Answer:
Buying the subcomponent will increase income by $7,666.
Explanation:
Giving the following information:
Units= 10,700
Production costs:
Direct materials $8,988
Direct labor $12,091
Variable overhead $13,482
An outside supplier has offered to sell Vaughn the subcomponent for $2.85 a unit.
Additional income= $3,600
To calculate which one is better, we need to determine the total cost of both options. We will not take into account the fixed costs.
Production:
Total cost= 8,988 + 12,091 + 13,482= $34,561
Buy:
Total cost= 10,700*2.85 - 3,600= $26,895
Buying the subcomponent will increase income by $7,666.
Campbell Co. has net sales revenue of $1,320,000, cost of goods sold of $760,700, and all other expenses of $297,000. The beginning balance of stockholders' equity is $407,000 and the beginning balance of fixed assets is $368,000. The ending balance of stockholders' equity is $607,000 and the ending balance of fixed assets is $396,000. The fixed asset turnover ratio is closest to:
Answer:
3.46
Explanation:
Calculation for Campbell Co. fixed asset turnover ratio
First step is to find the Average net fixed assets
Using this formula
Average Fixed assets= Fixed assets Beginning balance +Fixed assets ending balance /2
Let plug in the formula
Average Fixed assets= $368,000 + $396,000/ 2
Average Fixed assets=$764,000/2
Average Fixed assets=$382,000
Second step is to calculate for the Fixed asset turnover
Using this formula
Fixed asset turnover = Net revenue ÷ Average net fixed assets
Let plug in the formula
Fixed asset turnover= $1,320,000 ÷ $382,000
Fixed asset turnover= 3.46
Therefore Campbell Co. fixed asset turnover ratio will be 3.46
Net capital outflow and net exports An open economy interacts with the rest of the world through its involvement in world markets for goods and services and world financial markets. Although it can often result in an imbalance in these markets, the following identity must remain true: In other words, If a transaction directly affects the left side of this equation, then It must also affect the right side. The following problem will help you understand why this Identity must hold. Suppose you are a fashion designer Living In the United States, and a trendy boutique in Bangkok just purchased your entire inventory for THB 80,000.
Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If the direction of change is 'No change,'' enter ''0'' in the Magnitude of Change column. Hint: The magnitude of change should always be positive, regardless of the direction of change. Because of the identity equation that relates)_________ to net exports, the in U.S. net exports Is matched by _________in U.S. net capital outflow. Which of the following Is an example of how the United States might be affected in this scenario?
a. You store the Thai baht in your safety deposit box at home.
b. You purchase THB 48,000 worth of stock in a Thai corporation and THB 32,000 worth of Thai bonds.
c. You exchange the THB 80,000 for dollars at your local bank, which then uses the foreign currency to purchase stock in a Thai corporation.
Answer:
1. a. Exports will increase by THB 80,000
You live in the US and you just sold something to someone outide the US. This is an export so you increased US exports by THB 80,000.
b. Imports will be $0.
You did not import anything from outside the country.
c. Net Exports will be THB 80,000
Net Exports are Exports less imports for a given period.
= 80,000 - 0
= THB 80,000
2. Because of the identity equation that relates to net exports, increase in U.S. net exports Is matched by an increase in U.S. net capital outflow.
As a result of the US exporting goods, money from other countries come into it. This flow of capital into the US contributes to the U.S. net capital outflow.
3. a. You store the Thai baht in your safety deposit box at home.
b. You purchase THB 48,000 worth of stock in a Thai corporation and THB 32,000 worth of Thai bonds.
c. You exchange the THB 80,000 for dollars at your local bank, which then uses the foreign currency to purchase stock in a Thai corporation.
In the first scenario, the US would be affected because even though money came in, it is not being used but it rather sitting ideal at home.
In the other 2 scenarios, the money was not used to purchase thing in the US but rather went back outside the country. This means that capital flowed out of the US so negatively affects her Net Capital Outflow.
Net capital outflow refers to the amount that is credited from the country and debited to the other country. This means the country faces an outflow of funds. Exports are the activity in which the goods and services are delivered to the other parts of the country.
1. a. Exports will increase by THB 80,000
Living in the US and you just sold something to someone outside the US. This is export so you increased US exports by THB 80,000.
b. Imports will be $0.
No imports from the other country.
c. Net Exports will be THB 80,000
Net Exports are Exports fewer imports for a given period.
= 80,000 - 0
= THB 80,000
2. Because of the identity equation that relates to net exports, an increase in U.S. net exports Is matched by an increase in U.S. net capital outflow.
