Answer:
1. negative, 2. negative, 3. negative, 4. negative, 5. positive, 6. negative, 7. negative, 8. positive, 9. positive
Explanation:
In the context, if the given good is normal, then substitution effect effect will be negative as the quantity demanded will decrease with the price for the normal goods. Income effect also becomes negative as the increase in the income will also increase he quantity that is demanded in the case of the normal good. And the demand curve slope will become negative as the substitution effect will overpower the income effect.
However, the substitution effect will be negative when the goods are inferior and the net income will be positive, but the demand curve slope will become negative as the positive income effect is not as large as to outweigh substitution effect.
When the good is Giffen good, the substitution effect will become negative and the income effect becomes positive and the demand curve slope becomes positive.
A refrigerator costs $800 on an installment plan that requires a down payment of $140 and monthly payments for 12 months. What are the monthly payments of the plan?
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Answer:
Oh dear... Do you need help with something or is this just something random- lol
Explanation:
Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely be greater in the a. eighth year after it is imposed than in the first year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year. b. first year after it is imposed than in the eighth year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year. c. first year after it is imposed than in the eighth year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year.
Answer:
A
Explanation:
Deadweight loss of tax measures the decrease in demand as a result of an increase in tax
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Price elasticity of supply measures the responsiveness of quantity supplied to changes in price of the good.
Demand is less elastic in the short run because there is no enough time for consumers to find suitable and cheaper substitutes. As time goes on, demand becomes more elastic because consumers would have had enough time to find cheaper substitutes
Supply is also less elastic in the short time and more elastic in the long run
Prepare the adjusting journal entries for the following transactions.
1. Supplies for office use were purchased during the year for $620, of which $160 remained on hand (unused) at year-end.
2. Interest of $310 on a note receivable was earned at year-end, although collection of the interest is not due until the following year.
3. At year-end, salaries and wages payable of $4,200 had not been recorded or paid.
4. At year-end, one-half of a $2,600 advertising project had been completed for a client, but nothing had been billed or collected.
5. Re-deemed a gift card for $660 of services.
Answer and Explanation:
The adjusting entries are shown below:
1. Supplies expense $460 ($620 - $160)
To supplies $460
(being supplies expense is recorded)
2. Interest receivable $310
To Interest revenue $310
(Being interest revenue is recorded)
3. wages expense $4,200
To wages payable $4,200
(Being wages expense is recorded)
4. Account receivable $1,300 (50% of $2,600)
To Service revenue $1,300
(Being service revenue is recorded)
5. Unearned revenue $660
To Service revenue $660
(Being service revenue is recorded)
Help Help!~ I will give brainliest to the first correct & honest answer!
Beekeeping has become a focus of Jacinta’s life. She understands that bees are fast disappearing and works hard to keep her hives healthy and productive. The Agriculture, Food, and Natural Resource pathway Jacinta works in is _____.
a). Agribusiness Systems
b). Food Products & Processing Systems
c). Animal Systems
d). Natural Resources Systems
Answer:
Explanation: B Food Products & Processing Systems
Answer:
I think it is Food products and Processing systems
Your cousin Vinnie owns a painting company with fixed costs of $200 and the following schedule for variable costs:
Quantity Variable Cost Average Fixed Cost Average Variable Cost Average Total Cost
(Houses Painted per Month) (Dollars) (Dollars) (Dollars) (Dollars)
1 10
2 20
3 40
4 80
5 160
6 320
7 640
The efficient scale is houses.
