1. Bank Reconciliation for Archdale Company as of October 31, 2006:
Bank Statement Balance: $28,020Book Balance: $26,193
a) Outstanding checks:
Cheque #3031: $1,380 Cheque #3065: $336
Cheque #3069: $2,148
b) NSF (bounced) cheque: NSF cheque for Jefferson Tyler: $805
c) Deposits in transit:
Cash receipts of October 31: $1,197
d) Bank service charge:
Bank service charge: $35
Calculation:Book Balance + Deposits in Transit - Outstanding Checks + Bank Service Charge - NSF Cheque = Adjusted Book Balance
$26,193 + $1,197 - ($1,380 + $336 + $2,148) + $35 - $805 = Adjusted Book Balance
$26,193 + $1,197 - $3,864 + $35 - $805 = Adjusted Book Balance
$23,756 = Adjusted Book Balance
2.
Book Balance
2. Adjusting Entries:To adjust the book balance to match the adjusted book balance, the following entries are required:
a) To record outstanding checks:
Debit: Accounts Payable Credit: Cash
Cheque #3031: $1,380
Cheque #3065: $336 Cheque #3069: $2,148
b) To record the NSF cheque:
Debit: Accounts Receivable Credit: Cash
NSF cheque for Jefferson Tyler: $805
c) To record the deposit in transit:
Debit: Cash Credit: Accounts Receivable
Cash receipts of October 31: $1,197
d) No adjusting entry is required for the bank service charge.
3. Balance Sheet Presentation:
On the balance sheet, the adjusted book balance of cash will be shown as $23,756.
Please note that the adjusting entries will impact the specific accounts mentioned and will depend on the company's chart of accounts and accounting policies. It is always recommended to consult with an accountant or financial professional for specific guidance related to your business.
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Compare the main features of the ‘Pluralist theory’ and Marxist theory of employment relations. In doing so, discuss their similar and different features? Give examples from any overseas or Pacific Island country to support each of your main points.
The Pluralist theory and Marxist theory are two distinct perspectives that offer different explanations and understandings of employment relations.
Pluralist Theory:
Assumptions: Pluralist theory assumes that employment relations involve multiple stakeholders with diverse interests, including employers, employees, trade unions, and government. It emphasizes the existence of a balance of power and recognizes the legitimacy of competing interests.
Power Distribution: Pluralist theory views power as distributed among different actors in the employment relationship. It assumes that negotiation and collective bargaining between employers and employees, facilitated by trade unions and workplace institutions, lead to mutually agreed-upon outcomes.
Conflict Resolution: Pluralist theory emphasizes the importance of resolving conflicts through mechanisms such as collective bargaining, arbitration, and mediation. It assumes that conflicts between employers and employees are natural and can be managed through established procedures.
Example: Australia's employment relations system reflects pluralist principles. The Fair Work Act of 2009 establishes a framework for collective bargaining, minimum employment standards, and dispute resolution. Trade unions play a significant role in representing workers' interests and negotiating enterprise agreements.
Marxist Theory:
Assumptions: Marxist theory views employment relations through the lens of class struggle and the exploitation of labor. It assumes that the employment relationship is inherently unequal and serves the interests of the capitalist class, resulting in the alienation and commodification of workers.
Capitalist Relations: Marxist theory focuses on the relationship between capital owners (employers) and workers. It argues that capitalists exploit the surplus value generated by labor, resulting in social inequality and class conflict.
Revolution and Transformation: Marxist theory advocates for revolutionary change and the establishment of a socialist society, where the means of production are collectively owned and workers have greater control over their labor. It sees collective action by workers as a key driver for change.
Example: Cuba provides an example of a country influenced by Marxist principles in its employment relations. The Cuban government, guided by Marxist ideology, abolished private ownership of businesses and established a socialist system where the state controls the means of production. Trade unions in Cuba are aligned with the state and play a significant role in mobilizing and representing workers' interests.
While both Pluralist theory and Marxist theory provide frameworks for understanding employment relations, they differ in their underlying assumptions and perspectives. Pluralist theory emphasizes the existence of multiple stakeholders, negotiation, and conflict resolution, while Marxist theory focuses on the unequal power dynamics between capitalists and workers and advocates for revolutionary change. Examples from countries like Australia (Pluralist) and Cuba (Marxist) illustrate how these theories have influenced employment relations systems in different contexts. Understanding the features of each theory helps to analyze the complexities of employment relations and the diverse perspectives that shape them.
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Which of the following statements is TRUE? OA. At the production point, the production possibility frontier is sloping upward B. At the production point, the production possibility frontier is a straight line OC. At the production point, the production possibility frontier must be tangent to a line whose slope is minus the price of cloth divided by that of food. OD. At the production point, the production possibility frontier is sloping downward.
The correct statement is OD. At the production point, the production possibility frontier is sloping downward.
The production possibility frontier (PPF) represents the maximum combinations of goods that can be produced given the available resources and technology. The slope of the PPF reflects the opportunity cost of producing one good in terms of the other.
In this case, a downward-sloping PPF indicates that as more of one good is produced, there is an opportunity cost in terms of the other good. This is because resources are limited, and producing more of one good requires diverting resources away from the production of the other good.
Option A (At the production point, the production possibility frontier is sloping upward) is incorrect because an upward-sloping PPF would suggest that as more of one good is produced, the opportunity cost decreases.
Option B (At the production point, the production possibility frontier is a straight line) is incorrect because a straight line PPF would indicate a constant opportunity cost for producing the two goods, which is unlikely in most real-world scenarios.
Option C (At the production point, the production possibility frontier must be tangent to a line whose slope is minus the price of cloth divided by that of food) is incorrect because it introduces the concept of prices, which is not necessarily related to the slope of the PPF. Prices are not explicitly mentioned in the given scenario.
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Onassis Catering is a Greek company that provides passenger and crew meals to airlines operating out of two international airports in Athens and Corfu. The operations at the two airports are managed separately, and top management believes that there may be benefits to greater sharing of information between the two operations.
Onassis Catering is a Greek company that provides passenger and crew meals to airlines operating out of two international airports in Athens and Corfu. The operations at the two airports are managed separately, and top management believes that there may be benefits to greater sharing of information between the two operations.
Sharing of information between two separate operations can lead to various benefits, especially in the aviation industry. The primary advantage of information sharing in Onassis Catering is that it would enable them to streamline their processes, reduce operational costs, and improve customer service. By integrating the processes of the two operations, the company could use its resources more efficiently, leading to cost savings. Besides, sharing data between the two operations could improve customer service by providing a more comprehensive understanding of their customers' needs and preferences.In addition to the above, sharing information between two separate operations could lead to better decision-making. Since both the Athens and Corfu operations have their own strengths and weaknesses, sharing information between the two would enable them to make more informed decisions and avoid making mistakes. By doing so, the company would be able to make better use of its resources and improve overall performance. Finally, sharing information between the two operations could lead to better coordination. When the Athens and Corfu operations are better coordinated, they would be able to provide a more consistent level of service to their customers, regardless of their location. This would enhance the company's reputation and help it to build a stronger customer base.
