Answer and Explanation:
a. The computation of activity rate for each activity cost pool is shown below:-
Activity cost Estimated Expected Activity
pool overhead Activity Rate
cost
a b a ÷ b
Labor-related $31,200 5,000 $6.24
Machine-related $1,250 5,000 $0.25
Machine setups $36,000 1,200 $30
Production orders $18,000 500 $36
Product testing $22,000 1,100 $20
Packaging $42,900 3,900 $11
General factory $56,000 5,000 $11.2
Total $207,350
b. The computation of company's predetermined overhead rate is shown below:-
Company's predetermined overhead rate = Total estimated overhead cost ÷ Total expected direct labor hours
= $207,350 ÷ 5,000
= $41.47
Suppose that both the number of buyers and the number of sellers increase. Which of the following will occur?
a. The equilibrium quantity will increase and the equilibrium price will increase.
b. The equilibrium quantity will increase and the effect on the equilibrium price is undetermined.
c. The total effect on equilibrium price and quantity is undetermined.
d. The equilibrium price will increase and the effect on the equilibrium quantity is undetermined.
e. The equilibrium quantity will increase and the equilibrium price will decrease.
Answer:
The answer is B.
Explanation:
If both the number of buyers and the number of sellers increase in a market for a specific product, this results in the equilibrium quantity's increase because of the increase in both supply and demand.
The equilibrium price however depends on other variables and factors so it cannot be determined in this example.
So the correct answer is B.
I hope this answer helps.
If the price of eggs differs by from one month to the next, by how much would you expect the price of milk to differ? Round the answer to two decimal places.
Answer:
The numbers are missing, as well as the first part of the question. I looked for a similar question and found the attached data.
first you need to calculate the regression line equation, which in this case = 0.59343x + 2.01844
the slope coefficient = 0.59343
if the price of milk differs by $0.15, then the price of eggs will change by $0.15 x 0.59343 = $0.089 or $0.09
Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 26,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $525,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Harris’s actual manufacturing overhead cost for the year was $658,321 and its actual total direct labor was 26,500 hours.
Required:
Compute the company's predetermined overhead rate for the year.
Answer:
$23.2 per direct labor hour
Explanation:
Harris fabrics computes its plantwide determined overhead rate annually in the basis of direct labor hours
Predetermined Overhead rate= Total estimated overhead cost/Total estimated allocation base
The total estimated overhead cost can be calculated as follows
= $525,000 + 3×26,000
= $525,000 + 78,000
= $603,000
Therefore the predetermined overhead rate for the year can be calculated as follows
= $603,000/26,000
= $23.2 per direct labor hour
According to its annual report, P&G's billion-dollar brands include Pampers, Tide, Ariel, Always, Pantene, Bounty, Charmin, Downy, Olay, Crest, Vicks, Gillette, Duracell, and others. The following are items taken from its recent balance sheet and income statement. Note that different companies use slightly different titles for the same item. Select each item in the following list as an asset, liability, or stockholders' equity item that would appear on the balance sheet or a revenue or expense item that would appear on the income statement.
1) Accounts receivable2) Cash and cash equivalents3) Net sales4) Debt due within one year5) Taxes payable6) Retained earnings7) Cost of products sold8) Selling, general, and administrative expense9) Income taxes10) Accounts payable11) Trademarks and other intangible assets12) Property, plant, and equipment13) Long-term debt14) Inventories15) Interest expense
Answer and Explanation:
The categorization is shown below:
1. Assets
2. Assets
3. Revenue
4. Liability
5. Liability
6. Stockholder equity
7. Expense
8. Expense
9. Expense
10. Account payable
11. Assets
12. Assets
13. Liability
14. Assets
15. Expense
This shows the each item classified in the financial statement whether it is an asset, expense, liability, stockholder equity
Blue Spruce’s Miniature Golf and Driving Range Inc. was opened on March 1 by Bob Dean. These selected events and transactions occurred during March.
Mar. 1 Stockholders invested $58,000 cash in the business in exchange for common stock of the corporation.
3 Purchased Snead’s Golf Land for $38,200 cash. The price consists of land
$24,900, building $8,460, and equipment $4,840.
5 Advertised the opening of the driving range and miniature golf course,
paying advertising expenses of $1,940 cash.
6 Paid cash $4,750 for a 1-year insurance policy.
10 Purchased golf clubs and other equipment for $5,950 from Tahoe Company,
payable in 30 days.
18 Received golf fees of $1,850 in cash from customers for golf services
performed.
19 Sold 100 coupon books for $25 each in cash. Each book contains 10
coupons that enable the holder to play one round of miniature golf or to hit
one bucket of golf balls.
25 Paid a $540 cash dividend.
30 Paid salaries of $850.
30 Paid Tahoe Company in full for equipment purchased on March 10.
31 Received $880 in cash from customers for golf services performed.
Journalize the March transactions. Friendley's records golf fees as service revenue.
Answer:
Blue Spruce's Miniature Golf and Driving Range, Inc.
Journal Entries:
March 1:
Debit Cash Account $58,000
Credit Common Stock $58,000
To record the investment of cash by stockholders.
March 3:
Debit Land $24,900
Debit Building $8,460
Debit Equipment $4,840
Credit Cash Account $38,200
To record the purchase of land, building, and equipment.
March 5:
Debit Advertising Expense $1,940
Credit Cash Account $1,940
To record the payment of advertising expense.
March 6:
Debit Prepaid Insurance $4,750
Credit Cash Account $4,750
To record the prepayment of insurance policy for one year.
March 10:
Debit Golf Clubs and Equipment $5,950
Credit Accounts Payable (Tahoe Company) $5,950
To record the purchase of golf clubs and equipment on account.
March 18:
Debit Cash Account $1,850
Credit Service Revenue $1,850
To record the receipt of golf fees.
March 19:
Debit Cash Account $2,500
Credit Deferred Service Revenue $2,500
To record the sale of 100 coupon books for $25 each.
March 25:
Debit Dividend $540
Credit Cash Account $540
To record the payment of cash dividend.
March 30:
Debit Salaries Expense $850
Credit Cash Account $850
To record the payment of salaries.
