Answer:
=> fraction of the portfolio that should be allocated to T-bills = 0.4482 = 44.82%.
=> fraction to equity = 0.5518 = 55.18%.
Explanation:
So, in this question or problem we are given the following parameters or data or information which are; that the utility function is U = E(r) – 0.5 × Aσ2 and the risk-aversion coefficient is A = 4.4.
The fraction of the portfolio that should be allocated to T-bills and its equivalent fraction to equity can be calculated by using the formula below;
The first step is to determine or Calculate the value of fraction to equity.
Hence, the fraction to equity = risk premium/(market standard deviation)^2 - risk aversion.
= 8.10% ÷ [(20.48%)^2 × 3.5 = 0.5518.
Therefore, the value for fraction of the portfolio that should be allocated to T-bills = 1 - fraction to equity = 1 - 0.5518 =0.4482 .
You have been asked to analyze the bids for 200 polished disks used in solar panels. These bids have been submitted by three suppliers: Thailand Polishing, India Shine, and Sacramento Glow. Thailand Polishing has submitted a bid of 3,000 baht. India Shine has submitted a bid of 3,000 rupee. Sacramento Glow has submitted a bid of $3,000. You check with your local bank and find that $1=10 baht , and $1=8 rupee. The final destination for the disks is New Delhi, India and there is a 35% import tax. Thailand Polishing and Sacramento Glow are based outside of India and India Shine is based in India.A .What is the price per unit in dollars, including import tax for Thailand polishing?B. What is the price per unit for India Shine?C. What is the price per unit for Sacramento Glow?
Answer:
(a) Thailand polishing price per unit is $2.03
(b) India shine price per unit is $1.88
(c) Sacramento glow price per unit is $15
Explanation:
(a) Thailand polishing:
Thailand polishing has submitted a quote of 3000 baht
$1 = 10 bhat
1 bhat = $ 0.1
Thailand polishing submitted bid = 3000 × $0.1 =$300
Import tax = 35%
Total cost = 1.35 × 300 = $405
Cost per unit = 405 ÷ 200 = $2.03
(b) India shine:
India shine has submitted a bid of 3000 rupees
$1 = 8 rupees
1 Rupee = $0.125
India shine submitted bid = 3000 × 0.125 = $375
Price per unit = 375 ÷ 200 = $1.88
(c) Sacramento Glow submitted bid = $3,000
price per unit = $3,000 ÷ 200
= $15
Hahn Flooring Company uses a perpetual inventory system.
A. Sales returns of $97,650 and merchandise returns of $48,100 are estimated for the current year's sales.
B. The inventory account has a balance of $673,400, while physical inventory indicates that $663,800 of merchandise is on hand.
Journalize the December 31 adjusting entries based on the above transactions. Assume that the inventory shrinkage is a normal amount. Refer to the Chart of Accounts for exact wording of account titles.
Answer and Explanation:
The adjusting journal entries are as follows
1. Sales $97,650
To Customer refunds payable $97,650
(Being the sales return is recorded)
For recording this we debited the sales as it reduced the sales and credited the customer refund payable as it increased the liabilities
2. Estimated Returns inventory $48,100
To Cost of goods sold $48,100
(Being the merchandise return is recorded)
For recording this we debited the estimated returns inventory and credited the cost of goods sold
3. Cost of goods sold $9,600
To Inventory $9,600
(Being the inventory shrinkage is recorded)
For recording this we debited the cost of goods sold as it increased the expenses and credited the inventory as it reduced the assets
The computation is shown below:
= Balance of inventory account - physical inventory merchandise on hand
= $673,400 - $663,800
= $9,600
The owner of a downtown parking lot has employed a civil engineering consulting frim to advise him on the economic feasibility of constructing an office building on the site. bill samuels, a newly hired civil engineer, has been assigned to make the analysis. he has assembled the following data
alternative total investment total net annual revenue
sell parking lot 0 0
keep parking lot 200,000 22,000
build 1 story building 400,000 60,000
build 2 story building 555,000 72,000
build 3 story building 750,000 100,000
build 4 story building 875,500 105,000
build 5 story building 1,000,000 120,000
The analysis period is be 15 years. for all alternatives, the property has an estimated resale(salvage) value at the end of 15 years equal to the present total investement.
(a) constuct a choice table for interest rate from 0% to 100%
(b) if the MARRR is 10%, what recommendation should bill make?
Answer: The answer has been attached
Explanation:
Base on the MARR been 10%, I'll recommend 3 storey building.
Further explanation has been attached. In the explanation, note that:
I = A/P e.g.
Interest rate for build 1 storey building:
= 60/400 × 100
= 15%
Lopez Corporation incurred the following costs while manufacturing its product.Materials used in product $120,000 Advertising expense $45,000Depreciation on plant 60,000 Property taxes on plant 14,000Property taxes on store 7,500 Delivery expense 21,000Labor costs of assembly- 110,000 Sales commissions 35,000line workersFactory supplies used 23,000 Salaries paid to sales clerks 50,000Work in process inventory was $12,000 at January 1 and $15,500 at December 31. Finished goods inventory was $60,000 at January 1 and $45,600 at December 31.Compute:____ Cost of goods manufactured $Compute cost of goods sold.