Answer:
AVERAGE FIXED COST
1 200
2 100
3 66.7
4 50
5 40
6 33.3
7 28.6
AVERAGE VARIABLE COST
1 10
2 10
3 13.3
4 20
5 32
6 53.3
7 91.4
AVERAGE TOTAL COST
1 210
2 110
3 80
4 70
5 72
6 86.7
7 120
The efficient scale is 4 houses per month
Explanation:
Calculation for the average fixed cost, average variable cost, and average total cost for each quantity
First step is to calculate the Variable Cost,Fixed Cost and Total cost
Quantity Variable Cost Fixed Cost Total cost
$0 $200 $200 $200
1 10 +200=210
2 20 +200=220
3 40 +200=240
4 80 + 200=280
5 160 +200=360
6 320 +200=520
7 640+ 200=840
Now let calculate the average fixed cost, average variable cost, and average total cost for each quantity
Calculate AVERAGE FIXED COST
Quantity Fixed Cost AVERAGE FIXED COST
$0 $200 ---
1 200=200 (200/1)
2 200=100 (200/2)
3 200=66.7 (200/3)
4 200=50 (200/4)
5 200=40 (200/5)
6 200=33.3 (200/6)
7 200=28.6 (200/7)
Calculate for AVERAGE VARIABLE COST
Quantity Variable Cost AVERAGE VARIABLE COST
$0 $200 ---
1 10 =10 (10/1)
2 20=10 (20/2)
3 40 =13.3 (40/3)
4 80=20 (80/4)
5 160 =32 (160/5)
6 320=53.3 (320/6)
7 640=91.4 (640/7)
Calculation for AVERAGE TOTAL COST
Quantity Total cost AVERAGE TOTAL COST
$0 $200 -----
1 210 =210 (210/1)
2 220 =110 (220/2)
3 240=80 (240/3)
4 280=70 (280/4)
5 360=72 (360/5)
6 520=86.7 (520/6)
7 840=120 (840/7)
Based on the above Calculation The efficient scale is 4 houses per month reason been that it has the lowest Average total cost of 70 therefore minimizing the Average total cost.
The deans' suite hoped to cut costs and decided to perform a total cost analysis on its vodka supplier. Consumption was currently 6,000 bottles per semester and this was predicted to maintain that level for the next few years. Their current source, Byron's, charged $9.50 per bottle and packed 288 bottles in a crate. The cost to ship the crate was $15. Another potential source of vodkas was Pancho's, who charged $9.00 per bottle but could ship only 100 bottles in a crate and at a higher price, $20. Assume that a partial crate may be purchased. What is the total annual cost to supply vodka from their current supplier
Answer:
$55,200
Explanation:
Consumption = 6000 bottles
Cost per bottle = $9
Consumption Cost = 6000*$9 = $54,000
No of crates = 6000/100 = 60 crates
Cost pet crate = $20
Crate cost = $1,200
Total annual cost = Consumption Cost + Crate cost
Total annual cost = $54,000 + $1,200
Total annual cost = $55,200
So, the total annual cost to supply vodka from their current supplier is $55,200
The total annual cost to supply vodka from their current supplier is $55,200.
Total annual costConsumption Cost:
Consumption Cost = 6000×$9
Consumption Cost = $54,000
Number of crates:
Number of crates = 6000/100
Number of crates= 60 crates
Total annual cost:
Total annual cost=$54,000+(60×$20)
Total annual cost = $54,000 + $1,200
Total annual cost = $55,200
Inconclusion the total annual cost to supply vodka from their current supplier is $55,200.
Learn more about total annual cost here:https://brainly.com/question/25799822
Which of the following people owe a tax penalty for early withdrawal? Leslie is 58 years old and wants to buy a car, so she withdrew some money from her IRA Benjamin is 62 years old and withdrew money this year for retirement. Dalton is 50 years oldHe lost his job due to Cavid-19 and some money out nay
Answer: Leslie is 58 years old and wants to buy a car, so she withdrew some money from her IRA
Explanation:
Out of the options given in the question, the person who owe a tax penalty for early withdrawal is Leslie.
From the question, we are informed that "Leslie is 58 years old and wants to buy a car, so she withdrew some money from her IRA.
For someone to be able to withdraw, the person must be above 60 years as in the case of Benjamin or in a case of a situation when there's an unforeseen circumstances such as loss of job in case of Dalton
A company issued 6-year, 8% bonds with a par value of $750,000. The market rate when the bonds were issued was 7.5%. The company received $757,500 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:
Answer:
$28,406.25
Explanation:
Calculation for how much is the amount of interest expense for the first semiannual interest period Using the effective interest method
Interest expense=$757,500 x .075 x ½ year
Interest expense= $28,406.25
Therefore the amount of interest expense for the first semiannual interest period is $28,406.25
Match each of the following terms A through F with the appropriate definitions 1 through 6.