March 30:
Debit Accounts Payable (Tahoe Company) $5,950
Credit Cash Account $5,950
To record the payment of cash on account.
March 31:
Debit Cash Account $880
Credit Service Revenue $880
To record the receipt of cash for golf services performed.
Explanation:
The above journal entries are made on a daily basis as business transactions and events take place. Journal entries are the initial records of business transactions and events. They identify the accounts to be debited and the accounts to be credited in the general ledger.
According to a newly added office smoking regulation, only employees who have an enclosed office may smoke at their desks. This leads to a major conflict between various employees as virtually all employees with enclosed offices are higher level managers, and all other employees lack enclosed offices. Therefore, the lower level employees who smoke argue that they should be offered enclosed offices. Which of the following, if true, strengthens the employees' argument?
A) The company is a zealous supporter of the "Kick the Butt" campaign a corporate anti-smoking campaign.
B) The smoking regulations allow all employees who smoke an equal opportunity to do so, regardless of an employee's job level.
C) The company has a limited budget for infrastructure modifications.
D) Employees at the higher level, who do not smoke, do not have enclosed offices.
E) Higher level managers, who have enclosed offices, are willing to share their offices with lower level employees.
Answer: B. The smoking regulations allow all employees who smoke an equal opportunity to do so, regardless of an employee's job level
Explanation:
Based on the scenario that we have in the question, the option that strengthens the employees' argument is that the smoking regulations allow all employees who smoke an equal opportunity to do so, regardless of an employee's job level.
In this case, there's actually a justification for the employees demand of enclosed offices since the smoking regulations allow all the workers who smoke an equal opportunity to do so.
Hence, this particular option strengthens their argument. The other options doesn't support the argument of the employees.
In 1880 five aboriginal trackers were each promised the equivalent of 50 Australian dollars for helping to capture the notorious outlaw Ned Kelley. In 1998 the granddaughters of two of the trackers claimed that this reward had not been paid. The prime minister stated that if this was true, the government would be happy to pay the $50. However, the granddaughters also claimed that they were entitled to compound interest.
A. How much was each entitled to if the interest rate was 3%?B. How much was each entitled to if the interest rate was 6%?
Answer:
A. $1,635
B. $48,424
Explanation:
Using the formulae P (1+r)^t, where P= $50; the principal, r= 0.03 or 3%; the interest rate, and t= 118 (1998-1880).
Hence, at 3% each would be entitled
=50 (1+0.03)^118
=50 (1.03)^118
= $1,635
At 6% each would be entitled
= 50 (1+06)^118
= 50 (1.06)^118
= $48,424
Therefore, since the granddaughters also claimed that they were entitled to compound interest, they would be entitled $1,635 at 3% interest rate and $48,424 if the interest rate was 6%.
Gillock, Inc. uses MACRS for its income tax return and the straight-line method for its financial statements. On January 1, Year 1, the company purchased a long-term asset that cost $130,000 and has a $10,000 salvage value and an expected 8-year useful life. MACRS specifies a 5-year life for that asset and a depreciation rate of 20% for the first year of its life. Which of the following would the company show on its financial records? Depreciation expense of $26,000 on the income statement and $15,000 on the tax return Less depreciation expense on the tax return than on the income statement The same amount of depreciation expense for financial reporting as for income tax preparation A deferred tax liability will be reported on the balance sheet Which of the following would be classified as a long-term operational asset?
a) Trademark
b) Accounts receivable
c) Inventory
d) Notes receivable
Answer:
A deferred tax liability will be reported on the balance sheet
b) trademark
as longterm assets refers to those assets that will not become cash within a one-year period
Explanation:
As the accounting makes the depreciaiton of the asset among 8 years
while the MACRS (depreciaiton for tax purposes) does it in 5 years
the company will pay lower income taxes now but, higher in the future
creating a tax liability as the tax relief occurs now.
Calculations:
Account Depreciation Expense
(cost - salvage value )/ useful life =
(130,000 - 10,000)/ 8 years = 8,000
Tax-purpose depreciation expense
130,000 x 20% = 26,000
There is a tax difference of (26,000 - 8,000) x corporate income tax
On June 1 of year 1, Riverside Corp. (RC), a calendar-year taxpayer, acquired the assets of another business in a taxable acquisition. When the purchase price was allocated to the assets purchased, RC determined it had purchased $1,629,000 of goodwill for both book and tax purposes. At the end of year 1, RC determined that the goodwill had not been impaired during the year. In year 2, however, RC concluded that $485,000 of the goodwill had been impaired and wrote down the goodwill by $485,000 for book purposes.
Required:
a. What book-tax difference associated with its goodwill should RC report in year 1? Is it favorable or unfavorable? Is it permanent or temporary?
b. What book-tax difference associated with its goodwill should RC report in year 2? Is it favorable or unfavorable? Is it permanent or temporary?
Answer:
a. $63,350 temporary and favorable difference.
b. $376,400 temporary and unfavorable difference.
Explanation:
According to Federal tax codes, Goodwill is amortized for 180 months (15 years) on a straight line basis.
a. Company was purchased on June 1 which means that for year 1, 7 months would have gone by at year end.
Amortization = 1,629,000 * 7/180
= $63,350
Riverside will not deduct this from Goodwill in the books however.
In Year 1 therefore, the book-tax difference will be a favorable and temporary difference of $63,350
b. Amortization = 1,629,000 * 12/180
= $108,600
Riverside wrote down Goodwill by $485,000 for book purposes.
Temporary tax difference = 485,000 - 108,600
= $376,400
This is unfavorable.
Selma operates a contractor's supply store. She maintains her books using the cash method. At the end of 2020, her accountant computes her accrual basis income that is used on her tax return. For 2020, Selma had cash receipts of $1,400,000, which included $200,000 collected on accounts receivable from 2019 sales. It also included the proceeds of a $100,000 bank loan. At the end of 2020, she had $250,000 in accounts receivable from customers, all from 2020 sales.
Required:
a. Compute Selma's accrual basis gross receipts for 2020
b. Selma paid cash for all of the purchases. The total amount paid for merchandise in 2014 was $1.3 million. At the end of 2019, she had merchandise on hand with a cost of $150,000. At the end of 2020, the cost of merchandise on hand was $300,000. Compute Selma's gross income from merchandise sales for 2020.
