Answer:
Net income is $135,00 from the income statement.
Explanation:
In the Income Statement for a particular year, all expenses all expenses for the year are deducted from the income to arrive at net income for that year. Based this, we have:
Paradise Travel Service Income Statement For the Year Ended May 31, 2018
Details ($)
Fees earned 900,000
Office expense (300,000)
Miscellaneous expense (15,000)
Wages expense (450,000)
Net income 135,000
Therefore, net income is $135,00 from the income statement.
A building is acquired on January 1, at a cost of $960,000 with an estimated useful life of 10 years and salvage value of $86,400. Compute depreciation expense for the first three years using the double-declining-balance method. (Round your answers to the nearest dollar.)
Answer:
Year 1 - $192,000
Year 2 - = $153,600
Year 3 - $122,880
Explanation:
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life) = 2 x (1/10) = 0.2
Depreciation expense in the first year = 0.2 x $960,000 = $192,000
Book value at the beginning of year 2 = $960,000 - $192,000 = $768,000
Depreciation expense in year 2 = 0.2 x $768,000 = $153,600
Book value in year 3 = $768,000 - $153,600 = $614,400
Depreciation expense in year 3 = 0.2 x $614,400 = $122,880
I hope my answer helps you
Hurricane Industries had a net income of $141,150 and paid 35 percent of this amount to shareholders in dividends. During the year, the company sold $87,750 in new common stock. What was the company's cash flow to stockholders?
Answer:
$38,347
Explanation:
Calculation for Hurricane Industries cash flow to stockholders
Formula for Cash flow to stockholders:
Cash flow to stockholders = Dividends paid - Net new equity raised
Let plug in the formula
Where:
Dividends paid =$141,150
Net new equity raised=$87,750
Hence:
Dividends = $141,150 * .35= $49,403
New net equity = $87,750
Cash flow to stockholders = $87,750-$49,403
= $38,347
Therefore the company's cash flow to stockholders will be $38,347
FOR BUS LAW I
Certain that Al Gore would emerge victorious from the post-election chaos, Melvin's Decorations ordered 50,000 "President Al Gore" medallions from Medallions, Inc. on December 1, 2000 for $5 per medallion. Delivery was to be on January 10, 2001. By that date, the value of the medallions had fallen to $1 per medallion. Melvin's Decorations refused to accept the medallions because it was clear that George Bush would keep the presidency, and Medallions, Inc. sued for Melvin’s breach. What can Medallions recover? (Assume that there was nothing wrong with the medallions and that Melvin's did breach the contract).
A.
Medallions' lost profit on the deal.
B.
The difference between the contract price and the market price.
C.
Either A or B.
D.
Neither A nor B.
Answer:
A. Medallions' lost profit on the deal.
Explanation:
Since Melvin's Decorations breached the contract they had with Medallions, the non breaching party is entitled to sue for compensatory monetary damages. Courts will generally assign compensatory damages that cover the losses incurred due to the contract breach, i.e. the amount of money that medallion would have made as a profit if Melvin's decoration had purchased and paid for the medallions.
Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below.
Balance Sheets:
2013 2012
Cash and equivalents $100 $85
Accounts receivable 275 300
Inventories 375 250
Total current assets $750 $635
Net plant and equipment 2,300 1,490
Total assets $3,050 $2,125
Accounts payable $150 $85
Accruals 75 50
Notes payable 150 75
Total current liabilities $375 $210
Long-term debt 450 290
Common stock 1,225 1,225
Retained earnings 1,000 400
Total liabilities and equity $3,050 $2,125
Income Statements:
2013 2012
Sales $2,600 $1,400
Operating costs excluding depreciation 1,250 1,000
EBITDA $1,350 $400
Depreciation and amortization 100 75
EBIT $1,250 $325
Interest 62 45
EBT $1,188 $280
Taxes (40%) 475 112
Net income $713 $168
Dividends paid $53 $48
Addition to retained earnings $600 $120
Shares outstanding 100 100
Price $25.00 $22.50
WACC 10.00%
The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash. Using the financial statements given above, what is Rosnan's 2013 free cash flow (FCF)? Use a minus sign to indicate a negative FCF.
