A travel agent wants to determine how much the average client is willing to pay for a weekend at an all-expense paid resort. The agent surveys 30 clients and finds that the average willingness to pay is $2,500 with a standard deviation of $840. However, the travel agent is not satisfied and wants to be 95% confident that the sample mean falls within $150 of the true average. What is the minimum number of clients the travel agent should survey

Answers

Answer 1

Answer:

[tex]n=(\frac{1.960(840)}{150})^2 =120.47 \approx 121[/tex]

So the answer for this case would be n=12 rounded up to the next integer

Explanation:

[tex]\bar X=2500[/tex] represent the sample mean

[tex]\mu[/tex] population mean (variable of interest)

s=840 represent the sample standard deviation

n represent the sample size  

The margin of error is given by this formula:

[tex] ME=z_{\alpha/2}\frac{\sigma}{\sqrt{n}}[/tex]    (a)

And on this case we have that ME =150 and we are interested in order to find the value of n, if we solve n from equation (a) we got:

[tex]n=(\frac{z_{\alpha/2} \sigma}{ME})^2[/tex]   (b)

The critical value for 95% of confidence interval, the significance level if 5% and the critical value would be [tex]z_{\alpha/2}=1.960[/tex], replacing into formula (b) we got:

[tex]n=(\frac{1.960(840)}{150})^2 =120.47 \approx 121[/tex]

So the answer for this case would be n=12 rounded up to the next integer


Related Questions

Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $100,000. However, the building carries a $36,000 mortgage that will be assumed by the partnership. Smart is investing $61,000 cash. The balance of Maxwell's Capital account will be:

Answers

Answer:

=$64,000

Explanation:

Max and Smart are forming partnership

Market Value of building = 100,000

The building carried mortgage by the partnership= 36,000

Smart is investing= 61,000

Balance of Maxwell capital Account will be Building value - Mortgage on building

=$100,000 - $36,000

=$64,000

Balance of Maxwell capital Account is equals to =$64,000

Capital account is the account that show the net worth of an enterprise or business in accounting.

Torche Corporation Balance Sheet As of March 11, 2020 (amounts in thousands) Cash 14,700 Accounts Payable 2,400 Accounts Receivable 4,800 Debt 3,700 Inventory 3,800 Other Liabilities 5,000 Property Plant & Equipment 15,800 Total Liabilities 11,100 Other Assets 900 Paid-In Capital 6,000 Retained Earnings 22,900 Total Equity 28,900 Total Assets 40,000 Total Liabilities & Equity 40,000 Use T-accounts to record the transactions below, which occur on March 12, 2020, close the T-accounts, and construct a balance sheet to answer the question. 1. Receive payment of $12,000 owed by a customer 2. Buy $15,000 worth of manufacturing supplies on credit 3. Purchase equipment for $44,000 in cash What is the final amount in Total Liabilities & Equity?

Answers

Answer:

Final amount in Total Liabilities & Equity = $40,015,000

Explanation:

A T-account refers to an informal term that is used to describe a set of financial records that are based on the principle of double-entry bookkeeping. The term T- account is used to indicate how bookkeeping entries appear.

Balance sheet is a statement of financial position used to report assets, liabilities and shareholders' equity of a company.

Note: See the attached excel for the T-accounts prepared and the balance sheet constructed. Just scroll down on the excel file to see everything.

A firm has sales of $1,140, net income of $218, net fixed assets of $528, and current assets of $284. The firm has $93 in inventory. What is the common-size balance sheet value of inventory

Answers

Answer:

The answer is 11.45%

Explanation:

Solution

Given that:

Firm sales = $1,140

The net income = $218

Net fixed assets = $528

The firm's inventory = $93

The next step is to find the common-size balance sheet value of inventory

Now,

The common size value of inventory would be value of inventory divided by total value of assets.

So,

Total assets=current assets+net fixed assets

=$528+$284 = $812

Therefore,

The common size value of inventory = inventory/Total assets

$93/$812

=11.45%

Discuss silence is golden in relation to ethics at the work place

Answers

Answer:

Silence is a golden virtue and it involves more of listening than speaking .It is required under certain circumstances and environment. It is always advisable to remain quite silent and not be too quick to respond to situations or issues so as to avoid making and saying wrong words.