Answer:
a. $1,350,000
b. $200,000
Explanation:
a. Selma's accrual basis gross receipts for 2020
= cash receipts + accounts receivables - cash collected from 2019 sales - bank loan
= $1,400,000 + $250,000 - $200,000 -
$100,000
= $1,350,000
b. Selma's gross income from merchandise sales 2020.
We need to calculate first the cost of goods sold during 2020.
The cost of goods sold during 2020
= Total purchase made during 2020 + ending inventory 2019 - ending inventory 2020
= $1,300,000 + $150,000 - $300,000
= $1,150,000
The Gross profit for 2020
= Gross receipts - Cost of goods sold
= $1,350,000 - $1,150,000
= $200,000
Two or more items are omitted in each of the following tabulations of income statement data. Fill in the amounts that are missing.
2019 2020 2021
Sales revenue $290,000 $360000 $410,000
Sales returns and allowances (11,000) (13,000) (20000)
Net sales 279000 347,000 390000
Beginning inventory 20,000 32,000 37000
Ending inventory 32000 37000 44000
Purchases 242000 260,000 298,000
Purchase returns and
allowances (5,000) (8,000) (10,000)
Freight-in 8,000 9,000 12,000
Cost of goods sold (233,000) 256000 (293,000)
Gross profit on sales 46,000 91,000 97,000
Answer:
2019
Net Sales = Sales revenue - Allowances = 290,000 - 11,000 = $279,000
Ending Inventory = 2020 Beginning balance = $32,000
Purchases = Cost of goods sold + Ending inventory + Purchase returns - Beginning inventory - freight-in
= 233,000 + 32,000 + 5,000 - 20,000 - 8,000
= $242,000
2020
Sales revenue = Sales returns + Net sales = 13,000 + 347,000 = $360,000
Cost of goods sold = Net sales - Gross profit = 347,000 - 91,000 = $256,000
Ending Inventory = Beginning inventory + Purchases + Freight in - Purchase returns - Cost of goods sold
= 32,000 + 260,000 + 9,000 - 8,000 - 256,000
= $37,000
2021
Net sales = Cost of goods sold + gross profit = 293,000 + 97,000 = $390,000
Sales returns = Sales - Net Sales = 410,000 - 390,000 = $20,000
Beginning Inventory = 2020 ending inventory = $37,000
Ending inventory = Beginning inventory + Purchases + Freight in - Purchase returns - Cost of goods sold
= 37,000 + 298,000 + 12,000 - 10,000 - 293,000
= $44,000
The missing amount for the year 2019,2020, and the year 2020 should be calculated below,
Calculation of missing amounts:For 2019
Net Sales = Sales revenue - Allowances
= 290,000 - 11,000
= $279,000
Ending Inventory = 2020 Beginning balance = $32,000
So,
Purchases = Cost of goods sold + Ending inventory + Purchase returns - Beginning inventory - freight-in
= 233,000 + 32,000 + 5,000 - 20,000 - 8,000
= $242,000
For 2020
Sales revenue = Sales returns + Net sales
= 13,000 + 347,000
= $360,000
Cost of goods sold
= Net sales - Gross profit
= 347,000 - 91,000
= $256,000
So,
Ending Inventory = Beginning inventory + Purchases + Freight in - Purchase returns - Cost of goods sold
= 32,000 + 260,000 + 9,000 - 8,000 - 256,000
= $37,000
For 2021
Net sales = Cost of goods sold + gross profit
= 293,000 + 97,000
= $390,000
Sales returns = Sales - Net Sales
= 410,000 - 390,000
= $20,000
Beginning Inventory = 2020 ending inventory = $37,000
Ending inventory = Beginning inventory + Purchases + Freight in - Purchase returns - Cost of goods sold
= 37,000 + 298,000 + 12,000 - 10,000 - 293,000
= $44,000
Learn more about an inventory here: https://brainly.com/question/14170257
Finding Unknown Values in the Cost of Goods Manufactured Report [LO 2-3, 2-6]Mulligan Manufacturing Company uses a job order cost system with overhead applied to products at a rate of 150 percent of direct labor cost. Case 1 Case 2 Case 3Direct material used 15,000 14,100Direct labor 18,000 Manufacturing overhead applied 11,500 Total current manufacturing costs 27,500 28,500Beginning work in process inventory 9,900 8,000Ending work in process inventory 5,900 9,900 Cost of goods manufactured 44,000 26,001Beginning finished goods inventory 4,700 12,000 Ending finished goods inventory 7,600 6,200Cost of goods sold 41,000 36,000Required:Treating each case independently, selected from the manufacturing data given below, find the missing amounts. You should do them in the order listed. (Hint: For the manufacturing costs in Case 3, first solve for conversion costs and then determine how much of that is direct labor and how much is manufacturing overhead.) (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. Enter all amounts as positive values.)
Answer:
For Case 1:
Manufacturing overhead applied = 27,000
Total current manufacturing costs = 60,000
Cost of goods manufactured = 64,000
Cost of goods sold = 61,100
For Case 2:
Direct labor = 7,667
Direct material used = 8,333
Beginning work in process inventory = 26,400
Ending finished goods inventory = 15,000
For Case 3:
Direct labor = 5,760
Manufacturing overhead applied = 8,640
Ending work in process inventory = 10,499
Beginning finished goods inventory = 16,199
Explanation:
Note: The data in the question are merged together. The data are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
Also note: See the attached excel file for the table with the computed figure in bold red color.