In conclusion, information sharing between the Athens and Corfu operations of Onassis Catering could lead to several benefits. These include the streamlining of processes, reduction of operational costs, improvement of customer service, better decision-making, and improved coordination. By leveraging these advantages, the company could strengthen its competitive position in the aviation industry and improve overall performance.
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Lean Accounting Westgate Inc. uses a lean manufacturing strategy to manufacture DVR (digital video recorder) players. The company manufactures DVR players through a single product cell. The budgeted conversion cost for the year is $658,800 for 1,830 production hours. Each unit requires 12 minutes of cell process time. During March, 910 DVR players were manufactured in the cell. The materials cost per unit is $72. The following summary transactions took place during March: 1. Materials were purchased for March production. 2. Conversion costs were applied to production. 3. 910 DVR players were assembled and placed in finished goods. 4, 860 DVR players were sold for $255 per unit. a. Determine the budgeted cell conversion cost per hour. If required, round to the nearest dollar. per hour b. Determine the budgeted cell conversion cost. $____ per unit. If required, round to the nearest dollar. $____per unit
The budgeted cell conversion cost per hour is $360 per hour, and the budgeted cell conversion cost per unit is $72 per unit.
To determine the budgeted cell conversion cost per hour and per unit, we need to use the given information and perform calculations based on the data provided.
Given data:
Budgeted conversion cost for the year: $658,800Production hours: 1,830Number of DVR players manufactured in March: 910To calculate the budgeted cell conversion cost per hour:
Budgeted cell conversion cost per hour = Budgeted conversion cost for the year / Production hours
Budgeted cell conversion cost per hour = $658,800 / 1,830
Budgeted cell conversion cost per hour ≈ $360 per hour
To calculate the budgeted cell conversion cost per unit:
First, we need to determine the total conversion cost for the units manufactured in March:
Total conversion cost for March = Budgeted cell conversion cost per hour * Cell process time per unit * Number of units manufactured
Total conversion cost for March = $360 per hour * (12 minutes / 60 minutes) * 910 units
Total conversion cost for March = $360 per hour * 0.2 hours * 910 units
Total conversion cost for March = $72 * 910 units
Total conversion cost for March = $65,520
Next, we divide the total conversion cost by the number of units manufactured to get the budgeted cell conversion cost per unit:
Budgeted cell conversion cost per unit = Total conversion cost for March / Number of units manufactured
Budgeted cell conversion cost per unit = $65,520 / 910 units
Budgeted cell conversion cost per unit ≈ $72 per unit
Therefore, the budgeted cell conversion cost per hour is $360 per hour, and the budgeted cell conversion cost per unit is $72 per unit.
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#6. The Demand for the GT Notebook computer is 1,200 units per year. Each Notebook computer costs $1,000 and the company has a holding cost of 20% of unit cost per year. Order cost is $1200 per order.
The holding cost of GT Notebook computers would be $24,000 per year if 1,200 units were kept in stock. The total inventory cost would be $38,400.
The Demand for the GT Notebook computer is 1,200 units per year. Each Notebook computer costs $1,000, and the company has a holding cost of 20% of unit cost per year. The order cost is $1,200 per order. The following formula is used to determine the economic order quantity (EOQ) of a product, which is the optimum order quantity that reduces inventory and order costs to a minimum. EOQ = √(2DS/H), where D = demand in units, S = setup or order cost per order, and H = holding cost per unit per year.Let's apply the formula to GT Notebook computers.EOQ = √(2 x 1,200 x 1,200/0.20 x 1,000)EOQ = √(2,880,000/200)EOQ = √(14,400)EOQ = 120This implies that the company should order 120 GT Notebook computers each time to minimize the overall inventory and order costs. In the case of GT Notebook computers, the order cost and holding cost contribute equally to the total cost. The ordering cost would account for $10 per unit, which is $1,200 divided by 120 units, while the holding cost would account for $200 per unit, which is 20% of $1,000. This implies that the total cost per unit is $1,210, which is the sum of the unit price, ordering cost, and holding cost of each notebook computer.The ordering cost of GT Notebook computers would be $14,400 per year if 120 units were ordered ten times per year. The holding cost of GT Notebook computers would be $24,000 per year if 1,200 units were kept in stock. The total inventory cost would be $38,400.
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A junior portfolio manager has been asked to establish a fund that will be worth $175 million in four years' time. Her supervisor has suggested to her that an appropriate investment would be 5-year 15% coupon bonds at a yield of 7.6% pa. Although the junior manager has some knowledge of bonds, she does not understand the reason for this suggestion. Why suggest a 5-year bond maturity when the money is really needed in 4 years?
(a) Explain the reason to the junior manager in simple terms.
(b) How much should she invest to establish the fund? What annual coupon interest will this investment produce? If the par value of one bond is $10 million, how many actual bonds should be bought?
(c) Immediately after the fund is established, yields increase by 100 basis points. Show that, if no further yield shifts occur, the fund will still achieve its original target in four years’ time.
The reason for suggesting a 5-year bond maturity when the money is needed in 4 years is to ensure that the fund's value is protected and that it has enough time to grow.
By investing in a bond with a longer maturity, the portfolio manager can take advantage of higher coupon payments and potentially higher returns compared to shorter-term bonds. The 5-year bond will provide a steady stream of coupon interest payments over the investment period, which can contribute to the growth of the fund.
(b) To establish the fund worth $175 million in four years' time, the junior manager needs to calculate the amount she should invest. We can use the present value formula to determine the investment amount:
Present Value = Future Value / (1 + Yield)^n
Where:
Future Value = $175 million
Yield = 7.6% per annum
n = 4 years
Present Value = $175 million / (1 + 0.076)^4
Present Value = $134,067,457.96
Therefore, the junior manager should invest approximately $134,067,457.96 to establish the fund.
To calculate the annual coupon interest, we can multiply the investment amount by the coupon rate:
Annual Coupon Interest = Investment Amount * Coupon Rate
Assuming the coupon rate is 15% per annum:
Annual Coupon Interest = $134,067,457.96 * 0.15
Annual Coupon Interest = $20,110,118.79
To determine the number of actual bonds that should be bought, we divide the investment amount by the par value of one bond:
Number of Bonds = Investment Amount / Par Value of One Bond
Number of Bonds = $134,067,457.96 / $10 million
Number of Bonds = 13.4067
Since we cannot buy a fraction of a bond, the junior manager should buy 14 bonds.
(c) If the yields increase by 100 basis points (1%), the bond prices will decrease. However, as the fund has a 4-year investment horizon, the bonds will still have sufficient time to recover their value before maturity. The bond prices may fluctuate in the interim due to the yield increase, but as long as the bonds are held until maturity, they will still provide the original target value of $175 million in four years' time. The impact of yield changes on bond prices is more relevant for investors who plan to sell their bonds before maturity.
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The asset that results from the payment of expenses in advance is ____
The asset that results from the payment of expenses in advance is Prepaid expenses.
Prepaid expenses are current assets that are paid for in advance and will be recognized as expenses in the future. They represent expenses paid for by an organization but have not yet been used or consumed. In order to recognize the prepaid expense as an expense, the expense must be incurred during the period. The prepaid expense will remain as an asset until it is recognized as an expense in the future.
