Answer:
1. Insurance expires at the rate of $450 per month.
Dr Insurance expense 450
Cr Prepaid insurance 450
2. A count of supplies shows $1,140 of unused supplies on May 31.
Dr Supplies expense 1,460
Cr Supplies 1,460
3. (a) Annual depreciation is $2,880 on the building.
Dr Depreciation expense 240
Cr Accumulated depreciation, building 240
(b) Annual depreciation is $2,280 on equipment.
Dr Depreciation expense 240
Cr Accumulated depreciation, equipment 190
4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)
Dr Interest expense 168
Cr Interest payable 168
5. Unearned rent of $2,510 has been earned.
Dr unearned revenue 2,510
Cr Rent revenue 2,510
6. Salaries of $880 are accrued and unpaid at May 31.
Dr Wages expense 880
Cr Wages payable 880
Darryl, a cash basis taxpayer, gave 1,000 shares of Copper Company common stock to his daughter on September 29, 2019. Copper Company is a publicly held company that has declared a $2.00 per share dividend on September 30th every year for the last 20 years. Just as Darryl had expected, Copper Company declared a $2.00 per share dividend on September 30th, payable on October 15th, to stockholders of record as of October 10th. The daughter received the $2,000 dividend on October 18, 2019. a. The daughter must recognize the income because she owned the stock when the dividend was declared and she received the $2,000. b. Darryl must recognize the $2,000 dividend as his income because he constructively received the dividend. c. Darryl must recognize $1,500 of the dividend because he owned the stock for three-fourths of the year. d. Darryl must recognize the income of $2,000 because the purpose of the gift was to avoid taxes. e. None of these choices are correct.
Answer:
Correct option :a. The daughter must recognize the income because she owned the stock when the dividend was declared and she received the $2,000.
Explanation:
Based on the information given we were told Darryl gave 1,000 shares of stock to his daughter in the month of September 29, 2019 in which Darryl daughter also received the amount of $2,000 dividend on October 18 of the same year which means that Darryl daughter have to recognize the income reason been that the daughter owned the common stock when the dividend was been declared and she as well received the amount of $2,000.
After visiting several automobile dealerships, Richard selects the used car he wants. He likes its $11,500 price, but financing through the dealer is no bargain. He has $1,500 cash for a down payment, so he needs an $10,000 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $10,000 for a period of four years at an add-on interest rate of 11 percent.
What is the total intetrest on Richard's loan?
What is the total cost of the car?
What is the monthly payment ?
What is the annual percentage rate?
Explanation:
I = Prt
I = (10000)(.11)(4) = $4400
Total Cost = Down Payment + Principal Borrowed + Interest
Total Cost = 2000 + 8000 + 4400
= $14,400
Monthly Payment = (Principal Borrowed + Total interest) / Total number of payments
Monthly Payment = (10,000 + 4400) / 48
= $300
APR= (2 × n × I) / [P × (N + 1)]
APR = (2 × 12 × 4400) / [10,000 × (48+1)]
= 21.55%
Jacob is a nutritionalist who is in the process of setting a large group practice. He expects that the group will have gross receipts of $20,000,000 in the first year and grow by 4% each year. In addition to providing nutritional counseling services the group will sell vitamins, DVDs, and small exercise equipment such as hand weights and mats for stretching The revenues for these products is expected to be about 5% of the total revenue earned each year. Jacob's group would like to use the cash method of accounting if allowed.
Required:
Prepare a memo discussing whether Jacob's group will be able to use the cash method of accounting.
Answer:
As the company is offering 95% services of total sales, the company can use cash accounting but it is better that we use accrual accounting as it will be used in the future because the firm is growing with good numbers and by law we have to follow the accrual accounting.
Explanation:
Cash Accounting:
Sales and Expenses recorded when they are received or paid. This is against the matching principle which says that the expenses say $50 associated with sales of say $100 must be recorded in the same year.It is also not recommended by the International Financial Reporting Standards and GAAP (Generally accepted principles).Mostly used by small service organizations or manufacturing organizations with small inventory in stock.It confuses the user because it doesn't comply with the matching concept and hence it is possible that the sales of previous year are recorded in the current year due to arrears payments and expenses of current year may be recorded in the previous year because of advance payments. The law allows cash accounting for small firms but not for large firms as their stakeholder are in bulk quantities.Helpful in seeking loan as it reflects the cash results of the company.Accrual Accounting:
Sales and Expenses realized when they are earned or incurred not when they are received or paid. This is as per the matching principle.It is also recommended by the International Financial Reporting Standards and GAAP (Generally accepted principles).Can be used by any size of organizations because of its meaningful reports. It gives accurate profits and losses calculated and also reflect better balance sheet due to recognition of profits and losses on the basis of matching concept.Easily adoptable by the management as it is simple.Decision:
In my recommendation, the Jacob's group sales are almost $20 million and 5% of these are product sales and the remainder 95% are service sales which shows that the company can use cash accounting as well.
But remember that using cash accounting will not give you meaningful Financial statements and that the accrual accounting will be used in near future due to growth of the company. So it is better now the company adopt accrual basis now.
Ian loaned his friend $25,000 to start a new business. He considers this loan to be an investment, and therefore requires his friend to pay him an interest rate of 9% on the loan. He also expects his friend to pay back the loan over the next four years by making annual payments at the end of each year. Ian texted and asked that you help him calculate the annual payments that he should expect to receive so that he can recover his initial investment and earn the agreed-upon 9% on his investment.
Required:
Calculate the annual payment.
Answer: $7,716.76
Explanation:
Ian's friend will have to pay a specific annual payment per year so this is an annuity.
The $25,000 is the present value of the payments.
25,000 = Annuity * Present Value interest factor of Annuity, 9%, 4 years
25,000 = Annuity * 3.2397
Annuity = 25,000/3.2397
= $7,716.76
Garrison Corporation was closing its books on May 31, 2020. Garrison's accountant prepared a bank reconciliation as of May 31, 2020, and has found the following possible reconciling items between its book balance and its cash balance per the bank: Garrison's book balance 16,280 Outstanding checks 960 Customer's NSF check returned by the bank 190 Interest earned on checking account 160 In the search for reconciling items, the accountant also discovered that Garrison made an error in recording a customer’s check: the amount was recorded in cash receipts as $410; the bank recorded the amount correctly as $920. Required: What amount will Garrison report as its adjusted cash balance at May 31, 2020?
Answer:
$16,760
Explanation:
The computation of the adjusted cash balance is shown below:
= Book balance + interest earned + bank error - NSF checks
= $16,280 + $160 + ($920 - $410) - $190
= $16,760
We simply applied the above formula so that the correct answer could be come and the same is to be considered
Hence, the adjusted cash balance is $16,760
If you work 6.5 hours, how many minutes did you work? *
290 minutes
390 minutes
490 minutes
190 minutes
Answer:
390
Explanation:
Answer:
390
Explanation:
becuse in 6.5 hours is 390
Complete the Year 2 income statement data for Blue Hamster, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar.
