Answer:
Net income year 2 = $21,300
Explanation:
I looked for the missing information and found this:
Year Depreciation overstated Prepaid expense omitted
1 $2,500 $2,000
2 $4,000 $2,700
If your question doesn't include the same values, just adjust the answer.
Year 2's net income = net income (year 2) + overstated depreciation (year 2) + omitted prepaid expenses (year 1) - omitted prepaid expenses (year 2) = $18,000 + $4,000 + $2,000 - $2,700 = $21,300
Describe how communication strengthens relationship at work and as a result increases your productivity
The Grondas, who owned a party store along with land, fixtures, equipment, and a liquor license, entered into a contract to sell their liquor license and fixtures to Harbor Park Market in an agreement that was expressly conditioned on approval by the Grondas' attorney. The Grondas submitted the contract to their attorney but before the attorney had approved it, they received a second, better offer and submitted that contract to the attorney as well. The attorney reviewed both agreements and approved the second one. Harbor Park Market sued the Grondas for breach of contract. Will their suit succeed?
Answer:
No the suit will not succeed as their is no agreement
Explanation:
The contract was conditional contract. As the condition explicitly said that, the right to agree on terms and conditions is explicitly attorney's right. When the attorney has not agreed on the terms and conditions of Harbor Park, the company hasn't formed any contract. Furthermore, there is no limitation on Grondas to consider other available options and attorney is also not obliged to agree to Harbor's offer.
Thus the suit that says Grondas has breached the contract is meaningless and will not succeed in the court.
On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $120,000, and its estimated useful life was four years or 1,150,000 cuttings, after which it could be sold for $5,000.
Required
a. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods (round all answers to the nearest dollar):
1. Straight-line.
2. Double-declining balance.
3. Units-of-production. (Assume annual production in cuttings of 280,000; 430,000; 360,000; and 80,000.)
1. Straight-Line
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2. Double-declining balance
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2019 Answer
3. Units of Production
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
b. Assume that the machine was purchased on July 1, 2015. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods:
1. Straight-line.
2. Double-declining balance.
1. Straight-Line
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2019 Answer
2. Double-declining balance (Round answers to the nearest whole number, when appropriate.)
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2019 Answer
Answer:
Explanation:
Depreciation is the systematic allocation of the cost of a machine over its useful lifetime.
There are different types of depreciation like the straight line , double declining and the units of production method.
Workings
Depreciable amount = 120,000-5000 = 115,000
Useful life = 4 years
Depreciation rate = 115000/4 = 25% = 28,750
2015 2016 2017 2018
Straight line depreciation 28,750 28,750 28,750 28,750
Double declining
Double declining rate = 25%*2 = 50%
2015 = 50% * 115,000= 57,500
2016
Opening book value = 115,000-57,500 = 57500
Depreciation = 57,500*50% = 28,750
2017
Opening book value = 57500-28,750 =28750
Depreciation = 50%*28,750 =14,375
2018
Opening book value 28750-14375 = 14375
Depreciation = 14375*50% = 7188
Units of production
2015 = 280000/1150,000*115,000 = 28,000
2016 =430,000/1150000*115000 = 43,000
2017= 360000/1150000*115000 = 36,000
2018 = 80,000/1150000*115000 = 8000
B
IF the machine was bought on July 1, 2015
Straight line depreciation
2015 = (25%*115000 ) /2 = 14,375
2016 =25%* 115,000 = 28,750
2017 = 25%*115000 = 28750
2018 = 25%*115,000 =28750
2019 =(25%*115000)/2 = 14,375
Double declining method
2015
(115,000*50,000)/2 =28750
2016
Opening book value =115,000-28750 =86250
Depreciation = 50%*86250 = 43,125
2017
Opening book value =86250-43125 =43125
Depreciation = 43,125*50% = 21,563
2018
Opening book value
43125-21563 =21562
Depreciation = 21562*50% =10,781
2019
Opening book value = 21562-10781 =10781
Depreciation = 50%*10781 = 5391
Answer:
um... im actually finna work this out its interesting
Explanation:
Arthur White Sunglasses sell for about $ 151 per pair. Suppose the company incurs the following average costs per pair: LOADING...(Click the icon to view the cost information.) Arthur White has enough idle capacity to accept a one-time-only special order from Nevada Glasses for 22 comma 000 pairs of sunglasses at $ 62 per pair. Arthur White will not incur any variable marketing expenses for the order. Read the requirements
Requirement
How would accepting the order affect Arthur White's operating income?
