All of the following statements are correct when referring to process costing except:Multiple ChoiceCosts are accumulated by department.A process costing system has the same basic purposes as a job-order costing system.Process costing would be appropriate for a jeweler who makes custom jewelry to order.Units produced are indistinguishable from each other.
Answer:
Process costing would be appropriate for a jeweler who makes custom jewelry to order.
Explanation:
Product costing is defined as the process by which the best costing method is chosen to suit a particular product.
There are three main types: process costing, specific order costing, and service costing.
Process costing is a method that determines the cost incurred at each stage of production. It is best used for processes that are repetitive such as manufacturing plants.
However a jeweler who makes custom jewelry to order will most appropriately be served by a specific order costing.
This involves costing according to distinct jobs or contracts.
There is no specific or repetitive process, rather the job is usually carried out according to specific needs of a customer.
If a government wants to efficiently reduce a widespread negative externality like air pollution, it must know the costs of pollution abatement of the individual polluters. However, this information is difficult to obtain directly. Tradeable emissions permits are one way to solve the asymmetric information problem affecting pollution abatement efforts.
a. Because the permits are tradeable, firms with ___ abatement costs will sell some of their permits to firms with ___ abatement costs.
b. Now consider that even after a firm has sold its permits, it must still reduce its pollution output.
Since those who sell their permits would have ___ abatement costs, the negative externality is reduced at ___ possible cost to society.
Answer:
a). lower, higher
b). lower, lower
Explanation:
The abatement costs may be defined as the cost that is borne by a firm or an organization when it is necessary to remove any undesirable nuisances or any negative byproducts of the process that is created during the production process. It is cost incurred in eliminating a negative externality such as environmental externality like pollution.
In the context, for solving the pollution abatement cost, the tradeable emissions permits as they are tradebale, an organization with a lower abatement cost sells the permits to the higher abatement cost firms.
Even after selling, the firm still have to reduce the pollution output, then the firm that sold the permit would have lower abatement cost and the negative externality is also reduced at the lower possible cost.
List the name of the inventory method that best fits the description. Assume that the cost of inventory is rising.
_________Maximizes reported income
_________ Used to account for automobiles, jewelry, and art objects
_________Results in a cost of ending inventory that is close to the current cost of replacing the inventory
_________Generally associated with saving income taxes
_________Enables a company to buy high-cost inventory at year-end and thereby decrease reported income and income tax
_________Results in an old measure of the cost of ending inventory
_________Provides a middle-ground measure of ending inventory and cost of goods sold
_________Enables a company to keep reported income from dropping lower by liquidating older layers of inventory
_________Writes inventory down when current replacement cost drops below historical cost
_________Matches the most current cost of goods sold against sales revenue
Answer:
Inventory is the complete list of the items or the list of stock such as goods, properties, etc.
Explanation:
Inventory are defined as the stock of the goods and the materials that the business holds in order to ultimate goal of a resale. Inventory management is the discipline that is primarily about specifying shape and the placement of the stocked goods. There are various inventory methods. FIFO as well as LIFO are the important inventory methods.
The full form of FIFO is first in first out while the full form of LIFO is last in first out.
LIFO -- it maximizes the reported income.
Specific unit cost -- they are used for account of the automobiles, art objects and jewelries.
FIFO -- it results in the cost of the ending inventory which is close to current cost of the replacing inventory.
LIFO -- it generally associated with the savings income taxes.
LIFO -- it enables the company to buy a high cost inventory method at the year end.
LIFO -- it results old measure of a cost ending inventory.
Average cost -- it provides the middle ground measure of the ending inventory and also the cost of the goods sold.
FIFO -- it enables the company in order to keep the reported income from the dropping lower by the liquidating of the older layers of the inventory.
applies to all the four methods -- writes the inventory down when the current replacement cost drops to the below historical costs.
LIFO -- it matches the current cost of the goods that are sold against the sales revenue.
Imagine that your country takes in $100 million each year in tax money but chooses to spend $500 million on various services it provides. What type of stance does your country take on fiscal policy?
A.
expansionary stance
B.
contractionary stance
C.
economic stance
D.
neutral stance
For plato, Expansionary stance.
Expansionary stance is the type of stance does your country take on fiscal policy. Hence, option A is correct.
What is Expansionary stance?When government expenditure surpasses tax receipts, the fiscal attitude is said to be "expansionary" because this tends to increase aggregate demand. For instance, household spending will increase if income taxes are reduced by the government.
