During the year, the following selected transactions affecting stockholders' equity occurred for Navajo Corporation: a. Feb. 1 Repurchased 230 shares of the company's own common stock at $27 cash per share. b. Jul. 15 Sold 130 of the shares purchased on February 1 for $28 cash per share. c. Sept. 1 Sold 100 of the shares purchased on February 1 for $26 cash per share. Required: 1. Prepare the journal entry required for each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answers

Answer 1

Answer:

a. Feb. 1

Treasury Shares $6,210 (debit)

Cash $6,210 (credit)

b. Jul. 15

Cash $3,600 (debit)

Common Shares $3,600 (credit)

c. Sept. 1

Cash $2,600 (debit)

Common Shares $2,600 (credit)

Explanation:

The purchase of company own shares is known as Treasury Shares.This decreases the equity element (Treasury Shares) and decreases the Assets of Cash.

Issue of Company own shares increases the Equity element (Common Shares) and decreases the Assets of Cash.


Related Questions

Tiptop Flight School offers flying lessons at a small municipal airport. The school's owner and the manager have been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below:

Tiptop Flight School
Variance Report
For the Month Ended July 31
Actual Results Planning Budget Variances
Lessons 155 150
Revenue $33,900 $33,000 $900 F
Expenses:
Instructor wages 9,870 9,750 120 U
Aircraft depreciation 5,890 5,700 190 U
Fuel 2,750 2,250 500 U
Maintenance 2,450 2,330 120 U
Ground facility expenses 1,540 1,550 (10) F
Administration 3,320 3,390 (70) F
Total expense 25,820 24,970 850 U
Net operating income $8,080 $8,030 $50 F
After several months of using such variance reports, the owner has become frustrated. For example. she is quite confident that instructor wages were very tightly controlled in July. but the report shows an unfavorable variance. The planning budget was developed using the following formulas, where q is the number of lessons sold:

Cost Formulas
Revenue $220 q
Instructor wages $65 q
Aircraft depreciation $38 q
Fuel $15 q
Maintenance $530 + $12 q
Ground facility expenses $1,250 + $2 q
Administration $3,240 + $1 q
Required:

1. Should the owner feel frustrated with the variance reports? Explain.

2. Prepare a flexible budget performance report for the school for July.

3. Evaluate the school's performance for July.

Answers

Answer:

1. Should the owner feel frustrated with the variance reports?

Yes, because they were incomplete. Since the quantity of lessons is larger than the budgeted, you must prepare a flexible budget. The flexible budget shows that there exists a total unfavorable variance of $385. E.g. , regarding the pilots' salaries, there is a favorable variance in the flexible budget.

2. Prepare a flexible budget performance report for the school for July.

I used an excel spreadsheet to prepare a flexible budget and I attached it.

3. Evaluate the school's performance for July.

The school's performance is neither good or bad because it has higher revenues than estimated (even though it lowered its sales price), but their costs are also higher than budgeted. They are doing a good job at selling their lessons, but a bad job of keeping costs under control. The overall variance is not that significant, but it is still unfavorable. Their fuel expenses should be controlled since the largest unfavorable variance results from spending too much fuel.

Explanation:

                                                    Actual            Planning        Variances

                                                    Results           Budget

Lessons                                         155                 150                     5 F

Revenue                                   $33,900           $33,000          $900 F

Expenses:

Instructor wages                $9,870              $9,750          $120 U Aircraft depreciation         $5,890              $5,700          $190 U Fuel                                     $2,750             $2,250          $500 U Maintenance                      $2,450             $2,330           $120 U Ground facility expenses   $1,540              $1,550            ($10) F Administration                    $3,320              $3,390           ($70) F Total expense                  $25,820            $24,970          $850 U

Net operating income                $8,080              $8,030            $50 F

1. The school proprietor should not feel frustrated with the variance reports as they are meant to provide guidance and not a feeder for frustration.  A careful review of the variance reports will help the owner to understand the cost dynamics for improvements.