In addition to the special order's effect onprofits, what other (longer-term qualitative) factors should Arthur White's managers consider in deciding whether to accept theorder?
Prepare an incremental analysis to determine the specialorder's effect on operating income. (Enter a "0" for any zero balances.
Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (22,000 units) Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order
Answer:
How would accepting the order affect Arthur White's operating income?
operating income will increase by $88,000In addition to the special order's effect onprofits, what other (longer-term qualitative) factors should Arthur White's managers consider in deciding whether to accept theorder?
The most important qualitative factors which cannot be measured in $ are:
Morale Customers Investors Community ProductsIn this case, the only two factors that could be affected are the investors which will be happy to earn more money and customers which might consider making special orders only. In this case, the special order is feasible because the company has a lot of spare capacity, but what would happen in the future if there is no spare capacity and more customers want to place special orders?
Prepare an incremental analysis to determine the special order's effect on operating income.
without special with special differential
order order amount
revenue $0 $1,364,000 $1,364,000
variable costs $0 ($1,276,000) ($1,276,000)
contribution $0 $88,000 $88,000
margin
fixed costs $0 $0 $0
total effect on $0 $88,000 $88,000
operating income
Explanation:
production costs per unit:
direct labor $11direct materials $39variable manufacturing overhead $8fixed manufacturing overhead $16variable marketing expenses $4total $78sales price $151
special order 22,000 pairs at $62:
since the company has idle capacity, no fixed manufacturing costs nor any variable marketing expenses
total cost per unit = $78 - $16 - $4 = $58
special order's contribution margin = $62 - $58 = $4 x 22,000 = $88,000
Tristan refuses to let Marla list his property on the MLS, even though Marla told him that more exposure to the property will generate more potential buyers. Which two fiduciary duties are at odds in this situation
Answer: a. Reasonable skill and care and obedience
Explanation:
The Fiduciary responsibility of Reasonable Skill and Care charges that professionals in a contract should give the same level of skill and care that another competent member of the profession will be able to give. Essentially, Professionals should do their best in a contract to execute it. Marla needs to exercise this fiduciary responsibility by listing Tristan's property on the MLS so that it is sold faster.
However, this will go against her other Fiduciary Responsibility to Tristan, that of Obedience. Tristan's wishes as the client are supposed to be listened and adhered to. Marla is supposed to follow Tristan's directives and remain faithful to them. His directive in this scenario is that Marla does not register the property on the MLS and Marla needs to follow this.
The two fiduciary duties are at odds in this situation are therefore those of Reasonable skill and care and Obedience.
Profit or Loss on New Stock Issue Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent offering of Beedles Inc., the terms were as follows: Price to public: $5 per share Number of shares: 3 million Proceeds to Beedles: $14,000,000 The out-of-pocket expenses incurred by Security Brokers in the design and distribution of the issue were $340,000. What profit or loss would Security Brokers incur if the issue were sold to the public at the following average price? $5 per share? Use minus sign to enter loss, if any. $ $6.25 per share? Use minus sign to enter loss, if any. $ $4.25 per share? Use minus sign to enter loss, if any.
Answer and Explanation:
The computation of profit or loss is shown below:
The formula used is
= (Price × number of shares) - proceeds to Beedles - out of pocket expenses
a. For $5 per share
= ($5 × 3 million shares) - $14,000,000 - $340,000
= $15,000,000 - $14,000,000 - $340,000
= $660,000
b. For $6.25 per share
= ($6.25 × 3 million shares) - $14,000,000 - $340,000
= $18,750,000 - $14,000,000 - $340,000
= $4,410,000
c. For $5 per share
= ($4.25 × 3 million shares) - $14,000,000 - $340,000
= $12,750,000 - $14,000,000 - $340,000
= -$1,590,000
A pension plan is obligated to make disbursements of $1.8 million, $2.8 million, and $1.8 million at the end of each of the next three years, respectively. Find the duration of the plan's obligations if the interest rate is 9% annually.
Answer:
1.9516 years.
Explanation:
So, the best and fastest way to solve this question is to use excel. So the first step is to calculate the Present Value of Cash Flow for the three cash flows and sum them up.
(A).
(1). For cash flow = $1,800,000, time = 1.