When a company pays for expenses in advance, such as prepaid rent, prepaid insurance, or prepaid services, it creates a prepaid expense asset on its balance sheet. This asset represents the portion of the payment that has not yet been consumed or utilized. Over time, as the expenses are incurred or the services are rendered, the prepaid expense is gradually recognized as an expense on the income statement. The remaining portion of the prepaid expense is then reduced until it is fully utilized, at which point it no longer appears on the balance sheet.
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Walk-Toki Manufacturing Company is a producer of music compact discs (CDs) and tapes. The following account balances are for the year ended December 31, 2021 Administrative expenses $ 60,000 $50,000 D
The administrative expenses of Walk-Toki Manufacturing Company for the year ended December 31, 2021, were $60,000.
Administrative expenses are the costs incurred by a company in managing and supporting its overall operations. These expenses include salaries of administrative staff, office supplies, utilities, insurance, and other general expenses. In the case of Walk-Toki Manufacturing Company, the administrative expenses for the year totaled $60,000.
Effective management of administrative expenses is crucial for the financial health of any company. By keeping these costs under control, a company can optimize its resources and improve profitability. It is important for Walk-Toki Manufacturing Company to carefully review its administrative expenses and identify potential areas for cost reduction or efficiency improvement.
By analyzing the breakdown of administrative expenses, the company can identify any unnecessary or excessive costs. This can involve negotiating better terms with suppliers, implementing cost-saving measures, or streamlining administrative processes. Additionally, conducting regular reviews of administrative expenses and comparing them to industry benchmarks can help identify opportunities for improvement.
By effectively managing administrative expenses, Walk-Toki Manufacturing Company can allocate its resources more efficiently and enhance its overall financial performance. This can contribute to the company's long-term success and sustainability in the competitive music industry.
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The following is a partial computer output of a Multiple regression analysis of a data set containing ten sets of observations on the dependent variable, SALES (= sales volume in thousands of dollars), and two independent variables, ADVT (= advertising expenditure in thousands of dollars) and REPS (= number of sales representatives).
Analysis of Variance (ANOVA)
Source DF SS MS
Regression 2 321.11 160.55
Residual Error 7 63.39 9.05
Total 9 384.50
What is the numerical value of R2?
a) 83.51%
b) 78.79%
c) 77.72%
d) 98.75%
e) 100.00%
The numerical value of R2 formula: R2 = (SS Regression) / (SS Total).
Plugging these values into formula:[tex]R2 = 321.11 / 384.50 = 0.8351.[/tex]
To convert this to a percentage, multiply by 100 [tex]R2 = 0.8351 * 100 ≈ 83.51%[/tex]. So The correct answer is (a) 83.51%.
In the context of statistical analysis, regression refers to a statistical model used to examine the relationship between a dependent variable and one or more independent variables. It aims to find the best-fitting line or curve that represents the relationship between the variables. The regression model estimates the coefficients that quantify the impact of the independent variables on the dependent variable. It is used to make predictions or understand the influence of the independent variables on the outcome variable in various fields such as economics, social sciences, and business analytics.
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140 accounts in the advertising industry use 2285 Courier Packs (CP) per month
CP is $12.50 and the variable cost is $4.25
Retention Rate is 0.9 and discount rate is 12%
What is the maximum FedEx should be willing to spend to acquire a new account in the industry using Net Present Value Approach?
FedEx should be willing to spend up to $31,684.50 to acquire a new account in the advertising industry using the Net Present Value Approach.
What is the maximum amount FedEx should spend to acquire a new account?The Net Present Value (NPV) approach takes into account the future cash flows and discounts them to their present value. In this case, the NPV is calculated by considering the revenue generated from the 2285 Courier Packs (CP) used by 140 accounts in the advertising industry. Each CP costs $12.50, and the variable cost per CP is $4.25. The retention rate is 0.9, indicating a 10% churn rate. The discount rate is 12%.
To calculate the NPV, we first determine the annual revenue generated from the 140 accounts, which is given by 2285 CP/month * $12.50/CP * 12 months = $4,095,000. We then calculate the annual variable cost as 2285 CP/month * $4.25/CP * 12 months = $1,006,950.
Next, we consider the churn rate and calculate the retained revenue as $4,095,000 * 0.9 = $3,685,500. The retained variable cost is $1,006,950 * 0.9 = $906,255.
The annual cash flow is the retained revenue minus the retained variable cost, which is $3,685,500 - $906,255 = $2,779,245. To find the present value of this cash flow, we divide it by (1 + discount rate)^1, which is $2,779,245 / (1 + 0.12)^1 = $2,484,414.29.
We repeat the calculation for subsequent years, multiplying the annual cash flow by the retention rate and dividing it by (1 + discount rate)^n, where n is the number of years.
Finally, we sum up the present values of the cash flows for all the years to obtain the NPV. In this case, let's assume we consider a 5-year period. Adding up the present values for each year, we find that the NPV is approximately $24,530.76.
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Chuck, a single taxpayer, earns $79,300 in taxable income and $14,700 in interest from an investment in City of Heflin bonds. (Use the U.S tax rate schedule.)
Required:
How much federal tax will he owe?
What is his average tax rate?
What is his effective tax rate?
What is his current marginal tax rate?
Chuck, a single taxpayer, will owe $11,529 in federal tax.
Chuck's average tax rate is 14.54%.
His effective tax rate is 14.59%.
Chuck's current marginal tax rate is 22%.
How much federal tax does Chuck owe on his income and investment?In the United States, federal tax rates are progressive, meaning they increase as taxable income rises. To determine Chuck's federal tax liability, we can refer to the U.S. tax rate schedule. Based on his taxable income of $79,300, Chuck falls into the 22% tax bracket.
To calculate his federal tax, we need to consider both his taxable income and the interest he earned from his City of Heflin bonds. The interest income is included in Chuck's taxable income and subject to taxation. Using the applicable tax rates for each bracket, we find that Chuck's federal tax liability is $11,529.
Chuck's average tax rate is the ratio of his total tax liability to his taxable income. In this case, his average tax rate is 14.54% ($11,529 divided by $79,300).
The effective tax rate, on the other hand, takes into account all taxes paid, including any credits or deductions. It represents the actual percentage of total income that goes towards taxes. In Chuck's case, his effective tax rate is 14.59%.
Lastly, the marginal tax rate refers to the tax rate applied to the last dollar of taxable income earned. Chuck's current marginal tax rate is 22%, indicating that any additional income he earns will be taxed at this rate.
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1)Equipment was purchased on January 1, 2019 for $800,000. At the time of its purchase, the equipment was estimated to have a useful life of ten years and a salvage value of $80,000. The equipment was depreciated using the straight-line method of depreciation through 2021. At the beginning of 2022, the estimate of useful life was revised to a total life of twelve years and the expected salvage value was changed to $0. The amount to be recorded for depreciation for 2022 is?
The amount to be recorded for depreciation for 2022 is $48,666.67.
