Nordstrom Inc. reports net income of $600 million for its fiscal year ended January 2016. At the beginning of that fiscal year, Nordstrom had $9,245 million in total assets. By fiscal year ended January 2016, total assets had decreased to $7,698 million.
What is Nordstrom's ROA?

Answers

Answer 1

Answer:

The answer is 7.1%

Explanation:

ROA means Return on Asset. It is one of the profitability ratios. It tells us how profitable a company is in using its assets. It is the rate of return on assets owned by the business and it is expressed as a percentage. The formula for calculating it is:

Net profit ÷ total assets.

In this the question we have the beginning and the ending total assets, what we need to do is to find the average i.e ($9,245 million + $7,698 million) / 2 =$8,472.5 million

Therefore, Nordstrom's ROA is:

$600 million / $8,472.5 million

= 7.1%


Related Questions

The expected average rate of return for a proposed investment of $800,000 in a fixed asset with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $360,000 for the four years is

Answers

Answer:

22.5%

Explanation:

For computation of return on investment first we need to find out the average investment and average income per year which is shown below:-

Average investment = Proposed investment ÷ Average

= $800,000 ÷ 2

= $400,000

Now, the Average income per year = Expected total net income ÷ Number of year

= $360,000 ÷ 4

= $90,000

Return on investment = Average income per year ÷ Average investment

= $90,000 ÷ $400,000

= 0.225

or

= 22.5%

The following data have been recorded for recently completed Job 323 on its job cost sheet. Direct materials cost was $2,063. A total of 33 direct labor-hours and 234 machine-hours were worked on the job. The direct labor wage rate is $18 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $24 per machine-hour. The total cost for the job on its job cost sheet would be:

Answers

Answer:

$8,723

Explanation:

Calculation for total cost for the job on its job cost sheet

Direct materials 2,063

Direct labor (33 hours × $18 per hour) 594

Manufacturing overhead (234 hours × $24 per hour) 5,616

Total manufacturing cost for job 8,273

"ART Company just paid a dividend of $2.00. The dividend is expected to grow by 10% this year, 9% in year two and 6% in year three. Then, beginning in year four, the dividend will begin growing at a constant rate of 4%. With a required return of 10%, what is the stock worth today

Answers

Answer:

The stock is worth $38.99 per share today

Explanation:

We can calculate the value of the stock using the dividend discount model approach (DDM). The DDM values the stock based on the present value of the expected future dividends from the stock. To calculate the price of the stock today, we simply discount back all the future expected dividends and terminal value (calculated when the growth rate in dividends become constant) to their present value using the required rate of return as the discount factor.

The value of ART company's stock today will be,

P0 or V0 = 2 * (1+0.1) / (1+0.1)  + 2 * (1+0.1)*(1+0.09) / (1+0.1)^2  +  

2 * (1+0.1)*(1+0.09)*(1+0.06) / (1+0.1)^3  +  

[( 2 * (1+0.1)*(1+0.09)*(1+0.06)*(1+0.04)) / (0.1 - 0.04)] / (1+0.1)^3

P0 or V0 = $38.9939 rounded off to $38.99

Trucks R' Us has a market capitalization of $142 million, $78 billion in BB rated debt, and $10 billion in cash. If Trucks R' Us' equity beta is 1.68, then their underlying asset beta is closest to:

Answers

Answer:

Their underlying asset beta is closest to is 1.08

Explanation:

According to the given data we have the following:

Debt is given as $78 billion

Equity is given as $142 billion

equity beta given as 1.68

Therefore, in order to calculate the underlying asset beta we would have to use the formula of the the equity beta for a levered firm as follows:

betaE =beta A [1 + (Debt / Equity)]

1.68 = \beta A [1 + ($78 B/ $142 B)]

