Sammy's Shovels had sales of $ 90,880 in 2010. The cost of goods sold was $ 34,863 , operating expenses (excluding depreciation) were $ 11,490 , interest expenses were $ 1,317 , depreciation expense was $ 7,961 , and dividends paid were $ 3,415 . The firm's tax rate is 27 percent. What did Sammy's Shovels report as net income (or, net profit) in 2010
Answers
Answer: $25731.77
Explanation:
The attached picture explains the way to solve the question. It would be noted that the expenses like the operating, depreciation, interest expense and the cost of good sold were all subtracted from the sales revenue.
Then the income before tax was $35249. Then the tax expense of 27% was deducted.
Income Tax expense = 27% of $35249 = $9517.23
Net profit = $35249 - $9517.23 = $25731.77
The net profit for Sammy Shovels is $25731.77.
Related Questions
Arthur sustained an injury to his back. Arthur claimed the injury was suffered at work and filed a claim for workers' compensation benefits. The employer opposed this claim, saying the injury, if real, was the result of a congenital condition. In accordance with the statute, a hearing was held before the Workers' Compensation Board, which ruled against Arthur. Arthur became disgusted with the hearing officer and the proceedings because Arthur felt that the hearing officer did not like him. Arthur has consulted an attorney seeking to sue for workers' compensation benefits. An appeal is available within the agency, but Arthur wants to go directly to court because he feels that the agency appeal would be useless. Discuss the merits of this strategy.
Answers
Answer: Arthur can't bring a lawsuit to help overturn the ruling of the Worker’s Compensation Board,
Explanation:
From the question, Arthur got a back injury and Arthur claimed that the injury was suffered at work and therefore filed a claim for workers compensation benefits while the employer opposed this claim, by saying that the injury was due to a congenital condition.
A hearing was held before the Workers' Compensation Board, and the board ruled against Arthur. Arthur became disgusted and wants to go directly to the court because as he feels an agency isn't worth it.
The merits of this strategy are that
Arthur can't bring a lawsuit in order to help overturn the findings the Worker’s Compensation Board made, because Arthur failed to exhaust the available administrative remedies he had. Therefore, the lawsuit will not be successful and would therefore not be heard by the courts.
The balance sheet of Hidden Valley Farms reports total assets of $810,000 and $945,000 at the beginning and end of the year, respectively. The return on assets for the year is 15%. What is Hidden Valley's net income for the year
Answers
Answer:
$131,625
Explanation:
The computation of the net income for the year is shown below:
As we know that
Return on assets = net income ÷ average assets
0.15 = net income ÷ ($810,000 + $945,000) ÷ 2
0.15 = net income ÷ $877,500
So, the net income is
= $877,500 × 0.15
= $131,625
hence, the net income for the year is $131,625
We simply applied the above formula
Rosewood Company made a loan of $16,000 to one of the company's employees on April 1, 2020. The one-year note carried a 6% rate of interest. Principal and interest will be paid at the end of the term of the loan. The amount of interest revenue that Rosewood would report in 2020 and 2021, would be?
Answers
Answer:
loan interest revenue for 2020 is $720
loan interest revenue for 2021 is $240
Explanation:
The loan interest revenue in the year 2020 is for 9 months out of the total loan tenure of twelve months:
interest revenue for 2020=$16,000*6%*9/12=$720.00
This would be debited to interest receivable and credited to interest revenue account.
interest revenue for 2021=$16,000*6%*3/12=$240.00
Answer:
The answer is $720 and $240
Explanation:
Solution
Recall that:
Rosewood company made a loan of =$16,000
One year note carried an interest of =6%
Now,
We solve for the amount of interest revenue that rosewood would report
Report is given below:
$16,000 * 6% * 9/12 = $720 Interest revenue in April to December, 2020
$16,000 * 6% * 3/12 = $240 interest revenue in January - March, 2021
Therefore the interest revenue for Rosewood report/feedback in 2020 and 2021 is $720 and $240 respectively.
