Joy Elle’s Vegetable Market had the following transactions during 2010: Issued $50,000 of par value common stock for cash. Repaid a 6 year note payable in the amount of $22,000. Acquired land by issuing common stock of par value $100,000. Declared and paid a cash dividend of $2,000. Sold a long-term investment (cost $63,000) for cash of $6,000. Acquired an investment in IBM stock for cash of $12,000. What is the net cash provided by financing activities?

Answers

Answer 1

Answer:

$26,000

Explanation:

                    Joy Elle’s Vegetable Market

               Cash flow from Financing Activities

Issuance of Stock                                          $50,000

Less: Repaid Note payable                          $22,000

Less: Paid Dividend                                       $2,000

Net Cash provided by financial activities  $26,000

-Acquired land by issuing common stock is a Non cash investing and financing activities under cash flow

-Sold a long-term investment for cash is an investing activities under cash flow

-Acquired an investment in IBM stock for cash is an Investing activities under Cash flow


Related Questions

Vertical Analysis of Income Statement The following comparative income statement (in thousands of dollars) for two recent fiscal years was adapted from the annual report of Speedway Motorsports, Inc., owner and operator of several major motor speedways, such as the Atlanta, Texas, and Las Vegas Motor Speedways. Current Year Previous Year Revenues: Admissions $100,694 $100,798 Event-related revenue 146,980 146,849 NASCAR broadcasting revenue 217,469 207,369 Other operating revenue 31,320 29,293 Total revenues $496,463 $484,309 Expenses and other: Direct expense of events $104,303 $102,196 NASCAR event management fees 133,682 128,254 Other direct expenses 19,541 18,513 General and administrative 177,926 194,120 Total expenses and other $435,452 $443,083 Income from continuing operations $61,011 $41,226 a. Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Enter all amounts as positive numbers. (Note: Due to rounding, amounts may not total 100%). Round your percentages to one decimal place.

Answers

Answer:

Speedway Motorsports, Inc.,

Vertical Analysis of Income Statement

                                           Current Year              Previous Year

Revenues:

Admissions                                 20.28≅ 20.3           20.81 ≅20.8

Event-related revenue                 29.61 ≅ 29.6              30.32≅30.3

NASCAR broadcasting revenue    43.80≅ 43.8             42.82≅42.8

Other operating revenue                6.31  ≅  6.3            6.05≅6.1

Total revenues                                100%                     100%

Expenses and other:

Direct expense of events                 21.01 ≅ 21.0                21.10≅ 21.1

NASCAR event management fees  29.61≅  29.6                26.48≅ 26.5

Other direct expenses                      3.94  ≅  3.9                3.82≅3.8

General and administrative              35.84 ≅ 35.8                 40.08≅40.1

Total expenses and other                 87.72 ≅  87.7               91.49≅ 91.5

Income from continuing operations 12.23%                       8.51%

 

Explanation:                                    

Vertical Analysis =(Income Statement Item/ Sales )*100

We prepared a comparative income statement for these two years in vertical form, stating each item as a percent of revenues.

                                                Current Year           Previous Year

Revenues:

Admissions                             $100,694                $100,798

Event-related revenue           146,980                     146,849

NASCAR broadcasting revenue 217,469               207,369

Other operating revenue            31,320                    29,293

Total revenues                        $496,463                 $484,309

Expenses and other:

Direct expense of events         $104,303                    $102,196

NASCAR event management fees 133,682                 128,254

Other direct expenses                     19,541                      18,513

General and administrative             177,926                   194,120

Total expenses and other              $435,452               $443,083

Income from continuing operations $61,011                 $41,226

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $3,250,000. Its useful life was estimated to be five years, with a $255,000 residual value. At the beginning of 2021, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows:Year Straight-Line Declining Balance Difference 2010 $ 400 $ 853 $ 453 2011 400 569 169 2012 400 379 (21) $ 1,200 $ 1,801 $ 601 Required:Prepare any 2013 journal entry related to the change.

Answers

Answer and Explanation:

The journal entry is shown below:

Depreciation expense Dr $398,000

          To Accumulated depreciation $398,000

(Being the depreciation expense is recorded)

For recording this we debited the depreciation expense as it increased the expenses and credited the accumulated depreciation as it decreased the value of the assets

The computation of the depreciation expense is as follows

Cost of the asset               $3,250,000

Less: accumulated

depreciation till date       ($1,801,000)

Undepreciation cost        $1,449,000

Less:

Estimated residual value  ($255,000)

Value for remaining

3 years                               $1,194,000

Divided by 3 years              ÷ 3

Depreciation expense      $398,000

Journalize the following transactions using the allowance method of accounting for uncollectible receivables.