1.68 = \beta A [1 + 0.5493]

betaA = 1.68 / 1.5493

betaA = 1.08

Their underlying asset beta is closest to is 1.08

Required Information
The following information applies to the questions displayed below) Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $13. At the start of January 2018, VGC's income statement accounts had zero balances and its balance sheet account balances were as follows:________.
Cash $1,600,000
Accounts Receivable 174,000
Supplies 15,100
Equipment 930,000
Buildings 510,000
Land 2,050,000
Accounts Payable 113,000
Deferred Revenue 74,800
Notes Payable (due 2025) 94,800
Common Stock 2,500,000
Retained Earnings 2,498,100
In addition to the above accounts, VGC's chart of accounts includes the following: Service Revenue, Salaries and Wages Expense, Advertising Expense, and Utilities Expense. The following transactions occurred during the January month:________.
A. Received $57,750 cash from customers on 1/1 for subscriptions that had already been earned in 2017.
B. Purchased 10 new computer servers for $41,500 on 1/2; paid $11,500 cash and signed a three-year note for the remainder owed.
C. Paid $14,300 for an Internet advertisement run on 1/3.
D. On January 4, purchased and received $5,300 of supplies on account.
E. Received $150,000 cash on 1/5 from customers for service revenue earned in January.
F. Paid $5,300 cash to a supplier on January 6.
G. On January 7, sold 19,900 subscriptions at $13 each for services provided during January. Half was collected in cash and half was sold on account.
H. Paid $380,000 in wages to employees on 1/30 for work done in January.
I. On January 31, received an electric and gas utility bill for $6,260 for January utility services. The bill will be paid in February.

Answers

Answer:

Cash             57,750 debit

   Account receivables 57,750 credit

--------------------------------------------

Equipment  41,500 debit

 cash                  11,500 credit

 note payable  30,000 credit

--------------------------------------------

Advertising Expense  14,300 debit

             cash                 14,300 credit

--------------------------------------------

supplies   5,300 debit

   account payables 5,300 credit

------------------------------------------

cash     150,000 debit

      service revenue 150,000 credit

-------------------------------------------

account payables   5,300 debit

      cash                         5,300 credit

---------------------------------------------

cash                           129,350 debit

account receivables 129,350 debit

          services revenue        258,700 credit

---------------------------------------------

wages expense 380,000 debit

    cash                       380,000 credit

--------------------------------------------

utilities expense       6,260 debit

     account payable     6,260 credit

Explanation:

To make thge jounral entries we must follow the basic principles:

debit = credit

and one value per account

Is important to comment that A state the income has been earned so we deduct from account recievables

then. we again receive cash for service earned

In none ofthe case we are doing the recognition of hte deferred revenue so this, stays untouched.

G) 19,900 x $13 each = $258,700

half cash-half credit : 258,700 / 2 = 129,350

Raising Canes is a restaurant located primarily in the south and the owner is interested in expanding nationwide. Name and describe the various types of research suppliers and discuss which type could meet his need for finding the best locations in new markets.?

Answers

Answer:

- syndicate research service

- limited research service

- standardized research

- custom research

Explanation:

Note, Raising canes ones to expand nationwide, which of course is a monumental task.

- The syndicated research supplier using is already established standards for the research in exchange for a fee.

- Standardized research supplier is willing to meet the needs of clients by directing strategies best fitted to find suitable retail locations. It is the best type of research service to meet this client’s needs.

- Limited-service research are suppliers that are limited in their scope of operations such as data warehousing, or data processing.

What was the firm's end-of-year cash balance? Recreate the firm's cash flow statement to arrive at your answer. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar, if necessary.

Answers

Answer:

$340,000

Explanation:

Statement of cash flow ( year-end December 31, 2012)

Operating activities Cashflow

Net Income                         = $5,000,000

Add back: Depreciation     = $440,000

Net cashflow                      = $5,440,000

Investing activities Cashflow

Cash paid for machinery   = ($5,400,000)

Net cashflow                      = ($5,400,000)

Financing activities Cashflow

Cash receipt from issuing long term debt  =$1,000,000

Cash paid for dividends                               =(800,000)

Net cashflow                                                 =$200,000

Net increase              = ($5,440,000-$5,400,000+$200,000)

Net increase in cash = $240,000

Opening balance as at 1 Jan 2012    =$100,000

Closing balance as at 31 Dec 2012    =($100,000+$240,000) = $340,000

15) A market is defined as A) a physical place where people buy only goods. B) a physical place where people buy both goods and services. C) a store where people buy physical goods. D) any arrangement that brings buyers and sellers together. E) a place where one good is bartered for another.