During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 80,000 mini refrigerators, of which 72,000 were sold. Operating data for the month are summarized as follows: 1 Sales $10,800,000.00 2 Manufacturing costs: 3 Direct materials $6,400,000.00 4 Direct labor 1,600,000.00 5 Variable manufacturing cost 1,280,000.00 6 Fixed manufacturing cost 320,000.00 9,600,000.00 7 Selling and administrative expenses: 8 Variable $1,080,000.00 9 Fixed 180,000.00 1,260,000.00Required:
1. Prepare an income statement based on the absorption costing concept.*
2. Prepare an income statement based on the variable costing concept.*
3. Explain the reason for the difference in the amount of income from operations reported in (1) and (2).
Answers
Answer:
Absorption Costing Net Income 1008,000
Variable Costing Net Income 976,000
Explanation:
Kodiak Fridgeration Company
Units Produced = 80,000
Units Sold = 72,000
Ending Inventory = 8000
Per Units Cost
Direct materials $6,400,000/80,000 = $ 80
Direct labor 1,600,000 /80,000= $ 20
Variable manufacturing cost 1,280,000/80,000= $ 16
Fixed manufacturing cost 320,000 /80,000 = $ 4
Absorption Manufacturing Cost per unit= 9,600,000/80,000= $ 120
Variable Manufacturing Costs per unit = $ 116
Kodiak Fridgeration Company
Income Statement
Absorption Costing
Sales $10,800,000
Manufacturing costs:
Direct materials $6,400,000
Direct labor 1,600,000
Variable manufacturing cost 1,280,000
Fixed manufacturing cost 320,000 9,600,000
Less Ending Inventory (8000*120) (960,000)
Cost of Goods Sold 86,40,000
Gross Profit 2160,000
Selling and administrative expenses:
Variable $ 72,000* 13.5= 972,000
Fixed 180,000
Net Income 1008,000
Kodiak Fridgeration Company
Income Statement
Variable Costing
Sales $10,800,000
Variable manufacturing cost
(80,000*116) 9280,000
Less Ending Inventory ( 8000*116) 928,000
Cost of Goods Sold 83,52,000
Gross Contribution Margin 2448,000
Variable Selling and administrative expenses
(72000 * $1,080,000/80,000) 972,000
Contribution Margin 1476,000
Less Fixed Expenses
Fixed manufacturing cost 320,000
Fixed 180,000 500,000
Net Income 976,000
3. The difference in absorption and variable costing income is because in absorption costing the fixed costs are treated as unit cost and in variable costs the fixed costs are treated as period costs. Also the fixed costs of the ending units is deducted in absorption costing where it is not deducted in variable costing.
The Whitewater LLP is equally owned by three partners and has the following balance sheet at the end of the current tax year:
Basis FMV
Cash $60,000 $60,000
Unrealized 0 15,000
receivables Land $15,000 $45,000
$75,000 $120,000
Petula, capital $25,000 $40,000
Prudence, capital $25,000 $40,000
Primrose, capital $25,000 $40,000
$75,000 $120,000
Petula is an active partner retiring from me service-oriented partnership. She receives $60,000 cash, none of which is stated to be for goodwill.
a) How much of the payment is for "unstated goodwill"?
b) How is the $60,000 allocated between a 736(a) income payment and a 736(b) property payment?
Answers
Answer:
A.) $20,000
Explanation:
Kindly check attached picture for detailed explanation
Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 25 million bottles of wine were sold every month at a price of $6 per bottle. After the tax, 20 million bottles of wine are sold every month; consumers pay $8 per bottle (including the tax), and producers receive $5 per bottle. The amount of the tax on a bottle of wine is_____________ $ per bottle. Of this amount, the burden that falls on consumers is_________ $ per bottle, and the burden that falls on producers is $___________ per bottle.?
Answers
Answer:
Explanation:
From the question, we are informed that before the tax, 25 million wine bottles were sold at price of $6 per bottle and that after the tax, 20 million bottles of wine are sold every month and the consumers pay $8 per bottle which include the tax and producers receive $5 per bottle.
The amount of tax on wine will be the difference between the price consumers pay after the tax and the price producers receive. This will be:
= $8 - $5
= $3 per bottle
The tax burden that falls on the consumers will be difference between price paid after tax and the price which is paid before the tax.
= $8 - $6
= $2 per bottle
The tax burden on the producers will be difference between price received before the tax and price received after the tax.