Governments engage in contractionary fiscal policy when they either cut spending or raise taxes. Its name alludes to the method by which the economy contracts. It limits the amount of money that both businesses and people can spend.
Contractionary policy is used to control inflation. Governments are said to be implementing an expansionary fiscal strategy when they lower tax rates while raising spending to promote economic growth. As a result of an increase in purchasing power, consumption increases.
Thus, option A is correct.
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Riley Incorporated reports the following amounts at the end of the year (all amounts in $000):
Cash $16,140
Product Revenues $112,500
Depreciation Expense 3,210
Mortgage Payable 38,000
Taxes Payable 1,020
Treasury Stock 650
Buildings 79,000
Salaries 62,800
Land 40,000
Accumulated Depreciation 21,730
Current Portion - Notes and Mortgage Payable 2,200
Accounts Payable 18,500
Equipment 42,000
Net Accounts Receivable 23,500
Income Tax Expense 3,650
Discounts on Notes Payable 7,950
Interest Expense 4,000
Inventory 6,400
Notes Payable 25,650
Costs of Goods Sold 17,400
Utilities 350
License Revenues 250
Advertising Expense 11,300
Short Term Investments (Securities) 2,500
Prepaid Expense 900
Wages Payable 3,200
In addition, the company had common stock of $75,000 at the beginning of the year and issued an additional $5,000 during the year. The company also had retained earnings of $20,700 at the beginning of the year and declared/paid dividends of $2,000 during the year. Prepare the income statement, statement of stockholders’ equity, and balance sheet.
Answer and Explanation:
The presentation of the financial statement is as follows:
Income Statement
Revenues
Product revenues $112,500
License Revenues $250
Total Revenues (A) $112,750
Expenses
Salaries $62,800
Discount on Notes Payable $7,950
Interest expense $4,000
Depreciation expenses $3,210
Income Tax Expenses $3,650
Cost of Goods Sold $17,400
Utilities $350
Advertising Expenses $11,300
Total Expenses (B) $110,660
Net Income (A-B) $2,090
Stockholders’ Equity
Statement of Stockholder's Equity
Particulars Common Stock Retained Earning
Opening Balance $75,000 $20,700
Add: Issue $5,000
Add: Net Income $2,090
Less: Dividend ($2000)
Closing Balance $80,000 $20,790
Balance Sheet
A. Stockholder's Equity
Common Stock $80,000
Retained Earning $20,790
Treasury Stock (650)
Total $100,140
B. Liabilities
Mortgage Payable $38,000
Taxes Payable $1,020
Notes & Mortgage payable $2,200
Accounts payable $18,500
Notes Payable $25,650
Wages Payable $3,200
Total liabilities $88,570
Total Stockholders' Equity and Liabilities $188,710
C. Assets
Equipment $42,000
Building $79,000
Land $40,000
Accumulated Depreciation (21730)
Net Accounts Receivables $23,500
Cash $16,140
Inventory $6,400
Short Term Investments $2,500
Prepaid Expense $900
Total Assets $188,710
example of paraphrase about business?
Answer:
Sometimes you only need to paraphrase the information from one sentence. Here are some examples of paraphrasing individual sentences: Original: Her life spanned years of incredible change for women as they gained more rights than ever before. Paraphrase: She lived through the exciting era of women's liberation.
Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,348,800.
a. Determine the total factory overhead amount applied.
b. Calculate the over or underapplied amount for the year.
Solution :
a).
Estimated overhead 1,250,000
Divide by the estimated machine hours 50,000
Predetermined overhead rate 25
Actual machine hours 54,300
Multiply by predetermined overhead rate 25
The factory overhead amount applied $ 1,357,500
b).
Actual factory overhead 1,348,800
Less : factory overhead amount applied 1,357,500
The underapplied amount is $ 8700
As part of its commitment to quality, the J. J. Borden manufacturing company is proposing to introduce just-in-time (JIT) production methods. Managers of the company have an intuitive feel regarding the financial benefits associated with a change to JIT, but they would like to have some data to inform their decision making in this regard. You are provided with the following data:
Item ExistingSituation AfterAdopting JIT
Manufacturing costs as percentage of sales:
Product-level support 15 % 4 %
Variable manufacturing overhead 28 10
Direct materials 30 20
Direct manufacturing labor 20 13
Other financial data:
Sales revenue $ 1,430,000 $ 1,810,000
Inventory of WIP 260,000 46,000
Other data:
Manufacturing cycle time 60 days 30 days
Inventory financing costs (per annum) 10 % 10 %
Required:
As the management accountant for the company, prepare an estimate the financial benefits associated with the adoption of JIT. Specifically, what is the estimated change in annual operating income attributable to the JIT implementation?
