Answer:
8.62%
Explanation:
The common stock of Auto deliveries currently sells for $28.99 per share
The stock is expected to pay a dividend of $1.34
The growth rate is 4%
= 4/100
= 0.04
Therefore, the market rate of return on the stock can be calculated as follows
Market rate= dividend/stock price + growth rate
= $1.34/$28.99 + 0.04
= 0.04622+0.04
= 0.0862×100
= 8.62%
Hence the estimated market rate of return on the stock is 8.62%
On December 31, it was estimated that goodwill of $51,500 was impaired. In addition, a patent with an estimated useful economic life of 12 years was acquired for $115,200 on April 1.
a. Journalize the adjusting entry on December 31 for the impaired goodwill
b. Journalize the adjusting entry on December 31 for the amortization of the paten
Answer:
a. The journal entries for the impaired goodwill as at Dec 31 would be:
Debit Impairment expense/charge $51,500
Credit Goodwill/Allowance for impairment $51,500
(To recognize impairment expense on goodwill)
b. Journal entries for the amortization of the patent as at Dec 31 would be:
Debit Amortization expense $9,600 [$115,200/12]
Credit Accumulated amortization $9,600
(To recognize amortization expense on patent)
Explanation:
A goodwill is impaired when its carrying value exceeds its fair value. The impairment test is carried out annually and the difference by which the carrying value of the goodwill exceeds the fair value is charged to the profit or loss account as impairment expense. The impairment reduces the goodwill to its fair value.
Goodwill belongs to a class of intangible asset and it arises essentially as a result of business combination. A business combination occurs when a company acquires another company.
The Polishing Department of Bonita Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process. Production: Beginning inventory 1,580 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 41,200; ending inventory of 6,600 units 10% complete as to conversion costs. Manufacturing costs: Beginning inventory costs, comprised of $20,600 of materials and $14,674 of conversion costs; materials costs added in Polishing during the month, $186,883; labor and overhead applied in Polishing during the month, $127,600 and $257,440, respectively.
a. compute the equivalent units of production for materials and conversion costs for the month of september
b. compute the unit costs for materials and conversion costs for the month.
c. determine the costs to be assigne to the units transfered out in the process.
Answer:
a. Materials = 15,780 units and Conversion = 9,840 units
b. Materials = $13.15 and Conversion = $40.62
c. $354,882
Explanation:
First calculate the number of Units Completed and Transferred
Units Completed and Transferred = 1,580 + 14, 200 - 6,600
= 9,180
Then, Calculation of the equivalent units of production for materials and conversion costs for the month of September
Materials
Units Completed and Transferred ( 9,180 × 100%) = 9,180
Units In Ending Work In Process Inventory ( 6,600 × 100%) = 6,600
Equivalent units of production for materials = 15,780
Conversion
Units Completed and Transferred ( 9,180 × 100%) = 9,180
Units In Ending Work In Process Inventory ( 6,600 × 10%) = 660
Equivalent units of production for Conversion = 9,840
Calculate the unit costs for materials and conversion costs for the month.
Unit costs for materials = Total Materials Cost / Total Equivalent units of production for materials
= ($20,600 + $186,883) / 15,780
= $13.15
Unit costs for Conversion = Total Conversion Cost / Total Equivalent units of production for Conversion
= ($14,674 + $127,600 + $257,440) / 9,840
= $40.62
Calculate the costs to be assigned to the units transferred out in the process.
Costs to be assigned = Units Transferred Out × Total Cost per Equivalent unit of Production.
= 6,600 × ($13.15 + $40.62)
= 6,600 × $53.77
= $354,882
Journalize Payroll Tax The payroll register of Patel Engineering Co. indicates $2,880 of social security withheld and $720 of Medicare tax withheld on total salaries of $48,000 for the period. Earnings of $14,400 are subject to state and federal unemployment compensation taxes at the federal rate of 0.8% and the state rate of 5.4%. Provide the journal entry to record the payroll tax expense for the period. If an amount box does not require an entry, leave it blank. Round to two decimal places. Payroll Tax Expense Social Security Tax Payable 2,880 Medicare Tax Payable 720 State Unemployment Tax Payable Federal Unemployment Tax Payable
Answer and Explanation:
The Journal entry is shown below:-
Payroll Tax Expense Dr, $4,493
To Social Security Taxes Payable $2,880
To Medicare Taxes Payable $720
To State Unemployment Tax Payable $778 ($14,400 × 5.4%)
To Federal Unemployment Tax Payable $115 ($14,400 × 0.8%)
(Being payroll tax expense for the period is recorded)
Here we debited the payroll tax expenses as it increased the expenses and we credited the Social Security Taxes Payable, Medicare Taxes Payable, State Unemployment Tax Payable, Federal Unemployment Tax Payable as it increased the liabilities
"An analysis of yield curves of U.S. Government and lower medium quality corporate bonds shows the yield spread to be widening over the last 4 months. This is an indication that investors expect the economy to:"
Explanation:
recession
Answer:
To be going into recessionary situation over the coming time period. The widening spread indicates that the yield on lower grade corporate bond are higher than normal relative to yield bonds issued by government. This situation is happening due to investors investing highly in government bonds leading to increase in yields.
