 40%.
1. If the project is financed using 100% equity capital, then Happy Turtle Transportation Company’s return on equity (ROE) on the project will be 11.55% / 10.45% / 13.20% / 11.00%. In addition, Happy Turtle’s earnings per share (EPS) will be$ 0.99 / $ 1.10 / $ 1.21 / $0.94 / $ 1.05.
2. Alternatively, Happy Turtle Transportation Company’s CFO is also considering financing the project with 50% debt and 50% equity capital. The interest rate on the company’s debt will be 13%. Because the company will finance only 50% of the project with equity, it will have only 15,000 shares outstanding. Happy Turtle Transportation Company’s ROE and the company’s EPS will be ???? if the management decides to finance the project with 50% debt and 50% equity.
14.20% and $ 1.42, respectively
14.91% and $ 1.35, respectively
17.04% and $ 1.63, respectively
16.33% and $ 1.56, respectively
3. When a firm uses debt financing, the business risk exposure for the firm’s common shareholders will increase / decrease.
Answer: Check attachment
Explanation:
1. Based on the calculations on the attachment, the return on equity is 11% and the earning per share is $1.1.
2. Return on equity is 14.20% and the earning per share is $1.42.
3. The business risk exposure for the common area shareholders of the firm will increase when debt financing is used by the firm.
Check the attachment for further details
Savant Homes, Inc., is a custom home designer and builder. Using what it called the Anders Plan, Savant built a model house in Windsor, Colorado. This was a ranch house with two bedrooms on one side and a master suite on the other, separated by a combined family room, dining room, and kitchen. Ron and Tammie Wagner toured the Savant house. The same month, the Wagners hired builder Douglas Collins and his firm, Douglas Consulting, to build a house for them. After it was built, Savant filed a lawsuit in a federal district court against Collins for copyright infringement, alleging that the builder had copied the Anders Plan in the design and construction of the Wagner house. Collins showed that the Anders Plan consisted of standard elements and standard arrangements of elements. In these circumstances, has infringement occurred? Explain.
Answer and Explanation:
There is no copyright infringement here. Savant homes had not taken a copyright protection for the design prior to this time. Also in the case it was found that the design is not in fact a unique design by Savant homes as it is used widely and was common before savant homes used it. And so it was a dummy model for everyone to copy from. Therefore the infringement was considered invalid as there was no ground for savant homes to claim it as am intellectual property
Once a week, Smith purchases a six-pack of cola and puts it in his refrigerator for his two children. He invariably discovers that all six cans are gone on the first day. Jones also purchases a six-pack of cola once a week for his two children, but unlike Smith, he tells them that each may drink no more than three cans. If the children use cost-benefit analysis each time they decide whether to drink a can of cola, explain why the cola lasts much longer at Jones's house than at Smith's.
Answer:
Jones purchases a six-pack of cola once a week for his two children, but unlike Smith, he tells them that each may drink no more than three cans.
Explanation:
Cost-benefit analysis is defined as a method to estimate all the costs involved and possible profits that can be achieved in a business opportunity.
Jones purchases a six-pack of cola once a week for his two children, but unlike Smith, he tells them that each may drink no more than three cans.
So, at Smith's house, there's always a chance that one of the siblings will drink the cola before the other.
Therefore,
cola can lasts much longer at Jones's house than at Smith's.
On September 1, Pat Hopkins established Ona Cloud Corporation (OCC) as a provider of cloud computing services. Pat contributed $14,000 for 1,400 shares of OCC. On September 8, OCC borrowed $36,500 from a bank, promising to repay the bank in two years. On September 10, OCC wrote a check for $22,500 to acquire computer equipment. On September 15, OCC received $1,450 of supplies purchased on account and, on September 16, paid $2,500 for September rent. Through September 22, OCC provided its customers $11,550 of services, of which OCC collected $6,900 in cash. On September 28, OCC paid $695 for Internet and phone service this month. On September 29, OCC paid wages of $5,450 for the month. Finally, on September 30, OCC submitted its electricity meter reading online and determined that the total charges for the month will be $645. This amount will be paid on October 14 through a preauthorized online payment.
