you are planning t save for retirement over the next 30 years. To do this, you will invest $850 per month in a stock account and $350 per month in a bond account. The return of the stock account is expected to be 10 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account assuming a 25 year withdrawal period? stock account value retirement
Answers
Answer:
$13,287.70
Explanation:
The computation of the amount at withdrawal is to be determined by using the excel spreadsheet in which we applied the formulas like future value, PMT
Given that
Time period = 30 years
Withdrawal period = 25 years
Invested amount in stock account = $850
Invested amount in bond account = $350
Return on stock = 10%
Return on bond = 6%
Based on the above information
The withdrawal amount os $13,287.70
Related Questions
Compute the payback period for each of these two separate investments: A new operating system for an existing machine is expected to cost $240,000 and have a useful life of five years. The system yields an incremental after-tax income of $69,230 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $9,000. A machine costs $170,000, has a $13,000 salvage value, is expected to last nine years, and will generate an after-tax income of $38,000 per year after straight-line depreciation.
Answers
Answer:
Investment Payback period(in years)
A 2.08
B 3.066
Explanation:
The payback period is the length of time in years it will take the net cash inflow of a project to recoup its initial cost
Payback period = Initial cost of investment /Annual net cash inflow
Investment A
Annual depreciation = (Cost - Salvage value)/Number of years
= (240,000 - 9,000)/5 =
Annul cash inflow = 69,230 + 46200 = 115,430
Payback period = Initial cost of investment /Annual net cash inflow
= 240,000/ 115,430 = 2.079
Investment B
Annual depreciation = (Cost - Salvage value)/Number of years
= (170,000 - 13,000)/9 = 17,444.444
Annul cash inflow= 38,000 + 17,444.44= 55,444.44
Payback period = 170,000 /55,444.44 =3.067
Investment Payback period(in years)
A 2.08
B 3.066
Explain how self and social awareness can help you know your personal strengths and limitations and help you be more successful at work
Answers
A small Canadian firm that has developed some valuable new medical products using its unique biotechnology know-how is trying to decide how best to serve the European Union. Its choices are given below. The cost of investment in manufacturing facilities will be a major one for the Canadian firm, but it is not outside its reach. If these are the firm's only options, which one would you advise it to choose? Why?
a. Manufacture the product at home and let foreign sales agents handle marketing.
b. Manufacture the product at home and set up a wholly owned subsidiary in Europe to handle marketing.
Answers
Answer:
Correct Answer:
a. Manufacture the product at home and let foreign sales agents handle marketing.
Explanation:
For the small Canadian company, manufacturing the product at home (Canada) would afford them the opportunity to protect their new medical product from piracy. Also, they would be able to receive tax incentives from their government as well file for patent of their new innovation.
The foreign agent would strictly be focused on the marketing of the finished product without having access to the detailed information of the product.
Ben has $500 in his savings account and the bank pays an interest rate of 10 percent a year. The inflation rate is 6 percent a year. The government taxes the interest that Ben earns on his deposit at 20 percent. Calculate the nominal after-tax interest rate and the real after-tax interest rate that Ben earns.
Answers
Answer:
Nominal after-tax interest rate = 8%Real After-Tax Interest Rate = 2%Explanation:
The Nominal rate is 10%
Inflation rate is 6%
And Tax rate is 20%
Nominal after-tax interest rate
= Nominal rate (1 - tax rate)
= 10% ( 1 - 0.2)
= 8%
Real After-Tax Interest Rate
= Nominal after-tax interest rate - inflation rate
= 8% - 6%
= 2%
Consider the market for minivans (Some would describe a minivan as a family car). Looking at the two statements, which one is true and which one is false? Then again, are they both true or both false? Statement 1: People decide to have fewer children. The demand curve for minivans will shift to the right. Statement 2: The stock market crashes lowering people’s wealth (Hint: Minivan would be considered a normal good). The demand curve for minivans will shift to the right.
Answers
Answer:
both statements are false
Explanation:
if People decide to have fewer children, there would be less demand for minivans as a result the demand curve would shift to the left.
also, if The stock market crashes lowering people’s wealth and minivans are normal goods, the demand for minivans would fall and the demand curve would shift to the left.
A leftward shift signifies a fall in demand while a rightward shift signals a rise in demand
Normal goods are goods that are goods whose demand increases when income increases and falls when income falls
A machine costing $57,000 with a six-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.