The ethics in a workplace involves communicating with others with less amount of talking as possible and more of body languages and signs. This is because the workplace is meant to be a serene place. Lack of serenity can cause distractions and Lower the productivity of the workers.

Wright Machinery Corporation manufactures automobile engines for major automobile producers. The engines sell for $910 per engine. In addition, customers have the option to purchase a service-type warranty for $70 per engine that protects against any defects for a period of 5 years. During 2019, Wright sold 9,000 engines to National Motors. National Motors purchased warranties on all of the engines purchased. During 2019, Wright repaired defective motors at a cost of $93,400.
Prepare the necessary journal entries to record:__________.1. The sale of engines and service warranty on account during 2016 (one entry).2. The warranty costs paid during 2016.3. The warranty revenue earned in 2016.

Answers

Answer:

1. The sale of engines and service warranty on account during 2016 (one entry).

Dr Cash 8,820,000

    Cr Sales revenue 8,190,000 (= 9,000 x $910)

    Cr Unearned warranty revenue 630,000 (= 9,000 x $70)

2. The warranty costs paid during 2016.3. The warranty revenue earned in 2016.

to record warranty expenses during the year

Dr Warranty expense 93,400

    Cr Cash 93,400

to record warranty revenue

Dr Unearned warranty revenue 126,000 (= $630,000 / 5 = $126,000)

    Cr Extended warranty revenue 126,000

Explanation:

Service-type warranties sold are a liability for the company (unearned revenue) and they will be accrued as time goes on. In this case, accrued warranty revenue is adjusted annually but it could also be adjusted monthly.

Horizontal analysis: Is also called vertical analysis. Is the presentation of financial ratios. Is a tool used to evaluate financial statement items relative to industry statistics. Is a method used to evaluate changes in financial data across time. Evaluates financial data across industries.

Answers

Answer:

Explanation:

Horizontal analysis is comparing financial statistics or data over a period of time. it is also known as trend analysis. 

Vertical analysis compares line items within the same period.

I hope my answer helps you

In Appellia, it takes 10 units of resources to increase its output of sugar from 12 tons to 13 tons, but 11 units of resources to increase output from 13 tons to 14 tons, and 12 units of resources to increase output from 14 tons and 15 tons, and so on. The need for increasing resources is an example of:________.
a. comparative advantage.
b. diminishing returns to specialization.
c. absolute advantage.
d. mercantilism Porter's diamond model.

Answers

Answer:

b. diminishing returns to specialization.

Explanation:

Diminishing returns is also called diminishing productivity. It states that as additional unit of input is used in production it will get to a stage where more of input will be required to maintain output levels.

If the same level of input is used it will result in reduction in output over time.

This is exemplified in this secanrio where it takes 10 units of resources to increase its output of sugar from 12 tons to 13 tons, but 11 units of resources to increase output from 13 tons to 14 tons, and 12 units of resources to increase output from 14 tons and 15 tons.

It takes more input to increase output by 1 ton

This year, Napa Corporation received the following dividends: KLP Inc (a taxable Delaware corporation in which Napa holds an 8% stock interest) - $55,000 Gamma Inc (a taxable Florida corporation in which Napa holds a 90% stock interest) - $120,000 Napa and Gamma do not file a consolidated tax return. Compute Napa's dividends-received deduction. Please show complete calculation.

Answers

Answer:

$147,500

Explanation:

Computation of Napa's dividends-received deduction

Napa is said to holds less than 20% stock interest in KLP Inc which means that the dividends received deduction in the case of dividends received from KLP would be 50%.

And in case of dividends received from Gamma, the dividends received deduction would be 100% reason been that KLP holds more than 80% of the stock interest in Gamma.

Hence:

Napa’s dividends-received deduction will be:

= ($55,000 x 50%) + $120,000

=$27,500 +$120,000

= $147,500

Therefore Napa's dividends-received deduction will be $147,500

Match the following terms with the best definition given.
a. Currently attainable standard
b. Favorable cost variance
c. Ideal standard
d. Nonfinancial performance measure
e. Unfavorable cost variance


- An example is number of customer complaints.
- Actual cost > standard cost at actual volumes
- Actual cost < standard cost at actual volumes
- Normal standard
- Theoretical standard

Answers

Answer: Please refer to Explanation

Explanation:

a. Currently attainable standard - Normal standard.