2. The flexible budget performance report for the school in the month of July is as follows:

Tiptop Flight School

Flexible Budget Performance Report

For the Month Ended July 31

                                         Actual Results   Flexible Budget   Variances

Lessons                                    155                       155

Revenue                                 $33,900            $34,100            $200 U

Expenses:

Instructor wages                        9,870                10,075              205 F

Aircraft depreciation                 5,890                 5,890               0     None

Fuel                                            2,750                 2,325             (425) U

Maintenance                             2,450                 2,390               (60) U

Ground facility expenses         1,540                  1,560                20  F

Administration                         3,320                  3,395                75 F

Total expense                       25,820                25,635              185 U

Net operating income       $8,080               $8,465            $385 U

3. The school's performance in July is not encouraging based on the flexible budget.  There may be the need for the owner to review the price per lesson upward, keeping customers' effective demand in mind.

Data and Calculations:

The actual number of lessons for July, q = 155

Flexing the Budget:

Revenue $220 q = $34,100

Instructor wages $65 q = $10,075

Aircraft depreciation $38 q = $5,890

Fuel $15 q = $2,325

Maintenance $530 + $12 q = $2,390

Ground facility expenses $1,250 + $2 q = $1,560

Administration $3,240 + $1 q = $3,395

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The Whitewater LLP is equally owned by three partners and has the following balance sheet at the end of the current tax year:

Basis FMV
Cash $60,000 $60,000
Unrealized 0 15,000
receivables Land $15,000 $45,000
$75,000 $120,000
Petula, capital $25,000 $40,000
Prudence, capital $25,000 $40,000
Primrose, capital $25,000 $40,000
$75,000 $120,000
Petula is an active partner retiring from me service-oriented partnership. She receives $60,000 cash, none of which is stated to be for goodwill.

a) How much of the payment is for "unstated goodwill"?

b) How is the $60,000 allocated between a 736(a) income payment and a 736(b) property payment?

Answers

Answer:

A.) $20,000

Explanation:

Kindly check attached picture for detailed explanation

An inexperienced accountant for Riverbed Corp showed the following in the income statement: income before income taxes $258,000 and unrealized gain on available-for-sale securities (before taxes) $94,900. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 34% tax rate. Prepare a correct statement of comprehensive income.

Answers

Answer:

Kindly check attached file for the Comprehensive report

Acme Products manufactures and markets a product called Grow Tall. Acme claims in its advertising that Grow Tall will make its users grow a minimum of six inches taller than their current height. The Federal Trade Commission (FTC) will likely find that the ad is

Answers

Answer: a. deceptive, and the FTC may issue a cease-and-desist order.

Explanation:

A product that can increase human height by 6 inches sounds highly improbable and so is deceptive to people.

The Federal Trade Commission in it's role as a protector of Consumers from.unfair and deceitful practices in Commerce can act against Acme to stop them from deceiving the consumer.

One of the ways that the FTC can do this is by issuing a Cease and Desist order to Acme and if they fail to do so, can then take them to Court.

TOMS is a shoe company that, since its inception, has given away one pair of shoes to someone in need for every pair purchased by a customer. They have expanded their philanthropy and now support programs designed to provide eye exams and glasses, clean drinking water, and safe birthing services to people in need in various parts of the world. Customers loyal to the TOMS brand believe the company is _____________, fill in the blank, through their participation in these charitable efforts.

Answers

Answer:

Socially responsible

Explanation:

A socially responsible company is one that seeks to identify as well as relieve the social needs in its business environment.

A major social problem or need around the world is the lack of clean drinking water and birthing services. Thus, by proffering solutions to this problem loyal customer of TOMS shoe company could notice that the company takes seriously its responsibility to the society.

Quantum Logistics. Inc., a wholesale distributor, is considering the construction of a new warehouse to serve the southeastern geographic region near the Alabama-Georgia border. There are three cities being considered. After site visits and a budget analysis, the expected income and costs associated with locating in each of the cities have been determined. The life of the warehouse is expected to be 12 years and MARR is 15 percent/year. What is the future worth of each site based on future worth ranking? Which city should be recommended?

Answers

Answer:

Anniston City should be recommended as it has higher future value.

Explanation:

Using the formula:

Future value of annuity = C * { [(1+r)^n - 1] / r } C where C= initial cost, r= interest rate (MARR=15%), n= 12)

- Langrange City

= $1,260,000 * { [(1+0.15)^12 - 1] / 0.15 } = $6,741,308.466

- Auburn City

$1,000,000 * { [(1+0.15)^12 - 1] / 0.15 } = $5,350,243.439

- Anniston City

$1,620,000 * { [(1+0.15)^12 - 1] / 0.15 } = $8,667,398.504

Nikki, the design and development manager at Holden Outerwear, says she likes "taking something everyone does every day and doing it slightly different." A workplace that provides the freedom that Nikki promotes has a

Answers

Answer:

Democratic leadership style

Explanation:

Based on the information provided it seems that Nikki's workplace has a Democratic leadership style. This refers to a type of leadership style in which the members of the group take a participative role in the decision-making process. The phrase "taking something everyone does every day and doing it slightly different." shows that the company allows it's employees to make their own decisions as long as they get the desired results.