A. Maker of a note
B. Interest
C. Promissory note
D. Payee of a note
E. Principal of a note
F. Dishonoring a note _____
1. A written promise to pay a specified amount either on demand or at a definite future date. _____
2. The cost of borrowing money for a borrower, alternatively the profit from, lending money for a lender. _____
3. One who signs a note and promises to pay it at maturity. _____
4. The one to whom the promissory note is made payable. _____
5. Refers to a note maker's inability or refusal to pay the note at maturity. _____
6. The amount that the signer of a note agrees to pay back when the note matures, not including interest. Defining promissory notes.
Solution :
A. Maker of a note: 3. It is the person who signs the note and promises to pay.
The maker puts his signature and promises to pay the bearer the amount of the value of the note.
B. Interest: 2. It is the cost of borrowing money and profit for lender.
It is the extra money that the borrower pays to the lender. It is like an income to the lender.
C. Promissory note: 1. It is a promise to pay the signed sum.
It is a note that promises to pay the amount of the value.
D. Payee of a note: 5. It is the person to which the note is payable.
Payee is the individual who is the owner of the note.
E. Principal of a note: E. It is the amount signed to be paid back excluding interest.
It is the basic amount signed to be paid to the bearer.
F. Dishonoring a note: 5. It is inability to pay the signed sum.
Dishonoring is refusal to pay or the inability to pay the value for the signed amount.
Information concerning a magazine’s readership is of interest both to the publisher and to the magazine’s advertisers. A survey of 500 subscribers included the following questions. For each question, determine the data type of possible responses.
a What is your age?
b What is your gender?
c What is your marital status?
d Is your annual income less than $30000,
between $30000 and $60000, or over
$60 000?
e To how many other magazines do you
subscribe?
f How do you rate the feature article
published in the current issue of the magazine (very good, good or poor)?
Discuss the purpose of strategic planning in a health care environment. Explain what factors affect future planning in an organization and what tools can be used for future planning
Answer: Strategic planning in health care organization is the outlining of steps to to to reach a specific goal within the health sector, it could be a challenge that needs to be solved or an improvement on already existing plans to make them better
Explanation:
Strategic planning in health care organization is the outlining of steps to to to reach a specific goal within the health sector, it could be a challenge that needs to be solved or an improvement on already existing plans to make them better
Factors that affect future planning in organization;
Poor planning; not having a proper plan can lead to failure most times. Sometimes, it's not just about planning but it's more importantly about having aims and objectives that would solve a problem, if it is not solving a problem then there would be failure.
Poor execution; this problem is most times caused by team members who have not grasped the full idea of what the plan is about, don't know how to go about it or are not enthusiastic about the plan.
Tools for planning;
SWOT Analysis
Porter's Five Forces
PESTLE Analysis
Visioning
VRIO Framework
Would you prefer to buy an existing business or start from scratch? Why?
Answer:
I would start from scratch Because It helps u feel accomplished about your work
Swifty Corporation developed the following data for the current year: Beginning work in process inventory $270000 Direct materials used 164000 Actual overhead 308000 Overhead applied 236000 Cost of goods manufactured 284000 Total manufacturing costs 790000 Swifty Corporation's ending work in process inventory is
Answer:
Ending WIP= 776,000
Explanation:
First, we need to calculate the cost of direct labor:
Total manufacturing costs= direct material + direct labor + applied overhead
790,000 = 164,000 + direct labor + 236,000
390,000 = direct labor
To calculate the ending work in process inventory, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
284,000 = 270,000 + 164,000 + 390,000 + 236,000 - Ending WIP
-776,000 = -Ending WIP
Ending WIP= 776,000
Based on Jacobs (1954). The Carter Caterer Company must have the following number of clean napkins available at the beginning of each of the next four days: day 1, 1500; day 2, 1200; day 3, 1800; day 4, 600. After being used, a napkin can be cleaned by one of two methods: fast service or slow service. Fast service costs 50 cents per napkin, and a napkin cleaned via fast service is available for use the day after it is last used. Slow service costs 30 cents per napkin, and these napkins can be reused two days after they are last used. New napkins can be purchased for a cost of 95 cents per napkin. Determine how to minimize the cost of meeting the demand for napkins during the next four days. (Note: There are at least two possible modeling approaches, one network and one nonnetwork. See if you can model it each way.)
Below, you are provided with the value of the income elasticity of demand for a good. You will use this information to identify the percentage change in the quantity demanded for that good that arises from a particular percentage change in the average income of consumers. You will also identify whether the good is a normal good or an inferior good.