Answers
Answer:
$9,000
Explanation:
The computation of the depreciation expense using the straight-line method is shown below;
= (Purchase value of machinery - residual value) ÷ (estimated useful life)
= $54,000 ÷ 6 years
= $9,000
The depreciation cost is the cost which is come after considering the salvage value and the same is to be considered
Hence, the depreciation expense is $9,000
Fit-for-Life Foods reports the following income statement accounts for the year ended December 31
Gain on sale of equipment $ 6,250 Depreciation expense—Office copier $ 500
Office supplies expense 700 Sales discounts 16,000
Insurance expense 1,300 Sales returns and allowances 4,000
Sales 220,000 TV advertising expense 2,000
Office salaries expense 32,500 Interest revenue 750
Rent expense—Selling space 10,000 Cost of goods sold 90,000
Sales staff wages 23,000 Sales commission expense 13,000
Prepare a multiple-step income statement.
Answers
Answer:
Fit-for-Life Foods
Multiple-step income statement, for the year ended December 31
Sales 220,000
Less Sales returns and allowances (4,000)
Net Revenue 216,000
Less Cost of goods sold (90,000)
Gross Profit 126,000
Less Operating Expenses :
General and Administrative Expenses
Gain on sale of equipment ( 6,250)
Office supplies expense 700
Depreciation expense—Office copier 500
Insurance expense 1,300
Office salaries expense 32,500 (28,750)
Selling and Distribution Expenses
TV advertising expense 2,000
Sales discounts 16,000
Sales commission expense 13,000
Sales staff wages 23,000
Rent expense—Selling space 10,000 (64,000)
Operating Income / (Loss) 33,250
Less Non - Operating Expenses
Interest revenue 750
Net Income / (Loss) 34,000
Explanation:
A multiple-step income statement shows separately profit generated from Primary Activities of the Company (Operating Profit) and profits that included Secondary Activities of the Company (Net Profit)
he inventory of Marigold Corp. was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first 2 months of the year are obtained: Sales Revenue $55,000, Sales Returns and Allowances $1,100, Purchases $33,500, Freight-In $1,500, and Purchase Returns and Allowances $1,600. Determine the merchandise lost by fire, assuming: A beginning inventory of $21,500 and a gross profit rate of 40% on net sales.
Answers
Answer:
$22,560
Explanation:
The computation of the inventory lost is shown below:
To beginning inventory $21,500 By net sales($55,000 - $1,100) $53.900
To net purchases
($33,500 - $1,600) $31,900 By merchandise lost(balance) $22,560
To freight $1,500
To gross profit
($53,900 × 40%) $21,560
Total $76,420 Total $76,420
Kipling Company has sales of $1,500,000 for the first quarter of 2016. In making the sales, the company incurred the following costs and expenses.
Variable Fixed
Product costs $500,000 $550,000
Selling expenses 100,000 75,000
Administrative expenses 80,000 67,000
Calculate net income under CVP for 2016.
Answers
Answer:
Kipling Company
Cost volume profit (CVP) Income Statement
Revenue $1,500,000
Variable costs ($680,000)
Contribution margin $820,000
Fixed costs ($692,000)
Net income $128,000
Explanation:
Variable Fixed
Product costs $500,000 $550,000
Selling expenses $100,000 $75,000
Administrative expenses $80,000 $67,000
In order to prepare a CVP income statement we must first determine the total variable and total fixed costs. It is very similar to a variable costing income statement.
Eppich Corporation has provided the following data for the most recent month: Raw materials, beginning balance $ 20,500 Work in process, beginning balance $ 32,800 Finished Goods, beginning balance $ 50,800 Transactions: (1) Raw materials purchases $ 79,100 (2) Raw materials used in production (all direct materials) $ 77,900 (3) Direct labor $ 52,800 (4) Manufacturing overhead costs incurred $ 92,500 (5) Manufacturing overhead applied $ 72,800 (6) Cost of units completed and transferred from Work in Process to Finished Goods $ 190,000 (7) Any overapplied or underapplied manufacturing overhead is closed to Cost of Goods Sold ? (8) Finished goods are sold $ 221,700 Required: Complete the following T-accounts by recording the beginning balances and each of the transactions listed above.
