Answer:
Simple interest is calculated on the original amount of a loan. Compound interest is calculated on the principal amount and also on the accumulated interest of previous periods.
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Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $5.4 million. The machinery can be sold to the Romulans today for $7.6 million. Klingon's current balance sheet shows net fixed assets of $4.2 million, current liabilities of $850,000, and net working capital of $144,000. If all the current accounts were liquidated today, the company would receive $965,000 cash.
a. What is the book value of Klingon's total assets today? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
b. What is the sum of the market value of NWC and the market value of fixed assets? (Do not round Intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
a. Book value of total assets
b. Sum of market value of NWC and fixed assets
Answer:
a. $5,194,000
b. $7,715,000
Explanation:
a. Book Value of assets = Book value of fixed assets + book value of current assets
Book Value of assets = Book value of fixed assets + (Current Liabilities + Net working capital)
Book Value of assets = $4,200,000 + ($850,000 + $144,000)
Book Value of assets = $5,194,000
b. Sum of market value = $7,600,000 + ($965,000 - $850,000)
Sum of market value = $$7,600,000 + $115,000
Sum of market value = $7,715,000
Foxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 2018, the end of the fiscal year, the accountant for Foxy Investigative Services prepared an end-of-period spreadsheet, a part of which follows: Required:Foxy Investigative ServicesEnd-of-Period SpreadsheetFor the Year Ended November 30, 2018 ~ Adjusted Trial BalanceAccount Title ~ Dr. Cr. ~Cash ~ 27,500Accounts Receivable ~ 71,800Supplies ~ 3,550Prepaid Insurance ~ 750Building ~ 330,500Accumulated Depreciation-Building ~ 184,100Accounts Payable ~ 16,100Salaries Payable ~ 6,600Unearned Rent ~ 1,500Common Stock ~ 40,000Retained Earnings ~ 70,300Dividends ~ 30,000Service Fees ~ 675,500Rent Revenue ~ 9,000Salaries Expense ~ 435,000Rent Expense ~ 55,000Supplies Expense ~ 11,850Depreciation Expense-Building ~ 10,000Utilities Expense ~ 8,800Repairs Expense ~ 4,250Insurance Expense ~ 3,000Miscellaneous Expense ~ 11,100 ~ 1,003,100 1,003,1001. A. Prepare an income statement for the year ended November 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles.B. Prepare a retained earnings statement for the year ended November 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.C. Prepare a balance sheet as of November 30, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.2. Based upon the end-of-period spreadsheet, journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles.3. If Retained Earnings had instead decreased $46,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? If required, use a minus sign to indicate a net loss.
Answer:
Foxy Investigative Services
1. Foxy Investigative Services
A. Income Statement
For the Year Ended November 30, 20Y8
REVENUE
Service Fees $675,500
Rent Revenue 9,000
Total revenues $684,500
EXPENSES
Salaries Expense 435,000
Rent Expense 55,000
Supplies Expense 11,850
Depreciation Expense-Building 10,000
Utilities Expense 8,800
Repairs Expense 4,250
Insurance Expense 3,000
Miscellaneous Expense 11,100
Total expenses $539,000
Net income $ 145,500
Retained Earnings 70,300
Dividends -30,000
Balance, November 30, 20Y8 $185,800
Foxy Investigative Services
B. Statement of Shareholders' Equity
November 30, 20Y8
Common Stock $40,000
Net income $ 145,500
Retained Earnings 70,300
Dividends -30,000
Balance, November 30, 20Y8 $185,800
Total stockholders' equity $225,800
Foxy Investigative Services
C. Balance Sheet
November 30, 20Y8
ASSETS
Current assets
Cash 27,500
Accounts Receivable 71,800
Supplies 5,550
Prepaid Insurance 750
Total Current Assets $105,600
Building 330,500
Accumulated Depreciation -184,100
Total property, plant, and equipment $146,400
Total assets $252,000
LIABILITIES
Current liabilities
Accounts Payable 16,100
Salaries Payable 6,600
Unearned Rent 1,500
Total Liabilities $24,200
EQUITY
Common Stock 40,000
Retained Earnings 185,800
Total stockholders' equity $225,800
Total liabilities and stockholders' equity $250,000
NB: Liabilities + Equity side is short by $2,000 because the Trial Balance is not in balance.
2. Closing Journal Entries:
Account Title Dr. Cr.
Income Summary 30,000
Dividends 30,000
To close dividends to the income summary (Retained Earnings)
Account Title Dr. Cr.
Service Fees 675,500
Rent Revenue 9,000
Income Summary 684,500
To close revenues to the income summary.
Account Title Dr. Cr.
Income Summary $539,000
Salaries Expense 435,000
Rent Expense 55,000
Supplies Expense 11,850
Depreciation Expense-Building 10,000
Utilities Expense 8,800
Repairs Expense 4,250
Insurance Expense 3,000
Miscellaneous Expense 11,100
To close the expenses to the income summary.
3. Net Income remained $ 145,500. Retained Earnings, beginning balance would have been reduced by $46,000.
Explanation:
a) Data and Calculations:
Foxy Investigative Services
End-of-Period Spreadsheet
For the Year Ended November 30, 20Y8
Adjusted Trial Balance
Account Title Dr. Cr.
Cash 27,500
Accounts Receivable 71,800
Supplies 5,550
Prepaid Insurance 750
Building 330,500
Accumulated Depreciation-Building 184,100
Accounts Payable 16,100
Salaries Payable 6,600
Unearned Rent 1,500
Common Stock 40,000
Retained Earnings 70,300
Dividends 30,000
Service Fees 675,500
Rent Revenue 9,000
Salaries Expense 435,000
Rent Expense 55,000
Supplies Expense 11,850
Depreciation Expense-Building 10,000
Utilities Expense 8,800
Repairs Expense 4,250
Insurance Expense 3,000
Miscellaneous Expense 11,100
Totals 1,003,100 1,003,100
Correct total of Debit side = 1,005,100 2,000
Both friends agree that the demand and supply for hybrid cars will increase. For each of the following situations, determine whether the demand curve or the supply curve increases by dragging the item to the appropriate category.
a. The government gives consumers a subsidy to buy hybrid cars.
b. More automobile producers start producing hybrids.
c. The price of non-hybrid cars falls.
d. The price of batteries for hybrid cars rises.
e. Gasoline prices rise.