Laser World reports net income of $620,000. Depreciation expense is $47,000, accounts receivable increases $11,000, and accounts payable decreases $27,000. Calculate net cash flows from operating activities using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)

Answers

Answer:

$629,000  

Explanation:

The net cash flow from operating activities is the net income plus depreciation, minus the increase in accounts receivable as well as the decrease in accounts payable.

Net income is                               $620,000

depreciaton  expense                    $47,000

Increase in accounts receivable   ($11,000)

decrease in accounts payable     ($27,000)

Net cash flow from operations    $629,000  

The increase in accounts receivable denies the business of additional cash,hence it is deducted ,the same applies to increase in accounts payable

Brooks Co. purchases debt investments as trading securities at a cost of $61,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $66,000.1. Prepare the December 27 entry for the purchase of debt investments.2. Prepare the December 31 year-end fair value adjusting entry for the trading securities' portfolio and the January 3 entry when Brooks sells a portion of its trading securities (costing $30,500) for $31,750 cash.

Answers

Answer:

Dr short-term investment-trading   $61,000

Cr Cash                                                           $61,000

Dr fair value adjustment-trading      $5,000

Cr unrealized gain                                            $5,000

Dr cash         $31,750

Cr short-term investment-trading                                                             $30,500

Cr realized gain on sale of short-term investment ($31,750-$30,500)  $1,250

Explanation:

The cash paid for the purchase of trading securities would be credited with $61,000 while the debit goes to short-term  investment-trading

The 31st December year-end fair value adjusting entry is $5,000 ($66,000-$61,000) unrealized gain which would be debited to fair value adjustment-trading securities while the credit goes to unrealized gain-trading securities.

A firm is about to undertake the manufacture of a product, and is weighing the process configuration options. There are two intermittent processes under consideration, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month, and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 and variable costs of $1 per unit.a. At what output does the large intermittent process become cheaper than the small one?b. At what output does the repetitive process become cheaper than the larger intermittent process?

Answers

Answer:

A.$1,125

B.$38,000

Explanation:

Using this formula:

Fixed Cost of Process B- Fixed Cost of Process A ÷Unit Variable cost of Process A – Unit Variable Cost of Process B

a.

Where:

Fixed Cost =$12,000

Fixed Cost =$3,000

Unit Variable =10

Unit Variable =2

Hence:

(12,000-3,000)/ (10-2)

=$9,000/8

= $1,125

This means that large intermittent process become cheaper than the small one by $1,125

b.

Fixed Cost =$50,000

Fixed Cost =$12,000

Unit Variable =2

Unit Variable =1

(50,000-12,000)/ (2-1)

=$38,000/1

= 38,000

This means that repetitive process become cheaper than the larger intermittent process by $38,000

The Converting Department of Osaka Napkin Company uses the average cost method and had 2,000 units in work in process that were 60% complete at the beginning of the period. During the period, 25,200 units were completed and transferred to the Packing Department. There were 1,100 units in process that were 30% complete at the end of the period.

a. Determine the number of whole units to be accounted for and to be assigned costs for the period.

b. Determine the number of equivalent units of production for the period.

Answers

Answer:

Equivalent Units

Material cost = 26,560

Conversion Cost= 25,540

Explanation:

We would assume the company uses  weighted average method of valuation.

Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.

Equivalent units = Degree of completion (%) × Number of units

Material cost

Item                                 Unit                                  Equivalent unit

Completed                    25,200      100% ×25200  = 25,200

Closing WIP                   1,360           100%× 1,360       1360

Total equivalent units                                                 26,560

Conversion Cost

Item                                 Unit                                  Equivalent unit

Completed                    25,200      100% ×25200  = 25,200

Closing WIP                   1,360           25%× 1,360        340

Total equivalent units

The Converting Department of Osaka Napkin Company uses the average cost method and had 2,000 units in work in process that were 60% complete at the beginning of the period.