When a company says that a certain level of production is it's Currently Attainable Standard, they mean that this is the normal standard that they are able to operate in. That it is the standard that they have the actual capacity to produce at and so is normal for them.

b. Favorable cost variance - Actual cost < standard cost at actual volumes.

Variance cost in production is a measure that compares the cost that a company budgets to be able to produce a good vs the actual amount it takes to produce the said good. When the Budget is higher than the actual cost of production, it is said to be a FAVOURABLE balance because the budget was not exceeded.

c. Ideal standard - Theoretical standard.

This is the Standard that the company would like to be producing at to make a certain level of profit. It is usually different from the Normal Standard and the goal of most of not all companies is to work towards attaining their Ideal standard. They usually make Theoretical forecasts about their Ideal Standard.

d. Nonfinancial performance measure - An example is number of customer complaints.

There are many ways to measure performance but those ways are usually group into 2 categories being Financial and Non-financial measures of performance. The number of customer complaints that a business gets is a type of Non-financial Performance. As the intended market for a product, Customers are the most important appraisers of a Company's goods and services and if there are relatively low customer complaints, this shows that the company is performing well as they are able to please their customers.

e. Unfavorable cost variance - Actual cost > standard cost at actual volumes

As mentioned before, Variance helps determine the cost of production vs the budgeted cost of production. When a cost Variance is labeled as Unfavourable, it means that the Actual Cost exceeded the Budget of the production activity. This is unfavourable because it means that the business had to spend more than it thought it would on production thereby harming it's profit margins.

The Sunland Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $80 a night. Operating costs are as follows:

Salaries $5,400 per month
Utilities $1,200 per month
Depreciation $1,100 per month
Maintenance $2,140 per month
Maid service $19 per room
Other costs $37 per room

Required:
a. Determine the inn's break-even point in number of rented rooms per month.
b. Determine the inn's break-even point in dollars.

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

The inn has 50 rooms that it rents at $80 a night.

Operating costs are as follows:

Salaries $5,400 per month

Utilities $1,200 per month

Depreciation $1,100 per month

Maintenance $2,140 per month

Maid service $19 per room

Other costs $37 per room

We won't take into account the depreciation expense because it is not a cash disbursement.

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Fixed costs= 5,400 + 1,200 + 2,140= $8,740

Variable cost= 19 + 37= $56

Break-even point in units= 8,740 / (80 - 56)

Break-even point in units= 364 rented rooms

To calculate the break-even point in dollars, we need to use the following formula:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 8,740 / (24/80)

Break-even point (dollars)= $29,133

Wings Co. budgeted $572,000 manufacturing direct wages, 2,500 direct labor hours, and had the following manufacturing overhead: Overhead Cost Pool Budgeted Overhead Cost Budgeted Level for Cost Driver Overhead Cost Driver Materials handling $ 196,000 4,900 pounds Weight of materials Machine setup 19,600 560 setups Number of setups Machine repair 1,600 32,000 machine hours Machine hours Inspections 16,500 330 inspections Number of inspections Requirements for Job #971 which manufactured 4 units of product: Direct labor 20 hours Direct materials 220 pounds Machine setup 30 setups Machine hours 16,700 machine hours Inspections 15 inspections The total overhead of Job #971 under the ABC costing is:

Answers

Answer:

Total allocated overhead= $11,435

Explanation:

Giving the following information:

Materials handling $196,000 4,900 pounds

Machine setup $19,600 560 setups  

Machine repair $1,600 32,000 machine hours

Inspections $16,500 330 inspections

Job 971

Direct labor 20 hours

Direct materials 220 pounds

Machine setup 30 setups

Machine hours 16,700 machine hours

Inspections 15 inspections

First, we need to calculate the estimated overhead rate for each activity:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Materials handling= 196,000/4,900= $40 per pound

Machine setup= 19,600/560= $35 per setup  

Machine repair= 1,600/32,000= $0.05 per machine hour

Inspections= 16,500/330= $50 per inspection

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Materials handling= 40*220= 8,800

Machine setup= 35*30= 1,050  

Machine repair= 0.05*16,700=835

Inspections= 50*15= 750

Total allocated overhead= $11,435

Carroll Corporation has two products, Q and P. During June, the company's net operating income was $24,000, and the common fixed expenses were $52,000. The contribution margin ratio for Product Q was 40%, its sales were $137,000, and its segment margin was $44,000. If the contribution margin for Product P was $42,000, the segment margin for Product P was:

Answers

Answer:

$32,000= Segment margin product P

Explanation:

Giving the following information:

Company net operating income= $24,000

Common fixed costs= $52,000

Product Q:

Segment margin= $44,000

Contribution margin for Product P= $42,000

We need to calculate the segment margin for Product P.