Blue Hamster Manufacturing Inc Income Statement for Year Ending December 31
Year 1 Year 2
Net sales $15,000,000
Less: Operating costs, except depreciation and amortization 9,000,000
Less: Depreciation and amortization expenses 600,000 600,000
Operating income (or EBIT) $5,400,000
Less: Interest expense 540,000
Pre-tax income (or EBT) 4,860,000
Less: Taxes (25%) 1,215,000
Earnings after taxes $3,645,000
Less: Preferred stock dividends 100,000
Earnings available to common shareholders 3,545,000
Less: Common stock dividends 1,458,000
Contribution to retained earnings $2,087,000 $2,539,250
Consider the following scenario:
1. Blue Hamster Manufacturing Inc.'s income statement reports data for its first year of operation. The firm's CEO would like sales to increase by 25% next year. 1, Blue Hamster is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT).
2. The company's operating costs (excluding depreciation and amortization) remain at 60% of net sales, and its depreciation and amortization expenses remain constant from year to year.
3. The company's tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBT).
4. In Year 2, Blue Hamster expects to pay $100,000 and $1,407,600 of preferred and common stock dividends, respectively.
Answer:
Year 2 Net = $18,750,000
Year 2 Operating costs, except depreciation and amortization = $11,250,000
Year 2 Operating Income/EBIT = $6,900,000
Year 2 Interest expense = $1,035,000
Year 2 Pre-tax income/EBT = $5,865,000
Year 2 Taxes = $2,346,000
Year 2 Earnings After taxes = $3,519,000
Year 2 Earnings available to common shareholders = $3,419,000
Year 2 Contribution to retained earnings = $2,011,400
Explanation:
Note: The data in this question are merged together and there are also some errors in the question. The complete correct question with sorted data are therefore provided before answering the question. See the attached pdf file for the complete correct question with the sorted data.
Also note: See the attached excel file for the complete Year 2 income statement data in bold red color.
Based on the information provided in the question, the following calculations are used in the attached excel file for year 2:
Year 2 Net Sales = Year 1 Net sales + (Year 1 Net Sales * Percentage increase in sales in year 2) = $15,000,000 + ($15,000,000 * 25%) = $15,000,000 + $3,750,000 = $18,750,000
Year 2 Operating costs, except depreciation and amortization = 60% * Year 2 net sales = 60% * $18,750,000 = $11,250,000
Year 2 Operating Income/EBIT = Net Sales - Year 2 Operating costs, except depreciation and amortization - Year 2 Depreciation and amortization expenses = $18,750,000 - $11,250,000 - $600,000 = $6,900,000
Year 2 Interest expense = 15% * Year 2 earnings before interest and taxes (EBIT) = 15% * $6,900,000 = $1,035,000
Year 2 Pre-tax income/EBT = Operating Income/EBIT - Interest expense = $6,900,000 - $1,035,000 = $5,865,000
Year 2 Taxes = 40% * Year 2 Pre-tax income/EBT = 40% * $5,865,000 = $2,346,000
Year 2 Earnings After taxes = Year 2 Pre-tax income/EBT - Year 2 Taxes = $5,865,000 - $2,346,000 = $3,519,000
Year 2 Earnings available to common shareholders = Year 2 Earnings After taxes – Year 2 Preferred Stock Dividends = $3,519,000 - 100,000 = $3,419,000
Year 2 Contribution to retained earnings = Year 2 Earnings available to common shareholders – Year 2 Common Stock dividends = $3,419,000 - $1,407,600 = $2,011,400
Walker & Co. (Walker) signed a written contract to lease a large neon advertising sign to Herbert Harrison, who is in the dry-cleaning business, for $148.50 a month. The contract stated that Walker, as the lessor of the sign, would "at its expense maintain and service the sign [and would perform] cleaning and repainting of sign in original color scheme as often as deemed necessary by lessor to keep sign in first-class advertising condition and make all necessary repairs to sign and equipment installed by lessor." A few weeks the sign was installed, someone hit the sign with a tomato and "little spider cobwebs" appeared in the sign's corners. Harrison repeatedly asked Walker to fix the sign, but Walker did not do so. As a result, Harrison made no further payments and Walker sued Harrison for remainder of the lease payments pursuant to the contract's terms. Did Walker make a material breach of the contract?
Answer:
I believe that Walter breached the contract because they failed to clean the sign, but I wouldn't consider it a material breach (this would be a non-material breach).
A material breach of a contract takes place when the breaching party does something (or fails to do something) that goes against the basic reason why the contract was signed. A material breach would be that Walter didn't provide the sign or that the sign never worked (didn't turn on). But in this case, the sign was a little bit dirty with little spider cobwebs appearing at its corners.
Walter broke the contract by failing to wipe the sign, but it wasn't a material breach in my opinion (this would be a non-material breach).
When a breaching party does anything (or fails to do something) that goes against the core reason for the contract's signing, it is called a substantial breach of contract.
About material breach:
A material breach would be if Walter failed to give the sign or if the sign was never turned on. However, the sign was a little dusty in this case, with small spider cobwebs emerging at its corners.
For example, if you hired a contractor to build a house, a substantial breach would be if the contractor failed to complete the project.
For more information about material breach refer to the link:
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Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and the Deluxe. Suppose that Schell has conducted further research into its overhead and potential cost drivers. As a result, the company has compiled the following detailed information, breaking total overhead into three cost pools:Activity Cost Pools Cost Driver Cost Assigned to Pool Quantity/Amount Consumed by Standard Floor Mat Line Quantity/Amount Consumed by Deluxe Floor Mat LineMaterial handling Number of moves $3,750 30 moves 70 movesQuality control Number of inspections $13,860 400 inspections 600 inspectionsMachine maintenance Number of machine hours $21,450 4,150 machine hours 3,000 machine hoursRequired:1. Calculate the activity rates for each cost pool assuming Schell uses an ABC system.Activity RateMaterial Handling _____ per Material MoveQuality Control _____ per InspectionMaintenance _____ per Machine Hour2. Calculate the amount of overhead that Schell will assign to the Standard floor mat line.3. Determine the amount of overhead Schell will assign to the Deluxe product line.