Answer:
A. $74,100 $954,700
B. $880,600
Explanation:
A. Preparation to estimate the financial benefits associated with the adoption of JIT
Current situation After JIT
Sales 1,430,000 1,810,000
Less costs
Production level support 214,500 72,400
(15%*1,430,000=214,500)
(4%*1,810,000=72,400)
Variable manufacturing overhead 400,400 181,000
(28%*1,430,000=400,400)
(10%*1,810,000=181,000)
Direct material 429,000 362,000
(30%*1,430,000=429,000)
(20%*1,810,000=362,000)
Direct manufacturing labor 286,000 235,300
(20%*1,430,000=286,000)
(13%*1,810,000=235,300)
Inventory financing costs 26,000 4,600
(10%*260,000=26,000)
(10%*46,000=4,600)
Total costs 1,355,900 855,300
Operating profits $74,100 $954,700
(1,430,000-1,355,900)
(1,810,000-855,300)
Therefore the the financial benefits associated with the adoption of JIT will be $74,100 $954,700
B. Preparation for the estimated change in annual operating income attributable to the JIT implementation
Current situation After JIT Change
Sales 1,430,000-1,810,000=-380,000
Less costs
Production level support 214,500-72,400 =142,100
Variable manufacturing overhead 400,400 -181,000=219,400
Direct material 429,000-362,000=67,000
Direct manufacturing labor 286,000- 235,300= 50,700
Inventory financing costs 26,000-4,600 =21,400
Total costs 1,355,900-855,300=500,600
Operating profits 74,100-954,700=880,600
Therefore the estimated change in annual operating income attributable to the JIT implementation will be 880,600
How Much Capital Do You Need to Start Investing?
The motivation for making investments is largely driven by the goals you have. These goals could be short-term such as buying a new car, saving for a down payment or save enough to take a year off and travel. In any situation, the first step is to identifying the amount of capital you need and how much risk are you willing to take for the return you expect.
Jake is a 25-year-old financial consultant whose primary long-term financial goal is to save enough money to comfortably retire. Therefore, he wants to begin an investment plan that will make this a reality within 40 years. He currently has $10,000 saved for this purpose, and he wants to determine the appropriate monthly savings amount that will allow him to reach his goal. He estimates that he can earn an average annual return of 10%, and he would like to save a total of $500,000.
Table of Future Value Factors Table of Future Value Annuity Factors
Year 2% 5% 8% 10% Year 2% 5% 8% 10%
1 1.020 1.050 1.080 1.100 1 1.000 1.000 1.000 1.000
5 1.104 1.276 1.469 1.611 5 5.204 5.526 5.867 6.105
10 1.219 1.629 2.159 2.594 10 10.950 12.578 14.487 15.937
40 2.208 7.040 21.724 45.258 40 60.401 120.797 259.052 442.580
If he invests the $10,000 today, the terminal value of this initial investment in 40 years (earning an average 10% return) will be. This means that he must accumulate the remainingthrough his annual savings plan to obtain the full $500,000. Still assuming an average return on investment of 10%, the additional yearly investment required to reach Shen’s targeted financial goal within 40 years is .
Suppose instead that Jake had no capital saved and thus needed to accumulate the entire $500,000 in the next 40 years. In this case, his annual contribution would have to be___.
When Jake starts with an initial investment of $10,000, the total amount that he ends up contributing to accumulate $500,000 is equal to the initial investment plus the additional yearly payments, for a total of____.
When he starts with no initial capital contribution, the amount he ends up contributing is equal to the sum of all annual contributions you calculated in the no-initial-capital scenario, for a total of___
Once Jake has determined the annual amount he needs to save, the next step toward achieving his goal is coming up with an investment plan.
The appropriate investment plan depends on the investment objective.
A. True
B. False
Answer:
How Much Capital Do You Need to Start Investing?
Jake
If he invests the $10,000 today, the terminal value of this initial investment in 40 years (earning an average 10% return) will be $452,580. This means that he must accumulate the remaining through his annual savings plan to obtain the full $500,000. Still assuming an average return on investment of 10%, the additional yearly investment required to reach Shen’s targeted financial goal within 40 years is $107.11.
