Answer:
Ending inventory= $15,170
COGS= $10,380
Explanation:
Giving the following information:
Units sold= 450
April 1 inventory= 330 units for $22
April 15 purchase= 380 units for $26
April 23 purchase= 290 units for $29
First, we need to calculate the number of units in ending inventory:
Ending inventory units= 1,000 - 450= 550 units
Now, to calculate the ending inventory under the FIFO (First-in, first-out) method, we need to use the cost of the last units incorporated into inventory.
Ending inventory= 290*29 + 260*26= $15,170
COGS= 330*22 + 120*26= $10,380
Zeus wanted to convey Mount Olympus to Artemis, Ares, Aphrodite, and Athena in equal shares. On July 1, he saw Artemis, Aphrodite, and Athena and gave them their conveyance stating to Artemis, Ares, Aphrodite, and Athena a 1/4 interest in Mount Olympus as joint tenants with rights of survivorship. On July 4, Zeus gave Ares his corresponding conveyance. Two months later, Ares died in battle, leaving two sons. The following month Athena transferred her share in Mount Olympus to Dionysos. How do Artemis, Aphrodite, Athena, and Ares hold title when Zeus conveyed them Mount Olympus?
Answer:
Joint Tenancy
Explanation:
Each tenant was given an equal share.
The conveyance deed was completed on a specific date passing all the land fairly to all tenants.
The Hera, Aphrodite, Athena and Ares also bear the title of Mutual Tenancy as Zeus transmitted Mount Olympus to them.
Therefore the correct option is Joint Tenancy and the same is to be considered
Suppose that, in an attempt to combat severe unemployment, the government decides to increase the amount of money in circulation in the economy.
This monetary policy ___________ the economy's demand for goods and services, leading to ____________ product prices. In the short run, the change in prices induces firms to produce __________ goods and services. This, in turn, leads to a _________ level of unemployment.
In other words, the economy faces a trade-off between inflation and unemployment: Higher inflation leads to ____________ unemployment.
Answer:
increases
higher
more
lower
lower
Explanation:
If the money supply is increased. individuals would have more money and consumption would increase. Increase in consumption would lead to a rise in demand.
when demand exceeds supply, prices rise,
When there is a rise in price, it encourages producers to increase production in order to increase their profit margin.
In order to expand production, more factors of production would be needed. So, more labour would be hired. thus, unemployment would fall.
it can be seen that higher inflation lowers unemployment
On Mar 3, Lyons Company paid dividends of $1,000. Use your knowledge of what a correct journal entry should look like to identify what would be included.
a. Dividends would be debited and listed first.
b. Dividends would be credited and listed second.
c. Cash would be credited and listed second.
d. Dividends expense would be debited and listed first.
e. Cash would be debited and listed first
Answer:
Cash would be credited and listed second.
Dividends would be debited and listed first.
Explanation:
The journal entry that must be passed as Cash would be credited and listed second, and Dividends would be debited and listed first. Thus, option A and C are correct.
What is Dividend?A dividend is a profit distribution made by a firm to its shareholders. When a business makes a profit or has a surplus, it can distribute a portion of the earnings to shareholders as a dividend. Any money that is not dispersed is re-invested in the company.
Dividends are typically paid out quarterly and might be either in cash or in the form of more stock reinvestment.
Cash would be credited and listed second in the journal entry, while dividends would be debited and listed first. As a result, options A and C are correct.
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When the price of erasers increases from $1.50 to $2.50, the quantity demanded of pencils is unchanged. The cross-price elasticity of demand between erasers and pencils is
Answer:
The cross elasticity of demand is zero
Explanation:
Cross elasticity of demand measures the percentage change in the quantity demand of a product occasioned by a change in the price of another but related commodity.
If the the commodities are complements, the cross of elasticity of demand between them would be negative. his implies an increase(decrease) in the price of one would lead to a decrease(increase) in the demand of the other.
If the the commodities are substitutes, the cross elasticity of demand between them would be positive. This implies an increase(decrease) in the price of one would lead to a increase (decrease) in the quantity demand of the other.