= $6 - $5
= $1 per bottle
A registered investment adviser lives in State X. The adviser does business with 1 client in State A and 1 client in State B. The adviser gives seminars about investing to groups of potential customers in State C. The adviser is required to register in:
Answers
Answer:
State X and C
Explanation:
Remember, the clients themselves stay in state A and B, not the investment advisor. According to the requirements of the law, the investment advisor is to register in the state where he gives seminars–State C, and the state in which he resides–X.
Suppose subway ridership in New York City declined by 10 percent after a fare increase of 25 cents to $2.75. Using the midpoint method, an estimate of the price elasticity of demand for subway rides is . True or False: According to your estimate, the Transit Authority's revenue rises when the fare increases. True False
Answers
Answer: Elasticity is 1.05
False
Explanation:
The Price Elasticity of Demand which measures how demand for goods change in relation to a change in price is calculated by the following formula,
Elasticity of demand = % change in Quantity ÷ % change in Prices
The Midpoint method is a method of estimating price percentage change by dividing the change in price by the AVERAGE of the new price and the old price.
The average of the changes are,
= (2.75 + (2.75 - 0.25))/2
= (2.75 + 2.5)/2
= 2.625
The Midpoint method gives a chance in price of,
= (2.75 - 2.65 )/ 2.625
= 9.5%
The Elasticity is therefore,
= Elasticity of demand = % change in Quantity ÷ % change in Prices
= 10% / 9.5%
= 1.05
According to this, the Transit Authority's revenue will not rise when Fair increases because the Elasticity is quite close to 1. An elasticity of 1 means that when fares increase, people using trains decrease by almost the same amount so revenue remains the same.
Acme Products manufactures and markets a product called Grow Tall. Acme claims in its advertising that Grow Tall will make its users grow a minimum of six inches taller than their current height. The Federal Trade Commission (FTC) will likely find that the ad is
Answers
Answer: a. deceptive, and the FTC may issue a cease-and-desist order.
Explanation:
A product that can increase human height by 6 inches sounds highly improbable and so is deceptive to people.
The Federal Trade Commission in it's role as a protector of Consumers from.unfair and deceitful practices in Commerce can act against Acme to stop them from deceiving the consumer.
One of the ways that the FTC can do this is by issuing a Cease and Desist order to Acme and if they fail to do so, can then take them to Court.
The Holt fund has $500 million in assets, 80 million in debt and 15 million shares at the start of the year. At the end of the year, the fund has $600 million in assets, 40 million in debt and 16 million shares. During the year, investors received $0.80 in distributions per share. The total expense ratio is 0.4%, which is deducted at the end of the year. What is the rate of the return on the fund?
A. 38.54%
B. 27.32%
C. 35,14%
D. 25.81%
E. 34.79%
Answers
Answer:
B. 27.32%
Explanation:
First we need to calculate the Net asset value per share at the start and end of the year
NAV at the start of the year = ($500 million - $80 million) / 15 million shares = $28 per share
NAV at the end of the year = ($600 million - ( ($600 million x 0.004) + $40 million ) / 16 million shares = $34.85 per share
Return = (NAV at the end of the year - NAV at the start of the year + Distribution received) / NAV at the start of the year
Return = ( 34.85 - 28 + 0.8 ) / 28 = 0.2732 = 27.32%
RequiredIndicate the effect of each of the following transactions on (1) the current ratio, (2) working capital, (3) stockholders’ equity, (4) book value per share of common stock, and (5) retained earnings. Assume that the current ratio is greater than 1:1. (Indicate the effect of each transactions by selecting "+" for increase, "–" for decrease, and "NC" for no change.)a. Collected account receivable.b. Wrote off account receivable.c. Converted a short-term note payable to a long-term payable.d. Purchased inventory on account.e. Declared cash dividend.f. Sold merchandise on account at a profit.g. Issued stock dividend.h. Paid account payable.i. Sold building at a lossdo a +, -. or NC for each one.Current Ratioa.b.c.d.e.f.g.h.i.Working Capitala.b.c.d.e.f.g.h.i.Stockholders Equitya.b.c.d.e.f.g.h.i.Book Valuea.b.c.d.e.f.g.h.i.Retained Earningsa.b.c.d.e.f.g.h.i.
Answers
Find the given attachment
An inexperienced accountant for Riverbed Corp showed the following in the income statement: income before income taxes $258,000 and unrealized gain on available-for-sale securities (before taxes) $94,900. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 34% tax rate. Prepare a correct statement of comprehensive income.
