Assume the company is considering investing in a new machine that will increase its fixed costs by $36,000 per year and decrease its variable costs by $10 per unit. Prepare a forecasted contribution margin income statement for 2018 assuming the company purchases this machine

Answers

Answer 1

Answer:

Find below complete question:

Hudson Co. reports the contribution margin income statement for 2017. Assume sales remain constant at 10.000 units.

HUDSON CO.

Contribution Margin Income Statement

For Year Ended December 31, 2017

Sales (10,000 units at $244 each)                    $2,440,000

Variable costs (10,000 units at $195 each)             $1,950,000

Contribution margin                                              $490,000

Fixed costs                                                               $327,600

Pretax Income                                                       $162,400

Assume the company is considering investing in a new machine that will increase its fixed costs by $36,000 per year and decrease its variable costs by $10 per unit.

Prepare a forecasted contribution margin income statement  for 2018 assuming the company purchases this machine

The new pretax income is  $226,400 compared to 2018 $162,400,which implies that investing in the new machine is viable

Explanation:

The forecast contribution margin income statement for 2018 is prepared below with fixed costs of $36,000 added to the previous cost of $327,600 while variable cost per unit drops by $10 to $185 per unit

Hudson Co,forecast contribution margin income statement for 2018

Sales (10,000*$244)                                  $2,440,000

variable cost(10,000*$185)                       ($1,850,000)

Contribution margin                                   $590,000

fixed costs( $327,600+$36,000)              ($ 363,600)

Pretax income                                             $ 226,400


Related Questions

Victory Company uses weighted-average process costing to account for its production costs.
Conversion costs are added evenly throughout the process.
Direct materials are added at the beginning of the process.
During November, the company transferred 800,000 units of product to finished goods.
At the end of November, the work in process inventory consists of 187,000 units that are 60% complete with respect to conversion.
Beginning inventory had $192,465 of direct materials and $159,635 of conversion cost.
The direct material cost added in November is $1,288,035 and the conversion cost added is $3,033,065.
Beginning work in process consisted of 74,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion.
Of the units completed, 74,000 were from beginning work in process and 726,000 units were started and completed during the period.
Required:1. Determine the equivalent units of production with respect to direct labor and direct materials.2. Compute both the direct labor cost and the direct materials cost per equivalent unit. (Round "Cost per EUP" to 2 decimal places.)3. Compute both direct labor cost and direct materials cost assigned to units completed and transferred out and ending goods in process inventory. (Round "Cost per EUP" to 2 decimal places.)

Answers

Answer:

1. Direct Materials = 987,000 units , Direct Labor = 912,200 units

2.Direct Materials = $1.50 , Direct Labor = $3.50

3.

Units Completed and Transferred Costs

Direct Materials = $ 1,200,000

Direct Labor =  $ 2,800,000

Ending goods in process inventory cost

Direct Materials = $ 280,500

Direct Labor = $ 392,700

Explanation:

First step is to determine the equivalent units of production with respect to direct labor and direct materials

Direct Materials

Note : Materials are added at beginning of the process hence, they are 100 % complete for both units categories

Units Completed and Transferred (800,000 × 100%) =  800,000

Units of Ending Work In Process (187,000 × 100%)     =   187,000

Equivalent units of production                                      =   987,000

Direct Labor

Note : Conversion costs are added evenly throughout the process, hence we need to establish units to the extent of work done.

Units Completed and Transferred (800,000 × 100%) =  800,000

Units of Ending Work In Process (187,000 × 60%)     =      112,200

Equivalent units of production                                      =    912,200

The next step is to Calculate the Total Cost of Production with respect to direct labor and direct materials incurred during the period.

Direct Materials

Cost in Opening Work In Process =    $192,465

Cost added during the period       = $1,288,035

Total Costs                                      = $1,480,500

Conversion

Cost in Opening Work In Process =     $159,635

Cost added during the period       = $3,033,065

Total Costs                                      =  $3,192,700

Then use the above data to calculate the cost per equivalent unit for direct labor and direct materials.

Cost per equivalent unit. = Total Cost / Total Equivalent units

Direct Materials = $1,480,500 / 987,000 = $1.50

Direct Labor = $3,192,700 / 912,200 = $3.50

CONCLUSION :

Units Completed and Transferred Costs

Direct Materials = (800,000 ×  $1.50) = $ 1,200,000

Direct Labor = (800,000 ×  $3.50) = $ 2,800,000

Ending goods in process inventory cost

Direct Materials = (187,000 ×  $1.50) = $ 280,500

Direct Labor = (112,200 ×  $3.50) = $ 392,700

Hopewell Corporation Balance Sheet As of December 31, 2019 (amounts in thousands) Cash 21,000 Liabilities 20,000 Other Assets 26,000 Equity 27,000 Total Assets 47,000 Total Liabilities & Equity 47,000 Hopewell Corporation Income Statement January 1 to March 31, 2020 (amounts in thousands) Revenue 5,500 Expenses 2,600 Net Income 2,900 Between January 1 and March 31, 2020: 1. Cash decreases by $100,000 2. Liabilities decrease by $300,000 3. Paid-In Capital does not change 4. Dividends paid of $300,000 What is the value for Other Assets on March 31, 2020?