$
Answer:
–$32
Explanation:
Rosnan Industries' 2013 free cash flow (FCF)
Details $
Net income 713
Add Non-Cash Expenses:
Depreciation and amortization 100
(Increase) decrease in non-cash current assets:
Decrease in accounts receivable (300 - 275) 25
Increase inventories (375 - 250) (125)
Increase (decrease) in current liabilities:
Increase in total current liabilities (375 - 210) 165
Capital expenditure:
Increase in net plant and equipment (2,300 - 1,490) (810)
Depreciation and amortization (100)
Free cash flow (32)
Therefore, Rosnan's 2013 free cash flow (FCF) minus $32.
The Federal Reserve sets the reserve requirement, which banks must meet through deposits at the Fed and cash held at the bank. What do these requirements achieve? Check all that apply. They help to control the money supply. They help to prevent bank runs by reassuring the public that banks will not make too many loans and run out of cash. They mean that banks must have one dollar of deposits for every dollar it loans. They help to facilitate transfers of funds between banks when a customer from one bank writes a check to a customer of another.
Answer:
The correct answer to the following question will be Option B.
Explanation:
These conditions hopefully reduce banking crises as well as quantify the community against banks never running cash. The criteria for the reservation were established to be doing the ends of the next day.Amount of inter-bank payments, these funds also convince the public which banks aren't going to make many such mortgages.Other available options have no connection with the particular circumstance. So the answer to the above seems to be the right one.
Ben lives in an apartment building next to a children’s park. He is in his apartment when a baseball flies in through the window and lands in his room. Which of the following statements is true of this scenario?
1. Ben must return the baseball to the owner immediately as it is not an object of great value.
2. Ben can keep the baseball because of the rule of first possession.
3. The owner of the apartment building must take the final decision as the baseball landed on his premises.
4. The owner of the baseball can exercise his right of eminent domain and claim the baseball.
5. The baseball must be turned over to police and can only be claimed after a week has passed.
Answer:
1. Ben must return the baseball to the owner immediately as it is not an object of great value.
Explanation:
The owner of the baseball is still the rightful owner because he was the one who purchased the item. He does not lose ownership of the baseball simply because it landed on Ben's apartment.
Ben has not right to claim ownership of the baseball, and he must return it to the owner immediately.
Oriole Inc manufactures model airplanes and repair kits. The planes account for 75% of the sales mix, and the kits the remainder. The variable cost ratio for the planes is 80% and 65% for the kits. Fixed costs are $114000. Compute the breakeven point in sales dollars.
Answer:
Break-even point (dollars)= $480,000
Explanation:
Giving the following information:
Fixed costs are $114000.
Sales mix:
Planes= 0.75
Kits= 0.25
Contribution margin ratio:
Planes= 0.20
Kits= 0.35
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= Total fixed costs / Weighted average contribution margin ratio
Weighted average contribution margin ratio= sales mix*contribution margin ratio
Weighted average contribution margin ratio= 0.75*0.2 + 0.25*0.35
Weighted average contribution margin ratio= 0.2375
Break-even point (dollars)= 114,000/0.2375
Break-even point (dollars)= $480,000
At January 1, 2019, Betty DeRose, Inc. had an allowance for bad debts with a $4,500 credit balance. During 2019, Betty wrote-off as uncollectible accounts receivable in the amount of $6,200. At December 31, 2019, Betty had total accounts receivable of $216,000 and prepared the following aging schedule: Accounts Receivable % Uncollectible not past due $100,000 1% 1-30 days past due 60,000 4% 31-60 days past due 27,000 8% 61-90 days past due 19,000 26% over 90 days past due 10,000 40% total accounts receivable $216,000 Calculate the net realizable value of Betty DeRose's accounts receivable at December 31, 2019.
Answer:
$16,200
Explanation:
The bad debt expense has beginning balance of $4,500. Bad debt written of during 2019 is $6,200. The total account receivable is $216,000.