Answer:
Cost of goods manufactured is $323,500
Cost of goods sold is $337,900
Explanation:
Given:
Materials used in product = $120,000
Advertising expense = $45,000
Depreciation on plant = $60,000
Property taxes on plant = $14,000
Property taxes on store = $7,500
Delivery expense = $21,000
Labor costs of assembly-line workers = $110,000
Sales commissions = $35,000
Factory supplies used = $23,000
Salaries paid to sales clerks = $50,000
Work in process inventory was $12,000 at January 1 and $15,500 at December 31.
Finished goods inventory was $60,000 at January 1 and $45,600 at December 31.
(a) Cost of goods manufactured = Materials used in product + Depreciation on plant + Labor costs of assembly-line workers + Property taxes on plant + Factory supplies used + Beginning work in process - ending work in process
= $120,000 + $60,000 + $110,000 + $14,000 + $23,000 + $12,000 - $15,500
= $323,500
(b) Cost of goods sold = Cost of goods manufactured + opening finished goods inventory - Closing finished goods inventory
= $323,500 + $60,000 - $45,600
= $337,900
Based on the given information,
The cost of goods manufactured is $323,500
cost of goods sold $337,900
Calculations are as follows
(a) Cost of goods manufactured =Depreciation on plant + Materials used in product +Property taxes on plant + Labor costs of assembly-line workers + Factory supplies used + Beginning work in process - ending work in process
= $120,000 + $60,000 + $110,000 + $14,000 + $23,000 + $12,000 - $15,500
= $323,500
(b) Cost of goods sold = Cost of goods manufactured + opening finished goods inventory - Closing finished goods inventory
= $323,500 + $60,000 - $45,600
= $337,900
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g A firm buys on terms of 3/15, net 45. It does not take the discount, and it generally pays after 85 days. What is the nominal annual percentage cost of its non-free trade credit, based on a 365-day year? The firm's APR of not taking the trade credit is ____. (If you use percent, then do not use the percent sign. Go two places to the right of the decimal point (XX.XX). If you use decimal places, then go four places to the right of the decimal place. 0.XXXX).
Answer: 0.1613
Explanation:
From the question, a firm buys on terms of 3/15, net 45. This implies that a discount rate of 3% will be provided I payment is made within 15 days. If it's not made within 15 days, then full payment will be due on 85 days.
The nominal annual percentage cost is 0.1613. The calculation has been attached
Causwell Company began 2018 with 11,000 units of inventory on hand. The cost of each unit was $4.00. During 2018 an additional 35,000 units were purchased at a single unit cost, and 21,000 units remained on hand at the end of 2018 (25,000 units therefore were sold during 2018). Causwell uses a periodic inventory system. Cost of goods sold for 2018, applying the average cost method, is $108,750. The company is interested in determining what cost of goods sold would have been if the FIFO or LIFO methods were used. Required: 1. Determine the cost of goods sold for 2018 using the FIFO method. [Hint: Determine the cost per unit of 2018 purchases.] 2. Determine the cost of goods sold for 2018 using the LIFO method.
Answer and Explanation:
For computing the cost of goods sold under two method first we have to determine the cost per unit which is shown below:
The average cost per unit is
= $108,750 ÷ 25,000 units
= $4.35
Now the cost per unit is
Total cost (11,000 units + 35,000 units) × $4.35 $200,100
Beginning units (11,000 units × $4) $44,000
The Remaining cost for 35000 units ($200,100 - $44,000) $156,100
Divide by Purchase cost per unit of 35000 units $4.46
Now the cost of goods sold are as follows
1. Under the FIFO method
Beginning 11,000 × $4.00 $44,000
Purchased 14,000 × $4.46 $62,440
Total 25,000 $1,06,440
2. Under the LIFO method
Purchased 25,000 × $4.46 $1,11,500
The annual fixed costs for a plant are $100,000, and the variable costs are $140,000 at 70% utilization of available capacity, with net sales of $280,000. What is the breakeven point in units of production if the selling price per unit is $40
Answer:
With the production 5000 units the plant will achieve it's break even point
Explanation:
Solution
The break even points is the point in a business when the total revenue is exactly the same to the equal expenditure.
The formula is given below:
D' = Cy/(p-cy)
Here
D' =the demand at break even point
p = the selling price
cy= the variable costs per unit
Cy = the total fixed cost
Thus
The total cost of the plant = $100,000
The variable costs = $140,000
The net sales = $280,000
The selling price per unit = $40
The total no units sold per year is given as :
Annual sale (units) = Total sales/Sale per unit
Now,
By the method of substitution we have the following.