Answers

Answer:

The value for Other Assets on March 31, 2020 $29,000,000

Explanation:

Hopewell Corporation Balance Sheet As of December 31, 2019

Cash = $21,000,000

Other Assets = $26,000,000

Total Assets = $47,000,000

Liabilities = $20,000,000

Equity = $27,000,000

Total Liabilities & Equity = $47,000,000

Hopewell Corporation Income Statement January 1 to March 31, 2020

Revenue = $5,500,000

Expenses = $2,600,000

Net Income = $2,900,000

Between January 1 and March 31, 2020:

1. Cash decreases by $100,000

2. Liabilities decrease by $300,000

3. Paid-In Capital does not change

4. Dividends paid of $300,000

Assets

Cash = $21,000,000 - $100,000 = $20,000,000

Liabilities = $20,000,000 - $300,000 = $19,700,000

Equity = $27,000,000 + $2,600,000 - $300,000 = $29,300,000

Total Liabilities & Equity = $19,700,000 + $29,300,000 = $ 49,000,000

Other assets =  $49,000,000 - $20,000,000 = $29,000,000

Frank Barlowe is retiring soon, so he is concerned about his investments providing him with a steady income every year. He is aware that if interest rates , the potential earnings power of the cash flow from his investments will increase. In particular, he is concerned that a decline in interest rates might lead to annual income from his investments. What kind of risk is Frank most concerned about protecting against? Reinvestment rate risk Interest rate risk

Answers

Answer:

Increase

less

A) Reinvestment rate risk.

Explanation:

Reinvestment rate risk is demonstrated as the type of financial risk in which the investor is concerned about his investment getting canceled or stopped in the future and the other party/place might not be able to provide a similar rate of return.

In the given situation, Frank Barlowe is concerned about reinvestment risk. He is aware that he will earn a steady income from his investments as he knows that when the interest rates increase, his potential returns would increase and vice versa. But since he is retiring, he has a potential concern that if the investment gets abandoned somehow, he might not be able to reinvest his amount at the same rate and will not be able to continue with steady returns. Thus, option A is the correct answer.

Job costing, unit cost, ending work in process. Rowan Company produces pipes for concert-quality organs. Each job is unique. In April 2016, it completed all outstanding orders, and then, in May 2016, it worked on only two jobs, M1 and M2: A B C 1 Rowan Company, May 2016 Job M1 Job M2 2 Direct materials $ 75,000 $ 56,000 3 Direct manufacturing labour 275,000 209,000 Direct manufacturing labour is paid at the rate of $25 per hour. Manufacturing overhead costs are allo- cated at a budgeted rate of $22 per direct manufacturing labour-hour. Only Job M1 was completed in May. Required: 1. Calculate the total cost for Job M1. 2. 1,600 pipes were produced for Job M1. Calculate the cost per pipe. 3. Prepare the journal entry transferring Job M1 to finished goods. 4. What is the ending balance in the Work-in-Process Control account?

Answers

Answer:

1. The total cost for Job M1 is $592,000

2. Cost per unit is $370

3. Journal

Finished goods inventory 592,000  

Work in process inventory                    592,000

4.  Ending balance in Work-in-Process Control account is $448,920

Explanation:

                                A                              B                          C

1)   Rowan Company, May 2016           Job M1              Job M2

2)  Direct materials                             $ 75,000             $ 56,000

3)  Direct manufacturing labour          275,000                209,000

Direct manufacturing labour is paid at the rate of $25 per hour

Manufacturing overhead costs are allocated at a budgeted rate of $22 per direct manufacturing labour-hour

1. Direct labor rate = $25 per hour

Direct labor hours used on Job M1 = Direct manufacturing labor ÷ Direct labor rate

= 275,000 ÷ 25

= $ 11,000

Manufacturing overhead applied to Job M1 = Direct labor hours used on Job M1 x 22

= $11,000 x 22

= $242,000

Job cost sheet (Job M1)

Direct material  = $75,000

Direct labor = $275,000

Overhead applied  = $242,000

Total cost = $592,000

2.  Cost per unit = Total cost ÷ Number of units

= 592,000 ÷ 1,600

= $370

3. Journal

Finished goods inventory 592,000  

Work in process inventory                    592,000

4.  Direct labor hours used on Job M2 = Direct manufacturing labor/Direct labor rate

= 209,000 ÷ 25

= $8,360

Manufacturing overhead applied to Job M2 = Direct labor hours used on Job M2 x 22

= $8,360 x 22

= $183,920

Job cost sheet (Job M2)

Direct material  = $56,000

Direct labor  = $209,000

Overhead applied  = $183,920

Total cost  = $448,920

Ending balance in work in process control account = $448,920

Sam is training for a triathlon, a timed race that combines swimming, biking, and running. Consider the following sentence: In order to swim for an hour, Sam must take time away from work, where he earns $10 per hour. This is in addition to paying a $5 entrance fee for the pool. Which basic principle of individual choice do these statements best illustrate? The cost of something is what you give up to get it. Markets are usually a good way to organize economic activity. People usually exploit opportunities to make themselves better off. Trade can make everyone better off.