Answers

Answer:

D) any arrangement that brings buyers and sellers together.

Explanation:

In earlier times before now a market has a specific way of defining it. But due to recent advancement in technology, it can be described or defined to be any arrangement that brings buyers and sellers together.

The power of online presence totally altered the initial marker definitions the world know as any physical place where these buyers and sellers meet to do their tradings or businesses or a place where goods are bartered for another. Therefore any arrangement, be it via mail, sms, codes, online stores, video meetings etc are all forms of market places.

Barry is the branch manager of a large toy store. He has been given the responsibility to communicate with, coach, and motivate supervising managers. In this scenario, Barry most likely requires _____ to perform his role efficiently.
1. Human skills
2. Conceptual skills
3. Technical skills
4. Cognitive skills

Answers

Answer:

Human Skills

Explanation:

On January 1, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December 31, the cost of the available-for-sale securities was $252,000, and the fair value was $258,890. Prepare the adjusting entry to record the unrealized gain or loss on available-for-sale investments on December 31. Refer to the Chart of Accounts for exact wording of account titles.

Answers

Answer:

Dr  Valuation Allowance for Available-for-Sale Investments  $6890

Cr  unrealized gain/(loss) on AFS investments                                        $6890

Explanation:

The unrealized  gain or loss on the available-for-sale securities is the difference between its cost of $252,000 and the fair value of $258,890 on 31st December.

Gain/(loss)=$258,890-$252,000=$6890  unrealized gain

The amount would be credited to unrealized gain/(loss) on AFS investments while Valuation Allowance for Available-for-Sale Investments would be debited with the same amount

NewTech Incorporated management plans on paying the company's first dividend of $2.00 three years from today (D3 = $2.00) on its' common stock. After year three the dividend is expected to grow at a constant rate of 5% thereafter. As an investor with a required rate of return of 15%, what would you pay for NewTech common stock today?

Answers

Answer:

Stock price today = $13.807

Explanation:

According to the dividend valuation model , the current price of a stock is the present value of the expected future dividends discounted at the required rate of return

This principle can be applied as follows:

The value of cash flow the stock today is the present value of the future cash flow discounted at the required rate of return

Step 1 : Compute the PV in year 3 of future dividend

PV = D× (1+g)/r-g

D- div in year 3, g- growth rate, r-required rate of return

PV in year 3 = 2× (1.05)/0.15-0.05

                   = 21

Step 2: PV in year in year 0

PV = PV in year 3 × (1+r)^(-n)

r-rate of return- 15%, n- number of years- 3

    =  21 × 1.15^(-3)

    =13.80784088

Stock price today = $13.807

Every year, the U.S. Census Bureau conducts an income survey of about 60,000 American families carefully selected to represent the whole population. The data collected help to measure income inequality in the economy. Which of the following causes the census data to inaccurately measure income inequality?
a) Very few people move from one income quintile to another over the years.
b) Higher-income families tend to have more persons to support.
c) In-kind transfers do not add to people's incomes but are counted as income.

Answers

Answer:

c) In-kind transfers do not add to people's incomes but are counted as income.

Explanation:

In the given scenario the aim of the census is to measure income inequality in the population selected.

If however the amount of income earned by individuals is not estimated accurately the results of the study will be inaccurate.

In kind transfers are usually goods and services that a person gets for free of at a reduced rate. They are not considered to be income.

When in kind transfers are counted as income and do not actually add up to income, we cannot get a true picture of income of participants of the income survey.

People who have low income but high in kind transfers will be considered high income earners which is not true.

Suppose that Dmitri, an economist from an AM talk radio program, and Frances, an economist from a school of industrial relations, are arguing over saving incentives. The following dialogue shows an excerpt from their debate:
Caroline: The usefulness of government intervention in the economy is a long-standing issue that economists continue to debate.
Antonio: I feel that government involvement in the economy should be reduced because government programs cause more harm than good.
Caroline: While I do agree that government programs can be inefficient, I really think they are necessary to help the less fortunate.
1. The disagreement between these economists is most likely due to
a. differences in values
b. differences in scientific judgement
c.differences in perception verse reality.
2. Despite their differences, with which proposition are two economists chosen at random most likely to agree?
a. Lawyers make up an excessive percentage of elected officials.
b. Minimum wage laws do more to harm low-skilled workers than help them.
c. Tariffs and import quotas generally reduce economic welfare.

