Answer:
At December 31, Black should record interest revenue of: $545
Explanation:
Black Company receives a 10% interest bearing note from Reese Company to settle an $21,800 account receivable.
The amount of the interest per year = 10% x $21,800 = $2,180
At December 31, following 3 months, the interest accrual = $2,180/12 x 3 = $545
Journal entries to record the interest accrual:
Debit Interest receivable $545
Credit Interest revenue $545
The following information is from the records of Pangolin Camera Shop: Bad expense is estimated by the aging-of-receivables method. Management estimates that $2,950 of accounts receivable will be uncollectible. Calculate the amount of net accounts receivable after the adjustment for bad debts. Supporting Materials / Group of answer choices $22,950 $22,050 $21,150 $20,800
Answer:
$22,050
Explanation:
The computation of the net account receivable after the adjustment of bad debt is shown below:
As we know that
Net account receivable = Account receivable - bad debt expense
= $25,000 - $2,950
= $22,050
By deducting the bad debt expense from the account receivable we can get the net account receivable and the same is to be considered
hence, the correct option is B.
Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds that pay 5.6 percent interest. Jackson is a single taxpayer who earns $47,500 annually. Assume that the city of Mitchell bonds and the Sundial, Inc. bonds have similar risk. What interest rate would the city of Mitchell have to pay in order to make Jackson indifferent between investing in the city of Mitchell and the Sundial, Inc. bonds for 2019
Answer: 4.37%
Explanation:
As interest is tax deductible, the Sundial Interest needs to be adjusted for tax to find out the true return.
Jackson as a single tax payer earning $47,500 in 2019 has a tax rate of 22% according to the IRS Tax bracket for that year.
That means that the interest that true interest that Sundial is offering him is,
= 5.6 * ( 1 - tax rate)
= 5.6 * ( 1 - 0.22)
= 5.6 * 0.78
= 0.04368
= 4.37%
To make Jackson indifferent with the same amount of risk, the city of Mitchell would have to offer him the same interest that Sundial is offering net of tax which is 4.37%.
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.
Calculate the cost of goods sold for a merchandiser using the periodic inventory system from the following details.
Purchases $500,000
Beginning Merchandise Inventory 175,000
Purchase Returns and Allowances 60,000
Purchase Discounts 12,000
Freight In 17,000
Ending Merchandise Inventory 160,000
A. $477,000
B. $460,000
C. $780,000
D. $500,000
Answer:
B. $460,000
Explanation:
The computation of the cost of goods sold using the periodic inventory system is shown below:
Beginning Inventory $175,000
Add: Purchases $500,000
Add: Freight In $17,000
Less: Purchase Returns and allowances -$60,000
Less: Purchase Discounts -$12,000
Cost of goods available for sale $620,000
Less: Ending Inventory -$160,000
Cost of goods sold $460,000
We simply applied the above format to determine the cost of goods sold
Maquoketa Services was formed on May 1, 2017. The following transactions took place during the first month.
Transactions on May 1:
1. Jay BradFord invested $40,000 cash in the company, as its sole owner.
2. Hired two employees to work in the warehouse. They will each be paid a salary of $3,050 per month.
3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for the first year.
4. Purchased furniture and equipment costing $30,000. A cash payment of $10,000 was made immediately; the remainder will be paid in 6 months.
5. Paid $1,800 cash for a one-year insurance policy on the furniture and equipment.
Transactions during the remainder of the month:
6. Purchased basic office supplies for $420 cash.
7. Purchased more office supplies for $1,500 on account.
8. Total revenues earned were $20,000—$8,000 cash and $12,000 on account.
9. Paid $400 to suppliers for accounts payable due.
10. Received $3,000 from customers in payment of accounts receivable.
11. Received utility bills in the amount of $380, to be paid next month.
12. Paid the monthly salaries of the two employees, totaling $6,100.
Prepare journal entries to record each of the events listed. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Answer:
1. Jay BradFord invested $40,000 cash in the company, as its sole owner.
Account Debit Credit
Cash $40,000
Capital $40,000
2. Hired two employees to work in the warehouse. They will each be paid a salary of $3,050 per month.
Account Debit Credit
Wage Expense $3,050
Wages Payable $3,050
3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for the first year.