A. To determine the number of whole units to be accounted for and to be assigned costs for the period, let's calculate the total equivalent units of production.

Whole units at the beginning of the period = 2,000 unit

Units started and completed during the period = 25,200 units

Whole units in process at the end of the period = 1,100 units

Total whole units to be accounted for:

= Whole units at the beginning + Units started and completed during the period + Whole units in process at the end

= 2,000 units + 25,200 units + 1,100 units

= 28,300 units

B. To determine the number of equivalent units of production for the period, we need to consider the percentage of completion for the units in process at the beginning and the units in process at the end.

Equivalent units of production for units in process at the beginning:

= Whole units at the beginning × Percentage of completion at the beginning

= 2,000 units × 60%

= 1,200 equivalent units

Equivalent units of production for units in process at the end:

= Whole units in process at the end × Percentage of completion at the end

= 1,100 units × 30%

= 330 equivalent units

Total equivalent units of production for the period:

= Equivalent units of production for units in process at the beginning + Equivalent units of production for units in process at the end + Units started and completed during the period

= 1,200 equivalent units + 330 equivalent units + 25,200 units

= 26,730 equivalent units

Therefore, the number of equivalent units of production for the period is 26,730 units.

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The Holt fund has $500 million in assets, 80 million in debt and 15 million shares at the start of the year. At the end of the year, the fund has $600 million in assets, 40 million in debt and 16 million shares. During the year, investors received $0.80 in distributions per share. The total expense ratio is 0.4%, which is deducted at the end of the year. What is the rate of the return on the fund?
A. 38.54%
B. 27.32%
C. 35,14%
D. 25.81%
E. 34.79%

Answers

Answer:

B. 27.32%

Explanation:

First we need to calculate the Net asset value per share at the start and end of the year

NAV at the start of the year = ($500 million - $80 million) / 15 million shares = $28 per share

NAV at the end of the year = ($600 million - ( ($600 million x 0.004) + $40 million ) / 16 million shares = $34.85 per share

Return = (NAV at the end of the year - NAV at the start of the year + Distribution received) / NAV at the start of the year

Return = ( 34.85 - 28 + 0.8 ) / 28 = 0.2732 = 27.32%

Someone claiming to be an employee of the employer for whom Bernie works has been handing out flyers denigrating the employer at a local shopping mall. Bernie's employer had its security force search all of the employees' lockers to see if they had any of the flyers. Bernie can file an action against his employer under the 4th amendment if

Answers

Answer:

1 if employer is the federal government

2. If employer is the state or local government

Explanation:

Under the 4th amendment, Bernie can file an action against his employer if the employer is a state or local government and also if his employer is a federal government. Bernie can do this because the 4th amendment only applies to government employers and not private employers.

Suppose subway ridership in New York City declined by 10 percent after a fare increase of 25 cents to $2.75. Using the midpoint method, an estimate of the price elasticity of demand for subway rides is . True or False: According to your estimate, the Transit Authority's revenue rises when the fare increases. True False

Answers

Answer: Elasticity is 1.05

False

Explanation:

The Price Elasticity of Demand which measures how demand for goods change in relation to a change in price is calculated by the following formula,

Elasticity of demand = % change in Quantity ÷ % change in Prices

The Midpoint method is a method of estimating price percentage change by dividing the change in price by the AVERAGE of the new price and the old price.

The average of the changes are,

= (2.75 + (2.75 - 0.25))/2

= (2.75 + 2.5)/2

= 2.625

The Midpoint method gives a chance in price of,

= (2.75 - 2.65 )/ 2.625

= 9.5%

The Elasticity is therefore,

= Elasticity of demand = % change in Quantity ÷ % change in Prices

= 10% / 9.5%

= 1.05

According to this, the Transit Authority's revenue will not rise when Fair increases because the Elasticity is quite close to 1. An elasticity of 1 means that when fares increase, people using trains decrease by almost the same amount so revenue remains the same.

What percent of the educated workforce in the world can be found outside of the US?
O 75%
O 25%
O 50%
15%

Answers

Answer:

A. 75%

Explanation:

A workforce is a term used to describe the number of able people working for government, establishments, institutions and private companies etc in a society. Thus, educated workforce implies the number of educated able people that have the ability to work with respect to their academic discipline.