Net income= Segment margin product P + Segment margin product Q - common fixed costs

24,000= Segment margin product P + 44,000 - 52,000

32,000= Segment margin product P

On January 1, 2009, a U.S. firm made an investment in Germany that will generate $5 million annually in depreciation, converted at the current spot rate. Projected annual rates of inflation in Germany and in the United States are 5 percent and 2 percent, respectively. The real exchange rate is expected to remain constant, and the German tax rate is 50 percent. Required: Calculate the expected real value (in terms of January 1, 2009, dollars) of the depreciation charge in year 2013. Assume that the tax write-off is taken at the end of the year.

Answers

Answer:

The expected real value (in terms of January 1, 2009, dollars) of the depreciation charge in year 2013 will be $1,958,815.416.

Explanation:

It is expected that the value of the dollar in the German market will fall at the same rate as that of the real market value of the dollar when we envisage the exchange rate will remain the same. Thus the depreciation of the tax write-off in terms of its real value in dollars will fall at 5% every year from 2009 to 2013.

Therefore, at a tax rate of 50% in Germany, a $2.5 million charge on depreciation on the investment of $5 million will result in 2013.

To calculate the real value of the dollar at an inflation of 5% yearly in 2013

When the tax rate in German is 50%, then charges of depreciation of $5 million will equal4$2.5 million in 2013 dollars. When the dollar's real value of this write-off is declining due to the inflation at 5% annually, the real value in 2013 will be calculated as:

Given: $2,500,000 (P/F , 5%, 5years) ;  0.78356 (factor for calculating the amount to be recieved after  5years)

= $2,500,000 * 0.78356

= $1,958,815.416

atton Company purchased $1,500,000 of 10% bonds of Scott Company on January 1, 2021, paying $1,410,375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $89,625 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity. On July 1, 2021, Patton Company should debit its Debt Investments account for the Scott Company bonds by__________ and credit its Interest Revenue account by __________.

Answers

Answer:

Patton Company should debit its Debt Investments account for the Scott Company bonds by $2,571  and credit its Interest Revenue account by $155,283

Explanation:

On July 1 2021, Patton Company should increase its Debt Investments account for the Scott Company bonds by =

Amount of discount amortized  = Interest revenue - Interest received

= ($1,410,375 × 11% × 6/12) - ($1,500,000 × 10% × 6/12)

= $77,571 - $75,000

= $2,571

Interest revenue on 31 December 2021 = ($1,410,375 + $2,571) × 11% × 6/12

= $77,712

For the year ended December 31, 2021, Patton Company should report interest revenue from the Scott Company bonds of = $77,571 + $77,712 = $155,283

On September 30, 2018, the San Fillipo Corporation issued 8% stated rate bonds with a face amount of $480 million. The bonds mature on September 30, 2038 (20 years). The market rate of interest for similar bonds was 10%. Interest is paid semiannually on March 31 and September 30.

Required:
Determine the price of the bonds on September 30, 2018.

Answers

Answer:

The price of the bonds today is $397.64 million (rounded off to two decimal places)

Explanation:

The price of a bond is calculated as the present value of the face value of the bond discounted at the market interest rate plus the present value of the annuity of interest payments related to the bond discounted at the market interest rate or the Yield to Maturity (YTM).

The formula for the price of the bond is attached hereby.