$100,000 * 1% = $1000
$60,000 * 4% =$2400
$27,000 * 8% =$2160
$19,000 * 26% =$4940
$10,000 * 40% =$4000
The total of uncollected is $14,500
The bad debt of the current year is $4500 - $6200 = $1700
You are going to set your budget for your utility (gas/water/sewer and electricity) expenses for the next year. You have recorded your utility expenses for the past year. That information is provided below. Evaluate and discuss whether the data collected was appropriate and representative of the information that is required to analyze the problem presented in the problem setting.Utilities Utilities Period Gas, Water, Sewer ElectricityMar, 2011 125.47 65.68Apr, 2011 70.89 61.5May, 2011 72.58 59.93Jun, 2011 80.91 72.17Jul, 2011 66.08 101.35Aug, 2011 84.58 118.04Sep, 2011 80.39 80.07Oct, 2011 88.12 60.76Nov, 2011 86.5 58.7Dec, 2011 130.06 70.22Jan, 2012 131.34 65.5Feb, 2012 121.2 67.71Mar, 2012 98.96 67.99
Answer:
Based on the data set given one cannot determine the next year's expenses for utilities and this is because the data set does not provide the information regarding the number of people that have consumed the utilities in the past and the per unit rate of consumption as well
Explanation:
Given data
Gaswater sewer electricityexpenses done for utilitymonth of usageTo identify the future expenses in utility the following data has to be considered :
The total expenses done in the past year for each facility, The total number of people consuming the utility to identify per person usage,The Past 2-3 years or even more utility rates per unit to identify the trend of inflation.Based on the data to be considered above the utility usage can be calculated using the following :
projected per unit rate of each utilitytotal number of people who will be consuming utilities in each monthThe projected future expenses for each utility can be gotten by combining the aboveBased on the data set given one cannot determine the next year's expenses for utilities and this is because the data set does not provide the information regarding the number of people that have consumed the utilities in the past and the per unit rate of consumption as well.
The Nelson Company has $1,750,000 in current assets and $700,000 in current liabilities. Its initial inventory level is $490,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.9? Round your answer to the nearest cent. $ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places.
Answer:
(a) Short-term debt can increase by a maximum of $466,666.67 without pushing its current ratio below 1.9
(b) The firm's quick ratio after Nelson has raised the maximum amount of short-term funds is 1.34
Explanation:
Current assets = $1,750,000
Current liabilities = $700,000
Initial inventory level = $490,000
Current ratio = Current assets ÷ Current liabilities
= $1,750,000 ÷ $700,000 = 2.5
1.9 = (Current assets + [tex]\Delta{NP[/tex]) ÷ (Current liabilities + [tex]\Delta{NP[/tex])
1.9 = ($1,750,000 + [tex]\Delta{NP[/tex]) ÷ ($700,000 + [tex]\Delta{NP[/tex])
1.9 × ($700,000 + [tex]\Delta{NP[/tex]) = ($1,750,000 + [tex]\Delta{NP[/tex])
$1,330,000 + [tex]1.9\Delta{NP[/tex] = $1,750,000 + [tex]\Delta{NP[/tex]
[tex]0.9\Delta{NP[/tex] = $1,750,000 - $1,330,000
[tex]\Delta{NP[/tex] = $466,666.67
Short-term debt can increase by a maximum of $466,666.67 without pushing its current ratio below 1.9
Quick ratio = (Current assets - Inventories) ÷ Current liabilities
= $937,500 ÷ $700,000
= 1.34
Which of the following BEST represents a mission statement? A. Our goal is to honor and empower wounded warriors. B. We strive to be the worldwide leader in sharing delicious tastes and creating joyful memories. C. We envision a world in which all people dash even in the most remote areas of the globe dash hold the power to create opportunities for themselves and others. D. We strive to design, build, and sell the world's best vehicles. E. We strive to be a highly productive and deeply humane company.
Answer:
B. We strive to be the worldwide leader in sharing delicious tastes and creating joyful memories
Explanation:
There are two concepts i.e mission and vision. The mission statement is the statement in which it talks about the company goals and objective that represent the present condition of which market should be targeted, its geographical location, etc
While on the other hand the vision statement refers to position of the company in the future. It is always for the long term as it is always thinking for the future where the company what to be.
Based on the above explanation, the option B is correct as it depicts the mission statement.
Kingbird Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as follows.