Where the cross elasticity of demand is zero, this implies that the goods are not in any way related. This implies that a change in the price of one would produce no change in the quantity demand of the other.
On November 1, Alan Company signed a 120-day, 10% note payable, with a face value of $27,000. What is the maturity value of the note on March 1
Answer: $27,900
Explanation:
From the question, we are informed that on November 1, Alan Company signed a 120-day, 10% note payable, with a face value of $27,000.
The maturity value of the note on the note on March 1 will be the face value plus the interest. This will be:
= $27,000 + [($27,000 × 10%)/360 × 120]
= $27,000 + [($2700/360) × 120]
= $27,000 + ($7.5 × 120)
= $27,000 + $900
= $27,900
The liquidity trap _____. rev: 06_20_2018 Multiple Choice makes expansionary monetary policy less effective makes contractionary monetary policy less effective makes expansionary fiscal policy less effective makes contractionary fiscal policy less effective
Answer:
Makes expansionary monetary policy less effective
Explanation:
A liquidity trap occurs when interest rates are already so low, that most of the public prefer to hold money as cash, instead of investing in bonds and other interest-bearing securities.
In a situation like this, expansionary monetary policy becomes less effective, because the central bank cannot boost the economy anymore by lowering interest rates (interest rates are lowered by increasing the money supply) because most of the public prefers to hold money as cash, and the interest rate is very low already.
Santana Mortgage Company uses a process cost system to accumulate costs in its Application Department. When an application is completed, it is forwarded to the Loan Department for final processing. The following processing and cost data pertain to September.
1. Applications in process on September 1, 170
2. Applications started in September, 930
3. Completed applications during September, 660
4. Applications still in process at September 30 were 100% complete as to materials (forms) and 60% complete as to conversion costs.
Beginning WIP:
Direct materials $1,310
Conversion costs 4,140
September costs:
Direct materials $5,114
Direct labor 12,820
Overhead 7,581
Materials are the forms used in the application process, and these costs are incurred at the beginning of the process. Conversion costs are incurred uniformly during the process.
Required:
a. Determine the equivalent units of service (production) for materials and conversion costs.
b. Compute the unit costs and prepare a cost reconciliation schedule.
Answer: a) The equivalent units for material = 1,100
The equivalent units for conversion cost = 924.
b) The unit cost for material and conversion cost is $5.84 and $26.56 respectively.
c) cost reconciliation schedule is in the explanation column
Explanation:
first , we calculate units in process
Units in Process = Units of applications Opened + units of application started - units of application completed
= 170 + 930 - 660 = 440 units
Equivalent units of production for materials =application units completed + Application units in process x its percentage complete
660 + (440 x 100%)=660+440= 1,100
Equivalent units of production for conversion = application units completed + Application units in process x its percentage complete
660 + (440 x 60%)=660+264=924
Computing the unit costs
Units of cost as per material
Number of application units during the month = 660units
Wor in process unit = 440units
Material cost during ,month -=$5,114
Beginning work in progress cost for materials =$1,310
Equivalent unts of production for materials = 1,100
Unit cost for material = Material cost during the month +Begining work in progress cost for materials/Equivalent units of production for materials = $5,114 + $1,310=$6,424/ 1100= $5.84
Units of cost as per conversion
Number of application units during the month = 660units
Work in progess unit = 440units
conversion cost during ,month -= direct labour + overhead = $12,820 + $7,581= $20, 401
Beginning work in progress cost for materials =$4,140
Equivalent unts of production for materials = 924
Unit cost = Material cost during the month +Beginning work in progress cost for materials/Equivalent units of production for materials = $20,401 + 4,140=$24,541 / 924= $26.56
Cost Reconciliation schedule
Particulars no of units materials conversion Total
units transferred 660 $5,114 $20,401 $25,515
ending WIP 440 $6,424 $24, 541 $30,965
Total $11,538 $44,942 $56,480
What are some of the possible pitfalls of owning a credit card? Check all that apply. A Only paying the minimum balance due. B Possible free collision coverage when renting a car. C Paying your bill late. D Establishing a credit rating. E Juggling too many cards.