Semi annual coupon rate = 8%/2  = 4%

Semi annual market interest rate = 10% / 2 = 5%

Number of semi annual interest periods = 20 * 2 = 40 periods

The interest paid by the bond semi annually is = 480 * 0.04 = $19.2 million

Price of the bond = 19.2 * [(1 - (1+0.05)^-40) / 0.05] + 480 / (1+0.05)^40

Price of the bond = $397.6363855 million rounded off to $397.64 million

A country produces melons and wheat. ​1.) Using the​ 3-point curved line drawing tool​, draw a representative PPC for this country. Label it​ 'PPC'. ​2.) Using the point drawing tool​, show a production point that is efficient. Label it​ 'A'. ​3.) Using the point drawing tool​, show a production point that is attainable but not efficient. Label it​ 'BE'. Carefully follow the instructions​ above, and only draw the required objects.

Answers

Answer:

1.) Using the​ 3-point curved line drawing tool​, draw a representative PPC for this country. Label it​ 'PPC'.

I have attached a picture below. It shows a simple possibilities frontier for a country that can produce up to 16 units of melons and wheat.

2.) Using the point drawing tool​, show a production point that is efficient. Label it​ 'A'

Producition points that are efficient are any points on the curve. Producing 16 melons and 0 wheat is efficient because all economic resources are being used to produce the maximum amount of a good that is possible. Producing 8 melons, and 8 units of wheat is also efficient for the same reason.

3.) Using the point drawing tool​, show a production point that is attainable but not efficient.

Any point inside the curve would be inefficient because resouces would be used to produce less than the maximum amount possible. For example, if 15 units of wheat are produced, but less than one unit of melon is produced, then, there is inefficiency, because 1 unit of melon should be produced in that case.

On January 1, the Sleepy Monk Coffee Shop paid $15,000 for a full year of rent beginning on January 1. The rent payment was appropriately recorded in the Cash and Prepaid Rent accounts. If financial statements are prepared on January 31, the journal entry to record the adjustment would be:

Answers

Answer:

If financial statements are prepared on January 31, the journal entry to record the adjustment would be debit rent expense and credit prepaid rent for $1,250

Explanation:

According to the given data the rent has been expired for one month so only one month's rent expense will be recorded. Therefore to calculate one month's rent expense we have to make the following calculation:

one month's rent=Total rent/period for which rent is paid*1

one month's rent=$15,000/12*1

one month's rent=$1,250

Therefore, If financial statements are prepared on January 31, the journal entry to record the adjustment would be debit rent expense and credit prepaid rent for $1,250

Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product A under activity-based costing?

Answers

Answer:

$3.00

Explanation:

Calaculation of the approximate overhead cost per unit of Product A under activity-based costing:

The first step is to calculate for the Activity 1 allocated to Product A line which is :

$87,000 × 3,000/5,800

=$261,000,000/5,800

=$45,000

The second step is to calaculate for Activity 2 allocated to Product A line which is :

$62,000 × 4,500/10,000

$279,000,000/10,000

=$27,900

The third step is to calculate for Activity 3 allocated to Product A line which is :

$93,000 × 2,500/7,750

=$232,500,000/7,750

=$30,000

The total overhead allocated to Product A

$45,000+$30,000+$27,900

= $102,900

Overhead per unit of Product A: $102,900/Annual production of 34,300 units

= $3.00

Therefore the approximate overhead cost per unit of Product A under activity-based costing will be $3.00

On January 1, the $3,000,000 par value bonds of Spitz Company with a carrying value of $3,000,000 are converted to 1,000,000 shares of $1 par value common stock. Record the entry for the conversion of the bonds.

Answers

Answer:

Dr bonds payable     $3,000,000

Cr common stock                                                                                 $1,000,000

Cr paid in capital in excess of par val.-common stock($3m-$1m)   $2,000,000

Explanation:

The conversion means that the bonds payable account is debited since the obligation has now been settled by a way of giving common stock in lieu.

The credit entries would comprise of par value of the conversion which is $1 par value multiplied by number of common stock of 1,000,000 which gives $1,000,000 while the remaining balance is credited to paid-in capital in excess-common stock

A company reported total assets at the end of 2017 of $95,000; including cash of $35,000, accounts receivable of $20,000, and inventory of $40,000. It reported total assets at the end of 2018 of $110,000; including cash of $44,000; accounts receivable of $29,000, and inventory of $37,000. Compute the net increase or decrease in cash in 2018. Decrease of $9,000 Increase of $15,000 Increase of $9,000 Decrease of $15,000

Answers

Answer:

The correct option is increase of $9,000

Explanation:

The increase or decrease in cash in 2018 could be determined by using the formula below which is coined from the statement of cash flow:

Cash at the end of the year=cash at the beginning plus +increase in cash

cash at the end of 2018 is $44,000 whereas cash at the beginning which is the same at closing balance of 2017 is $35,000

$44,000=$35,000+increase in cash

increase in cash =$44,000-$35,000

increase in cash in 2018=$9,000

The current sections of Flint Corporation’s balance sheets at December 31, 2016 and 2017, are presented here. Flint Corporation’s net income for 2017 was $156,213. Depreciation expense was $27,567.