Answers

Answer:

The cost of something is what you give up to get it.

Explanation:

To partake in triathlon, Sam is forgoing the amount he would have earned if he went to work instead. This is known as the opportunity cost or implicit cost

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

Sam has to pay $5 to partake in the triathlon. This amount is known as explicit cost. Explicit cost is the cost incurred in carrying out an activity.

Sam's accounting cost is $5

Sam's economic cost is $5 + $10 = $15

I hope my answer helps you

Cat's product manager continues to perform well in the market. However, a competing product is coming on strong and is looking to take over as the market share leader in the segment. Without sacrificing contribution margin, what can the Cat product manager do in order to improve upon the buying criteria, and thus potentially increase demand

Answers

Answer:

Increase promotion spending

Explanation:

Note that the challenge for the product is to get a demand that supersedes that of their competitor. Thus, by spending more on promotion they could still maintain the contribution margin while at the same time increase consumers demand the product.

For example, by adding extra gift items to their products consumers would likely feel motivated to buy the product over the other.

The residents of Alaska and people throughout the world were outraged when the Exxon Valdez crashed into a shoal and dumped millions of gallons of crude oil into the pristine waters of Prince William Sound. People were upset with Exxon's response to the disaster. The company was slow to admit its mistake and even slower to implement cleanup activities. Exxon was criticized for acting in a manner that would benefit the organization but not society. In short, Exxon did not demonstrate:___________.
1. Social responsibility
2. Value conciousness
3. Gray marketing
4. Profit responsibility
5. Transactional marketing

Answers

Answer:

1. Social responsibility.

Explanation:

Social responsibility is an ethical principle or business practice that supports, that individuals or business entities are required to fulfil civic duties, such as welfare, charity, etc. for the benefit of the society at large.

Simply stated, it incorporates sustainable societal development into business models. A company's social responsibility involves the process of creating a balance between economic growth, societal welfare and largely it's environment.

In this scenario, Exxon was slow to own up to it's error and even slower in implementing cleanup activities of the pristine waters of Prince William Sound. Sequel to this, it was criticized by the residents of Alaska and others around the world for acting in a manner that would benefit the organization but not society.

Hence, Exxon did not demonstrate social responsibility.

Brief Exercise 233 Kinney Company purchased a truck for $66,000. The company expected the truck to last four years or 100,000 miles, with an estimated residual value of $8,000 at the end of that time. During the second year the truck was driven 27,000 miles. Compute the depreciation for the second year under each of the methods below and place your answers in the blanks provided.Units-of-activity $_________
Double-declining-balance $_________

Answers

Answer:

$15,660

$16,500

Explanation:

Depreciation expense using the double declining method = Depreciation factor x cost of the asset

Depreciation factor = 2 x (1 / useful life)

2 x (1 / 4 ) = 0.5

The depreciation expense in the first year = 0.5 x $66,000 = $33,000

Book value = $66,000 - $33,000 = $33,000

The depreciation expense in the second year = 0.5 x $33,000 = $16,500

The Units of production method = (miles driven in the second year / estimated total miles that can be driven) x (Cost of asset - Salvage value)

(27,000 / 100,000) × ($66,000 - $8,000)

= 0.27 x $58,000 = $15,660

I hope my answer helps you

Kenrick Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts equipment expense and indirect labor to three activity cost pools Processing, Supervising and Other based on resource consumption. Data to perform these allocations appear below.
Overhead costs
Equipment expense $18,000
Indirect labor $2,000
Distribution of Resource Consumption Across activity cost pools
Activity Cost Pools
Processing Supervising Other
Equipment expense 0.10 0.30 0.60
Indirect labor 0.30 0.40 0.30
In the second stage. Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products as follows.
Activity
MHs (Processing) Batches (Supervising)
Product U4 5,500 600
Product C7 4,500 1,400
Total 10,000 2,000
Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.
Sales and Direct Cost Data:
Product U4 Product C7
Sales (total) $58,400 $31,800
Direct materials (total) $26,900 $13,900
Direct labor (total) $25,000 $11,200
What is the product margin for Product U4 under activity-based costing?
a. $3,500
b. $6,500
c. $5,180
d. $3,320

Answers

Answer:

D.) $3320

Explanation:

Product margin = (Sales - direct labor - direct materials - overhead)

$(58400 - 26900 - 25000 - 3180) = $3,320

Check attached picture for detailed explanation

Account balances at the beginning of the year were: accounts receivable, $180,000; and inventory, $270,000. All sales were on account. Assume that Castile Products, Inc., paid dividends of $2.55 per share during the year. Also assume that the company’s common stock had a market price of $70 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.

Answers

Additional information:

The financial statements for Castile Products, Inc., are given below:

Castile Products, Inc.