Answer:
C. Paying your bill late.
E. Juggling too many cards.
Explanation:
On December 31, 2021, Larry's Used Cars had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $66,000 and $900, respectively. During 2022, Larry's wrote off $2,275 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,500 at December 31, 2022. Bad debt expense for 2022 would be:
Answer:Bad debts expense = $6,875
Explanation:
A bad debt expense is recognized when a customer cannot pay its financial obligations therefore the account receivable will no longer be collectible
Beginning uncollectible accounts= $900
Ending allowance for uncollectible accounts = $5,500
Amounts written off = $2,275
Ending allowance for uncollectible accounts =Begining uncollectible accounts + current bad debts expense - amounts written off in 2022
$5,500= $900 + bad debts expense - $2,275
current bad debts expense for 2022= $5,500 - $900 + $2,275 = $6,875
Can also be illustrated as
ACCOUNTS
Begining uncollectible accounts $900
Amounts written off (less) - $2,275
Bad debts expense(add) + $6,875
Ending allowance for uncollectible accounts $5,500
Maria is an investment adviser who is working through investment objectives and risk tolerance with a new client, Bobby. Bobby indicates that he'd like to see some capital appreciation, achieve at least some income, and wants to maintain a relatively high level of safety and principal protection. The BEST recommendation that Maria can make to Bobby is that Bobby invest in
Answer:
The best recommendation that Maria can make to Bobby is that Bobby should invest in Federal Government Bonds and Treasury Bills.
However, it all depends on what his investments priorities and approach are. For a relatively high level of safety and principal protection, Federal Government Bonds and Treasury Bills are the best bet.
Any other investment that will offer some income will be too risky for safety.
Explanation:
Risk appetite determines a person's investment profile. However, it must be clear that higher returns on investment go with higher risks. Every high return investment compensates for the high risks. It is even the riskiest not to invest. Risk should be studied and accepted when it cannot be avoided. We usually say, "you cannot eat your cake and have it."
What is the stock price per share for a stock that has a required return of 12%, an expected annual dividend of $3.15 per share in the first year, and a constant (sustainable) growth rate of dividends of 8%
Answer:
Price per share = $78.75
Explanation:
The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.
If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:
Price=Do (1+g)/(k-g)
Where Do- Dividend now, g- growth rate, k- required rate of return(cost of equity)
Note Do (1+g) represents the expected dividend in the first year
DATA:
Do (1+g) = 3.15
g= 8%
k= 12%
Price per share = 3.15/(0.12- 0.08) = $78.75
Price per share = $78.75
A current liability is a debt that is reasonably expected to be paid a. out of cash currently on hand b. within one year c. out of currently recognized revenues d. between 6 months and 18 months
Answer: within one year
Explanation:
Current liabilities are the liabilities that are incurred by a firm and must be settled within a year.
Typically, the current liabilities are settled by using the current assets. Examples of current liabilities are the accounts payable, noted payable, dividends and the short-term debt.
Cooperton Mining just announced it will cut its dividend from $4.01 to $2.57 per share and use the extra funds to expand. Prior to the announcement, Cooperton's dividends were expected to grow at a 3.4% rate, and its share price was $50.07. With the planned expansion, Cooperton's dividends are expected to grow at a 4.7% rate. What share price would you expect after the announcement? (Assume that the new expansion does not change Cooperton's risk.) Is the expansion a good investment?
Answer:
$34.35
The price has fallen from $50.07 to $34.35 which means that Expansion will not be a good option.
Explanation:
Computation for the share price to expect after the announcement
Using this formula
Ke = [ D1 / P0 ] +g
Where,
D1 =$4.01
P0 = $50.07
g =3.4%
Let plug in the formula
Ke = [ D1 / P0 ] +g
Ke= [ $4.01 / $50.07] + 0.034
Ke= 0.0800+ 0.034
Ke= 0.1140
Second step is to find the Price after Expansion using this formula
P0 = D1 / [ Ke - g ]
Where,
D1=$2.57
Ke=0.1140
g=4.7%
Let plug in the formula
P0= $ 2.57 / [ 0.1140 - 0.047 ]
P0=$2.57/0.067
P0=$ 34.35
Based on this calculation, we can see that the price has fallen from $50.07 to $34.35 which means that Expansion will not be a good option.