Required:
a. Indicate the accounting equation effects of the September events.
b. Prepare journal entries to record the September events described above.
c. Using your answer to requirement 1 or 2, calculate OCC's preliminary net income for September. Is OCC profitable, based on its preliminary net income?
d. Identify at least two adjustments that OCC will be required to make before it can prepare a final income statement for September.
Answer:
a) I used an excel spreadsheet since there is not enough room
b)
On September 1, Pat Hopkins established Ona Cloud Corporation (OCC) as a provider of cloud computing services. Pat contributed $14,000 for 1,400 shares of OCC.
Dr Cash 14,000
Cr Common stock 14,000
On September 8, OCC borrowed $36,500 from a bank, promising to repay the bank in two years.
Dr Cash 36,500
Cr Notes payable 36,500
On September 10, OCC wrote a check for $22,500 to acquire computer equipment.
Dr Equipment 22,500
Cr Cash 22,500
On September 15, OCC received $1,450 of supplies purchased on account and,
Dr Supplies 1,450
Cr Accounts payable 1,450
on September 16, paid $2,500 for September rent.
Dr Rent expense 2,500
Cr Cash 2,500
Through September 22, OCC provided its customers $11,550 of services, of which OCC collected $6,900 in cash.
Dr Cash 6,900
Dr Accounts receivable 4,650
Cr Service revenue 11,550
On September 28, OCC paid $695 for Internet and phone service this month.
Dr Internet and phone expenses 695
Cr Cash 695
On September 29, OCC paid wages of $5,450 for the month.
Dr Wages expense 5,450
Cr Cash 5,450
Finally, on September 30, OCC submitted its electricity meter reading online and determined that the total charges for the month will be $645. This amount will be paid on October 14 through a preauthorized online payment.
Dr Utilities expense 645
Cr Accounts payable 645
c) preliminary net income = $2,260, so the company seems to be profitable
d) OCC must adjust depreciation expense (equipment), interest expense on the bank loan and supplies expense.
Darnell and Eleanor are building their portfolios. Darnell purchases shares in a mutual fund and pays fees to a manager who actively manages the mutual fund's portfolio. He does so because he believes that the manager can identify inexpensive stocks that will rise in value. Eleanor is not convinced. She buys shares in an index fund—a type of mutual fund that simply buys all of the stocks in a given stock index rather than actively managing a portfolio. Eleanor builds her portfolio based on the notion that:
a. All stocks are overvalued.
b. The stock market exhibits informational efficiency.
c. Stock analysts can use fundamental analysis to identify undervalued stocks.
Answer:
b. The stock market exhibits informational efficiency.
Explanation:
According to the efficient market hypothesis, it is believed that share prices reflect all information and consistent alpha generation is impossible. So, if Eleanor buys shares from an index fund, she believes shares are efficiently priced.
On the other hand, Darnell is buying under valued stocks with the hopes of earning a positive alpha
You recently graduated from Empire State University with a degree in Marketing. You loved your time at Empire State, and have made numerous friendships with faculty members, current students, and community members. Because of this, you want to remain in your college town and achieve your dream of opening your own coffee shop, The Daily Grind. Before you can open your business, you know that you need to divide the market into segments, to develop customer profiles in order for you to determine which segment of the market you want to target. You have decided to focus on a handful of variables that represent all four market segmentation bases (demographic, geographic, psychographic, behavioral). In one or more fully formed paragraphs, identify and explain at least one variable within each base of market segmentation that should be used to segment the market to create a customer profile of patrons appropriate for The Daily Grind.
Answer and Explanation:
Demographic: the demographic aspect in looking at market segmentation variables in his coffee business would consider such things as age brackets, gender and different groups of population that would be interested in what his business aims to offer. Individuals who are in the older age brackets such as from 30-70 would be interested in coffee. Also these individuals are usually educated
Geographic:
This variable would consider where consumers are located geographically. Therefore are customers able to access the coffee shop easily I'm terms of proximity. How convenient is it to move to to the coffee shop from the customers location?
Psychographic:
what is customers attitudebor lifestyle ? Are customers thorough about the kind of coffee they want. Will customers accept to pay higher for higher quality coffee.