In the attached excel file, the following calculations are employed:
For Case 1:
Since overhead applied to products at a rate of 150 percent of direct labor cost, we have:
Manufacturing overhead applied = Direct labor * 150% = 18,000 * 150% = 27,000
Total current manufacturing costs = Direct material used + Direct labor + Manufacturing overhead applied = 15,000 + 18,000 + 27,000 = 60,000
Cost of goods manufactured = Total current manufacturing costs + Beginning work in process inventory - Ending work in process inventory = 60,000 + 9,900 - 5,900 = 64,000
Cost of goods sold = Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory = 64,000 + 4,700 - 7,600 = 61,100
For Case 2:
Since overhead applied to products at a rate of 150 percent of direct labor cost, we have:
Direct labor = (Manufacturing overhead applied / 150%) * 100% = (11,500 / 150%) * 100% = 7,667
Direct material used = Total current manufacturing costs - Manufacturing overhead applied - Direct labor = 27,500 - 11,500 - 7,667 = 8,333
Beginning work in process inventory = Cost of goods manufactured + Ending work in process inventory - Total current manufacturing costs = 44,000 + 9,900 - 27,500 = 26,400
Ending finished goods inventory = Cost of goods manufactured + Beginning finished goods inventory - Cost of goods sold = 44,000 + 12,000 – 41,000 = 15,000
For Case 3:
Since overhead applied to products at a rate of 150 percent of direct labor cost, we can let:
Direct labor = x
Therefore, we have:
Manufacturing overhead applied = x * 150%
Since,
Total current manufacturing costs = Direct material used + Direct labor + Manufacturing overhead applied ……………………….. (1)
Where;
Total current manufacturing costs = 28,500
Direct material used = 14,100
We can therefore substitute the relevant values into equation (1) and solve for x as follows:
28,500 = 14,100 + x + 1.5x
28,500 - 14,100 = 2.5x
14,400 = 2.5x
x = 14,400 / 2.5
x = 5,760
Therefore;
Direct labor = x = 5,760
and
Manufacturing overhead applied = x * 150% = 5,760 * 150% = 8,640
Ending work in process inventory = Total current manufacturing costs + Beginning work in process inventory - Cost of goods manufactured = 28,500 + 8,000 - 26,001 = 10,499
Beginning finished goods inventory = Cost of goods sold + Ending finished goods inventory - Cost of goods manufactured = 36,000 + 6,200 - 26,001 = 16,199
Greenstream Insurance Agency prepares monthly financial statements. Presented below is an income statement for the month of June that is correct on the basis of information considered.
GREENSTREAM INSURANCE AGENCY
Income Statement
For the Month Ended June 30
Revenues
Service Revenue $40,000
Expenses
Salaries and Wages Expense $12,000
Advertising Expense 800
Rent Expense 4,200
Depreciation Expense 2,800
Total Expenses 19,800
Net Income 20,200
Additional Data: When the income statement was prepared, the company accountant neglected to take into consideration the following information:
1. A utility bill for $1,200 was received on the last day of the month for electric and gas service for the month of June.
2. A company insurance salesman sold a life insurance policy to a client for a premium of $10,000. The agency billed the client for the policy and is entitled to a commission of 20%.
3. Supplies on hand at the beginning of the month were $2,500. The agency purchased additional supplies during the month for $1,500 in cash and $1,200 of supplies were on hand at June 30.
4. The agency purchased a new car at the beginning of the month for $24,000 cash. The car will depreciate $6,000 per year.
5. Salaries owed to employees at the end of the month total $5,300. The salaries will be paid on July 5.
Instructions:
Prepare a corrected income statement.
Answer:
Net Income $12,400
Explanation:
Preparation of a corrected income statement.
GREENSTREAM INSURANCE Agency Income Statement For the Month Ended June 30
RevenuesService Revenue $42,000
[$40,000 +(20%* $10,000).]
Expenses:
Salaries and Wages Expense $17,300
($12,000 + $5,300)
Rent Expense 4,200
Depreciation Expense 3,300
($2,800 + $500)
Supplies Expense 2,800
($0 + $2,800)
Utilities Expense 1,200
($0 + $1,200)
Advertising Expense 800
Total expenses 29,600
Net Income $12,400
(42,000-29,600)
Therefore the net income for the corrected income statement will be $12,400
Consider the market for wheat, which is currently in equilibrium. Then, the following two things happen: 1) A change in the climate causes farmers to switch from planting wheat to corn and 2) a credible study shows that eating even a moderate amount of wheat is bad for you If the change given is the only change that happened (all other things are held constant), what will be the effect on the equilibrium?
A. Price of wheat increases, change in quantity of wheat is ambiguous.B. Price of wheat decreases, change in quantity of wheat is ambiguous.C. Quantity of wheat increases, change in price of wheat is ambiguous.D. Quantity of wheat decreases, change in price of wheat is ambiguous.E. None of the above.
Answer:
The market for wheat
If the following two things happen: 1) A change in the climate causes farmers to switch from planting wheat to corn and 2) a credible study shows that eating even a moderate amount of wheat is bad for you.
If all other things are held constant, and the given change is the only change that happened, the effect on the equilibrium is:
D. Quantity of wheat decreases, change in price of wheat is ambiguous.
Explanation:
With the switch from the planting of wheat to the production of corn by farmers caused by climate change, the quantity of wheat will surely nosedive. This decrease in the quantity produced and supplied is ordinarily supposed to trigger an increase in the price of wheat, thereby dislocating the market equilibrium, but because of the low demand caused by the study, the change in price of wheat will remain ambiguous.
Answer:
According to my research, I think the answer is D. Quantity of wheat decreases, change in the price of wheat is ambiguous
Flint Corporation provides security services. Selected transactions for Flint Corporation are presented below.
Oct.
1 Issued common stock in exchange for $75,200 cash from investors.
2 Hired part-time security consultant. Salary will be $2,300 per month. First day of work will be October 15.
4 Paid 1 month of rent for building for $2,300.
7 Purchased equipment for $20,500, paying $4,600 cash and the balance on account.
8 Paid $2,300 for advertising.
10 Received bill for equipment repair cost of $480.
12 Provided security services for event for $3,600 on account.
16 Purchased supplies for $470 on account.
21 Paid balance due from October 7 purchase of equipment.
24 Received and paid utility bill for $169.
27 Received payment from customer for October 12 services performed.
31 Paid employee salaries and wages of $5,800.
Journalize the transactions. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Post the transactions to T-accounts. (Post entries in the order of journal entries presented in the previous part. For accounts with zero balance select "Balance" from the list and enter "0" or leave it blank.)
Prepare a trial balance at October 31, 2017.
