Answer:
209305
Explanation:
Statement of cash flow
Cash from operating activities
Profit after taxation 156213
Adjustments :
Depreciation 27567
Cash flow from operating activities before working capital changes 183780
Working Capital changes :
Change in trade receivables 9189
Change in inventories 4084
Change in prepaid expenses (5105)
Change in trade payables 7147
Change in accrued expenses 10210
Cash generated from operations 209305
Mahugh Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $122
Units in beginning inventory 0
Units produced 8,300
Units sold 8,200
Units in ending inventory 100
Variable costs per unit:
Direct materials $27
Direct labor $46
Variable manufacturing overhead $4
Variable selling and administrative $7
Fixed costs:
Fixed manufacturing overhead $199,200
Fixed selling and administrative $106,600
Required:
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare an income statement for the month using the contribution format and the variable costing method.
d. Prepare an income statement for the month using the absorption costing method.
e. Reconcile the variable costing and absorption costing operating incomes for the month.
Answer:
a. $77
b. $101
c.Income statement for the month using the contribution format and the variable costing method.
Sales ( $122 × 8,200) 1,000,400
Less Cost of Sales
Opening Stock 0
Add Cost of Goods Manufactured (8,300× $77) 639,100
Less Closing stock ( 100 × $77) (7,700) (631,400)
Contribution 369,000
Less Expenses
Fixed manufacturing overhead ($199,200)
Variable selling and administrative ($7×8,200) (57,400)
Fixed selling and administrative ($106,600)
Net Income / (Loss) 5,800
d.Income statement for the month using the absorption costing method.
Sales ( $122 × 8,200) 1,000,400
Less Cost of Sales
Opening Stock 0
Add Cost of Goods Manufactured (8,300× $101) 838,300
Less Closing stock ( 100 × $101) (10,100) (828,200)
Contribution 172,200
Less Expenses
Variable selling and administrative ($7×8,200) (57,400)
Fixed selling and administrative ($106,600)
Net Income / (Loss) 8,200
e.Reconcile the variable costing and absorption costing operating incomes for the month
Absorption Costing Net Profit 8,200
Add Fixed Costs in Opening Stock 0
Less Fixed Costs in Closing Stock (100 × $24) (2,400)
Variable Costing Net Profit 5,800
Explanation:
Product Cost (Variable Costing) = All Variable Manufacturing Costs
= $27 + $46 + $4
= $77
Product Cost (Absorption Costing) = All Variable Manufacturing Costs + All Fixed Manufacturing Costs
= $77 + ($199,200/8,300)
= $77 + $24
= $101
Income Statements
Non Manufacturing Costs are treated as a Periodic Cost in Absorption Costing Income Statement
Whilst Both Fixed Manufacturing Costs and Non Manufacturing Costs are treated as a Periodic Cost in Variable Costing Income Statement.
Reconciliation
The difference in Profit is due to Fixed Cost component absorbed in Absorption Costing.
The phone bill for a corporation consists of both fixed and variable costs. Refer to the fourminusmonth data below and apply the highminuslow method to answer the question. Minutes Total Bill January 470 $ 4 comma 500 February 200 $ 2 comma 695 March 180 $ 2 comma 650 April 320 $ 2 comma 830 If the company uses 390 minutes in May, how much will the total bill be? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.)
Answer:
Total cost= $3,989.65
Explanation:
Giving the following information:
Minutes Total Bill
January 470 $4,500
February 200 $2,695
March 180 $2,650
April 320 $2,830
First, we need to calculate the unitary variable cost and fixed costs:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (4,500 - 2,650) / (470 - 180)
Variable cost per unit= $6.37931
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 4,500 - (6.37931*470)
Fixed costs= $1,501.72
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 2,650 - (6.37931*180)
Fixed costs= $1,501.72
If the company uses 390 minutes in May:
Total cost= 1,501.72 + 6.37931*390
Total cost= $3,989.65
House A has an ocean view and House B does not. In all other respects, the two houses are the same. The market price of house A is $2,800,000; the market price of house B is $2,600,000. The ocean view is therefore valued at a. $1,950,000. b. $2,700,000. c. $200,000. d. -$700,000.
Answer:
$200,000
Explanation:
The value of the ocean is the price difference between the two houses
$2,800,000 - $2,600,000 = $200,000
I hope my answer helps you
Kinds of managers
An example of a position that a team leader would hold is:_______
a. vice president.
b. department manager.
c. group facilitator.
d. divisional manager
Using your knowledge of the different levels of management in organizations, indicate whether each statement is most likely to apply to first-level, middle-level, or top-level managers.
Answer:
Option C
group facilitator.
Explanation:
A team leader would most likely be a group facilitator. This is because a team is usually a small unit assigned with the task of achieving a specific goal. Most of the time, teams are given small and well defined tasks which are not usually as complex as that of the whole organization.
A team leader would be a group facilitator because he is expected to coordinate the efforts of a small group of people to achieve a set goal. His scope of authority and influence is only limited to that of the group.