Answer:
1. The subsidy will work as a motivating factor for the consumers as the product will be purchased at a lower cost. Thus. it will increase the demand curve.
2. This will increase the supply curve due to increase in the suppliers throughout the market.
3. It will increase the demand curve as the consumers will face lower pressure on their pocket while purchasing cars.
4. This will decrease demand as the price of cars rises due to increase in the cost of production.
5. Increase in price of gasoline will decrease demand for cars as the consumers have to face high pressure on their pockets for using he cars.
The explanation to each part should be explained below:
The following information should be considered:
A) A government subsidy is equal to a reduction in price for consumers. A decline in prices increases demand. The demand curve increase.
b)More producers result in more output, which is an increase in supply. The supply curve increases.
c). Non-hybrid cars should be the substitutes goods for hybrid vehicles. In the case the price of non-hybrid cars falls, their demand will increases. Consequently, the demand for hybrid cars reduces. Both The demand curve and supply curve will not increase.
d). An increase in production cost results in a price rise. Consequently, it reduces the demand for hybrid cars. Both the demand and curve curves will not increase.
e). An increase in gasoline price will make non-hybrid cars less desirable however will increase the demand for hybrid cars. The demand curve for hybrid cars increases.
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Sunland Inc. has conducted the following analysis related to its product lines, using a traditional costing system (volume-based) and an activity-based costing system. Both the traditional and the activity-based costing systems include direct materials and direct labor costs.
Products Sales Revenue Traditional ABC
Product 540X $200,000 $53,000 $47,100
Product 137Y 162,000 48,000 29,000
Product 249S 92,000 25,000 49,900
Required:
a. For each product line, compute operating income using the traditional costing system.
b. For each product line, compute operating income using the activity-based costing system.
c. Compute the percentage difference in operating income for each of the product lines of Ayala.
Answer:
a. Traditional CostProduct 540X
= Revenue - Cost
= 200,000 - 53,000
=$147,000
Product 137Y
= 162,000 - 48,000
= $114,000
Product 249S
= 92,000 - 25,000
= $67,000
B. ABC CostingProduct 540X
= Revenue - Cost
= 200,000 - 47,100
=$152,900
Product 137Y
= 162,000 - 29,000
= $133,000
Product 249S
= 92,000 - 49,900
= $42,100
c.
Difference in Income for 540X
[tex]= \frac{Income under ABC - Income under Traditional costing}{Income under Traditional costing} \\\\= \frac{152,900 - 147,000}{147,000} \\\\= 0.0401[/tex]
= 4.01%
Difference in Income for 137Y
[tex]= \frac{Income under ABC - Income under Traditional costing}{Income under Traditional costing} \\\\= \frac{133,000 - 114,000}{114,000} \\\\= 0.1667[/tex]
= 16.67%
Difference in Income for 249S
[tex]= \frac{Income under ABC - Income under Traditional costing}{Income under Traditional costing} \\\\= \frac{42,100 - 67,000}{67,000} \\\\= -0.3716[/tex]
= -37.16%
Two different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows:
PREDICTED DEMAND
Period Demand F1 F2
1 68 63 66
2 75 70 67
3 70 75 70
4 74 69 72
5 69 70 73
6 72 68 75
7 80 70 77
8 78 74 84
Required:
Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate
Answer:
Kindly check explanation
Explanation:
Given the data:
Period Demand F1 F2
1 68 63 66
2 75 70 67
3 70 75 70
4 74 69 72
5 69 70 73
6 72 68 75
7 80 70 77
8 78 74 84
Mean absolute deviation (MAD) for F1:
P___Demand(D) __F1__F2___|D - F1|___|D-F2|
1____ 68 _______63 __66____5______ 2
2____75_______ 70__ 67____ 5______ 8
3____70_______ 75__ 70____ 5______ 0
4____74_______ 69__ 72____ 5______ 2
5____69_______ 70__ 73____ 1______ 4
6____72_______ 68__ 75____ 4______3
7____80_______ 70__ 77____ 10 _____3
8____78_______ 74__ 84____ 4______6
Mean absolute deviation (MAD) For F1 :
Σ(|D - F1|)/n :
(5 + 5 + 5 + 5 + 1 + 4 + 10 + 4) / 8
= 39 / 8
= 4.875
Mean absolute deviation (MAD) For F2 :
Σ(|D - F2|)/n :
(2 + 8 + 0 + 2 + 4 + 3 + 3 + 6) / 8
= 28 / 8
= 3.50
F2 seems to be more accurate has it has a Lower MAD value
Concrete Consulting Co. has the following accounts in its ledger: Cash; Accounts Receivable: Supplies; Office Equipment; Accounts Capital; Jason Payne, Drawing: Fees Earned; Rent Expense; Advertising Expense; Utilities Expense; Miscellaneous Expense.