Behavioral: customers may consider the coffee shop a relaxation spot or a place to hangout with friends and family while enjoying a nice cup of coffee. What does this group do most and associate coffee with?
Monty Inc. produces organic cranberry juice from cranberries it farmed. Unfortunately, it has been a bad year for cranberries because of severe cold weather. Monty has only 10,000 litres of juice. It usually sells 15,000 litres at $3.10 per litre. The variable costs of farming the cranberries are $0.90 per litre. Monty has loyal customers, but its managers are worried that the company will lose customers if it does not have juice available for sale when people stop by the farm. A neighbour is willing to sell 5,000 litres of extra cranberry juice at $3.00 per litre.
Required:
Using the general decision rule, what is the most per litre that Riverbed's managers would be willing to pay for additional juice?
Answer:
$3.10 per litre
Explanation:
Riverbed will agree to buy the additional cranberries for at most $3.10 per litre since this is their normal selling price. They can buy at this price and accept to not make profit since they are out to satisfy customers now and are not necessarily looking to make profit.
Therefore cost of purchase of extra cranberries would equal selling price at maximum
While many others dreamed about owning their own business, Holly Gabrel decided to do something about it. Holly knew that being self-employed required long hours and hard work, but with the help of her husband, Trent, Holly was positive that the hours and the work would be rewarded. First, she and Trent developed a new concept in sunglasses that could be used by athletes better than the sunglasses now on the market. Holly and Trent obtained a patent on their invention, and began production and marketing. With the entrepreneurial personality, Holly can be expected to have all of the following traits except:
a. mission or vision of the company.
b. information about the suppliers.
c. policy for extending credit to customers.
d. analysis of critical risks that threaten success.
e. all of these should be included.
Answer:
e. all of these should be included.
Explanation:
These listed items are not entrepreneurial personality traits. Holly is not expected to have any of them as traits because they are not. Personality traits are human characteristics, which propel Holly as an entrepreneur to take entrepreneurial risks. They include Creativity, Risk-taking, Passion, Planning, Social Skills, Open-mindedness, Decisiveness, Positivity, etc. Holly abundantly possesses them.
Degelman Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2014, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $22,600, direct labor $13,560, and manufacturing overhead $18,080. As of January 1, Job No. 49 had been completed at a cost of $101,700 and was part of finished goods inventory. There was a $16,950 balance in the Raw Materials Inventory account.
During the month of January, Deglman Manufacturing began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $137,860 and $178,540, respectively. The following additional events occurred during the month.
1. Purchased additional raw materials of $101,700 on account.
2. Incurred factory labor costs of $79,100. Of this amount $18,080 related to employer payroll taxes.
3. Incurred manufacturing overhead costs as follows: indirect materials $19,210; indirect labor $22,600; depreciation expense on equipment $21,470; and various other manufacturing overhead costs on account $18,080.
4. Assigned direct materials and direct labor to jobs as follows.
Job No. Direct Materials Direct Labor
50 $11,300 $5,650
51 44,070 28,250
52 33,900 22,600
1. Calculate the pre-determined overhead rate for 2014, assuming Degelman Company estimates total manufacturing overhead costs of $1,107,400, direct labor costs of $791,000, and direct labor hours of 22,600 for the year.
2. Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January.
3. Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a).
4. Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry (or entries) to record the completion of any job(s) during the month.
5. Prepare the journal entry (or entries) to record the sale of any job(s) during the month. What is the balance in the Finished Goods Inventory account at the end of the month? What is the amount of over- or underapplied overhead?
Answer:
Degelman Company
1. Predetermined overhead rate for 2014 = Total manufacturing overhead/total direct labor costs
= $81,360/$79,100
= $1.03 per direct labor cost
2. Journal Entries to record the purchase of raw materials, factory labor costs incurred, and the manufacturing overhead costs:
Debit Raw materials $101,700
Credit Accounts Payable $101,700
To record the purchase of raw materials in January, 2014.
Debit Factory labor $79,100
Credit Wages & Salaries Expense $79,100
To Wages Expense to factory labor.