Answers
Answer:
Kindly check attached file for the Comprehensive report
Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002 and $1.50 in 2009. If 4 apples were produced in 2002 and 5 in 2009, whereas 3 oranges were produced in 2002 and 5 in 2009, then the GDP deflator in 2009, using a base year of 2002, was approximately:________.
A) 1.5.
B) 1.7.
C) 1.9.
D) 2.0.
Answers
Answer:
B) 1.7
Explanation:
GDP deflator simply shows the occurring event of the level of prices in the economy which is why It is often the ratio of nominal GDP to real GDP.
GDP deflator in 2009 will be:
Norminal GDP
Cost of apple= $1 in 2009
Apple produced =5 in 2009
Cost of oranges= $1.50 in 2009.
Orange produce= 5 in 2009
$1.00*(5)+$1.50*(5)
=5+7.5
=$12.50
Real GDP
Cost of apple= $0.50 in 2002
Apple produced =5 in 2002
Cost of oranges= $1 in 2002
Orange produce= 5 in 2002
0.50*(5)+$1.00*(5)
=2.5+5
=$7.50
GDP deflator = Nominal GDP/Real GDP)
=$12.50/$7.50
=1.666
approximately 1.7
Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 49 range instruments and 297 pressure gauges were produced, and overhead costs of $88,560 were estimated. An analysis of estimated overhead costs reveals the following activities.
Activities Cost Drivers Total Cost
1. Materials handling Number of requisitions $38,850
2. Machine setups Number of setups 26,190
3. Quality inspections Number of inspections 23,520
$88,560
The cost driver volume for each product was as follows.
Cost Drivers Instruments Gauges Total
Number of requisitions 420 630 1,050
Number of setups 225 260 485
Number of inspections 265 225 490
Determine the overhead rate for each activity.
Overhead Rate
Materials handling $
Machine setups $
Quality inspections $
Assign the manufacturing overhead costs for April to the two products using activity-based costing.
Instruments Gauges
Total cost assigned $ $
Overhead cost per Unit $ $
Answers
Answer and Explanation:
1. The computation of overhead rate for each activity is shown below:-
Overhead rate for each activity Overhead Rate
Materials handling 37
($38,850 ÷ 1,050)
Machine setups 54
($26,190 ÷ 485)
Quality inspections 48
(23,520 ÷ 490)
2. The computation of assignment of manufacturing overhead costs for April to the two products using activity-based costing is shown below:-
Assignment of Instruments Gauges
manufacturing
overhead costs
Materials handling $37 × 420 $15,540 $37 × 63 $23,310
Machine setups $54 × 225 $12,150 $54 × 260 $14,040
Quality inspections $48 × 265 $12,720 $48 × 225 $10,800
Total cost assigned $40,410 $48,150
Overhead cost
per Unit $40,410 ÷ 49 $824.69 $48,150 ÷ 297 $162.12
Therefore we have applied the above formula.
TOMS is a shoe company that, since its inception, has given away one pair of shoes to someone in need for every pair purchased by a customer. They have expanded their philanthropy and now support programs designed to provide eye exams and glasses, clean drinking water, and safe birthing services to people in need in various parts of the world. Customers loyal to the TOMS brand believe the company is _____________, fill in the blank, through their participation in these charitable efforts.
Answers
Answer:
Socially responsible
Explanation:
A socially responsible company is one that seeks to identify as well as relieve the social needs in its business environment.
A major social problem or need around the world is the lack of clean drinking water and birthing services. Thus, by proffering solutions to this problem loyal customer of TOMS shoe company could notice that the company takes seriously its responsibility to the society.
A firm is about to undertake the manufacture of a product, and is weighing the process configuration options. There are two intermittent processes under consideration, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month, and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 and variable costs of $1 per unit.a. At what output does the large intermittent process become cheaper than the small one?b. At what output does the repetitive process become cheaper than the larger intermittent process?
Answers
Answer:
A.$1,125
B.$38,000
Explanation:
Using this formula:
Fixed Cost of Process B- Fixed Cost of Process A ÷Unit Variable cost of Process A – Unit Variable Cost of Process B
a.