Oct. 1 Paid rent for the month, $3,600
3 Paid advertising expense, $1,200.
5 Paid cash for supplies, $750
6 Purchased office equipment on account, $8,000
10 Received cash from customers on account, $14,800
15 Paid creditors on account, $7,110
27 Paid cash for miscellaneous expenses, $400.
30 Paid telephone bill (utility expense) for the month, $250
31 Fees earned and billed to customers for the month, $33,100
31 Paid electricity bill (utility expense) for the month, $1,050.
31 Withdrew cash for personal use, $2,500
Journalize the transactions for October 2019
Answer:
Journal entries for October 2019
Date Accounts Titles and Explanation Debit Credit
Oct 1 Rent expense $3,600
Cash $3,600
(To record entry for payment of rent for month)
Oct 3 Advertising expenses $1,200
Cash $1,200
(To record entry for Advertising expenses)
Oct 5 Supplies $750
Cash $1750
(To record entry for purchase of supplies)
Oct 6 Office equipment $8,000
Accounts Payable $8,000
(To record purchase of office equipment on account)
Oct 10 Cash $14,800
Accounts Receivable $14,800
(To record cash received from customers on account)
Oct 15 Accounts payable $7,110
Cash $7,110
(To record payment made to creditors)
Oct 27 Miscellaneous expenses $400
Cash $400
(To record repair expense of office equipment)
Oct 30 Telephone expense $250
Cash $250
(To record payment made for telephone bill)
Oct 31 Accounts receivables $33,100
Service fees $33,100
(To record fees earned)
Oct 31 Utility expense $1,050
Cash $1,050
(To record payment made for electricity bill)
Oct 31 Personal use $2,500
Cash $2,500
(To record payment of dividend)
The Journal Entries are mentioned below.
What are Journal Entries?A journal entry is the first step—and an essential function—of the accounting process. They are the record of monetary transaction of a business.
Journal Entries in the books of Concrete Consulting Co.
for October 2019
Date Accounts Titles and Explanation Debit Credit
Oct 1 Rent expense A/c Dr. $3,600
To Cash A/c $3,600
(Being rent paid)
Oct 3 Advertising expenses A/c Dr $1,200
To Cash A/c $1,200
(Being Advertising expenses paid)
Oct 5 Supplies A/c Dr $750
To Cash A/c $750
(Being payment for purchase of supplies)
Oct 6 Office equipment A/c Dr $8,000
To Accounts Payable A/c $8,000
(Being office equipment purchased)
Oct 10 Cash A/c Dr $14,800
To Accounts Receivable A/c $14,800
(Being cash received from customers)
Oct 15 Accounts payable A/c Dr $7,110
To Cash A/c $7,110
(Being payment made to creditors)
Oct 27 Miscellaneous expenses A/c Dr $400
To Cash A/c $400
(Being expense made for repair of office equipment)
Oct 30 Telephone expense A/c Dr $250
To Cash A/c $250
(Being payment made for telephone bill)
Oct 31 Accounts receivables A/c Dr $33,100
To Service fees A/c $33,100
(Being fees earned)
Oct 31 Utility expense A/c Dr $1,050
To Cash A/c $1,050
(Being electricity bill paid)
Oct 31 Personal use A/c Dr $2,500
To Cash A/c $2,500
(Being cash withdrawn for personal use)
Therefore the above Journal Entries captures all the transactions.
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During 2017, its first year of operations as a delivery service, Concord Corporation entered into the following transactions:
1. Issued shares of common stock to investors in exchange for $181,000 in cash.
2. Borrowed $54,000 by issuing bonds.
3. Purchased delivery trucks for $60,000 cash.
4. Received $17,000 from customers for services performed.
5. Purchased supplies for $5,800 on account.
6. Paid rent of $4,800.
7. Performed services on account for $11,000.
8. Paid salaries of $29,300.
9. Paid a dividend of $10,700 to shareholders.
Required:
Using the following tabular analysis, show the effect of each transaction on the accounting equation.
If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place ( ) around the amount.
Transaction Assets = Liabilities + Stockholders' Equity
1
2
3
4
5
6
7
8
9
Answer:
Concord Corporation
Transaction Assets = Liabilities + Stockholders' Equity
1 Assets (Cash +$181,000) = Liabilities + Stockholders' Equity (Common Stock +$181,000)
2 Assets (Cash +$54,000) = Liabilities (Bonds Payable +$54,000) + Equity
3 Assets (Delivery Trucks +$60,000, Cash - $60,000) = Liabilities + Equity
4 Assets (Cash + $17,000, Accounts Receivable -$17,000) = Liabilities + Equity
5 Assets (Supplies + $5,800) = Liabilities (Accounts Payable +$5,800) + Equity
6 Assets (Cash - $4,800) = Liabilities + Equity (Retained Earnings -$4,800)
7 Assets (Accounts Receivable + $11,000) = Liabilities + Equity (Retained Earnings + $11,000)
8 Assets (Cash - $29,300) = Liabilities + Equity (Retained Earnings + $29,300)
9 Assets (Cash - $10,700) = Liabilities + Equity (Retained Earnings + $10,700)
Explanation:
In accordance with the accounting equation, Assets are always equal to Liabilities + Equity with each given business transaction. The accounting equation reflects the double-entry system of accounting. It shows that two or more accounts are involved in any transaction and each transaction that is properly recorded keeps the equation in balance at all times.
Ozdemir Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below:
Beginning work in process inventory: Units in beginning work in process inventory Materials costs Conversion costs Percent complete with respect to materials Percent complete with respect to conversion Units started into production during the month Units transferred to the next department during the month Materials costs added during the month Conversion costs added during the month Ending work in process inventory: Units in ending work in process inventory Percent complete with respect to materials Percent complete with respect to conversion 400 $ 2,200 $ 800 55% 10% 5,400 4,900 $ 78,800 $132,800 900 85% 70%
What are the equivalent units for conversion costs for the month in the first processing department?
