Answer:
e. all of the above
Explanation:
Price are an mechanism that serve to coordinate economic activity. They help coordinate economic decisions such as rationing, they transmit information, and they also help economic agents make decisions about what to sell, what to buy, what to exchange, and so on.
On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending December 31, McGuire earned income of $48,000 and paid dividends of $14,000. Required: Prepare the entries for Todd Company for the purchase of the stock, share of McGuire income, and dividends received from McGuire.
Jan. 2__________
Dec. 31 _________
Dec. 31__________
Answer:
Dr equity investment $205,000
Cr cash $205,000
Dr equity investment $19200
Cr share of net income of affiliate company $19200
Dr cash $5,600
Cr equity investment $5,600
Explanation:
The cash of $205,000 paid for the equity investment would be credited to cash account while equity investment is debited with the same amount.
The share of Todd Company from the earned income is 40% of the earned income of $48,000 which is $19200 .
The share of dividends that accrued to Todd is 40% of $14,000 dividends paid which is $5,600
Reliance Corporation sold 4,500 units of its product at a price of $20 per unit. Total variable cost per unit is $11.00, consisting of $10.10 in variable production cost and $0.90 in variable selling and administrative cost. Compute the contribution margin for the company.
Answer:
$40,500
Explanation:
A Companies Contribution Margin is a product's price minus all associated variable costs, this final value gives the products incremental profit earned for each unit sold. Therefore in this scenario, the Contribution Margin for the company is as follows
(4,500 * $20) - (4,500 * $11)
$90,000 - $49,500
$40,500
Therefore the final Contribution Margin for the company is $40,500 dollars.
It may seem surprising that the CEO selected to replace Steve Jobs was hired from within the firm. When considering who to appoint as CEO, the board had to consider many factors. What condition existed at Apple that would have suggested a preference to hire from outside?
Answer: Apple's need to continually innovate
Explanation:
Here is the complete question:
may seem surprising that the CEO selected to replace Steve Jobs was hired from within the firm. When considering who to appoint as CEO, the board had to consider many factors. What condition existed at Apple that would have suggested a preference to hire from outside?
a. Apple's need to reverse recent poor performance
b. Appreciation of Apple's culture and core values
c. Apple's need to continually innovate
d. The need for the CEO to know the firm's core competencies as well as be able to develop new ones
Answer:
In 2011, after the resignation of Steve Jobs resigned as the Chief Executive Officer of Apples, Tim Cook became the chairman of the board, and was named as the new chief executive officer of Apple Inc.
Steve Cook was already working with Apple and he knew the culture and core values and it'll be easier to develop be ones as he knew the firm's core competencies.
The condition that existed at Apple which would have suggested a preference for them to hire from outside will be the need to continually innovate.
The company's culture focuses on
the maintenance of a high level of innovation which involves creativity coupled with a mindset which challenges standards and conventions. In line with the innovation value, hiring from outside might have been preferable.
Personal Selling is :
a. The two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision.
b. A nonpersonal, indirectly paid presentation of an organization, product, or service.
c. A short-term inducement of value offered to arouse interest in buying a product or service.
d. Promotional alternative that uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet.
Answer:
Option A. The two-way flow of communication between a buyer and seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision.
Explanation:
The reason is that the personal selling is the face to face selling which means two way flow of communication is necessary. The seller will use his marketing exprience to influence the buyer which results in greater sales and customer satisfaction. So it is the face to face selling method which most of the companies opt and this way of selling is known as personal selling.