If each of two competing monopolists undertakes equal advertising efforts to attract consumers away from the other, the total result is Group of answer choices
Complete Question:
If each of two competing monopolists undertakes equal advertising efforts to attract consumers away from the other, the total result is
Group of answer choices:
A. they will both increase market share.
B. they will simply neutralize one another's efforts.
C. they will both lose market share.
D. they will both improve their industrial position.
Answer:
B. they will simply neutralize one another's efforts.
Explanation:
If each of two competing monopolists undertakes equal advertising efforts to attract consumers away from the other, the total result is they will simply neutralize one another's efforts.
A monopolist can be defined as an individual who is engaged in selling a unique product in a market without any competitor. Also, a monopolistic competition involves various firms engaged in monopoly competes with one other, but selling products that are unique and distinct from the other.
Hence, when two competing monopolists undertakes equal advertising efforts to attract consumers away from the other, this would result in one monopolist effort canceling or nullifying the effort of the other. This simply means that, it would have been as though none of them had made any effort at all because they were both involved in doing the same thing. Thus, making the market the same as it were originally prior to their advertising efforts.
The following information is available for the first month of operations of Lane Inc., a manufacturer of mechanical pencils:
Sales $416,720
Gross profit 242,950
Indirect labor 90,430
Indirect materials 45,220
Other factory overhead 13,750
Materials purchased 128,350
Total manufacturing costs for the period 239,610
Materials inventory, end of period 17,090
Using the above information, determine the following:
a. The cost of finished goods available for sale minus the ending finished goods inventory.Cost of goods sold.
b. The cost of materials that are an integral part of the finished product.Direct materials cost.
c. The wages of factory workers who are directly involved in converting materials into a finished product.Direct labor cost.
Answer:
a. Cost of goods sold = Sales - Gross profit
= $416,720 - $242,950
= $173,770
b. Direct materials cost = Materials purchased -Indirect materials - Materials inventory, end of period
= $128,350 - $45,220 - $17,090
= $66,060
c. Direct labor cost =Total manufacturing costs for the period - Direct materials cost - Factory overhead
= $239,610 - $66,060 - ($90,430 + $45,220 + $13,750)
= $239,610 - $66,060 - $149,380
=$239,610 - $215,440
=$24,170
Checking a diversified firm's business portfolio for the competitive advantage potential of cross-business strategic fits entails consideration of Group of answer choices
Complete Question:
Checking a diversified firm's business portfolio for the competitive advantage potential of cross-business strategic fits entails consideration of:
Group of answer choices
A. whether the parent's company's competitive advantages are being deployed to maximum advantage in each of its business units.
B. whether the competitive strategies employed in each business act to reinforce the competitive power of the strategies employed in the company's other businesses.
C. whether the competitive strategies in each business possess good strategic fit with the parent company's corporate strategy.
D. the extent to which there are competitively valuable relationships between the value chains of sister business units and what opportunities they present to reduce costs, share use of a potent brand name, create competitively valuable new capabilities via cross-business collaboration, or transfer skills or technology or intellectual capital from one business to another.
E. how compatible the competitive strategies of the various sister businesses are and whether these strategies are properly aimed at achieving the same kind of competitive advantage.
Answer:
D. the extent to which there are competitively valuable relationships between the value chains of sister
business units and what opportunities they present to reduce costs, share use of a potent brand name, create competitively valuable new capabilities via cross-business collaboration, or transfer skills or technology or intellectual capital from one business to another.
Explanation:
Checking a diversified firm's business portfolio for the competitive advantage potential of cross-business strategic fits entails consideration of the extent to which there are competitively valuable relationships between the value chains of sister business units and what opportunities they present to reduce costs, share use of a potent brand name, create competitively valuable new capabilities via cross-business collaboration, or transfer skills or technology or intellectual capital from one business to another.
Generally, a strategic fit exists whenever one or more activities comprising the value chain of various business entities are evidently similar to avail the choice of transferring competitively valuable expertise, resources, or technology from one business entity to another or combine the similar value chain activities of the sister business unit into a single operation so as to maximize profits and lower the cost of production.