The income elasticity of demand captures the percent change in the__________ (quantity demanded, price) of a good or service that results from a percent change in the average income of consumers.
Answer:
quantity demanded
Explanation:
Q#1. How would you describe the word “CAREER” Explain in 4 to 6 sentences.
PLZ HELP IĹL GIVE BRAINLIEST !
Answer:
A career is the job or profession that someone does for a long period of their life.
Explanation:
2/2
John's employer offered him health insurance coverage for $125 per month that would
cover him as an individual. However, he was also offered the option to cover himself, bis
wife, and his child for $295 a month. How much extra would it cost John annually to add
his family to his health insurance?
Recording Transactions in Journal Entries and T-Accounts
On December 1, 2018, R. Lambert formed Lambert Services, which provides career and vocational counseling services to graduating college students. The following transactions took place during December, and company accounts include the following: Cash, Accounts Receivable, Land, Accounts Payable, Notes Payable, Common Stock, Retained Earnings, Counseling Services Revenue, Rent Expense, Advertising Expense, Interest Expense, Salary Expense, and Utilities Expense.
(1) Raised $7,000 cash through common stock issuance.
(2) Paid $750 cash for December rent on its furnished office space.
(3) Received $500 invoice for December advertising expenses.
(4) Borrowed $15,000 cash from bank and signed note payable for that amount.
(5) Received $1,200 cash for counseling services rendered.
(6) Billed clients $6,800 for counseling services rendered.
(7) Paid $2,200 cash for secretary salary.
(8) Paid $370 cash for December utilities.
(9) Declared and paid a $900 cash dividend.
(10) Purchased land for $13,000 cash to use for its own facilities.
(11) Paid $100 cash to bank as December interest expense on note payable.
Required:
A. Prepare journal entries for each of the transactions 1 through 11.
B. Set up T-accounts for each of the accounts used in part a and post the journal entries to those T-accounts.
Answer:
A. Journal Entries:
1. Debit Cash $7,000
Credit Common Stock $7,000
To record the issuance of stock.
2. Debit Rent Expense $750
Credit Cash $750
To record the payment of rent expense for December.
3. Debit Advertising Expense $500
Credit Account Payable $500
To record the accrued expense.
4. Debit Cash $15,000
Credit Notes Payable $15,000
To record the borrowing of cash from bank with a note payable.
5. Debit Cash $1,200
Credit Counseling Services Revenue $1,200
To record the receipt of cash for counseling services rendered.
6. Debit Accounts Receivable $6,800
Credit Counseling Services Revenue $6,800
To record revenue for counseling services rendered.
7. Debit Salary Expense $2,200
Cash Cash $2,200
To record the payment for secretary salary.
8. Debit Utilities Expense $370
Credit Cash $370
To record the payment of utilities expense for the month.
9. Debit Dividends $900
Credit Cash $900
To record the payment of dividends.
10. Debit Land $13,000
Credit Cash $13,000
To record the purchase of land for cash.
11. Debit Interest Expense $100
Credit Cash $100
To record the payment of interest on Note Payable.
B. T-accounts:
Cash
Account Titles Debit Credit
Common stock $7,000
Rent Expense $750
Note payable 15,000
Counseling Services 1,200
Salary Expense 2,200
Utilities Expense 370
Dividends 900
Land 13,000
Interest Expense 100
Accounts Receivable
Account Titles Debit Credit
Counseling Services $6,800
Land
Account Titles Debit Credit
Cash $13,000
Accounts Payable
Account Titles Debit Credit
Advertising expense $500
Notes Payable
Account Titles Debit Credit
Cash $15,000
Common Stock
Account Titles Debit Credit
Cash $7,000
Retained Earnings
Account Titles Debit Credit
Counseling Services Revenue
Account Titles Debit Credit
Cash $1,200
Rent Expense
Account Titles Debit Credit
Cash $750
Advertising Expense
Account Titles Debit Credit
Accounts Payable $500
Interest Expense
Account Titles Debit Credit
Cash $100
Salary Expense
Account Titles Debit Credit
Cash $2,200
Utilities Expense
Account Titles Debit Credit
Cash $370
Dividends
Account Titles Debit Credit
Cash $900
Explanation:
a) Data and Calculations:
Transactions Analysis:
1. Cash $7,000 Common Stock $7,000
2. Rent Expense $750 Cash $750
3. Advertising Expense $500 Advertising Payable $500
4. Cash $15,000 Notes Payable $15,000
5. Cash $1,200 Counseling Services Revenue $1,200
6. Accounts Receivable $6,800 Counseling Services Revenue $6,800
7. Salary Expense $2,200 Cash $2,200
8. Utilities Expense $370 Cash $370
9. Dividends $900 Cash $900
10. Land $13,000 Cash $13,000
11. Interest Expense $100 Cash $100
Cheyenne Corp. incurred the following costs while manufacturing its product.