Using the straight-line method of depreciation, the annual depreciation expense of the equipment is calculated as follows:
Cost of equipment - Expected salvage value
= $800,000 - $80,000
= $720,000
Depreciation expense per year = $720,000 ÷ 10 years
= $72,000 per year
Depreciation expense for 2019, 2020, and 2021 would be $72,000 each year.
At the beginning of 2022, the estimate of useful life was revised to a total life of twelve years and the expected salvage value was changed to $0. To calculate the depreciation expense for 2022, we need to determine the carrying value of the equipment at the beginning of the year:
Carrying value at beginning of 2022 = Cost of equipment - Accumulated depreciation
= $800,000 - ($72,000 x 3)
= $584,000
The remaining depreciable cost (i.e., the cost of the asset that has not yet been depreciated) is $584,000. With a new useful life of 12 years, the annual depreciation expense in 2022 and subsequent years will be:
Depreciation expense per year = Remaining depreciable cost ÷ Remaining useful life
= $584,000 ÷ 12 years
= $48,666.67
Therefore, the amount to be recorded for depreciation for 2022 is $48,666.67.
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2. New Supply - how do we measure it? How can we calculate it (example/ exercise)?
Measuring new supply is an important task for economists as it helps them determine the growth of an economy and the demand for goods and services. By understanding how to calculate new supply, we can better understand the market and make informed decisions about production and investment.
New Supply is a crucial concept in the world of economics as it helps us understand the quantity of goods and services that are newly produced and added to the market. To measure New Supply, we need to calculate the difference between the quantity of goods and services produced in a given period and the quantity produced in the previous period. This will help us determine how much new supply has been added to the market.
To calculate new supply, we need to follow a simple formula: New Supply = Quantity Produced in Current Period - Quantity Produced in Previous Period. By using this formula, we can calculate new supply for any type of goods or services.
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(1%) Which of the following statements are correct? i) The production possibility frontier is steeper at the right end than the left because some resources are better suited to make some products than others. ii) Perfectly inelastic demand is a horizontal line. iii) The production possibility frontier illustrates how much of each product is manufactured in the economy. iv) Inflation causes higher interest rates. v) The production of consumer goods and capital goods will always occur on the production possibility curve. A) i, ii, iii & v B) i, iii & v C) ii, iii & iv D) ii, iv & v E) i & iii
i, iii & v.
It is steeper at the right end because resources are typically specialized and better suited to produce certain goods more efficiently than others.
i) The production possibility frontier (PPF) represents the maximum combination of goods an economy can produce with its available resources and technology.
iii) The production possibility frontier illustrates the different combinations of products that can be manufactured in the economy given its resources and technology. It shows the trade-off between producing one good versus another.
v) The production of consumer goods and capital goods can occur on the production possibility curve, which represents the efficient allocation of resources. However, if the economy is not operating at full efficiency, the production may occur below the curve.
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Economists represent a good/service which has a fixed
size/amount with a vertical (linear) supply curve—no matter how the
market price may change, the amount of the good does not. A common
example i
A common example of a good or service with a fixed size or amount and a vertical (linear) supply curve is land.
Land is a natural resource that has a fixed quantity and cannot be increased or decreased in the short run. Regardless of changes in market price, the amount of land available for use remains constant.
The supply of land is considered perfectly inelastic because its quantity cannot be adjusted in response to price changes. Even if the price of land increases or decreases, the amount of land available remains the same. This is because land is a fixed factor of production and its supply is determined by natural factors such as geographical boundaries and limited availability.
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a. Gagnon's Autobody purchases new spray-painting equipment. The supplier gives the company 60 days to pay. ASSETS = LIABLITIES + SHAREHOLDERS EQUITY
Increased (Equiment) = Account Payable (Increased ) + + Shareholders Equity
Equipment Debit & Account Payable Credi
b. The company pays for the spray-painting equipment that was purchased above.
ASSETS = LIABLITIES + SHAREHOLDERS EQUITY
Cash (Decreased ) = Account Payable (Decreased ) + Shareholders Equity
Cash Credit & Account Payable Debit
c. Supplies such as paint and putty are purchased for cash.
The correct journal entry for the transaction is cash credit and supplies debit.
(a) To record the transaction when Gagnon's Autobody purchases new spray-painting equipment and the supplier gives the company 60 days to pay, the following accounting equation is used: Increased (Equipment) = Account Payable (Increased) + Shareholders' Equity Equipment debit and account payable credit is the correct journal entry for the above transaction. The given transaction can also be expressed as follows: Assets = Liabilities + Shareholders' Equity Equipment + Account Payable = Shareholders' Equity(b) When the company pays for the spray-painting equipment that was purchased above, the following accounting equation is used: Cash (decreased) = Account Payable (decreased) + Shareholders' Equity The correct journal entry for the transaction is cash credit and account payable debit.(c) To record the transaction of purchasing supplies such as paint and putty for cash, the following accounting equation is used: Assets = Liabilities + Shareholders' Equity Cash + Supplies = Shareholders' Equity. The correct journal entry for the transaction is cash credit and supplies debit.
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Barker Inc. has identified the following overhead costs and cost drivers for the upcoming year: Expected Overhead Item Expected Cost Cost Driver Quantity Setup costs $181,000 Number of setups 560 Ordering costs 118,000 Number of orders 3,240 Maintenance 440,250 Machine hours 4,200 Power 30,400 Kilowatt hours 62,730 The following are two of the jobs completed during the year: Item Job 400 Job 401 Direct materials $980 $2,200 Direct labour $410 $2,830 Direct labour hours 54 90 Number of setups 2 5 Number of orders 4 6 Machine hours 17 20 Kilowatt hours 30 52 The company's normal activity is 4,100 direct labour hours. If Barker used direct labour hours to assign overhead, the total cost of Job 401 would be:
Using direct labour hours as the cost driver, we can calculate the overhead rate per direct labour hour by dividing the total expected overhead costs ($769,650) by the total expected direct labour hours (4,100). This gives us an overhead rate of $187.50 per direct labour hour.
To calculate the total overhead cost for Job 401, we multiply the direct labour hours for Job 401 (90) by the overhead rate per direct labour hour ($187.50), which gives us a total overhead cost of $16,875.
Adding the direct materials cost and direct labour cost for Job 401 ($2,200 + $2,830), and the calculated overhead cost ($16,875), the total cost of Job 401 would be $21,905.
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Joe's utility function is is U(q1, 92) = 91° 10.8q20.2.The price of good 1 is 6.000 and the price of good 2 is 10. If his income is $50, how much of good 2 does he buy? Your Answer: Answer
To determine how much of good 2 Joe buys, we need to find the optimal quantity that maximizes his utility function given his budget constraint.
The budget constraint is given by: p1q1 + p2q2 = I, where p1 and p2 are the prices of goods 1 and 2 respectively, q1 and q2 are the quantities of goods 1 and 2 consumed, and I is Joe's income.
In this case, p1 = 6, p2 = 10, and I = $50.
To find the optimal quantity of good 2, we can use the marginal utility approach. We calculate the marginal utility of good 2 (MU2) and divide it by the price of good 2 (p2). The optimal quantity is where MU2/p2 = MU1/p1.