Account Debit Credit
Prepaid Rent $24,000
Cash $24,000
4. Purchased furniture and equipment costing $30,000. A cash payment of $10,000 was made immediately; the remainder will be paid in 6 months.
Account Debit Credit
Furniture and Equipment $30,000
Cash $10,000
Accounts Payable $10,000
5. Paid $1,800 cash for a one-year insurance policy on the furniture and equipment.
Account Debit Credit
Prepaid Insurance $1,800
Cash $1,800
6. Purchased basic office supplies for $420 cash.
Account Debit Credit
Office supplies $420
Cash $420
7. Purchased more office supplies for $1,500 on account.
Account Debit Credit
Supplies $1,500
Accounts Payable $1,500
8. Total revenues earned were $20,000—$8,000 cash and $12,000 on account.
Account Debit Credit
Revenue $20,000
Cash $8,000
Accounts Receivable $12,000
9. Paid $400 to suppliers for accounts payable due.
Account Debit Credit
Accounts Payable $400
Cash $400
10. Received $3,000 from customers in payment of accounts receivable.
Account Debit Credit
Accounts Receivable $3,000
Cash $3,000
11. Received utility bills in the amount of $380, to be paid next month.
Account Debit Credit
Utility Expense $380
Accounts Payable $380
12. Paid the monthly salaries of the two employees, totaling $6,100.
Account Debit Credit
Wage Expense $3,050
Wages Payable $3,050
Revising for Conciseness - Rejecting Redundancies and PurgingEmpty Words
Concise writing will save your reader time and make your message easier to understand. During phase three of the 3-x-3 writing process, revise for conciseness by rejecting redundancies and purging empty words.
Which of the following options are redundancies?
1) Adequate enough
2) Combined together
3) Big in size
4) Absolutely essential
Determine which empty words can be purged from the following sentence to make it more concise.
Answer: A. 1) Adequate enough
2) Combined together
3) Big in size
4) Absolutely essential
b. 3) “That was unfinished”
Explanation:
A. Redundancies in phrases refer to the repetition of words with the same or similar meanings which gives off the impression of saying the same things twice. All the options listed are therefore redundancies.
By saying something is Adequate which means that it is sufficient for something one does not again need to include enough because it is the same as sufficient as well.
By also saying Combined, one has already inferred that something was brought together. Including together again is redundant because the together is already in the definition of combined.
Big in size is another redundancy because when a person describes something as Big, they are already referring to the size of the thing in question. Adding in size is therefore not needed.
Finally, the Absolutely in the phrase makes the phrase redundant. When something is said to be essential it means that it is absolutely needed or crucial. To say something is Absolutely Essentially is like saying something is an Essential Essential.
B. The Johnson report had already been said to contain incomplete data. To go on to say that the data is Unfinished is a redundancy because by saying that it is incomplete it means that the data is by definition Unfinished. Removing the “That was unfinished” bit fixes the sentence.
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
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.
Farron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $92
Units in beginning inventory 0
Units produced 8,700
Units sold 8,300
Units ending inventory 400
Variable costs per unit:
Direct materials $13
Direct labor $55
Variable manufacturing overhead $1
Variable selling and administrative $5
Fixed costs:
Fixed manufacturing overhead $130,500
Fixed selling and administrative $8,300
What is the unit product cost for the month under absorption costing?