Preston Woods has 17,500 shares of stock outstanding along with $408,000 of interest bearing debt. The market and book values of the debt are the same. The firm has sales of $697,000 and a profit margin of 6.8 percent. The tax rate is 35 percent, the debt-equity ratio is 40 percent, and the price-earnings ratio is 11.8. The firm has $130,000 of current assets of which $41,200 is cash. What is the enterprise value
Answer:
$ 926,072.80
Explanation:
The company's market capitalization can be computed using the price-earnings ratio of 11.8.
Net income(earnings after tax)=sales* profit margin=$697,000*6.8%=
$ 47,396.00
P/E ratio=market capitalization/net income
11.8=market capitalization/$ 47,396.00
market capitalization=11.8*$47,396.00
market capitalization=$ 559,272.80
Enterprise value=market capitalization+debt-cash
enterprise value=$ 559,272.80+$408,000.00-41,200=$ 926,072.80
Black Sparrow Aviation, Inc. is concerned they are not maintaining adequate liquidity. The accounting department has provided you, the newly hired finance manager, with the following ratios:
1. Current ratio 4.5 Industry norm 4.0
2. Quick ratio 2.0 Industry norm 3.1
3. Inventory turnover 6.0 Industry norm 10.4
4. Average collection period 73 days Industry norm 52 days
5. Average payment period 31 days Industry norm 40 days
Discuss · In your opinion, what do these ratios indicate about Black Sparrow Aviation, Inc.?
A. What recommendations would you make based on these ratios?
B. What results do you think you can achieve if your recommendations are followed?
C. Why might your recommendations not be effective?
Answer:
Black Sparrow Aviation, Inc.
1. Indications from ratios about Black Sparrow Aviation:
The current ratio of 4.5 is higher than the industry's norm of 4.0. This indicates that working capital elements are not being managed properly. This is supported by the the remaining four ratios. Inventory level is not optimal. More inventory is held without being sold to customers. Obviously, from the inventory turnover of 6.0 translating to approximately 61 days that it takes the company to sell its inventory as against the industry average of 35 days, it shows that the marketing and sales forces lack stamina. Debt collection from customers is over-delayed, showing poor credit policy and management. Perhaps, it takes the company many days to issue invoices. More time than necessary is allowed to customers to pay compared to the industry norm. In addition, payments are made to suppliers 11 days earlier than the industry average. Advantage is not being taken of trade credit offered by suppliers. Trade credit is an important source of funding operations, which every company should utilize to the maximum.
2A. Based on the above ratios, I would recommend:
1. Minimum inventory should be maintained.
2. Sales efforts should be intensified, so that more sales are made each year than it is currently the case.
3. Debt collection is an important activity for every company that sells on account. This activity should be taken seriously. Credit extension to customers should not exceed 50 days.
4. Payments to suppliers can be delayed by more 10 days without offending suppliers.
2B. Results from Recommendations:
1. Working capital is not tied in inventory.
2. More debts are recovered from customers and on time. Delay increases credit default.
3. More sales are made to customers, increasing the turnover. The profit is always in the frequency of turnover.
4. Short-term financing is obtained from suppliers, which strengthens liquidity.
Explanation:
Liquidity management is a financial management tool, which describes a company's ability to meet financial obligations through cash flow, funding activities, and capital management in order to minimize the risks associated with illiquidity.
Calculation, analysis, comparison of ratios are some of the ways to make informed decisions on liquidity management. Ratios should be compared over many periods, with best performing competitors, and the industry norm to ascertain the position of the reporting entity.
Bergstrom accepted the return of merchandise by a customer. The merchandise had been sold on account, and payment had not been received on the date of return. The returned goods retailed for $400, but cost Bergstrom only $300. The appropriate journal entry for Bergstrom is:
Answer:
Debit Sales Return and allowances $400
Credit Accounts receivable $400
Explanation:
In the given scenario the sale was made on account. That means that no money was collected for the transaction.
So we do not consider the $300 it would cost Bergstrom.
When a good is sold on account, the accounts receivable is debited for the sale amount ($400). As the customer pays the money owed the account is credited to balance it up.
In this case however the good is being returned. So we will debit the Sales Return and Allowance account to recognise the returned item.
Accounts receivable is credited to remove the credit sale since the product has been returned.
Caroline runs her own business selling horse related products (saddles, boots, bridles, etc.). She is considering investing $70,000 into an operating systems for security and data management for online ordering. After 8 years the equipment has a salvage value of $18,000. In the third year a major update is expected to cost $5,000. The operating costs per year are $2,000 for license and IT contracts.
a) Draw the cash flow diagram.
b) What is the present value the expected costs of the new security and data management system (including salvage value) using a 5% interest rate?
Answer:
The present value the expected costs of the new security and data management system is $-75,062.5
Explanation:
Kindly check attached picture for explanation
Non-verbal communication influences the way a message is received and functions in at least five different ways. Read the following scenario, and identify the most appropriate form of non-verbal communication to use.
You are meeting with a new customer for the first time in person. This customer had a negative experience with one of your company’s competitors, and you want to communicate to the customer that you are honest and trustworthy.What form of non-verbal communication will serve you best?