Answer:
$5,490
Explanation:
Computation for the equivalent units for conversion costs
To complete beginning work in process inventory 360
[400*(1-10%)]
Units started and completed 4,500 (4,900-400)
Ending work in process inventory 630 (900*70%)
Equivalent units for Conversion costs $5,490 units
Therefore the equivalent units for conversion costs is $5,490
The going concern assumption of GAAP implies that the firm: __________
a. Will continue to operate and that all assets should be recorded at their cost rather than at their liquidation value.
b. Will continue to operate and its assets should be recorded at historical cost.
c. Is going under and needs to be liquidated at historical cost.
d. Is going under and needs to be liquidated at liquidation value.
Answer:
correct option is (a)
Explanation:
Anxiety is a financially stable accounting term for a company to fulfill its obligations and continue its business for the future.So, One of the key assumptions under GAAP is the going concern assumption that will continue to operate and that all assets should be recorded at their cost rather than at their liquidation valueElvera Easton traded in copying equipment with an adjusted basis of $10,000 for other copying equipment valued at $6,000. She also received $2,500 in cash, and her mortgage of $3,000 on the traded copying equipment was wiped out. What is her recognized gain on this exchange, if any
Answer:
It would be $0
Because of the low labor costs in Thailand, Melnick Co. (based in the United States) recently established a major research and development subsidiary there that it owns. The subsidiary was created to improve new products that the parent of Melnick can sell in the United States (denominated in dollars) to U.S. customers. The subsidiary pays its local employees in baht (the Thai currency). The subsidiary has a small amount of sales denominated in baht, but its expenses are much larger than its revenue. It has just obtained a large loan denominated in baht that will be used to expand its subsidiary. The business that the parent of Melnick Co. conducts in the United States is not exposed to exchange rate risk. If the Thai baht strengthens over the next three years, will the value of Melnick Co. be favorably affected, unfavorably affected, or not affected? Briefly explain.
Answer:
The subsidiary operates in Thailand simply because its labor costs are much lower. The vast majority of their operations is financed by US dollars that are sent there by the parent company. If the Thai strengthens, then it is more expensive to operate there. I.e. the cheaper a country, the better for the parent company.
In this particular case, the company just obtained a large loan in bahts that it can use to finance its expansion. The thing is that the loan is going to be repaid using US dollars, not Thai bahts. The subsidiary doesn't generate enough bahts to even cover its own expenses, so it will not be able to repay the loan by itself.
If the baht's value increases, then the subsidiary will be hit hard since it will need more US dollars to finance its normal operations and to repay the loan. That will hurt Meinick's value since their cash outflows will increase, reducing its net cash flows.
8. Anna Drew sells custom cabinets and
doors. She receives a 15% commission on
the doors she sells and a 7% commission
for each cabinet. What would her total
commission be if she sold $5,200-worth
of cabinets and $760-worth of doors?
A $112
B $230
C $478
D $542
Answer:
C
Explanation:
Maury and Bev have saved all their lives and they have been able to pay off their mortgage on their home. Bev is getting elderly and frail and Maury needs to put her into a nursing home where they can give her round-the-clock care. Maury intends to finance this arrangement by getting a loan where the lender makes payments to the homeowner each month, based on accumulated equity. What type of loan does Maury want to get?
Answer:
Reverse Mortgage Loan
Explanation:
Banks allow older people above the age of 62 to use their home's value to obtain a reverse mortgage loan. The bank values the home and extends credit facilities to its elderly owners. The loan amount is usually a part of the home's value and is paid as a lump sum or fixed monthly payments.
Maury wants to apply for a reverse mortgage loan. He will use the value of their home to obtain a credit facility to care for Bev. Maury does not need to repay the loan. The bank will recover its money by selling the house once the couple dies or relocates.
During the next two months an automobile manufacturer must meet (on time) the following demands for trucks and cars: month 1, 400 trucks and 800 cars; month 2, 300 trucks and 300 cars. During each month at most 1000 vehicles can be produced. Each truck uses two tons of steel, and each car uses one ton of steel. During month 1, steel costs $700 per ton; during month 2, steel is projected to cost $800 per ton. At most 2500 tons of steel can be purchased each month. (Steel can be used only during the month in which it is purchased.) At the beginning of month 1, 100 trucks and 200 cars are in the inventory. At the end of each month, a holding cost of $200 per vehicle is assessed. Each car gets 35 miles per gallon (mpg), and each truck gets 15 mpg. During each month, the vehicles produced by the company must average at least 23 mpg.
Required:
a. Determine how to meet the demand and mileage requirements at minimum total cost.
b. Explain intuitively what happens when the requirement is greater than 17 mpg.
Answer:
a. solver found a solution 600C₁ + 400T₁ + 300C₂ + 200 T₂
the company should produce 600 cars and 400 trucks during month 1, and it should produce 300 cars and 200 trucks during month 2
b. here it doesn't really make a lot of difference since a car's mpg is 35 and a truck's is 15. The average between them is 25. You would need to produce more than 9 trucks per car (at least 10) in order for the average to be lower than 17 mpg.
Explanation:
minimization equation = 700S₁ + 800S₂ + 200HC₁ + 200HT₁ + 200HC₂ + 200HC₂
where:
C₁ = cars produced during month 1
T₁ = trucks produced during month 1
C₂ = cars produced during month 1
T₂ = trucks produced during month 2
S₁ = steel used during month 1
S₂ = steel used during month 2
HC₁ = holding cost for a car on month 1
HT₁ = holding cost for a truck on month 1
HC₂ = holding cost for a car on month 2
HT₂ = holding cost for a truck on month 1
constraints:
C₁ + T₁ ≤ 1000
C₂ + T₂ ≤ 1000
-S₁ + C₁ + 2T₁ = 0
-S₂ + C₂ + 2T₂ = 0
-HC₁ + C₁ ≥ 600
-HT₁ + T₁ ≥ 300
HC₁ - HC₂ + C₂ ≥ 300
HT₁ - HT₂ + T₂ ≥ 300
4C₁ - 6T₁ ≥ 0
4C₂ - 6T₂ ≥ 0
S₁ ≤ 2500
S₂ ≤ 2500
solver found a solution 600C₁ + 400T₁ + 300C₂ + 200 T₂
Puri Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below:
Beginning work in process inventory:
Units in beginning work in process inventory 400
Materials costs $4,800
Conversion costs $3,300
Percent complete with respect to materials 85 %
Percent complete with respect to conversion 45 %
Units started into production during the month 5,800
Units transferred to the next department during
the month 5,100
Materials costs added during the month $69,500
Conversion costs added during the month $82,300
Ending work in process inventory:
Units in ending work in process inventory 1,100
Percent complete with respect to materials 55 %
Percent complete with respect to conversion 45 %
The cost per equivalent unit for conversion costs for the first department for the month is closest to:_______.