April 1 Sold merchandise on account to Jim Dobbs, $6,800. The cost of the merchandise is $6,700.
June 10 Received $1,400 from Jim Dobbs and wrote off the remainder owed of $5,400.
Oct. 11 Reinstated the account of Jim Dobbs and received $5,400 cash in full payment.
April 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of the merchandise is $5,400.
June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder.
Oct. 11 Reinstated the account of Jim Dobbs for and received cash in full payment.

Answers

Answer:

See the journal entries with narration below.

Explanation:

a. For the first set of transactions, the journal entries will look as follows:

Date        Details                                              Dr ($)           Cr ($)        

April 1  Account Receivable - J. Dobbs         6,800  

           Sales                                                                        6,800

           To record sale of merchandising on account to Jim Dobbs.

April 1  Cost of goods sold                             6,700  

           Inventory                                                                 6,700

           To record cost of goods sold to Jim Dobbs.           

June 10  Cash                                                 1,400  

              Allow. for doubtful acct. (B. debt)   5,400  

              Account Receivable - J. Dobss                          6.800

              To record cash receipt J. Dobbs and amount written off.  

Oct. 11  Account Receivable - J. Dobbs         5,400  

            Allowance for doubtful accounts                          5,400

            To reinstate Jim Dobbs' account receivable.                       

Oct. 11  Cash                                                    5,400  

            Account Receivable                                             5,400

           To record cash received from Jim Dobbs' in full.          

b. For the first set of transactions, the journal entries will look as follows:

Date        Details                                              Dr ($)           Cr ($)        

April 1  Account Receivable - J. Dobbs          7,200  

           Sales                                                                        7,200

           To record sale of merchandising on account to Jim Dobbs.

April 1  Cost of goods sold                             5,400  

           Inventory                                                                 5,400

           To record cost of goods sold to Jim Dobbs.          

June 10  Cash (1/3 * 7,200)                           2,400  

              Allow. for doubtful acct. (B. debt)  4,800  

              Account Receivable - J. Dobss                          7,200

             To record cash receipt J. Dobbs and amount written off.   

Oct. 11  Account Receivable - J. Dobbs          4,800  

           Allowance for doubtful accounts                           4,800

           To reinstate Jim Dobbs' account receivable.                      

Oct. 11  Cash                                                      4,800  

           Account Receivable                                                4,800

           To record cash received from Jim Dobbs' in full.          

Fairfield Company’s raw materials inventory transactions for the most recent month are summarized here: Beginning raw materials $ 20,000 Purchases of raw materials 90,000 Raw materials issued Materials requisition 1445 25,000 For Job 101 Materials requisition 1446 35,000 For Job 102 Materials requisition 1447 30,000 Used on multiple jobs 1. How much of the raw materials cost would be added to the Work in Process Inventory account during the period? 2. How much of the raw materials costs would be added to the Manufacturing Overhead account? 3. Compute the ending balance in the Raw Materials Inventory account.

Answers

Answer:

1. $60,000

2. $30,000

3. $20,000

Explanation:

1. How much of the raw materials cost would be added to the Work in Process Inventory account during the period?

The amount to add add to the Work in Process Inventory account during the period is the direct material used calculated as follows:

Direct raw materials used =  Materials requisition 1445 For Job 101 + Materials requisition 1446 For Job 102 = $25,000 + $35,000 = $60,000

2. How much of the raw materials costs would be added to the Manufacturing Overhead account?

Manufacturing overhead refers to all indirect costs that are incurred during the production process. Therefore, the raw materials costs that would be added to the Manufacturing Overhead account is the indirect materials used on multiple jobs.

Therefore, we have:

Amount to add to the Manufacturing Overhead account = Indirect materials used = $30,000

3. Compute the ending balance in the Raw Materials Inventory account.

Ending raw materials balance = Beginning raw materials + Purchases of raw materials - Direct raw materials used - Indirect materials used = $20,000 + $90,000 - $60,00 - $30,000 = $20,000

Division A does not have excess capacity to produce Product XX. The division can sell Product XX for $10 per unit outside the company. Variable costs are $6 per unit. Division B wants to purchase Product XX from Division A to use in Product ZZ. The selling price of Product ZZ is $25 per unit and variable costs to finish the product after the transfer are $12 per unit. An outside supplier will sell Product XX for $12 per unit. What is the minimum transfer price for Division A

Answers

Answer:

Minimum transfer price = $10

Explanation:

The  Division A is operating at full capacity, hence it has no excess capacity

This implies that it can not produce enough to meet both the internal demand (from Division B) and external buyers.  