KingBird Resort Trial Balance August 31, 2020
Debit Credit
Cash $25,900
Prepaid Insurance 10,800
Supplies 8,900
Land 22,000
Buildings 122,000
Equipment 18,000
Accounts Payable $10,800
Unearned Rent Revenue 10,900
Mortgage Payable 62,000
Common Stock 99,300
Retained Earnings 9,000
Dividends 5,000
Rent Revenue 78,200
Salaries and Wages Expense 44,800
Utilities Expenses 9,200
Maintenance and Repairs Expense 3,600
$270,200 $270,200
Other data:
1. The balance in prepaid insurance is a one-year premium paid on June 1, 2020.
2. An inventory count on August 31 shows $443 of supplies on hand.
3. Annual depreciation rates are (a) buildings (4%) (b) equipment (10%). Salvage value is estimated to be 10% of cost.
4. Unearned Rent Revenue of $3,472 was earned prior to August 31.
5. Salaries of $392 were unpaid at August 31.
6. Rentals of $873 were due from tenants at August 31.
7. The mortgage interest rate is 8% per year.
A. Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31.
No. Date Account Titles and Explanation Debit Credit
1. Aug. 31
2. Aug. 31
3a. Aug. 31
3b. Aug. 31
4. Aug. 31
5. Aug. 31
6. Aug. 31
7. Aug. 31
B. Prepare an adjusted trial balance on August 31.
Answer:
A. Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31.
1. The balance in prepaid insurance is a one-year premium paid on June 1, 2020.
prepaid insurance expense per month = $10,800 / 12 = $900 x 3 months = $2,700
Dr Insurance expense 2,700
Cr Prepaid insurance 2,700
2. An inventory count on August 31 shows $443 of supplies on hand.
supplies expense = $8,900 - $443 = $8,457
Dr Supplies expense 8,457
Cr Supplies 8,457
3. Annual depreciation rates are (a) buildings (4%) (b) equipment (10%). Salvage value is estimated to be 10% of cost.
depreciation expense per month:
buildings = ($122,000 x 90%) x 4% x 1/12 = $366 x 3 = $1,098
equipment = ($18,000 x 90%) x 10% x 1/12 = $135 x 3 = $405
Dr Depreciation expense 1,503
Cr Accumulated depreciation building 1,098
Cr Accumulated depreciation equipment 405
4. Unearned Rent Revenue of $3,472 was earned prior to August 31.
Dr Unearned revenue 3,472
Cr Rent revenue 3,472
5. Salaries of $392 were unpaid at August 31.
Dr Wages expense 392
Cr Cash 392
6. Rentals of $873 were due from tenants at August 31.
Dr Accounts receivable 873
Cr Rent revenue 873
7. The mortgage interest rate is 8% per year.
interest expense per month = $62,000 x 8% x 1/12 = $413.33 x 3 = $1,240
Dr Interest expense 1,240
Cr Interest payable 1,240
B. Prepare an adjusted trial balance on August 31.
first we must calculate the quarter's profit:
Rent Revenue $82,545
Salaries and Wages Expense ($45,192)
Utilities Expenses ($9,200 )
Maintenance and Repairs Expense ($3,600)
Insurance expense ($2,700)
Supplies expense ($8,457)
Depreciation expense ($1,503)
Interest expense ($1,240)
net income = $10,653
retained earnings = $9,000 - $5,000 + $10,653 = $14,653
Kingbird Resort
Balance Sheet
For the Year Ended August 31, 202x
Assets:
Cash $25,508
Accounts receivable $873
Prepaid Insurance $8,100
Supplies $443
Land $22,000
Buildings $120,902
Equipment $17,595
Total assets: $195,421
Liabilities and Stockholders' Equity:
Accounts Payable $10,800
Unearned Rent Revenue $7,428
Interest payable $1,240
Mortgage Payable $62,000
Common Stock $99,300
Retained Earnings $14,653
Total liabilities and stockholders' equity: $195,421
XYZ began operations in 2018. The company reported $128,000 of depreciation expense on its income statement in 2018 and $84,000 in 2019. On its tax returns, the company deducted $192,000 for depreciation in 2018 and $112,000 in 2019. The 2019 tax return shows a tax obligation (liability) of $132,000 based on a 25% tax rate.
Calculate the income tax expense for 2019.