Suppose instead that Jake had no capital saved and thus needed to accumulate the entire $500,000 in the next 40 years. In this case, his annual contribution would have to be_$1,129.71__.
When Jake starts with an initial investment of $10,000, the total amount that he ends up contributing to accumulate $500,000 is equal to the initial investment plus the additional yearly payments, for a total of_$14,285___.
When he starts with no initial capital contribution, the amount he ends up contributing is equal to the sum of all annual contributions you calculated in the no-initial-capital scenario, for a total of_$45,188__
Once Jake has determined the annual amount he needs to save, the next step toward achieving his goal is coming up with an investment plan.
The appropriate investment plan depends on the investment objective.
A. True
Explanation:
a) Data and Calculations:
Age of Jake now = 25
Age of Jake at retirement = 65 (25 + 40)
Retirement savings = $10,000
Expected total savings = $500,000
Period of savings = 40 years
Relevant Future Value Factor = 45.258 (40 years at 10% compounded annually)
With the initial retirement savings of $10,000
Jake must Save Every Year Until 65
Amount to Save Every Year: $107.11
Total Principal: $14,285
Total Interest: $485,715
Without the initial retirement savings of $10,000
Jake must Save Every Year Until 65
Amount to Save Every Year: $1,129.71
Total Principal: $45,188
Total Interest: $454,812
The terminal value of $10,000 in 40 years at 10% interest is:
= $10,000 * 45.258 = $452,580
Balance to save = $500,000 = $452,580 = $47,420
Taggart Technologies is considering issuing new common stock and using the proceeds to reduce its outstanding debt. The stock issue would have no effect on total assets, the interest rate Taggart pays, EBIT, or the tax rate. Which of the following is likely to occur if the company goes ahead with the stock issue?
A. The ROA will decline.
B. Taxable income will decline.
C. The tax bill will increase.
D. Net income will decrease.
E. The times-interest-earned ratio will decrease.
Answer:
C. The tax bill will increase.
Explanation:
Interest paid on debt finance is tax deductible , unlike the dividends paid on common stock which are not deductible for tax purposes,hence, by reducing debt capital so also the interest expense which has the potential to reduce taxable income would also reduce.
Hence, there would higher taxable profit and eventually, there would higher tax, in essence, the correct option is the option C
What are The two segments of the organization's environment
Shear, Inc., began operations in Year 1. Included in Shear’s Year 1 financial statements were credit loss expenses on accounts receivable of $1,400 and profit from an installment sale of $2,600. For tax purposes, the credit losses will be deducted and the profit from the installment sale will be recognized in Year 2. The applicable tax rate is 25%. In its Year 1 income statement, what amount should Shear report as deferred income tax expense?
Answer:
$300
Explanation:
Calculation for what amount should Shear report as deferred income tax expense
Using this formula
Deferred income tax expense=(installment sale Profit-Loss expenses on accounts receivable)*Tax rate
Let plug in the formula
Deferred income tax expense=(2,600-1,400)*25%
Deferred income tax expense=1,200*25%
Deferred income tax expense=$300
Therefore the amount that Shear should report as deferred income tax expense will be $300
Testbank Multiple Choice Question 145 Sheffield Corp. had 330 units of product A on hand at January 1, 2020, costing $22 each. Purchases of product A during January were as follows: Date Units Unit Cost Jan. 10 410 $23 18 450 24 28 180 25 A physical count on January 31, 2020 shows 440 units of product A on hand. The cost of the inventory at January 31, 2020 under the LIFO method is $10740. $9790. $9490. $10190.
Answer:
$9790
Explanation:
LIFO means last in first out. It means it is the last purchased inventory that is the first to be sold.
If LIFO method is used, the reaming inventory would consist of the earliest purchased inventories.
If 440 units remain, they wold consist of beginning inventory and inventory purchased on 10th of January
(330 x $22) + [(440 - 330) x $23) = $9790
You are the executive director of a nonprofit that runs an animal shelter and animal services, such as low-cost spay/neuter programs. Your biggest donor, a local foundation, has just withdrawn funding, saying that it has refocused its mission on supporting arts programs and your activities do not align with that. Unless other funding can be found, and soon, the shelter building will need to be closed, paid staff laid off, and most animals turned over to other, already crowded shelters. Your employees and volunteers are very worried and are looking to you for leadership.