2017

2016

Current assets
Cash
$107,205

$ 101,079

Accounts receivable
81,680

90,869

Inventory
171,528

175,612

Prepaid expenses
27,567

22,462

Total current assets
$387,980

$390,022

Current liabilities
Accrued expenses payable
$ 15,315

$ 5,105

Accounts payable
86,785

93,932

Total current liabilities
$102,100

$ 99,037



Prepare the net cash provided (used) by operating activities section of the company’s statement of cash flows for the year ended December 31, 2017, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answers

Answer:

209305

Explanation:

Statement of cash flow

Cash from operating activities

Profit after taxation                                                                           156213

Adjustments :

Depreciation                                                                                       27567

Cash flow from operating activities before working capital changes  183780

Working Capital changes :

Change in trade receivables                                                                  9189

Change in inventories                                                                           4084

Change in prepaid expenses                                                                (5105)

Change in trade payables                                                                      7147

Change in accrued expenses                                                                10210  

Cash generated from operations                                                      209305

Interest During Construction Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed $1 million specifically for the project by issuing a 10%, 5-year, $1 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, $3 million note payable and a 10%, 10-year, $1.8 million note payable outstanding all year. In Year 1, Dexter incurred costs as follows: January 1 $280,000 March 1 600,000 June 30 1,000,000 November 1 480,000 Calculate Dexter's capitalized interest on the student condominium complex for Year 1. Capitalized interest

Answers

Answer:

$140,500

Explanation:

first we must calculate the weighted average accumulated expenditures:

incurred costs as follows:

January 1: $280,000 x 12/12 = $280,000

March 1: $600,000 x 10/12 = $500,000

June 30: $1,000,000 x 6/12 = $500,000

November 1: $480,000 x 2/12 = $80,000

total = $1,360,000

now we must calculate the weighted average interest rate on the non construction debt:

12% x $3 million = $360,000

10% x $1.8 million = $180,000

total = $540,000 / ($3,000,000 + $1,800,000) = 11.25%

capitalized interest:

$1,000,000 x 10% (specific construction debt) = $100,000

$360,000 x 11.25% (non construction debt) = $40,500

total $140,500

Which conditions would allow Country X to have an absolute advantage over Country Y in the
production of automobiles?
O Country X's workers eam higher wages
O Country X can manufacture cars more cheaply.
O Country Y has a protective tariff on car imports.
O Country Y subsidizes its automobile industry.
Next​

Answers

Answer:

O Country Y has a protective tariff on car imports.

Explanation:

A protective tariff is "a tariff imposed to protect domestic firms from import competition "

Answer:

Country X can manufacture cars more cheaply.

Explanation:

took test

Save-the-Earth Co. reports the following income statement accounts for the year ended December 31. Sales discounts $ 890 Office salaries expense 3,400 Rent expense—Office space 2,900 Advertising expense 780 Sales returns and allowances 390 Office supplies expense 780 Cost of goods sold 11,800 Sales 48,000 Insurance expense 2,400 Sales staff salaries 3,900 Required: Prepare a multiple-step income statement for the year ended December 31.

Answers

Answer:

Multiple-step income statement for the year ended December 31.

Sales                                                                   48,000

Less Sales returns and allowances                        390

Net Sales                                                              47,610

Less Cost of goods sold                                     (11,800)

Gross Profit                                                          35,810

Less Operating Expenses :

Sales discounts                                       890

Office salaries expense                       3,400

Rent expense—Office space               2,900

Advertising expense                               780

Office supplies expense                         780

Insurance expense                              2,400

Sales staff salaries                               3,900    (15,050)

Operating  Income / (Loss)                                 20,760

Explanation:

The multiple-step income statement shows separately profit derived from Primary Activities of an Entity (Operating Profit) and the profit that includes Secondary Activities of an Entity (Net Profit)

In this case, Save-the-Earth Co derived its profit only from Primary Activities.