Therefore the share price that you would expect after the announcement will be $34.35
Which of the following is approximately the Value at Risk at 5 percent of a portfolio of $10 million of asset A, whose expected return is 10 percent and volatility is 20 percent, and $10 million of asset B, whose expected return is 16 percent and volatility is 25 percent, where the correlation between the two assets is 0.1.
A. $5.6 million
B. $10 million
C. $15 million
D. $1.25 million
E. none of the above
Answer:
A. $5.6 million
Explanation:
Value at risk is the minimum value of portfolio that is considered to lose in case of certain event or volatility. There are two assets in the given scenario and both of them have worth of $10 million. The correlation between them is 0.1 which means there is low strength relationship between the two assets. The value at risk can be found by:
($10 * 5% * 20%) + ($10 * 16% * 25%) * log 1.65
= 5.6 million
Many enterprise organizations believe that cloud computing is essential to their business operations. There are some; however, that argue it is not cost efficient and operationally appropriate. Provide a use case where cloud computing is not appropriate and explain why you feel this is an appropriate decision for the enterprise.
Answer and Explanation:
Cloud computing provides a platform or infrastructure that is readily available to its subscribers at very efficient cost as compared to in house structures for same productivity. It enables small businesses that may not be able to afford storage facilities and IT infrastructure access software(saas) and other cloud infrastructures and environment for their productivity at affordable rates and less inconvenience. However there may be cases where a company should not use cloud computing services.
A simple example is one that goes against efficient cost/reduced cost of using cloud computing services, such as when internet connection is quite expensive and slow or dial up connections are used in the area where a company operates. This would particularly be cost inefficient for the company as cloud services relies heavily on internet.
Sarbanes-Oxley applies to a.publicly held companies b.privately held businesses c.not-for-profit organizations d.All of these choices are correct.
Answer: A
Publicly held companies
Explanation:
The Sarbanes Oxley act of 2002 was established against the back drop of corporate frauds in publicly quoted companies in the United States. It goal was to make corporate disclosure more accurate by means of more accurate financials.
Compute the present value of a $2,000 deposit in year 1, and another $1,500 deposit at the end of year 3 if interest rates are 10 percent.
Answer:
the present value formula that I will use is the following:
present value = future value / (1 + interest rate)ⁿ
in the first case, the present value of $2,000 in 1 year is:
PV = $2,000 / (1 + 10%) = $2,000 / 1.1 = $1,818.18
in the second case, the present value of $1,500 in 3 years is:
PV = $1,500 / (1 + 10%)³ = $1,500 / 1.331 = $1,126.97
Craigmont Company's direct materials costs are $4,900,000, its direct labor costs total $8,710,000, and its factory overhead costs total $6,710,000. Its conversion costs total:
Answer:
Conversion costs= $15,420,000
Explanation:
Giving the following information:
Direct material= $4,900,000
Direct labor costs= $8,710,000
Factory overhead costs= $6,710,000
The conversion costs are the sum of the direct labor and factory overhead.
Conversion costs= 8,710,000 + 6,710,000
Conversion costs= $15,420,000
Xia Co. manufactures a single product. All raw materials used are traceable to specific units of product. Current information for company follows: Beginning raw materials inventory $ 22,000 Ending raw materials inventory 25,000 Raw material purchases 99,000 Beginning work in process inventory 34,000 Ending work in process inventory 44,000 Direct labor 124,000 Total factory overhead 99,000 Beginning finished goods inventory 74,000 Ending finished goods inventory 54,000 The company's cost of direct materials used, cost of goods manufactured and cost of goods sold is:
Answer:
Instructions are below.
Explanation:
First, we need to calculate the direct material used in production:
Direct material used= beginning inventory + purchases - ending inventory
Direct material used= 22,000 + 99,000 - 25,000
Direct material used= $96,000
Now, we can determine the cost of goods manufactured:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 34,000 + 96,000 + 124,000 + 99,000 - 44,000
cost of goods manufactured= $309,000
Finally, the cost of goods sold:
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 74,000 + 309,000 - 54,000
COGS= $329,000
Sending the product out to test families is a form of rev: 01_09_2015_QC_CS-37293 Multiple Choice idea generation. market testing. concept testing. alpha testing.