Larned Corporation recorded the following transactions for the just completed month.
1. $89,000 in raw materials were purchased on account.
2. $87,000 in raw materials were used in production.
3. Of this amount, $76,000 was for direct materials and the remainder was for indirect materials.
4. Total labor wages of $128,500 were paid in cash. Of this amount, $103,000 was for direct labor and the remainder was for indirect labor.
5. Depreciation of $190,000 was incurred on factory equipment.
Required:
Record the above transactions in journal entries.
Answer with its Explanation:
Part 1: $89,000 in raw materials were purchased on account.
The purchase of raw material inventory on account is treated as increase in raw material inventory and accounts payables. The journal entry would be as under:
Dr Raw Material Inventory $89,000
Cr Accounts Payables $89,000
Part 2: $87,000 in raw materials were used in production. Of this amount, $76,000 was for direct materials and the remainder was for indirect materials.
The entry would be increase in work in progress by $76,000 & Manufacturing overhead by $11,000 and would decrease the raw material inventory with $87,000.
The journal entry would be as under:
Dr Work In Progress $76,000
Dr Manufacturing Overhead $11,000
Cr Raw Material Inventory $87,000
Part 3: Total labor wages of $128,500 were paid in cash. Of this amount, $103,000 was for direct labor and the remainder was for indirect labor.
The direct cost are allocated to the work in progress and indirect costs are allocated to manufacturing overheads.
The journal entry would be as under:
Dr Work In Progress $128,500
Dr Manufacturing Overhead $103,000
Cr Cash Account $231,500
Part 4: Depreciation of $190,000 was incurred on factory equipment.
The depreciation of the factory equipment is an indirect cost and all the indirect costs are charged to manufacturing overhead.
The journal entry would be as under:
Dr Manufacturing Overhead $190,000
Cr Cash Account $190,000
Activities included (and not included) in the calculation of GDP
The gross domestic product (GDP) of the United States is defined as the all in a given period of time.
Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2020.
Scenario 2020 GDP
Included Excluded
1. Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 14, 2020. An elementary school student buys the chocolate bar on December 24.
2. The Jones family buys an antique silver platter at an auction in upstate New York on March 11, 2020.
3. Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Iowa on September 25, 2020. It sells the corn syrup to Crunchy's for use in the production of cereal that will be made in the United States in 2020. (Note: Focus exclusively on whether production of the corn syrup increases GDP directly, and ignore the effect of production of the cereal on GDP.)
4. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 6, 2020. It sells the car at a dealership in San Francisco on February 2, 2020.
5. Roadway Motors, a U.S. automobile company, produces a convertible at a plant in Germany on March 11, 2020. Roadway Motors imports the convertible into the United States on May 29, 2020.
Answer:
Included in 2020 GDP
1. Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 14, 2020. An elementary school student buys the chocolate bar on December 24.
4. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 6, 2020. It sells the car at a dealership in San Francisco on February 2, 2020.
5. Roadway Motors, a U.S. automobile company, produces a convertible at a plant in Germany on March 11, 2020. Roadway Motors imports the convertible into the United States on May 29, 2020.
NOT INCLUDED IN 2020 GDP
2. The Jones family buys an antique silver platter at an auction in upstate New York on March 11, 2020.
3. Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Iowa on September 25, 2020. It sells the corn syrup to Crunchy's for use in the production of cereal that will be made in the United States in 2020
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceeds import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
The purchase of chocolate would be added to GDP as part of consumption spending on non durable items.
the purchase of the antique silver platter would not be added as part of GDP because it wasn't produced in 2020 and only goods produced in 2020 would be added to 2020 GDP.
The corn syrup is an intermediate good and it would not be added in the calculation of GDP. only final goods are added in the calculation of GDP.
The automobile would be added to GDP as part of investment spending by businesses.
the import of cars would be added as part of net export in 2020 GDP
nterest rates on 2-year Treasury securities are currently 6.0%, while 6-year Treasury securities yield 6.5%. If the pure expectations theory is correct, what does the market believe that 4-year securities will be yielding 2 years from now
Answer:
The market believes that 4-years from now, the 4-year securities will be 6.75%
Explanation:
We proceed as follows using the pure expectations theory .
The theory states that the future rates are exclusively represented by the forward rate.