Annual sale (units) = $280,000/40
=7000 units/year
The formula for variable cost per unit cy is
cy = Cy/Annual sale (units)
Now,
We substitute in the above equation the value of Cy as $140,000 and annual sale as 7000 units/per year
cy = $140,000/7000
=$20 units
For the demand at break even point D', we have the following:
D' = Cy/(p-cy)
We We substitute in the above equation the value of Cy as $100,000 and p as $40/unit and cy as $20 /unit
D' = 100000/(40 -20)
=5000 units/year
A couple borrows $200,000 for a mortgage that requires fixed monthly payments over 30 consecutive years. The first monthly payment is due in one month. If the interest rate on the mortgage is 5%, which of the following comes closest to the monthly payment?
When would the calculation of the effective annual interest rate be most useful?
a. When comparing two investments with different annuity amounts
b. When comparing two investments with different par values
c. When comparing two investments that end at different points in time
d. When comparing two investments that compound differently within a year
e. When comparing two investments that have different inherent risk
Answer:
(a) The monthly payment is $ 1,073.64
(b) The correct option is option D. When comparing two investments that compound differently within a year.
Explanation:
Monthly payment = $1,073.64
Using financial calculator BA II Plus - Input details:
$
I/Y = Rate = 5/12 = 0.416667
FV = Future value = $0
N = Total payment term 25*12 = 360
PV = Present value of loan -$200,000
CPT > PMT = Monthly Payment $1,073.64
1. The monthly payment by the couple is $1,073.64.
2. The calculation of the effective annual interest rate would be most useful d. When comparing two investments that compound differently within a year.
Data and Calculations:
The monthly payment is determined as follows:
(# of periods) = 360 months (30 x 12)
I/Y (Interest per year) = 5%
PV (Present Value) = $200,000
FV (Future Value) = $0
Results:
Monthly Payment = $1,073.64
Sum of all periodic payments = $386,511.57
Total Interest = $186,511.57
Thus, the couple would pay $1,073.64 monthly for 30 years in order to pay off the mortgage of $200,000 at 5% interest.
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Some major technology companies have faced scrutiny in the past when it comes to labor and human rights on the overseas suppliers' side. What are the challenges of monitoring overseas suppliers (especially tier 3, tier 4, etc.) that are guilty of not following labor and human rights guidelines
Answer: The answer is provided below
Explanation:
With overseas factories that continue to move to new locations with a lower labour costs, the monitoring and controlling working conditions becomes a challenge. Research has shown that companies do little to monitor human rights violations in the low-cost supply chain locations.
A scandal involving Apple was reported in 2014 at a manufacturing building in China. The building which was owned by Catcher Technology Co., manufactures metal iPad covers for iPhones. Some findings included hiring discrimination, locked safety exits, excessive work hours, and also unpaid overtime each month totalling about $290,000 in owed wages. The factory was reported to have been dumping its industrial fluids and waste into nearby rivers, and also not providing proper toxic equipment for the employees.
Human rights of these people saw n those area are being abused by having them exposed to pollution, which can lead to lung diseases.
Companies like Apple have said that they are continuing to monitor situations like this, and are fixing them, but we still hear cases of more wrongdoings, therefore you have to wonder how vital these issues truly are to the firms involved.
A company currently pays a dividend of $3.4 per share (D0 = $3.4). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company's stock has a beta of 1.3, the risk-free rate is 6.5%, and the market risk premium is 1.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.
Answer:
Current price of stock =$128.06
Explanation:
The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.
The model is given as
P = D× g/(r-g)
P- price, D- dividend payable in year 1, r -cost of equity, g - growth rate in dividend
Cost of equity
The cost of equity can be calculated using the Capital Asset Model (CAPM).
Ke= Rf +β(Rm-Rf)
Ke =? , Rf- 6.5%, (Rm-Rf)- 1.5, β- 1.3
Ke=6.5% + 1.3× (1.5)= 8.45%
Stock price
PV of dividend in year 1 = 3.4× 1.17× 1.0845^(-1)=3.668
PV of dividend in year 2 = 3.4× 1.17^2× 1.0845^(-2) = 3.9572
PV of dividend in year 3
This will be done in two(2) steps:
Step 1- PV in year 2 terms
3.4× 1.17^2× 1.05/(0.0845- 0.05)= 141.651
Step 2- PV in year 0
141.6513913× 1.0845^(-2)= 120.4375
Current piece of stock = 3.668 + 3.957 + 120.4375 = 128.062
Current price of stock =$128.062
Plaintiffs filed a class action lawsuit against investment banks alleging that they inflated prices on more than 300 IPOs, causing IPO investors to overpay for stock, and unlawfully benefited these banks through overcompensation of banking commissions and profits made through quick sales of this stock in their own accounts before prices settled into a more realistic valuation. How would you combat such abuses going forward
Answer: The answer is provided below
Explanation:
When we think about investment, individuals and firms should understand the risks before they invest their money, and also the loss risks.