Answer: Market testing
Explanation:
Market Testing a very important part of the product development and marketing process. It helps a company find out what its potential market thinks of a certain product before it is released in full so that a company will know whether to release it in full or tweak some aspects that are problematic.
Market testing therefore involves sending samples of the new product to various types of customers who are potentials to enable them assess the product. Th product might be garnered towards serving families so it was sent to families as a form of market testing.
The CEO has given her secretary this material for a memo, but it is highly un-organized. Rewrite the memo so that the main point is first, that the memo flows in a much more logical order. Delete information not relevant to the main idea. Use strong subjects and verbs -- in other words, employ the principles we talked about in the lesson on writing.
To employees at a call center
I’m hoping you can send out a memo for me to all phone operators. As you might or might not be aware of, we’ve had some problems lately with operators asking for breaks, or simply taking them, at all sorts of time during their shift. While we are happy to be flexible, we do have a job to do and must have a certain amount of operators manning the phones at all times. Several times the phones have rung and rung with not enough people to answer them. Several supervisors have complained to me that their people have argued with them about combining their breaks and meal break to get an hour at one time. I feel like I need to put my foot down so that each supervisor doesn’t have to make their own decision. We need to remind folks of our policy on breaks and meal breaks through the day. Remind telephone operators that they should take the two 15 minute breaks allotted to them generally about halfway through a four-hour work period. If they want or need to take a break during another time, they should talk with their supervisor. But let folks know this should be under extraordinary circumstances. Stress that these should be extraordinary circumstances so we can count on enough people to be on the phones through the day. Meal breaks should be taken roughly halfway through their shift, but they should be coordinated with their supervisor. Several times, we’ve lost folks we were counting on, only to find that they were on break. Phone operators can stay at their desks and work on personal business, or simply each lunch, as long as they are not tying up resources. We’d prefer, though, that they go to the break rooms or leave their cubicles. We don’t want people to create the perception that they’re doing personal tasks during work time. I often eat at my desk but of course I’m not salaried employee. Oh, and we don’t want folks saving up their breaks and leaving work early. We need to staff our phones from 8 a.m. to 8 p.m. Our staggered schedule allows us to do that, but not if folks create their own schedules. Do people have to take their breaks? Yes, they do -- federal law mandates it. So tell them they just can’t skip the breaks, though why they’d want to I don’t know. By the way, it looks like we’ll be hiring in the new fiscal year, as we go ahead with that expansion into the Southeast. Should be about 20 to 25 new phone operators.
Answer:
TO EMPLOYEES AT A CALL CENTER
It is my aim to send out a memo to you all phone operators. As you might or might not be aware of, we have faced series of problems lately with operators asking for breaks, or simply taking them without express permission which ended up clashing with their shift time for work. While we are happy to be flexible, we need to remind you of our policy on breaks and meal breaks through the day.
Most times,when a call came in, there will be no one to attend to it. Several supervisors have tabled the complaints of their team members, about combining their normal breaks and meal break in-order to get an hour at one time. Despite being a noble suggestion, the employees and their supervisor should remember that, the working condition was explicitly stated in the contract agreement they signed before taking this job.
In a situation were there is extraordinary condition, the call operators should liaised with their supervisor and discuss about the need to take extra break time. Meal breaks should be taken roughly halfway through their shift, which should be under strict coordination by their supervisor. Phone operators can stay at their desks and work on personal business, or simply each lunch, as long as they are not tying up resources.
We would prefer, though, that they go to the break rooms or leave their cubicles. We don’t want people to create the perception that they’re doing personal tasks during work time. We need to staff our phones from 8 a.m. to 8 p.m. Our staggered schedule allows us to do that, but not if folks create their own schedules. Do people have to take their breaks? Yes, they do -- federal law mandates it. By the way, it looks like we will be hiring in the new fiscal year, as we go ahead with that expansion into the Southeast. Should be about 20 to 25 new phone operators.