Hence, it implies that Division A can not accommodate the demands of the  Division B at a price lower than the external price of $10. Any price lower than $10 would  result into a loss in contribution.

To maximize and optimize the group profit

Minimum transfer price = External selling price at which Division A can sell product XX

Minimum transfer price = $10

g "At the start of the current year, Minuteman Corporation had a credit balance in the Allowance for Doubtful Accounts of $3,500. During the year a monthly provision of 3% of sales was made for uncollectible accounts. Sales for the year were $1,110,000, and $7,200 of accounts receivable were written off as worthless. No recoveries of accounts previously written off were made during the year. The year-end financial statements should show:"

Answers

Answer: Allowance for the doubtful accounts with a credit balance of $29,600

Explanation:

From the information that is provided in the question, the following can be deduced and the year-end financial statements should show:

Allowance for the doubtful accounts with a credit balance will be calculated as: the beginning allowance for the doubtful accounts + (the sales × Provision % ) - accounts receivable that were written off.

= $3,500 + ($1,110,000 × 3%) - $7,200

= $3500 + $33300 - $7200

= $36800 - $7200

= $29,600

Lily wants to build a business. She has very little capital. She does, however, have a partner with which she could run a business. Lily wants to be able to avoid being held personally liable for any problems the business has. Which of the following would lead Lily to choose a sole proprietorship organization for her business?

a. Possession of a partner
b. Little capital
c. Avoidance of personal liability
d. None of the above

Answers

Answer:

The correct answer is option (b) Little capital

Explanation:

Solution

With a little capital this will help Lily to choose a sole proprietorship organization for her business. a sole proprietorship can begin with a little capital.

The option (a) is not correct as possession of a partner will not lead her to start a sole proprietorship business.

Also the option (c) is not correct the avoidance of personal liability is not the reason because in sole proprietorship, Lily will be liable for her debts.

An inexperienced accountant for Cheyenne Corp. showed the following in the income statement: income before income taxes $371,000 and unrealized gain on available-for-sale securities (before taxes) $88,700. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 35% tax rate. Prepare a correct statement of comprehensive income.

Answers

Answer:

An correct statement was prepared for a comprehensive income which is given below.

Explanation:

Solution

Given that:

                                  Cheyenne Corporation              

          Correct Statement  of Comprehensive/General Income

Income before income taxes           $371,000

The less Tax ($371,000 * 35%)         $129,850

The Net Income                                                         $241,150

Other Comprehensive income

Unrealized profit on present for

sales securities, net of tax                                          $57,655

The comprehensive income

($241,150 +$57,655)                                                    $298,805      

Note:

The Unrealized profit on present for sales securities, net of tax is given as

=($88,700 * (100% -35%))

=$88,700 * 65%

=$57,655    

Classify the following activities in providing medical services at Healthsmart Clinic.
Activity Control Level Activity Driver
A. Registering patients
B. Cleaning beds
C. Stocking examination rooms
D. Washing linens
E. Ordering medical equipment
F. Heating the clinic
G. Providing security services
H. Filling prescriptions
1. classify each activity as unit level (U), batch level (B), product level (P), or facility level (F).
2. identify an activity driver that might be used to measure these activities at the clinic.

Answers

Answer:

The following Classification of activities for medical services at health smart clinic is categorized below

Explanation:

Solution

Given that:

The following activities for providing medical services at health smart Clinic is stated below:

     Activity               Control level     Activity Driver

A. Patient registering - Unit level - Number of patients

B. Cleaning beds - Unit level - bed, patients, labor hours

C. Stocking examination rooms - Facility Level - Number of rooms

D. Washing linens - Batch level - Loads

E. Ordering medical equipment - Facility Level - Cost of equipment, Number of suppliers

F. Heating the clinic - Facility Level - Degree days, space

G. Providing security services - Facility level - No. of days , area covered

H. Filing prescriptions - Batch level - No. of prescriptions

The balance sheet of Sand Sportswear reports total equity of $500,000 and $650,000 at the beginning and end of the year, respectively. The return on equity for the year is 20%. What is Sand Sportswear's net income for the year