Where:
Fixed Cost =$12,000
Fixed Cost =$3,000
Unit Variable =10
Unit Variable =2
Hence:
(12,000-3,000)/ (10-2)
=$9,000/8
= $1,125
This means that large intermittent process become cheaper than the small one by $1,125
b.
Fixed Cost =$50,000
Fixed Cost =$12,000
Unit Variable =2
Unit Variable =1
(50,000-12,000)/ (2-1)
=$38,000/1
= 38,000
This means that repetitive process become cheaper than the larger intermittent process by $38,000
Stansfield Corporation had the following activities in 2012.
1. Payment of accounts payable: $770,000
2. Issuance of common stock: $250,000
3. Payment of dividends: $350,000
4. Collection of note receivable: $100,000
5. Issuance of bonds payable: $510,000
6. Purchase of treasury stock: $46,000
Compute the amount Stansfield should report as net cash provided by financing activities in its 2012 statement of cash flows.
Answers
Answer:
Net cash provided by financing activities in 2012 is $364,000
Explanation:
Computation of net financing activity.
Particular Amount
Issuance of common stock $250,000
Issuance of bonds payable $510,000
$760,000
Less: Payment of dividends $350,000
Less: Purchase of treasury stock $46,000
Net cash provided $364,000
Net cash provided by financing activities in 2012 is $364,000
Suppose the income elasticity of demand is -0.5 for good X. This implies that a 5% decrease in income will cause the quantity demanded of good X to a. increase by 2.5%, and X is an inferior good. b. decrease by 2.5% and X is a normal good. c. increase by 10% and X is an inferior good. d. decrease by 10% and X is a normal good.
Answers
Answer:
a. increase by 2.5%, and X is an inferior good.
Explanation:
The income elasticity of demand is the ratio between the percentage change in demand and the percentage change in income.
The change in demand caused by a 5% decrease in income is:
[tex]-0.5=\frac{\%\ change\ demand}{\%\ change\ income} \\-0.5=\frac{D}{-5\%} \\D=+2.5\%[/tex]
Demand will increase by 2.5%. A good whose demand increases when consumer income decreases is called an inferior good.
Therefore, the answer is a. increase by 2.5%, and X is an inferior good.
Bond A pays $8,000 in 20 years. Bond B pays $8,000 in 10 years. (To keep things simple, assume these are zero-coupon bonds, which means the $8,000 is the only payment the bondholder receives.)
Suppose the interest rate is 7 percent.
Using the rule of 70, the value of Bond A is approximately_______ , and the value of Bond B is approximately_______ .
Now suppose the interest rate increases to 14 percent.
Using the rule of 70, the value of Bond A is now approximately_________ , and the value of Bond B is approximately________ . Comparing each bond's value at 7 percent versus 14 percent, Bond A's value decreases by a_______ percentage than Bond B's value. The value of a bond__________ when the interest rate increases, and bonds with a longer time to maturity are _________sensitive to changes in the interest rate.
Answers
Answer:
To find the value of bond, let's use the formula:
Value of bond = price of bond / (1 + interest rate)ⁿ
Here n represents number of years.
At 7% interest rate:
Value of bond A = [tex]\frac{8000}{(1+0.07)^2^0} = 2067.35[/tex]
Value of bond B = [tex]\frac{8000}{(1+0.07)^1^0} = 4066.79[/tex]
At 14% interest rate:
Value of bond A = [tex] = \frac{8000}{(1+0.14)^20} = 582.09 [/tex]
Value of bond B = [tex] = \frac{8000}{(1+0.14)^10} = 2157.95 [/tex]
The difference between bond A at 7% and 14%:
$582.09 - $2067.35 = -$1485.26
The difference between bond B at 7% and 14%:
$2157.95 - $4066.79 = -$1908.84
% decrease between bond A and B:
[tex] \frac{1908.84 - 1485.26}{1908.84} * 100 = 22.19 [/tex]
Therefore, from the above calculations, we have the following:
Suppose the interest rate is 7%, Using the rule of 70, the value of Bond A is approximately $2067.35, and the value of Bond B is approximately $4066.79 .
Now suppose the interest rate increases to 14 percent.
Using the rule of 70, the value of Bond A is now approximately $528.09 , and the value of Bond B is approximately $2157.95 .
Comparing each bond's value at 7 percent versus 14 percent, Bond A's value decreases by a 22.19 percentage than Bond B's value.