Explanation:
Busy Beaver, Inc. signed a $315,000, 5-year note payable to buy a new industrial veneer cutter. Busy Beaver paid $5,000 cash for transportation of the machine and $750 cash for installation costs. What is the overall effect of this transaction on the accounting equation?
Answer:
Machinery asset increase by $320,750
Total asset increase by $315,000
Total liabilities increase by $315,000
Explanation:
As we know that
Accounting equation is
Total assets = Total liabilities + stockholder equity
Since the industrial veneer cutter is purchased for
= Note payable + transportation cost + installation cost
= $315,000 + $5,000 + $750
= $320,750
There is a cash outflow of $5,000 + $750 i.e $5,750 which decrease the assets
But at the same time it also increased the assets by
= $320,750 - $5,750
= $315,000
And, since there is a note payable for $315,000 which also increased the liabilities
Villalpando Winery wants to raise $20 million from the sale of preferred stock. If the winery wants to sell one million shares of preferred stock, what annual dividend will it have to promise if investors demand a return of a. 12%? b. 15%? c. 8%? d. 7%? e. 6%? f. 3%? a. What annual dividend will it have to promise if investors demand a return of 12%?
Answer:
$2.4/share
Explanation:
In order to calculate annual dividend we have to find the price per share first
Price per share = Total Capital raised/Number of shares
Price per share = $20,000,000/1,000,000
Price per share = $20
The annual dividend can be calculated by the following formula
Formula: Expected Return = Annual dividend/ price per share
NOTE: To find Annual dividend we need to adjust the formula accordingly
Annual dividend = Expected Return x Price per share
If Expected return is 12%
Annual dividend = 12% x $20 = $2.4/share
If Expected return is 15%
Annual dividend = 15% x $20 = $3/share
If Expected return is 8%
Annual dividend = 8% x $20 = 1.6/share
If Expected return is 7%
Annual dividend = 7% x $20 = $1.4/share
If Expected return is 6%
Annual dividend = 6% x $20 = $1.2/share
If Expected return is 3%
Annual dividend = 3% x $20 = $0.6/share
Cost data for Johnstone Manufacturing Company for the month ended March 31 are as follows: Inventories March 1 March 31 Materials $210,000 $193,100 Work in process 435,900 510,400 Finished goods 586,200 615,900 Direct labor $3,500,000 Materials purchased during March 2,666,200 Factory overhead incurred during March: Indirect labor 320,000 Machinery depreciation 210,000 Heat, light, and power 175,000 Supplies 34,900 Property taxes 30,000 Miscellaneous costs 45,700 a. Prepare a cost of goods manufactured statement for March.
Answer:
Cost of goods manufactured statement for March
Direct labor $3,500,000
Materials $2,683,100
Indirect labor $320,000
Machinery depreciation $210,000
Heat, light, and power $175,000
Supplies $34,900
Property taxes $30,000
Miscellaneous costs $45,700
Add Opening Work in process Inventory $435,900
Less Closing Work in process Inventory ($510,400)
Cost of goods manufactured $6,924,200
Explanation:
Prepare a Raw Materials T - Account to determine the cost transferred to Manufacturing Account for Raw Materials.
Raw Materials T - Account
Debits :
Opening Balance $210,000
Purchases $2,666,200
Totals $2,876,200
Credits :
Closing Balance $193,100
Materials transferred to Production $2,683,100
Totals $2,876,200
a. The preparation of the cost of goods manufactured is presented below:
Cost of goods manufactured statement for March
Direct labor $3,500,000
Materials $2,683,100
Indirect labor $320,000
Machinery depreciation $210,000
Heat, light, and power $175,000
Supplies $34,900
Property taxes $30,000
Miscellaneous costs $45,700
Add Opening Work in process Inventory $435,900
Less Closing Work in process Inventory ($510,400)
Cost of goods manufactured $6,924,200
Working note:
Raw Materials T - Account
Debits
Opening Balance $210,000
Purchases $2,666,200
Totals $2,876,200
Credits :
Closing Balance $193,100
Materials transferred to Production $2,683,100
Totals $2,876,200
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Clinton and Trump on fiscal policy In the 2016 Presidential election campaign, both Hillary Clinton and Donald Trump committed to big government infrastructure spending and tax cuts. Source: The Wall Street Journal, July 27, 2016 Consider an increase in infrastructure spending and a tax cut of the same magnitude. What policy will change aggregate demand the most: an increase in infrastructure spending or a cut in taxes?