Debit Manufacturing overhead $81,360
Credit Raw materials $19,210
Credit Wages & Salaries expense $22,600
Credit Depreciation expense on equipment $21,470
Credit Accounts Payable $18,080
To record manufacturing overhead costs.
To record manufacturing overhead costs
3a. Debit Job 50 $11,300
Debit Job 51 $44,070
Debit Job 52 $33,900
Credit Raw materials $89,270
To assign raw materials to Jobs.
3b. Debit Job 50 $5,650
Debit Job 51 $28,200
Debit Job 52 $22,600
Credit Factory labor $56,450
To assign direct labor to Jobs.
3c. Debit Job 50 $5,820
Debit Job 51 $29,046
Debit Job 52 $23,278
Credit Manufacturing overhead $58,144
To assign manufacturing overheads to Jobs using the predetermined rate.
4. Job 50 Job 51
Beginning balance $54,240
Raw materials $11,300 $44,070
Direct labor $5,650 28,200
Overhead $5,820 29,046
Total costs $77,010 $101,316
Journal Entries:
Debit Finished Goods Inventory $178,326
Credit Job 50 $77,010
Credit Job 51 $101,316
To record the completion of Jobs 50 and 51.
5. Debit Cost of Goods Sold $178,710
Credit Finished Goods Inventory $178,710
To record the cost of goods sold (Jobs 49 and 50)
Debit Cash (Job 49) $137,860
Debit Accounts Receivable (Job 50) $178,540
Credit Sales Revenue $316,400
To record the sale of Jobs 49 and 50.
5b. Balance in the Finished Goods Inventory account is: $181,094
Job 51 Job 52
Raw materials $44,070 $33,900
Direct labor $28,200 22,600
Overhead $29,046 23,278
Total costs $101,316 $79,778
5c. Over- or underapplied overhead:
Actual overhead costs incurred $81,360
Applied overhead costs $58,144
Underapplied overhead costs $23,216
Explanation:
a) Data and Calculations:
Jan. 1, 2014: Job 50 in process
Job 50 costs:
Direct materials $22,600
Direct labor $13,560
Manufacturing overhead $18,080
Balance = $54,240
Job 49 completed at a cost of $101,700
Raw Materials Inventory = $16,950
Started production on Jobs 51 and 52
Completed Jobs 50 and 51
Sales:
Job 49 = $137,860
Job 50 = $178,540 sold on account
Additional events:
1. Purchase of raw materials $101,700 on account
2. Incurred Factory labor = $79,100
Employer payroll taxes 18,080
Net Factory labor = $61,020
3. Incurred manufacturing overhead:
Indirect materials $19,210
Indirect labor $22,600
Depreciation expense on equipment $21,470
Other manufacturing overhead costs $18,080 on account
Total manufacturing overhead costs $81,360
4. Assigned direct materials, direct labor, and overhead to Jobs:
Job No. Direct Materials Direct Labor Manufacturing Overhead Total
50 $11,300 $5,650 $5,820 ($1.03 * $5,650)
51 44,070 28,200 $29,046 ($1.03 * $28,200)
52 33,900 22,600 $23,278 ( ($1.03 * $22,600)
Total $89,270 $56,450 $58,144
Presented below are a number of balance sheet items for Tamarisk, Inc. for the current year, 2020.
Goodwill $27,340 Accumulated Depreciation-Equipment $292,490
Payroll Taxes Payable 179,931 Inventory 242,140
Bonds payable 302,340 Rent payable (short-term) 47,340
Discount on bonds
payable 15,490 Income taxes payable 100,702
Cash 362,340 Rent payable (long-term) 482,340
Land 482,340 Common stock, $1 par value 202,340
Notes receivable 448,040 Preferred stock, $10 par value 152,340
Notes payable (to
banks) 267,340 Prepaid expenses 90,260
Accounts payable 492,340 Equipment 1,472,340
Retained earnings ? Equity investments (trading) 123,330
Income taxes receivable 99,960 Accumulated Depreciation-Buildings 270,446
Notes payable
(long-term) 1,602,330 Buildings 1,642,330
Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of equity investments (trading) are the same.