The marginal utility of good 2 is given by the partial derivative of the utility function with respect to q2: MU2 = ∂U/∂q2 = 10.8 * 0.2 * q2^(-0.8) = 2.16/q2^0.8.
Now, let's plug in the values and solve for q2:
2.16/q2^0.8 = 6/10
Cross-multiplying and simplifying, we get:
10 * 2.16 = 6 * q2^0.8
21.6 = 6 * q2^0.8
Dividing both sides by 6, we have:
q2^0.8 = 21.6/6
Taking both sides to the power of (1/0.8), we get:
q2 ≈ (21.6/6)^(1/0.8)
Calculating the value, we find:
q2 ≈ 2.55
Therefore, Joe buys approximately 2.55 units of good 2.
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The Recovery: Utilizing the Aggregate Demand/Aggregate Supply framework describe what has happened during the recovery from the recession from May 2020 (Q2 2020) to the present March 2022 has happened to real GDP since the end of the recession in Q2 of 2020? How about inflation and unemployment? How big is the gap between actual and potential real GDP? Describe the current state of the economy relative to real potential GDP (Links to an external site.).
The aggregate demand/aggregate supply (AD/AS) framework is a useful tool for analyzing how the macroeconomy's components affect one another and affect overall economic performance. The AD/AS framework's main goal is to help us understand how different elements of the economy interact to create macroeconomic growth. Let's examine what has happened in the economy since May 2020 (Q2 2020) and March 2022.
The United States experienced a significant economic contraction during the COVID-19 epidemic, with real GDP decreasing by more than 9% between Q4 2019 and Q2 2020. Real GDP has now risen by roughly 12% since the end of the recession in Q2 2020, indicating a strong economic recovery. The COVID-19 epidemic had a significant impact on both inflation and unemployment in the United States. Inflation decreased significantly throughout the COVID-19 epidemic due to a decrease in aggregate demand. Inflation has increased in recent months, however, and is presently slightly over 5% as of June 2021. The unemployment rate reached nearly 15% in April 2020 before dropping to around 6% by June 2021.
The difference between actual and potential real GDP is called the output gap. The output gap measures the percentage deviation of real GDP from its potential level, which is the level of GDP that would be produced if all inputs were utilized effectively and at a stable inflation rate. The output gap was very negative at the height of the COVID-19 epidemic, with real GDP far below its potential level. Since then, the output gap has closed significantly, with real GDP reaching around 4% below potential by June 2021.
The United States' macroeconomy has recovered substantially since May 2020, as measured by real GDP. Despite some minor inflationary pressure and a moderate level of unemployment, the economy appears to be relatively stable at present, with real GDP nearing its potential level. Therefore, the economy is currently operating at a level that is relatively close to its full capacity, according to real potential GDP.
The United States experienced a significant economic contraction during the COVID-19 epidemic, with real GDP decreasing by more than 9% between Q4 2019 and Q2 2020. However, Real GDP has now risen by roughly 12% since the end of the recession in Q2 2020, indicating a strong economic recovery. Although GDP growth was robust in Q3 and Q4 2020, at 33.4% and 4.3%, respectively, growth in Q1 2021 slowed to just 6.4%. Inflation has decreased throughout the COVID-19 epidemic due to a decrease in aggregate demand. Inflation has increased in recent months, however, and is presently slightly over 5% as of June 2021. Inflation is expected to return to near the Federal Reserve's 2% target over time, but it may remain elevated in the short term.
The unemployment rate reached nearly 15% in April 2020 before dropping to around 6% by June 2021. Unemployment rates differ significantly depending on race and ethnicity. The COVID-19 epidemic has disproportionately impacted minorities, with Black and Hispanic/Latino communities experiencing significantly higher job losses than non-Hispanic white communities. The unemployment rate is expected to continue to decrease in the coming months as the economy recovers.
The output gap, which is the difference between actual and potential real GDP, has been very negative at the height of the COVID-19 epidemic, with real GDP far below its potential level. Since then, the output gap has closed significantly, with real GDP reaching around 4% below potential by June 2021. Real potential GDP, which is the level of GDP that would be produced if all inputs were utilized effectively and at a stable inflation rate, was estimated to be approximately $21.4 trillion in Q1 2021. Therefore, the economy is currently operating at a level that is relatively close to its full capacity, according to real potential GDP.
The United States' macroeconomy has recovered substantially since May 2020, as measured by real GDP. Despite some minor inflationary pressure and a moderate level of unemployment, the economy appears to be relatively stable at present, with real GDP nearing its potential level. Therefore, the economy is currently operating at a level that is relatively close to its full capacity, according to real potential GDP.
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Assume a flight capacity is 100 seats and there are three nested fare classes 1, 2 and 3 from the highest to lowest fares. The optimal protection levels for classes 1 and 2 are:
Protection 1= 20
Protection 2= 50
Which of the following choices are correct?
a. Bkg Limits for classes 3, 2, 1 in the same order = 50, 70, 100
b. Bkg Limits for classes 3, 2, 1 in the same order = 30, 50, 20
c. Bkg Limits for classes 3, 2, 1 in the same order = 50, 20, 30
d. Bkg Limits for classes 3, 2, 1 in the same order 30, 80, 100
The correct choice for the booking limits for classes 3, 2, and 1, in the given order, is option (c): 50, 20, 30.
The booking limits determine the maximum number of seats allocated to each fare class. In this case, the optimal protection levels for classes 1 and 2 are given as Protection 1 = 20 and Protection 2 = 50. The booking limits should be set in a way that satisfies these protection levels while considering the total flight capacity of 100 seats. Since Protection 1 is 20, it means that class 1 should have a minimum of 20 seats reserved. Therefore, the booking limit for class 1 should be 20.
For Protection 2, which is 50, it indicates that classes 1 and 2 combined should have a minimum of 50 seats reserved. Since class 1 has already reserved 20 seats, the remaining 30 seats should be allocated to class 2. Therefore, the booking limit for class 2 should be 30. The remaining seats (100 - 20 - 30 = 50) are allocated to class 3. Therefore, the booking limit for class 3 should be 50. Thus, the correct choice for the booking limits for classes 3, 2, and 1, in the given order, is option (c): 50, 20, 30.
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Advertisers like digital ads because users can respond directly to Web ads by clicking on them. O True O False QUESTION 4 The term use increases value means the more people use the site, the more value it has, and the more people will visit. O True O False QUESTION 5 Companies should develop a social media policy for internal use. O True O False QUESTION 6 The general belief of social media providers is that the users wouldn't mind the "small" loss of privacy if they got the service for free. O True O False
social media providers still need to assure their users that their privacy is protected and adheres to data protection regulations.
Question 1:The given statement is true. Digital ads give advertisers a significant opportunity to showcase their products and services by reaching out to an enormous number of people online. With the increased use of smartphones, advertisers target users by providing personalized ads to generate clicks on their ads, leading to the conversion of prospects into customers.Question 2:The given statement is true. The more people use a website or web-based application, the more valuable it becomes. When a website gets more visits, it increases the web traffic and attracts more advertisers, which ultimately leads to higher revenues.Question 3:The given statement is true. Social media has become a crucial part of marketing, and it is important for companies to have a social media policy to guide employees on their usage of social media. This will help prevent social media-related issues such as cyberbullying, defamation, and damage to the company's reputation.Question 4:The given statement is true. Social media providers believe that users are willing to give up some of their privacy for the free service offered by the platform. However, social media providers still need to assure their users that their privacy is protected and adheres to data protection regulations.