As a result of the US exporting goods, money from other countries comes into it. This flow of capital into the US contributes to the U.S. net capital outflow.
3. a. You store the Thai baht in your safety deposit box at home.
b. You purchase THB 48,000 worth of stock in a Thai corporation and THB 32,000 worth of Thai bonds.
c. You exchange the THB 80,000 for dollars at your local bank, which then uses the foreign currency to purchase stock in a Thai corporation.
In the first scenario, the US would be affected because even though the money came in, it is not being used but it rather sitting ideal at home.
In 2 scenarios, the money was not used to purchase things in the US but rather went back outside the country. This means that capital flowed out of the US so negatively affects her Net Capital Outflow.
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Suppose you deposit your paycheck, drawn on another bank. The total money supply in the banking system will ___________ because:
a. Assets of your bank would increase by more than the amount withdrawn from the other bank.
b. An increase in the assets of your bank by the amount of your paycheck would simply decrease the assets of another bank by the same amount.
c. Assets of the other bank would decrease by a fraction of the amount deposited at your bank.
Answer:
Option B, An increase in the assets of your bank by the amount of your paycheck would simply decrease the assets of another bank by the same amount, is correct.
Explanation:
The total money supply in the banking system will remain the “same” because it is given that paycheck is drawn from another bank. So, if a person withdraws money from another bank it implies that there is a decrease in money supply in the banking system and when the cheque is deposited in the other bank so again the money supply will increase in the banking system. However, the amount of money supply will remain the same. Therefore, option B is the right answer.
To retain high-performing engineers, a large semiconductor company provides corporate stock as part of the compensation package. In one particular year, the company offered 1000 shares of either class A or class B stock. The class A stock was selling for $30 per share at the time, and stock market analysts predicted that it would increase at a rate of 6% per year for the next 5 years. The class B stock was selling for $20 per share, but its price was expected to increase by 12% per year. At an interest rate of 8% per year, which stock should the engineers select on the basis of present worth analysis and a 5-year planning horizon?
Answer:
class A stocks
Explanation:
in 5 years, class A stock will be worth = $30 x (1 + 6%)⁵ = $40.15
in 5 years, class B stock will be worth = $20 x (1 + 12%)⁵ = $35.25
now we need to determine the present value if each stock:
class A stock present value = $40.15 / (1 + 8%)⁵ = $27.33
class B stock present value = $35.25 / (1 + 8%)⁵ = $23.99
since the present value of class A stock is higher, then the engineers should select that type of stocks.
During step 3 of activity-based costing, activity overhead cost pool rates are used to assign overhead costs to final cost objects. Proper determination of activity rates depends on all of the following: (Check all that apply).
A. Proper determination of factor which drive cost
B. Proper measurement of activities
Answer:
Proper determination of activity rates depends on the following :
A. Proper determination of factor which drive cost
B. Proper measurement of activities
Explanation:
Predetermined Activity Rates = Overhead Cost / Total Cost Driver units
Thus it is important to measure correctly the overheads incurred for each Activity that exist that accumulated overheads.
It is also important to determine correct cost drivers for those overheads identified to absorb costs correctly into outputs.
Proper determination of activity rates depends on the following :
A. Proper determination of factor which drive cost.
B. Proper measurement of activities.
What is the predetermined activity rate:We know that
Predetermined Activity Rates = Overhead Cost / Total Cost Driver units
It should be calculated by dividing the cost of overhead from the total cost driver units. It is vital for determining the overhead amount in the current manner also the correct cost drivers should be measured so that the cost should be absorbed.
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Activities included (and not included) in the calculation of GDP
The gross domestic product (GDP) of the United States is defined as the all in a given period of time.
Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2020.
Scenario 2020 GDP
Included Excluded
1. Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 14, 2020. An elementary school student buys the chocolate bar on December 24.
2. The Jones family buys an antique silver platter at an auction in upstate New York on March 11, 2020.
3. Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Iowa on September 25, 2020. It sells the corn syrup to Crunchy's for use in the production of cereal that will be made in the United States in 2020. (Note: Focus exclusively on whether production of the corn syrup increases GDP directly, and ignore the effect of production of the cereal on GDP.)
4. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 6, 2020. It sells the car at a dealership in San Francisco on February 2, 2020.
5. Roadway Motors, a U.S. automobile company, produces a convertible at a plant in Germany on March 11, 2020. Roadway Motors imports the convertible into the United States on May 29, 2020.
Answer:
Included in 2020 GDP
1. Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 14, 2020. An elementary school student buys the chocolate bar on December 24.
4. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 6, 2020. It sells the car at a dealership in San Francisco on February 2, 2020.
5. Roadway Motors, a U.S. automobile company, produces a convertible at a plant in Germany on March 11, 2020. Roadway Motors imports the convertible into the United States on May 29, 2020.
NOT INCLUDED IN 2020 GDP
2. The Jones family buys an antique silver platter at an auction in upstate New York on March 11, 2020.
3. Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Iowa on September 25, 2020. It sells the corn syrup to Crunchy's for use in the production of cereal that will be made in the United States in 2020
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceeds import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
The purchase of chocolate would be added to GDP as part of consumption spending on non durable items.
the purchase of the antique silver platter would not be added as part of GDP because it wasn't produced in 2020 and only goods produced in 2020 would be added to 2020 GDP.
The corn syrup is an intermediate good and it would not be added in the calculation of GDP. only final goods are added in the calculation of GDP.
The automobile would be added to GDP as part of investment spending by businesses.
the import of cars would be added as part of net export in 2020 GDP
The company wants to end each month with ending finished goods inventory equal to 10% of the next month’s sales. Finished goods inventory on December 31 is 280 units. The budgeted production units for January are:
Answer:
Budgeted production in January 2,910 units
Explanation:
Calculation for the budgeted production units for January
Using this formula
Budgeted production in January= Budgeted sales + Desired ending inventory - Beginning inventory available
Let plug in the formula
Budgeted production in January=2,800 + (3,900*10%) - 280
Budgeted production in January=$2,800+$390-280
Budgeted production in January= 2,910 units
Therefore the Budgeted production in units for January are: 2,910 units
Are there differences in employee retention due to gender, or whether the employee is from the local area in the data in the worksheet Employee Retention?
Answer:
Yes there are differences in employee retention based on gender.
Explanation:
Employee retention refers to the ability of an organization to retain its good performing employees. There may be some market factors affecting the retention rate. There are many factors that affect employee retention. There can be difference in employee retention based on gender. It is found that women work 10% more harder than the men even the women have home care duties they still manage to balance their work and life.
Shares of common stock of the Samson Co. offer an expected total return of 12.00 percent. The dividend is increasing at a constant 6.70 percent per year. The dividend yield must be:
Answer:
5.3%
Explanation:
The shares of a common stock of Samson corporation offer an expected total return on 12.00 percent
The dividend is increasing at a constant 6.70 percent per year
Therefore, the dividend yield can be calculated as follows
Dividend yield= Required return + capital gains yield
= 12% - 6.70%
= 5.3%
Hence the dividend yield is 5.3%
You have $256,000 to invest in a stock portfolio. Your choices are Stock H, with an expected return of 14.1 percent, and Stock L, with an expected return of 10.7 percent. If your goal is to create a portfolio with an expected return of 12.3 percent, how much money will you invest in Stock H and in Stock L
Answer: Investment in H = .4706($256,000)
Investment in H = $120,470.59
Investment in L = .5294($256,000)
Investment in L = $135,529.41
Explanation:
Investment in Stock H
Investment in Stock L
Here, the expected return of the portfolio and the expected return of the assets in the portfolio have been given and we're to calculate the dollar amount of each asset in the portfolio. So, we need to find the weight of each asset in the portfolio. Since the total weight of the assets in the portfolio must equal 1 (or 100%), we can find the weight of each asset as:
E[Rp] = .1230 = .141xH + .107(1 - xH)
xH = .4706
xL = 1 - xH
xL = 1 - .4706
xL = .5294
So, the dollar investment in each asset is the weight of the asset times the value of the portfolio, so the dollar investment in each asset must be:
Investment in H = .4706($256,000)
Investment in H = $120,470.59
Investment in L = .5294($256,000)
Investment in L = $135,529.41
Errors in the sales forecast can be offset by similar errors in costs and income forecasts. Thus, as long as the errors are not large, sales forecast accuracy is not critical to the firm. Correct or Incorrect?
Answer: False
Explanation:
The above analysis is false. Sales forecast is when future sales are being estimated. It is very important for the sales forecast to be correct and accurate because it is used by the organization to make decisions and also predict the performances.
It is actually possible for the errors in the sales forecast to be offset by similar errors in costs and income forecasts but the accuracy of the sales forecast matters a lot.