Answers
Answer:
Raw Materials T - Account
Debit :
Beginning Balance $ 20,500
Raw materials purchases $ 79,100
Total $99,600
Credit :
Raw materials used in production $ 77,900
Closing Balance $ 21,700
Total $99,600
Overheads T - Account
Debit :
Manufacturing overhead costs incurred $ 92,500
Totals $ 92,500
Credit :
Manufacturing overhead applied $ 72,800
Understatement of Overheads $ 19,700
Totals $ 92,500
Work In Process T - Account
Debit :
Beginning Work In Process $ 32,800
Raw materials $ 77,900
Direct Labor $ 52,800
Manufacturing overhead applied $ 72,800
Totals $236,300
Credit :
Transferred to Finished Goods $ 190,000
Ending Work In Process $46,300
Totals $236,300
Finished Goods T - Account
Debit :
Beginning Balance $ 50,800
Transferred from Work In Process $ 190,000
Totals $240,800
Credit :
Trading Account $ 221,700
Ending Balance $ 19,100
Totals $240,800
Cost of Goods Sold = $241,400
Explanation:
Cost of Goods Sold = $ 221,700 + $ 19,700 (under-applied overheads)
= $241,400
"According to Google's 2013 Study on the Incremental Clicks Impact of Mobile Search Advertising, the vertical with the highest CTR was"
Answers
The available options are:
a)Classified and Local
b) Education and Government
c)Media and Entertainment
d)Technology
Answer:
a)Classified and Local
Explanation:
Google's 2013 Study on the Incremental Clicks Impact of Mobile Search Advertising, was conducted from March 2012 to April 2013, on more than 300 U.S. AdWords accounts from 12 verticals.
The results, which shows the verticals range from 82 percent incremental clicks in the general service industry to 97 percent in the classified ad vertical.
This infographic provides details on the 12 different verticals which are:
1. Classified and Local - 97
2. Business and Industrial - 94%
3. Education and Government - 94%
4. Technology - 90%
5. Finance - 87%
6. Automative - 86%
7. Consumer Packaged Goods - 86%
8. Media and Entertainment - 86%
9. Retail - 86%
10. Travel - 85%
11. Healthcare - 83%
12. Service in all Veriticals - 82%
Hence, the right answer is CLASSIFIED AND LOCAL with 97%
Life Savers Gummies Fruit Splosions, liquid-filled gummies combined with a burst of real fruit juice, are a new product for The Wrigley Co. Before marketing the product nationwide, Wrigley gave out samples of the candy at several rock concerts and then recorded consumers' feelings about the candy, its taste, and its name. In which stage of the new-product development process would this have happened
Answers
Answer: D. Test marketing
Explanation:
Test Marketing is a stage in the New Product Development process where the product is tested in the real world or the Field Laboratory as it is otherwise known. Here the consumers are given a sample of the products and their responses are recorded without them knowing they are part of a test making their reactions as genuine as can be.
This stage helps the company more accurately ascertain how the new product will fare in the real world thereby giving them a chance to fix whatever needs fixing.
Considering the added value chain, backward integration refers to acquiring capabilities toward suppliers, while forward integration refers to acquiring capabilities toward distribution or even customers.
a) true
b) false
Answers
Answer:
a) true.
Explanation:
Backward integration can be defined as a process in which companies use a strategy of integrating with their suppliers in order to add value to their value chain. The advantages of this process are increased production efficiency, decreased costs, increased quality, increased profitability.
Forward integration refers to a company's control process in its supply chain. It is the process that a company acquires some resources to improve essential elements of the supply chain until the product or service reaches the final customer. The benefits are: increased market share, creation of competitive barriers, maintenance of process quality, etc.
The trial balance for Skysong, Inc. appears as follows: Skysong, Inc. Trial Balance December 31, 2022 Cash $280 Accounts Receivable 480 Prepaid Insurance 75 Supplies 166 Equipment 3680 Accumulated Depreciation, Equipment $550 Accounts Payable 353 Common Stock 1100 Retained Earnings 1290 Service Revenue 2768 Salaries and Wages Expense 920 Rent Expense 460 $6061 $6061 If, on December 31, 2022, the insurance still unexpired amounted to $18, the adjusting entry would contain a:
Answers
Answer:
Debit Insurance expenses for $57
Credit Prepaid insurance for $57
Explanation:
From the Trial Balance, Prepaid Insurance is $75. Since on December 31, 2022, the insurance still unexpired amounted to $18, the insurance expenses for the year can therefore be calculated as follows:
Insurance expenses = $75 - $18 = $57
The adjusting entries will therefore be as follows:
Particulars Dr ($) Cr ($)
Insurance expenses 57
Prepaid insurance 57
(To record insurance expenses for the year.)