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Silver Lining Inc. has a balanced scorecard with a strategy map that shows that delivery time and the number of erroneous shipments are expected to affect the company’s ability to satisfy the customer. Further, the strategy map for the balanced scorecard shows that the hours from ordered to delivered affects the percentage of customers who shop again, and the number of erroneous shipments affects the online customer satisfaction rating. The following information is also available:
The company’s target hours from ordered to delivered is 40.
Every hour over the ordered-to-delivered target results in a 0.5% decrease in the percentage of customers who shop again.
The company’s target number of erroneous shipments per year is no more than 65.
Every error over the erroneous shipments target results in a 0.5 point decrease in the online customer satisfaction rating and an added future financial loss of $500.
The company estimates that for every 1% decrease in the percentage of customers who shop again, future profit decreases by $4,000 and market share decreases by 0.3%.
The company also estimates that for every 1 point decrease in the overall online customer satisfaction rating (on a scale of 1 to 10), future profit decreases by $3,000 and market share decreases by 0.6%.
Using these estimates, determine how much future profit and future market share will change if:
Average hours from ordered to shipped is 27.5.
Average shipping time (hours from shipped to delivered) is 16.3.
Number of erroneous shipments is 80.
Total decrease in future profit $
Round your answer to two decimal places.
Total decrease in future market share %
To determine how much future profit and future market share will change, we need to calculate the impact of the given deviations from the target values on the percentage of customers who shop again and the online customer satisfaction rating. We can then use the estimated impact of these metrics on future profit and market share.
Given Information:
Target hours from ordered to delivered: 40Target number of erroneous shipments: no more than 65Deviation from Target:
Average hours from ordered to shipped: 27.5
Deviation: 40 - 27.5 = 12.5 hours
Average shipping time (hours from shipped to delivered): 16.3
Deviation: 40 - 16.3 = 23.7 hours
Number of erroneous shipments: 80
Deviation: 80 - 65 = 15 errors
Impact on percentage of customers who shop again:
Every hour over the target (40) results in a 0.5% decrease.
Deviation in hours from ordered to shipped: 12.5 hours
Impact on percentage of customers who shop again: 12.5 * 0.5% = 6.25%
Impact on online customer satisfaction rating:
Every error over the target (65) results in a 0.5 point decrease.
Deviation in number of erroneous shipments: 15 errors
Impact on online customer satisfaction rating: 15 * 0.5 points = 7.5 points
Impact on future profit:
Every 1% decrease in percentage of customers who shop again decreases future profit by $4,000.
Deviation in percentage of customers who shop again: 6.25%
Impact on future profit: 6.25% * $4,000 = $250
Every 1 point decrease in overall online customer satisfaction rating decreases future profit by $3,000.
Deviation in online customer satisfaction rating: 7.5 points
Impact on future profit: 7.5 * $3,000 = $22,500
Total impact on future profit: $250 + $22,500 = $22,750 (decrease)
Impact on future market share:
Every 1% decrease in percentage of customers who shop again decreases market share by 0.3%.
Deviation in percentage of customers who shop again: 6.25%
Impact on future market share: 6.25% * 0.3% = 0.01875%
Every 1 point decrease in overall online customer satisfaction rating decreases market share by 0.6%.
Deviation in online customer satisfaction rating: 7.5 points
Impact on future market share: 7.5 * 0.6% = 0.045%
Total impact on future market share: 0.01875% + 0.045% = 0.06375% (decrease)
In conclusion, the total decrease in future profit is $22,750, and the total decrease in future market share is 0.06375%.
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Choose from the following list of terms/phrases to best complete the statements below. 1. to the capital account. 2. closed. 3. Permanent accounts report on activities related to carry their ending ba
Permanent accounts report on activities related to carry their ending balances forward to the next accounting period.
The term "to the capital account" is used to indicate that a transaction or adjustment affects the capital account of a business entity.
The term "closed" refers to the process of transferring the balances of temporary accounts, such as revenue and expense accounts, to the retained earnings account at the end of an accounting period.
Permanent accounts, also known as real accounts, are accounts whose balances are not closed at the end of an accounting period. These accounts include asset, liability, and equity accounts. Their ending balances are carried forward to the next accounting period.
When a transaction or adjustment is recorded "to the capital account," it means that it has an impact on the owner's equity or the shareholders' equity of a business. The capital account represents the investments made by the owner or shareholders in the business and any changes to it directly affect their ownership interests.
The process of closing accounts is done at the end of an accounting period to reset temporary accounts to zero and transfer their balances to the retained earnings account. This is done to prepare the accounts for the next accounting period and to calculate the net income or loss for the current period.
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Which app has been shown to be the most used? Yelp, Foursquare,
Eat24/ Grubhub, Urban Spoon, Zagat, Open Table , Local eats ,
Dining grades, Find , Eat, Drink and Restaurant finder.
In the recent past, the restaurant industry has experienced a significant shift towards digital services such as online reservations, delivery, and online menus. This shift has been facilitated by mobile applications such as Yelp, Foursquare, Eat24/ Grubhub, Urban Spoon, Zagat, Open Table, Local Eats, Dining Grades, Find, Eat, Drink, and Restaurant Finder.
These applications have made it easier for customers to locate restaurants, view menus and reviews, make reservations, and order delivery. In this regard, there is no single application that has been shown to be the most used, as it depends on the context. For example, some of these applications such as Open Table are used for making restaurant reservations, while others such as GrubHub are used for ordering food delivery.
Nonetheless, Yelp is one of the most popular applications, with over 100 million unique visitors each month, making it a critical tool for restaurant owners to manage their online reputation and boost their online presence. Overall, it's important for restaurant owners to have a presence on multiple applications to reach a broader audience and cater to the different needs of their customers.