Answer:
Tamarisk, Inc.
Classified Balance Sheet
As of December 31, 2020:
ASSETS:
Current Assets:
Cash $362,340
Equity investments (trading) 123,330
Notes receivable 448,040
Income taxes receivable 99,960
Inventory 242,140
Prepaid expenses 90,260
Total current assets $1,366,070
Equipment 1,472,340
Accumulated
Depreciation (292,490) 1,179,850
Buildings 1,642,330
Accumulated
Depreciation (270,446 ) 1,371,884
Land 482,340
Goodwill 27,340
Total long-term assets $3,061,414
Total assets $4,427,484
LIABILITIES
Current Liabilities
Accounts payable 492,340
Payroll Taxes Payable 179,931
Income taxes payable 100,702
Rent payable (short-term) 47,340
Discount on bonds payable 15,490
Notes payable (to banks) 267,340
Total current liabilities $1,103,143
Bonds payable 302,340
Rent payable (long-term) 482,340
Notes payable (long-term) 1,602,330
Total long-term liabilities $2,387,010
Total Liabilities $3,490,153
EQUITY
Common stock, 400,000 shares authorized
Issued, 202,340 shares at
$1 par value 202,340
Preferred stock, 200,000 shares authorized
Issued, 15,234 shares at
$10 par value 152,340
Retained earnings 582,651
Total Equity $937,331
Total liabilities & Stockholders' equity $4,427,484
Explanation:
a) Data:
Account Title Debit Credit
Cash $362,340
Equity investments (trading) 123,330
Notes receivable 448,040
Income taxes receivable 99,960
Inventory 242,140
Prepaid expenses 90,260
Equipment 1,472,340
Accumulated Depreciation-Equipment $292,490
Buildings 1,642,330
Accumulated Depreciation-Buildings 270,446
Land 482,340
Goodwill 27,340
Accounts payable 492,340
Payroll Taxes Payable 179,931
Income taxes payable 100,702
Rent payable (short-term) 47,340
Discount on bonds payable 15,490
Notes payable (to banks) 267,340
Bonds payable 302,340
Rent payable (long-term) 482,340
Notes payable (long-term) 1,602,330
Common stock, $1 par value 202,340
Preferred stock, $10 par value 152,340
Retained earnings 582,651
Total $4,990,420 $4,990,420
10 characteristics of using ideal chemical sanitizer
Answer:
Characteristics Steam Chlorine Iodophor QUATS* AAS**
Gram-positive bacteria Best Good Good Good Good
Gram-negative bacteria Best Good Good Poor Fair
Spores Good Good Poor Fair Fair
Yeasts and molds Best Good Good Fair Poor
Bacteriophage Best Good Fair Poor Poor
Optimum pH N/A 4-5 3 10 2-2.5
Penetration Poor Good Poor Good Excellent
Corrosive No Yes Slight No Slight
Irritation N/A Yes No No Yes
Hard water affects No No Slight Yes/No Slight
Shelf-life N/A Short Long Long Long
Organic matter affects No Yes Slight Low Slight
Stable in 140°F H2O N/A No No Yes Yes
Leaves residue No No Yes Yes Yes
Flavor/odor No Yes Yes No No
Ease of use Poor Excellent Excellent Foam Foam
Use with detergent No No/yes Yes No/yes No
Maximum use by FDA/USDA None 200 ppm*** 25 ppm**** 200 ppm***** 200-400 ppm
Cost High Low Moderate Moderate Moderate
Where to use Equipment Equipment, floors, walls Rubber, plastic crates Aluminum, walls, floors Stainless steel, CIP
Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2021, appears below.
Account Title Debits Credits
Cash 34,900
Accounts receivable 42,600
Supplies 2,800
Inventory 62,600
Notes receivable 22,600
Interest receivable 0
Prepaid rent 2,300
Prepaid insurance 8,600
Office equipment 90,400
Accumulated depreciation 33,900
Accounts payable 33,600
Salaries payable 0
Notes payable 52,600
Interest payable 0
Deferred sales revenue 3,300
Common stock 78,200
Retained earnings 35,000
Dividends 6,600
Sales revenue 159,000
Interest revenue 0
Cost of goods sold 83,000
Salaries expense 20,200
Rent expense 12,300
Depreciation expense 0
Interest expense 0
Supplies expense 2,400
Insurance expense 0
Advertising expense 4,300
Totals 395,600 395,600
Information necessary to prepare the year-end adjusting entries appears below.