Answers

Answer:

1. The disagreement between these economists is most likely due to

a. differences in values

2. Despite their differences, with which proposition are two economists chosen at random most likely to agree?

a. Lawyers make up an excessive percentage of elected officials.

Explanation:

Economists chosen at random do not usually agree on economic events and realities, instead, they are more likely to agree on issues that are not economic.  They offer differing opinions based on similar principles.  Most of their disagreements stem from differences in what they place their values on.  Some value market-oriented approaches while others value government interventions in market situations, with other variants in-between.

Presented below is an aging schedule for Bryan Company. Number of Days Past Due Customer Total Not Yet Due 1-30 31-60 61-90 Over 90 Aneesh $ 24,000 $ 9,000 $15,000 Bird 30,000 $ 30,000 Cope 50,000 5,000 5,000 $40,000 DeSpears 38,000 $38,000 Others 120,000 72,000 35,000 13,000 $262,000 $107,000 $49,000 $28,000 $40,000 $38,000 Estimated percentage uncollectible 3% 7% 12% 24% 60% Total estimated bad debts $ 42,400 $ 3,210 $3,430 $3,360 $ 9,600 $22,800 At December 31, 2016, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $8,000.Journalize the adjusting of bad debit at December 31 2016.

Answers

Answer and Explanation:

The adjusting journal entry is shown below:

On Dec 2016

Bad debt expense Dr ($42,400 - $8,000)  $34,400

          To Allowance for doubtful debts $34,400

(Being the bad debt expense is recorded)

For recording this we debited the bad debt expense as it increased the expenses and credited the allowance for doubtful debts as it reduced the assets

Robinson Company purchased Franklin Company at a price of $2,500,000. The fair market value of the net assets purchased equals $1,800,000. 1. What is the amount of goodwill that Robinson records at the purchase date? 2. Does Robinson amortize goodwill at year-end? 3. Robinson believes that its employees provide superior customer service, and through their efforts, Robinson believes it has created $900,000 of goodwill. Should Robinson Company record this goodwill?

Answers

Answer:

Explanation:

Goodwill is defined as the excess in amount of the purchase price of a company over the fair value at acquisition.It is intangible in nature , meaning it can not be physically separated from the other assets. Example are patent , brand name , good employee relation.

1.

Goodwill calculation

Purchase price - $2,500,000

Fair value -          $1,800,000

Goodwill -               $700,000        

2.

No

Under the IAS 36, impairment of assets , goodwill is not amortized but annually tested for impairment as amortization is applicable to intangible assets with a definite useful life while intangible assets with indefinite useful life are annually tested for impairment to evaluate a loss in value experienced.

3

No

Under IAS 38 , Internally generated goodwill are not recognized as no related cost is incurred towards achieving a future benefit

Wattan Company reports beginning inventory of 10 units at $60 each. Every week for four weeks it purchases an additional 10 units at respective costs of $61, $62, $65, and $70 per unit for weeks 1 through 4. Compute the cost of goods available for sale and the units available for sale for this four-week period. Assume that no sales occur during those four weeks.

Answers

Answer:

Activity Units    Units cost      Cost of Goods     Available

Beginning Inventory        10   $60.00   $600

1st week purchase           10   $61.00    610

2nd week purchase        10   $62.00   620

3rd week purchase         10   $65.00   650

4th week purchase         10   $70.00   700

Units available for sale 50

Cost of goods available for sale $3,180

Explanation:

We can compute the cost of goods available for sale and the units available for sale for this four-week period by assuming that no sales occur during those four weeks

Activity Units Unit Cost Cost of Goods Available

Beginning Inventory 10 60 600

1st Week purchase 10 61 610

2nd Week purchase 10 62 620

3rd Week purchase 10 65 650

4th Week purchase 10 70 700

Units available for sale 50    

Cost of goods available for sale  3180

Thus, in the above it is shown the computing of the cost of goods available for sale and the units available for sale for this four-week period by assuming that no sales occur during those four weeks.