Answer:
1. Calculate the activity rates for each cost pool assuming Schell uses an ABC system.Material Handling = Cost Assigned to Pool/ (Quantity/Amount Consumed by Standard Floor Mat Line / Quantity/Amount Consumed by Deluxe Floor Mat Line)
= 3,750/( 30 +70)
= $37.50 material move
Quality Control = 13,860/ ( 400 + 600)
= $13.86 per inspection
Maintenance = 21,450/ (4,150 + 3,000)
= $3 per machine hour
2. Calculate the amount of overhead that Schell will assign to the Standard floor mat line.
= Material handling + Quality Control + Maintenance
= (37.5 * 30) + (13.86 * 400) + (3 * 4,150)
= $19,119
3. Determine the amount of overhead Schell will assign to the Deluxe product line.
= Material handling + Quality Control + Maintenance
= (37.5 * 70) + (13.86 * 600) + (3 * 3,000)
= $19,941
The activity rate is the ratio between the number of active people (employed and unemployed) and the total number of people involved, this is calculated as one of the significant part of Activity-based Costing.
What is ABC Costing?Activity-based (ABC) is a cost-effective method that identifies activities in an organization and provides the cost per job for all products and services depending on the actual use of each.
This model, therefore, offers an overhead cost over direct costs compared to normal costs.
Calculation of activity rates as per the given information:
[tex]\rm\, Material \;Handling:\\\\=\frac{Cost \; Assigned \; to \; Pool}{(\;(Quantity/ \;Amount Consumed \;by \;Standard \; Floor \; Mat \; Line \; or\,Deluxe \;Floor \; Mat \; Line)}[/tex]
Material Handling:
[tex]\rm\,Activity \;Rate = 3,750/( 30 +70)\rm\,Activity\;Rate = \$37.50 material move[/tex]
Quality Control:
[tex]\rm\,Activity \;Rate = 13,860/(400 + 600)\\\\\rm\,Activity\;Rate = \$13.86 \;per \;inspection[/tex]
Maintenance:
[tex]\rm\,Activity \;Rate = 21,450/(4,150 + 3,000)\\\\ \rm\,Activity\;Rate = \$3 \; per \; machine \; hour[/tex]
2. Calculation of the amount of overhead that Schell will assign to the standard floor mat line:
[tex]\rm\,Overhead \; Costs = Material \;handling + Quality \; Control + Maintenance\\\\= (37.5 \times 30) + (13.86 \times 400) + (3\times 4,150)\\\\= \$19,119[/tex]
3. Calculation of the amount of overhead that Schell will assign to the Deluxe Product line:
[tex]\rm\,Overhead \; Costs = Material \;handling + Quality \; Control + Maintenance\\\\\\\rm\,Overhead \; Costs = (37.5 \times 70) + (13.86 \times 600) + (3\times 3,000)\\\\\\\rm\,Overhead \; Costs = \$19.941[/tex]
Hence, the Activity rates of costs assigned as calculated assuming the firm follows ABC Costing analysis and the total overhead costs under standard floor mat line and Deluxe Product line are $19,119 and $19,941.
To learn more about Activity-based Costing analysis, refer to the link:
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Countries with democratic regimes, market-based economic policies, and strong protection of property rights are more likely to attain high and sustained economic growth rates and are thus a more attractive location for international business. The benefits, costs, and risks are associated with the political, economic, and legal systems of the country. The overall attractiveness of a country depends on balancing the benefits, costs, and risks.
Roll over each item on the left for a detailed description. Then, drag each item to the appropriate category of evaluations a manager must make when examining a country's attractiveness.
1. Middle-class population growth potential
2. First-mover advantages
3. Unaxpestec political change
4. Infrastructure issuos
5. Resolving contract disputes
6. Bribe payments
7. Free market economy
8. Economio uncertainty
A. Evaluate Benefits
B. Evaluate Costs
C. Evaluate Risks
Answer:
Explanation:
There are different categories of evaluations a manager must make when examining a country's attractiveness such as Evaluation of Benefits, Evaluation of Costs and Evaluation of Risks. All these evaluation are necessary for high and sustained economic growth rates as well as means of attraction for location for international business for countries with market-based economic policies.
Cost evaluation provide insight on the total cost of the project.
Each of the given item are positioned below to the appropriate category of evaluations a manager must make when examining a country's attractiveness.
A. Evaluate Benefits
1. Middle-class population growth potential
2. First-mover advantages
7. Free market economy
B. Evaluate Costs
4. Infrastructure issues
5. Resolving contract disputes
6. Bribe payments
C. Evaluate Risks
3. Unaxpestec political change
8. economic uncertainty
Pepper’s Pens uses the weighted average method of process costing for product costing. Pepper Potts, the owner, provides you the following information about the prior month’s production: August beginning WIP (40% complete with respect to conversion costs) 8,000 Units started in August 45,000 Units completed and transferred in August 52,000 Ending August WIP (70% complete with respect to conversion costs) 1,000 All direct materials are added at the beginning of the process. Conversion costs are added evenly throughout the process. Costs this period Beginning WIP Direct materials $463,500 $124,500 Conversion costs 247,500 24,200 Total manufacturing costs $ 711,000 $ 148,7001. How many units were started, completed and transferred out in August? How many were completed and transferred from beginning work-in-process in August? 2. Calculate the cost per equivalent unit for a. Direct materials b. Conversion costs 3. Calculate the direct materials and conversion costs assigned to units that were completed and transferred out in August, and those in ending WIP. 4. Tony Stark, a cost accountant in the company, has raised the concern that the FIFO method of process costing is not as informative about the changes in product costs as the weighted average method. Is Tony correct? Explain.
Answer:
1. How many units were started, completed and transferred out in August?
44,000 unitsHow many were completed and transferred from beginning work-in-process in August?
8,000 units2. Calculate the cost per equivalent unit for
a. Direct materials = $13.4151
b. Conversion costs = $2.8216
3. Calculate the direct materials and conversion costs assigned to units that were completed and transferred out in August, and those in ending WIP.
units completed = $844,309.77ending WIP = $15,390.234. Tony Stark, a cost accountant in the company, has raised the concern that the FIFO method of process costing is not as informative about the changes in product costs as the weighted average method. Is Tony correct? Explain.