A. Smiling
B.Standing far away
C. Sustained eye contact
Non-verbal communication sends powerful messages through body language and facial expressions. Our work space arrangement also sends nonverbal messages to others. In the following situation, consider what the intern is conveying non-verbally.
After preparing a project development agenda, the office manager prepares a conference room for the meeting. She places a circular table in the center of the room and surrounds it with comfortable chairs. What message is the office manager expressing non-verbally?
A. She wishes to promote open communication.
B. She wishes to discourage communication.
C. She wishes to set up a clear hierarchy.
Document appearance can have either positive or negative effects on how an audience receives a message.
In the following situation, consider what message is being conveyed non-verbally through document appearance.
Nathan is hiring a summer intern to assist him in launching a new marketing campaign. He opens a letter of introduction from one applicant and notices three misspellings in the first sentence. Additionally, Nathan notes that while the applicant seems to have the necessary experience, he has not formatted his letter of introduction in a professional manner. What message is the internship applicant expressing non-verbally?
A. He is very interested in the summer internship.
B. He is well qualified but too busy to be bothered with formatting.
C. He is not very professional and is not interested in the job.
Answer:
A. Smiling
A. She wishes to promote open communication.
C. He is not very professional and is not interested in the job.
Your answer
Explanation:
Non verbal communication is the transmission of information without the use of words.
Non verbal communication can be carried out through eye contact, facial expressions, physical appearance or settings, tone of voice and distance.
Smiling is an example of non verbal communication using facial expressions. It communicates friendliness and honesty.
By arranging the chairs in a certain manner, physical settings is the mode of non verbal communication used.
I hope my answer helps you
Montclair Company earns an average contribution margin ratio of 40% on its sales. The local store manager estimates that he can increase monthly sales volume by $45,000 by spending an additional $7,000 per month for direct mail advertising. Compute the monthly increase in operating income if the manager's estimate about the increased sales volume is accurate.
Answer:
$11,000
Explanation:
The computation of the monthly increase in operating income is shown below:
= Sales volume × contribution margin ratio - additional spending done on the direct mail advertising
= $45,000 × 40% - $7,000
= $18,000 - $7,000
= $11,000
We simply applied the above formula so that the monthly increase in operating income could be determined.
Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 20% weight in equity, 10% in preferred stock, and 70% in debt. The cost of equity capital is 14%, the cost of preferred stock is 10%, and the pretax cost of debt is 9%. What is the weighted average cost of capital for Ford if its marginal tax rate is 30%?
Answer: 8.21%
Explanation:
The Weighted Average Cost of Capital(WACC) simply put, is the rate at which a company pays those who have invested in it and financed it be it debt holders or equity holders.
The rates in question are averaged according to the proportion by which the company uses the said capital. This results in the following formula,
WACC= [(Wd*Rd) * (1-Tax) + (We * Re) +(Wp * Rp )]
Where,
Wd is the Weight of debt
We is the weight of common Equity
Wp is the weight of preferred Equity
Rd is the Pre-tax cost of debt
Re is the cost of common Equity
Rp is the cost of Preferred equity.
Note: Sometimes you will be given the After - tax cost of debt. In which case you will not need to include the tax adjustment of (1 - tax).
Calculating,
= [( 70% * 9%) * ( 1 - 30%) + (20% * 14%) + (10% * 10%) ]
= 0.0441 + 0.028 + 0.01
= 0.0821
= 8.21%
Each of the following is a method by which to allocate joint costs except: Group of answer choices a. Chemical analysis. b. Relative sales value. c. Relative weight, volume, or linear measure. d. Relative marketing costs. g
Answer:
The correct answer is the option A: Chemical analysis.
Explanation:
To begin with, a chemical analysis consists in the study of chemical composition and structure of substances and it refers to the field of chemistry as its name indicates so therefore that it does not implicate the allocation of joint costs as all of the other methods. Moreover, this type of analysis is considered to be the principal basis technique by which every chemical information is obtanied and there are also two main brances in it, the qualitative and quantitative analysis.
Spicewood Stables, Inc. was established in Dripping Springs, Texas, on April 1. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new Assistant Controller. The following transactions for April are provided for your review.1. Received contributions from investors and issued $330,000 of common stock on April 1.2. Built a barn and other buildings for $165,000. On April 2, the company paid half the amount in cash on April 1 and signed a three-year note payable for the balance.3. Provided $24,900 in animal care services for customers on April 3, all on credit.4. Rented stables to customers who cared for their own animals; received cash of $11,500 on April 4.5. On April 5, received $3,900 cash from a customer to board her horse in May, June, and July (record as Unearned Revenue).6. Purchased hay and feed supplies on account on April 6 for $4,700.7. Paid $2,860 on accounts payable on April 7 for previous purchases.8. Received $1,240 from customers on April 8 on accounts receivable.9. On April 9, prepaid a two-year insurance policy for $5,700. for coverage starting in May.10. On April 28, paid $960 in cash for water utilities incurred in the month.11. Paid $15,800 in wages on April 29 for work done this month.12. Received an electric utility bill on April 30 for $1,940 for usage in April; the bill will be paid next month.1. Prepare the journal entry for each of the above transactions.