When investing in a business or a corporation that you may work for, it is vital to understand and be clear on the fine print and also the 180-dayhold. It is vital on any purchase to understand the risks and rules which come along with it especially stocks.
It is crucial to the success of an individual, that research is done in order to make sure everything is understood prior to the stock sale.
On the other side, federal banking regulators committee should also do a better job with the investigations and the enforcements of bank and the stock regulations.
Jasper and Crewella Dahvill were married in year 0. They filed joint tax returns in years 1 and 2. In year 3, their relationship was strained and Jasper insisted on filing a separate tax return. In year 4, the couple divorced. Both Jasper and Crewella filed single tax returns in year 4. In year 5, the IRS audited the couple’s joint year 2 tax return and each spouse’s separate year 3 tax returns. The IRS determined that the year 2 joint return and Crewella’s separate year 3 tax return understated Crewella’s self-employment income, causing the joint return year 2 tax liability to be understated by $12,700 and Crewella’s year 3 separate return tax liability to be understated by $7,350. The IRS also assessed penalties and interest on both of these tax returns. Try as it might, the IRS has not been able to locate Crewella, but they have been able to find Jasper. (Leave no cells blank - be certain to enter "0" wherever required.)
a. What amount of tax can the IRS require Jasper to pay for the Dahvill’s year 2 joint return?
Amount of Tax:__________________
b. What amount of tax can the IRS require Jasper to pay for Crewella’s year 3 separate tax return?
Amount of Tax:__________________
Answer: a. $12,700
b. $0
Explanation:
a. As Jasper and Crewella Dahvill filed joint tax returns in Year 2, both of them are joint and severally liable for any errors that may arise in the filing. The IRS could not find Crewella but they could find Jasper and as he is liable as well, he will have to pay the full amount that Crewella understated their tax liability by.
b. In year 3, Jasper and Crewella Dahvill had a strained relationship and filed their returns separately. As a result Jasper is not liable for any errors that will arise from Crewella's tax returns filing including the understatement of tax liability.
Hoosier Corporation declared a 2-for-1 stock split to all shareholders of record on March 25 of this year. Hoosier reported current E&P of $600,000 and accumulated E&P of $3,000,000. The total fair market value of the stock distributed was $1,500,000. Barbara Bloomington owned 1,000 shares of Hoosier stock with a tax basis of $100 per share.a) What amount of taxable dividend income, if any, does Barbara recognize this year? Assume the fair market value of the stock was $150 per share on March 25 of this year.b) What is Barbara's income tax basis in the new and existing stock she owns in Hoosier Corporation, assuming the distribution is tax-free?c) How does the stock dividend affect Hoosier's accumulated E&P at the beginning of next year?
Answer:
(a) The stock dividend is not taxable because it affects all shareholders pro rata
(b) Babara will transfer half of the old stock base to the new stock and make her new and old stock tax base $50
(c) Hoosier does not change his E&P for the stock dividend since the shareholders are not taxable.
Explanation:
On October 1, Natalie King organized Real Solutions, a new consulting firm. On October 31, the company's records show the following items and amounts.
Cash $2,000 Cash dividends $3,360
Accounts receivable 13,000 Consulting fees earned 15,000
Office supplies 4,250 Rent expense 2,550
Land 36,000 Salaries expense 6,000
Office equipment 28,000 Telephone expense 660
Accounts payable 7,500 Miscellaneous expenses 680
Common stock 74,000
Also assume the following:
a. The owner’s initial investment consists of $37,720 cash and $45,940 in land in exchange for its common stock.
b. The company’s $17,710 equipment purchase is paid in cash.
c. The accounts payable balance of $8,230 consists of the $2,990 office supplies purchase and $5,240 in employee salaries yet to be paid.
d. The company’s rent, telephone, and miscellaneous expenses are paid in cash.
e. No cash has been collected on the $13,800 consulting fees earned.
Required:
Using the above information to prepare an October 31 statement of cash flows for Real Solutions.
Answer:
Statement of cash flows for Real Solutions for the year ended October 31 .
Cash flow from Operating Activities
Net Profit $14,660
Adjustment for Changes in Working Capital :
Increase in Accounts receivable ($13,000)
Increase in Accounts Payable $7,500
Net Cash from Operating Activities $9,160
Cash flow from Investing Activities
Purchase of Equipment ($17,710)
Net Cash from Investing Activities ($17,710)
Cash flow from Financing Activities
Cash dividends ($3,360)
Net Cash from Financing Activities ($3,360)
Movement during the Period ($11,910)
Cash and Cash Equivalents at Beginning of the year $37,720
Cash and Cash Equivalents at End of the year $25,810
Explanation:
The Indirect Method has been used for the Preparation of Cash flow from Operating Activities. (opt for this as it is easier to deal with the information given).