Mathematically;
(1 + .065)^6 = (1 + .^206)2 * (1 + x)^4
1.4591 = 1.1236 * (1 + x)^4
Divide both sides by 1.1236
1.2986 = (1 + x)^4
Take both sides to the 1/4 power to get rid of the power of 4
1.0675= 1 + x
x = .0675 or 6.75%
In cost-volume-profit analysis, all costs are classified into the following two categories: a.variable costs and fixed costs b.discretionary costs and sunk costs c.sunk costs and fixed costs d.mixed costs and variable costs
Answer: a.variable costs and fixed cost
Explanation:
In cost-volume-profit analysis, all costs are classified into the fixed cost and the variable cost. The fixed cost is the type of cost which doesn't depend on the production level because it is normally constant and doesn't varies.
Variable cost is a cost that varies with production level. Examples of variable cost are the cost of raw materials that are used in production and the direct labor costs.
In cost-volume-profit analysis, all costs are classified into the following two categories: variable costs and fixed costs.
Variable costs are costs that vary in direct proportion to changes in the level of production or sales. These costs increase or decrease as the volume of production or sales increases or decreases. Examples of variable costs include the cost of raw materials, direct labor, and sales commissions. For example, if a company produces more units, it will require more raw materials and labor, resulting in higher variable costs.
Fixed costs, on the other hand, are costs that remain constant regardless of the level of production or sales. These costs do not change in the short term, even if the volume of production or sales fluctuates. Examples of fixed costs include rent, salaries of permanent employees, and insurance premiums. For example, even if a company produces fewer units, it still needs to pay the same amount of rent and salaries.
By classifying costs into variable and fixed categories, cost-volume-profit analysis helps companies understand how changes in sales volume impact their profitability. This analysis allows companies to determine the break-even point, which is the level of sales at which total revenue equals total costs. It also helps companies calculate the contribution margin, which is the difference between sales revenue and variable costs.
In summary, in cost-volume-profit analysis, costs are classified into variable costs and fixed costs. Variable costs vary with changes in production or sales volume, while fixed costs remain constant regardless of the level of production or sales. Understanding these cost categories helps companies analyze their profitability and make informed decisions about pricing, production levels, and sales strategies.
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F Mining has $6 million in sales, its ROE is 20%, and its total assets turnover is 3.2x. The company has 40% equity financed (i.e., equity multiplier is 2.5). What is its net income? (DuPont analysis)
Answer:
$0.15 million
Explanation:
The formula for ROE can be used as a stepping stone to determining the value of net income:
ROE=Profit margin*Total asset turnover*Equity multiplier
ROE is 20%
total asset turnover is 3.2
equity multiplier is 2.5
20%=profit margin*3.2*2.5
20%=profit margin*8
profit margin=20%/8=2.5%
The formula for profit margin can now be used to determine net income.
profit margin=net income/sales
2.5%=net income/$6 million
net income=$6 million*2.5%
net income=$0.15 million
Short-term notes payable: Multiple Choice Cannot replace an account payable. Can be issued in return for money borrowed from a bank. Are not negotiable. Are a conditional promise to pay. Rarely involve interest charges.
Answer:
Can be issued in return for money borrowed from a bank.
Explanation:
The short term note payable is a note payable that can be issued against the borrowed amount. Since it is short term so its duration is within one year and it is an amount of loan in which the person has to pay within the specified time period along with the interest charges. It is shown in the liabilities side of the balance sheet
Hence, the second option is correct
Errors in the sales forecast can be offset by similar errors in costs and income forecasts. Thus, as long as the errors are not large, sales forecast accuracy is not critical to the firm. Correct or Incorrect?
Answer: False
Explanation:
The above analysis is false. Sales forecast is when future sales are being estimated. It is very important for the sales forecast to be correct and accurate because it is used by the organization to make decisions and also predict the performances.
It is actually possible for the errors in the sales forecast to be offset by similar errors in costs and income forecasts but the accuracy of the sales forecast matters a lot.
Shares of common stock of the Samson Co. offer an expected total return of 12.00 percent. The dividend is increasing at a constant 6.70 percent per year. The dividend yield must be:
Answer:
5.3%
Explanation:
The shares of a common stock of Samson corporation offer an expected total return on 12.00 percent
The dividend is increasing at a constant 6.70 percent per year
Therefore, the dividend yield can be calculated as follows
Dividend yield= Required return + capital gains yield
= 12% - 6.70%
= 5.3%
Hence the dividend yield is 5.3%
Suppose you deposit your paycheck, drawn on another bank. The total money supply in the banking system will ___________ because:
a. Assets of your bank would increase by more than the amount withdrawn from the other bank.
b. An increase in the assets of your bank by the amount of your paycheck would simply decrease the assets of another bank by the same amount.
c. Assets of the other bank would decrease by a fraction of the amount deposited at your bank.
Answer:
Option B, An increase in the assets of your bank by the amount of your paycheck would simply decrease the assets of another bank by the same amount, is correct.