Can't Hold Me Back, Inc. is preparing to pay its first dividends. It is going to pay $1.00, $2.50, and $5.00 a share over the next three years, respectively. After that, the company has stated that the annual dividend will be $1.25 per share indefinitely. What is this stock worth to you per share if you demand a 7% rate of return
Answer:
The stock worth to you per share if you demand a 7% rate of return is $21.78
Explanation:
In order to calculate the stock worth per share if you demand a 7% rate of return we would have to make the following calculation:
stock worth per share=PV of the first three years' returns+PV of the constant dividend stream from the fourth year
PV of the first three years' returns = 1/1.07+2.5/1.07^2+5/1.07^3 =$7.20
PV of the constant dividend stream from the fourth year,= (1.25/0.07)/1.07^3 =$14.58
Therefore, stock worth per share=$7.20 +$14.58
stock worth per share=$21.78
The stock worth to you per share if you demand a 7% rate of return is $21.78
yler Tooling Company uses a job order cost system with overhead applied to products on the basis of machine hours. For the upcoming year, the company estimated its total manufacturing overhead cost at $420,000 and total machine hours at 60,000. During the first month of operations, the company worked on three jobs and recorded the following actual direct materials cost, direct labor cost, and machine hours for each job: Job 101 Job 102 Job 103 Total Direct materials used $ 19,200 $ 14,400 $ 9,600 $ 43,200 Direct labor $ 28,800 $ 11,200 $ 9,600 $ 49,600 Machine hours 1,000 hours 4,000 hours 2,000 hours 7,000 hours Job 101 was completed and sold for $60,000. Job 102 was completed but not sold. Job 103 is still in process. Actual overhead costs recorded during the first month of operations totaled $45,000. Required: 1. Calculate the predetermined overhead rate. 2. Compute the total manufacturing overhead applied to the Work in Process Inventory account during the first month of operations. 3. Compute the balance in the Work in Process Inventory account at the end of the first month.
Answer:
1. $7.00
2. $49,000
3. $33,200
Explanation:
1. The computation of predetermined overhead rate is shown below:-
Predetermined overhead rate = Estimated overhead ÷ Estimated machine hours
= $420,000 ÷ 60,000
= $7.00
2. The computation of total manufacturing overhead applied is shown below:-
Particulars Job 101 Job 102 Job 103 Total
Direct material $19,200 $14,400 $9,600 $43,200
Direct labor $28,800 $11,200 $9,600 $49,600
Manufacturing
overhead $7,000 $28,000 $14,000 $49,000
Total $55,000 $53,600 $33,200 $141,800
3. The computation of balance in the Work in Process Inventory account at the end of the first month is shown below:-
Particulars Job 101 Job 102 Job 103 Total
Direct material $19,200 $14,400 $9,600 $43,200
Direct labor $28,800 $11,200 $9,600 $49,600
Manufacturing
overhead $7,000 $28,000 $14,000 $49,000
Total $55,000 $53,600 $33,200 $141,800
Job 101 is completed and sold
Job 102 is completed and kept in finished goods inventory.
Job 103 is balance which indicates the work in progress.
44,000 shares of common stock outstanding at a market price of $32 a share. The common stock will pay a $1.50 annual dividend and has a dividend growth rate of 3.5 percent. There are 7,500 shares of 9% preferred stock outstanding at a market price of $92 a share. The outstanding bonds mature in 11 years, have a total face value of $825,000, a coupon rate of 6.5 percent, a face value per bond of $1,000, and a market price of $989 each. The tax rate is 35 percent. What is the weight of equity in to be use to calculate the firm's WACC?
Answer:
The weight of equity in to be use to calculate the firm's WACC is 0.48 or 48%
Explanation:
The weight of equity to be used in firm's WACC computation is market value of equity divided by the sum of market value of equity ,preferred stock and bonds.
Market value of equity=44,000*$32 =$1,408,000.00
Market value of preferred stock=7,500*$92 =$690,000
Market value of bonds=$825,000*$989/$1000=$815,925.00
Sum of market values =$ 2,913,925.00
Weight of equity=market value of equity/ Sum of market values=$1,408,000.00/$2,913,925.00= 0.48 =48%
The following questions are based on this problem and accompanying Excel windows. Jack's distillery blends scotches for local bars and saloons. One of his customers has requested a special blend of scotch targeted as a bar scotch. The customer wants the blend to involve two scotch products, call them A and B. Product A is a higher quality scotch while product B is a cheaper brand. The customer wants to make the claim the blend is closer to high quality than the alternative. The customer wants 50 1500 ml bottles of the blend. Each bottle must contain at least 48% of Product A and at least 500 ml of B. The customer also specified that the blend have an alcohol content of at least 85%. Product A contains 95% alcohol while product B contains 78%. The blend is sold for $12.50 per bottle. Product A costs $7 per liter and product B costs $3 per liter. The company wants to determine the blend that will meet the customer's requirements and maximize profit
Answer:
The blend should be made with 720 ml of Product A and 780 ml of Product B
Explanation:
We create excel solve to get the cheapest blend with the requirement givens by the customer:
A B C D E F
1 ml type $ alcohol $mix alcohol mix
2 720 Product A 7 0.95 5.04 0.456
3 780 Product B 3 0.78 2.34 0.4056
4 Total 7.38 0.8616
5 Sales Price 12.50
6 Gross Profit 5.12
Constrains:
A2 = integer
A2 > 1500 x 48/100
A3 > 500
F4 > 0.85
A recently graduated engineer has decided to return to school in the evenings to obtain a master's degree. He feels it should be accomplished in a manner that that will allow him the maximum amount of time for his regular day job plus time for recreation. In working for the degree, he will
Answer: minimize input
Explanation:
From the question, we have been told that a recently graduated engineer decided to return to school in the evenings in order to obtain a master's degree. The recent graduate feels it should be accomplished in a way that will give him the maximum amount of time needed for his regular day job and time for recreation.