Depreciation on the office equipment for the year is $11,300.
Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2021, were $1,400.
On October 1, 2021, Pastina borrowed $52,600 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
On March 1, 2021, the company lent a supplier $22,600 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022.
On April 1, 2021, the company paid an insurance company $8,600 for a one-year fire insurance policy. The entire $8,600 was debited to prepaid insurance.
$860 of supplies remained on hand at December 31, 2021.
A customer paid Pastina $3,300 in December for 1,400 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue.
On December 1, 2021, $2,300 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $1,150 per month. The entire amount was debited to prepaid rent.
Required:
Prepare an adjusted trial balance.
Answer:
Account Title Debits Credits
Cash 34,900
Accounts receivable 42,600
Supplies 860
Inventory 62,600
Notes receivable 22,600
Interest receivable 1,507
Prepaid rent 1,150
Prepaid insurance 2,150
Office equipment 90,400
Accumulated depreciation 45,200
Accounts payable 33,600
Salaries payable 1,400
Notes payable 52,600
Interest payable 1,578
Deferred sales revenue 3,300
Common stock 78,200
Retained earnings 35,000
Dividends 6,600
Sales revenue 159,000
Interest revenue 1,507
Cost of goods sold 83,000
Salaries expense 21,600
Rent expense 13,450
Depreciation expense 11,300
Interest expense 1,578
Supplies expense 4,340
Insurance expense 6,450
Advertising expense 4,300
Totals 411,385 411,385
Insurance expense
= 8,600 * 9/12 months = $6,450
Prepaid Insurance = 8.600 - 6,450 = $2,150
Supplies expense = 2,400 + (2,800 - 860) = $4,340
Interest expense and Interest payable = 12% * 3/12 * 52,600 = $1,578
Rent = 12,300 + 1,150 = $13,450
Interest revenue = 22,600 + 8% * 10/12 months = $ 1,507
Accumulated depreciation = 33,900 + 11,300 = $45,200
Emily, who is single, has been offered a position as a city landscape consultant. The position pays $153,800 in cash wages. Assume Emily has no dependents. Emily deducts the standard deduction instead of itemized deductions, and she is not eligible for the qualified business income deduction. (Use the tax rate schedules.) (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
Required:
a. What is the amount of Emily’s after-tax compensation (ignore payroll taxes) and his income tax liability?
b. Suppose Rick receives a competing job offer of $102,500 in cash compensation and nontaxable (excluded) benefits worth $4,900.
c. What is the amount of Emily’s after-tax compensation (ignore payroll taxes) and his income tax liability?
Answer:
a) using the 2020 tax schedule:
Emily's taxable income = $153,800 - $12,200 = $141,600
Emily's tax liability = $14,605.50 + [($141,600 - $85,525) x 24%] = $28,063.50
Emily's after tax compensation = $153,800 - $28,063.50 = $125,736.50
b and c ) if Emily (or Rick?) get a $102,500 offer that includes benefits worth $4,900 that are not taxable:
taxable income = $102,500 - $12,200 = $90,300
tax liability = $14,605.50 + [($90,300 - $85,525) x 24%] = $15,751.50
after tax compensation = $102,500 - $15,751.50 + $4,900 = $91,648.50
It can be deduced that the amount of Emily’s after-tax compensation will be $135784.50.
How to calculate the after-tax compensationGross income = $153800
AGI deduction = 0
Adjusted gross income = $153800
Standard deduction = $12400
Taxable income = $141400
Income tax liability= $28015.50
After tax compensation = $135784.50
When Rick receives a competing job offer of $102,500 in cash compensation and nontaxable benefits worth $4,900, the amount of Emily’s after-tax compensation will be:
Gross income = $144000
AGI deduction = 0
Adjusted gross income = $144000
Standard deduction = $12400
Taxable income = $131600
Income tax liability= $25663.50
After tax compensation = $128136.50
Learn more about tax on:
https://brainly.com/question/25783927
1. Consumer markets consist of
individuals that buy goods and services to resell.
companies that produce products to sell to consumers.
households that buy goods for personal consumption.
government agencies that buy goods to produce public services.