Explanation:
The total money supply in the banking system will remain the “same” because it is given that paycheck is drawn from another bank. So, if a person withdraws money from another bank it implies that there is a decrease in money supply in the banking system and when the cheque is deposited in the other bank so again the money supply will increase in the banking system. However, the amount of money supply will remain the same. Therefore, option B is the right answer.
Efficiency is attained when a. total surplus is maximized. b. producer surplus is maximized. c. all resources are being used. d. consumer surplus is maximized and producer surplus is minimized
Answer:
A.
Explanation:
Efficiency is attained when total surplus is maximized. At this point consumer surplus is equal to producers surplus which means that they are in equilibrium.
When efficiency is reached, the sum of the total amount of consumer surplus and producer surplus is maximized.
Which of the following stages in a buying sequence will result in a specific option or set of options from which price, delivery, system compatibility, and other characteristics can be determined?
a. Determine the characteristics
b. Establish specifications
c. Search for and qualify potential suppliers
d. Request proposals
Answer:
C.
Explanation:
Since determine of characteristics has already been established the next would be to search.
Suppose a monopolist produces two different products. If the marginal cost of producing one is lower than the marginal cost of producing the other, and the monopolist charges a different price for the two goods, then the monopolist is:
Answer:
perfectly price discriminating.
Explanation:
here are the options to this question :
not maximizing its profit.
imperfectly price discriminating.
not price discriminating.
perfectly price discriminating.
perfect price discrimination also known as first-degree discrimination is when a seller sells his product at the maximum possible price for each unit consumed. Due to the price variance, the seller captures all available consumer surplus.
A monopoly is when there is only one firm operating in an industry.
Computing and analyzing acid-test and current ratios LO A1
Case X Case Y Case Z
Cash $ 2,000 $ 110 $ 1,000
Short-term investments 50 0 580
Current receivables 350 470 700
Inventory 2,600 2,420 4,230
Prepaid expenses 200 500 900
Total current assets $ 5,200 $ 3,500 $ 7,410
Current liabilities $ 2,000 $ 1,000 $ 3,800
Compute the current ratio and acid-test ratio for each of the above separate cases.
Current Ratio
Choose Numerator: Choose Denominaa Current Ratio
/ = Current ratio
Case X / = to 1
Case Y / = to 1
Case Z / = to 1
Acid-Test Ratio
Choose Numerator: Choose Denominator: Choose cid-Test Ratio
/ = Acid-test ratio
Case X / = to 1
Case Y / = to 1
Case Z / = to 1
Answer:
Current ratio
Case X 2.60
Case Y 3.50
Case Z 1.95
Acid -test ratio
Case X 1.20
Case Y 0.58
Case Z 0.60
Explanation:
Computation of the current ratio and acid-test ratio
CURRENT RATIO
Particulars Choose Numerator / Choose denominator = Current Ratio
Formula Current Assets / Current Liabilities = Current Ratio
Case X $5,200.00 / $2,000.00 = 2.60 to 1
Case Y $3,500.00 / $1,000.00 = 3.50 to 1
Case Z $7,410.00 / $3,800.00 = 1.95 to 1
ACID - TEST RATIO
Particulars Choose Numerator / Choose denominator = Acid Test Ratio
Formula Quick Assets / Current Liabilities = Acid Test Ratio
Case X $2,400.00 / $2,000.00 = 1.20 to 1
Case Y $580.00 / $1,000.00 = 0.58 to 1
Case Z $2,280.00 / $3,800.00 = 0.60 to 1
Note:
Quick Asset
Case X
Cash $ 2,000
Short-term investments 50
Current receivables 350
=$2,400
Case Y
Cash $ 110 $
Short-term investments 0
Current receivables 470
=$580
Case Z
Cash $ 1,000
Short-term investments 580
Current receivables 700
=$2,280
Therefore:
Current ratio will be:
Case X 2.60
Case Y 3.50
Case Z 1.95
Acid -test ratio will be:
Case X 1.20
Case Y 0.58
Case Z 0.60
Rizio Co. purchases a machine for $12,500, terms 210, n60, FOB shipping point. Rizio paid within the discount period and took the $250 discount. Transportation costs of $360 were paid by Rizio. The machine required mounting and power connections costing $895. Another $475 is paid to assemble the machine, and $40 of materials are used to get it into operation. During installation, the machine was damaged and $180 worth of repairs were made. Compute the cost recorded for this machine.
Answer:
Cost of machine= $14,200
Explanation:
According to International Accounting standards(IAS) 16 property plan and equipment (PPE), the cost of an asset is the purchase cost plus other costs of bringing it to the intended working conditions.