Present Value of Cash Flow:
$1,800,000 / (1 + 9%)^1
= 1651376.14678899082.
(2). For cash flow = $2,800,000, time = 2.
= $2,800,00/ (1 + 9%)^2.
= 2356703.98114636815.
(3). For cash flow = $2,800,000, time = 3.
= $1,800,000 / (1 + 9%)^3.
= 1389930.26410991568.
Thus, 1651376.14678899082 + 2356703.98114636815 + 1389930.26410991568.
= 5398010.39204527465.
(B). Also, 1651376.14678899082 ×( time = 1) = 1651376.14678899082.
2356703.98114636815 × (time= 2 ) = 4,713,407.9622927363.
1389930.26410991568 × (time = 3) = 4169790.79232974704.
Thus, 4169790.79232974704 + 1651376.14678899082 + 4,713,407.9622927363.
= 10534574.90141147416.
Hence, duration = 10534574.90141147416/ 5398010.39204527465.
= 1.95156625058292731
Approximately 1.9516 years.
Sheridan Company has the following information available for September 2020. Unit selling price of video game consoles $400 Unit variable costs $320 Total fixed costs $25,600 Units sold 600 Compute the unit contribution margin.
Answer:
Contribution margin per unit= $80
Explanation:
Giving the following information:
Unitary selling price of video game consoles $400
Unit variable costs $320
To calculate the unitary contribution margin, we need to use the following formula:
Contribution margin= selling price - unitary variable cost
Contribution margin= 400 - 320
Contribution margin= $80
Epic Company earned net income of $784,000 this year. The number of common shares outstanding during the entire year was 420,000, and preferred shareholders received a $28,000 cash dividend. Compute Epic company's basic earning per share.
Answer:
The answer is $1.8/share
Explanation:
Basic Earnings Per Share (EPS)= (Net income - preferred shars) ÷ weighted number of outstanding shares
Net income - $784,000
Preferred shares - $28,000
Weighted number of outstanding shares - 420,000 shares
($784,000 - $28,000) ÷ 420,000 shares
= $756,000 ÷ 420,000 shares
= $1.8 per share.
This means that each shareholder has $1.8 per share from the net income of $784,000
When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.
Answer: costs of production fall
Explanation:
When the costs of production fall, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.
This is because when there is a reduction in the costs of production, there will be more money and hence, the producer can supply more goods thereby shifting the supply curve to the right.
A company purchases equipment for $32,000 cash. This transaction should be shown on the statement of cash flows under:________
a. operating activities
b. investing activities
c. noncash investing and financing activities
d. financing activities
Answer:
b. investing activities
Explanation:
Cash flow can be defined as the net amount of cash and cash-equivalents that is flowing into (received) and out (given) of a business. There are three components of the cash flow;
1. Operating cash flow: all cash generated from the business activities of an organization.
2. Financing cash flow: all payments made by an organization and profits from issuance of debts and equity.
3. Investing cash flow: costs associated with purchasing of capital assets and investments of cash resources in other businesses.
A company purchases equipment for $32,000 cash. This transaction should be shown on the statement of cash flows under investing activities.
Generally, investing activities comprises of purchasing physical assets, investing in securities and the sale of assets or securities associated with the company.
Hence, a company that purchases equipment for $32,000 cash should show the transaction on the statement of cash flows under investing activities.
A. Suppose the wages of computer-factory workers rises. This will cause (the supply / the demand) of tablet computers to (shift in / shift out) , causing tablet computer price to (rise / fall) and quantity to (rise / fall) .
B. Suppose the price of notebook computers (a substitute for tablets) falls. This will cause (the supply / the demand) of tablet computers to (shift in / shift out) , causing price of tablet computers to (rise / fall) and quantity to (rise / fall) .
C. Suppose the number of tablet computer manufacturers rises. This will cause (the supply / the demand) the supply the demand of tablet computers to (shift in / shift out) , causing price to (rise / fall) and quantity to ( (rise / fall) .
D. Suppose an exciting new game is released that is only available on tablet computers. This will cause the supply / the demand the supply the demand for tablet computers to (shift in / shift out) , causing tablet computer price to (rise / fall) and quantity to (rise / fall) .
E. Suppose the prices for popular apps (complements to tablet computers) rise. This will cause (the supply / the demand) the supply the demand of tablet computers to (shift in / shift out) , causing tablet computer price to (rise / fall) and quantity to (rise / fall) .