Ironman is wrong, since FIFO costing method is more exact. Under FIFO, only costs incurred during the period are considered, while weighted average includes costs incurred in previous periods. Weighted average is simpler to calculate, and whether it's better or not depends on actual costs incurred. E.g. if your production schedule and costs are fairly stable, then any differences between both methods will be irrelevant. But if your production schedule or costs vary form month to month, then the differences between both methods will be significant.Explanation:
beginning WIP 8,000
100% complete for materials: $124,500
40% complete for conversion costs: $24,200
units started 45,000
units completed 52,000
ending WIP 1,000
100% complete for materials
70% complete for conversion costs
period costs:
Direct materials $463,500
Conversion costs $247,500
total manufacturing costs:
Direct materials $711,000
Conversion costs $148,700
EUP:
for materials 53,000
for conversion costs 52,700
cost per EUP:
Direct materials $711,000 / 53,000 = $13.4151
Conversion costs $148,700 / 52,700 = $2.8216
total cost assigned to finished units = [($711,000 / 53,000) x 52,000] + [($148,700 / 52,700) x 52,000] = $697,584.91 + $146,724.86 = $844,309.77
ending WIP = ($711,000 + $148,700) - $844,309.77 = $15,390.23
Canterbury Co. issues a discounted, non-interest-bearing note in exchange for borrowed funds. Choose whether the cash received will be higher or lower than the face value of the note, and whether the effective annual interest rate will be higher or lower than the discount rate: Cash Received vs. Face Value of Note Effective Rate vs. Discount Rate
a. Higher Lower
b. Lower Higher
c. Lower Lower
d. Higher Higher
For a troubled debt restructuring involving only a modification of terms, which of the following items specified by the new terms would be compared to the carrying amount of the debt to determine if the debtor should report a gain on restructuring?
a. The total future cash payments.
b. The amount of future cash payments designated as principal repayments.
c. The present value of the debt at the original interest rate.
d. The present value of the debt at the modified interest rate.
Answer:
1. B
2. A
Explanation:
1. the answer is lower higher.
when a note has been discounted, the person who issues it is going to get its value at maturity. in a situation where it does not bear interes, this is the face value and it is going to be reduced by discount. such that the cash received would be lower than the face value. but when it is repaid, effective rate would be higher than the value of the discount.
2. a. The total future cash payments is what be compared to the carrying amount of the debt to determine if the debtor should report a gain on restructuring. the other options do not answer this question.
Quarter ($000) Net Income Operating Activities, Cash Flows Provided By or Used In Depreciation Adjustments to net income Changes in accounts receivable Changes in liabilities Changes in inventories Changes in other operating activities Total Cash Flow from Operating Activities Investing Activities, Cash Flows Provided By or Used In Capital expenditures Investments Other cash flows from investing activities Total Cash Flows from Investing Activities Financing Activities, Cash Flows Provided By or Used In Dividends paid Sale or purchase of stock Net borrowings Other cash flows from financing activities Total Cash Flows from Financing Activities Effect of exchange rate changes Change in Cash and Cash Equivalents 4 1 276625 229066 194168 218413 73213 74652 48804 (48,073) 69887 75664 14316 (13,131) 「(53,210) 100771 (84,594) 201724 (38,788) 82887[(111,619) (114,134) 40064 57571 (195,240) 84983 12706 (2,119) 176461(26,473) 227333 (13,837) 717808 254475 (82,478) (5,440) (108,828) (196,746) 「(41,702) 「(100,009) (69,286) 5550 (93,203)(48,401) 847 (57,966) 20714 (35,305) 「251,178) (119,369) 515684114657(283,689) 462945(13,401) 「(526,169) (96,973) (131,360) (131,285) (121,425) 78806 1175((76,853)(79,248) 64806 (182) 2052 (46,258) 39724 (96,143) 6781 68140 (119,984) (503) 32897 373551 (63,046)[(26,642)See the cash flow statement LOADING... (all values in thousands of dollars) (see MyLab Finance for the data in Excel format): a. What were the company's cumulative earnings over these four quarters? What were its cumulative cash flows from operating activities? b. What fraction of the cash from operating activities was used for investment over the four quarters? c. What fraction of the cash from operating activities was used for financing activities over the four quarters?
Find full question attached
Answer and Explanation:
Answer and explanation attached
Please refer to figures from the question for our answers
On January 1, Merry Walker and other stockholders established a catering service. Listed below are accounts to use for transactions (a) through (f), each identified by a number. Following this list are the transactions that occurred in Walker’s first month of operations. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.1. Cash2. Accounts Receivable3. Supplies4. Prepaid Insurance5. Equipment6. Truck7. Notes Payable8. Accounts Payable9. Common Stock10.Dividends11.Fees Earned12.Wages Expense13.Rent Expense14.Utilities Expense15.Truck Expense16.Miscellaneous Expense17.Insurance Expense TransactionsAccount(s) DebitedAccount(s) Crediteda. Recorded jobs completed on account and sent invoices to customers. b. Received an invoice for truck expenses to be paid in February. c. Paid utilities expense d. Received cash from customers on account. e. Paid employee wages. f. Paid dividends to stockholders. What will be an ideal response?
Answer with Explanation:
Part A. Recorded jobs completed on account and sent Invoices to customers
The entry would include the recognition of revenue earned and thus this would be increase in Fees Earned account which will be credited. The amount is yet not paid which means that the Accounts Receivable account will be debited with an equal amount.
Dr Accounts receivable a/c
Cr Fees Earned a/c
Part B. Received an invoice for truck expense to be paid in February
The truck expense would related to repair and maintenance of truck which is on credit. This would be recorded as increase in Truck expenses a/c which would be debited and increase in Accounts payables a/c which must be credited.
Dr Truck expense a/c
Cr Accounts payable a/c
Part C. Paid utilities expense.
The entry would be increase an increase in the utility expense account which would be debited and the cash paid would be credited because there is a decrease in cash due to payment.
Dr Utilities a/c
Cr Cash a/c
Part D. Received cash from customers on account.
The receipt of cash asset is increase in asset and must be debited and the accounts receivables must credited because the debt paid to the customer has be decreased.
Dr Cash a/c
Cr Accounts Receivable a/c
Part E. Paid employee wages.
The wages paid is an expense and thus wage expense account must be debited. The wages are paid in cash which means there is a decrease in cash asset which must be credited.
Dr Wages Expense a/c
Cr Cash a/c
Part F. Paid dividends to stockholders.
The dividends are paid out of retained earnings and are debit in nature so this means that it is an increase in dividends which must be debited. On the other hand, decrease in cash must be credited.
Dr Dividends a/c
Cr Cash a/c
Nike, Inc., with headquarters in Beaverton, Oregon, is one of the world's leading manufacturers of athletic shoes and sports apparel. The following activities occurred during a recent year. The amounts are rounded to millions a. Purchased additional buildings for $172 and equipment for $270; paid $432 in cash and signed a long-term note for the rest. b. Issued 100 shares of $2 par value common stock for $345 cash. c. Declared $145 in dividends to be paid in the following year. d. Purchased additional short-term investments for $7,616 cash. e. Several Nike investors sold their own stock to other investors on the stock exchange for $84 f. Sold $4,313 in short-term investments for $4,313 in cash. Required: For each of the events (a) through (), perform transaction analysis and indicate the account, amount, and direction of the effect +for increase and - for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. (If no impact on the accounting equation leave cells blank. Enter your answers in millions.)
Answer:
Nike, Inc.