Answer:
$15.20
Explanation:
Computation for the cost per equivalent unit for conversion costs for the first department
First step
FIFO METHOD
IN
Beginning WIP 400
Units Introduced 5800
Total 6,200
OUT
Beginning WIP Completed 400
Production started and Completed 4,700
(5800-1100)
Ending WIP 1100
Total 6,200
Equivalent Units
Materials
% Complete Equivalent unit
Beg. WIP Completed 400 15% 60
(15%*400=60)
Production started and Completed 4,700 (5800-1100) 100% 4,700
(100%*4,700=4,700)
Ending WIP 1,100 55% 605
(55%*1,100=605)
TOTAL 5,365
(60+4700+605)
Equivalent Units
Conversion
% Complete Equivalent unit
Beg. WIP Completed 400 55% 220
(55%*400=220)
Production started and Completed 4,700 (5800-1100) 100% 4,700
(100%*4,700=4,700)
Ending WIP 1,100 45% 495
(45%*1,100=495)
TOTAL 5,415
(220+4700+495)
Second step is to Compute the cost per equivalent unit for conversion costs
Cost Statement
Equivalents unit (A) Current period cost incurred (B) Cost per unit (B/A)
Material 5,365(a) $69,500(b) $12.95
Conversion 5,415(a) $82,300(b) $15.20
Therefore the Conversion cost for the first department for the month closest to $15.20
Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 2,900 tires to the Nixon Car Company for $40 each. The terms of the sale were 2/10, n/30. Harwell uses the net method of accounting for cash discounts.
Required:
1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23, 2021.
2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on August 15, 2021.
Answer:
1. July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
July 23
Dr Cash 113,680
Cr Accounts Receivable 113,680
2. July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
Aug 15
Dr Cash 116,000
Cr Accounts Receivable 113,680
Cr Sales discount forfeited 2,320
Explanation:
1.Preparation of the journal entries to record the sale on July 15 and payment on July 23, 2021.
July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
July 23
Dr Cash 113,680
Cr Accounts Receivable 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
2.Preparation of the journal entries to record the sale on July 15 and payment on August 15, 2021.
July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
Aug 15
Dr Cash 116,000
($40*2,900)
Cr Accounts Receivable 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
Cr Sales discount forfeited 2,320
(40*2,900*2%)
There are numerous definitions of insurance. based on the definition stated in the text, indicate whether each of the following guarantees is considered insurance.
a. The manufacturer guarantees a new television against defects for 90 days.
b. The manufacturer guarantees a new set of radial tires against road defects for 50,000 miles.
c. A builder of new homes gives a 10-year guarantee against structural defects in the home.
d. A cosigner of a note agrees to pay the loan balance if the original debtor defaults on the payments.
e. A large group of homeowners agrees to pay for losses to homes that are damaged or destroyed by fire during the year.
Answer: See explanation
Explanation:
Insurance is an arrangement whereby an economic entity like the individual or firm undertakes and agree to provide compensation for losses, damages or death to the insured.
a. The manufacturer guarantees a new television against defects for 90 days.
This is simply a guarantee and it's not an insurance. There are no pooling of losses even though risks are being transferred to the manufacturer.
b. The manufacturer guarantees a new set of radial tires against road defects for 50,000 miles.
This is also a guarantee and it's not an insurance. There are no pooling of losses even though risks are being transferred to the manufacturer. In a scenario whereby the tires are stolen, they won't be replaced.
c) A builder of new homes gives a 10-year guarantee against structural defects in the home.
This is just a guarantee and not an insurance. Even though risk are being transferred to the builder once there are structural defects, the owner of the home will bear the loss in case of fire.
d. A cosigner of a note agrees to pay the loan balance if the original debtor defaults on the payments.
This is not an insurance. This is just explaining that the consigner bears the risk of payment if the original debtor defaults.
e. large group of homeowners agrees to pay for losses to homes that are damaged or destroyed by fire during the year.
This is an insurance as losses are being pooled. The firm of insurance that'll be utilized here is the fire insurance.
Statements a,b,c, and d are guarantees and statement e represents insurance.
What are a guarantee and insurance?Insurance refers to the protection from the financial loss that the insurance holder otherwise would suffer. Insurance is a type of indemnity where one party promises to indemnify the insurer in case of loss.
Whereas gurantee can be defined as contract in which one party agrees to act on behalf of the other party in case of defaults by other party.
Therefore the statement a, b , c, and d are guarantee and the statement e represents insurance.
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Use the information below for 3M Company to answer the requirements (perform these computations from the perspective of a 3M shareholder).
($millions) 2015 2014
Sales $31,718
Net income consolidated 5,787
Net income attributable to
3M shareholders 5,779
Assets 33,395 $31,886
Total equity 11,747 13,142
Equity attributable to 3M
shareholders 11,708 13,109
A. Compute return on equity (ROE).
B. Compute the DuPont model component measures for profit margin, asset turnover, and financial leverage.
C. Compute ROA.
List and describe the three types of income. Include information regarding how each one is taxed.