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An investor is deciding whether to build a retail store. If she invests in the store and it is successful, she expects a return of $100,000 in the first year. If the store is not successful, she will suffer a loss of $80,000. She guesses that the probability that the store will be a success is 0.6. To remove some of the uncertainty from this decision, the investor tries to establish more information, but this market research will cost $20,000. If she spends this money, she will have more confidence in her investment. There is a 0.6 probability that this information will be favorable; if it is, the likelihood that the store will be a success increases to 0.9. If the information is not favorable, the likelihood that the store will be a success reduces to only 0.2. Of course, she can elect to do nothing.
A) Draw the associated decision tree.
B) What do you recommend?
C) How much is the information worth?
Replace all the monetary values with the following utilities
Monetary Value Utility
$100,000 1.00
$80,000 0.40
$0 0.20
-$20,000 0.10
-$80,000 0.05
-$100,000 0.00
A) What do you recommend, based on expected utility?
B) Is the investor a risk soeker or a risk avoider?

Answers

Answer:

Explanation:

Given that,

expects a return of $100,000 in the first year

loss of $80,000

probability that the store will be a success is 0.6

research will cost $20,000

0.6 probability that this information will be favorable

store will be a success increases to 0.9

store will be a success reduces to only 0.2

a) Decision tree is attached

EMV= (payoff of first outcome) * (probability of first outcome) +  (payoff of second outcome) * (probability of second outcome) +  (payoff of third outcome) * (probability of third outcome)

EMV(node 1) = EMV(new store)

= ($100,000 * 0.6) + (-80,000 * 0.4)

=$28,000

EMV (node 2) = EMV (no store)

= $0

EMV (node 3) = EMV ( new store and favourable research)

= ($100,000 * 0.9) + (-80,000 * 0.1)

=$82,000

EMV (node 4) = EMV ( no store and favourable research)

= $0

EMV (node 5) = EMV ( new store and unfavourable research)

= ($100,000 * 0.2) + (-80,000 * 0.8)

= -$44,000

EMV (node 6) = EMV ( no new store and unfavourable research)

= $0

B) Here we compare EMV of not conducting the market research ans EMV of conducting the market research and the maximum EMV shall be taken for decision making

Here the EMV of conducting the market research is higher than not conducting

Hence, the investor can go to market research test. If result is positive, she can invest in the store, if negative she can stop the proposal.

Which of the following is NOT a pitfall an organization should avoid in strategic planning? Involving all managers rather than delegating planning to a "planner" Failing to communicate the plan to employees Failing to create a collaborative climate supportive of change Top managers not actively supporting the strategic-planning process Doing strategic planning only to satisfy accreditation or regulatory requirements

Answers

Answer:

Involving all managers rather than delegating planning to a "planner"

Explanation:

Strategic planning is a process of establishing the direction of a business. It assesses where the business is and where it is going. And the action plan needed to get to it's goal.

Delegating planning to a planner rather than involving all managers is an identified pitfall in strategic planning.

This is why Involving all managers rather than delegating planning to a "planner" is the correct answer since we are required to identify a non pitfall by the question.

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: Location FC (annual) VC (per unit) Atlanta $ 80,000 $ 20 Phoenix $ 140,000 $ 16 If the annual demand will be 20,000 units, what would be the cost advantage of the better location? HINT: Compare the total costs Select one: a. 40000 b. 20000 c. 460000 d. 60000

Answers

Answer:

Cost Advantage of different locations:

b. $20,000

Phoenix certainly had a cost advantage over Atlanta and based on this factor, it should be chosen for the new plant instead of any other city.

Explanation:

a) Total Costs of different locations:

                        Atlanta       Phoenix

Fixed Cost      $80,000     $140,000

Variable cost  400,000      320,000

Total Costs  $480,000    $460,000

b) Variable costs

                                   Atlanta       Phoenix

Annual Demand        20,000        20,000

Variable cost/unit        $20              $16

Total variable cost  $400,000  $320,000

c) Cost Advantage is the competitive edge which location (or company) can have over another through reduced production or marketing costs or both so that it can offer cheaper prices or use excess profits to bolster promotion or distribution.   In this case, the comparison is on the total cost, which is made of variable and fixed costs.