Courtney Meehan has trouble keeping her debits and credits equal. During a recent month, Courtney made the following accounting errors:
a. In preparing the trial balance, Courtney omitted a $5,000 Notes Payable. The debit to Cash was correct
b. Courtney posted a $11000 Utilities Expense as $100. The credit to Cash was correct.
c. In recording a $600 payment on account, Courtney debited Furniture instead of Accounts Payable-
d. In journalizing a receipt of cash for service revenue, Courtney debited Cash for $50 instead of the correct amount of $500. The credit was correct.
e. Courtney recorded a $210 purchase of office supplies on account by debiting Office Supplies for $120 and crediting Accounts Payable for $120.
Required:
a. For each of these errors, state whether total debits equal total credits on the trial balance.
b. Identify each account that has an incorrect balance and the amount and direction of the error.
Answer:
a. In preparing the trial balance, Courtney omitted a $5,000 Notes Payable. The debit to Cash was correct
Liabilities (credit balance) are understated by $5,000 ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITSb. Courtney posted a $11000 Utilities Expense as $100. The credit to Cash was correct.
Expenses (debit balance) are understated by $10,900 ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITSc. In recording a $600 payment on account, Courtney debited Furniture instead of Accounts Payable-
Assets (debit balance) are understated by $600 and liabilities (credit balance) are overstated by $600. ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITSd. In journalizing a receipt of cash for service revenue, Courtney debited Cash for $50 instead of the correct amount of $500. The credit was correct.
Assets (debit balance) are understated by $450 ⇒ TOTAL DEBITS DO NOT EQUAL TOTAL CREDITSe. Courtney recorded a $210 purchase of office supplies on account by debiting Office Supplies for $120 and crediting Accounts Payable for $120.
both assets (debit balance) and liabilities (credit balance) are understated by $90. ⇒ TOTAL DEBITS EQUAL TOTAL CREDITSThe widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $20, $12, $8, $4, and $2 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $8, $12, $20, $32, and $44 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied.
Price Quantity Demanded Quantity Supplied
($ per widget) (widgets) (widgets)
$2
$4
$8
$12
$20
$32
$44
In this market, the equilibrium price will beper widget, and the equilibrium quantity will be______widgets.
Answer:
4
Explanation:
The completion of the table is shown below;
Price Quantity Demanded Quantity Supplied
($ per widget) (widgets) (widgets)
$2 5 1
$4 5 2
$8 5 3
$12 4 4
$20 3 5
$32 2 5
$44 1 5
As we can see that at the price of $12 the quantity demanded is equivalent to the quantity supplied i.e 4 so here the equilibrium quantity is 4 for the widgets
USA Airlines uses the following performance measures. Classify each of the performance measures below into the most likely balanced scorecard perspective it relates to. Label your answers using
C (customer),
P (internal process),
I (innovation and growth), or
F (financial).
1. Cash flow from operations
2. Number of reports of mishandled or lost baggage
3. Percentage of on-time departures
4. On-time flight percentage
5. Percentage of ground crew trained
6. Return on investment
7. Market value
8. Accidents or safety incidents per mile flown
9. Customer complaints
10. Flight attendant training sessions attended
11. Time airplane is on ground between flights
12. Airplane miles per gallon of fuel
13. Revenue per seat
14. Cost of leasing airplanes
Answer:
1. Cash flow from operations: F (financial).
2. Number of reports of mishandled or lost baggage: C (customer).
3. Percentage of on-time departures: C (customer).
4. On-time flight percentage: C (customer).
5. Percentage of ground crew trained: I (innovation and growth).
6. Return on investment: F (financial).
7. Market value: F (financial).
8. Accidents or safety incidents per mile flown: P (internal process).
9. Customer complaints: C (customer).
10. Flight attendant training sessions attended: I (innovation and growth).
11. Time airplane is on ground between flights: P (internal process).
12. Airplane miles per gallon of fuel: P (internal process).
13. Revenue per seat: F (financial).
14.Cost of leasing airplanes: F (financial).
Explanation:
The performance measures associated with an airline (USA) business are;
1. Customer (C): this includes all the passengers or clients who have done business with the airline company in the past or in the future. It gives full details about everything pertaining to the clients or customers.
2. Financial (F): this is a measure of all the revenues and expenses associated with the successful running of the airline business.
3. Innovation and growth (I): this is a measure of the manpower or labor, equipments, welfare and training used to ensure the business continues to run smoothly, effectively and efficiently.
4. Internal process (P): it involves all of the strategic decisions, policies, rules and regulations formulated by the executive management in order to enhance the smooth operations of the airline business.