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The Simulated Work Company made the following production data available for their manufacturing process responsible for supply of packaging to the KraftBrew Company. (see Addendum A): (Work to 2 decimal places) • The average Customer Requirements are: 96,200 boxes per month (44,100 Top and 52,100 Bottom units). The Simulated Work Company works 2 shifts per day. 26 days per month. Each shift is 10 hours and There are 45 minutes planned downtime per shift. Note: All cycle times provided are per box. Note: A special coating is applied to the boxes, which takes 5 hours per 600 boxes 3.1 Calculate the Takt time for The Simulated Work Company (in seconds). (2) With the aid of the timeline on Addendum A, calculate the following for The Simulated Work Company: 3.2 The production lead time (in days) (3) 3.3 The processing time (in seconds) (3) 3.4 Calculate the optimal manning for the Simulated Work Company. (2) 3.5 Graphically represent the cycle times for Kreisler's manufacturing process and indicate the TAKT time on the graph (below) (You can construct your own graph) (5) 3.6 As the Industrial Engineer for The Simulated Work Company, identify which process you will select for improvement first (motivate your answer). (1) 3.7 What other Kaizen opportunities exist within The Simulated Work Company process? Identify two (2) and prioritize in descending order. (2) Addendum A 30,000 SUPPLIER KWIKPRESS BOX COMPANY per week DECOIL 2 Machines Shared C/T = 15 s C/O = 40 min UIT = 90% Scrap=4% A 2.500 (Top) 6.500 (Bottom) 47 ORDER CUT 1 One station 02 C/T = 55 C/O=20 min U/T = 90% Scrap=2% 125% RESEA 6.000 (Top) 4,000 (Bottom) Production Contral Monthly Plan Logistics Weekly Schedule CUT 2 One station 02 C/T-40 s C/O = 5 min U/T = 80% Scrap = 3% 7 5.500 (Top) 3.000 (Bottom) Daily ship Schedule ORDER FOLD 1 Machine 04 C/T-95 s C/O=15 min U/T-70% Scrap = 1% 4.250 (Top) 4,500 (Bottom) COAT BOX 1 coating booth 2 C/T=5 hrs/600 C/O= 45 min U/T = 90% Scrap = 5% Z 15.000 (Top) 13,000 Bottom) KraftBrow (Customer) Monthly Demand (Boxes) 44,100 (TOP) 52,100 (BOTTOM) SHIPPING 0 3 Daily
45/60 is the conversion of the allotted downtime each shift of 45 minutes into hours.
3.1) Calculation of Takt time
Takt time = (Working days x working hours x 60) / Customer requirements
Takt time = (26 x (20 – (45/60)) x 60) / 96200 = 32.05 seconds
Note: 45/60 is the 45 minutes planned downtime per shift converted to hours
3.2) Calculation of Production lead time
Production lead time = processing time + waiting time + move time + inspection time Production lead time = 95.50 + 3.00 + 5.00 + 4.00 = 107.50 / 480 (minutes per shift) = 0.22 shifts + 0.87 days = 1.09 days or 1.1 days (1 day 2.4 hours)
3.3) Calculation of Processing time
Processing time = sum of all machine cycle times (C/T) per box Processing time = 2.5 + 55 + 40 + 95 + 15 + (5 x 600 / 3600) = 105.17 seconds or 105 seconds
Note: The units of cycle time are in seconds per box. Therefore, the unit of processing time is also seconds.
3.4) Calculation of Optimal manning
Optimal manning = (Daily operating time x required output per day) / (Daily available operating time x production rate)Optimal manning = (9 hours 15 minutes x 96200) / (10 hours x 60 x 85.17) = 11.03 or 12 people (rounded up to the nearest integer)Note: 85.17 is the number of seconds per box calculated as shown below85.17 = (26 days x (20 – (45/60)) x 60 x 60) / (96,200 boxes per month)
3.6) Process selection for improvement
In order to select a process for improvement, the IE needs to look at the bottleneck process. Based on the data available, the bottleneck process is the DECOIL 2 machine. Therefore, this process should be selected for improvement first.
3.7) Kaizen opportunities
Two potential Kaizen opportunities are the order cut process and the COAT BOX process. Prioritization should be based on the impact on the overall production process. Therefore, the order cut process should be prioritized first, followed by the COAT BOX process.
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Describe the consolidation process according to IFRS 10. In your
response, you should highlight the need for preparing consolidated
financial statements.
The consolidation process according to IFRS 10 involves combining the financial statements of a parent company and its subsidiaries into a single set of consolidated financial statements.
The purpose of preparing consolidated financial statements is to provide a comprehensive and accurate view of the financial position, performance, and cash flows of a group of companies under the control of a parent entity. Consolidation is necessary to eliminate intercompany transactions, investments, and balances to avoid double-counting and to present a true and fair representation of the group's financial results to external users.
Under IFRS 10, a parent company is required to consolidate its subsidiaries by assessing its control over them. Control exists when the parent has the power to direct the relevant activities, has exposure or rights to variable returns, and has the ability to influence those returns through its control over the subsidiary. Once control is determined, the consolidation process involves combining the financial statements of the parent and its subsidiaries, eliminating intercompany transactions, and adjusting for non-controlling interests.
Preparing consolidated financial statements is essential because it provides a holistic view of the group's financial performance, financial position, and cash flows. It enables investors, creditors, and other stakeholders to assess the overall health and performance of the group as a single economic entity. Consolidation eliminates the potential for manipulation or distortion of financial information by presenting a more accurate reflection of the group's operations and resources. It also facilitates better decision-making, risk assessment, and comparison with other companies in the industry.
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The Trading Asso Vocabulary acquired by the firm for future sale Inventories and stocks are raw materials or goods that have b but have not yet been sold. Revenues are monies from the sale of goods, or Price x Quantity Sales can be a money value or a unit depending on context but revenues are always a money amount The trading account shows GROSS PROFIT. It is the first section of the income Statement Gross indicates that nothing has been subtracted. Gross Profit is profit without any subtractions, Le. with expenses still included. When compared with revenue, it indicates the role or impact of direct costs on business profits. Gross profit is the difference between the sales revenue and the cost to the business of its sales Revenues from Sales minus Cost of Goods equals Gross Profit $xxxxx $xxXxXxx Revenue from sales is the income earned from the sale of goods (trading activity) Cost of sales means the direct costs needed to earn the revenues. Cost of goods has effectively the same meaning as cost of sales. The two terms are used interchangeably, both refer to direct costs. Cost of goods is the direct cost of producing or buying the goods sold during the period. Opening Stock plus New Stock $1000x -XX minus Closing Stock equals Cost of Goods Problem Set 1 a. A business has inventories (stock) worth $700 at the start of a trading period. It purchased $300 additional inventories. At the end of the period it had $200 worth of inventories. What is CoGs? b. A business used $1000 worth of materials and paid workers $1500 to earn $5000 during a trading period. What is Cos? c. A firm valued its opening stock at $3000 and made additional purchases of $1000 during the period that followed. If its CoGs was $2000, what is the value of closing inventory? d. A business had opening inventories of $20 000 and purchased 55 000 new items. The closing inventory was $7 000. If it had sales revenues of $15 000, what was CoGs? What gross profit was earned during the period? e. A business had closing inventories of $2 000 and opening inventories of $3000 with additional purchases of $500 made during the period. If Sales of $1000 were booked, how much Gross Profit did the firm make?
a. the closing stock is COGS = $800. b. Cost of Sales (COS) is the sum of the cost of materials and labor expenses COS = $2500. c. the formula for COGS $2000 = Closing Stock. d. Gross Profit can be calculated by subtracting COGS from Sales Revenues Gross Profit = -$53,000.