Answer:
1. Received contributions from investors and issued $330,000 of common stock on April 1.
Dr Cash 330,000
Cr Common stock 330,000
2. Built a barn and other buildings for $165,000. On April 2, the company paid half the amount in cash on April 1 and signed a three-year note payable for the balance.
Dr Barn and Buildings 165,000
Cr Cash 82,500
Cr Notes payable 82,500
3. Provided $24,900 in animal care services for customers on April 3, all on credit.
Dr Accounts receivable 24,900
Cr Service revenue 24,900
4. Rented stables to customers who cared for their own animals; received cash of $11,500 on April 4.
Dr Cash 11,500
Cr Rent revenue 11,500
5. On April 5, received $3,900 cash from a customer to board her horse in May, June, and July (record as Unearned Revenue).
Dr Cash 3,900
Cr Unearned revenue 3,900
6. Purchased hay and feed supplies on account on April 6 for $4,700.
Dr Supplies 4,700
Cr Accounts payable 4,700
7. Paid $2,860 on accounts payable on April 7 for previous purchases.
Dr Accounts payable 2,860
Cr Cash 2,860
8. Received $1,240 from customers on April 8 on accounts receivable.
Dr Cash 1,240
Cr Accounts receivable 1,240
9. On April 9, prepaid a two-year insurance policy for $5,700. for coverage starting in May.
Dr Prepaid insurance 5,700
Cr Cash 5,700
10. On April 28, paid $960 in cash for water utilities incurred in the month.
Dr Utilities expense 960
Cr Cash 960
11. Paid $15,800 in wages on April 29 for work done this month.
Dr Wages expense 15,800
Cr Cash 15,800
12. Received an electric utility bill on April 30 for $1,940 for usage in April; the bill will be paid next month.
Dr Utilities expense 1,940
Cr Accounts payable 1,940
A Journal entry is a systematic record of the transactions with the debit and credit columns, and it helps in identifying the transactions of a particular business in various heads and Accounting procedure starts from the journal entries.
Refer to the image given below for journal entries of the given transactions.
Various types of journal entries are:Purchase of goodsSale of goodsPayment of wagesPayment of insurance premiumReceiving of cashBad debts occurred, etc.Learn more about journal entries, refer:
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g Transfer payments are a. included in GDP because they represent income to individuals. b. included in GDP because they eventually will be spent on consumption. c. not included in GDP because they are not payments for currently produced goods or services. d. not included in GDP because taxes will have to be raised to pay for them.
Answer: c. not included in GDP because they are not payments for currently produced goods or services.
Explanation: Transfer payments are usually not included in the GDP because they do not represent payments made for recently produced goods or services.
The Gross Domestic Product (GDP) is the monetary value attached to all finished goods and services produced within a country during a time period.
Charlie the cat stole $20 from his cat mom. He's planning on spending the money he stole on catnip (Q1) and dental treats (Q2). Dental treats are more expensive at $3 per treat, but catnip is pretty cheap at $0.50 per pouch. What will Charlie's budget constraint look like?
Answer:
$ 20= Q1 (0.5 ) + Q3( 3)
Explanation:
Total Amount = $ 20
Dental treats Q2= $ 3
Catnip Q1= $ 0.50
Maximum no of Dental Treats he can get is = $ 20 /$3= 6.66
If he gets maximum dental treats i.e 6 , $18 will be spent (3*6)
He will be left with = $ 20- $ 18= $ 2
The maximum no of catnip he can get after buying 6 dental treats from $ 2= $ 2/$0.5= 4
Let Q1 denote the catnip and Q3 denote the dental treats then the equation would be like
$ 20= Q1 (0.5 ) + Q3( 3)
So putting the values for q1=0,1,2,3,4,5,6,7,8,9,10
for values 0-4 Q3 will be $ 18
for values 4-6 Q3 will be $ 15
for values 6-8 Q3 will be $ 12
From values Zero on wards the budget constraint will be a slope but after value 4 the change will be after every two points.
The slope will look like the one given in the diagram.
You are seeking a bank loan for $12000 and go to Prosper Bank and to Skyline Bank to see which loan has a lower rate. Your plan is to open a restaurant, which is quite risky. Prosper Bank expects that it could recover $10,000 if you defaulted while Skyline thinks it would only recoup $9000. However, Skyline puts your probability of repayment at 97% while Prosper only has it at 96%. Which loan has the lower interest rate? Assume both banks are aiming to earn 6%.
Answer:
SKYLINE = 6.96%, PROSPER = 6.94%.
Explanation:
So, in the question above we are given the following parameters or information or data as;
=> Amount of bank loan been seeked for = $12000.
=> "Prosper Bank expects that it could recover $10,000 if you defaulted while Skyline thinks it would only recoup $9000."
=> " Skyline puts the probability of repayment at 97% while Prosper only has it at 96%."
=>" both banks are aiming to earn 6%."
So, for both banks we will be making use of the formula below:
L × (1 + RER) = POR × L × (1 + IRCr) + (1 - POR) × RCD.