Labor Input Physical output 10 500 11 600 12 690 13 760 14 800 Refer to the above table, answer the following questions: A. If the price of the good produced is $7, what is the marginal revenue product (MRPL=11) of the 11th worker? B. Suppose the price of the good sold is $10 and the marginal factor cost of labor(MFC) is $700, how many units of labor will the firm hire?
Answer:
Explanation:
Labor Input Physical output
10 500
11 600
12 690
13 760
14 800
marginal output of 11 th labor = 600 - 500 = 100
price of each product = 7
marginal revenue product of 11 th labor 7 x 100 = 700
B )
price of each of the goods sold = 10
marginal factor cost of labour = 700
minimum no of goods to be sold to cover the labour cost
= 700 / 10 = 70
no of goods added due to addition of 11 the labour = 100
no of goods added due to addition of 12 the labour = 90
no of goods added due to addition of 13 the labour = 70
so no of units of labor upto which the firm will continue to hire
= 13 .
The following equations describe consumption, investment, government spending, taxes, and net exports in the country of Economika.
C = 400 + 0.80(Y - T)
I = 500
G = 450
T = 450
X = 100
1. In Economika, equilibrium GDP is equal to $_. (Round your answer to the nearest dollar.)
2. If real GDP in Economika is currently $4,450, which of the following is true?
a) There will be an unplanned decrease in inventories, and real GDP will increase next period.
b) There will be an unplanned increase in inventories, and real GDP will increase next period.
c) There will be an unplanned decrease in inventories, and real GDP will decrease next period.
d) There will be an unplanned increase in inventories, and real GDP will decrease next period.
e) There will be no unplanned change in inventories, and real GDP will stay the same next period.
Answer:
1. $5,450
2. a) There will be an unplanned decrease in inventories, and real GDP will increase next period.
Explanation:
1. GDP (Y) is the total economic output and can be calculated using the Expenditure method which is;
Y = C + I + G + X
Y = (400 + 0.80(Y - 450)) + 500 + 450 + 100
Y = 400 + 0.80Y - 360 + 500 + 450 + 100
Y - 0.80Y = 1,090
0.2Y = 1,090
Y = $5,450
2. With Equilibrium GDP being higher than the Real GDP of the country, the excess Demand (GDP is aggregate demand) will lead to more consumption in the Economy which will lead to an unplanned decrease inventories. This will then spur companies to produce more to meet the higher demand causing Real GDP to go up.
Facial cosmetics provides plastic surgery primarily to hide the appearance of the appearance of unwanted scars and other blemishes. During 2018 the company provides services of $400,000 on account. Of this amount $50,000 remains uncollected at the end of the year. An aging schedule as a December 31, 2018 is provided below:
Age Group
Not Yet Due 30000 2%
0-30 days past due 10000 5%
31-60 days past due 7000 10%
More than 60 days pst due 3000 20%
Total 50000
1) Calculate the allowance for uncollectible accounts
2) Record the December 31, 2018 adjusting entry assuming the balances of the allowance account before adjusting entries is $300 (debit)
3) On April 3 2019 a customers account balance of $400 is written off as uncollectible. Record the write off.
4) On July 17 2019 the customer whose account was written off in # 3 unexpectedly pays $100 of the amount but does not expect to pay any additional amounts. Record the cash collection.
Answer:
1.Alllowance for uncollectible accounts 2,400
2.Dr Bad Debt Expense 2700
Cr Allowance for Doubtful Account 2700
3.Dr Allowance for Doubtful account 400
Cr Accounts receivable 400
4) Dr Cash 100
Cr Allowance for Doubtful account 100
Explanation:
Calculation of the allowance for uncollectible accounts
Using this formula
Alllowance for uncollectible accounts=(Not Yet Due)+(0-30 days past due)+(30-60 days past due)+(More than 60 days pst due)
Let plug in the formula
Alllowance for uncollectible accounts=
(30,000 *2% )+ (10,000* 5%) + (7,000* 10 %)+(3,000* 20% )
Alllowance for uncollectible accounts =600+500+700+600
Alllowance for uncollectible accounts = 2,400
2)Record of the he December 31, 2018 adjusting entry
300 debit balance+ 2,400
=2,700 Adjustment
Dr Bad Debt Expense 2,700
Cr Allowance for Doubtful Account 2 700
3) Journal entry to record the write off.
Dr Allowance for Doubtful account 400
Cr Accounts receivable 400
4) Journal entry to Record the cash collection
Dr Cash 100
Cr Allowance for Doubtful account 100
Analyzing Contingent and Other Liabilities:
The following independent situations represent various types of liabilities. Analyze each situation and indicate which of the following is the proper accounting treatment for the company: (a) record a liability on the balance sheet, (b) disclose the liability in a financial statement footnote, or (c) neither record nor disclose any liability.