Calculation of Net Income for the Year Ended October 31
Revenue :
Consulting fees earned 15,000
Consulting fees accrued 13,800
Total Revenue 28,800
Less Expenses ;
Office supplies 4,250
Rent expense 2,550
Salaries expense 6,000
Telephone expense 660
Miscellaneous expenses 680 (14,140)
Net Income 14,660
At the end of 2021, Larkspur Co. has accounts receivable of $653,700 and an allowance for doubtful accounts of $24,200. On January 24, 2022, it is learned that the company’s receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,245.
A) Prepare the journal entry to record the write-off.
Credit
Enter an account title Enter a debit amount Enter a credit amount
What is the cash realizable value of the accounts receivable before the write-off and after the write-off?
Before Write-Off After Write-Off
Cash realizable value $ $
Answer:
January 24, 2022, Madonna Inc.'c account is written off
Dr Allowance for doubtful accounts 4,245
Cr Accounts receivable 4,245
the cash realizable value of the accounts receivable account:
before the write off = $653,700 - $24,200 = $629,500after the write off = ($653,700 - $4,245) - ($24,300 - $4,245) = $629,500The net balance of the account does not change because the allowance for doubtful accounts is a contra asset account that already decreased the accounts receivable balance.
Firms HD and LD are identical except for their level of debt and the interest rates they pay on debt—HD has more debt and pays a higher interest rate on that debt. Based on the data given below, what is the difference between the two firms' ROEs? Applicable to Both Firms Firm HD's Data Firm LD's Data Assets $200 Debt ratio 50% Debt ratio 30% EBIT $40 Interest rate 12% Interest rate 10% Tax rate 35%
Answer:
2.41%
Explanation:
The difference between the two firms' ROEs is shown below:-
Particulars Firm HD Firm LD
Assets $200 Debt ratio 50% Debt ratio 30%
EBIT $40 Interest rate 12% Interest rate 10%
Tax rate 35%
Debt $100 $60
Interest $12 $6
($100 × 12%) ($60 × 10%)
Taxable income $28 $36
($40- $12) ($40 - $6)
Net income $18.2 $22.1
$28 × (1 - 0.35) $36 × (1 - 0.35)
Equity $100 $140
($200 - $100) ($200 - $60)
ROE 18.2% 15.79%
($18.2 ÷ $100) ($22.1 ÷ $140)
Taxable income = EBIT - Interest
Net income = Income - Taxable income
Equity = Assets - Debt
ROE = Net income ÷ Equity
Difference in ROE = ROE Firm HD - ROE Firm LD
= 18.2% - 15.79%
= 2.41%
So, for computing the difference between the two firms' ROEs we simply deduct the ROE firm LD from ROE firm HD.
Two different forecasting techniques (F1 and F2) were used to forecast demand for cases of bottled water. Actual demand and the two sets of forecasts are as follows:
PREDICTED DEMAND
Period Demand F1 F2
1 68 63 62
2 75 66 61
3 70 73 70
4 74 65 71
5 69 71 73
6 72 69 73
7 80 70 76
8 78 72 80
a.
Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate? (Round your answers to 2 decimal place.)
MAD F1
MAD F2
(Click to select)F1F2None appears to be more accurate.
b.
Compute the MSE for each set of forecasts. Given your results, which forecast appears to be more accurate? (Round your answers to 2 decimal places.)
MSE F1
MSE F2
(Click to select)F1F2None appears to be more accurate.
c.
In practice, either MAD or MSE would be employed to compute forecast errors. What factors might lead a manager to choose one rather than the other?
Either one might already be in use, familiar to users, and have past values for comparison. If (Click to select)control chartstracking signals are used, MSE would be natural; if (Click to select)tracking signalscontrol charts are used, MAD would be more natural.
d.
Compute MAPE for each data set. Which forecast appears to be more accurate? (Round your intermediate calculations to 2 decimal places and and final answers to 2 decimal places.)
MAPE F1
MAPE F2
Answer:
a. Compute MAD for each set of forecasts. Given your results, which forecast appears to be more accurate?
I used an excel spreadsheet (attached as MAD).
F1 seems to be more accurate.
b. Compute the MSE for each set of forecasts.
I used an excel spreadsheet (attached as MSE).
F2 seems to be more accurate.
c. In practice, either MAD or MSE would be employed to compute forecast errors. What factors might lead a manager to choose one rather than the other?
Either one might already be in use, familiar to users, and have past values for comparison.
If control charts are used, MSE would be natural; if tracking signals are used, MAD would be more natural.d. Compute MAPE for each data set. Which forecast appears to be more accurate?
I used an excel spreadsheet (attached as MAPE).
F2 seems to be more accurate.