Note that the amount of $18 unexpired insurance will now be the Prepaid insurance that will appear as an asset under the Current Asset in the balance sheet, while the $57 insurance expenses will be charged as an expense in the income statement.
Palin's Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level).
Annual demand 2,870 mufflers Ordering cost $65per order
Standard deviation of daily demand 6 mufflers per working day Service probability 76%
Item cost $31.00 per muffler Lead time 2 working days
Annual holding cost 22% of item value Working days 205 per year
Review period 16working days
a. What is the optimal target level (order-up-to level)? (Use Excel's NORMSINV) function to find the correct critical value for the given
α-level. Do not round intermediate calculations. Round ''z'' value to 2 decimal places and final answer to the nearest whole number.)
b. If the service probability requirement is 97 percent, the optimal target level will:
_____Increase
_____Decrease
_____Stay the same
Answers
Answer:
A.) 270 units (b.) Increase
Explanation:
Given the following :
Annual demand (A) = 2870
Working days = 205
Review period (P) = 16 working days
Lead time (L) = 2 working days
Standard deviation (σ) = 6 per working day
Service probability = 76%
Therefore, z = NORMSINV(0.76) = 0.71
Average demand (D) = 2870 / 205 = 14
Optimum target level, (S) is given by the relation:
D×(P+L) + z×σ×√(P+L)
14×(16+2) + 0.71×6×√(16+2)
(14×18) + 4.26 × √18
252 + 4.26*4.242
252 + 18.07
= 270.07 units = 270 units
B) If service probability increases to 97%, Z will automatically increase, hence a corresponding increase in the optimal target level.
Suppose Ningbo Steel had sales revenue of $11,000 sales revenue, cost of goods sold of $5,000, operating expenses of $3000, interest expense of $1,000, a tax rate of 20%, and 1,000 shares of common stock outstanding. Based on this information, net profit after tax was:_________.
A. $1,600
B. $500
C. $1,000
D. $0
Answers
Answer:
A. $1,600
Explanation:
Ningbo Steel
Income Statement
Sales Revenue $11,000
Less Cost of goods sold $5,000
Gross Profit $6,000
Less Operating Expense $3,000
Earning Before Interest and Taxes $3,000
Less Interest Expense $1,000
Earning before Tax $2,000
Less Tax Expenses (2,000 *20%) $400
Net Profit after tax $1,600
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 $8.00 per guest check-in, $20.00 per room cleaning, and $4.00 per served meal (not including food). Julie Washington visited the hotel for a 7-night stay. Julie had 6 meals in the hotel during the visit. Determine the total activity-based cost for Washington's visit during the month. Round your answer to the nearest cent.
Answers
Answer:
Total cost= $172
Explanation:
Giving the following information:
guest check-in= $8 per guest check-in
room cleaning= $20 per room
meal service= $4 per served meal
Julie Washington visited the hotel for a 7-night stay. Julie had 6 meals in the hotel during the visit.
To calculate the total cost, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
guest check-in= 8*1= 8
room cleaning= 20*7= 140
meal service= 4*6= 24
Total cost= $172
An account is today credited with its annual interest thereby bringing the accountbalance to $12,490. The interest rate is 5.70% compounded annually. You plan tomake annual withdrawals of $1,450 each. The first withdrawal is in exactly one yearand the last in exactly 9 years. Find the account balance immediately after the lastwithdrawal.
Answers
Answer:
Explanation:
Let the account balance be B .
Equating the present value of money at 5.7 % discount
12490 = 1450 ( PVIFA , 5.7 , 9 ) + B ( PVIF , 5.7 , 9 )
= 1450 x 6.8938 + .6072 x B
= 9996.01 + .6072B
.6072 B = 2494
B = 4107
Which of the following will cause an increase in the supply of a product?
A.)production increases
B.)establishment of new companies
C.)both a and b
D.)neither a or b
Answers
Answer:
C.)both a and b
Explanation:
when production increases more unit of goods will be produced. when more number of goods will be produced, more will be available for supply in market.Hence, we can say that production increase cause an increase in the supply of a product.