Southland Company is preparing a cash budget for August. The company has $17,000 cash at the beginning of August and anticipates $120,800 in cash receipts and $134,500 in cash payments during August. Southland Company wants to maintain a minimum cash balance of $10,000. To maintain the minimum cash balance of $10,000, the company must borrow:

Answers

Answer:

The Southland Company must borrow the amount of $6,700

Explanation:

To determine the amount the company must borrow, analysis of its net cash balance is paramount. Then, the Net cash balance will be deducted from the minimum cash balance of $10,000  to know the amount to be borrowed

Particulars                              Amount

Opening Cash Balance          $17,000

Cash Receipts Expected        $120,800

Cash Payment                         $134,500

Net Cash Balance                    $3,300

Minimum cash balance           $10,000

Net Cash Balance                    $3,300

Amount to be borrowed          $6,700

The Southland Company must borrow the amount of $6,700

Karen Bartlett was given a generic version of Sulindac, an anti-inflammatory drug. The result was that she developed toxic epidermal necrolysis, a disease that disfigured and blinded her. She brought suit alleging that there were warnings that should have been put on the generic version of the drug because issues with the skin infections were being reported. However, the manufacturer to Sulindac did not have FDA approval to place the warning on the product. The jury awarded Ms. Bartlett $21 million, and the generic manufacturer appealed the decision. Which of the following theories would be the best approach for the generic manufacturer to take in order to have the verdict reversed?

a. the commerce clause
b. substantive due process
c. preemption
d. due process because of the excessive size of the verdict

Answers

Answer:

option c: Preemption

Explanation:

preemption can simply be defined as the rule of law that proclaims the federal law and the constitution as the supreme law in all the land so therefore if there is a case  whereby there is a conflict between a federal and a state law, the federal law will be in absolute control and this will render the state law to be void.

there are two  primary occasion that will warrant preemption  they are where clearly, federal law preempts state or local law, and  also where preemption is implied.  different kind of preemption can also be said to be express preemption, implied preemption, field preemption, conflict preemption and frustration of purpose preemption.

Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,900 uncollectible account of its customer, A. Hopkins. The entry or entries Gideon makes to record the write off of the account on May 3 is:

Answers

Answer:

Allowance for Doubtful Accounts   $2,900

            To Accounts Receivable $2,900

(Being the written off amount is recorded)

Explanation:

The journal entry to record the write off of the account using allowance method is shown below:

On May 3

Allowance for Doubtful Accounts   $2,900

            To Accounts Receivable $2,900

(Being the written off amount is recorded)

For recording this we debited the allowance for doubtful accounts as it reduced the allowance and credited the account receivable as it decreased the assets so that the proper recording of the given transaction could be done

The owner of a small firm has just purchased a personal computer, which she expects will serve her for the next two years. The owner has been told that she "must" buy a surge suppressor to provide protection for her new hardware against possible surges or variations in the electrical current, which have the capacity to damage the computer. The amount of damage to the computer depends on the strength of the surge. It has been estimated that there is a 3% chance of incurring 350 dollar damage, 5% chance of incurring 250 dollar damage, and 12% chance of incurring 100 dollar damage from a surge within the next two years. An inexpensive suppressor, which would provide protection for only one surge, can be purchased. How much should the owner be willing to pay if she makes decisions on the basis of expected value

Answers

Answer:

$35

Explanation:

The computation of the expected value is shown below;

As we know that  

= Estimated chance of damage percentage × dollar damage + Estimated chance of damage percentage × dollar damage + Estimated chance of damage percentage × dollar damage

= 3% × $350 + 5% × $250 + 12% × $100

= $10.5 + $12.5 + $12

= $35

We simply multiplied the estimated chance of damage percentage with the dollar damage and then added the other two so that the expected value could arrive

Suppose that an issuing bank pays on documents that are conforming to the requirements of the letter of credit, but the seller has shipped worthless goods to the buyer. Which of the following statements, if any, are true?