Answer:
The income tax expense for 2019 is $128,000
Explanation:
Income tax payable for 2019 is $132,000
Deferred tax asset for 2018 will be:
(128,000-112,000) * 25%
=16000 x 25%
=$4,000
Income Tax Expenses for 2019 will be:
Income tax payable - Deferred Tax asset
=$132,000 - $4,000
=$128,000
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 16%. The market has an expected return of 10% and the risk-free rate is 4%. The alpha for the informed investors is closest to:
Answer:
3.6%
Explanation:
The computation of the alpha for the informed investors is shown below:
As we know that
Expected rate of k = Risk free rate of return + Beta × (Market rate of return - Risk free rate of return) + Alpha
16% = 4% + 1.4 × (10% - 4%) + Alpha
16% = 4% + 8.4% + Alpha
16% = 12.4% + Alpha
So,
Alpha = 3.6%
We simply applied the above formula to determine the alpha
The rate of return is a metric for determining whether an investment has made a profit or loss money over time.
Given Information:-
Beta=1.4Expected return=16%expected return=10%Risk-free rate=4%
The computation of the alpha for the informed investors is shown below:
Expected rate of k = Risk free rate of return + Beta × (Market rate of return - Risk free rate of return) + Alpha
16% = 4% + 1.4 × (10% - 4%) + Alpha
16% = 4% + 8.4% + Alpha
16% = 12.4% + Alpha
Alpha = 3.6%
To know more about Expected rate, refer to the link:
https://brainly.com/question/4306148
Stock A has an expected return of 17.8 percent, and Stock B has an expected return of 9.6 percent. However, the risk of Stock A as measured by its variance is 3 times that of Stock B. If the two stocks are combined equally in a portfolio, what would be the portfolio's expected return
Answer:
13.70%
Explanation:
The expected return of a portfolio is said to be the weighted average of the returns of the individual components,
Given that:
Stock A has an expected return = 17.8%
Stock B has an expected return = 9.6%
the risk of Stock A as measured by its variance is 3 times that of Stock B.
If the two stocks are combined equally in a portfolio;
Then :
The weight of both stocks will be 50% : 50 %
So the portfolio's expected return can be determined as follows:
Expected return for stock A = 50% × 17.8%
Expected return = 0.50 × 17.8%
Expected return = 8.9 %
Expected return for stock B = 50 % × 9.6 %
Expected return for stock B = 0.50 × 9.6%
Expected return for stock B = 4.8%
Expected return of the portfolio = summation of the expected return for both stocks
Expected return of the portfolio = 8.9 % + 4.8%
Expected return of the portfolio = 13.70%
A buyer uses a perpetual inventory system, and on December 7, it contacts its supplier to report that some of the merchandise purchased on December 5 was defective. The seller offered to reduce the merchandise price by $400. The buyer agreed to keep the defective merchandise under those terms. Complete the buyer's necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
Journal
Account Title
Accounts Payable $400 (Debit)
Purchase return and allowances $400 (Credit)
Account Payable
Dec 7 Cash $400 (Debit)
Purchase Returned
Dec 7 Cash $400 (Credit)
Paragraph coherence occurs when the ideas in a paragraph are linked and there is a logical flow from one idea to the next. Which of the following are techniques that you can use to help the reader follow your ideas?
A) Place prepositions near the end of the sentence.
B) Show connections with transitional expressions.
C) Avoid repetition of words and phrases.
D) Use pronouns to refer to previous nouns.
E) Use bullets and lists to connect similar ideas.
Answer:
B) Show connections with transitional expressions.
Explanation:
When paragraphs are formed there needs to be a smooth flow so the reader can clearly understand what is being communicated. Paragraph coherence is used to achieve this.
An important method in achieving paragraph coherence is the use of transitions.
Transitions are words or a set of word that connects sentences and ideas together in a paragraph. It makes the relationship between ideas clear and understandable.
Coherence is used to make the ideas expressed flow smoothly and logically.