When new company companies establishes for production of a same same type of product, the production of product will increase when product production is measured altogether for the product and hence number of product in the market will increase and hence the supply of product will increase. Hence, we can say that establishment of new companies cause an increase in the supply of a product.
Thus, option C both a and b is the correct answer.
On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $14,238 each December 31 for 10 years. The required general journal entry to record the payment on the note on December 31, Year 2 is:
Answers
Answer:
Computation of the interest expense using the equation as shown below:
Interest expense for year 1 = Notes payable * Interest rate
= $100,000 * 10%
= $7,000
Notes payable reduction in Year 1 = $14,238 - $7,000
= $7,238
General journal entry
Item Debit Credit
Notes payable $7,745
Interest expense $6,493
Cash $14,238
Workings
Interest expense = ($100,000 - $7,238) * 7%
= $92,762 * 7%
=$6,493
Jamison Company purchased the assets of Booker Company at an auction for $4,200,000. An independent appraisal of the fair value of the assets is listed below:
Land $1,425,000
Building 2,100,000
Equipment 1,575,000
Trucks 2,550,000
Assuming that specific identification costs are impracticable and that Jamison allocates the purchase price on the basis of the relative fair values, what amount would be allocated to the Trucks?
A. $1,400,000
B. $2,100,000
C. $2,520,000
D. $2,550,000
Answers
Answer:
A. $1,400,000
Explanation:
Amount to be allocated = Auction price / Total individual price * Truck price
Auction price = $4,200,000
Total individual price = $1,425,000 + $2,100,000 + 1,575,000 + $2,550,000 = $7,650,000
Truck price = $2,550,000
Amount to be allocated = ($4,200,000 / $7,650,000) * $2,550,000
Amount to be allocated = $1,400,000
King enterprises has an Total Asset Turnover ratio of 5.0, Profit margin of 3%, and a ROE equals to 18%. What is the firm's equity mulitplier (Total Asset/Equity)? Use DuPont Analysis.
Answers
Answer: 1.2
Explanation:
The DuPont Analysis is a method of calculating the Return on Equity by using various other ratios. It shows the relatiosnhips between variables in a firm and can help the firm know which areas to target to improve ROE.
Using the DuPont Analysis, the Return on Equity is;
ROE = Profit Margin * Asset Turnover * Equity Multiplier
18% = 3% * 5 * Equity Multiplier
18% = 0.15 * Equity Multiplier
Equity Multiplier = 18%/0.15
Equity Multiplier = 1.2
1. On January 1, 2020, Scottsdale Company issued its 12% bonds in the face amount of $3,000,000, which mature on January 1, 2032. The bonds were issued for $$3,408,818 to yield 10%. Scottsdale uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. The 12/31/23 Premium on Bond Payable balance is:
Answers
Answer:
Premium ob bonds payable = $320,090.44 (credit balance)
Explanation:
January 1, 2020
Dr Cash 3,408,818
Cr Bonds payable 3,000,000
Cr Premium on bonds payable 408,818
January 1, 2021
Dr Interest expense 340,881.80
Dr Premium on bonds payable 19,118.20
Cr Cash 360,000
($3,408,818 x 0.1) - $360,000 = -$19,118.20
January 1, 2022
Dr Interest expense 338,969.98
Dr Premium on bonds payable 21,030.02
Cr Cash 360,000
($3,389,699.80 x 0.1) - $360,000 = -$21,030.02
January 1, 2023
Dr Interest expense 336,866.98
Dr Premium on bonds payable 23,133.02
Cr Cash 360,000
($3,368,669.78 x 0.1) - $360,000 = -$23,133.02
December 31, 2023
Dr Interest expense 334,553.68
Dr Premium on bonds payable 25,446.32
Cr Interest payable 360,000
($3,345,536.76 x 0.1) - $360,000 = -$25,446.32
The Suds Corporation has just suffered significant losses of revenue for three quarters in a row, and the shareholders are furious. Much of the loss can be attributed to the board's decision to change from their traditional lager beer to a lighter and smoother brew. Unfortunately, the new recipe alienated current customers and failed to bring in new customers. Although Suds has announced that it will return to its original product, the shareholders are claiming the board violated its fiduciary duty of care, and they are suing the directors personally for their significant losses. What must the shareholders prove to win their lawsuit
Answers
Answer and Explanation:
The fiduciary duty of care also called duty of care is the fudicaiary responsibility that requires board directors of a company to act and make decisions in good faith, having the best interest of the company in mind. This duty(whether written or implied) makes board directors responsible in ensuring that decisions made for the company are sound, ethical and legal.