So we will add the purchase cost to the installation cost , freight charges.
Note that the cost of the power connections, assembling and material used for installations all represent cost associated to bring the machine into ready for use.
Cost of machine = (12,500 - 250) + 360 + 895 + 475 + 40 + 180= 14,200
Cost of machine= $14,200
suppose a German company issues a bond with a par value of €1,000, 23 years to maturity, and a coupon rate of 3.8 percent paid annually. If the yield to maturity is 4.7 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Price of bond = €875.09
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond would be worked out as follows:
Step 1
Calculate the PV of interest payments
Annual interest payment
= 3.8% × 1,000 = 38
PV of interest payment = A ×(1- (1+r)^(-n))/r
r- annual yield = 4.7%
n- 23
PV of interest payment= 38 × (1-(1.047^(-23)/0.047 = €527.37
Step 2
PV of redemption Value
PV = RV × (1+r)^(-n)
PV = 1,000 × (1.047)^(-23) = €347.717
Step 3
Price of bond
= 527.37+ 347.717 = €875.09
Price of bond = €875.09
Many Western European countries are giving monetary incentives to employees who have multiple children. Why would they do this? How would a baby boom change Japan's demographics?
Answer:
The incentive is to encourage more families to have more children.
A baby boom in Japan will ensure that there is enough workforce to maintain the growing economy in the future.
Explanation:
The western countries, especially Europe is battling with population decline, which is estimated to have an economic impact in the future, due to a potential decline in the labor force in the future. To counter this, many of these western nations have crated policies that encourages childbirth by providing incentive for families with multiple children, reducing tax for such families, and even as far as up to 12 to 16 months paid paternity and maternity leave, when a couple has a new baby. Couples are also given government paychecks when they go on childbirth leave.
Japan is one of the countries that has been experiencing a population decline in recent years. The number of death seem to be more than the number of births. The general effect is the fear of a dwindling work force of the future. This will lead to more people retiring later, and there would be a huge pressure on the pension schemes, and the economy as a whole due to this. A population boom will mean that a future workforce is guaranteed, and the retirement age lowered, and the call for dependency on automation due to a shrinking workforce can be reviewed.
Many of the western and developed nations are now giving incentives to those who produce more than one child or multiple children.
As their economy is getting old and is aging hence in order to company the problem of the aging of population monetary incentives are given. The baby boom is a condition related to the growth of babies. Japan is a greying nation that has a negatively declining trend of population. Due to the larger medical aid population is getting older and the birth rate is low. A baby boom may lead to an increase in youth and the young population. More children and more people.Learn more about the Western European countries that are giving monetary incentives.
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Poison Corporation holds 70 percent of Snake Company’s voting common shares but none of its preferred shares. Summary balance sheets for the companies on December 31, 20X1, are as follows:
Poison Corporation Snake Company
Assets
Cash $20,000 $29,000
Accounts Receivable 32,000 42,000
Inventory 120,000 74,000
Buildings and Equipment 295,000 215,000
Less: Accumulated Depreciation (138,000) (63,000)
Investment in Snake Company 123,900
Total Assets $452,900 $297,000
Liabilities and Owners’ Equity
Accounts Payable $77,900 $64,000
Wages Payable 40,000
Preferred Stock 100,000 56,000
Common Stock ($10 par value) 120,000 100,000
Retained Earnings 115,000 77,000
Total Liabilities and Owners’ Equity $452,900 $297,000
Neither of the preferred issues is convertible. Poison’s preferred pays a 9 percent annual dividend and Snake’s preferred pays a 10 percent dividend. Snake reported net income of $52,000 and paid a total of $21,000 of dividends in 20X1. Poison reported $65,000 of income from its separate operations and paid total dividends of $47,000 in 20X1.
Required:
Compute 20X1 consolidated EPS. Ignore any tax consequences. (Round your answer to 2 decimal places.)
Answer:
Common Stock
Poison Corp's Common stock = $120,000 / $10 = 12,000 shares
Snake Co's Common stock = $100,000 / $10 = 10,000 shares
Poison Corp owned Common stock in Snake Co. = 10,000 shares *70% = 7,000 shares
Preferred Stock Dividend
Poison Corp = $100,000 * 9% = $9,000
Snake Co = $56,000 * 10%= $5,600
Net Income which is the Adjusted Net income in absence of any information:
Poison Corp - $65,000
Snake Co - $52,000
Subsidiary Basic EPS = (Adjusted Net Income of Subsidiary - Preferred Stock Dividend ) / Subsidiary Common shares outstanding
Therefore Basic EPS of Snake Co. = (52,000 - 5,600) / 10,000 shares
= $4.64
Consolidated Basic EPC = [ (Parent Adjusted Net Income generated Internally - Parent Preferreed Stock Dividend) + (Parent Owned Subsidiary Common shares * Subsidiary EPS) ] / Parent Common shares outstanding
Therefore Consolidated EPS of Poison Corp = [(65,000 - 9,000) + (7,000 shares * 4.64)} / 12,000 shares
= (56,000 + 32,550) / 12,000 shares
= $7.3781
=$7.38
The consolidated Earnings per Share (EPS) for Poison Corporation for the year 2021 will be $7.9 per share.