Balance Sheet

December 31

 Assets            

Current assets:            

    Cash $23,000  

    Accounts receivable, net $250,000  

    Merchandise inventory $340,000  

    Prepaid expenses $8,000  

Total current assets $621,000  

Property and equipment, net $840,000  

Total assets $1,461,000  

             

Liabilities and Stockholders' Equity            

Liabilities:            

    Current liabilities $290,000  

    Bonds payable, 11% $300,000  

Total liabilities $590,000  

Stockholders’ equity:            

    Common stock, $10 par value $130,000  

    Retained earnings $741,000  

Total stockholders’ equity $871,000  

Total liabilities and equity $1,461,000  

Castile Products, Inc.

Income Statement

For the Year Ended December 31

Sales $2,140,000  

Cost of goods sold $1,230,000  

Gross margin $910,000  

Selling and administrative expenses $600,000  

Net operating income $310,000  

Interest expense $33,000  

Net income before taxes $277,000  

Income taxes (30%) $83,100  

Net income $193,900

Required:

Compute financial ratios as follows: 1. Earnings per share. (Round your answer to 2 decimal places.) 2. Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) 3. Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) 4. Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.) 5. Book value per share. (Round your answer to 2 decimal places.)

Answer:

$14.9217.1%3.6%4.7$67

Explanation:

1. Earnings per share = net income / average shares outstanding = $193,900 / 13,000 stocks = $14.92

2. Dividend payout ratio = total dividends / net income = ($2.55 x 13,000) / $193,900 = $33,150 / $193,900 = 17.1%

3. Dividend yield ratio = dividend per share / market price per share = $2.55 / $70 = 3.6%

4. Price-earnings ratio = price per share / earnings per share = $70 / $14.92 = 4.7

5. Book value per share = (stockholders' equity - preferred stocks) / total number of stocks outstanding = $871,000 / 13,000 = $67

1. How has an understanding of consumer behavior helped Coppertone grow in the United States and around the globe? 2. Describe the five-stage purchase decision process for a Coppertone customer. 3. What are the possible situational, psychological, and sociocultural influences on the Coppertone consumer purchase decision process? Situational Psychological Sociocultural 4. What specific marketing activities does Coppertone utilize to help Coppertone grow in the marketplace? 5. What challenges does Coppertone face in the future? What actions would you recommend related to each challenge?

Answers

Answer: The answers are provided below

Explanation:

1. The understanding of consumer behavior which has helped Coppertone grow in the United States and around the world are:

• Its understanding of consumer behavior was along with changing behaviour of consumers.

• Its understanding was along with consumer's changing needs.

• Providing innovative solutions that are in accordance with consumer preferences.

Note that at the beginning, Coppertone started as a tanning product, but later developed nee products when the consumers preferences changed from tanning to skin protection.

2. . The Five stage purchase decision process for a Coppertone customer are:

a. Problem recognition - This is the stage of understanding the problem.

b. Search for information. It is the stage of seeking solution to the problem

c. Comparision of alternatives - This is the stage where the comparative analysis is done. This stage is influenced by the product, price, availability etc.

d. Decision of purchasing - This is the stage of decision making that is based on the comparisons made.

e. Post-purchase feedback - This is the stage whereby the consumer will evaluate the product performance. This stage is vital to retaining existing consumers.

3. The factors that can influence the Coppertone consumer purchase decision process are:

• Psychological: It is the intention of consumers to protect their skin from the sun while going out thereby maintaining their good look.

• Sociological : It is in human behaviour to replicate the things that are being done by other people in the society.

• Situational Factor: This is a case whereby consumers are left with no other alternatives than purchasing a particular product brand to meet their need.

4. The marketing activities Coppertone utilized to help it grow in the marketplace are:

• Advertisment: Coppertone advertisment strategy really worked through its use of the advertisement campaign for “the Coppertone Girl” and also their famous tagline “Tan, Don’t Burn.” This helped spar the product’s popularity.

• Use of social media: They also engage with their customers on social media nd other websites.

5. The challenges that would be faced by Coppertone in the future are:

• There will be an unbalanced demand and supply since the requirement of the product is seasonal.

• Selective usage of the product by the customer can hampers the sale.

• There may be the need for more innovative products in order to meet customer needs.

The recommendation related to each challenges are:

• Awareness should be created among the customers about their self health and looks, in order for them to shift away from seasonal usage.

• New products should be launched aggressively. This is because customers are trendy nowadays and also appealing marketing techniques should be used.

1. When The understanding of consumer behavior that has helped Coppertone grow in the United States and around the world are:

Although, Its understanding of consumer behavior was along with changing the behavior of consumers.

Then Its understanding was along with consumers' changing needs.

Consumer behavior

Also when Providing innovative solutions that are under consumer preferences.

Note that at the beginning, Coppertone started as a tanning product, but later developed nee products when the consumer's preferences changed from tanning to skin protection.