a. As long as the documents strickly comply with the letter of credit requirements, the bank will not have to reimburse the buyer
b. If there is fraud in the transaction, the bank will have to reinburse the buyer and seek its remedies against the seller
c. The strick compliance insulates the bank from liability, since it assures the bank that the underlying contract between the buyer and seller is entirely independent from the letter of credit contract
d. A and B

Answers

Answer:

the answer C

Explanation:

As long as the documents strickly comply with the letter of credit requirements, the bank will not have to reimburse the buyer

b. If there is fraud in the transaction, the bank will have to reinburse the buyer and seek its remedies against the seller

c. The strick compliance insulates the bank from liability, since it assures the bank that the underlying contract between the buyer and seller is entirely independent from the letter of credit contract

If 4 million kegs of beer are sold, , which means that: It would be fairer for society to devote fewer resources to the production of beer. It would be fairer for society to devote more resources to the production of beer. Society is currently devoting the efficient quantity of resources to the production of beer. It would be more efficient for society to devote more resources to the production of beer. If 12 million kegs of beer are sold, , which means that: It would be fairer for society to devote more resources to the production of beer. Society is currently devoting the efficient amount of resources to the production of beer. It would be fairer for society to devote fewer resources to the production of beer. It would be more efficient for society to devote fewer resources to the production of beer. The efficient allocation of resources would result in the production of kegs of beer.

Answers

Answer:

1. It would be more efficient for society to devote more resources to the production of beer.

2. Society is currently devoting the efficient amount of resources to the production of beer.

Explanation:

1. If 4 million kegs of beer are sold, the marginal benefit exceeds marginal cost which means that: the society values this quantity of kegs of beer and would be more beneficial and efficient if the society devote more resources to beer production.

2. If 12 million kegs of beer are sold, where marginal cost equal marginal benefit, it means that this is a good point in which shows an efficient allocation of resources to beer production because the marginal cost of the resources is equal to the marginal benefit of each keg of beer.

If 4 million kegs of beers are sold, marginal benefit exceeds the marginal cost, which means that :

It would be more efficient for society to devote more resources to the production of beers.

Reason :

the advantage of an additional unit of producing a good is more than the cost of producing it.hence it is good to produce more where marginal benefit equals marginal cost.

If 12 million kegs of beers are sold, marginal cost exceeds the marginal benefit, which means that :

It would be more efficient for society to devote fewer resources to the production of beers.

Reason :

the advantage of an additional unit of producing a good is less than the cost of producing it.hence it is good to produce less where marginal benefit equals marginal cost.

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CarsonWentz Company uses a job-order costing system. The company applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year, manufacturing overhead and direct labor-hours were estimated at $88,000 and 16,000 hours respectively, for the year. In June, job #315 was completed. Materials costs on the job totaled $1,590 and labor costs totaled $2,340 at $6.50 per hour. At the end of the year, it was determined that the company worked 15,300 direct labor-hours for the year, and incurred $86,750 in actual manufacturing overhead cos

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Estimated manufacturing overhead= $88,000

Estimated direct labor-hours= 16,000

Job 315:

Materials costs on the job totaled $1,590 and labor costs totaled $2,340 at $6.50 per hour.

At the end of the year, it was determined that the company worked 15,300 direct labor-hours for the year, and incurred $86,750 in actual manufacturing overhead costs.

With the information provided, we can calculate the total cost of Job 315 and the amount of under/over allocated overhead.

First, we need to determine the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 88,000/16,000= $5.5 per direct labor hour

Job 315:

Direct labor hours= 2,340/6.5= 360 hours

Total cost= 1,590 + 2,340 + 5.5*360= $5,910

Now, to calculate the over/under allocation, first, we need to allocate overhead for the whole company.

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 5.5*15,300= $84,150

Under/over applied overhead= real overhead - allocated overhead

Under/over applied overhead= 86,750 - 84,150= $2,600 underallocated

On July 1, Year 1, Danzer Industries Inc. issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, receiving cash of $37,282,062. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.2. Journalize the entries to record the following:*A. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method.
B. The interest payment on June 30, Year 2, and the amortization of the bond discount, using the straight-line method.
3. Determine the total interest expense for Year 1.4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?5. Compute the price of $37,282,062 received for the bonds by using the present value tables

Answers

Answer:

1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.