Where L = loan, RER = required earning rate, POR = probability of repayment, IRCr = interest rate charged and RCD = Recovery in case of default.
(A). FOR PROSPER BANK:
12000 × ( 1 + 6%) = 96% × 12000 × (1 + IRCr) + (1 - 96% ) × 10000.
SOLVING FOR IRCr, we have;
interest rate charged = 6.94%.
(B). FOR SKYLINE BANK;
12000 × (1 + 6%) = 97% × 12000 × (1 + IRcr ) + (1 - 97%) × 9000.
IRCr =6.96%.
Bob, proprietor of Bob's Burgers, would like to retire in 20 years. He plans to deposit $6500 at the end of each year for the next 20 years into an account expected to earn 7.5% compounded annually. How much will Bob have in his retirement account in 20 years immediately after making his last deposit
Answer:
$281,480
Explanation:
we need to find the future value of the annuity payments, we can use the future value of annuity formula (I couldn't find an annuity table for 7.5%):
future value = annual payment x [(1 + r)ⁿ - 1] / r
annual payment = $6,500r = 7.5%n = 20 yearsfuture value = $6,500 x [(1 + 0.075)²⁰ - 1] / 0.075 = $6,500 x 43.30468 = $281,480
The amount that Bob have in his retirement account in 20 years immediately after making his last deposit is $281,480.
Future value:Using this formula
Future value =Annual payment x [(1 + Interest rate)^Number of years - 1] / Interest rate
Where:
Annual payment = $6,500
Interest rate = 7.5% or 0.075
Number of years= 20 years
Let plug in the formula
Future value = $6,500 x [(1 + 0.075)²⁰ - 1] / 0.075
Future value=$6,500 x [(1 .075)²⁰ - 1] / 0.075
Future value=$6,500 x [(4.24785) - 1] / 0.075
Future value=$6,500 x [3.24785]/ 0.075
Future value = $6,500 x 43.30467
Future value= $281,480
Inconclusion the amount that Bob have in his retirement account in 20 years immediately after making his last deposit is $281,480.
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In its first month of operations, Concord Corporation made three purchases of merchandise in the following sequence: (1) 250 units at $6, (2) 350 units at $8, and (3) 450 units at $9. Assuming there are 150 units on hand at the end of the period, compute the cost of the ending inventory under (a) the FIFO method and (b) the LIFO method. Concord Corporation uses a periodic inventory system.
Answer:
FIFO - $1350
LIFO - $900
Explanation:
Total inventory = 250 + 350 + 450 = 1050
Total inventory sold = 1050 - 150 = 900
FIFO means first in , first out. It means that it is the first purchased inventory that is the first to be sold. So the ending inventory would consist of the last purchased inventory. So the cost of the ending inventory would be allocated to the 3rd purchase of inventory
150 x $9 = $1350
LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold. So the ending inventory would consist of the first purchased inventory. So the cost of the ending inventory would be allocated to the 1st purchase of inventory
150 x $6 = $900
I hope my answer helps you
Pickup Company acquired 100 percent of the voting common shares of Sedan Corporation by issuing bonds with a par value and fair value of $200,000. Immediately prior to the acquisition, Pickup reported total assets of $600,000, liabilities of $370,000, and stockholders’ equity of $230,000. At that date, Sedan reported total assets of $500,000, liabilities of $300,000, and stockholders’ equity of $200,000. Included in Sedan’s liabilities was an account payable to Pickup in the amount of $50,000, which Pickup included in its accounts receivable.
Based on the preceding information, what amount of total assets did Pickup report in its balance sheet immediately after the acquisition?
a. 1,100,000
b. 1,000,000
c. 800,000
d. 1,600,000
Answer:
c. $800,000
Explanation:
Relevant data provided
Beta reported total assets = $600,000
Fair value of investment = $200,000
The computation of total assets is shown below:-
Total assets did beta report = Beta reported total assets + Fair value of investment
= $600,000 + $200,000
= $800,000
Therefore for computing the total assets did beta report we simply added the beta reported total assets with fair value of investment.
Acitelli Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.
Estimated manufacturing overhead $ 351,960
Estimated machine-hours 8,400
Actual manufacturing overhead $ 352,960
Actual machine-hours 8,460
The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year.
The applied manufacturing overhead for the year is closest to:_________.
A. $357,012
B. $354,474
C. $355,489
D. $352,951
Answer:
B. $354,474
Explanation:
The Overheads that are initially included in Work In Process before determination of Actual Overheads are called Applied Overheads.
Applied Overheads = Predetermined overhead rate × Actual level of Activity.
Thus said we need to first determine the Predetermined overhead rate :
Predetermined overhead rate = Budgeted Overheads / Budgeted Activity
= $ 351,960 / 8,400 machine hours
= $41.90 per machine hour
Therefore,
Applied Overheads = $41.90 × 8,460 machine hours
= $354,474
Conclusion :
The applied manufacturing overhead for the year is closest to: $354,474
Swifty Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1.
Instructions:
Set up a schedule of interest expense and discount amortization under the straight-line method.