In this situation, we can see that the individual actually holds his regular job and recreation in high esteem and feels that they are more important than the masters degree. Base on this, the person will minimize its input towards the masters program.
Kendall Corners Inc. recently reported net income of $3 million and depreciation of $510,000. What was its net cash flow? Assume it had no amortization expense. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.
Answer:
$3,510,000
Explanation:
Net cash flows = net income + Depreciation expense
= $3,000,000 + $510,000 = $3,510,000
I hope my answer helps you
Jace is an executive at a large but decentralized corporation that uses the balanced scorecard. It would be reasonable for her to suggest using scorecard cascading to help her large company more effectively ensure that individuals throughout the company support its overriding strategy.A) TrueB) False
Answer:
The correct answer to the following question will be "True".
Explanation:
A structured scoring system is used to convert the organizational score sheet (alluded to this as Tier 1) through the first sector divisions, support groups, or agencies (Tier 2) and afterward groups or entities (Tier 3). The outcome ought to be compatible throughout all organizational levels.
Organizational cohesion will be easily evident across policy, policy diagram, success indicators as well as goals, or programs. Record books could have been used to highly organized through accurate as well as a performance measurement of property, and the required behavior of employees should be encouraged.The cascading strategy should be based on the entire department mostly on tactic and the creation of even a line-of-view here between work that individuals do and the top rate of outcomes they want. When the control system is cascaded through the enterprise, goals are more organizational and pragmatic, as do success metrics. Accountability is consistent with the objectives as well as indicators as possession is described through each stage.Focus on the outcomes and methods used to achieve outcomes is shared via most of the company. This adjustment process is critical towards becoming a strategy-focused organization.According to the above particular instance, therefore, the business owner becoming a decentralized corporation, Jace seems to be correct to embrace that scorecard methodology.
When the relationship between government and interest groups becomes entangled and tight with some groups having formal government sponsorship and/or special access, the system is labeled_________.
Answer: Neo-Corporatism.
Explanation:
Neo- Corporatism emerged in resent times as a successor to State Corporatism. State Corporatism was a system whereby interest and labor groups were supposed to work together for the good of society. These were most prevalent in authoritarian regimes like Nazi Germany and post communist Lithuania.
Recently though, in some Democratic countries, interest groups have chosen to work with the Government to improve the lives of the people and enable the Government reach out deeper. These Peak Associations as they are often called help the Government compete economically and are very prevalent in countries and regions such as, Germany, Switzerland, Austria and Scandinavia.
After hearing a knock at your front door, you are surprised to see the Prize Patrol from a large, well-known magazine subscription company. It has arrived with the good news that you are the big winner, having won $34 million. You have three options. (a) Receive $1.7 million per year for the next 20 years. (b) Have $11.5 million today. (c) Have $3.25 million today and receive $1,400,000 for each of the next 20 years. Your financial adviser tells you that it is reasonable to expect to earn 14 percent on investments.
Answer:
The requirement is to calculate the present value of each option:
$ 11.26 million
$11.5 million
$ 12.52 million
Explanation:
The present value formula in excel is very useful in this case:
=-pv(rate,nper,pmt,fv)
rate is the 14% interest rate to be earned per year
nper is duration of the payment
pmt is the amount of payment expected per year
fv is the is the future worth of the payment which is unknown
Option 1:
=-pv(14%,20,1.7,0)=$ 11.26 million
Option 2:
The amount receivable today is the present value i.e $11.5 million
option 3:
=-pv(14%,20,1.4,0)=$9.27 million
total =amount received today+$ 9.27 million=$3.25 million+$ 9.27 millon=$ 12.52 million
Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of going to college? Check all that apply. The quality and design of calculators improved dramatically from 2017 to 2019. For example, calculators made in 2019 accept memory cards, whereas those made in 2017 do not, but this quality change is hard to measure. A new, safe method of memory enhancement became available for purchase. Professors required each student to buy 10 textbooks, regardless of the price. As the price of textbooks increased, more and more students turned to the used-book market or chose not to buy textbooks at all, instead using the copies on reserve in the library.