1. A stockholder has filed a lawsuit against______. ______attorney's have reviewed the facts of the case. Their review revealed similar lawsuits have never resulted in a cash award and it is highly unlikely that this lawsuit will either.
2. _____signed a 60-day, 10% note when it purchased items from another company.
3. The EPA notifies______that a state where it has a plant is filing a lawsuit for groundwater pollution against_____and another company that has a plant adjacent to______plant. Test results have not identified the exact source of the polution. ______manufacturing process often produces by-products that can pollute groundwater.
4. _______manufactured and sold products to a retailer that later sold the products to consumers. ______will replace the product if it is found to be defective within 90 days of the sale to the consumer. Historically, 1.2% of the products are returned for replacement.
Answer:
1. Situation is that a Stockholder has filed a lawsuit against C corporation.
Accounting treatment: Neither record nor disclose any liability.
Since the liability is not at all possible, it should be neither recorded nor disclosed.
2. Situation: F signed a 60 days, 10% note when it purchased items from another company.
Account treatment: Record the liability on the balance sheet.
Real liability that is both certain and the liability amount can also be reasonably estimated. It should be recorded on the balance sheet.
3. The EPA notifies S co that a state where it has a plant is filing a lawsuit.
Account treatment: Disclose the liability in a financial statement footnote.
The liability is probable but not certain and liability amount can also be reasonably estimated. It should be disclosed in financial statement footnote.
4. Situation: Company manufactured and sold products to a retailer that later sold product to consumer.
Account treatment: Record the liability on the balance sheet.
Real liability that is both certain and the liability amount can also be reasonably estimated. It should be recorded on the balance sheet.
In the following example, the proposed debt issue would raise $4,000,000; the interest rate would be 10%. In addition, the EBIT would be $2,000,000. What would be the increase in the Earnings Per Share (EPS) from to current to the proposed structure
Answer:
$1.67
Explanation:
The computation of the increase in earning per share is shown below:
But before that first we need to find out the current and proposed earning
per share
Particulars Current Proposed
Number of shares $400,000 $240,000 (a)
EBIT $2,000,000 $2,000,000
Less:
Interest $400,000
($4,000,000 ×0.10)
EBT $2,000,000 $1,600,000
Less
Taxes $0 $0
Net income $2,000,000 $1,600,000 (b)
EPS $5 $6.67 (a ÷ b)
Increase in EPS
= $6.67 - $5
= $1.67
Many Western European countries are giving monetary incentives to employees who have multiple children. Why would they do this? How would a baby boom change Japan's demographics?
Answer:
The incentive is to encourage more families to have more children.
A baby boom in Japan will ensure that there is enough workforce to maintain the growing economy in the future.
Explanation:
The western countries, especially Europe is battling with population decline, which is estimated to have an economic impact in the future, due to a potential decline in the labor force in the future. To counter this, many of these western nations have crated policies that encourages childbirth by providing incentive for families with multiple children, reducing tax for such families, and even as far as up to 12 to 16 months paid paternity and maternity leave, when a couple has a new baby. Couples are also given government paychecks when they go on childbirth leave.
Japan is one of the countries that has been experiencing a population decline in recent years. The number of death seem to be more than the number of births. The general effect is the fear of a dwindling work force of the future. This will lead to more people retiring later, and there would be a huge pressure on the pension schemes, and the economy as a whole due to this. A population boom will mean that a future workforce is guaranteed, and the retirement age lowered, and the call for dependency on automation due to a shrinking workforce can be reviewed.
Many of the western and developed nations are now giving incentives to those who produce more than one child or multiple children.
As their economy is getting old and is aging hence in order to company the problem of the aging of population monetary incentives are given. The baby boom is a condition related to the growth of babies. Japan is a greying nation that has a negatively declining trend of population. Due to the larger medical aid population is getting older and the birth rate is low. A baby boom may lead to an increase in youth and the young population. More children and more people.Learn more about the Western European countries that are giving monetary incentives.
brainly.com/question/20414870.
A security held in a well-diversified portfolio that has a beta of zero in a one-factor model will have an expected return of:
Answer:
The answer is risk free rate.
Explanation:
Beta is a risk arising from systematic risk or market risk.
A portfolio with a beta of zero would have the same expected return as the risk-free rate. Such a portfolio would have zero correlation with market movements.
Market risk cannot be diversified. Examples of zero beta assets are cash and US treasury bill.