Answer:
Supply, shift in , rise fall
the demand, shift in, fall ,fall
supply , shift out fall, rise
the demand , shift out rise rise
the demand shift in fall fall
Explanation:
If the wages of factory worker increases, it becomes more expensive to hire workers, the cost of production increases and the demand for labour would fall. as a result, production would fall and the supply of tablets would fall. a decrease in supply leads to an inward shift of the supply curve. as a result of the fall in supply, quantity would fall and there would be a rise in price.
Substitute goods are goods that can be used in place of another good. If the price of notebooks falls, it becomes cheaper to purchase notebooks, so the quantity demanded of notebooks would rise and the demand for tablets would fall since it is cheaper to buy a tablet. the demand curve for tablets would shift in as a result of the fall in demand. As a result, price and quantity of tablets would fall.
Increase in the number of manufactures would lead to an increase in supply. this would cause a rise in the supply of tablets. when there is a rise in supply, the supply curve shifts out, prices fall and quantity increases.
the new game would increase demand for tablets because people would be interested in playing the game. as a result of the rise in demand, the demand curve would shift out, the quantity would rise and prices would rise
A complement is a good that is consumed together with another good. if the price of apps rise, it would become more expensive to buy apps as result the demand for tablets would fall. the demand curve would shift in and price and quantity would fall
When the wages of factory worker increases, it becomes more expensive to hire workers, also the cost of production increases, and also the demand for labor would fall. as a result, when the production would fall also the supply of tablets would fall. when a decrease in supply leads to an inward shift of the supply curve. Although as a result of the fall in supply, the quantity would fall, and also there would be a price rise.
When Substitute goods are goods that can be used in place of another good. also If the price of notebooks falls, it becomes cheaper to purchase notebooks, so the quantity demanded of notebooks would rise, and also the demand for tablets would fall since it is cheaper to buy a tablet. the demand curve for tablets would shift in as a result of the fall in demand. So As a result, the price and also the number of tablets would fall.
When Increase in the number of manufacturers would lead to an increase in supply. this would cause a rise in the supply of tablets. when there are a rise in supply, the supply curve shifts out, prices fall, and also quantity increases.
When the new game would increase demand for tablets because people would be interested in playing the game. So as a result of the rise in demand, the demand curve would shift out, the quantity would rise and also prices would rise
Thus A complement is a good that is consumed together with another good. if the price of apps rises, it would become more expensive to buy apps as a result the demand for tablets would fall. Then the demand curve would shift in and price and also quantity would fall
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Currently Acre is charged $3,693,600 Depreciation on the Income Statement of Andrews. Andrews is planning for an increase in this depreciation. On the financial statements of Andrews will this?
Answer: C)Increase Net Cash from Operations on the Cash Flow Statement
Explanation:
The Cash Flow Statement deals with only cash transactions of a business in an effort to know just how much actual cash the business has. The Operations section of the Cash Flow Statement is derived from the Net Income and to get to the Net Income, Depreciation is removed. Because Depreciation is a non-cash expense, and does not actually reduce cash, it is added back when calculating cash from Operations. A larger depreciation therefore would bring in more cash from Operations in the Cash Flow statement.
Golden Corp.'s current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes.
GOLDEN CORPORATION Comparative Balance Sheets December 31
Current Year Prior Year
Assets
Cash $167,000 $110,300
Accounts receivable 87,500 74,000
Inventory 605,500 529,000
Total current assets 860,000 713,300
Equipment 343,000 302,000
Accum. depreciation—Equipment (159,500) (105,500)
Total assets $1,043,500 $909,800
Liabilities and Equity:
Accounts payable $93,000 $74,000
Income taxes payable 31,000 26,600
Total current liabilities 124,000 100,600
Equity:
Common stock, $2 par value 595,600 571,000
Paid-in capital in excess of par value, common stock 201,400 164,500
Retained earnings 122,500 73,700
Total liabilities and equity $1,043,500 $909,800
GOLDEN CORPORATION Income Statement For Current Year Ended December 31
Sales $1,807,000
Cost of goods sold 1,089,000
Gross profit 718,000
Operating expenses
Depreciation expense $54,000
Other expenses 497,000 551,000
Income before taxes 167,000
Income taxes expense 26,200
Net income $140,800
Additional Information on Current Year Transactions:
Purchased equipment for $41,000 cash.