Answers

Answer:

Sand Sportswear's net income for the year is $115,000

Explanation:

In order to calculate the net income for the year we would have to us the following formula:

Return on equity = Net income / Average total equity

Return on equity=20%

Average total equity=($500,000 + $650,000) / 2 = $575,000

Therefore, Net income=Average total equity*Return on equity

Net income=$575,000*20%

Net income=$115,000

Sand Sportswear's net income for the year is $115,000

Complex companies adopt decentralization in order to realize all of the following benefits, except:________.
1. delegation of control to lower levels of management, thus facilitating their training and development
improved awareness of, and response to, local conditions
2. reduced record-keeping
3. shorter elapsed time from problem identification to decision-making and implementation
4. no exceptions above

Answers

Answer:

2. reduced record-keeping

Explanation:

The decentralization is the chain of the processes in which the proper process of all department is followed

Just like from top-level to middle level and then lower level

And, the inverse is lower level to middle level to top level.

The authority and responsibility are delegated to each level of management so that the day to day operations could be performed in a smooth, effective and efficient manner

For the complex companies who adopt decentralization, they have all the benefits like delegation, problem identification but do not reduce record keeping as it is not an easy task for every company

Hence, option 2 is correct

Sunset Corporation (a C corporation) had operating income of $200,000 and operating expenses of $175,000. In addition, Sunset had a $30,000 long-term capital gain, a $52,000 short-term capital loss, and $5,000 tax-exempt interest income. What is Sunset Corporation's taxable income for the year

Answers

Answer:

Sunset Corporation's taxable income is $3,000

Explanation:

Calculation of Sunset Corporation's taxable income is as worked below

Taxable Income = Operating Income - Operating Expenses + Capital Gains - Capital Losses  

Taxable Income = $200,000 - $175,000 + $30,000 - $52,000

Taxable Income = $3,000.  Hence, Sunset Corporation's taxable income is $3,000

 

Note that taxable income is the amount of income used to calculate how much tax an individual or a company owes or is going to pay the government in a particular tax year.

Q1 The following is a description of the conversion cycle of Central Production Limited: The conversion cycle of the company is triggered by a report from the warehouse. When the quantity of an inventory item falls below a pre-set minimum level, the warehouse manager sends an online inventory status report to production department advising them to schedule a production batch run for the item. Upon receipt of the report, the production clerk assesses the digital bill of materials and the route sheet files for the item to be produced and adds the production details to the online production schedule. The system automatically adds a record to the open work order file and sends an online work order to the work centre supervisor’s computer and to the accounting clerk’s computer. The work centre supervisor receives the work order from his computer and print hard-copy move tickets and materials requisitions for each production process. Production employees take the materials requisitions to store clerk and receives the materials and subassemblies needed to perform the production tasks. If additional materials beyond the standard amount is needed, the work centre supervisor prepares additional materials requisitions. Production employees complete job time tickets after completing a production process to record the time spent on the job. The job time tickets are then sent together with the move tickets to the accounting department. After releasing the materials into production, the store clerk updates the material inventory records and send the materials requisitions to accounting department. The clerk prepares a journal voucher and posts to the general ledger material control account at the end of each day. The accounting clerk assesses the work orders and set up a work-in-process account for a production batch. Throughout the production period, the clerk also receives move tickets, job tickets, and materials requisitions, which he uses to post to the work-in-process account. At the end of each day, the accounting clerk prepares a digital journal voucher and post it to the general ledger work-inprocess and finished goods control accounts. Q) Identify the risks exist in the conversion cycle of Central Production Limited. (10 marks 300 words) Q3 Elegant Limited sells restored classic cars. Most of its customers are private buyers who buy cars for themselves. However, some of them are investors who buy multiple cars and hold them for resale. All sales of Elegant Limited are for cash. Depict the association and cardinality for the sales of cars at Elegant Limited based on REA model. (10 marks, maximum 300 words) Q4 You are currently working in a mid-tier accounting firm. In an engagement meeting with a client, the management of your client is concerned that the audit tests that you perform will disrupt operations. Your client has recently implemented a data warehouse and the management suggests that you draw the data for analytical reviews and substantive testing from the data warehouse instead of the operational database. The management points out that operational data are copied weekly into the data warehouse and all data you need are contained there. Outline your response to the management’s proposal and mention any concerns you might have. (10 marks, maximum 300 words) Q5 The Chief Information Officer (CIO) and the Managing Director (MD) of Illustrious Limited recently had the following conversation regarding the development of a new information system for the company: CIO: The way to go about the analysis is to first examine the old system, such as reviewing key documents and observing the workers performing their tasks. Then we can determine which aspects are working well and which should be preserved. MD: We have been through these types of projects before, and what always ends up happening is that we do not get the new system we are promised. Instead we get a modified version of the old system. CIO: I can assure you that will not happen this time. My team just want a thorough understanding of what is working well and what is not. MD: I would feel much more comfortable if we first started with a list of our requirements. We should spend more time in determining what exactly we want the system to do upfront. Then your team can come in and determine what portions to salvage if you wish. Just don’t constrain us to the old system! Required: a) The CIO and MD have different views on how the system analysis should be performed. Comment on whose position you sympathise with the most. (6 marks, maximum 200 words) b) What method would you recommend to Illustrious Limited for system analysis? Explain. (4 marks, maximum 150 words)