2. When The Five stage purchase decision process for a Coppertone customer are:

a. Problem recognition - This is the stage of understanding the problem.

b. Search for information- It is the stage of seeking a solution to the problem

c. Comparison of alternatives - This is the stage where the comparative analysis is done. This stage is influenced by the product, price, availability, etc.

d. Decision of purchasing - This is the stage of decision-making that is based on the comparisons made.

e. Post-purchase feedback - This is the stage whereby the consumer will evaluate the product performance. This stage is vital to retaining existing consumers.

3. When The factors that can influence the Coppertone consumer purchase decision process are:

Psychological: Consumers intend to protect their skin from the sun while going out thereby maintaining their good look.

Sociological: It is in human behavior to replicate the things that are being done by other people in society.

Situational Factor: This is a case whereby consumers are left with no other alternatives than purchasing a particular product brand to meet their needs.

4. When The marketing activities Coppertone utilized to help it grow in the marketplace are:

The Advertisement: when the Coppertone advertisement strategy worked through its use of the advertisement campaign for “the Coppertone Girl” and also their famous tagline “Tan, Don’t Burn.” This helped spar the product’s popularity.

Use of social media: They also engage with their customers on social media and other websites.

5. The challenges that would be faced by Coppertone in the future are:

There will be an unbalanced demand and supply since the requirement of the product is seasonal.

Then Selective usage of the product by the customer can hamper the sale.

There may be a need for more innovative products to meet customer needs.

The recommendation related to each challenge are:

Awareness should be created among the customers about their self-health and looks, for them to shift away from seasonal usage.

New products should be launched aggressively. This is because customers are trendy nowadays and also appealing marketing techniques should be used.

Find out more information about consumer behavior here:

https://brainly.com/question/26324990

You are attempting to value a call option with an exercise price of $100 and one year to expiration. The underlying stock pays no dividends, its current price is $100, and you believe it has a 50% chance of increasing to $120 and a 50% chance of decreasing to $80. The risk-free rate of interest is 10%.Based upon your assumptions, calculate your estimate of the the call option's value using the two-state stock price model.

Answers

Answer:

$13.64

Explanation:

Given:

Exercise price,X = $100

Current price = $100

Value when price is up, uS = $120

Value when price is down, dS= $80

Risk free interest rate = 10%

First calculate hedge ratio, H:

[tex] H = \frac{C_u - C_d}{uS - dS} [/tex]

Where,

Cu = uS - X

= 120 - 100

= $20

[tex] H = \frac{20 - 0}{120 - 80} = \ftac{1}{2}[/tex]

A risk free portfolio involves one share and two call options.

Find cost of portfolio:

Cost of portfolio = Cost of stock - Cost of the two cells.

= $100 - 2C

This portfolio is risk free. The table below shows that

_______________

Portforlio 1:

Buy 1 share $80; Write 2 calls: $0; Total: ($80 + 0) $80

____________________

Portforlio 2:

Buy 1 share: $120; Write 2 calls: -$40; Total: ($120 - $40) $80

Check for oresent value of the portfolio:

Present value [tex] = \frac{80}{1 + 0.10} = 72.73 [/tex]

Value = exercise price - value of option

$72.73 = $100 - 2C

Find call option, C

[tex] C = \frac{100 - 72.73}{2} = 13.64 [/tex]

Call option's value = $13.64

You are a crude oil dealer. You intend to sell 40,000 barrels of crude oil in December. Each contract calls for delivery of 1,000 barrels of oil. Current futures price of one barrel of crude oil is $70. You believe that there are only four possible oil prices in December which are $50, $60, $70, and $80. i. Explain what action you would take to protect from changes in oil prices in December. Provide reasons for your action. ii. Calculate the total proceeds for each of the possible prices in December. Question 3 3 marks

Answers

Answer:

i. buy put option

ii. Proceeds will be as follows:

   $50 : 2,000,000

   $60 : 2,400,000

   $70 : 2,800,000

   $80 : 3,200,000

Explanation:

i. A put is option is one in which buyer of the option has a right to sell the asset at an agreed price at a later date. There can be a premium on the purchase of an option but its safe to buy an option to reduce risk exposure.

ii. $50 : 2,000,000 (40,000 barrels * $50)

   $60 : 2,400,000  (40,000 barrels * $60)

   $70 : 2,800,000  (40,000 barrels * $70)

   $80 : 3,200,000  (40,000 barrels * $80)

Time Remaining 39 minutes 48 seconds00:39:48 eBookItem 1Item 1 Time Remaining 39 minutes 48 seconds00:39:48 A private, not-for-profit hospital received contributions of $50,000 from donors on June 15, 20X9. The donors stipulated that their contributions be used to purchase equipment for the hospital. As of June 30, 20X9, the end of the hospital's fiscal year, $12,000 of the contributions had been spent on equipment acquisitions. In the hospital's general fund, what account would be credited to recognize the release of the restrictions on the temporarily restricted contributions used to acquire equipment

Answers

Answer: Net Assets Released from Equipment Acquisition Restriction.

Explanation:

When the stipulations by a donor have been satisfied, the assets involved can be removed from being restricted to now being unrestricted. The account credited to recognize this is known as the Net assets released from *asset name* acquisition restriction.