Answer:
Investment income
Passive Income
Profit Income
Earned Income
Interest Income
Explanation:
those are the only types of income I know. but then again I haven't learned much about this subject
On November 1, Year 1, Black Lion Company forecasts the purchase of raw materials from an Argentinian supplier on February 1, Year 2, at a price of 200,000 Argentinian pesos. On November 1, Year 1, Black Lion pays $1,200 for a three-month call option on 200,000 Argentinian pesos with a strike price of $0.35 per peso. The option is properly designated as a cash flow hedge of a forecasted foreign currency transaction. On December 31, Year 1, the option has a fair value of $900. The following spot exchange rates apply:
Date U.S dollar per Argentinian Peso
Nov 1,Year 1 $ 0.35
Dec,31 Year 1 0.30
February 1 Year2 0.36
What is the net impact on Black Lion Company’s Year 2 net income as a result of this hedge of a forecast foreign currency purchase? Assume that the raw materials are consumed and become a part of cost of goods sold in Year 2.
a. A $70,000 decrease in net income.
b. A $70,900 decease in net income.
c. A $71,100 decrease in net income.
d. A $72,900 decrease in net income.
Answer:
Option B: 70,900 decrease in net income
Explanation:
Net impact on black lion company's year 2 net income as a result of this hedge of a forecast foreign currency purchase can be calculated by summing up the Option expense, cost of goods sold and adjustment to net income in year 2 .
NET IMPACT ON YEAR NET INCOME
Option expenses (900)
Cost of goods sold (72,000)
Adjustment to Net Income 2000
Decrease in Net Income (70,900)
Working
DEBIT CREDIT
Option expense 900
Foreign currency Option 1100
(0.35 - 0.36) x 200,000 = 2000
2000 - 900 = 1100
Accumulated other comprehensive income 2000
DEBIT CREDIT
Foreign currency 72,000
(200,000x0.36)
Cash 70,000
(200,000x0.35)
Foreign currency option 2,000
DEBIT CREDIT
Cost of goods sold 72,000
Foreign currency 72,000
DEBIT CREDIT
Accumulated other comprehensive income 2000
Adjustment to Net Income 2000
The 2021 income statement of Anderson Medical Supply Company reported net sales of $12 million, cost of goods sold of $5.5 million, and net income of $835,000. The following table shows the company's comparative balance sheets for 2021 and 2020: ($ in thousands) 2021 2020Assets Cash$440 $520 Accounts receivable 840 570 Inventory 1,250 1,050 Property, plant, and equipment (net) 3,100 2,820 Total assets$5,630 $4,960 Liabilities and shareholders’ equity Current liabilities$1,100 $970 Bonds payable 1,550 1,550 Common stock 1,700 1,700 Retained earnings 1,280 740 Total liabilities and shareholders' equity$5,630 $4,960 Required:Calculate Anderson's turnover ratios for 2021. (Use 365 days a year. Round your answers to 2 decimal places.)Inventory turnover ratio timesReceivables turnover ratio timesAverage collection period days Asset turnover ratio times
Answer:
Inventory turnover ratio = cost of goods sold / average inventory = $5,500,000 / [($1,250,000 + $1,050,000)/2] = 4.78 times
Receivables turnover ratio = net sales / average accounts receivable = $12,000,000 / [($840,000 + $570,000)/2] = 17.02 times
Average collection period days = 365 / receivables turnover ratio = 365 / 17.02 = 21.45 days
Asset turnover ratio = net sales / average total assets = $12,000,000 / [($5,630,000 + $4,960,000)/2] = 2.27 times
Management in the News In April 2010, the explosion of British Petroleum’s (BP) Deepwater Horizon oil drilling rig and the accompanying oil spill dramatically changed the external environment in which all oil companies operate. The explosion released more oil than any other accidental spill in history and had a huge impact on the waters and surrounding communities of the Gulf Coast. The conditions that led to the spill, the attempts to stop the spill, and the clean-up and aftermath of the spill prompted debates in the U.S. Senate, concern on Wall Street, and attention from companies all over the world.Match each oil spill event with a specific dimension of the general environment. Event Dimension BP stock prices falling 25% during the first month after the oil spill ______ Using deep-se submersibles to take pictures of the oil leak a mile below the surface of the water ______People moving from Louisiana to Oklahoma to avoid the effects of the spill ______
Answer:
Event Dimension BP stock prices falling 25% during the first month after the oil spill. ECONOMIC.
The Economic dimension of the environment deals with production in the economy which means that it deals with business entities and the financial system. Dimension BP stock price falling therefore falls under her.
Using deep-se submersibles to take pictures of the oil leak a mile below the surface of the water. TECHNOLOGICAL.
The Technological dimension of the environment refers to anything related to the use of technology and using deep-sea submersibles to take pictures of the leak below the surface of the water will definitely fall under technology.
People moving from Louisiana to Oklahoma to avoid the effects of the spill. SOCIOCULTURAL.
Sociocultural dimension deals with human beings and how they relate with themselves and the environment around them. People therefore moving from Louisiana to Oklahoma will fall under here.
Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming year:
Direct materials used 50,000
Direct Labor costs 70,400
Wages of factory janitors 39,500
Sales supervisor salary 51,500
Utilities for factory 16,100
Rent on factory building 13,800
Advertising expense 5,830
The company estimates that direct labor hours will be worked in the upcoming year, while machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be:________
a. $154 46
b. $1869
c. $7921
d. $43.38
The company has the following estimated costs for the upcoming year: Direct materials used $50,800 Direct labor costs $70,000 Wages of factory janitors $39,500 Sales supervisor salary $51,600 Utilities for factory $16,100 Rent on factory building $13,200 Advertising expense $5130 The company estimates that 1420 direct ...Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming year: Direct materials used $50,800 Direct labor costs $70,000 Wages of factory janitors $39,500 Sales supervisor salary $51,600 Utilities for factory $16,100 Rent on factory building $13,200 Advertising expense $5130 The company estimates that 1420 direct labor hours will be worked in the upcoming year, while 1400 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be (Round your answer to the nearest cent.)