Answers

Answer:

a)

To my view, the MD viewpoint is better. In companies the existing process is usually analyzed and the pain points identified whenever there is a need for change. The new system is simply a change to the existing system. The stakeholders' specific needs are not completely addressed. The MD calls for a collection of and analysis of demands from scratch to share its needs , requirements and inhibitions between the principal stakeholders. The CIO and their staff would be able to assess in the requirements review process what worked and what did not work well for the organization.

In assessing the current process, the CIO and his team will align their thinking process with the pain points and correct the existing system. They are not going to build the system in a fresh light. A new system that meets the needs of stakeholders can be developed. For everybody, this is a win-win situation. The point of view of MD is therefore more logical and related.

b)

In the particular case, the most logical and comprehensive system analysis method is:

Primary stakeholder requirements collection: Primary stakeholders using the system must be consulted on their specific requirements and needs. It is also necessary to consider the limitations identified by stakeholders.

Comprehension of existing system and pain points: the current system can be analysed based on requirements collection and pain points can be emphasized in the current system.

A new system that will win for everyone: the new system must primarily comply with the needs of the stakeholders.

Presentation and approval of the system blueprint to stakeholders

Development and implementation of the system: system development can be carried out by the agile method of sprinting.

Monitoring and control of the system: to check for performance deviations, the system implemented should be observed. In order to monitor deviations, specific intervention can be implemented.

On December 31, 2017, Reggit Company held the following short-term investments in its portfolio of available-for-sale securities. Reggit had no short-term investments in its prior accounting periods. Prepare the December 31, 2017, adjusting entry to report these investments at fair value.

Answers

Complete Question:

Fair Value Adjustment Journal General Computation of fair value adjustment. Fair Value Adjustment Computation - Available for Sale Portfolio Cost Fair ValueUnrealized Verrizano Corporation bonds payable Preble Corporation notes payable Lucerne Company common stock Total $ 66,500 S 61,900 46,400 85,100 $ 208,400 $ 193,400 54,000 87,900 Fair Value Adjustment General Journal

Answer:

Dr Unrealized loss — Equity $15,000

Cr Available-For-Sale Securities $15,000

Explanation:

The difference of the cost and fair value of the portfolio gives us the loss of $15,000 which must be accounted for in accounting books as under:

Dr Unrealized losses             $15,000

Cr Available-For-Sale Securities $15,000

Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer.Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal).Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share.Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $210,000.Ken received $13,000 in disability benefits for the year. He purchased the disability insurance policy last year.Ken decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car payment.Ken’s son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike to Ken. Ken received the check on December 30 in the amount of $1,100.Ken received a $610 refund of the $3,600 in state income taxes his employer withheld from his pay last year. Ken claimed $12,050 in itemized deductions last year (the standard deduction for a single filer was $12,000).Ken received $30,000 of interest from corporate bonds and money market accounts.What is his gross income?

Answers

Answer:

Gross Income = 46950

Explanation:

SOURCE                                                                                           AMOUNT

Illegal gross income (from poker)                                                   1200

Gain on stock sale                                                                           1000

Annuity (25000 - 210000/20)                                                         14500

Scholarship (excess of book allowance paid, for taxable car)       200

Tax refund (tex benefit of last year)                                                  50

Interest Income                                                                                 30000

Total Gross Income                                                                         46950

Disability benefit is excluded as the policy was purchased by taxpayer. Income from son is also  not included, as income is taxed to taxpayer who earned the income

Which of the following statements is incorrect? Group of answer choices Cost of goods available for sale will always be equal to or greater than cost of goods sold. Ending inventory exceeds beginning inventory when purchases are greater than cost of goods sold. Cost of goods sold exceeds purchases when ending inventory is less than beginning inventory. Ending inventory is greater than beginning inventory when purchases are less than cost of goods sold.