Explanation:
Period Demand F1 F2
1 68 63 62
2 75 66 61
3 70 73 70
4 74 65 71
5 69 71 73
6 72 69 73
7 80 70 76
8 78 72 80
Prestige Manufacturing Corporation reports the following items in its statement of cash flows presented using the direct method. Indicate whether each item is disclosed in the operating activities (O), investing activities (I), or financing activities (F) section of the statement under GAAP or use (NA) if the item does not appear on the statement.1. Payment for equipment purchase. 2. Repayments of bank loan. 3. Dividends paid 4. Proceeds from issuance of stock. 5. Interest paid. 6. Receipts from customers.
Answer:
1. Payment for equipment purchase = investing activities (I)
2. Repayments of bank loan = financing activities (F)
3. Dividends paid = financing activities (F)
4. Proceeds from issuance of stock = financing activities (F)
5. Interest paid = operating activities (O)
6. Receipts from customers = operating activities (O)
Explanation:
Operating Activities are activities that generate cash in the ordinary course of business.
Investing Activities are activities that generate cash due to movement in capital expenditure balances
Financing Activities are activities that generate cash due to sourcing of funds or changes in ownership.
The two independent cases are listed below: Case A Case B Year 2 Year 1 Year 2 Year 1 Sales Revenue $11,000 $9,000 $21,000 $18,000 Cost of Goods Sold 6,000 5,500 12,000 11,000 Gross Profit 5,000 3,500 9,000 7,000 Depreciation Expense 1,000 1,000 1,500 1,500 Salaries and Wages Expense 2,500 2,000 5,000 5,000 Net Income 1,500 500 2,500 500 Accounts Receivable 300 400 750 600 Inventory 750 500 730 800 Accounts Payable 800 700 800 850 Salaries and Wages Payable 1,000 1,200 200 250 Show the operating activities section of the statement of cash flows for year 2 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
Net cash from operating activities are $2,250 for Case A and $3,820 for Case B.
Explanation:
The indirect method of presenting the cash flow statement is a method that starts with net income or loss, and then with additions to or subtractions from of revenue and expense items that are non cash to obtain cash flow from operating activities.
For this question, this can be presented as follows:
Details Case A ($) Case B ($)
Net Income 1,500 2,500
Adjustments:
Depreciation Expense 1,000 1,500
Changes in Operating assets & liab.:
(Increase) Decrease in Acct receivables 100 –150
Decrease (Increase) in Inventory –250 70
Increase (Decrease) in Accounts payable 100 –50
Increase (Decrease) in Sal. & Wag. Paybl. –200 –50
Net cash from operating activities 2,250 3,820
The Net cash-flow from the operating activities for Case A is $2,250.
The Net cash-flow from the operating activities for Case B is $3,820.
Here, we are preparing the "Year 2" operating activities section of the cash flows statement using the indirect method
Statememt of Cash flow (Operating activities)
Case A Case B
Particulars Amount Amount
Net Income $1,500 $2,500
Adjustments for Case A & B
Depreciation Expense $1,000 $1,500
Changes in operating assets
& liabilities of Case A & B
(Increase) / Decrease in Account receivables $100 -$150
Decrease / (Increase) in Inventory -$250 $70
Increase / (Decrease) in Accounts payable $100 -$50
Increase / (Decrease) in Sal. & Wage Payable $200 -$50
Net cash from operating activities $2,250 $3,820
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Global Commerce Corporation purchased trading debt investments for $114,000 on December 31, 2018. There is a decrease of $5,800 in the fair value of the trading debt investments by the end of the year 2019. Which of the following is the correct journal entry?
A. Trading Debt Investments 5,800
Unrealized Holding
Loss-Trading 5,800
B. Fair Value
Adjustment–Trading 5,800
Unrealized Holding
Loss-Trading 5,800
C. Unrealized Holding
Loss-Trading 5.800
Retained Earnings 5,800
D. Unrealized Holding
Loss-Trading 5,800
Fair Value
Adjustment–Trading 5,800
Answer:
The correct option is D,
Unrealized Holding Loss-Trading $5,800
Fair Value Adjustment–Trading $5,800
Explanation:
The decrease in fair value by $5,800 means that the investment has potentially lost $5,800 in value which is credited to fair value adjustment while the debit is posted to unrealized holding loss-trading account.
The loss cannot be realized in retained earnings since the loss is yet to be realized as the investment has not been sold for cash.
The realized loss or gain would be determined when investment is sold for cash.
Process Costing using the Weighted-Average Method
Compute the equivalent units of production using the weighted-average method.
Compute the cost per equivalent unit using the weighted-average method.
Assign costs to units using the weighted-average method.
Prepare a cost reconciliation report
Hayword, Inc. uses weighted-average costing and ha two departments mixing and packaging 2 The following information relates to work in the mixing department for the month of July: 4 Work in process, July 1: 5 Units in process 6 Percent completed with respect to materials 7 Percent completed with respect to conversion 8 Cost in the beginning inventory: 9 Materials cost 10Conversion cost 11 Units started into production during the period 12 Costs added to production during the period: 13 Materials cost 14 Conversion cost 15 Work in process, July 31: 16Units in process 17 Percent completed with respect to materials 18 Percent completed with respect to conversion 19 20 Use the data to answer the following 21 221. Compute equivalent units 300 60% 40% $10,500 $6,750 6,200 332,150 407,645 450 40% 30%
Answer:
First we find the equivalent units. Then Cost Per Equivalent Units. We apply these costs to the units to find the total cost. Then we compare the given costs with the found costs to see the difference.