Mayall Corporation is developing standards for its products. Each unit of output of the product requires 0.92 kilogram of a particular input. The allowance for waste and spoilage is 0.02 kilogram of this input for each unit of output.The standard quantity in kilograms of this input per unit of output should be:_________
a. 0.90
b. 0.92
c. 0.79
d. 1.05
Answer:
The answer is 0.94kg , hence not among the given options
Explanation:
To arrive at the standard quantity in kilograms of the input per unit of output, we will sum up each unit of output plus allowance for waste and spoilage
= 0.92kg + 0.02kg
= 0.94kg
The Polishing Department of Bonita Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process. Production: Beginning inventory 1,580 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 41,200; ending inventory of 6,600 units 10% complete as to conversion costs. Manufacturing costs: Beginning inventory costs, comprised of $20,600 of materials and $14,674 of conversion costs; materials costs added in Polishing during the month, $186,883; labor and overhead applied in Polishing during the month, $127,600 and $257,440, respectively.
a. compute the equivalent units of production for materials and conversion costs for the month of september
b. compute the unit costs for materials and conversion costs for the month.
c. determine the costs to be assigne to the units transfered out in the process.
Answer:
a. Materials = 15,780 units and Conversion = 9,840 units
b. Materials = $13.15 and Conversion = $40.62
c. $354,882
Explanation:
First calculate the number of Units Completed and Transferred
Units Completed and Transferred = 1,580 + 14, 200 - 6,600
= 9,180
Then, Calculation of the equivalent units of production for materials and conversion costs for the month of September
Materials
Units Completed and Transferred ( 9,180 × 100%) = 9,180
Units In Ending Work In Process Inventory ( 6,600 × 100%) = 6,600
Equivalent units of production for materials = 15,780
Conversion
Units Completed and Transferred ( 9,180 × 100%) = 9,180
Units In Ending Work In Process Inventory ( 6,600 × 10%) = 660
Equivalent units of production for Conversion = 9,840
Calculate the unit costs for materials and conversion costs for the month.
Unit costs for materials = Total Materials Cost / Total Equivalent units of production for materials
= ($20,600 + $186,883) / 15,780
= $13.15
Unit costs for Conversion = Total Conversion Cost / Total Equivalent units of production for Conversion
= ($14,674 + $127,600 + $257,440) / 9,840
= $40.62
Calculate the costs to be assigned to the units transferred out in the process.
Costs to be assigned = Units Transferred Out × Total Cost per Equivalent unit of Production.
= 6,600 × ($13.15 + $40.62)
= 6,600 × $53.77
= $354,882
On January 1, 2020, the Oriole Company had $2,990,000 of $10 par value common stock outstanding that was issued at par and Retained Earnings of $1,150,000. The company issued 146,000 shares of common stock at $16 per share on July 1. On December 15, the board of directors declared a 10% stock dividend to stockholders of record on December 31, 2020, payable on January 15, 2021. The market value of Oriole Company stock was $17 per share on December 15 and $17 per share on December 31. Net income for 2020 was $580,000.
Required:
Journalize the issuance of stock on July 1 and the declaration of the stock dividend on December 15.
Answer:
Oriole Company
Journal Entries:
July 1:
Debit Cash Account $2,336,000
Credit Common Stock $1,460,000
Credit Paid-in In Excess of Common Stock $876,000
To record the issuance of 146,000 shares of common stock, par $10 at $16 per share.
December 15:
Debit Retained Earnings $445,000
Stock Dividends Payable $445,000
To record the declaration of a 10% stock dividend.
Explanation:
a) Stockholders of record on December 31, 2020:
Number of shares in issue at beginning 299,000
Number of shares issued on July 1 146,000
Total 445,000
10% of 445,000 = 44,500 shares
b) Stock Dividends declared on December 15 will result to the issuance of 44,500 shares to stockholders. To finance this stock dividend, the Retained Earnings account is debited while the Stock Dividends Payable is credited. When the shares are issued on January 15, the Stock Dividends Payable (Distributable) will be debited and the Common Stock credited with the par value. The market price of $17 does not affect the company's records.
For the month of July, Jacobs Company incurs a direct materials cost of $6,000 for 6,000 gallons of paint produced in its Mixing Department. It also incurs conversion costs of $1,470 with 70% completed. If the conversion cost per equivalent unit was $0.25 per gallon in June, what is the difference in the conversion cost per equivalent unit between th
Answer:
The difference in the conversion cost per equivalent unit between the month of June and July is $0.10 .