Answer:
Date Account Titles Debit Credit
1-Oct Cash $75,200
Common Stock $75,200
2-Oct No entry required $0
4-Oct Rent Expenses $2,300
Cash $2,300
7-Oct Equipment $20,500
Cash $4,600
8-Oct Advertising expenses $2,300
Cash $2,300
10-Oct Repair expenses $480
Account payable $480
12-Oct Account Receivables $3,600
Service revenue $3,600
16-Oct Supplies $470
Account Payable $470
21-Oct Accounts payable $15,900
Cash $15,900
24-Oct Utility expenses $169
Cash $169
27-Oct Cash $3,600
Account receivables $3,600
31-Oct Salaries & Wages Ex $5,800
Cash $5,800
The following book and fair values were available for Westmont Company as of March 1.
Book Value Fair Value
Inventory $ 644,750 $ 609,000
Land 779,250 1,086,750
Buildings 1,770,000 2,138,250
Customer relationships 0 842,250
Accounts payable (102,000 ) (102,000 )
Common stock ( 2,000,000 )
Additional paid-in capital (500,000 )
Retained earnings 1/1 (424,500 )
Revenues (457,000 )
Expenses 289,500
Arturo Company pays $4,130,000 cash and issues 28,200 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $32,400 and Arturo pays $49,800 for legal fees to complete the transaction.
Prepare Arturo’s journal entry to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
DR Inventory $609,000
Land $1,086,750
Buildings $2,138,250
Customer Relationships $842,250
Goodwill $965,750
CR Accounts Payable $102,000
Common Stock $56,400
Additional Paid-In Capital $1,353,600
Cash $4,130,000
Working
Common Stock = 28,200 shares * $2 = $56,400
Additional Paid in Cap = 28,200 shares * ( 50 - 2) = $1,353,600
DR Additional Paid-In Capital $32,400
CR Cash $32,400
DR Professional Services Expense $49,800
CR Cash $49,800
Discussion (LO. 1, 2) Marmot Corporation pays a dividend of $100,000 in the current year. Otter Corporation, a calendar year C corporation, owns 15% of Marmot's stock. Gerald, an individual taxpayer in the 24% marginal bracket, also owns 15% of Marmot's stock. Compare and contrast the treatment of the dividend by Otter Corporation and Gerald. Click here to view the dividend received deduction to use for this question. a. Otter Corporation will be allowed a equal to % of the dividends it received. It will pay tax of % on of the dividends. b. Gerald must include in income . He will pay tax at the % rate.
Answer:
The correct response will be:
(a) 15%, 21%
(b) 15%
Explanation:
(a)
Otter Company would be entitled to subtract a dividend received equal to 50% including its dividends it obtained. For the continued membership including its dividends, these will pay an income tax of 21 percent.
The organization would then expect to be paid 21 percent tax mostly on the remaining part including its dividend while the federal income rate that is applied to it would be 21 percent. A business but with much less than 20 percent investment is given just 50 percent including its allowance as well as the additional dividend revenue is exempted from taxes of 21 percent.(b)
Gerald would have all the split ones in sales. At either the 15 percent rate, he is going to pay tax.
The semiconductor business of the California Microtech Corporation qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8 million. The loss from operations of the segment during 2021 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 million. The income tax rate is 25%. The estimated fair value of the segment's assets, less costs to sell, on December 31 was $7 million. Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions.)
Answer:
$1,650,000
Explanation:
Preparation of the lower portion of the 2021 income statement .
2021 Income from continuing operations before income taxes5,800,000
Income tax expense(1,450,000)
($5,800,000 × 25 %)
Income from continuing operations4,350,000
Discontinued operations:
Loss from operations of discontinued component(3,600,000)
Income tax benefit 900,000
(25*3,600,000)
Loss on discontinued operations(2,700,000)
Net income$1,650,000
(4,350,000-2,700,000)
Therefore the the lower portion of the 2021 income statement is $1,650,000
Fit & Slim (F&S) is a health club that offers members various gym services.
Assume F&S offers a deal whereby enrolling in a new membership for $1,100 provides a year of unlimited access to facilities and also entitles the member to receive a voucher redeemable for 30% off yoga classes for one year. The yoga classes are offered to gym members as well as to the general public. A new membership normally sells for $1,140, and a one-year enrollment in yoga classes sells for an additional $600. F&S estimates that approximately 50% of the vouchers will be redeemed. F&S offers a 10% discount on all one-year enrollments in classes as part of its normal promotion strategy.
Required:
a. Indicate whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price.
b. Prepare the journal entry to recognize revenue for the sale of a new membership.
Answer:
a. they are separate performance obligations
normal price of annual membership = $1,140
one yer enrollment in yoga = $600 x (30% - 10%) = $120 x 50% = $60
total $1,200
% of price allocated to:
annual membership = ($1,140 / $1,200) x $1,100 = $1,045
discount voucher = $1,100 - $1,045 = $55
b. the journal entry should be
Dr Cash 1,100
Cr Unearned revenue, membership fees 1,045
Cr Unearned revenue, discount voucher 55
Use Worksheet 5.2 and Exhibit 5.9. Denise Green is currently renting an apartment for $650 per month and paying $400 annually for renters insurance. She just found a small townhouse she can buy for $175,000. She has enough cash for a $10,000 down payment and $4,200 in closing costs. Denise estimated the following costs as a percentage of the homes price: property taxes, 2.5 percent; homeowners insurance, 0.5 percent; and maintenance, 0.7 percent. She is in the 25 percent tax bracket. Using Worksheet 5.2, calculate the cost of each alternative and recommend the least costly option - rent or buy - for Denise. Assume Denises security deposit is equal to one months rent of $650. Also assume a 4% after tax rate return on her savings, a 3% annual appreciation in home price, and a 6% mortgage interest rate for 30 years.1. Cost of renting. Round the answer to the nearest dollar.
$
2. Cost of buying. Round the answer to to the nearest dollar.
$
Please find full question attached
Answer and Explanation:
Please find full answer and explanation attached
Following are the transactions of Sustain Company.
June 1 T. James, owner, invested $14,500 cash in Sustain Co. in exchange for its common stock.