Which of the following do you do? Check all that apply.
a. Withhold information about the organizationâs financial picture so that employees continue to be loyal rather than looking for other jobs.
b. Hold meetings with employees, volunteers, and representatives of other local shelters and listen carefully as they brainstorm ideas.
c. Honestly acknowledge the challenges the organization faces while also communicating optimism about finding the resources to fulfill your mission.
d. Stay in your office as much as possible so people know youâre hard at work, and when you do walk around, keep a "poker face" on so no one gets the idea that things are worse or better than they are.
Answer:
Providing leadership in critical times:
b. Hold meetings with employees, volunteers, and representatives of other local shelters and listen carefully as they brainstorm ideas.
c. Honestly acknowledge the challenges the organization faces while also communicating optimism about finding the resources to fulfill your mission.
Explanation:
A leader assumes responsibility for clear communication with all stakeholders and must be forthcoming with necessary information. She must also be transparent and innovative. A leader collaborates with her team to find better solutions to challenges facing the organization. A good leader is a good negotiator and must remain optimistic amid the challenges of life.
Bakerston Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year:
Beginning Balance Ending Balance
Raw materials $ 11,700 $ 15,800
Work in process $ 32,700 $ 14,600
Finished goods $ 102,000 $ 121,000
The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 17,500 machine-hours and incur $262,500 in manufacturing overhead cost. The following transactions were recorded for the year:
• Raw materials were purchased, $415,000.
• Raw materials were requisitioned for use in production, $410,900 ($382,000 direct and $28,900 indirect).
• The following employee costs were incurred: direct labor, $332,000; indirect labor, $71,000; and administrative salaries, $154,000.
• Selling costs, $115,000.
• Factory utility costs, $27,000.
• Depreciation for the year was $124,000 of which $110,000 is related to factory operations and $14,000 is related to selling, general, and administrative activities.
• Manufacturing overhead was applied to jobs. The actual level of activity for the year was 14,200 machine-hours.
• Sales for the year totaled $1,283,000.
Required:
a. Prepare a schedule of cost of goods manufactured in good form. (Do not round predetermined overhead rate. Input all amounts as positive values.)
b. Was the overhead underapplied or overapplied? By how much? (Do not round predetermined overhead rate. Input the amount as a positive value.)
c. Prepare an income statement for the year. The company closes any underapplied or overapplied overhead to Cost of Goods Sold. (Input all amounts as positive values.)
Answer:
Part a
Cost of goods manufactured
Beginning Work In Process Inventory $32,700
Add Manufacturing Costs :
Raw Materials Cost $410,900
Direct Labor $332,000
Applied Overheads $213,000 $955,900
Less Ending Work In Process Inventory ($14,600)
Cost of Goods Manufactured $974,000
Part b
Under-applied overheads = $23,900
Part c
income statement for the year
Sales $1,283,000
Less Costs of Sales
Beginning Finished Goods Inventory $102,000
Add Cost of Goods Manufactured $974,000
Less Ending Finished Goods Inventory ($121,000)
$1,197,000
Add Under - Applied Overheads $23,900 ($1,220,900)
Gross Profit $62,100
Explanation:
Applied Overheads = $262,500 / 17,500 x 14,200 = $213,000
Raw Materials Cost = $11,700 + $415,000 - $15,800 = $410,900
Actual Overheads = $28,900 + $71,000 + $27,000 + $110,000 = $236,900
Under-applied overheads = $236,900 - $213,000 = $23,900
The next dividend payment by Zone, Inc., will be $2.08 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. If the stock currently sells for $42 per share, what is the required return
Answer:
10.95%
Explanation:
According to the gordon growth model,
the value of stock (price) = dividend / required return - growth rate
42 = 2.08/ r - 0.06
42(r-0.06) = 2.08
2.08/42 = r - 0.06
r = 10.95%
Answer each of the following independent questions. Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1) $64,000 cash immediately, (2) $20,000 cash immediately and a six-period annuity of $8,000 beginning one year from today, or (3) a six-period annuity of $13,000 beginning one year from today. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. Assuming an interest rate of 6%, determine the present value for the above options. Which option should Alex choose? 2. The Weimer Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2030. Weimer will make annual deposits of $100,000 into a special bank account at the end of each of 10 years beginning December 31, 2021. Assuming that the bank account pays 7% interest compounded annually, what will be the fund balance after the last payment is made on December 31, 2030?