In the above case, the company purchased some equipment with the money they were donated which means that the equipment had satisfied the stipulation for which they were donated funds for. The Net Assets Released from Equipment Acquisition Restriction thus needs to be credited.

There are 100 used laptop g for sale on the market. 40% of them are in good condition, and the rest of them are broken, which is the common knowledge to the owners and the buyers. Owners of broken laptops are willing to sell them for $300. Owners of good used laptops are willing to sell them if the price is above $1600 but will keep them if the price is lower than $1600. There is a large number of potential buyers who are willing to pay $2000 for a good laptop and $600 for a broken laptop. Buyers can't tell good laptops from bad, but original owners know. In equilibrium, what could be the maximum price set for a broken laptop to be sold

Answers

Answer:

In equilibrium the maximum price set for a broken laptop to be sold is $600

Explanation:

According to the given data we have the following:

It is given that 40% laptops are in good condition. This implies that 60% are in bad condition.

In ordert to calculate the maximum price set for a broken laptop to be sold we would have to calculate the expected price that the buyers will be willing to pay for a  laptop as follows:

Expected price=0.60($2000)+0.40($600)

Expected price=$1,200+$240

Expected price=$1,440

As the owners of good laptops are willing to sell their laptops for $1,800, whis is more that $1,440, they will not sell their products.

This implies that only bad laptops are sold in the market. The willingless to pay for the bad laptops is $600

Therefore, In equilibrium the maximum price set for a broken laptop to be sold is $600

Consider the following scenario:
Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream into a lake that has become thick with algae and polluted due to the minerals in the waste matter. The local office of a nonprofit environmental organization successfully lobbies state regulators to stop the farm's pollution.
1. Which of the following types of private solutions to the externality of pollution has occurred in this case?
Integration of different types of businesses
Contracts
Moral codes and social sanctions
Charities
2. It's important to note that sometimes private solutions to externalities do not work. For example, this occurs when communications barriers or social customs are important enough relative to the potential gains involved that -------.

Answers

Answer: 1. Charities

2. Government action the only viable solution

Explanation:

Externalities are the resultant additional effects that are experienced by others as a result of actions by an economic agent who does not bear the extra aformentioned cost or benefit that their actions bring about.

1. Private Solutions to Externalities include any solution independent of the government.

The above Private Solution is Charities because it was a Non-profit Environmental Organization that dealt with the lobbying for the reduction to be acted upon by state agents. These types of organisations are usually Charities.

2. If it is shown that the potential gains are viewed to be quite high as in this case then negotiating with the polluters might not work. In this case Government Intervention is needed to force the polluters to adhere to rules and regulations.

A company excludes from the current assets section, the amount of cash restricted for purposes other than payment of current obligations or for use in current operations.
1. True
2. False
Land held for speculation is reported in the long-term investment section of the balance sheet.
1. True
2. False
Financial flexibility measures the ability of an enterprise to take effective actions to alter the amounts and timing of cash flows
1. True
2. False
Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis. 1. True
2. False

Answers

Answer:

1. True.

2. True.

3. True.

4. True.

Explanation:

1. True: A company excludes from the current assets section, the amount of cash restricted for purposes other than payment of current obligations or for use in current operations.

2. True: Land held for speculation is reported in the long-term investment section of the balance sheet because they are fixed assets.

3. True: Financial flexibility measures the ability of an enterprise to take effective actions to alter the amounts and timing of cash flows.

4. True: Companies determine cash provided by operating activities by converting net income on an accrual basis to a cash basis.

a) Depreciation on the company's equipment for 2017 is computed to be $16,000.

b) The Prepaid Insurance account had a $9,000 debit balance at December 31, 2017, before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $900 of unexpired insurance coverage remains.

c) The Office Supplies account had a $540 debit balance on December 31, 2016; and $2,680 of office supplies were purchased during the year. The December 31, 2017, physical count showed $637 of supplies available.

d) One-fourth of the work related to $11,000 of cash received in advance was performed this period.

e) The Prepaid Insurance account had a $5,100 debit balance at December 31, 2017, before adjusting for the costs of any expired coverage. An analysis of insurance policies showed that $4,200 of coverage had expired.

f) Wage expenses of $5,000 have been incurred but are not paid as of December 31, 2017.


Prepare adjusting journal entries for the year ended (date of) December 31, 2017, for each of these separate situations.

Answers

Answer:

Adjusting Journal Entries:

a) Debit Depreciation Expense - Equipment $16,000

   Credit Accumulated Depreciation - Equipment $16,000

To record depreciation charge for the year.

b) Debit Insurance Expense $8,100

   Credit Insurance Prepaid $8,100

To record insurance expense for the year.

c) Debit Office Supplies Expense $2,583

   Credit Office Supplies Account $2,583

To record office supplies used for the year.

d) Debit Deferred Revenue $2,750

   Credit Service Revenue $2,750

To record revenue for work done this period.

e) Debit Insurance Expense $4,200

   Credit Prepaid Insurance $4,200

To record insurance expense for the year.

f) Debit Wages Expense $5,000

  Credit Wages Payable $5,000

To record unpaid wages as of December 31, 2017.