Answers

Answer:

Ending inventory is greater than beginning inventory when purchases are less than cost of goods sold.

Explanation:

Ending inventory is greater than beginning inventory when purchases are less than cost of goods sold is the wrong answer option

Ending inventory is the amount of inventory a company has in stock at the end of it's fiscal year. It is the beginning inventory plus net purchases minus cost of goods sold.

When the beginning inventory is greater than the ending inventory, then has been sold in the period than you bought.

Exhibit 9-1 Refer to Exhibit 9-1. If the economy is self-regulating, the price level is:_________.
a) lower in short-run equilibrium than in long-run equilibrium.
b) lower in long-run equilibrium than in short-run equilibrium.
c) higher in long-run equilibrium than in short-run equilibrium.
d) lower when the economy is in a recessionary gap than when it is in long-run equilibrium.
e) a and c

Answers

Answer: b) lower in long-run equilibrium than in short-run equilibrium.

Explanation:

A self regulating economy will try to move to the long run Equilibrium.

From the graph attached you will notice that the Price Level at the point where the Long Run Curve intersects with the Aggregate Demand curve is lower than the point where the Short Run Supply curve intersects with the same Aggregate Supply.

This means that Prices in the long term at equilibrium will be less than prices in the short term at Equilibrium should the Economy be a self regulating type that will move towards a long term Equilibrium.

nventory records for Water Incorporated revealed the following: Date Transaction Number of Units Unit Cost July 1 Beginning inventory 520 $ 2.48 July 25 Purchase 330 2.67 Water Inc. sold 630 units of inventory during the month. Ending inventory assuming weighted-average cost would be: (Round weighted-average unit cost to 4 decimal places and final answer to the nearest dollar amount.)

Answers

Answer:

$562

Explanation:

Date     Transaction                   Units          Unit Cost         Total

July 1    Beginning inventory     520              $2.48             $1,289.60

July 25 Purchase                       330              $2.67             $881.10      

subtotal                                      850             $2.554           $2,171

            Sales                              630            $2.554           $1,609.09

July 31  Ending inventory          220            $2.554           $561.91

July 31's ending inventory = 220 units at $2.554 per unit, total cost $561.91

A beekeeper lives adjacent to an apple orchard. The orchard owner benefits from the bees because each hive pollinates about one acre of apple trees. The orchard owner pays nothing for this​ service, however, because the bees come to the orchard without his having to do anything. Because there are not enough bees to pollinate the entire​ orchard, the orchard owner must complete the pollination by artificial​ means, at a cost of ​$10 per acre of trees. Beekeeping has a marginal cost
MC = 10 + 5Q
where Q is the number of beehives. Each hive yields £50 worth of honey.
A) Assuming the beekeeper wishes to maxmise his profits, how many beehives will the beekeeper maintain?
B) What is the socially effiecient number of hives?

Answers

Answer:

A. The number of beehives to be maintained is 8

B. The socially effiecient number of hives is 10

Explanation:

A. In order to calculate the amount of beehives that the beekeeper will maintain assuming the beekeeper wishes to maxmise his profits we would have to use the equality of MC and the price and can be calculated as follows:

P=MC

50=10 + 5Q

Q=8

The number of beehives to be maintained is 8

B. To calculate the socially effiecient number of hives we would have to equating the marginal social benefit and marginal cost as follows:

The orchard owner must complete the pollination by artificial​ means, at a cost of ​$10 per acre of trees, therefore,

MSB=MC

50+10=10 + 5Q

Q=10

The socially effiecient number of hives is 10

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 11 years because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $13.75 per share 12 years from today and will increase the dividend by 5.5 percent per year thereafter. If the required return on this stock is 13.5 percent, what is the current share price

Answers

Answer:

$42.69

Explanation:

From the question above Metallica Bearings Inc. is expected to pay a dividend of $13.75 pet share for a period of 12 years