a) $74 per unit
b) $89 per unit
c) $69 per unit
d) $84 per unit
Answer:
Unit product cost= $84
Explanation:
Giving the following information:
Units produced 8,700
Direct materials $13
Direct labor $55
Variable manufacturing overhead $1
Fixed manufacturing overhead $130,500
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unitary fixed overhead= 130,500/8,700= $15
Unit product cost= 13 + 55 + 1 + 15= $84
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
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%
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
Lloyd Inc. has sales of $250,000, a net income of $20,000, and the following balance sheet: Cash $51,000 Accounts payable $63,600 Receivables 118,800 Notes payable to bank 40,800 Inventories 294,000 Total current liabilities $104,400 Total current assets $463,800 Long-term debt 82,800 Net fixed assets 136,200 Common equity 412,800 Total assets $600,000 Total liabilities and equity $600,000 The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.5x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2.5x); if the funds generated are used to reduce common equity (stock can be repurchased at book value); and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places. % What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:
If inventories are sold and not replaced (thus reducing the current ratio to 2.5x); if the funds generated are used to reduce common equity (stock can be repurchased at book value); and if no other changes occur The ROE will be of 9.4%
The firm's new quick ratio is 3.95
Explanation:
To calculate how much will the ROE change we have to calculate first the current ratio as follows:
Current ratio = Current assets / Current liabilities
2.5 times = (Cash + receivables + Inventories ) / (Accounts payable + Other current liabilities)
2.5 = ($51,000 + $118,800 + Inventories) / $104,400
$169,000 + inventories = $261,000
Inventories = $92,000
Therefore, $202,000 worth of inventories were sold off.
If the funds generated are used to reduce the common equity that is by repurchasing the equity at book value.
Hence, the common equity amounts to $210,800
Calculating the ROE before the inventory is sold off:
ROE = Net income / Steockholder's equity
= $20,000 / $412,800
= 0.048 or 4.8%
Calculating the ROE after selling off the inventory:
ROE = $20,000 / $210,800
= 0.094 or 9.4%
If inventories are sold and not replaced (thus reducing the current ratio to 2.5x); if the funds generated are used to reduce common equity (stock can be repurchased at book value); and if no other changes occur The ROE will be of 9.4%
The firm's new quick ratio is
Quick ratio = (Current assets - Inventories) / Current liabilities
= ($463,800 - $92,000) / $104,400
= 3.95
Mexican Restaurant incurred salaries expense of $62,000 for 2018. The payroll expense includes employer FICA tax, in addition to state unemployment tax and federal unemployment tax. Of the total salaries, $22,000 is subject to unemployment tax. Also, the company provides the following benefits for employees: health insurance (cost to the company, $3,000), life insurance (cost to the company, $330), and retirement benefits (cost to the company, 10% of salaries expense)
Requirements:
1. Journalize Ricardo's expenses for employee benefits and for payroll taxes.
Explanations are not required.
2. What was Ricardo's total expense for 2018 related to payroll?
Answer:
1. The entry for the expenses of employee benefits and for payroll taxes would be as follows:
Debit Credit
Salaries Expense $62,000
FICA Taxes payable $4,743
Health insurance payable $3,000
Life Insurance payable $330
Retirement Benefits payable $6,200
Salaries payable $47,727
Debit Credit
Payroll tax expense $6,063
FICA Taxes payable $4,743
State unemployment taxes payable $1,188
Federal unemployment taxes payable $132
2. Ricardo's total expense for 2018 related to payroll was $68,063
Explanation:
1. According to the given the entry for the expenses of employee benefits and for payroll taxes would be as follows:
Debit Credit
Salaries Expense $62,000
FICA Taxes payable $4,743
Health insurance payable $3,000
Life Insurance payable $330
Retirement Benefits payable $6,200
Salaries payable $47,727
FICA Taxes payable=$62,000*7.65%=$4,743
Retirement Benefits payable=$62,000*10%=$6,200
Debit Credit
Payroll tax expense $6,063
FICA Taxes payable $4,743
State unemployment taxes payable $1,188
Federal unemployment taxes payable $132
FICA Taxes payable=$62,000*7.65%=$4,743
State unemployment taxes payable=$22,000*5.4%=$1,188
Federal unemployment taxes payable=$22,000*0.6%=$132
2. In order to calculate Ricardo's total expense for 2018 related to payroll we would have to make the following calculation:
Total expenses related to payroll=Salaries expense+payroll tax expense
Total expenses related to payroll=$62,000+$6,063
Total expenses related to payroll=$68,063
Ricardo's total expense for 2018 related to payroll was $68,063
As a manager your organization is constantly confronted with a variety of changes in the market or a wide range of situations. You have to recruit and select a manager for a group of employees responsible for several related products. You have just read about Fiedler’s Contingency model and decided to use the LPC score to aid you in selecting a leader for the management group. You have interviewed four candidates for the job (Erin, Josh, Michael, Tabitha) and the scores for each of the candidates were Erin=high LPC, Josh=moderately high LPC, Michael=middle LPC, Tabitha=low LPC. Which of the candidates would you hire?A. ErinB. JoshC. MichaelD. TabithaE. None of these.