2 The company purchased $7,500 of furniture made from reclaimed wood on credit.
3 The company paid $1,300 cash for a 12-month insurance policy on the reclaimed furniture
4 The company billed a customer $6,500 in fees earned from preparing a SASB-compliant sustainability report.
12 The company paid $7,500 cash toward the payable from the June 2 furniture purchase. 20 The company collected $6,500 cash for fees billed on June 4.
21 The company received $13,500 cash from a sustainable investor group in exchange for common stock.
30 The company received $8,500 cash from a client for sustainability services for the next 3 months.
Prepare general journal entries for the above transactions View transaction list Journal entry worksheet 123 4 5 678 T.
James, owner, invested $14,500 cash in Sustain Co. in exchange for its common stock. Note: Enter debits before credits. Date General Journal Debit Credit June 01
Answer and Explanation:
The Journal entries are shown below:-
1. Cash Dr, $14,500
To Common stock $14,500
(Being Common Stock issued is recorded)
2. Furniture Dr, $7,500
To Accounts Payable $7,500
(Being Furniture purchased on Credit is recorded)
3. Prepaid insurance Dr, $1,300
To Cash $1,300
(Being Prepaid Insurance Paid is recorded)
4. Accounts Receivable Dr, $6,500
To Service Revenue $6,500
(Being Revenue earned is recorded)
5. Accounts Payable Dr, $7,500
To Cash $7,500
(Being paid for Outstanding balance in payable is recorded)
6. Cash Dr, $6,500
To Accounts Receivable $6,500
(Being received from Accounts Receivables is recorded)
7. Cash Dr, $13,500
To Common stock $13,500
(Being common Stock issued is recorded)
8. Cash Dr, $8,500
To Unearned Service Revenue $8,500
(Being advance received for services is recorded)
Adjusting entries on month-end
Insurance Expense Dr, $108.33 ($1,300 ÷ 12)
To Prepaid Insurance $108.33
(Being insurance expired is recorded)
Biochemical Corp. requires $660,000 in financing over the next three years. The firm can borrow the funds for three years at 12.80% interest per year. The CEO decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 9.50% interest in the first year, 14.25% interest in the second year, and 10.75% interest in the third year. Assume interest is paid in full at the end of each year.
A. Determine the total interest cost under each plan.
B. Which plan is less costly?
Answer:
A. Fixed Cost Financing = $253,440
Short-term Financing=$227,700
B. Short term financing is less costly
Explanation:
A. Calculation to Determine the total interest cost under each plan.
Cost of Three Year FIXED COST FINANCING
$660,000 borrowed × 12.80% per annum × 3 years
= $253,440
Cost of Three Year Variable SHORT-TERM FINANCING
1st year $660,000 × 9.50%
Per annum= $ 62,700 Interest cost
2nd year $660,000 × 14.25%
Per annum=94,050 Interest cost
3rd year $660,000 × 10.75%
Per annum=70,950 Interest cost
TOTAL
YEAR 1 $ 62,700 Interest cost
YEAR 2 $94,050 Interest cost
YEAR 3 70,950 Interest cost
=$227,700
B. Based on the above calculation the SHORT TERM plan is less costly because the total interest cost for three years is $227,700 which is lesser than Fixed term the total interest cost of $253,440
Lucia and barley are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of barley and alfalfa each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of their land and alfalfa on the rest.
Barley Alfalfa
Bushels per acre Bushels per acre
Musashi 40 8
Rina 28 7
Lucia has an absolute advantage in the production of barley, and Lucia has an absolute advantage in the production of alfalfa. Kenji's opportunity cost of producing 1 bushel of alfalfa is ___________ bushels of barley, whereas Lucia's opportunity cost of producing 1 bushel of alfalfa is ____________ bushels of barley. Because Kenji has ahigher opportunity cost of producing alfalfa than ,Lucia has a comparative advantage in the production of alfalfa, andKenji has a comparative advantage in the production of barley.
Answer:
Kenji's alfalfa opportunity cost:
each bushel of Alfalfa cost 4 bushel of barley.
Lucia's alfalfa opportunity cost:
each bushel of Alfalfa cost 5 bushel of barley.
Explanation:
the opportunity cost is based on the output resinged when chosing a particular good.
In this case, the opportunity cost of barley is the Alfalfa and, for th Alfalfa the Barley that the farmer could have made.
Kenji's:
20 Barley / 7 alfalfa = 4 barley
each bushel of Alfalfa cost 4 bushel of barley.
Lucia's:
40 barley / 8 alfalta = 5 barly
each bushel of Alfalfa cost 5 bushel of barley.
DISCLAMER:
The table suggest two different names
I will assume the top value are from Lucia as those gives the absolute advantage stated in the question.
"Lucia has an absolute advantage in the production of barley, and Lucia has an absolute advantage in the production of alfalfa"
and the bottom from Kenji.
Haynes, Inc. obtained 100 percent of Turner Company's common stock on January 1, 2017, by issuing 10,000 shares of $10 par value common stock. Haynes's shares had a $15 per share fair value. On that date, Turner reported a book value of $100,000 (consisting of Common Stock $10,000, Additional Paid-In Capital $50,000, and Retained Earnings $40,000). However, its equipment (with a 5-year remaining life) was undervalued by $5,000 in the company's accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner's books. The customer list had an estimated remaining useful life of 10 years.
The following figures come from the individual accounting records of these two companies as of December 31, 2017:
Haynes Turner
Revenues $(600,000) $(230,000)
Expenses 440,000 120,000
Investment income Not given 0
Dividends declared 80,000 50,000
The following balances come from the individual accounting records of these two companies as of December 31, 2018:
Haynes Turner
Revenues $(700,000) $(280,000)
Expenses 460,000 150,000
Investment income Not given 0
Dividends declared 90,000 40,000
Equipment 500,000 300,000
Required:
a. What is the consolidated equipment balance as of December 31, 2018?
b. Would this answer be affected by the investment method applied by the parent?
Answer:
a. $848,000
b. No
Explanation:
a. The calculation of consolidated equipment balance as of December 31, 2018 is shown below:-
Consolidated equipment balance = Equipment balance of Haynes + Equipment balance of Turner + Allocation based on fair value - Depreciation
= $500,000 + $300,000 + $5,000 - (($5,000 ÷ 5 × 2)
= $500,000 + $300,000 + $5,000 - $2,000
= $848,000
2. No it will not affect by the investment method applied by the parent.
On April 1, 2019, AFC Corporation was organized. The following transactions occurred during 2019:
On April 1, 2019, 10,000 shares of $1 par value common stock were issued for $20 per share.