Materials used in product $129,100 Advertising expense $53,200
Depreciation on plant 64,600 Property taxes on plant 16,000
Property taxes on store 8,160 Delivery expense 24,300
Labor costs of assembly-line workers 111,300 Sales commissions 40,100
Factory supplies used 28,700 Salaries paid to sales clerks 57,100
Work in process inventory was $14,500 at January 1 and $16,800 at December 31. Finished goods inventory was $69,500 at January 1 and $46,000 at December 31.Compute cost of goods manufactured.
Answer:
$347,400
Explanation:
Cost of goods manufactured = Material used in product + Labor costs of assembly line workers + Factory overheads (ie Depreciation on plant+ Property taxes on plant + Factory supplies used) + Opening WIP - Closing WIP
Cost of goods manufactured = $129,100 + $111,300 + $64,600 + $16,000 + $28,700 + $14,500 - $16,800
Cost of goods manufactured = $347,400
A machine cost $239,800, has annual depreciation expense of $47,960, and has accumulated depreciation of $119,900 on December 31, 2020. On April 1, 2021, when the machine has a fair value of $96,320, it is exchanged for a similar machine with a fair value of $281,800 and the proper amount of cash is paid. The exchange lacked commercial substance.
Required:
Prepare all entries that are necessary at April 1, 2021.
Answer:
April 1, 2021
Dr Depreciation expense 11,990
Cr Accumulated depreciation 11,990
April 1, 2021
Dr Machinery, New $281,800
Dr Accumulated depreciation- Machinery 123,890
Dr Loss on disposal of machinery 19,590
Cr Cash 185,480
Cr Machinery, Old $239,800
Explanation:
Preparation of all entries that are necessary at April 1, 2021.
April 1, 2021
Dr Depreciation expense 11,990
Cr Accumulated depreciation 11,990
(47,960 * 3/12)
(Being To record depreciation)
April 1, 2021
Dr Machinery, New $281,800
Dr Accumulated depreciation- Machinery (111,900+11,990) 123,890
Dr Loss on disposal of machinery 19,590
[185,480+$239,800-($281,800+123,890)]
Cr Cash 185,480
($281,800-$96,320)
Cr Machinery, Old $239,800
(Being To record the exchange of machinery)
Based on the following information, determine the location quotient for Amusement City and whether this city has a competitive advantage in the amusement industry: employment in amusements and recreation in Amusement City: 54,446; total employment in Amusement City: 578,477; employment in amusements and recreation (nationally): 1,381,377; total employment (nationally): 106,201,232.
a. 0.23; No, the city does not have a competitive advantage in this industry.
b. 4.43; No, the city does not have a competitive advantage in the industry
c. 0.23; Yes, the city has a competitive advantage in this industry
d. 4.43; Yes, the city has a competitive advantage in this industry
Answer:
a. 0.23; No, the city does not have a competitive advantage in this industry
Explanation:
Calculation to determine the location quotient for Music City and whether this city has a competitive advantage in the entertainment industry
Location quotient for Music City= (3020/ 656,785)/ (2,160,970/ 106,201,232)
Location quotient for Music City=0.004598/0.020347881
Location quotient for Music City= 0.225
Location quotient for Music City= 0.23 (Approximately)
Based on the above calculation the city does NOT have a competitive advantage in this industry.
Limited Liability Companies (LLCs) are gaining in popularity over sub-chapter S corporations because:_____.
A. LLCs offer better liability protection to their members.
B. Sub-chapter S corporations are being phased out by the government which is promoting.
C. LLCs as they requires less paperwork on the part of the IRS.
D. Sub-chapter S corporations are being taxed at a higher rate by the IRS.
E. They are simpler when it comes to paperwork, offer some of the same tax advantages and also protect members from unlimited financial exposure.