Answer:
C. Michael
Explanation:
The least preferred coworker scale is a method used to determine the leadership style of individuals. It was developed by Fred Fiedler and American scholar.
When a person gives positive feedback on coworkers they are more relationship oriented and get a high LPC score.
For those that give negative feedback on coworkers, they are task oriented and will get low LPC scores.
Relationship oriented style is used when employees are experienced and know what to do, while task oriented leadership is needed when the team is less experienced or results need to be delivered in a short time.
The organization is constantly confronted with a variety of changes in the market or a wide range of situations. So this requires a mix of both relationship and task oriented leadership to adapt to changing organisational needs.
Michael is the best option with middle LPC score.
Piper's Pizza sold baking equipment for $25,000. The equipment was originally purchased for $72,000, and depreciation through the date of sale totaled $51,000. What was the gain or loss on the sale of the equipment
Answer:
The gain on disposal is of $4000
Explanation:
To calculate the gain or loss on disposal, we first need to calculate the Carrying value, also known as the Net Book Value, of the asset at the time of sale. The Carrying value is calculated using the following formula,
Carrying Value or NBV = Cost - Accumulated depreciation
Carrying Value or NBV = 72000 - 51000
Carrying Value or NBV = $21000
If the asset is sold for more than its carrying value, there is a gain on disposal. If it is sold for less than its carrying value, there is a loss on disposal.
As the asset was sold for $25000 which is more than its carrying value of $21000, there is a gain on disposal.
Gain on disposal = 25000 - 21000 = $4000 Gain
On January 1, 2016, Learned, Inc., issued $70 million face amount of 20-year, 14% stated rate bonds when market interest rates were 16%. The bonds pay interest semi-annually each June 30 and December 31 and mature on December 31, 2035.
REQUIRED:
A) Using the present value tables, calculate the proceeds (issue price) of Learned, Inc.’s bonds on January 1, 2016, assuming that the bonds were sold to provide a market rate of return to the investor.
B) Assume instead that the proceeds were $72,400,000. Use the horizontal model (or write the journal entry) to record the payment of semi-annual interest and the related premium amortization on June 30, 2016, assuming that the premium of $2,400,000 is amortized on a straight-line basis.
C) If the premium in PART B were amortized using the compound interest method, would interests expense for the year ended December 31, 2016 be more than, less than, or equal to the interest expense reported using the straightline method of premium amortization? Explain.
D) In reality, the difference between the stated interest rate and the market rate would be substantially less than 2% . The dramatic difference in the problem was designed so that you could use present value tables to answer PART A. What causes the stated rate to be different from the market rate, and why is the difference likely to be much less than depicted in the problem?
Answer:
A) $61,654,600
B) June 30, 2016, first coupon payment
Dr Interest expense 4,840,000
Dr Premium on bonds payable 60,000
Cr Cash 4,900,000
C) If you use the effective interest rate, the bond premium is higher, so the actual interest expense would be lower:
June 30, 2016, first coupon payment
Dr Interest expense 4,756,406
Dr Premium on bonds payable 143,594
Cr Cash 4,900,000
D) The actual difference between the coupon rate and the effective interest rate (with a $72,400,000 issue price) = 14% (coupon rate) - 13.93% = 0.07%.
The bond's issue price is generally determined by the market rate, but sometimes a company might believe that the interest rate applicable to them is actually different. A company might under estimate the riskiness of their operations, but the market doesn't. Generally the market rate is correct. So any variation in the coupon rate is due to a mistake by the firm. Usually companies do not make huge mistakes, if they miss on the coupon rate it generally is not significant.