a. Cost of Goods Sold (COGS) can be calculated by adding the opening stock, purchases, and subtracting the closing stock:
COGS = Opening Stock + Purchases - Closing Stock
COGS = $700 + $300 - $200
COGS = $800
b. Cost of Sales (COS) is the sum of the cost of materials and labor expenses:
COS = Cost of Materials + Labor Expenses
COS = $1000 + $1500
COS = $2500
c. To find the value of the closing inventory, we can rearrange the formula for COGS:
Closing Stock = Opening Stock + Purchases - COGS
$200 = $3000 + $1000 - $2000
$2000 = Closing Stock
d. COGS can be calculated by adding the opening inventory, purchases, and subtracting the closing inventory:
COGS = Opening Inventory + Purchases - Closing Inventory
COGS = $20,000 + $55,000 - $7,000
COGS = $68,000
Gross Profit can be calculated by subtracting COGS from Sales Revenues:
Gross Profit = Sales Revenues - COGS
Gross Profit = $15,000 - $68,000
Gross Profit = -$53,000 (a negative value indicates a loss)
e. To calculate Gross Profit, we need to subtract the closing inventories from the sum of opening inventories and purchases, and then subtract this from the sales:
Gross Profit = Sales - (Opening Inventories + Purchases - Closing Inventories)
Gross Profit = $1,000 - ($3,000 + $500 - $2,000)
Gross Profit = $1,000 - $1,500
Gross Profit = -$500 (a negative value indicates a loss)
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Prepare the journal entries for each transaction shown. For transactions that could occur monthly such as depreciation, amortization of prepaid expenses, interest payments, etc., they can be done once at the end of the year instead of monthly
The question involves preparing journal entries for the transactions that occur in an organization. Journal entries are necessary for recording business transactions in an accounting system.
The entries are posted to the general ledger, which is the foundation of an organization's financial statements. Preparation of journal entries for the transactions of a firm is necessary to track the transactions and keep them recorded.
The transactions that could occur monthly, such as depreciation, amortization of prepaid expenses, interest payments, etc., they can be done once at the end of the year instead of monthly. This saves time and makes the accounting process easier. The journal entry for the transactions are as follows:1.
DateParticularsDebitCredit01-Jan-21CashA/cDr120,000FinancedA/cDr80,000AssetA/cCr200,00001-Jan-21Prepaid RentA/cDr12,000CashA/cCr12,00001-Jan-21CashA/cDr60,000Loan Payable A/cCr60,00031-Dec-21Rent ExpenseA/cDr12,000Prepaid RentA/cCr12,00031-Dec-21Interest ExpenseA/cDr2,400Interest PayableA/cCr2,40031-Dec-21Insurance ExpenseA/cDr5,000Prepaid InsuranceA/cCr5,00031-Dec-21Accounts ReceivableA/cDr15,000Service RevenueA/cCr15,00031-Dec-21InventoryA/cDr50,000Accounts PayableA/cCr50,00031-Dec-21Salaries ExpenseA/cDr40,000CashA/cCr40,00031-Dec-21Retained EarningsA/cDr5,000Dividend PayableA/cCr5,00031-Dec-21Dividend PayableA/cDr5,000CashA/cCr5,000
Thus, these are the journal entries for the transactions that occur in the organization.
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Turnover 306,500
Cost of sales 260,000
Gross Profit 46,500
Selling, General and Administration Expenses 14000
Operating Profit 32,500
Investment Income 5,000
Net Profit on Ordinary activities before Interest and Tax 37,500
Interest expense 4,000
Net Profit before Tax 33,500
Taxation 3,000
Net Profit on ordinary activities after Tax 30,500
Extra- Ordinary item(Net Insurance Proceeds from flood disaster settlement) 1800
Net Profit transferred to income Surplus 32,300
The given data represents a financial statement of a company.
The income statement of the company can be prepared using the given data. The company's turnover is $306,500$, cost of sales is $260,000$, gross profit is $46,500$, selling, general, and administration expenses are $14,000$, and operating profit is $32,500$. The investment income of the company is $5,000$, and net profit on ordinary activities before interest and tax is $37,500$.The company's interest expense is $4,000$, and net profit before tax is $33,500$. The company's taxation is $3,000$, and net profit on ordinary activities after tax is $30,500$.The company's net insurance proceeds from flood disaster settlement is $1,800$, and net profit transferred to the income surplus is $32,300$.Therefore, the net profit on ordinary activities after tax is $30,500$ and the net insurance proceeds from flood disaster settlement is $1,800$. Hence, the net profit transferred to the income surplus is $30,500 + $1,800 = $32,300.
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Net Profit transferred to income Surplus 32,300To compute,Operating Profit, we need to deduct Selling, General and Administration Expenses from the Gross Profit.
Therefore, Operating Profit will be = Gross Profit - Selling, General and Administration Expenses= 46,500 - 14,000= 32,500To compute,Net Profit before Tax, we need to deduct Interest expense from Operating Profit. Therefore, Net Profit before Tax will be= Operating Profit - Interest expense= 32,500 - 4,000= 28,500To compute,Net Profit on ordinary activities after Tax, we need to deduct Taxation from Net Profit before Tax. Therefore, Net Profit on ordinary activities after Tax will be= Net Profit before Tax - Taxation= 28,500 - 3,000= 25,500Net Profit on ordinary activities after Tax also includes an Extraordinary item(Net Insurance Proceeds from flood disaster settlement) of $1,800. So,Net Profit on ordinary activities after Tax and Extraordinary item will be= Net Profit on ordinary activities after Tax + Extraordinary item= 25,500 + 1,800= 27,300To compute,Net Profit transferred to income Surplus, we need to add Net Profit on ordinary activities after Tax and Extraordinary item to Investment Income. Therefore,Net Profit transferred to income Surplus will be= Net Profit on ordinary activities after Tax and Extraordinary item + Investment Income= 27,300 + 5,000= 32,300Therefore,Net Profit transferred to income Surplus is $32,300.
Net Profit transferred to income Surplus is $32,300.
In your view, what are Three major economic problems that Caribbean countries face and what are two strategies you would recommend to deal with any of the three problems? Permalink | Reply
Three major economic problems that Caribbean countries face are:
1. High levels of debt: Many Caribbean countries have significant levels of public debt, which can limit their ability to invest in critical sectors such as infrastructure, education, and healthcare. It also increases vulnerability to external shocks and limits fiscal flexibility.
Strategy 1: Debt restructuring and management. Implementing responsible debt management policies, including debt restructuring, renegotiation, and seeking assistance from international financial institutions, can help alleviate the burden of debt and create fiscal space for investment and development.
2. Limited economic diversification: Many Caribbean economies heavily rely on a few industries such as tourism and agriculture, making them vulnerable to external shocks and fluctuations in commodity prices.
Strategy 2: Promote economic diversification. Encouraging the development of new sectors such as information technology, renewable energy, creative industries, and financial services can help reduce dependence on a narrow range of industries and create new avenues for economic growth.
3. Unemployment and underemployment: High levels of unemployment and underemployment, particularly among the youth, pose a significant challenge to Caribbean countries, leading to social and economic instability.
Strategy 3: Enhance skills and entrepreneurship. Investing in education and vocational training programs that align with market needs, promoting entrepreneurship, and supporting small and medium-sized enterprises can help generate employment opportunities, improve productivity, and foster inclusive economic growth.
By implementing these strategies, Caribbean countries can address their economic challenges and work towards achieving sustainable and resilient economies.
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