Answer:
Option 1$1,381,645Explanation:
1. Alex needs to pick the option that offers the highest present value.
Option 1 present value = $64,000
Option 2:
Mix of lump-sum and annuity:
Present value of annuity = Annity * Present value interest factor of annuity, 6%, 6 periods
= 8,000 * 4.9173
= $39,338.40
Present value of option B = 20,000 + 39,338.40
= $59,338.40
Option 3:
Present value of annuity = Annity * Present value interest factor of annuity, 6%, 6 periods
= 13,000 * 4.9173
= $63,924.90
Alex should choose option 1 as it has the largest present value.
2.As this concerns a future amount, the future value of an annuity is used.
Future value of Annuity = Annuity * (( 1 + rate)^n - 1 )/ r
= 100,000 * ((1 + 7%)¹⁰ - 1) / 7%
= 100,000 * 13.8164479612795
= $1,381,644.79
= $1,381,645
t the end of the current year, the following information is available for both Pulaski Company and Scott Company. Pulaski Company Scott Company Total assets $ 2,276,500 $ 1,145,500 Total liabilities 882,500 576,500 Total equity 1,394,000 569,000 Required: 1. Compute the debt-to-equity ratios for both companies. 2. Which company has the riskier financing structure?
Answer:
0.63
1.01
Scott company
Explanation:
Debt to equity ratio is an example of solvency ratio.
Solvency ratios measure a firms ability to honour its long term financial obligation
The higher the debt to equity ratio, the higher the financial risk and the weaker solvency is
Debt to equity ratio = total liabilities to equity ratio
Pulaski Company : 882,500 / 1,394,000 = 0.63
Scott company : 576,500 / 569,000 = 1.01
п
Shaila wants to add new tabs to her PowerPoint. She selects New Tab and renames it. She then starts adding the
terms Bring Forward and Bring to Front into her group. Shaila most likely chose her commands from
O commands not found in the Ribbon.
popular commands.
O custom tabs and groups.
O main tabs.
Answer:
Popular Commands.
Explanation:
To creat a new tab on Microsoft Powerpoint, , Popular command is the set of command that will be make available for the user, this popular command are composed of those action needed when making a presentation such as bring forward,Animation Commands,. Bring to Front and others.
Milea Inc. experienced the following events in Year 1, its first year of operations:
1. Received $13,500 cash from the issue of common stock
2. Performed services on account for $45,000
3. Pald the utility expense of $1,150.
4. Collected $36,540 of the accounts receivable.
5. Recorded $8,100 of accrued salaries at the end of the year
6. Paid a $1,050 cash dividend to the stockholders.
Required
1. Prepare the income statement
2. Prepare the statement of changes in stockholders' equity
3. Prepare the balance sheet as of December 31.
4. Prepare the statement of cash flows for the Year 1 accounting period.
Answer:
1. Net income = $35,750
2. Stockholders' equity = $48,200
3. Total assets = Total Equity and Liabilities = $56,300
4. Net cash generated = $47,840
Explanation:
1. Prepare the income statement
Milea Inc.
Income Statement
For the Year ended 31 December Year 1
Details Amount ($)
Revenue:
Service income 45,000
Expenses:
Utility expense (1,150)
Accrued salaries (8,100)
Net income 35,750
Dividend paid (1,050)
Retained earnings 34,700
2. Prepare the statement of changes in stockholders' equity
Milea Inc.
Statement of changes in stockholders' equity
For the Year ended 31 December Year 1
Details Amount ($)
Common stock 13,500
Retained earnings 34,700
Stockholders' equity 48,200
3. Prepare the balance sheet as of December 31.
Milea Inc.
Balance Sheet
As of 31 December Year 1
Details $
Assets
Current Assets
Ending cash balance 47,840
Accounts receivable ($45,000 - $36,540) 8,460
Total assets 56,300
Equity and Liabilities
Stockholders' equity 48,200
Liabilities
Current liabilities
Accrued salaries 8,100
Total Equity and Liabilities 56,300
4. Prepare the statement of cash flows for the Year 1 accounting period.
Milea Inc.
Statement of Cash Flows
For the Year ended 31 December Year 1
Details $ $
Net income 35,750
Adjustment to reconcile net income:
(Increase) decrease in current assets:
Accounts receivable ($45,000 - $36,540) (8,460)
Increase (decrease) in current liabilities:
Accrued salaries 8,100
Net cash from operating activities 35,390
Cash flow from financing activities:
Common stock 13,500
Dividend paid (1,050)
Net cash from financing activities 12,450
Net cash generated 47,840
Beginning cash balance 0
Ending cash balance 47,840
A student has received a $30,000 loan from a wealthy aunt in order to finance his four-year college program. The terms are that the student repay his aunt in full at the end of eight years with simple interest computed at the rate of 4 percent per year. Determine the interest that must be paid on the eight-year loan. Don't forget to include units
Answer:
$9,600
Explanation:
Loan received (Principal) = $30,000
SI Rate = 4%
Time Period = 8 years
Simple Interest = ?