Issued 12,300 shares of common stock for $5 cash per share.
Declared and paid $92,000 in cash dividends.
Required:
Prepare a complete statement of cash flows: report its cash inflows and cash outflows from operating activities according to the indirect method.
Answer:
Golden Corp.
Statement of Cash Flows for the year ended December 31, using the indirect method:
Net Income before taxes $167,000
Add non-cash expenses:
Depreciation 54,000
Adjustment of current assets:
Accounts receivable (13,500)
Inventory (76,500)
Adjustment of current liabilities:
Accounts payable 19,000
Income taxes payable (4,400)
Net Cash Flow from operations $145,600
Financing Activities:
Common Stock $61,500
Dividend paid 92,000
Net Cash Flow from financing activities $153,500
Investing Activities:
Equipment purchase $41,000
Net Cash Flow from investing activities $41,000
Net Cash Flow $340,100
Explanation:
The Golden Corp.'s statement of cash flows depicts the flow of cash under three main activity headings: operating, financing, and investing. There are two methods under which Golden Corp. can prepare the statement. They include the indirect method, which starts from the net income, adjusts the non-cash expenses and the changes in working capital, and the direct method, which shows the cash inflows and outflows for each cash flow item.
The cash flow for the company is analyzed below:
Net Income before taxes $167,000
Add: non-cash expenses:
Depreciation $54,000
Adjustment of current assets:
Accounts receivable (13,500)
Inventory (76,500)
Adjustment of current liabilities:
Accounts payable 19,000
Income taxes payable (4,400)
Net Cash Flow from operations $145,600
Financing Activities:
Common Stock $61,500
Add: Dividend paid 92,000
Net Cash Flow from financing activities $153,500
Investing Activities:
Equipment purchase $41,000
Net Cash Flow from investing activities $41,000
Net Cash Flow $340,100
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At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2017, it has outstanding accounts receivable of $55,000, and it estimates that 2% will be uncollectible. Prepare the adjusting entry to record bad debts expense for year 2017 under the assumption that the Allowance for Doubtful Accounts has: (a) a $415 credit balance before the adjustment. (b) a $291 debit balance before the adjustment.
Answer:
Mazie Supply Co.
Adjusting entries under the assumptions that the allowance for doubtful accounts has:
a) A $415 credit balance before the adjustment:
Debit Bad Debts Expense $685
Credit Allowance for Doubtful Accounts $685
To record the bad debts expense for the year.
b) A $291 debit balance before the adjustment:
Debit Bad Debts Expense $1,391
Credit Allowance for Doubtful Accounts $1,391
To record bad debts expense and bring the allowance for doubtful accounts to a balance of $1,100.
Explanation:
a) Accounts Receivable outstanding = $55,000
Uncollectible estimate of 2% = $1,100
b) With a credit balance of $415, the balance will be brought to $1,100 with an adjusting amount of $685 ($1,100 - $415).,
c) With a debit balance of $291, the balance will be brought to $1,100 with an adjusting amount of $1,391 ($1,100 + 291).
d) When the allowance for doubtful accounts has a credit balance, the bad debts expense is calculated as the difference between the new balance and the old credit balance. But, if the allowance for doubtful accounts has a debit balance, the bad debts expense would be the addition of the estimated allowance and the debit balance. These actions will respectively bring the balance of the allowance for doubtful accounts to the new estimated balance.
Wheat Inc. produces and sells a single product. The selling price of the product is $235.00 per unit and its variable cost is $86.95 per unit. The fixed expense is $373,653 per month. The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
Break-even point (dollars)= $593,100
Explanation:
Giving the following information:
The selling price of the product is $235.00 per unit and its variable cost is $86.95 per unit. The fixed expense is $373,653 per month.
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 373,653 / [(235 - 86.95)/235]
Break-even point (dollars)= $593,100
For a stock to be in equilibrium, that is, for there to be no long-term pressure for its price to depart from its current level, then a.the expected future return must be less than the most recent past realized return. b.the past realized return must be equal to the expected return during the same period. c.the expected future returns must be equal to the required return. d.the required return must equal the realized return in all periods. e.the expected return must be equal to both the required future return and the past realized return.
Answer:
c.the expected future returns must be equal to the required return.