Answer:
- The quality and design of calculators improved dramatically from 2017 to 2019.
- A new, safe method of memory enhancement became available for purchase.
- As the price of textbooks increased, more and more students turned to the used-book market or chose not to buy textbooks at all, instead of using the copies on reserve in the library.
Explanation:
Remember, regarding the prices for the textbooks the factors of demand applies that is why when prices increase, it might result in an overstating; which means inflation in the cost of going to college.
Also, just as improvements in the memory of calculators involves additional expenses, it results in inflation. Overall, all these circumstances can result in such inflation.
The true statements are
The quality and design of calculators improved dramatically from 2017 to 2019.
A new, safe method of memory enhancement became available for purchase.
As the price of textbooks increased, more and more students turned to the used-book market or chose not to buy textbooks at all, instead of using the copies on reserve in the library.
Price index:In the given situation, the statement that need to be considered is that when the design and quality of calculated improved, the new & safe method should be available, and in the case when the price of the textbook rises so more students used book market rather reserving libraries book.
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Scora, Inc., is preparing its master budget for the quarter ending March 31. It sells a single product for $50 per unit. Budgeted sales for the next three months follow. January February March Sales in units 1,000 2,600 1,200 Prepare a sales budget for the months of January, February, and March.
Answer:
Sale budget January= $50,000
Sales budget February= $130,000
Sales budget March= $60,000
Explanation:
Giving the following information:
It sells a single product for $50 per unit. Budgeted sales for the next three months follow. January February March Sales in units 1,000 2,600 1,200
The sales budget is a simple multiplication between the selling price per unit and the number of units sold.
Sale budget January= 1,000*50= $50,000
Sales budget February= 2,600*50= $130,000
Sales budget March= 1,200*50= $60,000
On December 31, 2018, Interlink Communications issued 6% stated rate bonds with a face amount of $107 million. The bonds mature on December 31, 2048. Interest is payable annually on each December 31, beginning in 2019. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Determine the price of the bonds on December 31, 2018, assuming that the market rate of interest for similar bonds was 7%. (Enter your answers in whole dollars. Round your final answers to nearest whole dollar amount.)
Answer:
$93,725,580.00
Explanation:
The market price of the bond is the present value of annual coupon payment plus the present value of face amount receivable at the end of the bond tenure.
Annual coupon interest=face amount*stated rate=$107,000,000*6%=$6,420,000.00
Face amount=$107,000,000
The discount factor for annual coupon is the present of 30 years annuity(2048-2018) at 7% market rate, which is 12.4090
The discount factor for the face value is 0.1314
Price of the bond=($6,420,000.00*12.4090)+($107,000,000*0.1314)=$93,725,580.00
Which of the following represents an increase in living standards over the past century? Check all that apply. Increased human activities have magnified the pollution of air and water. The purchasing power of a dollar has declined over time due to inflation. Medical breakthroughs enable people to enjoy better healthcare nowadays.
Answer:
Medical breakthroughs enable people to enjoy better healthcare nowadays.
Explanation:
An increase in living standard means that the lives of people are better off.
Advances in medicine have made it possible to find cure to various diseases. This improves standard of living.
Increased pollution of air and water and decline of dollar value have negative effects on living standard.
Pollution affects human health negatively and can cause diseases which negatively affect standard of living. Also, pollution can cause floods and other environmental disasters. Floods can displace people from their homes and this affects standard of living negatively.
Decrease in dollar value has made items more expensive.