Answer:
Clinton and Trump on fiscal policy In the 2016 Presidential election campaign
The policy that will change aggregate demand (AD) the most is a cut in taxes.
Explanation:
Aggregate demand is fueled mostly by household consumption. A cut in taxes increases the marginal propensity to consume (MPC) and reduces the marginal propensity to save (MPS), but at the same time fuels the marginal propensity to invest by firms trying to meet the new aggregate demand, thereby increasing the aggregate supply (AS) which is the real GDP output.
Larry’s Lawn Services provides custom landscaping for homes and businesses and uses job order costing to capture the cost of its landscaping jobs. There are no jobs in process at the beginning of May. Listed below are data concerning the three landscaping jobs conducted during May.
Southside Oceanview Rocky Heights
Direct materials $5,000 $6,890 $6,250
Landscaper labor costs $4,680 $5,850 $5,200
Landscaper hours 72 90 80
Overhead costs are applied to jobs on the basis of landscaper hours, and the predetermined overhead rate is $63 per landscaper hour. The Southside job is the only incomplete job at the end of May. Actual overhead for the month was $15,626.
Required:
a. Determine the cost of each job.
b. Indicate the balance of the Landscape Contracts in Process account at the end of May.
c. Calculate the ending balance of the Operating Overhead account for May.
Answer:
a. Southside = $14,216 , Oceanview = $18,410 and Rocky Heights = $16,490
b. Balance = $380 , Under-Applied Overheads.
Explanation:
Cost of each job
Southside Oceanview Rocky Heights
Direct materials $5,000 $6,890 $6,250
Landscaper labor costs $4,680 $5,850 $5,200
Overhead Cost at $63 / hr $4,536 $5,670 $5,040
Total Cost $14,216 $18,410 $16,490
Overheads T - Account
Debit :
Cash (Actual Overheads) $15,626
Total $15,626
Credit :
Work In Process :
Southside $4,536
Oceanview $5,670
Rocky Heights $5,040
Under-Applied Overheads $380
Total $15,626
On January 1, acquired 70 percent of common stock for $210,000 cash. The fair value of the noncontrolling interest at that date was determined to be $90,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
Gulliver Corp. Sea-Gull Corp.
Cash $60,000 $20,000
Accounts Receivable 80,000 30,000
Inventory 90,000 40,000
Land 100,000 40,000
Buildings and Equipment 200,000 150,000
Less: Accumulated Depreciation (80,000) (50,000)
Investment in Sea-Gull Corp. 160,000
Total Assets $610,000 $230,000
Accounts Payable $110,000 $30,000
Bonds Payable 95,000 40,000
Common Stock 200,000 40,000
Retained Earnings 205,000 120,000
Total Liabilities and Equity $610,000 $230,000
At the date of the business combination, the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and land, which had a fair value of $60,000.
Based on the preceding information, what amount of total inventory will be reported in the consolidated balance sheet prepared immediately after the business combination?
a. $130,000
b. $135,000
c. $90,000
d. $45,000
Answer:
Gulliver Corp. and Sea-Gull Corp.
Amount of Inventory in the consolidated Balance Sheet, immediately after the business combination:
b. $135,000
Explanation:
Inventory:
Gulliver Corp. = $90,000
Sea-Gull Corp. = 45,000
Total = $135,000
In consolidated financial statements, assets and liabilities are recognized based on their fair values. The procedure is to add such assets and liabilities together, line item by line item, in the consolidated financial statements. It is mainly equity interests and investments in the subsidiary by the investor entity that are eliminated.
XYZ, Inc. just sold 700,000 shares in a public offering for an offering price of $24 per share. The underwriting fee was 7.50% of the issue’s total value based on the offering price. As soon as the shares were issued, the price jumped to $36 per share. What are the explicit, implicit, and total costs of the issue?