Set up a schedule of interest expense and discount amortization under the effective-interest method. (Hint: The effective-interest rate must be computed.)
Answer:
Find attached amortization schedule for the interest expense and discount amortization under both methods.
Explanation:
Under straight line the discount amortization per year is total discount on bonds payable divided by 5 years.
Under effective method, I first of all computed the yield to maturity on the bind using rate formula in excel, the discount amortization each is the interest expense minus the coupon payment.
A few years back, Dave and Jana bought a new home. They borrowed $230,415 at a fixed rate of 5.49% (15-year term) with monthly payments of $1,881.46. They just made their twenty-fifth payment and the current balance on the loan is $208,555.87.
Interest rates are at an all-time low and Dave and Jana are thinking of refinancing to a new 15-year fixed loan. Their bank has made the
following offer: 15-year term, 3.0%, plus out-of-pocket costs of $2,937. The out-of-pocket costs must be paid in full at the time of refinancing.
Build a spreadsheet model to evaluate this offer. The Excel function:
=PMT(rate, nper, pv, fv, type)
alculates the payment for a loan based on constant payments and a constant interest rate. The arguments of this function are as follows:
rate = the interest rate for the loan
nper = the total number of payments
pv= present value - - the amount borrowed
fv = future value - - the desired cash balance after the last payment (usually 0)
type = payment type (0 = end of period, 1 = beginning of the period)
For example, for Dave and Jana's original loan there will be 180 payments (12*15 = 180), so we would use =PMT( .0549/12, 180, 230415,0,0) = $1881.46. Note that since payments are made monthly, the annual interest rate must be expressed as a monthly rate. Also, for payment calculations, we assume that the payment is made at the end of the month.
Assume that Dave and Jana have accepted the refinance offer, and that there is no pre-payment penalty, so that anything above the beyond the required payment is applied to the principal. Construct a spreadsheet model in Excel so that you may use Goal Seek to determine the monthly payment that will allow Dave and Jana to pay off the loan in 12 years. Do the same for 10 and 11 years. Which option for prepayment if any, would you choose and why?
(Hint: Break each monthly payment up into interest and principal [the amount that gets deducted from the balance owed] Recall that the monthly interest that is charged is just the monthly loan rate multiplied by the remaining loan balance.)
If required, round your answers to two decimal places.
Pay off loan in years Additional Payment
10 Years $
11 Years $
12 Years $
Which option for prepayment if any, would you choose and why?
Answer:
Explanation:
If required, round your answers to two decimal places.
Pay off loan in years Additional Payment
10 Years $
11 Years $
12 Years $
Which option for prepayment if any, would you choose and why?
New monthly payment
PMT(3%/12, 15*12, 208555.87, 0, 0) = $1,440.25
Now, we need find the additional amount that they need to pay in order to repay their outstanding loan in 10,11 and 12 years. So, using the above formula, we get
10-year installment = PMT(3%/12, 10*12, 208555.87, 0, 0) = $2,013.83
11-year installment = PMT(3%/12, 11*12, 208555.87, 0, 0) = $1,856.93
12-year installment = PMT(3%/12, 12*12, 208555.87, 0, 0) = $1,726.40
Additional Monthly Payment
10-year: $2,013.83 - $1,440.25 = $573.58
11-year: $1,856.93 - $1,440.25 = $416.68
12-year: $1,726.40 - $1,440.25 = $286.15
Refinancing means finance again(object) and, usually with a new loan with a low-interest rate.
What is the term refinancing means?Refinance, or "refi" briefly, refers to the process of reviewing and replacing existing credit agreement terms, usually as they relate to the loan or mortgage.
Calculation of new monthly payment under refinance model:
New monthly payment:
[tex]PMT(3\%/12, 15\times 12, 208555.87, 0, 0) = \$1,440.25[/tex]
The calculation is shown in the attached image.
Now, we need to find the additional amount that they need to pay in order to repay their outstanding loan in 10,11, and 12 years.
Using the above formula, we get
[tex]\rm\,10-year \;installment\; = \;PMT(3\%/12, 10\times 12, 208555.87, 0, 0) = \$2,013.83\\\\11-year installment = PMT(3\%/12, 11 \times 12, 208555.87, 0, 0) = \$1,856.93\\\\12-year installment = PMT(3\%/12, 12 \times 12, 208555.87, 0, 0) = \$1,726.40[/tex]
Additional Monthly Payment
[tex]\rm\,10-year \$2,013.83 - \$1,440.25 = \$573.58\\\\11-year: \$1,856.93 - \$1,440.25 = \$416.68\\\\12-year: \$1,726.40 - \$1,440.25 = \$286.15[/tex]
Hence, We can go for 12-year model, as it is cost-effective for Dave and Jana.
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Lately the demand for building materials has dropped due to the slowdown in new housing construction. Woods Corp, is thinking of closing its fine wood division that produces mahogany and cherry lumber for building cabinets and other applications. Under the Boston Consulting Group Growth-Share Matrix, the fine wood division would most likely be classified as a:________.