Explanation:

Adjusting journal entries are entries made in the journal to accrue expenses and revenue in line with the accrual concept and the matching principle of U.S. GAAP.  The concept and principle require that expenses and revenue are matched in the period they were incurred and not when they were actually paid for or received.

New Age Makeup produces face cream. Each bottle of face cream costs $10 to produce and can be sold for $13. The bottles can be sold as is, or processed further into sunscreen at a cost of $14 each. New Age Makeup could sell the sunscreen bottles for $23 each.
A) Face cream must be processed further because its profit is $9 each.
B) Face cream must not be processed further because costs increase more than revenue.
C) Face cream must not be processed further because it decreases profit by $1 each.
D) Face cream must be processed further because it increases profit by $3 each.

Answers

Answer:

Face cream must not be processed further because costs increase more than revenue.

Explanation:

Profit = Total revenue - Total cost

If sold as face cream, total profit = $13 - $10 = $3

If processed into sunscreen , total cost = $10 + $14 = $24

Profit = $24 - $23 = $1

The profit from selling the product as a face cream is greater than the profit of developing it to a face cream. So the product shouldn't be developed further.

I hope my answer helps you

You work for a company that ends their fiscal year on September 30th. The company billed its customers for services provided in August, but they have not yet received payment for these services. Assuming the company uses accrual accounting, how should this transaction be recorded

Answers

Answer:

Debit Accounts receivable

Credit Service Revenue

Being entries for services rendered to customers in August

Explanation:

Under accrual accounting, revenue is recognized once it is earned which is when the goods or services have been delivered to the customers such that the risk and reward or control of the goods/services now lies with the customer.

This is different from the cash basis of accounting where revenue is only recognized when cash has been received.

In accrual accounting, When revenue is earned but cash is yet to be received,

Debit Accounts receivable

Credit Revenue account

On receipt of cash,

Debit Cash account  

Credit Accounts receivable.

Assume that the economy has three types of people. 20% are fad followers, 75% are passive investors and 5% are informed traders. The portfolio consisting of all informed traders has a beta of 1.4 and an expected return of 12.4%. The market has an expected return of 10% and the risk-free rate is 4%. The expected return for the fad follower's portfolio is closest to:__________.
a. 11.5%
b. 13.6%
c. 16%
d. 12.4%

Answers

Answer: a. 11.5%

Explanation:

Fad followers are those investors who follow a trend when it emerges and as such their betas will be less than that of informed traders because the informed traders would have acted first.

Using the Capital Asset Pricing Model to calculate expected return.

Er = Rf + b( Rm - Rf)

Er = Expected return

Rf = Risk Free Rate

b = Beta

Rm = Market Return.

The Expected Return for the Informed Investors is,

= 4% + 1.4 ( 10% - 4%)

= 4% + 1.4 ( 6%)

= 12.4%

With the Fad followed expected to have a lower beta and therefore a lower expected return than the Informed Investors, the only suitable option is the 11.5%.

On January 1 of the current year, Jimmy's Sandwich Company, Inc. reported stockholders' equity totaling $122,500. During the current year, total revenues were $96,000 while total expenses were $85,500. Also, during the current year the business paid $20,000 to the stockholders. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $196,000, the change in stockholders' equity during the year was:

Answers

Answer:

The multiple choices are:

A decrease of $9,500.

An increase of $9,500.

An increase of $30,500.

A decrease of $30,500.

An increase of 73,500.

The correct option is  a decrease of $9,500

Explanation:

The changes in stockholders' equity is in the form of the difference between inflow to stockholders and outflow to stockholders.

Inflow to stockholders is the earnings attributable to them in form of net income while outflow is the dividends paid to them.

net income=revenues-expenses=$96,000-$85,500=$10,500

Dividends were paid to the tune of $20,000

change in stockholders' equity=$10,500-$20,000=-$9,500

In essence ,the opening balance of stockholders' equity went down by $9,500 since the net income generated of $10,500 was not enough to fund dividend payment

Answer:

Explanation:a

2. What does an interest inventory measure?
A. The skills you have
B. Your ability to learn
C. The things you like to do
D. The things you do extremely well

Answers

Interest inventory measures the skills u have

Exercise 4-7 (Algo) Income statement presentation; discontinued operations; restructuring costs [LO4-1, 4-3, 4-4] Esquire Comic Book Company had income before tax of $1,650,000 in 2021 before considering the following material items: Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accounting principles. The before-tax loss on disposal was $405,000. The division generated before-tax income from operations from the beginning of the year through disposal of $630,000. The company incurred restructuring costs of $70,000 during the year. Required: Prepare a 2021 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 25%. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.)

Answers

Answer:

Net income = $1,353,750

Note: See the income statement below.