US has a high number of workforce and compensating packages for them. But when compared to other countries, over 75% of educated workforce exists outside of the United States of America.

Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 25 million bottles of wine were sold every month at a price of $6 per bottle. After the tax, 20 million bottles of wine are sold every month; consumers pay $8 per bottle (including the tax), and producers receive $5 per bottle. The amount of the tax on a bottle of wine is_____________ $ per bottle. Of this amount, the burden that falls on consumers is_________ $ per bottle, and the burden that falls on producers is $___________ per bottle.?

Answers

Answer:

Explanation:

From the question, we are informed that before the tax, 25 million wine bottles were sold at price of $6 per bottle and that after the tax, 20 million bottles of wine are sold every month and the consumers pay $8 per bottle which include the tax and producers receive $5 per bottle.

The amount of tax on wine will be the difference between the price consumers pay after the tax and the price producers receive. This will be:

= $8 - $5

= $3 per bottle

The tax burden that falls on the consumers will be difference between price paid after tax and the price which is paid before the tax.

= $8 - $6

= $2 per bottle

The tax burden on the producers will be difference between price received before the tax and price received after the tax.

= $6 - $5

= $1 per bottle

Arthur sustained an injury to his back. Arthur claimed the injury was suffered at work and filed a claim for workers' compensation benefits. The employer opposed this claim, saying the injury, if real, was the result of a congenital condition. In accordance with the statute, a hearing was held before the Workers' Compensation Board, which ruled against Arthur. Arthur became disgusted with the hearing officer and the proceedings because Arthur felt that the hearing officer did not like him. Arthur has consulted an attorney seeking to sue for workers' compensation benefits. An appeal is available within the agency, but Arthur wants to go directly to court because he feels that the agency appeal would be useless. Discuss the merits of this strategy.

Answers

Answer: Arthur can't bring a lawsuit to help overturn the ruling of the Worker’s Compensation Board,

Explanation:

From the question, Arthur got a back injury and Arthur claimed that the injury was suffered at work and therefore filed a claim for workers compensation benefits while the employer opposed this claim, by saying that the injury was due to a congenital condition.

A hearing was held before the Workers' Compensation Board, and the board ruled against Arthur. Arthur became disgusted and wants to go directly to the court because as he feels an agency isn't worth it.

The merits of this strategy are that

Arthur can't bring a lawsuit in order to help overturn the findings the Worker’s Compensation Board made, because Arthur failed to exhaust the available administrative remedies he had. Therefore, the lawsuit will not be successful and would therefore not be heard by the courts.

Bond A pays $8,000 in 20 years. Bond B pays $8,000 in 10 years. (To keep things simple, assume these are zero-coupon bonds, which means the $8,000 is the only payment the bondholder receives.)

Suppose the interest rate is 7 percent.

Using the rule of 70, the value of Bond A is approximately_______ , and the value of Bond B is approximately_______ .
Now suppose the interest rate increases to 14 percent.

Using the rule of 70, the value of Bond A is now approximately_________ , and the value of Bond B is approximately________ . Comparing each bond's value at 7 percent versus 14 percent, Bond A's value decreases by a_______ percentage than Bond B's value. The value of a bond__________ when the interest rate increases, and bonds with a longer time to maturity are _________sensitive to changes in the interest rate.

Answers

Answer:

To find the value of bond, let's use the formula:

Value of bond = price of bond / (1 + interest rate)ⁿ

Here n represents number of years.

At 7% interest rate:

Value of bond A = [tex]\frac{8000}{(1+0.07)^2^0} = 2067.35[/tex]

Value of bond B = [tex]\frac{8000}{(1+0.07)^1^0} = 4066.79[/tex]

At 14% interest rate:

Value of bond A = [tex] = \frac{8000}{(1+0.14)^20} = 582.09 [/tex]

Value of bond B = [tex] = \frac{8000}{(1+0.14)^10} = 2157.95 [/tex]

The difference between bond A at 7% and 14%:

$582.09 - $2067.35 = -$1485.26

The difference between bond B at 7% and 14%:

$2157.95 - $4066.79 = -$1908.84

% decrease between bond A and B:

[tex] \frac{1908.84 - 1485.26}{1908.84} * 100 = 22.19 [/tex]

Therefore, from the above calculations, we have the following:

Suppose the interest rate is 7%, Using the rule of 70, the value of Bond A is approximately $2067.35, and the value of Bond B is approximately $4066.79 .