Earnings per Share (EPS) are the amount of profits or gains a company earns over its common total stock outstanding in the market and subscribed fully.
We know that the Earnings Per Share can be calculated as using the following formula for the Poison Corporation which is a holding company of Snake Corporation holding its 70% equity.[tex]\rm Earnings\ per\ Share= \dfrac{Total\ Net\ Earnings}{Total\ Stock\ Outstanding}[/tex]We can calculate the no. of shares of Snake Co. held by Poison Corp by the following method.[tex]\rm Total\ holdings\ in\ Snake\ Co.= 0.70\ x\ 10000[/tex]We can say that Poison Co. holds 7000 shares in Snake Co. Now we can calculate the adjusted net income as ,[tex]\rm Adjusted \ net\ Income\ after\ Dividends= 65000-9000[/tex]So the net adjusted income for Poison Corp will be $56,000 and the adjusted net income of Snake Co. will be $46800 (52000-5600).EPS of Snake Co. will be,[tex]\rm EPS= \dfrac {46400}{10000}\\\\\\\rm EPS = 4.64[/tex]EPS of Poison Corp will be ,[tex]\rm EPS\ of\ Poison= \dfrac {56000}{12000}\\\\\\\rm EPS\ of\ Poison = 4.66[/tex]So now as we know that Poison holds 70% in Snake Co. we can say that their share in Snake Co. will be ,[tex]\rm EPS\ of\ Poison\ in\ Snake= 0.70\ x\ 4.64\\\\\\ EPS\ of\ Poison\ in\ Snake= 3.24[/tex]Now adding the values of EPS of Poison standalone and the EPS of Poison in Snake Co. we get ,[tex]\rm Consolidated\ EPS\ Of\ Poison\ Corp.= EPS\ standalone+ EPS\ in\ Snake\ Co.\\\\\\\rm Consolidated\ EPS\ Of\ Poison\ Corp.= 4.66+3.24\\\\\\\rm Consolidated\ EPS\ Of\ Poison\ Corp.=7.9[/tex]Hence, the consolidated EPS of Poison Corp will be $7.9 per share.
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Marquette purchased 7% of RST stock for $50,000 on 1/1/21. Data regarding these securities follow: Year-end Date Market Value December 31, 2021 $47,000 December 31, 2022 57,000 December 31, 2023 68,000 The 12/31/23 balance of the Securities Fair Value Adjustment account will be: Select one:
Answer:
The security at December 31th 2023 will be listed for 68,000 under current assets.
Explanation:
The securities will be listed at their fair balance.
But, as the gain is unrealized until sale the company will record it within the concept of other comprehensive income.
The dividend will be considered gain of the period thus, they will be recognized ither cash or shares are received.
On the first day of the fiscal year, a company issues a $8,800,000, 7%, 10-year bond that pays semiannual interest of $308,000 ($8,800,000 × 7% × ½), receiving cash of $7,655,303. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.
Answer:
The journal entry to record the issuance of the bonds:
Dr January 1, 202x, bonds are issued at a discount
Dr Cash 7,655,303
Dr Discount on bonds payable 1,144,697
Cr Bonds payable 8,800,000
using straight line amortization:
$1,144,697 / 20 coupons = $57,234.85 per coupon
July 1, 202x, first coupon payment
Dr Interest expense 365,234.85
Cr Cash 308,000
Cr Discount on bonds payable 57,234.85
All of the following are normally found in a corporation's stockholders' equity section, exceptAll of the following are normally found in a corporation's stockholders' equity section, except a. Paid-in-capital in excess of par b. Unearned Rent c. Retained Earnings d. Common Stock
Answer:
b. Unearned Rent
Explanation:
Shareholders Equity is the residual amount of Assets after deducting the Liabilities.
The Unearned Rent is a Liability and is not found in the Shareholders Equity Section.
Liabilities are Present obligations of an entity that arise as a result of past events, the settlement of which will result in out flow of economic benefits from the entity.