Explanation:
issued $70 million face amount of 20-year, 14% stated rate bonds when market interest rates were 16%. The bonds pay interest semi-annually each June 30 and December 31, each coupon = $4,900,000
bonds market price = PV of maturity value + PV of coupons
PV of maturity value = $70,000,000 x 0.04603 = $3,222,100 PV of coupons = $4,900,000 x (8% annuity, 40 periods) = $4,900,000 x 11.925 = $58,432,500total issue price = $61,654,600if instead the issue price was $72,400,000 (resulting in a $2,400,000 premium), then the premium would be amortized by $2,400,000 / 40 = $60,000 during each coupon payment
if the effective interest method, (not the compound interest method), was used to amortize bond premium, then we first need to calculate the effective interest rate:
$72,400,000 - $70,000,000 = $2,400,000 / 40 = $60,000
$4,900,000 + $60,000 = $4,960,000 / {($72,400,000 + $70,000,000) / 2} = 0.0696629
bond premium discount using effective interest rate = ($72,400,000 x 0.0696629) - $4,900,000 = $5,043,594 - $4,900,000 = $143,594
Sunk costs: Multiple Choice Have already been incurred as a result of past actions. Vary among the alternative courses of action being considered. Are benefits that could have been obtained by following another course of action. Result from unfavorable cost variances.
Answer:
Have already been incurred as a result of past actions.
Explanation:
This form of cost is detailed to be incurred by a company in its past or during its long run and it nothing can be done to change it or it cannot be averted or recovered in the future and proceeding run time of the said company.
Once the company's money is spent, that money is considered a sunk cost. Regardless of what money is spent on, sunk cost are dollars already spent and permanently lost. Sunk costs cannot be refunded or recovered. Monies that provides column or a sunk cost does not really base on a particular spending; as it ranges from different sectoral spendings of the company involved.
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.
Quality Move Company made the following expenditures on one of its delivery trucks: Mar. 20. Replaced the transmission at a cost of $5,430. June 11. Paid $1,705 for installation of a hydraulic lift. Nov. 30. Paid $41 to change the oil and air filter. Prepare the journal entries for each expenditure.
Answer:
The journal entries for each expenditure would be as follows:
Debit ($) Credit ($)
Mar. 20
Delivery Truck 5,430
Cash 5,430
June. 11
Delivery Truck 1,705
Cash 1,705
Nov. 30
Repairs and Maintenance Expense 41
Cash 41
Explanation:
According to the given data, the journal entries for each expenditure would be as follows:
Debit ($) Credit ($)
Mar. 20
Delivery Truck 5,430
Cash 5,430
(To record the replacement of transmission at a cost of $5,430 and capitalizingthe transmission cost)
June. 11
Delivery Truck 1,705
Cash 1,705
(To record the installation of hydraulic lift and capitalization of installation expenses)
Nov. 30
Repairs and Maintenance Expense 41
Cash 41
(To record the payment for changing the oil and air filter)
Belltone Company made the following expenditures related to its 10-year-old manufacturing facility:
1. The heating system was replaced at a cost of $185,000. The cost of the old system was not known. The company accounts for improvements as reductions of accumulated depreciation.
2. A new wing was added at a cost of $740,000. The new wing substantially increases the productive capacity of the plant.
3. Annual building maintenance was performed at a cost of $22,000.
4. All of the equipment on the assembly line in the plant was rearranged at a cost of $34,000. The rearrangement clearly increases the productive capacity of the plant.
Required:
Prepare journal entries to record each of the above expenditures.
Answer: The answer is given below
Explanation:
A journal is a detailed account that is used in a business or an organization in order to record every financial transactions thatbtskes place in the business or organization who ch will be used for reconciliation of account in the future and also transfer to every other accounting records, like the general ledger.
The journal entries to record the expenses made by Belltone Company relating to its 10-year-old manufacturing facility has been prepared and attached.
List five goods that are likely to be sold in a monopolistically.competitive market.
Answer:
Cars
Toothpaste
Toilet paper
Hairspray
Televisions
The perfectly competitive firm's short-run supply curve is the Group of answer choices upward-sloping portion of its average total cost curve. horizontal portion of its marginal revenue curve. portion of its average variable cost curve that lies above the average fixed cost curve. upward-sloping portion of its marginal cost curve. portion of its marginal cost curve that lies above its average variable cost curve. Next
Answer:
Portion of its marginal cost curve that lies above its average variable cost curve.