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: Claim Jumper Makeover Total Sales $ 104,000 $ 52,000 $ 156,000 Variable expenses 32,200 6,800 39,000 Contribution margin $ 71,800 $ 45,200 117,000 Fixed expenses 86,850 Net operating income $ 30,150 Required: 1. What is the overall contribution margin (CM) ratio for the company
Answer:
Weighted average contribution margin ratio= 0.726
Explanation:
Giving the following information:
Sales:
Claim Jumper= $104,000
Makeover= $52,000
Variable cost:
Clain Jumper= $32,200
Makeover= $6,800
First, we need to calculate the participation of the sales for each product:
Claim Jumper= 104,000/156,000= 0.67
Makeover= 52,000/156,000= 0.33
To calculate the weighted average contribution margin ratio, we need to use the following formula:
Weighted average contribution margin ratio= (weighted average sales - weighted average variable cost)/ weighted average sales
weighted average sales= (0.67*104,000) + (0.33*52,000)
weighted average sales= 86,840
weighted average unitary variable cost= (0.67*32,200) + (0.33*6,800)
weighted average unitary variable cost= 23,818
Weighted average contribution margin ratio= (86,840 - 23,818) / 86,840
Weighted average contribution margin ratio= 0.726
An engineer analyzing cost data about hydrogen sulfide monitors discovered that the information for the first three years was missing. However, he knew the cost in year 4 was $1250 and that it increased by 5% each year thereafter. If the same trend applied to the first three years, the cost in year 1 was:
Answer:
Find below full question:
An engineer analyzing cost data about hydrogen sulfide monitors discovered that the information for the first three years was missing. However, he knew the cost in year 4 was $1250 and that it increased by 5% each year thereafter. If the same trend applied to the first three years, the cost in year 1 was:
a. $1312.50
b. $1190.48
c. $1028.38
d. $1079.80
Option D,$ 1,079.80 is correct
Explanation:
The present value formula can be used to determine the cost in year one as follows:
PV=FV*(1+r)^-n
FV is the future cost in year 4 which is $1,250
r is the growth rate of cost per year which is 5%
n is the duration of time involved,it is 3 because the difference between year 4 and year 1 is 3
PV=$1250*(1+5%)^-3
PV=$1250*(1.05)^-3
PV=$1250*0.863837599
PV=$ 1,079.80
The cost of the hydrogen sulfide monitor in year one is $ 1,079.80
In essence option D,$ 1,079.80 is correct
What is new and innovating about this design/chopping board?
A company reported the following information at December 31, Year 1: Accounts payable $ 4,690 Accounts receivable $ 9,540 Cash $ 25,390 Common Stock $ 91,900 Equipment $ 51,400 Inventory $ 33,100 Notes Payable due December 31, Year 3 $ 2,690 Retained Earnings, December 31, Year 1 $ 14,280 Wages payable $ 5,870 What is the amount of current liabilities on the classified balance sheet?
Answer:
$13,250
Explanation:
Current liabilities can be defined as the amount of money incurred by a company. This debt must be repaid back within a period of one year.
From the question above a company reported the following information on its classified balance sheet at December 31.
Account payable= $4,690
Account receivable= $9,540
Cash= $25,390
Common stock= $91,900
Equipment= $51,400
Inventory= $33,100
Notes payable= $2,690
Retained earnings= $14,280
Wages payable= $5,870
The amount of current liabilities can be calculated by adding up the different debts incurred by the company
Account payable+Notes payable+ wages payable
= $4,690+$2,690+$5,870
= $13,250
Hence the amount of current liabilities recorded on the classified balance sheet is $13,250
Consider the market for iced coffee. Suppose that the price of an iced coffee falls from $4.25 to $3.50. Assuming that the point on the graph below corresponds to the initial price of $4.25, move the point to a new position on the curve to show the impact of this price change (holding everything else constant).
Answer:
The fall in the price of iced coffee from $4.25 to $3.50 will cause demand to grow.
Explanation:
This is because the market demand curve for any good is downward sloping: the higher the price, the lower the quantity demanded, and the lower the price, the higher the quantity demanded.
So this fall in price will move the equilibrium quantity (the point where supply and demand meet) to move to a point on the demand curve that is below the previous point.
Presented below is information related to Oriole Corp. for the year 2020.