Explanation:
Hie your question has a missing part. I have searched for the missing information and the full question reads :
For the month of July, Jacobs Company incurs a direct materials cost of $6,000 for 6,000 gallons of paint produced in its Mixing Department. It also incurs conversion costs of $1,470 with 70% completed. If the conversion cost per equivalent unit was $0.25 per gallon in June, what is the difference in the conversion cost per equivalent unit between the month of June and July.
Solution :
First Calculate the Total Equivalent Units of Production for Conversion Cost for July
Total Equivalent Units = 6,000 × 70%
= 4,200
Then Calculate the Cost per Equivalent Unit for July
Cost per Equivalent Unit = Total Cost / Total Equivalent Units
= $1,470 / 4,200
= $0.35
Difference = $0.35 - $0.25
= $0.10
Constanza, who is single, sells her current personal residence (adjusted basis of $262,500) for $735,000. She has owned and lived in the house for 30 years. Her selling expenses are $36,750. What is Constanza’s realized and recognized gain? Constanza’s realized gain is $ and her recognized gain would be $ .
Answer:
Realized gain $435,750
Recognized gain$ 185,750
Explanation:
Calculation for Constanza’s realized and recognized gain
The realized gain will be calculated as :
Amount realized $698,250
($735,000 − $36,750)
Less the Adjusted basis ($262,500)
Realized gain $435,750
Constanza’s Recognised gain
Realized gain $435,750
Less Section 121 exclusion ($250,000)
Recognized gain$ 185,750
Therefore Constanza’s realized gain is $435,750 and her recognized gain would be $186,750 .
Rizio Co. purchases a machine for $12,500, terms 210, n60, FOB shipping point. Rizio paid within the discount period and took the $250 discount. Transportation costs of $360 were paid by Rizio. The machine required mounting and power connections costing $895. Another $475 is paid to assemble the machine, and $40 of materials are used to get it into operation. During installation, the machine was damaged and $180 worth of repairs were made. Compute the cost recorded for this machine.
Answer:
Cost of machine= $14,200
Explanation:
According to International Accounting standards(IAS) 16 property plan and equipment (PPE), the cost of an asset is the purchase cost plus other costs of bringing it to the intended working conditions.
So we will add the purchase cost to the installation cost , freight charges.
Note that the cost of the power connections, assembling and material used for installations all represent cost associated to bring the machine into ready for use.
Cost of machine = (12,500 - 250) + 360 + 895 + 475 + 40 + 180= 14,200
Cost of machine= $14,200
4. Calculate the required rate of return for Manning Enterprises assuming that investors expect 3.5% rate of inflation in the future. The real risk-free rate is 2.5%, and the market risk premium is 6.5% Manning has a beta of 1.7, and its realized rate of return has averaged 13.5% over the past 5 years.
Answer: 17.05%
Explanation:
Given the variables available, the method to be used to calculate the required return is the Capital Asset Pricing Model with the formula;
Required Return = Nominal Risk-free rate + beta ( Market premium)
Nominal Risk-free rate = real risk-free rate + inflation
= 2.5% + 3.5%
= 6%
Required Return = 6% + 1.7 ( 6.5%)
Required Return = 6% + 11.05%
Required Return = 17.05%
When preparing the operating activities section of the statement of cash flows using the indirect method, non-operating gains are added to net income. true or false
Answer:
True
Explanation:
Suppose the U.S. economy slips into a recession. In response, the Federal Reserve cuts the federal funds rate in order to avoid unemployment. Consider what happens to the following under a fixed exchange-rate regime.
a. Domestic investment would increase
b. Capital inflow would decrease
c. Capital outflow would increase
d. The exchange rate would be unchanged
e. Net exports would be unchanged
f. Aggregate demand would increase
Answer: All Variables will remain unchanged
Explanation:
Monetary Policy has no effect on a country's domestic currency because it is simply ineffective when it is in a fixed exchange rate regime. This is because, when monetary policy is used, it tends to change the exchange rate but because the Fed will be engaging in a fixed exchange regime, it will act to normalise the exchange rate which will bring the currency back to equilibrium.
For instance, if the Fed embarks on expansionary monetary policy and pegs its currency to the Euro. The expansionary policy will lead to a drop in interest rates which is supposed to help GDP. However as a result of lower rates, the dollar will depreciate and more people will demand Euros. The Fed will intervene to keep the Euro and the Dollar at the same level (fixed exchange) and sell Euros in its reserves while reducing dollars. This will bring the interest rate and currencies back to its original level so there will be no benefit.
Monetary policy is ineffective under a Fixed Rate regime so one of the variables will change.