Your grandmother asks for your help in choosing a certificate of deposit​ (CD) from a bank with a​ one-year maturity and a fixed interest rate. The first certificate of​ deposit, CD​ #1, pays 1.95 percent APR compounded monthly​, while the second certificate of​ deposit, CD​ #2, pays 2.00 percent APR compounded weekly. What is the effective annual rate​ (the EAR) of each​ CD, and which CD do you recommend to your​ grandmother?

Answers

Answer:

1.97% and 2.01%

Explanation:

The computation of the effective annual rate is shown below:-

Effective annual rate = (1 + Annual percentage rate ÷ n)^n -1

For CD 1

= (1 + 0.0195 ÷ 12)^12 - 1

= (1 + 0.001625 )^12 - 1

= (1.001625 )^12 - 1

= 1.97%

For CD 2

= (1 + 0.02 ÷ 2)^2 - 1

= (1 + 0.01 )^2 - 1

= (1.01)^2 - 1

= 2.01%

CD 2 will recommend to the grandmother

Spin Cycle Architecture uses three activity pools to apply overhead to its projects. Each activity has a cost driver used to allocate the overhead costs to the projects. The activities and related overhead costs are as follows: initial concept formation $52,960; design $420,000; and construction oversight $118,650. The cost drivers and estimated use are as follows.

Activities Cost Drivers Estimated Use of Cost Drivers per Activity
Initial concept formation Number of project changes 16
Design Square feet 140,000
Construction oversight Number of months 105

Required:
a. Compute the predetermined overhead rate for each activity.
b. Classify each of these activities as unit-level, batch-level, product-level, or facility-level.

Answers

Answer:

a. predetermined overhead rate for each activity

initial concept formation  = $3,310 per Project Change

design  = $3 per Square feet

construction oversight  = $1,130 per Month

b. Classification

unit-level activities :

design

batch level activities :

initial concept formation

Product level activities :

design

Facility level activities :

initial concept formation

construction oversight

Explanation:

This question requires application of Activity Based Costing (ABC) method of allocating overheads.

For each overhead a rate is determined as follows :

initial concept formation

Predetermined overhead rate = Overhead Cost / Number of Project Changes

                                                  = $52,960/ 16

                                                  = $3,310 per Project Change

design

Predetermined overhead rate = Overhead Cost / Square feet

                                                  = $420,000/ 140,000

                                                  = $3 per Square feet

construction oversight

Predetermined overhead rate = Overhead Cost / Number of Months

                                                  = $118,650/ 105

                                                  = $1,130 per Month

Classification

The way the activity is to be absorbed in costing determine its classification

You own a portfolio that has a total value of $130,000 and a beta of 1.28. You have another $49,000 to invest and you would like the beta of your portfolio to decrease to 1.18. What does the beta of the new investment have to be in order to accomplish this

Answers

Answer:βB =0.9147=beta of new investment

Explanation:

Total investment= $130,000 + $49,000=  $179,000

Using

Portfolio beta(βp) = wA × βA + wB × βB

Where βp is the portfolio beta coefficient,

wA is the weight of the first investment,

βA is the beta coefficient of first investment;

wB is the weight of the second investment,

βB is the beta coefficient of second investment

but weight of investment is  stock value/ total investment x 100

wA= 130,000/ 179,000X 100=72.63%

WB= 49,000/179,000 X100=27.374%

Portfolio beta(βp) = wA × βA + wB × βB

1.18=(72.63%*1.28)+(27.374% XβB  )  

1.18=0.9296+0.27374βB  

βB i=(1.18-0.9298)/0.27374

βB =0.9147=beta of new investment

Torres Company uses the gross method and a perpetual inventory system. Assuming the following entries, compute the amount that Torres Company received on May 12.

a. May 1 Sold goods costing $3,000 to Campbell Company on account, $5,000, terms 1/10, n/30. The goods are shipped FOB Shipping Point, Freight Prepaid by Seller, $110.
b. May 7 Campbell Company returned undamaged merchandise previously purchased on account, $200.
c. May 12 Received the amount due from Campbell Company.