The value of a bond decreases when the interest rate increases, and bonds with a longer time to maturity are more sensitive to changes in the interest rate.
g The Esposito Import Company had 1 million shares of common stock outstanding during 2021. Its income statement reported the following items: income from continuing operations, $7 million; loss from discontinued operations, $2.0 million. All of these amounts are net of tax. Required: Prepare the 2021 EPS presentation for the Esposito Import Company
Answers
Answer:
$5.00
Explanation:
Preparation of the 2021 EPS presentation for the Esposito Import Company
Earnings per share:
Income from continuing operations$7.00
Less Loss from discontinued operations(2.0)
Net income $5.00
Therefore the Net income after the Preparation of the 2021 EPS presentation for the Esposito Import Company is $5.00
What percent of the educated workforce in the world can be found outside of the US?
O 75%
O 25%
O 50%
15%
Answers
Answer:
A. 75%
Explanation:
A workforce is a term used to describe the number of able people working for government, establishments, institutions and private companies etc in a society. Thus, educated workforce implies the number of educated able people that have the ability to work with respect to their academic discipline.
US has a high number of workforce and compensating packages for them. But when compared to other countries, over 75% of educated workforce exists outside of the United States of America.
Quantum Logistics. Inc., a wholesale distributor, is considering the construction of a new warehouse to serve the southeastern geographic region near the Alabama-Georgia border. There are three cities being considered. After site visits and a budget analysis, the expected income and costs associated with locating in each of the cities have been determined. The life of the warehouse is expected to be 12 years and MARR is 15 percent/year. What is the future worth of each site based on future worth ranking? Which city should be recommended?
Answers
Answer:
Anniston City should be recommended as it has higher future value.
Explanation:
Using the formula:
Future value of annuity = C * { [(1+r)^n - 1] / r } C where C= initial cost, r= interest rate (MARR=15%), n= 12)
- Langrange City
= $1,260,000 * { [(1+0.15)^12 - 1] / 0.15 } = $6,741,308.466
- Auburn City
$1,000,000 * { [(1+0.15)^12 - 1] / 0.15 } = $5,350,243.439
- Anniston City
$1,620,000 * { [(1+0.15)^12 - 1] / 0.15 } = $8,667,398.504
Laser World reports net income of $620,000. Depreciation expense is $47,000, accounts receivable increases $11,000, and accounts payable decreases $27,000. Calculate net cash flows from operating activities using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)
Answers
Answer:
$629,000
Explanation:
The net cash flow from operating activities is the net income plus depreciation, minus the increase in accounts receivable as well as the decrease in accounts payable.
Net income is $620,000
depreciaton expense $47,000
Increase in accounts receivable ($11,000)
decrease in accounts payable ($27,000)
Net cash flow from operations $629,000
The increase in accounts receivable denies the business of additional cash,hence it is deducted ,the same applies to increase in accounts payable
Brooks Co. purchases debt investments as trading securities at a cost of $61,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $66,000.1. Prepare the December 27 entry for the purchase of debt investments.2. Prepare the December 31 year-end fair value adjusting entry for the trading securities' portfolio and the January 3 entry when Brooks sells a portion of its trading securities (costing $30,500) for $31,750 cash.
Answers
Answer:
Dr short-term investment-trading $61,000
Cr Cash $61,000
Dr fair value adjustment-trading $5,000
Cr unrealized gain $5,000
Dr cash $31,750
Cr short-term investment-trading $30,500
Cr realized gain on sale of short-term investment ($31,750-$30,500) $1,250
Explanation:
The cash paid for the purchase of trading securities would be credited with $61,000 while the debit goes to short-term investment-trading
The 31st December year-end fair value adjusting entry is $5,000 ($66,000-$61,000) unrealized gain which would be debited to fair value adjustment-trading securities while the credit goes to unrealized gain-trading securities.
Someone claiming to be an employee of the employer for whom Bernie works has been handing out flyers denigrating the employer at a local shopping mall. Bernie's employer had its security force search all of the employees' lockers to see if they had any of the flyers. Bernie can file an action against his employer under the 4th amendment if
Answers
Answer:
1 if employer is the federal government
2. If employer is the state or local government
Explanation:
Under the 4th amendment, Bernie can file an action against his employer if the employer is a state or local government and also if his employer is a federal government. Bernie can do this because the 4th amendment only applies to government employers and not private employers.