Dr Cash 37,282,062

Dr Discount on bonds payable 2,717,938

    Cr Bonds payable 40,000,000

2. Journalize the entries to record the following:*A. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method.

Dr Interest expense 1,535,897

    Cr Cash 1,400,000

    Cr Discount on bonds payable 135,897

B. The interest payment on June 30, Year 2, and the amortization of the bond discount, using the straight-line method.

Dr Interest expense 1,535,897

    Cr Cash 1,400,000

    Cr Discount on bonds payable 135,897

3. Determine the total interest expense for Year 1.

Interest expense 1,535,897

4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?

Yes, when the bond's interest rate is lower than the market rate, the bonds will be sold at a discount (less than face value). The market rate applicable to this bond issuance is the one used for similar bonds, so the market rate can change depending on the bond.

5. Compute the price of $37,282,062 received for the bonds by using the present value tables

the value of the bonds = PV of face value + PV of coupons

PV of face value = $40,000,000 / (1 + 4%)²⁰ = $18,255,478PV of annuity = $1,400,000 x PV annuity 4% for 20 periods = $1,400,000 x 13.59033 = $19,026,462

total value = $18,255,478 + $19,026,462 = $37,281,940

There is a small difference, $122, due to rounding errors from the annuity table. But the error is not significant, it represents only 0.0003% of the bonds' price.

Explanation:

issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, receiving cash of $37,282,062

coupon payment = $40,000,000 x 7% x 1/2 = $1,400,000

semiannual coupon paid December 31 and June 30

Discount on bonds payable $2,717,938 / 20 coupons = $135,896.90 ≈ $135,897 per coupon payment

Lehi City has designated an internal service fund as the single fund to account for its self-insurance activities. Most of the insured activities such as the police department, fire department, and general government functions are accounted for in the General Fund. What is the maximum amount that can be charged to expenditure in the General Fund related to the self-insurance activities

Answers

Answer: c)The actuarially determined amount necessary to cover claims, expenditures, and catastrophic losses.

Explanation:

The Expenditure on the account related to self - insurance activities  refers to the amounts that will be deducted from the fund for anything insurance related.

The insurance is meant to cover the claims and unlikely events of catastrophies. Therefore when those things do occur it will be deducted from the service fund to cover those things.

Those along with expenses incurred to maintain the fund will be considered expenses and that is the maximum amounts that can be deducted from the fund.

The separate components highlight several features of return on investment not revealed by a single calculation:a.The importance of investment turnover as a key to income is stressed.b.The importance of revenues is explicitly recognized.c.The important components are expressed as ratios or percentages instead of dollarfigures. This form of expression often enhances comparability of different divisions,businesses, and time periods.d.The breakdown stresses the possibility of trading off investment turnover for incomeas a percentage of revenues so as to increase the average ROI at a given level ofoutput

Answers

Answer:

The options (a) (b) and (c) is correct.

Explanation:

From the question stated the features that highlights the return of investment is listed as follows.

The significance of investment turnover as a key to income is stressedThe importance import of revenues is explicitly recognizedThe significant components are expressed as ratios or percentages instead of dollar figures.

Hence, the last option is not correct.

On December 31, a Company held the following short-term available-for-sale securities. The Company had no short-term investments prior to the current period. Prepare the December 31 year-end adjusting entry to record the fair value adjustment for these debt securities.

Answers

Answer:

1a. Unrealized amount 850

1b.Dr Unrealized holding loss-AFS 850

Cr Fair value adjustment 850

Explanation:

1a. Computation for fair value adjustment

Available for sale securities Cost -Fair value =Unrealized amount

Nintendo Co notes 44450-48900=4450

Atlantic Bonds 49000-47000=-2000

Kelogg Co notes25000-23200=-1800

Mcdonals Corp bonds46300-44800= -1500

Total 164750-163900= -850

1b. The Adjusting Journal entry

Dr Unrealized holding loss-AFS 850

Cr Fair value adjustment 850

(To record adjusting entry)

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