Explanation:
Equivalent Units
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
Units transfered 6050 100 1000 6050 6050
Ending WIP 450 40 30 180 135
Equivalent Units 6230 6185
Units Completed And Transferred
Particulars Units
Beginning WIP 300
Units started in production 6200
Total Units Available 6500
Less Ending WIP 450
Units Completed and Transferred 6050
Cost Per Equivalent Unit
Particulars Materials Conversion
Beginning WIP $10,500 $6,750
Costs added 332,150 407,645
Total Costs 342,650 414,395
Equivalent Units 6230 6185
Cost Per Equivalent Unit 342,650 / 6230 414,395/ 6185
=$ 55 =$ 67
Costs Assigned
Ending WIP $ 18945
Materials ( 180 * 55) = $ 9900
Conversion ( 135 * 67) = $ 9045
Units Completed And Transferred Out : $ 738100
Materials ( 6050 *55) = $ 332750
Conversion ( 6050 * 67) = $ 405350
Cost Reconciliation
Cost to be accounted for
Beginning WIP ( $10,500 + $6,750 )= $ 17250
Cost added ( 332,150+ 407,645)= $ 739795
Total Costs $ 757045
Ending WIP $ 18945
Units Completed And Transferred Out : $ 738100
Total Costs $ 757045
Which is the same.
Use the following information to answer the question: There are three firms in an economy: X, Y, and Z. Firm X buys $400 worth of goods from Firm Y, and $200 worth of goods from Firm Z to produce 250 units of output at $3 per unit. Firm Y buys $250 worth of goods from Firm X and $250 worth of goods from Firm Z to produce 250 units of output at $4 per unit. Firm Z buys $100 worth of goods from Firm X and $500 worth of goods from Firm Y to produce 500 units at $2 per unit. Given this information, using the Value Added approach to eliminating intermediate goods and services (in order to avoid double-counting), what is the economy's GDP
Answer:
$1,050
Explanation:
Value Added Approach to calculating the GDP avoids double counting by adding only the value addition of all firms in an economy to obtain the GDP. Value addition for each firm can be calculated by deducting the intermediate purchase of each firm from its intermediate sales as follows:
Firm X value addition = ($250 * 3) - $400 - $200 = $750 - $600 = $150
Firm Y value addition = ($250 * 4) - $250 - $250 = $1,000 - $500 = $500
Firm Z value addition = (500 * 2) - $100 - $500 = $1,000 - $600 = $400
Therefore, we have:
The economy's GDP = $150 + $500 + $400 = $1,050
The Digby company will sell 100 units (x1000) of capacity from their Daft product line. Each unit of capacity is worth $6 plus $4 per automation rating. The Digby company will sell the capacity for 35% off. How much do they receive when the capacity is sold
Answer: $2,210,000
Explanation:
The company will sell at full cost per Automation rating which is not provided.
The Comp-XM Inquirer shows this Automation rating to be 7.
The Total Cost per Automation rating is,
= $6 + ($4 * 7)
= $34
Selling 100,000 units gives
= 100,000 * 34
= $3,400,000
Selling at 35% off.
= 3,400,000 * ( 1 - 0.35)
= $2,210,000
Indicate whether each of the following statements is true or faise Statement 1. The government can raise revenue by taxing the sellers without creating deadweight loss when the demand for the goods being taxed is perfectly inelastic 2. A tax that raises no revenue for the government cannot have any deadweight loss.
Answer and Explanation:
The indication of the following statement regarding true or false is
For Statement 1
This given statement is true as the demand is perfectly inelastic so there is no deadweight loss because quantity does not change or not have any impact
Therefore, in this case, the government only raise revenue but at the same time when there is an increase in elasticity so there is a change in deadweight loss
For Statement 2
This given statement is false as if no revenue is there, there will be deadweight loss
1) Define the external business environment of Jessops Group Limited.
Answer:
The external business environment of Jess-op Group Limited are factors such as economic, technological, regulatory, social etc. factors which the company does not have control over but affect the operation of the company.
Explanation:
The company has to adapt to its external business environment in order to continue to be successful.
Note: See the attached Microsoft word file for the full explanation. There is a difficulty in submitting everything here.
A supermarket uses a periodic review system to manage inventory of gallons of drinking water. Average demand is 152 gallons of water per day with standard deviation of 33 gallons per day. It costs $57 to order water from the supplier, and orders are delivered after 4 days. The holding cost for a gallon of water is $0.11 per year. The supermarket is open 360 days per year. If the supermarket aims for a 94.5% service level for gallons of drinking water (z = 1.6), what value should be used for T, the target inventory position at the time of ordering?