Transaction Analysis and Indication of the account, amount, and direction of the effect on the accounting equation:
a. Purchased additional buildings for $172 and equipment for $270; paid $432 in cash and signed a long-term note for the rest.
Analysis:
Accounts affected: Building, Equipment, Cash, and Long-term Note Payable
Assets (Building +$172,000,000, Equipment + $270,000,000, Cash -$432,000,000) = Liabilities (Long-term Note Payable + $10,000,000) + Equity
Check: Assets +$10,000,000 = Liabilities + $10,000,000 + Equity
b. Issued 100 shares of $2 par value common stock for $345 cash.
Analysis:
Accounts Affected: Common Stock, Additional Paid-in Capital (APIC), and Cash
Assets (Cash +$345,000,000) = Liabilities + Equity (Common Stock +$200,000,000 and APIC +$145,000,000)
Check: Assets +$345,000,000 = Liabilities + Equity +$345,000,000
c. Declared $145,000,000 in dividends to be paid in the following year.
Analysis:
Accounts affected: Dividends Payable and Dividends (Retained Earnings)
Assets = Liabilities (Dividends Payable + $145,000,000) + Equity (Retained Earnings - $145,000,000
Check: Assets = Liabilities -$145,000,000 + Equity - $145,000,000
d. Purchased additional short-term investments for $7,616,000,000 cash.
Analysis:
Accounts Affected: Short-term Investments and Cash
Assets(Short-term Investments + $7,616,000,000, Cash -$7,616,000,000) = Liabilities + Equity
Check: Assets = Liabilities + Equity
e. Several Nike investors sold their own stock to other investors on the stock exchange for $84
No impact on the accounting equation.
f. Sold $4,313 in short-term investments for $4,313 in cash.
Analysis:
Accounts Affected: Short-term Investments and Cash
Assets(Short-term Investments - $4,313,000,000, Cash +$4,313,000,000) = Liabilities + Equity
Check: Assets = Liabilities + Equity
Explanation:
In Nike's financial records, the accounting equation is the basis for the double-entry system of accounting. It shows that the two sides of the financial position of Nike, Inc. are always in balance with the assets = liabilities + equity with the occurrence of each business transaction. This is because, two or more accounts are always involved and affect equally the two sides if proper accounting has been carried out.
The market price of cheeseburgers in a college town decreased recently, and the students in an economics class are debating the cause of the price decrease. Some students suggest that the price decreased because the price of beef, an important ingredient for making cheeseburgers, has decreased. Other students attribute the decrease in the price of cheeseburgers to a recent increase in the price of french fries. Everyone agrees that the increase in the price of french fries was caused by a recent increase in the price of potatoes, which are not generally used in making cheeseburgers.
The second group of students attributes the decrease in the price of cheeseburgers to the decrease in the price of calzones at local pizza parlors.
Suppose that both of the events you have just analyzed are partly responsible for the decrease in the price of cheeseburgers. Based on your analsis of the explanations offered by the two groups of students, how would you figure out which of the possible causes was the dominant cause of the decrease in the price of cheeseburgers?
a. If the equilibrium quantity of cheeseburgers increases, then the demand shift in the market for cheeseburgers must have been larger than the supply shift.
b. Whichever change occurred first must have been the primary cause of the change in the price of cheeseburgers.
c. If the equilibrium quantity of cheeseburgers increases, then the supply shift in the market for cheeseburgers must have been larger than the demand shift.
d. If the price decrease was small, then the supply shift in the market for cheeseburgers must have been larger than the demand shift.
Answer:
c. If the equilibrium quantity of cheeseburgers increases, then the supply shift in the market for cheeseburgers must have been larger than the demand shift.
Explanation:
Please find answer and explanation attached
Things often happen due to different reasons. If the equilibrium quantity of cheeseburgers increases, then the supply shift in the market for cheeseburgers must have been larger than the demand shift.
If the equilibrium quantity of cheeseburgers decreases, then the supply shift in the market for cheeseburgers may be due to higher than the demand shift.Note that the shift in supply from S0 to S1 is known to be larger than a change in demand from D0 to D1.
Note that a Decrease in the price of input is known to bring about a change or increase in the supply of commodity in the market. This is because the cost of production decreases.
Learn more about supply shift from
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Hassan, an undocumented worker employed by Robco Warehouse, is routinely harassed because of his Middle Eastern ancestry. His supervisors and co-workers often refer to him as a terrorist and call him "Taliban." He complains to the management about the harassment and after a few days, his supervisor conducts an investigation and finds out that Hassan is an illegal alien. This information is relayed to the Immigration and Naturalization Service (INS). Which of the following is the Equal Employment Opportunity Commission (EEOC) most likely to conclude? a) Hassan does not have a claim of discrimination because the Fair Labor Standards Act does not protect undocumented workers from abuse. b) Hassan has a claim of discrimination because the Immigration Reform and Control Act does not allow discrimination in favor of U.S. citizens as against illegal aliens. c) Robco Warehouse will be liable if the company acquired information on Hassan's status through a retaliatory investigation. d) Robco Warehouse is not liable because the Immigration Reform and Control Act does not prohibit discrimination on the basis of citizenship under any circumstances.
Answer: c) Robco Warehouse will be liable if the company acquired information on Hassan's status through a retaliatory investigation.
Explanation:
Title VII of the Civil Rights Act of 1964 protects workers from being retaliated against if they report discrimination that they are going through and as this is a Federal law on discrimination, it covers undocumented immigrants as well.
Hassan complained to management about his supervisors and co-workers calling him a terrorist and his supervisors launched an investigation and when they found out he was undocumented, reported him to the INS.
If the EEOC finds out that they reported him in retaliation, Robco Warehouse would be liable under Title VII of the Civil Rights Act.
Accounting records for Corporation yield the following data for the year ended , (assume sales returns are non-existent):
Inventory, June 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,000
Purchases of inventory (on account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57,000
Sales of inventory – 84% on account; 16% for cash (cost $43,000) . . . .92,000
Inventory at FIFO, June 30, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,000
Requirement:
Journalize inventory transactions for the year under the perpetual system.
Answer:
Follows are the Journalize inventory transactions to this question:
Explanation:
accounts names debit credit
The stock of Merchandise 57000
Accounts due 57000
Account purchase of stock
Goods for sale cost 43000
The stock of Merchandise 43000
Price of products sold during the year
Cash 14720
Receivable accounts 77280
Sales 92000
Goods Revenue
No inventory closing entry required
Job Cost Journal Entries and T Accounts
Following are certain operating data for Redwood Manufacturing Company for January 2016:
Materials Inventory Work in Process Inventory Finished Goods Inventory
Beginning inventory $40,000 $50,000 $80,000
Ending inventory 70,000 60,000 56,000
Total sales were $2,000,000, on which the company earned a 40% gross profit. Redwood uses a predetermined manufacturing overhead rate of 110% of direct labor costs. Manufacturing overhead applied was $396,000. Exclusive of indirect material used, total manufacturing overhead incurred was $300,000; it was under-applied by $24,000.