Net sales $1,534,000 Write-off of inventory due to obsolescence $94,400
Cost of goods sold 920,400 Depreciation expense omitted by accident in 2019 64,900
Selling expenses 76,700 Casualty loss 59,000
Administrative expenses 56,640 Cash dividends declared 53,100
Dividend revenue 23,600 Retained earnings at December 31, 2019 1,156,400
Interest revenue 8,260 Effective tax rate of 20% on all items
Prepare a multiple-step income statement for 2020. Assume that 62,370 shares of common stock are outstanding.
Answer:
Oriole Corp.
Income Statement
For the Year Ended December 31, 2020
Total sales $1,534,000
Cost of goods sold ($920,400)
Loss from inventory write off ($94,400)
Gross margin $519,200
Operating expenses:
Administrative expenses $56,640
Selling expenses $76,700
Total operating expenses ($133,340)
Income from operations $385,860
Other revenues and gains
Dividend revenue $23,600
Interest revenue $8,260
Total other revenues and gains $31,860
Other expenses and losses
Depreciation expense 2019 $64,900
Casualty loss $59,000
Total other expenses and losses ($123,900)
Net income before taxes $293,820
Income taxes 20%* ($58,764)
Net income $235,056
*Generally dividend revenue is not taxed or only 30% of it sis taxed. Since we were told to apply 20% income tax to all items, I didn't calculate it separately. But if you calculate it separately, then income taxes would be $1,156 lower (total $57,608) and net profit would be higher (total $236,212).
Peterson Corporation wanted to run an ad campaign that featured popular songs sung by the original singer. The aim was to make an emotional connection with people who remembered the songs. When Bette was approached to sing for the commercial, she refused saying she did not "do" commercials. Peterson Corporation still wanted to use the song, so they hired a backup singer for Bette and she was told to "sound as much as possible like the Bette record." The backup singer did the commercial, and people, even close acquaintances of Bette, thought it was her. Bette sued Peterson Corporation for wrongfully appropriating her likeness.
Required:
Is this a valid example of misappropriation. Why or why not.
Answer:
Misappropriation refers to the use of another person's intellectual property including their name or likeness without prior permission from the person which can then cause harm to that person.
This is indeed an example of misappropriation because the company tried to use Bette's likeness in the commercial. After being rebuffed by Bette saying that she does not do commercials for whatever business or personal reasons known to her, they still sought to use her popularity and image to make their products more popular.
To do so they hired a backup singer and told her to sing as much like Bette as she could so much so that even Bette's close acquaintances thought that it was Bette. If her close acquaintances could think it was her, imagine the general public.
They therefore made it seem as though Bette did their commercial which then would mean that Bette does in fact do commercials which would do damage her assertion that she does not do same. This would bring harm to her business relationships if for instance she had rebuffed other companies in the past when they sought her to do their commercials.
This is a case of Misappropriation and Bette should sue.
Identify the information that the current Generally Accepted Accounting Principles and Auditing Standards require the financial statements of an entity to show for the reporting period:_________.1. Budgeting vs actual comparisons of key balance sheet and income statement accounts2. Market value of the entity's net assets3. Number of people employed by the entity4. Investments by and distribution to owners (ex: stockholders) during the period5. Financial Position at the end of the period6. Cash flows during the period7. Earnings for the period
Answer:
4. Investments by and distribution to owners (ex: stockholders) during the period.
5. Financial Position at the end of the period.
6. Cash flows during the period.
7. Earnings for the period.
Explanation:
The information that the current Generally Accepted Accounting Principles (GAAP) and Auditing Standards require the financial statements of an entity to show for the reporting period are;
1. Investments by and distribution to owners (ex: stockholders) during the period.
2. Financial Position at the end of the period.
3. Cash flows during the period.
4. Earnings for the period.
The Financial Accounting Standards Board (FASB) issued some standards, accounting principles, and procedures to be followed by public companies in the United States of America for reporting and recording statements of income, this is known as the Generally Accepted Accounting Principles (GAAP).
The GAAP is also adopted by the Securities and Exchange Commission (SEC) to measure, analyze and regulate the stock market.
Larry Company makes and sells 2 models of dishwashers, Model ABC and Model XYZ. For every 2 Model ABC sold, 3 Model XYZ are sold. The following information is also provided: Model ABC Model XYZ Sales per unit $ 490 $ 730 Variable Cost per unit $250 $300 CM per unit $ 240 $ 430 What is the weighted average contribution margin?