Following are transactions for Valdez Services, a company owned by Brina Valdez. Brina Valdez invested $20,000 cash in the company in exchange for common stock. The company provided services to a client and immediately received $900 cash. The company received $10,000 cash from a client in payment for services to be provided next year. The company received $3,500 cash from a client in partial payment of accounts receivable. The company borrowed $5,000 cash from the bank by signing a note payable.
Required:
Prepare general journal entries for the above transactions of Valdez Services.
Answers
Tiptop Flight School offers flying lessons at a small municipal airport. The school's owner and the manager have been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below:
Tiptop Flight School
Variance Report
For the Month Ended July 31
Actual Results Planning Budget Variances
Lessons 155 150
Revenue $33,900 $33,000 $900 F
Expenses:
Instructor wages 9,870 9,750 120 U
Aircraft depreciation 5,890 5,700 190 U
Fuel 2,750 2,250 500 U
Maintenance 2,450 2,330 120 U
Ground facility expenses 1,540 1,550 (10) F
Administration 3,320 3,390 (70) F
Total expense 25,820 24,970 850 U
Net operating income $8,080 $8,030 $50 F
After several months of using such variance reports, the owner has become frustrated. For example. she is quite confident that instructor wages were very tightly controlled in July. but the report shows an unfavorable variance. The planning budget was developed using the following formulas, where q is the number of lessons sold:
Cost Formulas
Revenue $220 q
Instructor wages $65 q
Aircraft depreciation $38 q
Fuel $15 q
Maintenance $530 + $12 q
Ground facility expenses $1,250 + $2 q
Administration $3,240 + $1 q
Required:
1. Should the owner feel frustrated with the variance reports? Explain.
2. Prepare a flexible budget performance report for the school for July.
3. Evaluate the school's performance for July.
Answers
Answer:
1. Should the owner feel frustrated with the variance reports?
Yes, because they were incomplete. Since the quantity of lessons is larger than the budgeted, you must prepare a flexible budget. The flexible budget shows that there exists a total unfavorable variance of $385. E.g. , regarding the pilots' salaries, there is a favorable variance in the flexible budget.
2. Prepare a flexible budget performance report for the school for July.
I used an excel spreadsheet to prepare a flexible budget and I attached it.
3. Evaluate the school's performance for July.
The school's performance is neither good or bad because it has higher revenues than estimated (even though it lowered its sales price), but their costs are also higher than budgeted. They are doing a good job at selling their lessons, but a bad job of keeping costs under control. The overall variance is not that significant, but it is still unfavorable. Their fuel expenses should be controlled since the largest unfavorable variance results from spending too much fuel.
Explanation:
Actual Planning Variances
Results Budget
Lessons 155 150 5 F
Revenue $33,900 $33,000 $900 F
Expenses:
Instructor wages $9,870 $9,750 $120 U Aircraft depreciation $5,890 $5,700 $190 U Fuel $2,750 $2,250 $500 U Maintenance $2,450 $2,330 $120 U Ground facility expenses $1,540 $1,550 ($10) F Administration $3,320 $3,390 ($70) F Total expense $25,820 $24,970 $850 UNet operating income $8,080 $8,030 $50 F
1. The school proprietor should not feel frustrated with the variance reports as they are meant to provide guidance and not a feeder for frustration. A careful review of the variance reports will help the owner to understand the cost dynamics for improvements.
2. The flexible budget performance report for the school in the month of July is as follows:
Tiptop Flight School
Flexible Budget Performance Report
For the Month Ended July 31
Actual Results Flexible Budget Variances
Lessons 155 155
Revenue $33,900 $34,100 $200 U
Expenses:
Instructor wages 9,870 10,075 205 F
Aircraft depreciation 5,890 5,890 0 None
Fuel 2,750 2,325 (425) U
Maintenance 2,450 2,390 (60) U
Ground facility expenses 1,540 1,560 20 F
Administration 3,320 3,395 75 F
Total expense 25,820 25,635 185 U
Net operating income $8,080 $8,465 $385 U
3. The school's performance in July is not encouraging based on the flexible budget. There may be the need for the owner to review the price per lesson upward, keeping customers' effective demand in mind.