On April 2, 2019, a one year rent for $64,000 a year was signed on a store. The corporation paid the entire $64,000 on this date.
On April 2, 2019 the company borrowed $50,000 from the bank by signing a three year, 8%
note with interest payable each April 1 (first interest payment due April 1, 2020).
The company purchased furniture and equipment for $40,000 in cash on April 2, 2019. The
furniture and equipment has an estimated life of 5 years with no residual value.
During the 2019 the company purchased $130,000 worth of merchandise for cash.
Merchandise costing $120,000 was sold for $290,000 in 2019. All sales were cash sales.
Salaries and wages of $50,000 were paid during 2019.
Other operating expenses totaled $10,000 in 2019 and were paid in cash.
Dividends of $1 per share were declared on December 15, 2019 to be paid on January 15, 2020.
List of Accounts:
Cash, Inventory, Prepaid Rent, Furniture & Equipment, Accumulated Depreciation, Interest Payable, Notes Payable, Dividends Payable, Salaries & Wages Payable, Common Stock, Additional Paid In Capital, Retained Earnings, Sales Revenue, Cost of Goods Sold, Rent Expense, Salaries & Wages Expense, Interest Expense, Depreciation Expense, Other Expenses, Dividends
1. Journalize the transactions
2. Prepare an unadjusted trial balance
3. Prepare and Post Adjusting Entries. Prepare all necessary adjusting entries at December 31, 2019. Note that salaries and wages earned by employees in December of 2019 but not yet paid at December 31, 2019 amounted to $3,000 (Remember to update ledger accounts).
4. Prepare an adjusted trial balance
5. Prepared Financial Statements for the period in good forms
Answer:
1) On April 1, 2019, 10,000 shares of $1 par value common stock were issued for $20 per share.
Dr Cash 200,000
Cr Common stock 10,000
Cr Additional paid in capital 190,000
On April 2, 2019, a one year rent for $64,000 a year was signed on a store. The corporation paid the entire $64,000 on this date.
Dr Prepaid rent 64,000
Cr Cash 64,000
On April 2, 2019 the company borrowed $50,000 from the bank by signing a three year, 8% note with interest payable each April 1 (first interest payment due April 1, 2020).
Dr Cash 50,000
Cr Notes payable 50,000
The company purchased furniture and equipment for $40,000 in cash on April 2, 2019. The furniture and equipment has an estimated life of 5 years with no residual value.
Dr Furniture & equipment 40,000
Cr Cash 40,000
During the 2019 the company purchased $130,000 worth of merchandise for cash.
Dr Merchandise inventory
Cr Cash 130,000
Merchandise costing $120,000 was sold for $290,000 in 2019. All sales were cash sales.
Dr Cash 290,000
Cr Sales revenue 290,000
Dr Cost of goods sold 120,000
Cr Merchandise inventory 120,000
Salaries and wages of $50,000 were paid during 2019.
Dr Wages expense 50,000
Cr Cash 50,000
Other operating expenses totaled $10,000 in 2019 and were paid in cash.
Dr Operating expenses 10,000
Cr Cash 10,000
Dividends of $1 per share were declared on December 15, 2019 to be paid on January 15, 2020.
Dr Dividends 10,000
Cr Dividends payable 10,000
2) unadjusted trial balance
debit credit
Cash $246,000
Merchandise inventory $10,000
Prepaid rent $64,000
Furniture & equipment $40,000
Notes payable $50,000
Dividends payable $10,000
Common stock $10,000
Additional paid in capital $190,000
Sales revenue $290,000
Cost of goods sold $120,000
Wages expense $50,000
Operating expenses $10,000
Dividends $10,000
Totals $550,000 $550,000
3) adjusting entries
Dr Rent expense 48,000
Cr Prepaid rent 48,000
Dr Wages expense 3,000
Cr Wages payable 3,000
Dr Depreciation expense 6,000
Cr Accumulated depreciation: furniture & equipment 6,000
Dr Interest expense 3,000
Cr Interest payable 3,000
4) adjusted trial balance
debit credit
Cash $246,000
Merchandise inventory $10,000
Prepaid rent $16,000
Furniture & equipment $34,000
Notes payable $50,000
Wages payable $3,000
Interest payable $3,000
Dividends payable $10,000
Common stock $10,000
Additional paid in capital $190,000
Sales revenue $290,000
Cost of goods sold $120,000
Wages expense $53,000
Operating expenses $10,000
Rent expense $48,000
Depreciation expense $6,000
Interest expense $3,000
Dividends $10,000
Totals $556,000 $556,000
5) Income statement
Revenues $290,000
COGS ($120,000)
Gross profit $170,000
Operating expenses:
Wages expense $53,000Operating expenses $10,000Rent expense $48,000Depreciation expense $6,000 ($117,000)Operating profit $53,000
Other revenues and expenses:
Interest expense $3,000 ($3,000)Net income before taxes $50,000
Retained earnings = $50,000 - $10,000 = $40,000
balance sheet
Assets:
Cash $246,000
Merchandise inventory $10,000
Prepaid rent $16,000
Furniture & equipment $34,000
Total assets $306,000
Liabilities:
Notes payable $50,000
Wages payable $3,000
Interest payable $3,000
Dividends payable $10,000
Total liabilities $66,000
Stockholders' equity:
Common stock $10,000
Additional paid in capital $190,000
Retained earnings $40,000
Total stockholders' equity $240,000
Total liabilities + stockholders' equity $306,000
If every time production volume doubles, the direct labor costs decrease 20%, the learning curve is:
Answer:
d. 80%
Explanation:
In case when the volume of the production doubles, also the direct labor cost decreased by 20% so the learning curve is 80% as the labor cost is fall by 20% so the remaining percentage i.e.