I hope my answer helps you
The board of directors of Capstone Inc. declared a $0.80 per share cash dividend on its $1 par common stock. On the date of declaration, there were 48,000 shares authorized, 16,000 shares issued, and 5,000 shares held as treasury stock. What is the entry when the dividends are declared
Answer and Explanation:
The journal entry when the dividend is declared is shown below:
Cash Dividend A/c Dr $8,800 {(16,000 shares - 5,000 shares) × $0.80}
To Dividend payable A/c $8,800
(Being the dividend is declared)
for recording this we debited the cash dividend as it increased the balance of dividend and credited the dividend payable as it also increased the liabilities
A company is considering purchasing a new production machine and have identified two potential options. Option A has a first cost of $1450 but will produce annual revenues of $650 while incurring $245 worth of maintenance. Option B has a purchase price of $1130 with annual revenues of $445 and maintenance costs of $147. One of your colleagues has done an internal rate of return analysis on Option A and determined it had an IRR=12.28%
a. Your boss has asked you to determine the IRR for option B, assuming that both options have same service life
b. Assuming the two production machines are independent and the company has a MARR of 11%, what should the company do?
Answer:
a. The IRR for the option B will be 9.988%.
b. The company would accept option A and reject the option B
Explanation:
a. To calculate the IRR for option B we first need to determine the service life of the option A.
If R = 12.28%
Net annual benefits = 650-245=$405
Then, 1450= 405*(1-1/1.1228^n)/.1228
1/1.1228^n =1 - 1450*.1228/405 = .5603
1.1228^n = 1.7846
n = log(1.7846)/log(1.1228) = 5 years
Therefore, For option B
Let, IRR = R
Net annual benefit = 445-147 = $298
1130 = 298*(1-1/(1+R)^5)/R
At R = 9%
PV of cash inflows = $1159.12
At R = 10%
PV of cash inflows = $1129.65
As per the method of interpolation,
R = 9% + ((1159.12 - 1130)/( 1159.12-1129.65))*(10%-9%)
R = 9.988%
Thus, IRR for the option B will be 9.988%.
b. According to the given data to selection the any option, the value of IRR must be greater than or equal to the MARR. in this case, option A has the IRR of 12.28% that is greater than the MARR of 11%. But, it is not the case with option B whose IRR is only 9.988% and it is less than the MARR of 11%.
Thus, option A will be accepted and option B will be rejected.
Dave and Ellen are newly married and living in their first house. The yearly premium on their homeowner’s insurance policy is $600 for the coverage they need. Their insurance company offers a discount of 8 percent if they install dead-bolt locks on all exterior doors. The couple can also receive a discount of 5 percent if they install smoke detectors on each floor. They have contacted a locksmith, who will provide and install dead-bolt locks on the two exterior doors for $105 each. At the local hardware store, smoke detectors cost $28 each, and the new house has two floors. Dave and Ellen can install them themselves.
a. What discount will Dave and Ellen receive if they install the dead-bolt locks?b. What discount will Dave and Ellen receive if they install smoke detectors?
Answer:
1. 48 dollars
2. 30 dollars
Explanation:
The yearly premium on their homeowner's insurance policy is $600 for the coverage they need.
Their insurance company offers a discount of 8 percent if they install dead-bolt locks on all exterior doors.The couple can also receive a discount of 5 percent if they install smoke detectors on each floor.
1. What discount will Dave and Ellen receive if they install the dead-bolt locks?
discount for deadbolts =
Discount % x Premium
0.08 x 600 = 48 dollars
b. What discount will Dave and Ellen receive if they install smoke detectors?
discount for deadbolts =
Discount% x Premium
0.05 x 600 = 30 dollars
How are the project management processes that surround Scrum similar to and different to how the project management processes surround a project life cycle like SDLC (Waterfall)? Describe how the hybrid approach would make sense or not make sense for either your organization or an organization that you are familiar with.
Answer: The answers are provided below
Explanation:
There are several similarities between the project management processes which surround scrum to the traditional project management processes which surrounds a project life cycle such as Waterfall. When one looks at each iteration as a project, one will see that Scrum planning meeting will be identical to planning meeting of the traditional project.
The daily standups in scrum will resemble the monitoring and the controlling of traditional waterfall with the exception that in scrum, its team monitors itself. A sprint would be the execution stage while the sprint review will be like project closure lessons that are learned. Sprint can be seen as small waterfall model project.
However, the main difference is in the scrum's team mindset versus the team of the traditional project management. Also, the process of work defining as being completed is different for the teams. Lastly, the method used by the scrum team in its approaches to work, team collaboration, responsibility acceptance, tasks definition and accountability are different from the traditional project management team.
A hybrid approach will be sensible in a large organization which has pockets of power. This is true for large retails that have old legacy systems in which frequent deployments aren't possible.