(50 points) (GradPoint)
Maggie’s Skunk Removal Corp.’s 2018 income statement listed net sales of $13.8 million, gross profit of $8.70 million, EBIT of $6.9 million, net income available to common stockholders of $4.5 million, and common stock dividends of $2.5 million. The 2018 year-end balance sheet listed total assets of $53.8 million and common stockholders' equity of $22.3 million with 2.0 million shares outstanding.
1. Calculate the profit margin.
2. Calculate the basic earnings power.
3. Calculate the return on assets.
4. Calculate the return on equity.
5. Calculate the dividend payout.
Answer: See explanation
Explanation:
1. Calculate the profit margin
Profit Margin = (Net Income/Net Sales) × 100
Profit Margin = (4,500,000/13,800,000) × 100
Profit Margin = 3.26 × 100
Profit margin = 32.6%
2. Calculate the basic earnings power.
Gross Profit Margin:
= Gross Profit/Net Sales × 100
= (8,700,000/13,800,000) × 100
= 6.304 × 100
= 63.04%
3. Calculate the return on assets.
Return on assets= Net income/Total asset
= 4,500,000/53,800,000
= 0.0836
= 8.36%
4. Calculate the return on equity.
Return on equity = Net income/Equity
= 4,500,000/22,300,000
= 0.2017
= 20.17%
5. Calculate the dividend payout.
Dividend payout = Dividend/Net income
= 2,500,000/4,500,000
= 0.556
= 55.6%
On January 1, Merry Walker and other stockholders established a catering service. Listed below are accounts to use for transactions (a) through (f), each identified by a number. Following are the transactions that occurred in Walker's first month of operations. You need to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box (if more than one account is applicable, enter the numbers separated by a comma and without any space e.g. "1,3").
1. Cash
2. Accounts Receivable
3. Supplies
4. Prepaid Insurance
5. Equipment
6. Truck
7. Notes Payable
8. Accounts Payable
9. Common Stock
10. Dividends
11. Fees Earned
12. Wages Expense
13. Rent Expense
14. Utilities Expense
15. Truck Expense
16. Miscellaneous Expense
17. Insurance Expense
a. TransactionsAccount(s) DebitedAccount(s) Crediteda. Recorded jobs completed on account and sent invoices to customers.
b. Received an invoice for truck expenses to be paid in February.
c. Paid utilities expense
d. Received cash from customers on account.
e. Paid employee wages.
f. Paid dividends to stockholders.
What will be an ideal response?
Answer:
Transactions Account Debited Account Credited
a. Recorded jobs completed on 2 11
account and sent Invoices to
customers
b. Received an invoice for truck 15 8
expense to be paid in February
c. Paid utilities expense. 14 1
d. Received cash from customers on 1 2
account.
e. Paid employee wages. 12 1
S/n Transaction no Journal entry
a. Accounts receivable a/c Dr
To fees earned a/c Cr
b. Truck expense a/c Dr
To accounts payable a/c Cr
c. Utilities a/c Dr
To cash a/c Cr
d. Cash a/c Dr
To accounts receivable a/c Cr
e. Wages Expenses Dr
To Account Payable a/c Cr
which group will test out new technology but are not usually seen as leaders within an organization
Answer:
Innovators
Explanation:
The reason is that their idea might not be successful in the beginning and also that they are not supported by the company executive directors. This lessens their value as a leader. There are other issues that are also associated with innovators which makes them difficult to get aknowledged as a leader, these as listed below:
They don't have any busines field background so they can't appraise the proposal.They don't have decision making powers.The technology project takes time to reach maturity phase and creates demand. Blockchains were invented in 2008 but today they are valued. So great things take time.Many decision makers don't value them because they feel that the innovators will take away their appreciation.Sometimes their idea actually doesn't work which means they overestimate the favourable facts.