A. dog
B. cash cow
C. top gun
D. star
Answer:
A. dog
Explanation:
The Boston Consulting Group growth share matrix is a graphical representation used in planning which of a companie's products should be kept, discarded, or invested more in.
Four categories of products are stars, dogs, cash cow, and question mark.
Dogs have low market share and low growth rate. Options for handling such products are selling, repositioning, or liquidation.
Demand for building materials has dropped due to the slowdown in new housing construction and the company is considering bclosing its fine wood division that produces mahogany and cherry lumber for building cabinets and other applications.
This division is most likely a dog
Ratio proficiency McDougal Printing, Inc., had sales totaling $ 41 comma 000 comma 000 in fiscal year 2019. Some ratios for the company are listed below. Use this information to determine the dollar values of various income statement and balance sheet accounts as requested. Assume a 365-day year. Calculate values for the following: a. Gross profits b. Cost of goods sold c. Operating profits d. Operating expenses e. Earnings available for common stockholders f. Total assets g. Total common stock equity h. Accounts receivable McDougal Printing, Inc. Year Ended December 31, 2019 Sales $ 41 comma 000 comma 000 Gross profit margin 76% Operating profit margin 39% Net profit margin 7% Return on total assets 13.3% Return on common equity 24% Total asset turnover 1.9 Average collection period 64.3 days
Answer:
a) Gross Profit is $31,160,000
b) Cost of goods sold is $9,840,000
c) Operating profits is $15,990,000
d) Operating Expenses is $15,170,000
e) Earnings available to common stockholders is $2,870,000
f) Total assets is $21,581,947.37
g)Total common stock equity is $11,958,333.33
h) Accounts Receivable is $7,222,739.73
Explanation:
McDougal Printing, Inc.
Year Ended December 31, 2019
Sales = $ 41,000,000
Gross profit margin = 76%
Operating profit margin = 39%
Net profit margin = 7%
Return on total assets = 13.3%
Return on common equity = 24%
Total asset turnover = 1.9
Average collection period = 64.3 days
Calculation of the dollar values of various income statement and balance sheet accounts
a) Gross Profit = Sales × Gross Profit margin
= $41,000,000 × 76%
= $31,160,000
b) Cost of goods sold = Sales - Gross profit
= $41,000,000 - $31,160,000
= $9,840,000
c) Operating profits = Sales × Operating profit margin
= $41,000,000 × 39% = $15,990,000
d) Operating Expenses = Gross profit - Operating profit
= $31,160,000 - $15,990,000
= $15,170,000
e) Earnings available to common stockholders = Sales × Net profit margin
= $41,000,000 × 7%
= $2,870,000
f) Total assets = Sales ÷ Total asset turnover ratio
= $41,000,000 ÷ 1.9
= $21,581,947.37
g)Total common stock equity = Earnings available to common stockholders ÷ Return on common equity %
= $2,870,000 ÷ 24%
= $11,958,333.33
h) Accounts Receivable = (Sales ÷ 365 days) × Average collection period
= ($41,000,000 ÷ 365 days) × 64.3 days
= $7,222,739.73
An adjusted trial balance is given below.
Debit Credit
Cash $12,000
Accounts Receivable 3,000
Prepaid Rent 700
Merchandise Inventory 25, 000
Accounts Payable $4,100
Salaries Payable 1,500
Notes Payable 800
Common Stock 8,000
Retained Earnings 3,500
Dividends 1,000
Sales Revenue 89,500
Cost of Goods Sold 21,000
Salaries Expense 20,000
Rent Expense 14,000
Selling Expense 8,300
Delivery Expense 1,900
Supplies Expenseâââââ 500âââââââââââââââ
Totalâ $107,400â$ 107,400
What will be the final balance in theâ corporation's Retained Earnings account after recording the closingâentries?
Answer:
$16,400
Explanation:
The formula for Retained Earnings = Total assets - Total Liabilities except Retained Earnings
Under the Balance sheet in accordance with this question, the asset recognizable are Cash Account Receivables Prepaid Rent and Merchandise inventory. The liability recognizable are Account payable, Salary Payable, Notes Payable and Common stocks
Therefore Retained earnings = (12000+3000+700+25000)-(14000+1500+800+8000)
Retained earnings = 40700 - 24300
Retained earnings = $16,400
Stritch Company is trying to decide how many units of merchandise to order each month. The company's policy is to have 20% of the next month's sales in inventory at the end of each month. Projected sales for August, September, and October are 24,000 units, 14,000 units, and 34,000 units, respectively. How many units must be purchased in September
Answer:
Purchases budget = 18,000 units
Explanation:
Purchases budget = Sales + closing inventory - opening inventory
Closing inventory for September = 20% of august sales = 20% × 34,000=6,800
Opening inventor for September = 20%× September = 20% × 14,000= 2800
Purchases budget for September = 14,000 + 6,800 - 2,800 = 18,000
Purchases budget = 18,000 units
Hatfield Corporation, which has only one product, has provided the following data concerning its most recent month of operations:Selling price $123Units in beginning inventory 0Units produced 6,400Units sold 6,100Units in ending inventory 300Variable costs per unit: Direct materials $45 Direct labor $30 Variable manufacturing overhead $1 Variable selling and administrative $8Fixed costs: Fixed manufacturing overhead $140,800Fixed selling and administrative $91,500What is the net operating income for the month under variable costing?a) $12,200b) ($17,200)c) $5,600d) $6,600
Answer:
Instructions are below.