Data and Calculations:
The actual number of lessons for July, q = 155
Flexing the Budget:
Revenue $220 q = $34,100
Instructor wages $65 q = $10,075
Aircraft depreciation $38 q = $5,890
Fuel $15 q = $2,325
Maintenance $530 + $12 q = $2,390
Ground facility expenses $1,250 + $2 q = $1,560
Administration $3,240 + $1 q = $3,395
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The Converting Department of Osaka Napkin Company uses the average cost method and had 2,000 units in work in process that were 60% complete at the beginning of the period. During the period, 25,200 units were completed and transferred to the Packing Department. There were 1,100 units in process that were 30% complete at the end of the period.
a. Determine the number of whole units to be accounted for and to be assigned costs for the period.
b. Determine the number of equivalent units of production for the period.
Answers
Answer:
Equivalent Units
Material cost = 26,560
Conversion Cost= 25,540
Explanation:
We would assume the company uses weighted average method of valuation.
Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.
Equivalent units = Degree of completion (%) × Number of units
Material cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 100%× 1,360 1360
Total equivalent units 26,560
Conversion Cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 25%× 1,360 340
Total equivalent units
The Converting Department of Osaka Napkin Company uses the average cost method and had 2,000 units in work in process that were 60% complete at the beginning of the period.
A. To determine the number of whole units to be accounted for and to be assigned costs for the period, let's calculate the total equivalent units of production.
Whole units at the beginning of the period = 2,000 unit
Units started and completed during the period = 25,200 units
Whole units in process at the end of the period = 1,100 units
Total whole units to be accounted for:
= Whole units at the beginning + Units started and completed during the period + Whole units in process at the end
= 2,000 units + 25,200 units + 1,100 units
= 28,300 units
B. To determine the number of equivalent units of production for the period, we need to consider the percentage of completion for the units in process at the beginning and the units in process at the end.
Equivalent units of production for units in process at the beginning:
= Whole units at the beginning × Percentage of completion at the beginning
= 2,000 units × 60%
= 1,200 equivalent units
Equivalent units of production for units in process at the end:
= Whole units in process at the end × Percentage of completion at the end
= 1,100 units × 30%
= 330 equivalent units
Total equivalent units of production for the period:
= Equivalent units of production for units in process at the beginning + Equivalent units of production for units in process at the end + Units started and completed during the period
= 1,200 equivalent units + 330 equivalent units + 25,200 units
= 26,730 equivalent units
Therefore, the number of equivalent units of production for the period is 26,730 units.
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The price of a European call option on a stock with a strike price of $50 is $6. The stock price is $51, the continuously compounded risk-free rate (all maturities) is 6% and the time to maturity is one year. A dividend of $1 is expected in six months. What is the price of a one-year European put option on the stock with a strike price of $50?
Answers
Answer:
$3.06
Explanation:
The put call parity shows the relationship between the price of European put options and European call options of the same strike price and expiry date.
Given that:
Strike price (K) = $50
Price (C) = $6
rate (r) = 6% = 0.06
Stock price (SO) = $51
Time (T) = 1 year
Dividend (D) = $1
The period of dividend (t) = 6 months = 0.5 years
The put call parity (P) is given by the equation:
[tex]P+SO=C+Ke^{-rT}\\P=C+Ke^{-rT}-SO[/tex]
The dividend present value = [tex]De^{-rt}=1e^{-0.06*0.5}=\$0.97[/tex]
[tex]P=C+Ke^{-rT}-SO\\P=6+50e^{-0.06*1}-(51-0.97)\\P=6+47.088-50.03\\P=\$3.06[/tex]
The city football stadium is dangerous and there is a need to build a new city football stadium for both safety and size reasons. The city must have land adjoining the current stadium to enlarge. A condemnation proceeding to take the land is initiated against the land owner. This is an example of:
Answers
Answer:
Police power.
Explanation:
This form of power is sternly found in the law of the united states of america. It was been arranged and strongly enforced in the tenth amendment of the constitution. This law is said to be carried out by the higher authorities or state to protect and enforce order within their range for benefit of the environment, people and inhabitants.
And it is generally known that the states/authorities can possibly come all out to enforce this law no matter how hard they seem to come against the individual, provided his/her humans rights are not been tampered.