Explanation:

Before preparing the income statement, the following calculations are done first:

Income from operations of discontinued component = Income before-tax generated by the division - Before-tax loss on disposal = $630,000 - $405,000 = $225,000

Income from continuing operations = Income before tax - Restructuring costs = $1,650,000 - $70,000 = $1,580,000

The income statement can now be prepared as follows:

                Esquire Comic Book Company

                   Partial Income Statement  

          For the year ended December 31, 2021

Details                                                                        $  

Income from continuing operations               1,580,000

Discontinued operations gain (loss):  

Income from discontinued component            225,000

Total income before tax                                  1,805,000

Tax expenses (1,805,000.00 * 25%)                (451,250)

Net income                                                      1,353,750

The constraint at Johngrass Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below: UE BI CR Selling price per unit $335.18 $228.46 $199.21 Variable cost per unit $259.26 $173.08 $159.61 Minutes on the constraint 7.50 4.30 5.50 Assume that sufficient time is available on the constrained machine to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource?

Answers

Answer:

Explanation:

                                             UE              BI              CR

Selling price per unit      $335.18       $228.46     $199.21

Variable cost per unit    $259.26       $173.08      $159.61

Contribution margin       $75.92         $55.38       $39.60

Per unit (a)

Amount of constraint      7.50              4.30            5.50

resources required to

produced one unit (b)

Contribution margin

per unit of the                  $10.12           $12.86         $7.20

constraint resources

(a) / (b)

Ranking                             2                     1                  3

The company should be willing to pay up $7.20 per minute to produce more CR

Beasley, Inc., reports the following amounts in its December 31, 2021, income statement. Sales revenue $ 350,000 Income tax expense $ 39,000 Interest expense 12,000 Cost of goods sold 125,000 Salaries expense 37,000 Advertising expense 23,000 Utilities expense 43,000 Prepare a multiple-step income statement.

Answers

Answer and Explanation:

The preparation of the multiple-step income statement is presented below:

                                                 Beasley, Inc.

                                  Multiple-step income statement

                                             December 31, 2021

Sales revenue $350,000

Less: Cost of goods sold -$125,000

Gross profit $225,000

Less: Operating expenses

Salaries expense -$37,000

Advertising expense -$23,000

Utilities expense -$43,000

Operating income $122,000

Less: interest expense -$12,000

Income before income tax $110,000

Less: income tax expense -$39,000

Net income $71,000

We simply deduct all the expenses from the sales revenue so that the net income could arrive

NEED HELP ASAP
You find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2019 and the bond has a par value of $1,000. Rate Maturity Mo/Yr Bid Asked Chg Ask Yld ?? May 24 103.4690 103.5418 +.3093 6.119 5.524 May 29 104.5030 104.6487 +.4365 ?? 6.193 May 39 ?? ?? +.5483 4.151 In the above table, find the Treasury bond that matures in May 2029. What is your yield to maturity if you buy this bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answers

Answer:

4.93%

Explanation:

For computing the yield to maturity we need to apply the RATE formula i.e to be shown in the attachment below:

Provided that,  

Present value = $1,046.487

Future value or Face value = $1,000  

PMT = 1,000 × 5.524% ÷ 2 = $27.62

NPER = 10 years × 2 = 20 years

The 10 years is come from

= May 2029 - May 2019

= 10 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after applying the above formula,

The yield to maturity is

= 2.46% × 2

= 4.93%

g (Ignore income taxes in this problem.) Overland Corporation has gathered the following data on a proposed investment project: Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables. Investment required in equipment $ 440,000 Annual cash inflows $ 77,000 Salvage value of equipment $ 0 Life of the investment 20 years Discount rate 13 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The internal rate of return on the investment is closest to:

Answers

Answer:

16.70%

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

IRR can be calculated using a financial calculator:

Cash flow in year 0 = $-440,000

Cash flow each year from year one to twenty = $77,000

IRR = 16.70%

To find the IRR using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.

I hope my answer helps you

Which of the following statements is FALSE about opportunity​ cost? A. Opportunity cost exists only for goods with monetary values. B. Cost is always foregone opportunity. C. When a person buys two​ items, the concept of opportunity cost applies even though she can afford to buy both items. D. Opportunity cost is the next best alternative.

Answers

Answer:

A. Opportunity cost exists only for goods with monetary values.

Explanation:

Fundamentally, these are costs in economics used in analysis of a project, and it can also be used for calculation of cost benefits. It is generally known to measure or do all calculation that deals with the current and also forgone alternatives in any condition but this is mainly in economics where it is mostly used.

It is said that when a person buys two or more items, the concept of opportunity cost applies even though she can afford to buy both items and also known to be the best alternative. Here also, cost is notified as foregone opportunity.

Identify a true statement about the per-unit expenditure method of determining advertising budget. It bases its advertising budgets on those of competitors or other members of the industry. It attempts to determine the retail price by using production costs as a base. It sets the advertising budget as a predetermined share of profits or financial resources. It involves arguing for and presenting the advertising budget on the basis of research findings.

Answers

Answer: It attempts to determine the retail price by using production costs as a base.

Explanation:

The Per-unit expenditure approach to advertising sets the retail price based on the production cost. This means that the amount to be set for advertising is based on a fixed amount that is determined by how many units of a good the company expects to sell so that the advertising is based on how much it spent in production.

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