This is true for systems in which, testing can't be automated due to the fact that automated testing is a vital part for success for large scrum projects. In such organizations, it is sensible to use scrum for the teams which are able to move to scrum and waterfall can be used for other parts of the organization.
Willetta Company purchases inventory for $29,000 with terms 2/10, n/30. It then returns $3,900 of the inventory purchased to the supplier and also receives an allowance for defective inventory of $290. The company pays the amount due within the discount period. What is the amount of the discount that will be taken
Answer:
Discount taken is $496.20
Explanation:
The amount of purchases after some items were returned and also defective inventory allowance was taken needs to first of all be established.
adjusted purchases=$29,000-$3,900-$290=$ 24,810.00
Thereafter, the amount of discount taken is 2% of the adjusted purchases amount computed above.
Discount taken=$ 24,810.00*2=$ 496.20
Expenses include all of the following except: Multiple Choice making a payment on account. using supplies. paying for electricity used during the current period. paying wages for production workers for work performed during the current period.
Answer:
using supplies
Explanation:
An expense can be described as cost incurred by a company in a bid to earn revenue.
When supplies are used no explicit cost is incurred in the process so it doesn't qualify as an expense.
I hope my answer helps you
Expenses include making a payment on account, using supplies, and paying wages for production workers for work performed during the current period.
What is not considered an expense?However, paying for electricity used during the current period is not considered an expense. Instead, it is categorized as an operating cost or utility cost.
Expenses typically refer to the costs incurred by a business in its day-to-day operations, such as purchasing inventory, paying wages, or using supplies.
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Which of the following statements is correct?a. The cost of new equity (re) could possibly be lower than the cost of retained earnings (rs) if the market risk premium, risk-free rate, and the company's beta all decline by a sufficiently large amount.b. The component cost of preferred stock is expressed as rp(1 - T), because preferred stock dividends are treated as fixed charges, similar to the treatment of interest on debt.c. Its cost of retained earnings is the rate of return shareholders require on a firm's common stock.d. We should use historical measures of the component costs from prior financing when estimating a company's WACC for capital budgeting purposes.
Answer:
c. Its cost of retained earnings is the rate of return shareholders require on a firm's common stock.
Explanation:
The formula to compute the cost of retained earning is as follows
Cost of retained earning = (Expected annual dividend ÷ Price of the stock) + growth rate
It is the rate of return that equates with the cost of equity plus it also earns on the investment done in the company i.e equity
In a mathematical expression,
Cost of retained earnings = Cost of equity
hence, the correct option is c.
Assume one of the SWOT findings was an internal weakness of low motivation in the sales force regarding product sales. HP has designed a new compensation system to address this motivation. In which stage of the strategy implementation framework does this action reside?
Answer:
Stage 3
Explanation:
Strategic management is defined as formulation of strategies (decisions, actions, and measures) which are implemented to meet organisational goals and objectives.
Strategy formulation is a very important first step in strategy management. Lack of good strategy formulation can lead to organisational failure.
In the given scenario where motivation among employees is identified as a weakness, the action of modifying the reward system falls under the stage 3 of strategic implementation framework
Strategic implementation is concerned with how formulated strategy is implemented.
Sophia provides you with a list of business transactions that occurred during the year. You must use these transactions to demonstrate the first four steps in the accounting cycle: analyzing each transaction, using double entry accounting to record these transactions in the general journal, and posting them to their respective accounts. Finally, you prepare a trial balance, the fourth step in the accounting cycle, which ensures that the first three steps in the accounting cycle have been completed currently.