In the above example, board directors of the suds corporation may have not performed this duty as required but this would depend on thorough investigation to ascertain the method and process by which the decision was arrived on. For instance, we are sure the decision was legal and also ethical(as they were only out to improve on company products and increase revenue likewise), we are not sure however of the soundness of this decision. This leads us to investigate the processes and results obtained from enquiring/researching on this new product decided on by the board. Therefore was it sound according to these results and processes. This is where evidence of a breach of duty by the board may be found
g If the inflation rate is larger than the nominal interest rate: Group of answer choices the real interest rate is negative the real interest rate is larger than the nominal interest rate. the real interest rate is zero. Not enough information is given. unemployment rises.
Answers
Answer: the real interest rate is negative
Explanation:
The real interest rate is the rate of interest that is received or expected to be received by a lender, saver or an investor after due to inflation. Real interest rate is gotten when the inflation rate is deducted from the nominal interest rate.
A negative real interest rate simply implies that means that inflation rate is more than nominal interest rate.
Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and desired investment is $6 billion. Net foreign lending would be equal to
Answers
Answer:
Net foreign lending would be equal to $4 billion.
Explanation:
This can be computed using the formula for computing the total output of an open economy as follows:
Y = C + G + I + NX .................................. (1)
Where;
Y = Total Output = $35 billion
C = Desired consumption = $15 billion
G = Government purchases = $10 billion
I = Desired investment = $6 billion
NX = Net foreign lending = ?
Substituting the values into equation (1) and solve for NX, we have:
$35 = $15 + $10 + $6 + NX
$35 - $15 - $10 - $6 = NX
NX = $4 billion
Therefore, net foreign lending would be equal to $4 billion.
From past experience, the company has learned that 25% of a month’s sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 15% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $340,000, and March sales totaled $370,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. 2. What is the accounts receivable balance on June 30th?
Answers
Part of the Question:
Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below:
April May June Total
Budgeted sales (all on account) $310,000 $510,000 $160,000 $980,00
Answer:
1. A Schedule of Expected Cash Collections from Sales:
April May June Total for the
Quarter
25% sales month $77,500 $127,500 $40,000 $245,000
60% 2nd month 222,000 186,000 306,000 714,000
15% 3rd month 51,000 55,500 46,500 153,000
Total cash collections $350,500 $369,000 $392,500 $1,112,000
2. Accounts Receivable balance on June 30th:
Total beginning balance $328,500
Total quarter sales $980,000
Total due from customers $1,308,500
Cash receipts for quarter $1,112,000
Balance on June 30th $196,500
Explanation:
a) Data and Calculations:
Feb. Mar. April May June Total for the
Quarter
Sales $340,000 $370,000 $310,000 $510,000 $160,000 $980,00
Cash:
25% sales month $77,500 $127,500 $40,000 $245,000
60% 2nd month 204,000 222,000 186,000 306,000 714,000
15% 3rd month 51,000 55,500 46,500 153,000
Total cash collections $350,500 $369,000 $392,500 $1,112,000
b) Account Receivable balance
April 1, Beginning balance $51,000 from February
April 1, Beginning balance $277,500 from March
Total beginning balance $328,500
Total quarter sales $980,000
Total due from customers $1,308,500
Cash receipts for quarter $1,112,000
Balance on June 30th $196,500
c) The accounts receivable balance is the difference between the beginning balance of $328,500, the sales on account for the quarter of $1,308,500, and the cash receipts from customers for the quarter of $1,112,000. This gives a balance of $196,500, which represents 75% of June sales of $120,000 and 15% of May Sales of $76,500.