The target inventory position is T= ______ gallons.
Answer:
The target inventory position is T= 713.6 gallons.
Explanation:
Given:
Average demand =per day = D = 152 Gallons
Standard deviation of demand = σ = 33 Gallons per day
Lead time for delivery = L = 4 days
Z value for 94.5% service level = 1.6
The target inventory position = (Average demand x Lead time) + Safety stock
= (D × L) + (Z× σ × [tex]\sqrt{L}[/tex])
= (152 × 4) + (1.6 × 33 × [tex]\sqrt{4}[/tex])
= (152 × 4) + (1.6 × 33 × 2)
= 608 + 105.6
= 713.6
The value of the target inventory position will be 713.6 gallons.
The following can be illustrated from the information given:
Average demand per day, D = 152Standard deviation of demand, σ = 33Lead time for delivery, L = 4Z value for 94.5% service level = 1.6Therefore, the target inventory position will be:
= (Average demand x Lead time) + Safety stock
= (D × L) + (Z× σ × ✓L )
= (152 × 4) + (1.6 × 33 × ✓4 )
= (152 × 4) + (1.6 × 33 × 2)
= 608 + 105.6
= 713.6
Therefore, the target inventory position will be 713.6 gallons.
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Identify what type of unemployment each of the individuals faces. James is an architect who has been laid off owing to a slump in the demand for property. He feels he will have to wait until the economy picks up before he can get a new job. James is facing
Answer:
cyclical unemployment
Explanation:
The situation when the overall demand for goods and services cannot support full employment in an economy, it results in cyclical unemployment. It takes place during periods of slow economic growth.
In the given question,
as James will have to wait until the economy picks up before he can get a new job, he is facing cyclical unemployment.
Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,831. The freight and installation costs for the equipment are $554. If purchased, annual repairs and maintenance are estimated to be $415 per year over the four-year useful life of the equipment. Alternatively, Sloan can lease the equipment from a domestic supplier for $1,745 per year for four years, with no additional costs.
Required:
a. Prepare a differential analysis dated December 3 to determine whether Sloan should lease (Alternative 1) or purchase (Alternative 2) the equipment. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon () will automatically appear if required. (Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipment owner.)
b. Determine whether the Sloan should lease (Alternative 1) or purchase (Alternative 2) the equipment.
Answer:
Alternative 1 Alternative 2 Differential
Lease Buy Amount
Purchase cost $0 $3,831 ($3,831)
Freight and $0 $554 ($554)
installation costs
Annual repairs and $0 $1,660 ($1,600)
maintenance costs
Lease costs $6,980 $0 $6,980
Total costs $6,980 $6,045 $935
The equipment should be purchased instead of leased because the costs of purchasing and maintenance costs are lower than lease costs.
Explanation:
A differential analysis is carried out to determine whether alternative projects' revenues and costs are higher. This way you can determine which project or investment costs less or generates higher profits.
The curvilinear relationship of corporate performance and diversification indicates that: a. the less related the businesses acquired, the higher performing the organization. b. dominant-business corporate strategies tend to be higher performing than related constrained or unrelated business strategies. c. none of the strategies consistently outperforms the others. d. the highest performing business strategy is related constrained diversification.
Answer: d. the highest performing business strategy is related constrained diversification.
Explanation:
Multiple studies by strategic management experts have shown that business performance tends to relate in a curvelinear fashion with diversification and have shown that the companies who take advantage of this the most are companies using a related constrained diversification strategy.
This strategy involves expanding by acquiring companies or Businesses which have a similar business to the original company and then sharing resources, assets and knowledge amongst them.
In doing this they are applying the knowledge and resources as well as core competencies that made the original company successful to the acquired businesses so that they too can grow as the original company did.
Cho's Performance Pizza is a small restaurant in Miami that sells gluten-free pizzas. Cho's very tiny kitchen has barely enough room for the three ovens in which her workers bake the pizzas. Cho signed a lease obligating her to pay the rent for the three ovens for the next year. Because of this, and because Cho's kitchen cannot fit more than three ovens, Cho cannot change the number of ovens she uses in her production of pizzas in the short run. However, Cho's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Cho lets them know how many workers she needs for each day of the week. In the short run, these workers are __________ inputs, and the ovens are __________ inputs.
Answer: Variable ... Fixed
Explanation:
In the short run, Variable Inputs or costs are known as those which can be changed and their quantities can be varied. In this scenario, the employees that Cho's uses can be varied and so are the Variable Inputs.
Similarly, those costs that cann ot be changed or varied in the short run are rightly known as Fixed Inputs. Cho's Kitchen cannot take more than 3 ovens and also she has already signed a lease for them. These costs cannot be changed and so make the oven a Fixed Input.
It is worthy of note that in the long term, all Costs are considered Variable.