Now suppose the interest rate increases to 14 percent.

Using the rule of 70, the value of Bond A is now approximately $528.09 , and the value of Bond B is approximately $2157.95 .

Comparing each bond's value at 7 percent versus 14 percent, Bond A's value decreases by a 22.19 percentage than Bond B's value.

The value of a bond decreases when the interest rate increases, and bonds with a longer time to maturity are more sensitive to changes in the interest rate.

Mifflin Co. reported the following for the current year.
Net sales $60,000
Cost of goods sold $38.000
Beginning balance in accounts receivable $14.000
Ending balance in accounts receivable $ 6,000
Compute (a) accounts receivable turnover and (b) days’ sales uncollected. Hint: Recall that accounts receivable turnover uses average accounts receivable, and days’ sales uncollected uses the ending balance in accounts receivable.

Answers

Can an object accelerate if it's moving with constant speed? Yup! Many people find this counter-intuitive at first because they forget that changes in the direction of motion of an object—even if the object is maintaining a constant speed—still count as acceleration.Acceleration is a change in velocity, either in its magnitude—i.e., speed—or in its direction, or both. In uniform circular motion, the direction of the velocity changes constantly, so there is always an associated acceleration, even though the speed might be constant. You experience this acceleration yourself when you turn a corner in your car—if you hold the wheel steady during a turn and move at constant speed, you are in uniform circular motion. What you notice is a sideways acceleration because you and the car are changing direction. The sharper the curve and the greater your speed, the more noticeable this acceleration will become. In this section we'll examine the direction and magnitude of that acceleration.The figure below shows an object moving in a circular path at constant speed. The direction of the instantaneous velocity is shown at two points along the path. Acceleration is in the direction of the change in velocity, which points directly toward the center of rotation—the center of the circular path. This direction is shown with the vector diagram in the figure. We call the acceleration of an object moving in uniform circular motion—resulting from a net external force—the centripetal acceleration

Stansfield Corporation had the following activities in 2012.

1. Payment of accounts payable: $770,000

2. Issuance of common stock: $250,000

3. Payment of dividends: $350,000

4. Collection of note receivable: $100,000

5. Issuance of bonds payable: $510,000

6. Purchase of treasury stock: $46,000

Compute the amount Stansfield should report as net cash provided by financing activities in its 2012 statement of cash flows.

Answers

Answer:

Net cash provided by financing activities in 2012 is $364,000

Explanation:

                      Computation of net financing activity.

Particular                                                         Amount

Issuance of common stock                         $250,000

Issuance of bonds payable                         $510,000

                                                                    $760,000

Less: Payment of dividends                        $350,000

Less: Purchase of treasury stock                $46,000

Net cash provided                                     $364,000

Net cash provided by financing activities in 2012 is $364,000

During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 80,000 mini refrigerators, of which 72,000 were sold. Operating data for the month are summarized as follows: 1 Sales $10,800,000.00 2 Manufacturing costs: 3 Direct materials $6,400,000.00 4 Direct labor 1,600,000.00 5 Variable manufacturing cost 1,280,000.00 6 Fixed manufacturing cost 320,000.00 9,600,000.00 7 Selling and administrative expenses: 8 Variable $1,080,000.00 9 Fixed 180,000.00 1,260,000.00Required:
1. Prepare an income statement based on the absorption costing concept.*
2. Prepare an income statement based on the variable costing concept.*
3. Explain the reason for the difference in the amount of income from operations reported in (1) and (2).

Answers

Answer:

Absorption Costing Net Income  1008,000

Variable Costing Net Income     976,000

Explanation:

Kodiak Fridgeration Company

Units Produced = 80,000

Units Sold = 72,000

Ending Inventory = 8000

Per Units Cost

Direct materials $6,400,000/80,000 = $ 80

Direct labor 1,600,000 /80,000= $ 20

Variable manufacturing cost 1,280,000/80,000= $ 16

Fixed manufacturing cost 320,000 /80,000 = $ 4            

Absorption Manufacturing Cost  per unit= 9,600,000/80,000= $ 120

Variable Manufacturing Costs per unit = $ 116

Kodiak Fridgeration Company

Income Statement

Absorption Costing

Sales                                                              $10,800,000

Manufacturing costs:

Direct materials $6,400,000

Direct labor 1,600,000

Variable manufacturing cost 1,280,000

Fixed manufacturing cost 320,000                 9,600,000

Less Ending Inventory (8000*120)                     (960,000)

Cost of Goods Sold                                           86,40,000

Gross Profit                                                         2160,000

Selling and administrative expenses:

Variable $ 72,000* 13.5=                                    972,000

Fixed                                                                      180,000                                                  

Net Income                                                        1008,000

Kodiak Fridgeration Company

Income Statement

Variable Costing

Sales                                                              $10,800,000

Variable manufacturing cost

(80,000*116)                                                       9280,000

Less Ending Inventory ( 8000*116)                     928,000

Cost of Goods Sold                                           83,52,000                  

Gross Contribution Margin                                 2448,000

Variable Selling and administrative expenses

(72000 * $1,080,000/80,000)                              972,000

Contribution Margin                                            1476,000

Less Fixed Expenses

Fixed manufacturing cost 320,000

Fixed 180,000                                                    500,000

Net Income                                                          976,000

3. The difference in absorption and variable costing income is because in absorption costing the fixed costs are treated as unit cost and in variable costs the fixed costs are treated as period costs. Also the fixed costs of the ending units is deducted in absorption costing where it is not deducted in variable costing.

Following are transactions for Valdez Services, a company owned by Brina Valdez. Brina Valdez invested $20,000 cash in the company in exchange for common stock. The company provided services to a client and immediately received $900 cash. The company received $10,000 cash from a client in payment for services to be provided next year. The company received $3,500 cash from a client in partial payment of accounts receivable. The company borrowed $5,000 cash from the bank by signing a note payable.

Required:
Prepare general journal entries for the above transactions of Valdez Services.

Answers

Please I also need help on my page it’s very easy

The balance sheet of Hidden Valley Farms reports total assets of $810,000 and $945,000 at the beginning and end of the year, respectively. The return on assets for the year is 15%. What is Hidden Valley's net income for the year

Answers

Answer:

$131,625

Explanation:

The computation of the net income for the year is shown below:

As we know that

Return on assets = net income ÷ average assets

0.15 = net income ÷ ($810,000 + $945,000) ÷ 2

0.15 = net income ÷ $877,500

So, the net income is

= $877,500 × 0.15

= $131,625

hence, the net income for the year is $131,625

We simply applied the above formula

Consumption (household sector) spending is the largest component of:_______


a. Aggregate output
b. Aggregate income
c. Aggregate employment
d. Aggregate supply
e. Aggregate demand

Answers

Answer:

a. Aggregate output 

Explanation:

Aggregate output can also be referred to as GDP. Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.

GDP calculated using the expenditure approach:

GDP = Consumption spending + Investment spending by businesses + Government Spending + Net Export

Consumption spending usually represents 70% of aggregate output.

I hope my answer helps you

A registered investment adviser lives in State X. The adviser does business with 1 client in State A and 1 client in State B. The adviser gives seminars about investing to groups of potential customers in State C. The adviser is required to register in:

Answers

Answer:

State X and C

Explanation:

Remember, the clients themselves stay in state A and B, not the investment advisor. According to the requirements of the law, the investment advisor is to register in the state where he gives seminars–State C, and the state in which he resides–X.

Martha was considering starting a new business. During her preliminary investigations, she incurred the following expenditures:
Salaries $22,000
Travel 18,000
Professional fees 13,000
Interest on a short-term note 4,000
Martha begins the business on July 1 of the current year. If Marth elects \SS 195 trearment, determine her startup expenditure deduction for the current year.

Answers

Answer:

$3,700

Explanation:

The computation of startup expenditure deduction for the current year is shown below:-

According to the section 195, the tax payer is eligible for an immediate deduction of startup expenditure or 5,000 decreased amount that exceeds $50,000

The amount left over of start up expense is eligible for amortization over 180 months starting from the month when the tax payer business started  

Immediate deduction = $5,000 - Start up cost in excess of $50,000

= $5,000 - $3,000

= $2,000

The $3,000 come from

= $53,000 - $50,000

= $3,000

now,

Amortized deduction = ((Total start up cost - Immediate deduction) ÷ 180 months) × Total number of months from beginning July to ending December

= (($53,000 - $2,000) ÷ 180) × 6 months

= 283.33 × 6

= $1,700 approx

and

Start up cost = Salary expenses + Travel expenses + Professional fees

= $22,000 + $18,000 + $13,000

= $53,000

finally

Total deduction in the current year = Immediate deduction + Amortized deductions

= $2,000 + $1,700

= $3,700

The price of a European call option on a stock with a strike price of $50 is $6. The stock price is $51, the continuously compounded risk-free rate (all maturities) is 6% and the time to maturity is one year. A dividend of $1 is expected in six months. What is the price of a one-year European put option on the stock with a strike price of $50?