Explanation:
When the stock is at equilibrium than the intrinsic value of the stock is equivalent to the market price of the stock that depicts that the expected returns which held in the future should be equivalent to the required return
Therefore the option c is correct
And, the other options that are mentioned in the question are incorrect
For a stock to be in equilibrium, the expected future returns must be equal to the required return.
The correct answer to this question is answer option c. At the equilibrium position there is a balance between the expected returns and the required returns.
At this point the intrinsic value is the same thing as the market value. Telling us that the rate the investor is expecting is the same as the actual required rate of return.
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Which of the following statements about partnership financial statements is true? The owners’ equity statement is called the partners’ capital statement. Only the total of all partner capital balances is shown in the balance sheet. Details of the distribution of net income are shown in the partners’ capital statement. The distribution of net income is shown on the balance sheet.
Answer: The owners’ equity statement is called the partners’ capital statement.
Explanation:
Partnership is a form of business whereby two or more individuals join their skills and money together in conducting a business.
It should be noted that the owners’ equity statement is called the partners’ capital statement.
Match the transactions below with the journal or ledger in which it would be entered. Monthly adjustment for supplies used Cash receipt posting to an individual customer account Record sale on account to customer Record purchase on account from vendor Record payment received from customer Record payment made to vendor Cash payment posting to an individual vendor account General journal Accounts receivable subsidiary ledger Revenue journal Purchases journal Cash receipts journal Cash payments journal Accounts payable subsidiary ledger Group of answer choices Monthly adjustment for supplies used
Answer:
Matching transactions to journal or ledger:
1. Monthly adjustment for supplies used = General Journal
2. Cash receipt posting to an individual customer account = Accounts Receivable subsidiary ledger
3. Record sale on account to customer = Revenue Journal
4. Record purchase on account from vendor = Purchases journal
5. Record payment received from customer = Cash Receipts Journal
6. Record payment made to vendor = Cash Payments Journal
7. Cash payment posting to an individual vendor account = Accounts Payable subsidiary ledger
Explanation:
a. The general journal is used to record all kinds of transactions that occur on a daily, especially if the entity does not operate specialized journals like the Cash receipts, cash payments, purchases, and revenue journals. It records both adjusting and non-adjusting entries.
b. Accounts receivable and payable subsidiary ledgers are used to record individual customers and suppliers transactions which had been recorded in total to the Accounts Receivable and Accounts Payable accounts (as controls) respectively and then enable individual records to be kept.
c. Revenue journal is a specialized journal for recording revenue on account for customers who buy on credit from the entity. As a specialized journal, it usually have one amount column while the total is periodically posted to a control account in the general ledger with individual transactions posted to the subsidiary accounts receivable ledger.
d. Cash Receipts and Payments Journals are also specialized journals for recording receipts from customers and payments to suppliers of merchandise and services. They are similar in outlook like the Revenue Journal.
e. Accounts Payable subsidiary ledger is a secondary ledger for recording individual suppliers' transactions, with their totals already posted to the general ledger (control account). This ledger ensures the maintenance of individual suppliers' records in order to extract their individual balances.
The matching of the transactions with the journal or ledger is shown below.
Matching is as follows:1. Monthly adjustment for supplies used = General Journal
2. Cash receipt posting to an individual customer account = Accounts Receivable subsidiary ledger
3. Record sale on account to customer = Revenue Journal
4. Record purchase on account from vendor = Purchases journal
5. Record payment received from customer = Cash Receipts Journal
6. Record payment made to vendor = Cash Payments Journal
7. Cash payment posting to an individual vendor account = Accounts Payable subsidiary ledger
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Mathew bought a home for $245,000 using a 20% down payment. He obtained a 30-year fixed-rate mortgage at six percent (6%)for the remainder of the funds. His monthly principal and interest payment is $1175.12. What will the principal balance on the mortgage be after the second payment is made?
Answer:
Principal Balance at the end of the second payment or year:
$198,350.24
Explanation:
Schedule
start principal start balance interest end balance end principal
1 $196,000.00 $196,000.00 $11,760.00 $208,935.12 $197,175.12
2 $197,175.12 $208,935.12 $12,536.11 $222,646.35 $198,350.24
Cost of Home = $245,000
less down payment = 49,000 (20% of $245,000)
Starting principal = $196,000
Department Y started 675 units during the accounting period. They had a beginning balance in goods in process inventory of 225 units and an ending balance of 150 units. _____ units were completed and transferred out.
a. 750
b. 620
c. 650
d. None of above
Answer:
a. 750
Explanation:
units completed and transferred out = beginning work in process + units started - ending work in progress = 225 units + 675 units - 150 units = 750 units
The number of units completed and transferred out refer to the total number of finished units during a certain period and their cost is referred to as cost of goods manufactured.