Required
Compute the following items. (Set up T accounts for Materials Inventory, Work in Process Inventory, Finished Goods Inventory, and Manufacturing Overhead; fill in the known amounts; and then use the normal relationships among the various accounts to compute the unknown amounts.)
Answer:
Cost of goods sold = $1,224,000
Cost of goods manufactured = $1,200,000
Direct labor incurred = $360,000
Direct material used = $430,000
Indirect material used = $96,000
Total materials purchased = $556,000
Explanation:
Materials Inv. WIP Inv. Finished Goods Inv.
Beginning inventory $40,000 $50,000 $80,000
Ending inventory $70,000 $60,000 $56,000
Total sales were $2,000,000, on which the company earned a 40% gross profit.
Redwood uses a predetermined manufacturing overhead rate of 110% of direct labor costs. Manufacturing overhead applied was $396,000. Exclusive of indirect material used, total manufacturing overhead incurred was $300,000; it was under-applied by $24,000.
COGS = $2,000,000 x 60% = $1,200,000 + $24,000 of underapplied overhead = $1,224,000
COGM = COGS + ending finished goods inventory - beginning finished goods inventory = $1,224,000 + $56,000 - $80,000 = $1,200,000
Direct labor = applied overhead / predetermined overhead rate = $396,000 / 1.1 = $360,000
Direct materials = COGM - beginning WIP - overhead applied - underapplied overhead - direct labor + ending WIP = $1,200,000 - $50,000 - $396,000 - $24,000 - $360,000 + $60,000 = $430,000
Indirect materials = overhead - $300,000 = $396,000 - $300,000 = $96,000
Total materials purchased = ending materials + direct materials used + indirect materials - beginning materials = $70,000 + $430,000 + $96,000 - $40,000 = $556,000
The following data were extracted from the income statement of Keever Inc.: Current Year Previous Year Sales $18,500,000 $20,000,000 Beginning inventories 940,000 860,000 Cost of goods sold 9,270,000 10,800,000 Ending inventories 1,120,000 940,000 a. Determine for each year (1) the inventory turnover and (2) the number of days' sales in inv
Answer:
Please see answers below
Explanation:
1. Inventory turnover = Cost of goods sold / Average inventory
Current year inventory turnover = Cost of goods sold / [ Beginning inventory + Closing inventory / 2]
= 9,270,000 / [ 940,000 + 1,120,000 / 2]
= 9,270,000 / 1,030,000
= 9 times
Previous year inventory turnover = Cost of goods sold / [ Beginning inventory + Closing inventory / 2]
= 10,800,000 / [ 860,000 + 940,000 / 2 ]
= 10,800,000 / 900,000
= 12 times
2. The number of day sales in inventory = Number of days in a year / Inventory turnover
Current year = 365 / 9
= 40.55
Previous year = 365 / 12
= 30.42
Assume that Firm ABC has revenues of $120,000 for both 2017 and 2018. It also has operating expenses of $40,000 for each of these years. In addition, Firm ABC accrues a loss and related liability of $10,000 for financial reporting purposes because of pending litigation. Firm ABC cannot deduct this amount for tax purposes until it pays the liability, expected in 2018. As a result, a deductible amount will occur in 2018 when Firm ABC settles the liability, causing taxable income to be lower than pretax financial information.
2017 2018
Revenues 120,000 120,000
Expenses 40,000 40,000
Litigation Loss 10,000
Pretax Financial Income 70,000 80,000
Income Tax Expense (40%) 28,000 32,000
2017 2018
Revenues 120,000 120,000
Expenses 40,000 40,000
Litigation Loss 10,000
Taxable Income 80,000 70,000
Income Tax Expense (40%) 32,000 28,000
Q1) Journalize the entry at 12/31/2017 to record income tax expense, deferred tax asset, and income taxes payable:
Q2) Journalize the entry at 12/31/2018 to record income tax expense, deferred tax asset, and income taxes payable:
Answer:
1) deferred tax asset = 4000
2) deffered tax Liability = 4000
Explanation:
1) Journalizing entry at 12/31/2017
deferred tax asset = tax ( per income tax) - tax ( per book tax )
= 32000 - 28000 = 4000
Journal Entry made for Income tax and deferred tax asset)
Account Debit Credit
Income Tax Expense 28000
Deffered Tax Asset 4000
Income Tax Payable 32000
2) Journalizing entry at 12/31/2018
Deffered tax Liability = Tax (per book) - Tax ( Income tax )
deffered tax Liability = 32000 - 28000 = 4000
Journal Entry made for Income tax and deffered tax liability
Account Debit Credit
Income Tax Expense 32000
To Deffered Tax Liability 4000
To Income Tax Payable 28000
Cortina Company accumulates the following adjustment data at December 31.
Indicate (1) the type of adjustment (prepaid expense, accrued revenue, and so on) and (2) the status of the accounts before adjustment (overstated or understated). (Enter your answers in alphabetical order.)
Item (1)
Type of Adjustment (2)
Accounts Before Adjustment
(a) Supplies of $400 are on hand. Supplies account shows $1,600 balance.
Entry field with correct answer Prepaid ExpensesAccrued RevenuesAccrued ExpensesUnearned Revenues
Entry field with incorrect answer now contains modified data Expenses UnderstatedLiabilities UnderstatedExpenses OverstatedRevenues OverstatedAssets UnderstatedAssets OverstatedRevenues UnderstatedLiabilities Overstated
Entry field with incorrect answer now contains modified data Revenues UnderstatedAssets UnderstatedLiabilities UnderstatedLiabilities OverstatedExpenses UnderstatedExpenses OverstatedAssets OverstatedRevenues Overstated
(b) Services performed but unbilled total $700.
Entry field with correct answer Unearned RevenuesAccrued ExpensesPrepaid ExpensesAccrued Revenues
Entry field with incorrect answer now contains modified data Assets UnderstatedAssets OverstatedLiabilities OverstatedExpenses UnderstatedExpenses OverstatedRevenues UnderstatedRevenues OverstatedLiabilities Understated
Entry field with correct answer Assets OverstatedExpenses OverstatedRevenues UnderstatedLiabilities UnderstatedLiabilities OverstatedAssets UnderstatedExpenses UnderstatedRevenues Overstated
(c) Interest of $300 has accumulated on a note payable.