Answers

Answer:

Torres Company received  $4,800 on May 12.

Explanation:

When The Sale was made, the following entries apply :

J1

Trade Receivable $5,000 (debit)

Sales Revenue $5,000 (credit)

J2

Cost of Sales $3,000 (debit)

Merchandise $3,000 (credit)

J3

Freight Expenses $110 (debit)

Cash $110 (credit)

When Campbell Company returned Merchandise :

J1

Sales Revenue $200 (debit)

Trade Receivable $200 (credit)

When Campbell Company pays for the goods

The payment is made 2 days out of the discount period, therefore not eligible for discount.

Settle amount in full less Return Allowance of $200

Trade Receivable $4,800 (debit)

Cash  $4,800 (credit)

Conclusion :

Torres Company received  $4,800 on May 12.

Assume straight-line depreciation. A company plans to purchase machinery costing $1,000,000 with salvage value of $200,000 after 4 years. After-tax net income is expected to be $55,000, $40,000, $35,000, and $30,000 during the 4 years. Calculate the accounting rate of return. Round your answer to the nearest tenth of a percent.

Answers

Answer:

Accounting rate of return = 6.67%

Explanation:

The accounting rate of return (ARR) is the proportion of the average investment that is earned as profit.

ARR = average operating income/ Average investment

Average income =( 55,000 + 40,000 + 35,000 + 30,000)/4=40,000

Average investment  = initial cost + salvage value/2

                                 = 1,000,000 + 200,000/2 = 600,000

ARR = 40,000/600,000 × 100= 6.67

Accounting rate of return = 6.67%

Answer:

6.7%

Explanation:

Arizona Crystal is a distributor of feldspar, amethyst and other mystically powerful types of crystals. The owner of Arizona Crystal, Geri Moonbeam, is proud to be a part of the movement that is contributing to the higher spirituality of the world. Geri buys crystals from local collectors and then ships them out to wholesalers throughout the country. Geri pays cash for the crystals, but she extends credit to the wholesalers. As the business has grown, problems have arisen. When Geri buys more crystals than she can sell, inventory increases and cash flow problems arise. When Geri doesn’t buy enough crystals, then she can’t fill orders and that creates problems with her customers. She needs to base her buying decisions on accurate forecasts of the demand for crystals so she can avoid these problems. After consulting her tarot cards, Geri visits a friend from El Paso, Texas, who channels for a Wall Street tycoon who didn’t survive the crash of 1929. He recommends that, since she only has twelve months of data, she should try using a moving average or exponential smoothing forecasting model. So Geri contacts you. She provides you with data on the number of crystals (in thousands) ordered during each of the past twelve months and asks you to help her develop a forecasting model. 8. Use a five period moving average model to forecast the demand in January of 1993. Also calculate the RMSE for this model. Use the table below to carry out your calculations. How does this model compare with the three period model? Month Demand (A) Demand (F) (A-F)2 Jan-92 25.6 Feb-92 24.7 Mar-92 21.3 Apr-92 13.9 May-92 12.6 Jun-92 18.0 Jul-92 21.5 Aug-92 22.3 Sep-92 30.7 Oct-92 15.0 Nov-92 13.8 Dec-92 22.6

Answers

Answer:

Explanation:

Month       Demand (A)        Demand (F)         (A-F)²

Jan-92         25.6                      -                        0

Feb-92        24.7                      -                        0

Mar-92        21.3                       -                        0

Apr-92        13.9                       -                          0

May-92       12.6                19.62          49.28

Jun-92        18.0                18.1             0.01

Jul-92         21.5                17.46          16.32

Aug-92       22.3               17.66           21.53

Sep-92       30.7                21.02          93.7

Oct-92        15.0                21.5            42.25

Nov-92       13.8                20.66         47.06

Dec-92       22.6               20.88         29.58

The demand for january of 1993 is 20.88

RMSE² = 49.28+0.01+16.32+21.53+93.7+42.25+47.06+29.58

=299.73

[tex]=\frac{299.73}{12} \\\\= 24.98[/tex]

RMSE = √24.98

=4.99

The model has higher values of demand and RMSE than that of three month moving average model

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