Steelcase Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it produces filing cabinets in two departments: Fabrication and Assembly. Assume the following information for the Assembly Department:
Direct labor per filing cabinet 30 minutes
Supervisor salaries $150,000 per month
Depreciation $31,000 per month
Direct labor rate $15 per hour
Steelcase Inc-Assembly Department
Flexible Production Budget
August 2016 (assumed data)
Units of production 18,000 20,000 22,000
Variable cost:
Direct labor
Total variable cost
Fixed cost:
Supervisor salaries
Depreciation
Total fixed cost
Total department cost
Prepare a flexible budget for 12,000, 15,000, and 18,000 filing cabinets for the month of August, similar to Exhibit 5, assuming that inventories are not significant.
Answer:
Note: Per unit Direct labour cost = $15 /60 minutes * 30 minutes
=$7.5
Steelcase Inc
Assembly Department
Flexible budget for the month of August, 2016
Unit of Production Per Unit No. of filling cabinet
18,000 20,000 22,000
Variable cost
Direct labour cost 7.5 135,000 150,000 165,000
Total variable cost A 135,000 150,000 165,000
Fixed cost
Supervisor salaries 150,000 150,000 150,000
Depreciation 31,000 31,000 31,000
Total fixed cost B 181,000 181,000 181,000
Total Departmental Cost A+B 316,000 331,000 346,000
Per unit Department Cost 17.55 16.55 15.72
Note: Per unit department cost = Total department cost / No of filling cabinet
Sosa Company reported net income of $190,000 for 2017. Sosa Company also reported depreciation expense of $35,000 and a loss of $5,000 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 increase in prepaid expenses.
Prepare the operating activities section of the statement of cash flows for 2017. Use the indirect method.
Answer:
$228,000
Explanation:
Preparation of the operating activities section of the statement of cash flows for 2017 for Sosa Company
Sosa Company operating activities section of the statement of cash flows for 2017
Net income $190,000
Add:Depreciation expenses $35,000
Loss on disposal of plant assets $5,000
Increase in accounts payable $17,000
Less: Increase in accounts receivable($15,000)
Increase in prepaid expenses ($4,000)
Net cash flow of the operating activities $228,000
Therefore the operating activities section of the statement of cash flows for 2017 for Sosa Company will be $228,000
The Keynesian link between the money market and the goods and services market is __________. Changes in the money market must affect the __________ market before the goods and services market is affected.
Answer:
Indirect; investment.
Explanation:
John Maynard Keynes was a British economist born on the 5th of June, 1883 in Cambridge, England. He was famous for his brilliant ideas on government economic policy and macroeconomics which is known as the Keynesian theory. He later died on the 23rd of April, 1946 in Sussex, England.
The Keynesian link between the money market and the goods and services market is indirect. Changes in the money market must affect the investment market before the goods and services market is affected.
According to the Keynesian Transmission Mechanism, the link between the money market and the goods and services market is indirect; because at first, short-term interest rates are lowered by an increase in the supply of reserves and then with time both the bond and bank loan rates falls. Consequently, this would make investments and aggregate demand (AD curve shifts rightward) to rise or increase as a result of the low cost of capital for investors and by extension it boost the level of production or quantity of output (real gross domestic product or Real GDP).
This ultimately implies that, the interest rates affects the real and costs of capital (monetary changes).
If actual sales totaled $450,000 for the current year (30,000 units at $15 each) and planned sales were $540,000 (45,000 units at $12 each), the difference between actual and planned sales due to the unit price factor is a.$180,000. b.$45,000. c.$90,000. d.$225,000.
Answer:
Option B, $45,000, is the right answer.
Explanation:
Given actual sales = $450000
Actual units that is sold = 30000 units
Actual selling price = $15 per unit
Planned sales = $540000
Planned units = 45000
Planned selling price = $12 per units.
The difference between actual and planned sales due to unit price factor = change in units × change in price
= (45000 – 30000) × (15 – 12)
= $45000
Thus option B is correct.