1. Total cash collections is = $1,112,000
2. Accounts Receivable balance on June 30th $196,500
Calculation of Cash collections from sales
Silver Company makes a creation that is very popular as a Mother’s Day gift. Therefore, peak sales occur in May of each year, as indicated in the company’s sales budget for the second quarter given downward:
April May June Total
Budgeted sales (all on account) $310,000 $510,000 $160,000 $980,00
Calculation of
1. A Schedule of Expected Cash Collections from Sales:
April May June Total for the
Quarter
25% sales month $77,500 $127,500 $40,000 $245,000
60% 2nd month 222,000 186,000 306,000 714,000
15% 3rd month 51,000 55,500 46,500 153,000
The Total cash collections $350,500 $369,000 $392,500 $1,112,000
2. Accounts Receivable balance on June 30th:
The Total beginning balance is $328,500
Then Total quarter sales $980,000
After that Total due from customers was $1,308,500
Then Cash receipts for the quarter of $1,112,000
The Balance on June 30th is $196,500
a) Now Data and also Calculations:
Feb. Mar. April May June Total for the
Quarter
Sales $340,000 $370,000 $310,000 $510,000 $160,000 $980,00
Cash:
25% sales month $77,500 $127,500 $40,000 $245,000
60% 2nd month 204,000 222,000 186,000 306,000 714,000
15% 3rd month 51,000 55,500 46,500 153,000
Total cash collections $350,500 $369,000 $392,500 $1,112,000
b) Now Account Receivable balance are:
April 1, Beginning balance $51,000 from February
April 1, Beginning balance $277,500 from March
The Total beginning balance is $328,500
Total quarter sales $980,000
Total due from customers $1,308,500
Cash receipts for quarter $1,112,000
Therefore, the Balance on June 30th $196,500
c) When The accounts receivable balance is the dissimilarity between the beginning balance of $328,500, Then the sales on account for the quarter of $1,308,500, and the cash receipts from customers for the quarter of $1,112,000. This gives a balance of $196,500, which represents 75% of June sales of $120,000 and also 15% of May Sales of $76,500.
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Baxter Company produces Frisbees using a threeminusstep sequential process that includes molding, coloring and finishing. At what stage would the sets be allocated Manufacturing Overhead?
Answers
The options are:
A) When the Frisbees are in WIP InventoryWIP Inventory-Molding
B) When the Frisbees are in WIP InventoryWIP Inventory-Finishing
C) When the Frisbees are in WIP InventoryWIP Inventory-Coloring
D) All of the above
Answer:
D) All of the above
Explanation:
Manufacturing overhead is defined as all manufacturing cost incurred in producing a good that cannot be traced directly to the product in an economically feasible way.
For example processes in Work In Process stage of manufacturing such as labour and utility expenses are manufacturing overhead costs. Work in process is the manufacturing stage where goods are converted from raw goods to partially finished goods.
So all the options given which are on the WIP are correct.
New Era Cleaning Service, Inc. opened for business on July 1, 2010. During the month of July, the following transactions occurred:
July 1: Issued $18,000 of common stock for $18,000 cash.
July 1: Purchased a truck for $11,000. Paid $4,000 in cash and borrowed the remainder (long term) from the bank.
July 3: Purchased cleaning supplies for $900 on account.
July 5: Paid $1,800 on a one-year insurance policy, effective July 1.
July 12: Billed customers $4,800 for cleaning services.
July 18: Paid $1,500 of the amount owed on the truck.
July 18: Paid $500 of the amount owed on cleaning services.
July 20: Paid $1,700 for employee salaries.
July 21: Collected $1,200 from customers billed on July 12.
July 25: Billed customers $1,900 for cleaning services.
July 31: Paid gas and oil for the month on the truck, $500.
July 31: Paid a $800 dividend.
Please complete the following tasks: Post the July transactions to the general journal and the general ledger "T" account
repare an unadjusted trial balance; Post the following adjustments:
(a) Earned but unbilled fees at July 31 were $1,400
(b) Depreciation for the month was $200
(c ) One-twelfth of the insurance expired
(d) An inventory count showed $300 of cleaning supplies remaining on July 31
Answers
Answer:
New Era Cleaning Service, Inc.
a) General Journal:
July 1:
Debit Cash Account $18,000
Credit Common Stock $18,000
To record the issue of common stock for cash.
July 1:
Debit Truck $11,000
Credit Cash $4,000
Credit Bank Loan $7,000
To record the purchase of a truck.
July 3:
Debit Supplies $900
Credit Accounts Payable $900
To record the purchase of cleaning supplies on account.
July 5:
Debit Prepaid Insurance $1,800
Credit Cash Account $1,800
To record the payment of insurance for a year.