On January 1, 2020, the Oriole Company had $2,990,000 of $10 par value common stock outstanding that was issued at par and Retained Earnings of $1,150,000. The company issued 146,000 shares of common stock at $16 per share on July 1. On December 15, the board of directors declared a 10% stock dividend to stockholders of record on December 31, 2020, payable on January 15, 2021. The market value of Oriole Company stock was $17 per share on December 15 and $17 per share on December 31. Net income for 2020 was $580,000.
Required:
Journalize the issuance of stock on July 1 and the declaration of the stock dividend on December 15.
Answer:
Oriole Company
Journal Entries:
July 1:
Debit Cash Account $2,336,000
Credit Common Stock $1,460,000
Credit Paid-in In Excess of Common Stock $876,000
To record the issuance of 146,000 shares of common stock, par $10 at $16 per share.
December 15:
Debit Retained Earnings $445,000
Stock Dividends Payable $445,000
To record the declaration of a 10% stock dividend.
Explanation:
a) Stockholders of record on December 31, 2020:
Number of shares in issue at beginning 299,000
Number of shares issued on July 1 146,000
Total 445,000
10% of 445,000 = 44,500 shares
b) Stock Dividends declared on December 15 will result to the issuance of 44,500 shares to stockholders. To finance this stock dividend, the Retained Earnings account is debited while the Stock Dividends Payable is credited. When the shares are issued on January 15, the Stock Dividends Payable (Distributable) will be debited and the Common Stock credited with the par value. The market price of $17 does not affect the company's records.
Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $197,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $600,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,000,000 in total. Seida's January 1, 2018 book value equaled $1,850,000, although land was undervalued by $120,000. Any additional excess fair value over Seida's book value was attributable to a trademark with an 8-year remaining life. During 2018, Seida reported income of $300,000 and declared and paid dividends of $110,000. Prepare the 2018 journal entries for Milani related to its investment in Seida.
Answer:
Milani, Inc.
January 1, 2018:
Debit Investment in Seida $600,000
Credit Cash Account $600,000
To record the purchase of an additional 30% of Seida.
December 31, 2018:
Debit Investment in Seida $120,000
Credit Net Income $120,000
To record the share in the net income of Seida.
Debit Cash Account $44,000
Credit Cash Dividend Received $44,000
To record the company's share in the dividend paid by Seida.
Debit Cash Dividend Received $44,000
Credit Investment in Seida $44,000
To record the dividend received from Seida.
Explanation:
The cash dividend received from Seida will reduce Milani, Inc.'s investment value in Seida, just as the 40% share in the net income increased the investment value.
These journal entries have been used to debit and credit accounts as transactions occur. A journal plays an important role in recording transactions in the accounting system as it is usually the initial record of any transaction. It also shows the accounts debited or credited with a short narration that explains each transaction.
On October 5, Ivanhoe Company buys merchandise on account from Pharoah Company. The selling price of the goods is $5,240, and the cost to Pharoah Company is $3,180. On October 8, Ivanhoe Company returns defective goods with a selling price of $640 and a scrap value of $310. Record the transactions on the books of Pharoah Company, assuming a perpetual approach. (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.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title to record credit sales Inventory enter a debit amount enter a credit amount enter an account title to record credit sales Accounts Payable enter a debit amount enter a credit amount (To record credit sales) enter an account title to record cost of goods sold on account Accounts Payable enter a debit amount enter a credit amount enter an account title to record cost of goods sold on account Inventory enter a debit amount enter a credit amount (To record cost of goods sold on account) choose a transaction date enter an account title to record credit granted for receipt of returned goods Accounts Receivable enter a debit amount enter a credit amount enter an account title to record credit granted for receipt of returned goods Sales Revenue enter a debit amount enter a credit amount (To record credit granted for receipt of returned goods) enter an account title to record scrap value of goods returned enter a debit amount enter a credit amount enter an account title to record scrap value of goods returned enter a debit amount enter a credit amount (To record scrap value of goods returned)
Answer:
From Pharaoh's point of view:
October 5, merchandise sold on account to Ivanhoe Company
Dr Accounts receivable 5,240
Cr Sales revenue 5,240
Dr Cost of goods sold 3,180
Cr Inventory 3,180
October 8, defective merchandise is returned
Dr Sales returns and allowances 640
Cr Accounts receivable 640
Dr Inventory 310
Cr Cost of goods sold 310
From Ivanhoe's point of view:
October 5, merchandise sold on account from Pharaoh Company
Dr Inventory 5,240
Cr Accounts payable 5,240
October 8, defective merchandise is returned
Dr Accounts payable 640
Cr Inventory 640