SI = PRT / 100
SI = $30,000 * 4/100 * 8
SI = $9,600
So, the student must pay $9,600 as interest on the eight-year loan
The interest that must be paid on the eight-year loan is $9,600
Given the information below:
Loan received (Principal) = $30,000
SI Rate = 4%
Time Period = 8 years
Simple Interest = ?
We know that simple interest(SI) is computed as :
SI = Principal * Rate * Time / 100
SI = PRT / 100
SI = $30,000 * 4 / 100 * 8
SI = $9,600
Hence, the student must pay $9,600 as interest on the eight-year loan.
Learn more about simple interest here https://brainly.com/question/20690803
Diaz Company owns a milling machine that cost $126,500 and has accumulated depreciation of $92,700. Prepare the entry to record the disposal of the milling machine on January 3 under each of the following independent situations. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return. Diaz sold the machine for $15,900 cash. Diaz sold the machine for $33,800 cash. Diaz sold the machine for $41,200 cash.
Answer:
A. Jan 03
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on disposal of milling machine $33,800
Cr Milling machine $126,500
B .Jan 03
Dr Cash $15,900
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on sale of milling machine $17,900
Cr Milling machine $126,500
C. Jan 03
Dr Cash $33,800
Dr Accumulated depreciation—Milling machine $92,700
Cr Milling machine $126,500
Explanation:
Preparation of journal entries
A. Jan 03
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on disposal of milling machine $33,800
($126,500-$92,700)
Cr Milling machine $126,500
B .Jan 03
Dr Cash $15,900
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on sale of milling machine $17,900
[126,500-($15,900+$92,700)
Cr Milling machine $126,500
C. Jan 03
Dr Cash $33,800
Dr Accumulated depreciation—Milling machine $92,700
Cr Milling machine $126,500
Manufacturing overhead for the month was underapplied by $6,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for January would include the following:
Work In Process Finished Goods Cost of Goods Sold Total
Direct materials $10,670 $12,000 $81,120 $103,790
Direct labor 11,630 15,000 101,400 128,030
Manufacturing
overhead applied 9,680 9,680 68,640 88,000
Total $31,980 $36,680 $251,160 $319,820
Manufacturing overhead for the month was underapplied by $6,000.
The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for May would include the following:
a. credit to Work in Process of $31,980.
b. debit to Work in Process of $660.
c. credit to Work in Process of $660.
d. debit to Work in Process of $31,980.
Answer:
b. debit to Work in Process of $660.
Explanation:
Particulars Work in Finished Cost of Goods Sold Total
Process Goods
Manufacturing
overhead
applied during
the month 9680 9680 68640 88000
Percentage of total 11.0% 11.0% 78.0% 100.0%
Allocation of under-applied
manufacturing overhead 660 660 4680 6000
Consider an economy in which every inhabitant described is unique; no one fits into more than one category. All inhabitants are working-age adults. 3150 people work full-time 2400 people work part-time 400 people aren't working, but are actively looking for jobs on a weekly basis 220 people aren't working, nor are they looking (140 of these used to look, but gave up over a year ago) Calculate the labor force for this economy. Be sure to follow all formatting instructions from the assignment directions.
Answer: 5,950 people
Explanation:
The labor force in a country refers to the number of both employed and unemployed in an economy. Unemployed people by definition are those actively seeking employment which means that discouraged workers and those who are not seeking employment are not included.
Labor force = Working full time + Part time workers + Unemployed
= 3,150 + 2,400 + 400
= 5,950 people
A manager hires labor and rents capital equipment in a very competitive market. Currently the wage rate is $12 per hour and capital is rented at $8 per hour. Currently, the marginal product of labor is 60 units of output per hour and the marginal product of capital is 45 units of output per hour is the firm using the cost minimizing combination of labor and capital? If not, should the firm increase or decrease the amount of capital used in its production process?