Entry field with correct answer Prepaid ExpensesAccrued ExpensesAccrued RevenuesUnearned Revenues
Entry field with incorrect answer now contains modified data Assets UnderstatedExpenses UnderstatedRevenues OverstatedExpenses OverstatedLiabilities UnderstatedAssets OverstatedRevenues UnderstatedLiabilities Overstated
Entry field with correct answer Assets UnderstatedAssets OverstatedLiabilities UnderstatedRevenues UnderstatedLiabilities OverstatedRevenues OverstatedExpenses UnderstatedExpenses Overstated
(d) Rent collected in advance totaling $1,100 has been earned.
Entry field with correct answer Unearned RevenuesPrepaid ExpensesAccrued ExpensesAccrued Revenues
Entry field with incorrect answer now contains modified data Liabilities OverstatedAssets UnderstatedRevenues UnderstatedLiabilities UnderstatedRevenues OverstatedExpenses OverstatedExpenses UnderstatedAssets Overstated
Entry field with incorrect answer now contains modified data Expenses UnderstatedRevenues OverstatedLiabilities UnderstatedAssets UnderstatedExpenses OverstatedRevenues UnderstatedLiabilities OverstatedAssets Overstated
Answer:
(a) Supplies of $400 are on hand. Supplies account shows $1,600 balance.
Supplies (asset account) are overstated and supplies expense (expense account) is understated. Adjusting journal entry:
Dr Supplies expense 1,200
Cr Supplies 1,200
(b) Services performed but unbilled total $700.
Both service revenue (revenue account) and accounts receivable (asset account) are understated. Adjusting journal entry:
Dr Accounts receivable 700
Cr Service revenue 700
(c) Interest of $300 has accumulated on a note payable.
Interest expense (expense account) and interest payable (liability account) are both understated. Adjusting journal entry:
Dr Interest expense 300
Cr Interest payable 300
(d) Rent collected in advance totaling $1,100 has been earned.
Unearned revenue (liability account) is overstated, while rental revenue (revenue account) is understated. Adjusting journal entry:
Dr Unearned revenue 1,100
Dr Rental revenue 1,100
The following is a condensed version of the comparative balance sheets for Sheffield Corporation for the last two years at December 31.
2020 2019
Cash $265,500 $117,000
Accounts receivable 270,000 277,500
Investments 78,0001 11,000
Equipment 447,000 360,000
Accumulated Depreciation-Equipment (159,000) (133,500)
Current liabilities 201,000 226,500
Common stock 240,000 240,000
Retained earnings 460,500 265,500
Additional information:
a. Net income for 2022 was $55,800.
b. Depreciation expense was $20,400.
c.Cash dividends of $23,400 were declared and paid.
d. Bonds payable amounting to $30,000 were redeemed for cash $30,000.
e. Common stock was issued for $25,200 cash.
f. No equipment was sold during 2022.
g. Land was sold for its book value.
Required:
Prepare a statement of cash flows for 2020 using the indirect method.
Answer:
Sheffield Corporation
Statement of Cash Flows
For the year ended December 31, 2020
Net Income $55,800
Non-cash expense:
Depreciation 20,400
Net Cash from operation $35,400
Working capital changes:
Accounts receivable 7,500
Current liabilities (25,500)
Net cash from operating activities $17,400
Investing activities:
Investments 33,000
Financing activities:
Common Stock 25,200
Bonds payable (30,000)
Dividends (23,400) (28,200)
Net cash flows $22,200
Explanation:
a) Data and Calculations:
Sheffield Corporation
Comparative Balance Sheet
For the two years at December 31:
2020 2019 Inflow / outflow
Cash $265,500 $117,000
Accounts receivable 270,000 277,500 $7,500
Investments 78,000 111,000 33,000
Equipment 447,000 360,000
Accumulated Depreciation
-Equipment (159,000) (133,500)
Current liabilities 201,000 226,500 25,500
Common stock 240,000 240,000
Retained earnings 460,500 265,500
An investment will pay you $80,000 in 10 years. If the appropriate discount rate is 9 percent compounded daily, what is the present value? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
PV= $32,125.20
Explanation:
Giving the following information:
Future Value= $80,000
Number of periods= 10*365= 3,650
Interest rate= 0.09/365= 0.00025
To calculate the present value, we need to use the following formula:
PV= FV/(1+i)^n
PV= 80,000 / (1.00025^3,650)
PV= $32,125.20
Anita and Barry were negotiating, and Anita's attorney prepared a long and carefully drawn contract, which was given to Barry for examination. Five days later and prior to its execution, Barry's eyes became so infected that it was impossible for him to read. Ten days thereafter and during the continuance of the illness, Anita called upon Barry and urged him to sign the contract, telling him that time was running out. Barry signed the contract despite the fact he was unable to read it. In a subsequent action by Anita, Barry claimed that the contract was not binding upon him because it was impossible for him to read and he did not know what it contained prior to his signing it. Should Barry be held to the contract?
Answer:
Barry is to be held to the contract.
Explanation:
Barry had the contract during 5 days before he got sick and couldn't read it anymore. Even when he got sick, he could have also made someone else read it to him. He cannot argue that it was impossible for him to know the contents of the contract.
On the other side, Anita urged Barry to read and sign the contract, but did commit duress while doing so. There is no evidence that Anita physically harassed or forced Barry into signing the contract. Anita didn't misrepresent the contract to Barry because all she did was tell him to read it and sign it.
1. Cooper and Brandy are married and file a joint income tax return with two separate Schedule Cs. Cooper is an independent security specialist who spent $395 on uniforms during the year. His laundry expenses for the uniforms were $175 for this year, plus $65 for altering them. Brandy works as a drill press operator and wears jeans and a work shirt on the job, which cost $175 this year. Her laundry costs were $50 for the work clothes. Brandy is also required by state regulators to wear safety glasses and safety shoes when working, which cost a total of $115. How much is their total deduction on their Schedule Cs for special clothing and uniforms?
2. Cooper and Brandy are married and file a joint income tax return with two separate Schedule Cs. Cooper is an independent security specialist who spent $395 on uniforms during the year. His laundry expenses for the uniforms were $175 for this year, plus $65 for altering them. Brandy works as a drill press operator and wears jeans and a work shirt on the job, which cost $175 this year. Her laundry costs were $50 for the work clothes. Brandy is also required by state regulators to wear safety glasses and safety shoes when working, which cost a total of $115. How much is their total deduction on their Schedule Cs for special clothing and uniforms?