Mrs. Vick, a 40-year-old cash basis taxpayer, earned $45,000 as a teacher and $5,000 as a part-time real estate agent in Year 2. Mr. Vick, who died on July 1, Year 2, had been permanently disabled on his job and collected state disability benefits until his death. For all of Year 2 and Year 3, the Vick’s residence was the principal home of both their 11-year old daughter, Joan, and Mrs. Vick’ s unmarried cousin, Fran Phillips, who had no income in either year. During Year 2, Joan received $200 a month in survivor social security benefits that began on August 1, Year 2, and will continue at least until her 18th birthday. In Year 2 and Year 3, Mrs. Vick provided over one-half the support for Joan and Fran, both of whom were U.S. citizens. Mrs. Vick did not remarry.
a) What filing status should the Vicks use for Year 2?
b) What filing status should Mrs. Vick use for Year 3?
c) How many exemptions can the Vicks claim in Year 2?
d) How many exemptions can Mrs. Vick claim in Year 3?
Answer:
This question includes tax issues that were eliminated by the TC&JA (personal exemptions), but we can assume that we are living on 2017.
a) What filing status should the Vicks use for Year 2?
Since Mrs. Vick didn't remarry, then she can still file as married filing jointly.
b) What filing status should Mrs. Vick use for Year 3?
She can file as qualifying widow, which means that she will still file as married filing jointly.
c) How many exemptions can the Vicks claim in Year 2?
She will be able to claim 4 personal exemptions (1 for her, 1 for her deceased husband, 1 for Joan and 1 for Fran).
d) How many exemptions can Mrs. Vick claim in Year 3?
She will be able to claim 3 personal exemptions (1 for her, 1 for Joan and 1 for Fran).
Bridgeport Architects incorporated as licensed architects on April 1, 2022. During the first month of the operation of the business, these events and transactions occurred:
Apr. 1 Stockholders invested $19,980 cash in exchange for common stock of the corporation.
1 Hired a secretary-receptionist at a salary of $416 per week, payable monthly.
2 Paid office rent for the month $999.
3 Purchased architectural supplies on account from Burmingham Company $1,443.
10 Completed blueprints on a carport and billed client $2,109 for services.
11 Received $777 cash advance from M. Jason to design a new home.
20 Received $3,108 cash for services completed and delivered to S. Melvin.
30 Paid secretary-receptionist for the month $1,664.
30 Paid $333 to Burmingham Company for accounts payable due.
Required:
Journalize the transactions.
Recording estimates of future discounts LO P6 ProBuilder has the following June 30 fiscal-year-end unadjusted balances:
Allowance for Sales Discounts, $0; and Accounts Receivable, $10,800. Of the $10,800 of receivables, $2,400 are within a 3% discount period, meaning that it expects buyers to take $72 in future discounts arising from this period’s sales.
A. Prepare the June 30 fiscal-year-end adjusting journal entry for future sales discounts.
B. Assume the same facts above and that there is a $10 fiscal-year-end unadjusted credit balance in the Allowance for Sales Discounts.
Answer:
A. Date Account Title and Explanation Debit Credit
June 30 Sales discounts $72
($2,400 * 3%)
Allowance for sales discounts $72
(To record the expected sales discounts)
B. Date Account Title and Explanation Debit Credit
June 30 Sales Discounts $62
($72 - $10)
Allowance for sales discounts $62
(To record the expected sales discounts)
Horizon Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows: March April MayExpenses $125,800 $117,000 $106,500Depreciation, insurance, and property taxes represent $27,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June, 65% of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May.
Answer:
Depreciation, insurance, and property taxes represent $27,000 of the estimated monthly expenses so will have to be removed to find out how much is due in the month.
March April May
March Expenses :
Paid in March $73,112
Paid in April $25,688
April Expenses :
Paid in April $66, 600
Paid in May $23,400
May Expenses :
Paid in May $58,830
Total Cash Payment $73,112 $92,288 $82,230
Working
March Expenses
Paid in March ((125,800 - 27,000)* 74%) = $73,112
Paid in April ((125,800 - 27,000)*26%) = $25,688.
April Expenses
Paid in April ((117,000 - 27,000)*74%) = $66, 600
Paid in May ((117,000 - 27,000)*26%) = $23,400
May Expenses
Paid in May ((106,500 - 27,000)*74%) = $58,830
"The Total Cash Payment of March, April, and May $73,112; $92,288 and $82,230 To understand the calculations, check below"
Calculation of Depreciation, insurance, and property taxesComputation of Depreciation, insurance, and also property taxes represent $27,000 of the estimated monthly expenditures so will have to be withdrawn to find out how much is due in the month.
March April May
March Expenses:
Paid in March $73,112
Paid in April $25,688
April Expenses:
Paid in April $66, 600
Paid in May $23,400
May Expenses:
Paid in May $58,830
Total Cash Payment $73,112 $92,288 $82,230
Working Note:
March Expenses are:
Paid in March ((125,800 - 27,000)* 74%) is = $73,112
Paid in April ((125,800 - 27,000)*26%) is = $25,688.
April Expenses are:
Paid in April ((117,000 - 27,000)*74%) is = $66, 600
Paid in May ((117,000 - 27,000)*26%) is = $23,400
May Expenses are:
Then Paid in May ((106,500 - 27,000)*74%) is = $58,830
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You may worry that the indirect organizational strategy is unethical and manipulative, but the alternative—breaking the news bluntly—can cause pain and hard feelings.
Fill in the blank with the most appropriate answer.
Your goal in using the indirect strategy is to be______________.