The dividend will increase by 5.5 percent per year

= 5.5/100

= 0.055

The required rate of return is 13.5 percent

= 13.5/100

= 0.135

The first step is to calculate the price at 11 years

Price at 11 years= 13.75/ 0.135-0.055

= 13.75/0.08

= $171.87

The next step in to find the current price by applying the following formular

Current share price= Future value/ (1+r)^n

= $171.875/ (1+0.135)^11

= $171.87/ 1.135^11

= $171.87/ 4.026

= $42.69

Current share price= $42.69

Hence the current share price is $42.69

Corn is an input in the production of tortillas. If you don't know anything about the demand curve, which of the following can you say for certain will happen in the market for tortillas if there is an increase in the price of corn ?

a. overall supply will decrease
b. overall supply will increase
c. quantity supplied will decrease
d. quantity supplied will increase

Answers

Answer:

3.14

Explanation:

*Reintermediation takes place when Intermediaries provide only matching services between buyers and sellers. O Disintermediated entitles or newcomers take on new Intermediary roles O Intermediaries provide only relevant information about demand O Disintermediated entitles or newcomers take on existing intermediary roles O​

Answers

Answer: Disintermediated entitles or newcomers take on new Intermediary roles

Explanation:

Disintermediation refers to, for example, stockbrokers who only execute trade manually being left behind because of the development of online transactions.

However, new developments might bring new intermediary roles. Following our example, brokers who turn to electronic intermediation (or newcomers who take on the new intermediary role) prosper through reintermediation

Suppose that General Motors Acceptance Corporation issued a bond with 10 years until​ maturity, a face value of $ 1 comma 000​, and a coupon rate of 7.0 % ​(annual payments). The yield to maturity on this bond when it was issued was 6.0 %. What was the price of this bond when it was​ issued?

Answers

Answer:

$1,073.60

Explanation:

bond's current price = PV of face value + PV of coupons

maturity = 10 years

face value = $1,000

coupon rate = 7% annual

market rate = 6%

PV of face value = $1,000 / (1 + 6%)¹⁰ =$558.39

PV of coupons = coupon x annuity factor (10 years, 6%) = $70 x 7.3601 = $515.21

market value at issue date = $558.39 + $515.21 = $1,073.60

since the bond's coupon rate was higher than the market rate, the bond was sold at a premium.

Management of Carla Vista, Inc., is planning to raise $1,215,000 in new equity through a private placement. If the sale price is $20.25 per share, how many shares does the company have to issue

Answers

Answer:

Number of shares to be issued =  60,000  units

Explanation:

A private placement involves the issue of new shares to a few number of individual and institutional investors. Unlike initial public offering, here the shares are not offered to the general public.

The number of units to be issued is determined as follows

Units to be issued = Total capital to be raised / issue price per share

Number of units to be raised = $1215,000/$20.25 per share= 60,000  units

Number of shares to be issued =  60,000  units

Blossom Corp. has collected the following data concerning its maintenance costs for the past 6 months.
Units Produced Total Cost
July 18,070 $41,663
August 32,128 48,192
September 36,144 55,220
October 22,088 44,580
November 40,160 74,798
December 38,152 62.248
Compute the variable cost per unit using the high-low method. (Round answer to 2 decimal places, e.g. 2.25.)
Variable cost per unit $ e
Compute the fixed cost elements using the high-low method. Fixed costs $

Answers

Answer:

Variable  cost per unit = $1.5  per unit

Fixed cost = $14,558

Explanation:

Variable cost per unit

= cost at high activity - cost at low activity/High activity -low activity

=$(74,798- $41,663) / (40,160 -18,070) units

= $1.5  per unit

Fixed cost

Total fixed cost = cost at high activity - ( vc per unit × high activity)

= 74,798 - (1.5  × 40,160)

= $14,558

Variable  cost per unit = $1.5  per unit

Fixed cost = $14,558

The annual premium for a ​$ 15 comma 000 15,000 insurance policy against the theft of a painting is ​$ 300 300. If the​ (empirical) probability that the painting will be stolen during the year is 0 . 03 .03​, what is your expected return from the insurance company if you take out this​ insurance?

Answers

Answer:

P(x)=0.97

E(x)=$150

Explanation:

The expected return from the insurance company if the I nsurance is taken out will be:

A.Let assume x is the random variable for the amount received from the Insurance company.

Therefore:

x =$300-$0

=$300-$15,000

P(x)=1-0.03=0.97

P(x)=0.03

B.