Explanation:
This is explained to be the portion of its marginal cost curve because marginal gross benefits exceeds marginal cost, the firm can earn greater profits by increasing its output.
These profits are been maximized by choosing to supply the level of output where its marginal revenue equals its marginal cost. When this revenue is below the said marginal cost, money is lost, and consequently, it must reduce its output. Profits are however utilized when the firm chooses the level of output where its marginal revenue equals its marginal cost.
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
Acquisition of Land and Building
On February 1, 2016, Edwards Corporation purchased a parcel of land as a factory site for $100,000. It demolished an old building on the property and began construction on a new building that was completed on October 2, 2016. Costs incurred during this period are:
Demolition of old building $8,000
Architect’s fees 25,000
Legal fees for title investigation and purchase contract 4,000
Construction costs 650,000
Edwards sold salvaged materials resulting from the demolition for $2,000.
Required:
At what amount should Edwards record the cost of the land and the new building, respectively?
If an input box should be blank, enter a zero.
Land Building
Purchase price of land $ $
Demolition of old building
Architect's fees
Legal fees
Construction costs
Salvaged materials
Total
Answer: The total cost of land will be $110,00 while the total cost of building will be $675,000.
Explanation:
The total cost of land will be $110,00 while the total cost of building will be $675,000. Total cost of land is gotten by ($100,000 + $8,000 + $4,000 - $2,000) = $110,000
Total cost of building is gotten by adding $25,000 + $650,000 = $675,000.
Further explanation has been attached
Here are the 2015 revenues for the Wendover Group Practice Association for four different budgets (in thousands of dollars):
Static Budget Flexible (Enrollment/ Utilization) Budget Flexible (Enrollment) Budget Actual Results
$425 $200 $180 $300
a. What do the budget data tell you about the nature of Wendover's patients: Are they capitated or fce-for-service?
b. Calculate and interpret the following variances: Revenue variance Volume variance Price variance Enrollment variance Utilization variance
Answer: The answer is provided below
Explanation:
a). The revenue here shows that
Wendover's patients were capitated. The is because the actual revenue figures were assumed to be $180, but it
later came to $300 which means that the revenue increased.
The reason is that a capitated patient provides fixed payment a year, while a fee for service client pays per usage. With this explanation, it can be concluded that majority of Wendover's patients are fee for service because the difference between static results and the actual results is very high.
) 1. Revenue variance
= Actual Revenues - Static budget
= $ 300 - $ 425
= - $125
2. Volume variance
= Flexible Revenue - Static Budget
= $ 200 - $ 425
= - $ 225
3. Price Variance
= Actual Revenues - Flexible Revenues
=$300 - $200
= $100
4. Enrollment variance
= Flexible Revenues - Static Budget
= $ 180 - $ 425
= - $ 245
5. Utilization variance
= Flexible Revenue- Flexible Budget
= $ 200 - $ 180
= $ 20
Answer:
Kindly check Explanation
Explanation:
The difference between capita tes and fee-for-service is how payment is made, In capitates, a fixed annual amount is paid whereby In fee-for-service, payment is made separately for each service demanded. Thus it could be concluded from the data they the patients are fee-for - service due to the difference in the static and actual figure provided.
Given the following :
Static Budget - $425
Flexible (Enrollment/ Utilization) -$200
Budget Flexible (Enrollment) Budget -$180
Actual Results - $300
B)
Revenue variance = (Actual Revenues - Static Revenue)
Revenue variance = ($300-$425) = -$125 (Unfavorable)
This shows that the Wendover have less patients who use the services.
Volume variance = (Flexible Revenues (enrollment and utilization) – Static Revenues)
Volume variance = ($200 – $425) = -$225
Price variance = (Actual Revenues – Flexible Revenue)
Price variance = ($300 - $200)
Price variance = $100 F
Price variance is favorable which means service charge is high.
Enrollment variance = (Flexible Revenues (enrollment) – Static Revenue)
Enrollment variance = $180 – $425 = -$245
Utilization variance =Flexible revenues (enrollment/utilization) - Budget Flexible (Enrollment) Budget
$200 - $180 = $20
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.
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
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
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