Answer:
Explanation:
According to the rule of cost minimization, a firm should should employ that quantity f labor and capital for which the marginal rate of technical substitution between capital and labor (MRTSkl) equals the wage rental ratio (w/r). Hence, the cost minimization rules becomes:
(MRTSkl) = w/r
MPl / MPk = w / r
MPl / w = MPk / r
In the case given, substitute the values of the variables and find that
MPl / w = MPk / r
60 / 12 < 45 / 8
5 < 5.625
Since the ratio is not equal, the firm is not using the optimum mix of inputs. On last dollar spent basis, capital is a better deal than labor, and the firm should use less labor and increase the amount of capital in order to minimize costs.
Activity-Based Costing for a Service Business Sterling Hotel uses activity-based costing to determine the cost of servicing customers. There are three activity pools: guest check-in, room cleaning, and meal service. The activity rates associated with each activity pool are $8 per guest check-in, $25 per room cleaning, and $4 per served meal (not including food). Ginny Campbell visited the hotel for a three-night stay. Campbell had three meals in the hotel during her visit. Determine the total activity-based cost for Campbell's visit. $
Answer:
Total allocated costs= $95
Explanation:
To allocate costs to the Campbell visit, we need to use the following formula:
Allocated costs= Estimated activity rate * Actual amount of allocation base
guest check-in= 8
room cleaning= 25*3= 75
served meal= 4*3= 12
Total allocated costs= $95
During fiscal 2016, Caleres Inc. (formerly Brown Shoe Company), reported cost of goods sold of $1,517.4 million. Inventory at the start of the year was $546.7 million and at the end of the year was $585.8 million. Which of the following describes the closing entry that the company will make for these accounts?
A. Debit Inventory $39.1 million.
B. Credit Inventory $585.8 million.
C. Credit Cost of goods sold $1,517.4 million.
D. Both A and C.
E. None of the above.
Answer:
Credit Cost of goods sold $1,517.4 million
Explanation:
given data
cost of goods sold = $1,517.4 million
Inventory at the start of the year = $546.7 million
Inventory at the end of the year = $585.8 million
solution
Journal Entry will as
Income Summary DR $1,517.4 million
Cost of goods sold CR $1,517.4 million
so correct option is C. Credit Cost of goods sold $1,517.4 million.
In its first year of operations, Pharoah company recognized $31,800 in service revenue, $6400 of which was on account and still outstanding at year end. The remaining $25400 was received in cash from customers.
The company incurred operating expenses of $16600. Of these expenses, $12730 were paid in cash; $3870 was still owed on account at year end. In addition, Pharoah prepaid $2390 for insurance coverage that would not be sued until the second year of operations.
Calculate the first year's net earnings under the cash basis of accounting and the first year's net earnings under the accrual basis of accounting.
What basis of accounting (cash or accrual) provides more useful information for decision makers?
Answer:
Net income under cash basis:
= Revenues - Expenses
= ($31,800-$6,400) - ($12,730+$2390)
= $25,400 - $15,120
= $10,280
Net income under accrual basis:
= $31,800 - $16,600
= $15,200
The basis of accounting which provides more useful information for decision makers is the accrual basis because it entails the revenues and expenses for a specific period of time which make it easy for decision making.
To complete your degree and then go through graduate school, you will need $95,000 at end of each of the next 8 years. Your Aunt offered to put you through school, and she will deposit in a bank paying 4.00% interest a sum of money that is sufficient to provide you with the needed 8 withdrawals of $95,000 each.
Required:
a. How large of a deposit must she make today?
b. How much will be in the account immediately after you make the 3rd $95,000 withdrawal?
c. How much will be in the account immediately after you make all the withdrawals including the last one in 8 years?
d. Now, if you decide to drop out of school today and not make any of the withdrawal, but instead keep your auntâs money, that she deposited today, in the account that is earning 4.00%, how much would you have at the end of 8 years?
Answer:
PMT = $95,000
Rate = 4%
Life = 8 years
a. Amount to be deposited today
= PV(Rate, N, -PMT)
= PV(4%, 8, -95,000)
= $639,610.76
b. Amount in account after 3rd withdrawal
= PV(Rate, N, -PMT)
= PV(4%, 5, -95,000)
= $422,913.12
c. Balance in account after 8th withdrawal
= = PV(Rate, N, -PMT)
= PV(4%, 0, -95,000)
= $0
d. How much would you have at the end of 8 years?
= FV(4%, 8, -639610.76)
= $875,351.49
Which of the following markets is an example of monopolistic competition?
Answer: The restaurant industry
Explanation:
Answer:A new pizza shop promotes a unique new flavor of ice cream