A. The Sisters invest $15,000 in cash in Happy Home Environmental Cleaning (HHEC)
B. HHEC buys a building for $10,000 in cash.
C. HHEC buys office equipment for $1,800 for cash.
D. HHEC buys cleaning supplies for $2,800, agreeing to pay the upplier in 30 days.
E. HHEC earns cleaning revenues of $16,460 in cash.
F. HHEC earns cleaning revenues of $2,200 on account.
G. HHEc paid the following expenses in cash:
Wages $4275
Utilities $985
Miscellaneous $195
H. HHEC pays $950 in cash to creditors on account.
I. HHEC purchases a two year insurance policy for $2,400 in cash
J. At the end of the year, the cost of cleaning supplies on hand is $2040.
K. The sisters withdrew $2,000 in cash.
Answer:
Happy Home Environmental Cleaning
Demonstration of the first four steps in accounting cycle:
1) Analyzing each transaction:
A) Cash + $15,000 and Owners' Equity + $15,000
B) Building + $10,000 and Cash -$10,000
C) Office Equipment + $1,800 and Cash - $1,800
D) Cleaning Supplies + $2,800 and Accounts Payable + $2,800
E) Cash + $16,460 and Equity (Retained Earnings) + $16,460
F) Accounts Receivable + $2,200 and Equity (Retained Earnings) + $2,200
G) Cash - Wages $4,275, Utilities $985, Miscellaneous $195 and Equity (Retained Earnings) - $4,275, $985, $195
H) Cash - $950 and Liabilities - $950
I) Cash - $2,400, Prepaid Insurance + $1,200, and Equity (Retained Earnings) - $1,200
J) Cleaning Supplies -$760 and Equity (Retained Earnings) - $760
K) Cash - $2,000 and Equity - $2,000
2) Using double entry accounting to record transactions in the general journal:
A) Debit Cash Account $15,000
Credit Owners' Equity $15,000
To record capital contributed to the business.
B) Debit Building $10,000
Credit Cash Account $10,000
To record purchase of building.
C) Debit Office Equipment $1,800
Credit Cash Account $1,800
To record purchase of office equipment.
D) Debit Cleaning Supplies $2,800
Credit Accounts Payable $2,800
To record purchase of cleaning supplies on account.
E) Debit Cash $16,460
Credit Service Revenue $16,460
To record cash sales of services.
F) Debit Accounts Receivable $2,200
Credit Service Revenue $2,200
To record sale of services on account.
G) Debit Wages $4,275
Debit Utilities $985
Debit Miscellaneous $195
Credit Cash Account $5,455
To record payment of expenses.
H) Debit Accounts Payable $950
Credit Cash Account $950
To record payment on account.
I) Debit Prepaid Insurance $2,400
Credit Cash $12,400
To record insurance prepaid.
I) Debit Insurance Expense $1,200
Credit Prepaid Insurance $1,200
To record insurance expense for the period.
J) Debit Cleaning Supplies Expense $760
Credit Cleaning Supplies $760
K) Debit Drawings Account $2,000
Credit Cash Account $2,000
To record cash drawings.
3) Posting transactions to the Ledger accounts:
Debit Credit Balance
Cash Account:
Owners' Equity 15,000 15,000
Building 10,000 5,000
Office Equipment 1,800 3,200
Service Revenue 16,460 19,660
Wages 4,275 15,385
Utilities 985 14,400
Miscellaneous 195 14,205
Accounts Payable 950 13,255
Prepaid Insurance 2,400 10,855
Drawings 2,000 8,855
Debit Credit Balance
Owners' Equity:
Cash 15,000 15,000
Debit Credit Balance
Service Revenue Account:
Cash 16,460 16,460
Accounts Receivable 2,200 18,460
Debit Credit Balance
Building Account:
Cash 10,000 10,000
Debit Credit Balance
Office Equipment Account:
Cash 1,800 1,800
Debit Credit Balance
Wages Expense:
Cash 4,275 4,275
Debit Credit Balance
Utilities Expense:
Cash 985 985
Debit Credit Balance
Miscellaneous Expense:
Cash 195 195
Debit Credit Balance
Cleaning Supplies:
Accounts Payable 2,800 2,800
Cleaning Supplies Expense 760 2,040
Debit Credit Balance
Cleaning Supplies Expense:
Cleaning Supplies 760 760
Debit Credit Balance
Accounts Payable:
Cleaning Supplies 2,800 2,800
Cash 950 1,850
Debit Credit Balance
Prepaid Insurance:
Cash 2,400 2,400
Insurance Expense 1,200 1,200
Debit Credit Balance
Insurance Expense:
Prepaid Insurance 1,200 1,200
Debit Credit Balance
Drawing Account:
Cash 2,000 2,000
4) Preparation of a Trial Balance:
Debit Credit
Cash $8,855
Owners' Equity $15,000
Building 10,000
Office Equipment 1,800
Cleaning Supplies 2,040
Cleaning Supplies Expense 760
Accounts Payable 1,850
Service Revenue 18,660
Accounts Receivable 2,200
Prepaid Insurance 1,200
Insurance Expense 1,200
Wages 4,275
Utilities 985
Miscellaneous 195
Drawings 2,000
Total $35,510 $35,510
Explanation:
The steps in the accounting cycle are:
a) Analyzing each transaction from source documents, e.g. from Sales Invoice. This shows the accounts affected and even the effect of the transaction on the accounting equation.