Answer:
explicit costs = $1,260,000
the implicit costs = $8,400,000
total costs = $9,660,000
Explanation:
the underwriter's explicit costs = total number of shares x initial price x % charged by underwriter = 700,000 x $24 x 7.5% = $1,260,000
the implicit costs = (market price - initial price) x total number of shares = ($36 - $24) x 700,000 = $8,400,000
total costs = $9,660,000
The manager of a large commercial building became preoccupied with paperwork and did not inspect the premises as he should have, which resulted in lots of wear and tear from the tenants. The loss of value due to postponing repairs is called
Answer:
deferred repairs
Explanation:
In this scenario, the term being mentioned is known as deferred repairs. As mentioned in the question this term refers to the practice of postponing any and all maintenance activities, such as repairs on real property or personal property all with the hopes of saving costs, meeting budget funding levels, or realign available budget monies. This can also occur by accident due to neglect, such as in this specific scenario. Deferring repairs ultimately leads to higher costs due to worsening conditions.
Rainbow Paints Inc. is a leading paints company in Pakistan. In June 2019, the higher management of the company deliberated and decided upon the production targets for the year 2020. The procurement department was directed to order the supplies of required chemicals and raw materials from Chinese company i.e. XingPe Chemicals for the target production. The supplies were expected to arrive in January-February 2020 but unexpected situation halted the normal operations in China due to the spread of a novel virus. The situation created panic at Rainbow Paints Inc. as lack of supplies meant falling short of the targets and plunging in losses. The supplier was contacted but they were of the view that they cannot send the supplies as per the contract due to the lockdown. Now, conflict aroused between the parties as Rainbow Paints Inc. wanted the raw materials which the XingPi Chemicals cannot process due to restrictions from their respective government. It resulted in losses for Rainbow Paints Inc. Rainbow Paints Inc. decided to consult an International arbitrator for the resolution of the dispute. During negotiations, the Rainbow Paints Inc. maintained that they faced losses due to lack of supplies which did not reach them at the promised time. So, the supplier must not only compensate for it but also return their payments. While XingPe Chemicals insisted that they couldn’t move ahead due to unexpected and unavoidable pandemic situation, so the losses must be shared. They also reiterated the resolve to provide supplies in the future without any delays if the situation permits. They insisted on keeping the contract intact while finding a middle ground for the current dispute. Requirement: After analyzing the case, Identify the approaches to negotiation maintained by both the parties in conflict i.e. Rainbow Paints Inc. and XingPi Chemicals and explain them as per the scenario.
Answer:
Rainbow Paints Inc., Pakistan Vs XingPe Chemicals, China
1. Win-Lose Approach: Rainbow Paints Inc. was under an immense pressure to deliver on "production targets for the 2020." However, it approached the negotiation aggressively and assertively, blaming the Chinese company for its failure to deliver the required chemicals for its production. It did not care about the Coronavirus pandemic that is ravaging the world. It should not be confrontational in its approach. Business relationships are not maintained in such atmospheres. It must think long-term and not short-term. It should have tried to reduce its losses by minimizing its costs, using all possible means. Rainbow Paints, in its blindness, is even seeking for not only a compensation but the return of their payments, to ensure that the Chinese company bears the losses wholly. Such a negotiating strategy lacks common sense, fairness, and friendly business relationships.
2. Win-Win Approach: XingPe Chemicals approached the negotiation, seeking understanding. It cannot be blamed for the pandemic, unless it should have supplied before the outbreak. Its approach contrasts with the confrontational, aggressive, and assertive method being followed by the Pakistani company. Its approach is integrative and accommodating. It is even willing to share the losses of Rainbow Paints while Rainbow Paints was trying to push all of the losses to it.
Explanation:
There are many approaches to negotiation. Some prefer the Win-Lose, Lose-Lose, Compromise, or Win-Win approaches. The best for long-standing business relationships is the Win-Win approach, because it integrates and accommodates the interests of both parties. However, different situations call for the approach or combination of approaches to adopt.