= 100% - 20%
= 80%
Would be considered as a learning curve and the same is to be considered
Therefore the correct option is d. 80%
Your boss would like your help on a marketing research project she is conducting on the relationship between the price of soda and the quantity of soda demanded. She hands you the following document: Price of Soda Quantity of Soda Demanded (Dollars per can) (Billions of cans) 0.50 2,000 0.75 1,500 1.00 1,000 1.25 750 Your task is to take this________ and construct a graphical representation of the data. In doing so, you determine that as the price of soda rises, the quantity of soda demanded decreases. This confirms the________
Answer:
Your task is to take this demand schedule and construct a graphical representation of the data. In doing so, you determine that as the price of soda rises, the quantity of soda demanded decreases. This confirms the law of supply and demand .
Explanation:
A demand schedule basically shows us the quantity demanded for a good or service at different price levels.
As the price of a good or service increases, the consumers will be less willing to purchase the good or service, therefore the quantity demanded will decrease. When the price of a good or service increases, this results in a higher opportunity cost for the consumer and a lower consumer surplus.
Inversely, when the price of the good or service increases, the suppliers will be more willing to produce the good or service, therefore the quantity supplied will increase.
Characterize the totality of a territory
Incomplete question. However, I inferred you want to know what characterizes the totality of a territory?
Explanation:
The basic characteristics of a place include;
the topographical features,the atmospheric, andthe biological processes;A territory's topological features include factors like the elevation of the place, etc.
JV, a corporation, was formed in 2013 to design and manufacture electric cars. JV is 60 percent owned by AutoCo (a car manufacturer) and 40 percent owned by ElectricCo (a developer of electric car technology). The decision-making authority of JV is equally shared between AutoCo and ElectricCo: the board of directors of JV is comprised of two members appointed by AutoCo and two members appointed by ElectricCo. JV’s board of directors (1) set the annual budgets; (2) responsible for the hiring, firing, and compensation of management; and (3) approve all material contracts. As part of the agreement, all cars produced by JV will bear AutoCo’s logo and will be sold at AutoCobranded auto dealers.
AutoCo is an established car manufacturer that has been producing cars in the United States for the past century. To meet governmental mandates of lowering emissions and increasing the fuel economy of its fleet, AutoCo has been evaluating various ways to enter the electric vehicle market. AutoCo does not currently have viable technology for the production of electric cars. ElectricCo was established by professors that developed cutting-edge battery technology for electric cars. Although ElectricCo has not produced electric cars in a mass market, the battery technology is tested and highly valued. AutoCo and ElectricCo jointly formed JV to produce electric cars for the mass market. JV benefits from ElectricCo’s proprietary technology and AutoCo’s manufacturing expertise and access to credit markets and distribution channels.
JV is financed with 30 percent equity and 70 percent debt. When JV was formed, ElectricCo did not have access to sufficient cash at inception to fund its equity interest. To purchase its equity interest, ElectricCo received a loan from AutoCo. The debt financing was obtained in the form of a credit facility from a third-party bank. For the bank to provide debt to JV, it required that AutoCo guarantee the loan.
Required:
a. Is JV a variable interest entity (VIE)?
b. Which entity, if any, should consolidate JV?
Answer:
a. Is JV a variable interest entity (VIE)?
Yes, JV should be considered a variable interest entity. Basically both AutoCo and ElectricCo share JV's board, but ElectricCo didn't have the money to start a company or even be part of a joint venture. ElectricCo's equity is financed by AutoCo, so ElectricCo has basically no no equity at risk. Even the debt acquired by JV is backed by AutoCo, but AutoCo does not control JV on its own.
Basically ElectricCo's contribution is technology, and AutoCo provides everything else, but both control the company with one side (ElectricCo) not having enough money to invest but doing so through financing.
b. Which entity, if any, should consolidate JV?
AutoCo must include JV in its consolidated balance sheet since it owns 60% of the company and the products manufactured by JV are sold under AutoCo's brand.
Practice Makes Perfect Inc. was started on July 1 of the current year. Practice Makes Perfect provides piano lessons for students of all abilities. You are the founder, president, of manager, etc. You have not yet hired an accountant but your bank is asking for an income statement and balance sheet for the first month of operation. Then prepare a simple income statement and a balance sheet to present to the bank. Transactions:
a. You started your company with $100,000 that you raised by selling stock in Practice Makes Perfect Inc. to your family and friends.
b. Knowing that you would need additional funds, you presented your business plan to the bank and were able to get a $50,000 loan at 10 percent.
c. You purchased three pianos for $16,000 each, paying cash. You believe these pianos will last five years before you replace them. At the end of the five years, you think you can sell each piano for $1,000.
d. You spent $2,000 on supplies, which you charged on account.
e. The newspaper bills you $500 for the advertisement you ran. You plan on paying the bill next month.
f. Rent for the space you have leased is $1,000 a month, which you paid.
g. The firrst month, you bill students $2,000 for lessons.
h. You pay your two part-time piano teachers $500 each at the end of the month.
i. One of your students paid the $200 invoice you sent earlier in the month.
j. You write the check for the interest owed for the month.
k. You adjust the supplies account for $300 of sheet music that you gave to students.
l. You record one month of depreciation on the pianos.
2. Make a list of the assets and liabilities you would want to keep track of in a company you owned. What types of revenues would you have? What types of expenses would you want to track?
3. Look on the Internet for the ?nancial statements of a publicly held company. (If you own stock in a company, look for the financial statements in the last annual report you received.) OR ask your employer if you can look at a set of the company
Answer:
I used an excel spreadsheet to record this transactions on an accounting equation.
Practice Makes Perfect, Inc.
Income Statement
For the month ended July 31, 202x
Revenues $2,000
Expenses:
Advertising expense $500Rent expense $1,000Wages expense $1,000Supplies expense $300Depreciation expense $750Interest expense $417 ($3,967)Net income ($1,967)
Practice Makes Perfect, Inc.
Balance Sheet
For the month ended July 31, 202x
Assets:
Cash $99,783Accounts receivables $1,800Supplies $1,700Pianos $47,250Total assets $150,533
Liabilities:
Accounts payable $2,500Notes payable $50,000Total liabilities $52,500
Stockholders' equity
Common stock $100,000Retained earnings ($1,967)Total stockholders' equity $98,033
Total liabilities + equity $150,533