Explanation:
Giving the following information:
Selling price= $123
Units sold= 6,100
Variable costs per unit:
Direct materials $45
Direct labor $30
Variable manufacturing overhead $1
Variable selling and administrative $8
Fixed costs:
Fixed manufacturing overhead $140,800
Fixed selling and administrative $91,500
First, we need to calculate the total variable cost per unit:
Variable cost per unit= 45 + 30 + 1 + 8= $84
Income statement:
Sales= 6,100*123= 750,300
Total variable cost= 6,100*84= (512,400)
Contribution margin= 237,900
Fixed manufacturing overhead= (140,800)
Fixed selling and administrative= (91,500)
Net operating income= 5,600
At December 31, Idaho Company had the following ending account balances:
Retained Earnings $250,000
Preferred Stock ($100 par, 7% cumulative, 10,000 authorized,
5,000 issued and outstanding) 500,000
Treasury Stock 40,000
Paid-In Capital in Excess of Par—Common Stock 625,000
Paid-In Capital in Excess of Par—Preferred Stock 50,000
Common Stock ($5 par value, 500,000 shares authorized,
105,000 issued) 525,000
Required:
Prepare the Stockholders' equity section of the balance sheet in good form with all of the required disclosures.
Answer:
Balance of Stockholder's Equity at December 31 is $1,910,000.
Explanation:
This will appear as follows
Idaho Company
Details $
Stockholder's Equity:
Common Stock 525,000
Preferred Stock 500,000
Additional Paid-In Cap. - Common Stock 625,000
Additional Paid-In Cap. - Preferred Stock 50,000
Treasury Stock (40,000 )
Retained Earnings 250,000
Balance at December 31 1,910,000
The stockholders' equity or the share capital of the company is the amount of capital that is the ownership of investors of shareholders of the company over the assets and debts of the company.
The equity shareholder's are the true owners of the company as they are legible for decision making and voting's.
The stockholders' equity section of the balance sheet includes: common shares, preferred shares, retained earnings, and treasury stock.
The stockholders' equity section of the balance sheet is prepared in the image attached below.
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Which of the following is an expense of this period? Multiple Choice Costs of items paid for in this period but used up next period Repayment of debt from a loan in a prior period Cost of land purchased and paid for this period Costs of items used up this period but paid for next period
Answer: Costs of items used up this period but paid for next period
Explanation:
Period Expenses for the period are transactions that should be expensed because they were used in the current period.
Therefore if a period cost is not used in the period, it is not considered a period cost even if the company pays for it in the current period which also means that if a period cost for the period is not paid in the current period but in the next one, it is still a period cost for the current period.
From the above therefore, the period cost is the cost of items used up in this period but paid for in the next one.
The land purchased might look like the obvious choice but it is not because Assets are capitalised and not expensed.
Kiona Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year).
May 1 Prepared a company check for $350 to establish the petty cash fund.
15 Prepared a company check to replenish the fund for the following expenditures made since May 1.
a. Paid $109.20 for janitorial services.
b. Paid $89.15 for miscellaneous expenses.
c. Paid postage expenses of $60.90.
d. Paid $80.01 to The County Gazette (the local newspaper) for an advertisement.
e. Counted $26.84 remaining in the petty cashbox.
16 Prepared a company check for $200 to increase the fund to $550.
31 The petty cashier reports that $370.27 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15.
f. Paid postage expenses of $59.10.
g. Reimbursed the office manager for business mileage, $47.05.
h. Paid $48.58 to deliver merchandise to a customer, terms FOB destination.
31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $50, leaving a total of $500.
Required:
1. Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31. (Round your answers to 2 decimal places.)
Answer:
1-May
Dr Petty cash 350
Cr Cash 350
15-May
Dr Janitorial services 109.20
Dr Miscellaneous 89.15
Dr Postage expense 60.90
Dr Advertisement expense 80.01
Cr Cash over and short 16.1
Cr Cash 323.16
16-May
Dr Petty cash 200
Cr Cash 200
31-May
Dr Postage expense 47.05
Dr Mileage expense 38.5
Dr Delivery expense 48.58
Cr Cash 134.13
31-May
Dr Cash 50
Cr Petty cash 50
Explanation:
Kiona Co Journal entries
1-May
Dr Petty cash 350
Cr Cash 350
15-May
Dr Janitorial services 109.20
Dr Miscellaneous 89.15
Dr Postage expense 60.90
Dr Advertisment expense 80.01
Cr Cash over and short 16.1
Cr Cash 323.16
(350-26.84)
16-May
Dr Petty cash 200
Cr Cash 200
31-May
Dr Postage expense 47.05
Dr Mileage expense 38.5
Dr Delivery expense 48.58
Cr Cash 134.13
31-May
Dr Cash 50
Cr Petty cash 50