Answer:
E. They are simpler when it comes to paperwork, offer some of the same tax advantages and also protect members from unlimited financial exposure
Explanation:
Limited liability companies are set up to protect the owners from liability. The business is a seperate entity from the individual owners and their assets are not used to settle debts of the business.
This type of business is gaining more use than S corporation. S corporation in addition to having liability advantages also requires more rigid requirements to set up. They do not pay corporate tax, but rather are taxed as sole proprietorship or a partnership.
Because of the ease of setting up an LLC more people prefer it to an S corporation. It also protects owners from unlimited financial liability
M. K. Gallant is president of Kranbrack Corporation, a company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Gallant had predicted that the company’s earnings would grow by 20% this year. Unfortunately, sales have been less than expected for the year, and Gallant concluded within two weeks of the end of the fiscal year that it would be impossible to report an increase in earnings as large as predicted unless some drastic action was taken. Accordingly, Gallant has ordered that wherever possible, expenditures should be postponed to the new year—including canceling or postponing orders with suppliers, delaying planned maintenance and training, and cutting back on end-of-year advertising and travel. Additionally, Gallant ordered the company’s controller to carefully scrutinize all costs that are currently classified as period costs and reclassify as many as possible as product costs. The company is expected to have substantial inventories at the end of the year.
1. Why would reclassifying period costs as product costs increase this period’s reported earnings?
2. Do you believe Gallant’s actions are ethical? Why or why not?
Iris, a calendar year cash basis taxpayer, owns and operates several TV rental outlets in Florida, and wants to expand to other states. During 2018, she spends $14,000 to investigate TV rental stores in South Carolina and $9,000 to investigate TV rental stores in Georgia. She acquires the South Carolina operations, but not the outlets in Georgia. As to these expenses, Iris should: Group of answer choices Expense $9,000 for 2018 and capitalize $14,000. Capitalize $23,000. Capitalize $14,000 and not deduct $9,000. None of the above. Expense $23,000 for 2018.
Answer:
e. Expense $23,000 for 2018.
Explanation:
In this given case, Iris owns and operate TV rentals outlets, the investigation expenses which are deductible for 2018 are:
= $14,000 + $9,000
= $23,000
$23,000 should be charged off as expense for 2018.
Colby Corporation has provided the following information: Operating revenues from customers were $207,700. Operating expenses for the store were $119,000. Interest expense was $8,700. Gain from sale of plant and equipment was $3,700. Dividend payments to Colby's stockholders were $7,700. Income tax expense was $37,000. Prepaid rent expense was 4,100. How much was Colby's net income?
Answer:
$46,700
Explanation:
Operating revenue
$207,700
Less:
Operating expenses
($119,000)
Operating profit
$88,700
Less:
Interest expense
($8,700)
Income tax expense
($37,000)
Net income
$43,000
Add:
Gain from sale
$3,700
Total net income
$46,700
Therefore, Colby's net income is $46,700
Find the EAR in each of the following cases: Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) 7% Quarterly 17 Monthly 13 Daily 10 infinite
Answer:
7.19
18.39
13,88
10.51%
Explanation:
EAR = (1 + periodic interest rate)^m - 1
m = number of compounding
a. ( 1 + 0.07/4)^4 - 1 = 7.19%
b. (1 + 0.17/12)^12 - 1 = 18.39%
c. (1 + 0.13/365)^365 - 1 = 13.88%
d. EAR =
Abbey Park was organized on April 1, 2016, by Trudy Crawford. Trudy is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Trudy prepared the following income statement for the quarter that ended March 31, 2017.
Abbay Park
Income statement
For the quarter ended March 31,2017
Revenues 83000
Rent Revenue
Operating expenses
Advertising expense 4200
Salaries and wages expense 27600
Utilities expense 1500
Depreciation expense 800
Maintenance expense 2800
Total operating expense 36900
Net income 46100
Trudy knew that something was wrong with the statement because net income had never exceeded $20,000 in any one quarter. Knowing that you are an experienced accountant, she asks you to review the income statement and other data. You first look at the trial balance. In addition to the account balances reported in the income statement, the ledger contains these selected balances at March 31, 2017.