Answer:
the total deductions on their schedule Cs for special clothing and uniforms is $750
Explanation:
Now you have to know that Brandy's jeans and her laundry cannot be deductible. if her shirt is to be deductible,then it should have the id of the company on it. But we are told that they are just regular work wears.
the calculations are as follows:-
cooper's uniform through the year = $395
cooper's laundry = $175
cooper's altering allowances = $65
Brandy's safety glasses and shoes when working = $115
summing these up
395 + 175 + 65 + 115
= $750
the total deductions on schedule Cs is $750
note:
note:the second question you posted is the same as the first. so the answer is the same
Selected data for Kris Corporation’s comparative balance sheets for Year 1 and Year 2 are as follows:
Year 1 Year 2
Assets
Cash $100,000 $(50,000 )
Accounts receivable (net) 50,000 100,000
Inventory 100,000 250,000
Equipment (net) 300,000 350,000
Total assets $550,000 $650,000
Liabilities and Equity Accounts payable $150,000 $100,000
Income taxes payable 80,000 30,000
Bonds payable 100,000 80,000
Common stock 100,000 200,000
Retained earnings 120,000 240,000
Total liabilities and Equity $550,000 $650,000
Using the indirect method to create the operating activities section of the statement of cash flows, the cash flow from accounts receivable would be recorded as:__________
a. a decrease of $50,000 under investing activities.
b. an increase of $50,000 under investing activities.
c. a decrease of $150,000 under investing activities.
d. an increase of $150,000 under operating activities.
Answer:
Correct option : c. a decrease of $150,000
Explanation:
Based on the information given in Year 1 inventory shows the amount of $100,000 while the inventory in Year 2 shows the amount of $250,000 which simply means that inventory that is purchased is higher than the inventory that is sold which will inturn lead to outflow of cash because cash is been paid , hence cash will decreased by the amount of $150,000($100,000-$250,000).
Therefore the cash flow from accounts receivable would be recorded as:a decrease of $150,000
The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
Sheet (Millions of $) Assets 2007
Cash and securities $2,475
Accounts receivable 12,650
Inventories 17,600
Total current assets $32,725
Net plant and equipment $22,275
Total assets $55,000
Liabilities and Equity:
Accounts payable $10,450
Notes payable 7,700
Accruals 6,050
Total current liabilities $24,200
Long-term bonds $18,700
Total debt $42,900
Common stock $0
Retained earnings 12,100
Total common equity $12,100
Total liabilities and equity $55,000
Income Statement (Millions of $) 2007
Net sales $99,000
Operating costs except depreciation 92,565
Depreciation 1,733
Earnings bef interest and taxes (EBIT) $4,703
Less interest 1,650
Earnings before taxes (EBT) $3,053
Taxes 1,068
Net income $1,984
Other data: Shares outstanding (millions) 500.00
Common dividends (millions of $) $694.44
Int rate on notes payable & L-T bonds 6.25%
Federal plus state income tax rate 35%
Year-end stock price $43.39
Required:
a. What is the firm's ROE?
b. What is the firm's profit margin?
c. What is the firm's operating margin?
d. What is the firm's P/E ratio?
Answer:
See solutions below
Explanation:
a. ROE = Net income / Total equity
= $1,984 / $12,100
= 16.40%
b. Firm's profit margin = Net income / sales
= 1,984 / 99,000
= 2.00%
c. Firm's operating margin = Operating income / Net sales
Operating income = Net sales - Operating costs - depreciation
= 99,000 - 92,565 - 1,733
= 4,702
= 4,702 / 99,000
= 4.75%
d. Firm's P/E ratio = Market Price per share / Earnings per share
= 43.39 / [ 1,984 / 500 ]
= 43.39 / 3.968
= 10.93
Answer the following questions based on the tables below.
Buyer Willingness to Pay for One Unit
A $35
B 33
C 27
D 22
E 21
F 13
G 13
H 12
I 6
Seller Willingness to Sell One Unit
A $4
B 9
C 12
D 14
E 15
F 21
G 23
H 30
I 51
Required:
a. The quantity demanded at a price of $10 is:_____________
b. The quantity supplied at a price of $10 is: _____________
c. The quantity demanded at a price of $25 is:_______________.
d. The quantity supplied at a price of $25 is: 7 units:__________
Answer:
8
2
3
7
Explanation:
The willingness to pay of a buyer is the highest amount a buyer is willing to purchase a product.
As long as the willingness to pay is greater than the price of a good, the buyer would purchase the item
The willingness to sell of a seller is the least amount a seller is willing to sell a product.
The seller would sell an item as long as the price of the good is greater than the willingness to sell of a seller.
When price is $10, the quantity demanded is - A, B. C. D. E. F. G. H . That is eight units
When price is $10, the quantity supplied is A, B That is 2 units
When price is $25, the quantity demanded is A, B. C That is 3 units
When price is $25, the quantity supplied is A, B. C. D. E. F. G. That is 7 units
The December 31, 2021, unadjusted trial balance for Demon Deacons Corporation is presented below.
Accounts Debit Credit
Cash $9,100
Accounts Receivable 14,100
Prepaid Rent 6,120
Supplies 3,100
Deferred Revenue $2,100
Common Stock 11,000
Retained Earnings 5,100
Service Revenue 44,720
Salaries Expense 30,500
$62,920 $62,920
At year-end, the following additional information is available:
a. The balance of Prepaid Rent, $6,120, represents payment on October 31, 2021, for rent from November 1, 2021, to April 30, 2022.
b. The balance of Deferred Revenue, $2,100, represents payment in advance from a customer. By the end of the year, $525 of the services have been provided.
c. An additional $700 in salaries is owed to employees at the end of the year but will not be paid until January 4, 2022.
d. The balance of Supplies, $3,100, represents the amount of office supplies on hand at the beginning of the year of $1,250 plus an additional $1,850 purchased throughout 2021. By the end of 2021, only $710 of supplies remains.
Required:
a. Update account balances for the year-end information by recording any necessary adjusting entries. No prior adjustments have been made in 2018.
b. Prepare an adjusted trial balance as of December 31, 2018.
Answer:
Date Accounts Titles & Explanation Debit Credit
Dec 31 Rent Expense $2,040
($6,120 *2/6)
Prepaid Rent $2,040
Dec 31 Deferred Revenue $525
Service Revenue $525
Dec 31 Salaries Expense $700
Salaries Payable $700
Dec 31 Supplies Expense $2,390
($3,100 - $710)
Supplies $2,390
Demon Deacons Corporation
Adjusted Trial balance
December 31, 2021
Accounts Debit$ Credit$
Cash 9,100
Account receivable 14,100
Prepaid rent 4080
Supplies 710
Deferred revenue 1,575
Salaries payable 700
Common stock 11,000
Retain earnings 5,100
Service revenue 45,245
Salaries expenses 31,200
Rent expenses 2,040
Supplies expenses 2,390
Total $63,620 $63,620
Prepaid rent = 6,120 - 2,040 = 4080
Supplies = 3100 - 2390 = 710
Deferred revenue = 2,100 - 525 = 1575