Mars Inc. has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the actuary. The following information was included in the report: ending PBO, $110,000; benefits paid to retirees, $10,000; interest cost, $7,200. The discount rate applied by the actuary was 8%. What was the beginning PBO
Answer:
Beginning projected benefit obligation = $90,000
Explanation:
Beginning projected benefit obligation = Interest cost / Discount rate
=$7,200 / 8%
=$7,200 / 0.08
=$90,000
Suppose that you just short sold 100 shares of XYZ stock for $79.00 per share. a. If the initial margin requirement is 60%, how much equity must you invest?
Answer:
$4,740
Explanation:
Equity to invest = Initial margin × shares short sold × Value of stock sold per share
= 60% × 100 × $79
= $4,740
On May 1, Soriano Co. reported the following account balances along with their estimated fair values:
Carrying Amount Fair Value
Receivables $ 143,600 $ 143,600
Inventory 76,400 76,400
Copyrights 136,000 577,000
Patented technology 913,000 753,000
Total assets $ 1,269,000 $ 1,550,000
Current liabilities $ 197,000 $ 197,000
Long-term liabilities 676,000 658,300
Common stock 100,000
Retained earnings 296,000
Total liabilities and equities $ 1,269,000
On that day, Zambrano paid cash to acquire all of the assets and liabilities of Soriano, which will cease to exist as a separate entity. To facilitate the merger, Zambrano also paid $141,000 to an investment banking firm.
The following information was also available:
• Zambrano further agreed to pay an extra $85,000 to the former owners of Soriano only if they meet certain revenue goals during the next two years. Zambrano estimated the present value of its probability adjusted expected payment for this contingency at $42,500.
• Soriano has a research and development project in process with an appraised value of $244,000. However, the project has not yet reached technological feasibility and the project’s assets have no alternative future use.
Prepare Zambrano’s journal entries to record the Soriano acquisition assuming its initial cash payment to the former owners was (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Receivables (Dr.) $143,600
Inventory (Dr.) $76,400
Copyrights (Dr.) $577,000
Patented Technology (Dr.) $913,000
Goodwill (Dr.) $32,800
Current Liability (Cr.) $197,000
Long term liability (Cr.) $658,300
Cash (Cr.) $845,000
Contingent Consideration (Cr.) $42,500
Professional Fee Expense (Dr.) $141,000
Cash (Cr.) $141,000
Paid of Investment banking firm
Explanation:
Total of Assets 1,710,000
Total of Liabilities 855,300
Net Assets 854,700
Total Fair value of identifiable Assets 854,700
Fair value of contingent Liability 42,500
Consideration Paid as Cash 845,000
Good will $32,800
Suppose that Best National Bank currently has $150,000 in demand deposits and $97,500 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%.
Reserves=
Required Reserves=
Excess Reserves=
Answer:
Reserves = $52,500
Required Reserves = $15,000
Excess Reserves = $37,500
Explanation:
Reserves of a bank refers to deposits held by the bank that have not be given out as loan. It is deposits minus loan. Reserves of the Best National Bank can therefore be calculated as follows:
Reserves = Demand deposits - Outstanding loans = $150,000 - $97,500 = $52,500
Required Reserves refers to the portion of the deposits of a bank that is legally required by the regulatory to be kept as reserves that cannot be loaned out by the bank. Required Reserves of Best National Bank can be calculated as follows:
Required Reserves = Demand deposits * Reserve requirement = $150,000 * 10% = $15,000
Excess Reserves refers to the reserves held by a bank in excess of its required required reserves. Therefore, excess reserves can be given out as loan by the bank. It is can be calculated as reserve minus required reserve for Best National Bank as follows:
Excess Reserves = Reserves - Required Reserves = $52,500 - $15,000 = $37,500
Based on the above, we have the following for Best National Bank:
Reserves = $52,500
Required Reserves = $15,000
Excess Reserves = $37,500
assuming it is stored safely how long after It was prepared can refrigerated food be sold or served 1-7 days b-10 days c-14 days d-20 days
Answer:
1-7 days
Explanation:
But, ideally 4 days should be the maximum for prepared food to be refrigerated before it is sold or served.
Leaving food refrigerated for a long time makes it to lose its nutrients. Some foods like potatoes, meat, eggs, chicken, etc. can become harmful or poisonous, especially when you reheat them before eating. That is why it is right to adhere to proper routines for refrigerating food and also preparing and serving the food. Some healthy food are better eaten immediately after their preparation.