Answers

Answer:

$3.06

Explanation:

The put call parity shows the relationship between the price of European put options and European call options of the same strike price and expiry date.

Given that:

Strike price (K) = $50

Price (C) = $6

rate (r) = 6% = 0.06

Stock price (SO) = $51

Time (T) = 1 year

Dividend (D) = $1

The period of dividend (t) = 6 months = 0.5 years

The put call parity (P) is given by the equation:

[tex]P+SO=C+Ke^{-rT}\\P=C+Ke^{-rT}-SO[/tex]

The dividend present value = [tex]De^{-rt}=1e^{-0.06*0.5}=\$0.97[/tex]

[tex]P=C+Ke^{-rT}-SO\\P=6+50e^{-0.06*1}-(51-0.97)\\P=6+47.088-50.03\\P=\$3.06[/tex]

Rosewood Company made a loan of $16,000 to one of the company's employees on April 1, 2020. The one-year note carried a 6% rate of interest. Principal and interest will be paid at the end of the term of the loan. The amount of interest revenue that Rosewood would report in 2020 and 2021, would be?

Answers

Answer:

loan interest revenue  for 2020 is $720

loan interest revenue for 2021 is $240

Explanation:

The loan interest revenue in the year 2020 is for 9 months out of the total loan tenure of twelve months:

interest revenue for 2020=$16,000*6%*9/12=$720.00  

This would be debited to interest receivable and credited to interest revenue account.

interest revenue for 2021=$16,000*6%*3/12=$240.00  

Answer:

The answer is $720 and $240

Explanation:

Solution

Recall that:

Rosewood company made a loan of =$16,000

One year note carried an interest of =6%

Now,

We solve for the amount of interest revenue that rosewood would report

Report  is given below:

$16,000 * 6% * 9/12 = $720 Interest revenue in April to December, 2020

$16,000 * 6% * 3/12 = $240 interest revenue in January - March, 2021

Therefore the interest revenue for Rosewood report/feedback in 2020 and 2021 is  $720 and $240 respectively.

Suppose the income elasticity of demand is -0.5 for good X. This implies that a 5% decrease in income will cause the quantity demanded of good X to a. increase by 2.5%, and X is an inferior good. b. decrease by 2.5% and X is a normal good. c. increase by 10% and X is an inferior good. d. decrease by 10% and X is a normal good.

Answers

Answer:

a. increase by 2.5%, and X is an inferior good.

Explanation:

The income elasticity of demand is the ratio between the percentage change in demand and the percentage change in income.

The change in demand caused by a 5% decrease in income is:

[tex]-0.5=\frac{\%\ change\ demand}{\%\ change\ income} \\-0.5=\frac{D}{-5\%} \\D=+2.5\%[/tex]

Demand will increase by 2.5%. A good whose demand increases when consumer income decreases is called an inferior good.

Therefore, the answer is a. increase by 2.5%, and X is an inferior good.

Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 5 in 2009, then the GDP deflator in 2009, using a base year of 2002, was approximately:________.
A) 1.5.
B) 1.7.
C) 1.9.
D) 2.0.

Answers

Answer:

B) 1.7

Explanation:

GDP deflator simply shows the occurring event of the level of prices in the economy which is why It is often the ratio of nominal GDP to real GDP.

GDP deflator in 2009 will be:

Norminal GDP

Cost of apple= $1 in 2009

Apple produced =5 in 2009

Cost of oranges= $1.50 in 2009.

Orange produce= 5 in 2009

$1.00*(5)+$1.50*(5)

=5+7.5

=$12.50

Real GDP

Cost of apple= $0.50 in 2002

Apple produced =5 in 2002

Cost of oranges= $1 in 2002

Orange produce= 5 in 2002

0.50*(5)+$1.00*(5)

=2.5+5

=$7.50

GDP deflator = Nominal GDP/Real GDP)

=$12.50/$7.50

=1.666

approximately 1.7

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