Answer:
$354
Explanation:
The computation of the weighted average contribution margin is shown below:
= (Contribution margin per unit for Model ABC × Sales mix for model ABC) + (Contribution margin per unit for Model XYZ × Sales mix for model XYZ) ÷ (Sales mix for model ABC + Sales mix for model XYZ)
= ($240 × 2 models + $430 × 3 models) ÷ (2 models + 3 models)
= ($480 + $1,290) ÷ (5 models)
= $354
We simply applied the above formula
Why Do Organizations not change in response to environmental pressures?
Answer:
It often proves difficult to actually realize the change that you have come up with. Especially when it comes to cultural or behavioral change. We want to show that change is not so much something that you have to get others to join. You have to make your change part of it
In a certain economy, when income is $500, consumer spending is $375. The value of the multiplier for this economy is 5. It follows that, when income is $510, consumer spending is:________
a. $166.75
b. $175.00
c. $151.25
d. $170.20
Answer:
The options are wrong, if consumer spending is $375 when income is $500, it has to be higher if income increases (it cannot be lower).
Consumer spending at $510 = $383
Explanation:
the economy's multiplier = 1 / MPS (marginal propensity to save)
5 = 1 / MPS
MPS = 1 / 5 = 0.2
MPC (marginal propensity to consume) = 1 - MPS = 1 - 0.2 = 0.8
consumer spending at $510 = consumer spending at $500 + [$510 - $500) x 0.8] = $375 + ($10 x 0.8) = $375 + $8 = $383
MPC measures how much consumer spending increases if total disposable income increases.
The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company’s present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives:
Purchase alternative: The company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be needed, which can be purchased at a discounted price of $27,000 each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole:
Annual cost of servicing, taxes, and licensing $ 4,300
Repairs, first year $ 2,200
Repairs, second year $ 4,700
Repairs, third year $ 6,700
At the end of three years, the fleet could be sold for one-half of the original purchase price.
Lease alternative: The company can lease the cars under a three-year lease contract. The lease cost would be $70,000 per year (the first payment due at the end of Year 1). As part of this lease cost, the owner would provide all servicing and repairs, license the cars, and pay all the taxes. Riteway would be required to make a $15,000 security deposit at the beginning of the lease period, which would be refunded when the cars were returned to the owner at the end of the lease contract.
Riteway Ad Agency’s required rate of return is 20%.
Required:
1. Use the total-cost approach to determine the present value of the cash flows associated with each alternative. (Any cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places.)
Answer:
The present value of purchase is $ 209,907.41
The present value of lease is $ 153,773.15
Find attached spreadsheet.
Explanation:
The present of value of both options need to be calculated in order to determine the viable option:
Present value of purchase=($27,000*10)+($4,300+$2,200)/(1+20%)^1+($4,300+$4,700)/(1+20%)^2+($4,300+$6,700)/(1+20%)^3-($27000*10*0.5)/(1+20%)^3=$209,907.41
Present value of lease option=$15,000+$70,000/(1+20%)^1+$70,000/(1+20%)^2+$70,000/(1+20%)^3-$15,000/(1+20%)^3=$ 153,773.15
5. Which of the following is an example of global economies of scale? a. Johnson & Johnson makes fourteen different varieties of Band-Aid for various product segments in different countries. b. Intel has a big plant in Kiryat Gat (Israel) making i7 chips, which supplies the whole world, reducing the per-unit cost of each chip. c. Mutual funds invest their stocks in several different country funds, to offset the risk of one currency failing suddenly. d. Wal-Mart sells certain products very economically in some countries (like mobile AC units in Mexico), in order to attract customers, while other products may be at par with, or even more expensive than US prices..
Answer:
b. Intel has a big plant in Kiryat Gat (Israel) making i7 chips, which supplies the whole world, reducing the per-unit cost of each chip
Explanation:
Economies of scale is cost reduction as a result of the large scale do production. As production increases, cost falls.
Because of the large scale of production of itel, cost of shopping is falling. This is an example of economies of scale.
I hope my answer helps you