July 12:
Debit Accounts Receivable $4,800
Credit Service Revenue $4,800
To record services rendered on account.
July 18:
Debit Bank Loan $1,500
Credit Cash Account $1,500
To record payment on bank loan.
July 18:
Debit Accounts Payable $500
Credit Cash Account $500
To record payment on account.
July 20:
Debit Salaries $1,700
Credit Cash Account $1,700
To record payment of salaries.
July 21:
Debit Cash Account $1,200
Credit Accounts Receivable $1,200
To record receipt of cash on account.
July 25:
Debit Accounts Receivable $1,900
Credit Service Revenue $1,900
To record services rendered on account.
July 31:
Debit Automobile Fuel $500
Credit Cash Account $500
To record payment for gas and oil for the month.
July 31:
Debit Dividends $800
Credit Cash Account $800
To record payment for dividends.
b) General Ledger "T-account":
Cash Account
July 1 Common Stock $18,000 July 1 Truck $4,000
July 21 Accounts Receivable 1,200 July 5 Insurance 1,800
July 18 Bank Loan 1,500
July 18 Accounts Payable 500
July 20 Salaries 1,700
July 31 Automobile Fuel 500
July 31 Dividend 800
July 31 Balance c/d 8,400
19,200 19,200
Balance b/d 8,400
Common Stock
July 1 Cash account $18,000
Bank Loan
July 18 Cash 1,800 July 1 Truck $7,000
July 31 Balance c/d 5,200
7,000 7,000
Balance b/d 5,200
Truck
July 1 Cash $4,000 July 31 Balance c/d $11,000
July 1 Bank loan 7,000
11,000 19,200
Balance b/d 11,000
Supplies
July 3 Cash 900
Accounts Payable
July 18 Cash 500 July 3 Supplies 900
July 31 Balance c/d 400
900 900
Balance b/d 400
Prepaid Insurance
July 5 Cash 1,800
Service Revenue
July 31 Balance c/d 6,700 July 12 Accounts Receivable $4,800
July 25 Accounts Receivable $1,900
6,700 6,700
Balance b/d 6,700
Accounts Receivable
July 12 Service Revenue $4,800 July 21 Cash $1,200
July 25 Service Revenue 1,900 July 31 Balance c/d 5,500
6,700 6,700
Balance b/d 5,500
Salaries
July 20 Cash $1,700
Automobile Fuel
July 31 Cash $500
Dividend
July 31 Cash $800
Trial Balance as of July 31:
Description Debit Credit
Cash $8,400
Common Stock $18,000
Bank Loan 5,200
Truck 11,000
Supplies 900
Accounts Payable 400
Prepaid Insurance 1,800
Service Revenue 6,700
Accounts Receivable 5,500
Salaries 1,700
Automobile Fuel 500
Dividends 800
Total
c) Adjusting Journal Entries at July 31:
a) Debit Accounts Receivable $1,400
Credit Service Revenue $1,400
To record unbilled fees.
b) Debit Depreciation Expense $200
Credit Accumulated Depreciation $200
To record depreciation expense for the month.
c) Debit Insurance Expense $150
Credit Prepaid Insurance $150
To record a month's insurance expense.
d) Debit Supplies Expense $300
Credit Supplies $300
To record supplies expense.
Explanation:
Journal entries initially record transactions on a day-to-day basis. From the journal, the transactions are posted to the ledger accounts (e.g. T-accounts) and a trial balance is extracted to check if the two sides are in agreement. At the end of the accounting period, adjusting entries are recorded in the general journal to ensure that accounts are based on the accrual concept and not on cash basis.
Which of the following is the easiest but least accurate of the commonly used methods for allocating support department costs to production departments?
A. Sequential method
B. Activity-based management method
C. Reciprocal services method
D. Direct method
Answers
Answer:
D. Direct method
Explanation:
Cost allocation in financial accounting can be defined as the process of identifying, gathering and assigning of cost across multiple cost objects such as products, inventory or departments.
There are various types of cost allocation methods and these are;
1. Sequential method.
2. Activity-based management method.
3. Reciprocal services method.
4. Direct method.
The direct method is an allocation method for cost, where costs of the production service department are directly allocated to the production (operating) department of a firm or business entity using appropriate allocation base and then allocated to the product itself.
Generally, the direct method is the easiest (simplest) but least accurate of the commonly used methods for allocating support department costs to production departments.