b) Journal Entries: This involves using the doubt entry system of accounting to record transactions in the general journal. This is the first accounting record. It shows the accounts to be debited and the ones to be credited in the General Ledger.
c) General Ledger: Each transaction is posted to their respective accounts in the ledger, depending on journal entries. Usually, two accounts are affected by each transaction, just like in the journal.
d) The fourth step is the extraction of a Trial Balance. This is an accounting tool for checking that the first three steps have been completely and correctly followed.
If your employer offers a retirement plan, don’t participate in it. Don’t bother to set target dates for achieving your financial goals. Pay credit card balances in full each month. Start saving early in life and save throughout your life.
Answer: Please refer to Explanation
Explanation:
If your employer offers a retirement plan, don’t participate in it. Yes.
Having a retirement plan with your employer especially one in which you are a 100% vested is a drain on your income. It might have benefits in future when you retire but if you want to engage in financial planning, you need to have access to every penny and that includes the money going to the retirement plan.
Don’t bother to set target dates for achieving your financial goals. No
Setting a target date for various amounts in your financial goals enables you to work towards them with more determination. It is important to set target dates.
Pay credit card balances in full each month. Yes
Paying your credit card balance in full every month helps you avoid interest accruing as well as increasing your credit score. It is therefore very important to pay off the balance in full every month which will be easier as long as you charge things to it that you can afford.
Start saving early in life and save throughout your life. Yes.
The more you save the more you have to invest. This is why you should start saving early if you want to engage in financial planning. You need to formulate the determination to save every time. And don't just save for saving's case, save to invest.
Holding other factors constant, if bad weather destroys the annual crop for carrots, it causes the supply curve for carrots to a. Shift to the left, causing the prices of carrots to rise b. The supply curve does not shift. Only the demand curve shifts. c. Shift to the left, causing the prices of carrots to fall d. Stay the sam
Answer: a. Shift to the left, causing the prices of carrots to rise
Explanation:
The bad weather destroyed the annual crop of carrots. This will reduce the supply for Carrots. A reduction in supply forces the Supply Curve to shift to the left and assuming the demand curve remains the same, the new supply curve will intersect the demand curve a higher equilibrium price.
This is done to obey the Rules of Supply that when a good is scarce, it is more expensive.
Notice how the supply curve shifted left in the diagram and prices rose.
Tom Reynold is the sole proprietor of Pretty Pets, a business specializing in the sale of high-end pet gifts and accessories. Pretty Pets' sales totaled $ 986 comma 000 during the most recent year. During the year, the company spent $ 52 comma 000 on expenses relating to website maintenance, $ 31 comma 300 on marketing, and $ 29 comma 500 on wrapping, boxing, and shipping the goods to customers. Pretty Pets also spent $ 640 comma 000 on inventory purchases and an additional $ 18 comma 000 on freight-in charges. The company started the year with $ 18 comma 250 of inventory on hand and ended the year with $ 18 comma 400 of inventory. Prepare Pretty Pets' income statement for the most recent year.
Answer and Explanation:
For preparing the income statement first we have to determine the cost of goods sold which is shown below:
Beginning inventory $18,250
Add Inventory purchase ($640,000 + $18,000) $658,000
Total goods available for sale $676,250
Less: Ending inventory ($18,400)
Cost of goods sold $657,850
Now the preparation of the income statement is presented below:
Income statement
Sales $986,000
Less: Cost of goods sold - $657,850
Gross profit $328,150
Less: Operating expenses
Expenses relating to website maintenance -$52,000
Marketing exp -$31,300
wrapping, boxing, and shipping Exp -$29,500
Net income $215,350
Waterway Industries has equipment with a carrying amount of $2510000. The expected future net cash flows from the equipment are $2545000, and its fair value is $2043000. The equipment is expected to be used in operations in the future. What amount (if any) should Waterway report as an impairment to its equipment
Answer:
No impairment
Explanation:
Since the future net cash flows are still recoverable and they are higher than carrying amount, none needs to be reported