E(x)=0.97×$300-$14,700×0.03

=$291-$441

=$150

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts receivable $ 345,000 debit Allowance for uncollectible accounts 700 debit Net Sales 790,000 credit All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

Answers

Answer: $5,440

Explanation:

When using the percent of sales method to determine bad debts, the company estimates a percentage that it believes will results in uncollectible debt and then applies it to the sales/revenue figure. The figure that is calculated is then debited along with the debit balance on the Allowance for doubtful accounts to the Bad debts account for the year and credited to the Allowance for doubtful accounts.

This company estimates that they will have 0.6% of credit sales uncollectible.

There are also $790,000 in sales of which all are on credit.

The Uncollectible estimate is therefore,

= 790,000 * 0.6%

= $4,740

This figure is then added to the debit amount on the Allowance for Uncollectible Accounts.

= 4,470 + 700

= $5,440

Note; A debit balance on the Allowance for doubtful debt account signifies that the bad debts were higher than anticipated the last time. This is why the figure is added to the current bad debts expense.

Pat's Custom Tuxedo Shop maintains its records on the cash basis. During this past year Pat's collected $42,900 in tailoring fees, and paid $12,800 in expenses. Depreciation expense totaled $1900. Accounts receivable increased $1200, supplies increased $3600, and accrued liabilities increased $1650. Pat's accrual-basis net income was:

Answers

Answer:

$31,350

Explanation:

Calculation for Pat's accrual-basis net income

Cash receipts$42,900

Less Cash disbursements(12,800)

Cash basis net income 30,100

Less depreciation expense(1,900)

Add increase in accounts receivable1,200

Add increase in supplies 3,600

Less increase in accrued liabilities(1,650)

Accrual-basis net income$31,350

Reliable Gearing currently is all-equity-financed. It has 17,000 shares of equity outstanding, selling at $100 a share. The firm is considering a capital restructuring. The low-debt plan calls for a debt issue of $270,000 with the proceeds used to buy back stock. The high-debt plan would exchange $470,000 of debt for equity. The debt will pay an interest rate of 11%. The firm pays no taxes.

Required:
a. What will be the debt-to-equity ratio if it borrows $220,000?
b. If earnings before interest and tax (EBIT) are $130,000, what will be earnings per share (EPS) if Reliable borrows $220,000?
c. What will EPS be if it borrows $420,000?

Answers

Answer:

a. 0.15

b. $7.15 per share

c. $6.55

Explanation:

a. What will be the debt-to-equity ratio if it borrows $220,000?

Market value of equity = 17,000 * $100 = $1,700,000

Since the proceeds of a debt issue of $270,000 is used to buy back stock, we have:

Remaining market value of equity = $1,700,000 - $220,000 = $1,480,000

Therefore,

Debt-to-equity ratio = Debt / Remaining market value of equity = $220,000 / $1,480,000 = 0.15.

b. If earnings before interest and tax (EBIT) are $130,000, what will be earnings per share (EPS) if Reliable borrows $220,000?

Remaining number of shares = Remaining market value of equity / Market price per share = $1,480,000 / $100 = 14,800 shares

Interest on debt = $220,000 * 11% = $24,200

Tax = $0

Earning after interest and tax = EBIT - Interest on debt - Tax = $130,000 - $24,200 - $0 = $105,800

EPS = Earning after interest and tax / Remaining number of shares = $105,800 / 14,800 = $7.15 per share

c. What will EPS be if it borrows $420,000?

Remaining number of shares = ($1,700,000 - $420,000) / $100 = 12,800 shares

Interest on debt = $420,00 * 11% = $46,200

Tax = $0

Earning after interest and tax = EBIT - Interest on debt - Tax = $130,000 - $46,200 - $0 = $83,800

EPS = Earning after interest and tax / Remaining number of shares = $83,800 / 12,800 = $6.55 per share

Omaha Beef Co. purchased a delivery truck for $50,000. The residual value at the end of an estimated eight-year service life is expected to be $10,000. The company uses straight-line depreciation for the first six years. In the seventh year, the company now believes the truck will be useful for a total of 10 years (four more years), and the residual value will remain at $10,000. Calculate depreciation expense for the seventh year.

Answers

Answer:

2500

Explanation:

First depreciate for 6 years using regular method: (Cost - Salvage Value)/Initial Useful life

(50,000-10,000)/8 = 5000 <- this is annual depreciation

For 6 years, $30,000 accumulated depreciation

Now to calculate change in useful life, you do (Cost - Accumulated Depreciation - Salvage Value)/Remaining Useful life

Remaining Useful life = 10-6 = 4

(50,000-30,000-10,000)/4 = 2500

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