Printing and copying costs have skyrocketed at your company, and the company will begin charging employees for all hard copies of documents related to internal use. The message informing employees of this change uses an indirect approach and focuses on the environmental benefits of going paperless.
Is the sender using an indirect approach in an ethical or unethical manner?
a. Ethical
b. Unethical
At some point, everyone will have to deliver bad news. The bad feelings associated with this type of message can be alleviated if the receiver knows the reason for the bad news, feels the news is revealed sensitively, thinks the matter is treated seriously, and believes that the decision is fair. When applying these strategies, make sure to follow the writing process and determine whether to use a direct or an indirect pattern in your message. Determine what strategy should be used in the following situation?
You are demoting an employee to avoid laying them off.
a. Indirect
b. Direct
Question attached
Answer and Explanation:
Ethical: it is ethical to reduce the emotional impact of a bad news by making use of an indirect approach which is less harsh and blunt unlike the direct approach. In situations such as communicating that a person has lost his job, it is important that the manager communicates using indirect approach
Direct: you are communicating facts to someone that has less time. Therefore the direct approach would be most appropriate as it goes straight to the point without delays
Intend to deceive:your boss is extremely busy therefore in this case it would be important to use the direct approach and move straight to the point from the beginning not hiding the bad news at the end of the mail
What kind of system is the United States economy based on?
Answer:
capitalism
Explanation:
usa mainly runs on capitalism
Heitger Company is a job-order costing firm that uses activity-based costing to apply overhead to jobs. Heitger identified three overhead activities and related drivers. Budgeted information for the year is as follows:
Activity Cost Driver Amount of Driver
Materials handling $60,500 Number of moves 2,500
Engineering 116,900 Number of change orders 7,000
Other overhead 266,800 Direct labor hours 46,000
Heitger worked on four jobs in July. Data are as follows:
Job 13-43 Job 13-44 Job 13-45 Job 13-46
Beginning balance $22,800 $20,000 $2,900 $0
Direct materials $5,300 $10,000 $11,700 $10,500
Direct labor cost $930 $960 $1,670 $140
Number of moves 40 53 30 4
Number of change orders 31 44 16 20
Direct labor hours 930 960 1,670 140
By July 31, Jobs 13-43 and 13-44 were completed and sold. Jobs 13-45 and 13-46 were still in process.
Required:
1. Calculate the activity rates for each of the three overhead activities.
2. Prepare job-order cost sheets for each job showing all costs through July 31.
3. Calculate the balance in Work in Process on July 31.
4. Calculate the cost of goods sold for July.
5. What if Job 13-46 required no engineering change orders? What is the new cost of Job 13-46? How would the cost of other jobs be affected?
Answer:
Heitger Company
1. Calculation of the activity rates for each of the three overhead activities:
Activity Cost Driver Amount Activity
of Driver Rate
Materials handling $60,500 Number of moves 2,500 $24.20
Engineering 116,900 Number of change orders 7,000 $16.70
Other overhead 266,800 Direct labor hours 46,000 $5.80
Activity rate = Activity Cost/Amount of Driver
2. Job-order cost sheets through July 31:
Job 13-43 Job 13-44 Job 13-45 Job 13-46
Beginning balance $22,800 $20,000 $2,900 $0
Direct materials $5,300 $10,000 $11,700 $10,500
Direct labor cost $930 $960 $1,670 $140
Manufacturing overhead $6,413.70 $7,585.40 $10,579.2 $1,242.8
Production costs $35,443.70 $38,545.40 $26,849.20 $11,882.80
3. Balance in Work in Process:
Job 13-45 Job 13-46
Beginning balance $2,900 $0
Direct materials $11,700 $10,500
Direct labor cost $1,670 $140
Manufacturing overhead $10,579.2 $1,242.8
Production costs $26,849.20 $11,882.80
Total balance in Work in Process = $38,732.00
4. Cost of Goods Sold for July:
Job 13-43 Job 13-44
Beginning balance $22,800 $20,000
Direct materials $5,300 $10,000
Direct labor cost $930 $960
Manufacturing overhead $6,413.70 $7,585.40
Production costs $35,443.70 $38,545.40
Total cost of goods sold = $73,989.10
5. Engineering overhead cost of $267.20 will be deducted from the total production cost to date of Job 13-46 ($11,882.80 - 267.20) to arrive a new production cost to date of $11,615.60.
There is no obvious effect on other jobs, until more information is provided as to the budgeted change orders and engineering cost for Job 13-46. That is when the activity rate may change.
Explanation:
a) Data and Calculations:
Job-order costing
Uses activity-based costing to apply overhead to jobs
Three overhead activities and related drivers.
Budgeted information for the year:
Activity Cost Driver Amount Activity
of Driver Rate
Materials handling $60,500 Number of moves 2,500 $24.20
Engineering 116,900 Number of change orders 7,000 $16.70
Other overhead 266,800 Direct labor hours 46,000 $5.80
Data for Jobs worked in July:
Job 13-43 Job 13-44 Job 13-45 Job 13-46
Beginning balance $22,800 $20,000 $2,900 $0
Direct materials $5,300 $10,000 $11,700 $10,500
Direct labor cost $930 $960 $1,670 $140
Manufacturing overhead $6,413.70 $7,585.40 $10,579.2 $1,242.8
Production costs $35,443.70 $38,545.40 $26,849.20 $11,882.80
Number of moves 40 53 30 4
Number of change orders 31 44 16 20
Direct labor hours 930 960 1,670 140
Allocation of overheads Job 13-43 Job 13-44 Job 13-45 Job 13-46
Number of moves $24.20 $968 $1,282.60 $726.00 $96.80
Number of change orders 16.70 517.70 734.80 267.20 334.00
Direct labor hours 5.80 5,394.00 5,568 9,686 812.00
Total overhead allocated $6,413.70 $7,585.40 $10,579.2 $1,242.8