Supplies 4500
Prepaid insurance 7200
Notes payable 20000
You then make inquiries and discover the following.
1. Rent revenue includes advanced rentals for summer-month occupancy, $21,000.
2. There were $600 of supplies on hand at March 31.
3. Prepaid insurance resulted from the payment of a 1-year policy on January 1, 2017.
4. The mail on April 1, 2017, brought the following bills: advertising for week of March 24, $110; repairs made March 10, $1,040; and utilities $240.
5. Wage expense totals $290 per day. At March 31, 3 days’ wages have been incurred but not paid.
6. The note payable is a 3-month, 7% note dated January 1, 2017. Instructions With the class divided into groups, answer the following.
(a) Prepare a correct income statement for the quarter ended March 31, 2017.
(b) Explain to Trudy the generally accepted accounting principles that she did not follow in preparing her income statement and their effect on her results.
Answer:
Abbey Park
a) Correct Income Statement for the quarter ended March 31, 2017:
Abbey Park
Income statement
For the quarter ended March 31,2017
Revenue
Rent Revenue $62,000
Operating expenses
Advertising expense 4,310
Salaries and wages expense 28,470
Utilities expense 1,740
Depreciation expense 800
Maintenance expense 3,840
Supplies Expense 3,900
Insurance expense 1,800
Interest expense 350
Total operating expense 45,210
Net income $16,790
b) The generally accepted accounting principles that Trudy did not follow in the preparation of her income statement are the accrual concept and the matching principle. Failure to follow these principles means that the net income will be misstated. The accounts were based on the cash basis instead of the accrual basis of generally accepted accounting principles. This means that records for non-cash transactions were not recognized while some others were recognized based on their cash effects.
Explanation:
a) Income Statement for the quarter ended March 31, 2017:
Abbey Park
Income statement
For the quarter ended March 31,2017
Revenue
Rent Revenue $83,000
Operating expenses
Advertising expense 4,200
Salaries and wages expense 27,600
Utilities expense 1,500
Depreciation expense 800
Maintenance expense 2,800
Total operating expense 36,900
Net income $46,100
Adjustments:
1. Rent Revenue = $62,000 ($83,000 - 21,000)
2. Supplies Expenses $3,900 ($4,500 - 600)
Supplies balance = 600
3. Prepaid Insurance = $5,400 ($7,200 - 1,800)
Insurance expense = $1,800 ($7,200/4)
4. Advertising Expense = $4,310 ($4,200 + 110)
Maintenance Expense = $3,840 ($2,800 + 1,040)
Utilities Expense = $1,740 ($1,500 + 240)
Expenses Payable = $1,390
5. Wages Expenses = $28,470 (27,600 + ($290 * 3))
Wages payable $870
6. Interest Expense = $350 ($20,000 * 7% * 3/12)
Shelley is self-employed in Texas and recently attended a two-day business conference in New Jersey. After Shelley attended the conference, she had dinner with an old friend who lived nearby. Shelley documented her expenditures (described below). What amount can Shelley deduct.?
Airfare to New Jersey $2,180
Meals at the conference 238
Meal with an old friend 130
Lodging in New Jersey 432
Rental car 198
a. $3,048.
b. $1,958 if Shelley itemizes the deductions.
c. $2,929.
d. all of these expenses are deductible but only if Shelley attends a conference in Texas.
e. none of the expenses are deductible because Shelley visited her friend.
Answer:
$ 2929
Explanation:
Calculation for What amount can Shelley deduct
Airfare to New Jersey $2,180
Add Meals 119
(238/2)
Add Lodging in New Jersey 432
Add Rental car 198
Deducted amount $2929
Therefore the amount that Shelley can deduct will be $2929
The smallest amount you must pay each month on a loan is called the A. annual percentage rate B. annual fee C. minimum finance charge D. minimum monthly payment SUBMIT
Answer: D. minimum monthly payment
Explanation:
The minimum monthly payment is the lowest that a person should pay per month on a loan, particularly that of a credit card, if they do not want to be ruled as being in default.
The advantage of this is that the person will still be in good standing with the creditor meaning that they have not defaulted (really bad for credit score). Disadvantage is that the loan interest will be higher as it is based on a larger balance than had the person paid more.