Answer:
Give the nonbreaching party the benefit of its bargain.
Explanation:
A contract can be defined as an agreement between two or more parties (group of people) which gives rise to a mutual legal obligation or enforceable by law.
There are different types of contract in business and these includes: fixed-price contract, cost-plus contract, bilateral contract, implies contract, unilateral contract, adhesion contract, unconscionable contract, option contract, express contract, executory contract, etc.
Mutual assent is a legal term which represents an agreement by both parties to a contract. When two parties to a contract both have an understanding of the parameters, terms and conditions surrounding a contract, it ultimately implies that they are in agreement; this is generally referred to as mutual assent.
In contract law, damages can be defined as an amount of money that is paid to a claimant (innocent party) as a compensation for a breach of contractual agreement and it's based on the amount of interest he or she has vested in the contract. Thus, it covers the incurred by the nonbreaching party (claimant or innocent party) due to a breach of contract by the other party.
Hence, the ultimate goal of contract damages is to give the nonbreaching party the benefit of its bargain.
MC Qu. 160 Webster Corporation's monthly... Webster Corporation's monthly projected general and administrative expenses include $4,300 administrative salaries, $1,700 of other cash administrative expenses, $2,200 of depreciation expense on the administrative equipment, and .5% monthly interest on an outstanding bank loan of $27,000. Compute the total general and administrative expenses to be reported on the general and administrative expense budget per month.
Answer:
the total general and admin expense is $8,200
Explanation:
The computation of the total general and admin expense is given below:
Administrative salaries $4,300
Other cash administrative expenses $1,700
Depreciation $2,200
General and administrative expenses budget $8,200
hence, the total general and admin expense is $8,200
We simply added the above 3 items so that the correct value could come
If you are interested in working for a specific company, what type of job site should you look at for opening?
a. Geographic specific site
b. Industry specific site
C. Company site
d. General job site
Please select the best answer from the choices provided
A
B
0 0 0 0
C
D
Save and Exit
Next
Submit
retum
Answer:
c
Explanation:
if you got to the company site and go under careers, it will show you the jobs with descriptions they have available
Enviro Company issues 10.50%, 10-year bonds with a par value of $430,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 7.50%, which implies a selling price of 127.875. The straight-line method is used to allocate interest expense. 1. Using the implied selling price of 127.875. what are the issuer’s cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What is the amount of bond interest expense recorded on the first interest payment date?
Answer:
1.
549,862.5
2.
$331,637.5
3.
$16,581.87
Explanation:
1.
Cash proceeds = Par Value of the bond x Price ratio to par value
Cash proceeds = $430,000 x 127.875%
Cash proceeds = $549,862.5
2.
Bond Interest expense = Total Coupon payment - Premium on bond
Bond Interest expense = ( $430,000 x 10.50% x 10 ) - ( $549,862.5 - $430,000 )
Bond Interest expense = $451,500 - $119,862.5
Bond Interest expense = $331,637.5
3.
Bond Interest expense = Coupon Payment - Premium on Bond amortization
Bond Interest expense = ( $430,000 x 10.5% x 6/12 ) - ( ( $549,862.5 - $430,000 ) / ( 10 x 2 ) )
Bond Interest expense = $22,575 - $5,993.13
Bond Interest expense = $16,581.87
The records of the Dodge Corporation show the following results for the most recent year:
Sales (16,000 units) $256,000
Variable expenses $160,000
Net operating income $32,000
Given the provided data, identify the contribution margin.
Answer:
unitary contribution margin= $6
Explanation:
Giving the following information:
Sales (16,000 units) $256,000
Variable expenses $160,000
First, we need to calculate the unitary selling price and unitary variable cost:
Selling price= 256,000 / 16,000= $16
Unitary variable cost= 160,000 / 16,000= $10
Now, the unitary contribution margin:
unitary contribution margin= selling price - unitary variable cost
unitary contribution margin= 16 - 10
unitary contribution margin= $6
There is often litter along highways but rarely in people's yards. Which of the following statements help explain this observation?
a. No one cares if there is litter on the highway
b. When a person litters along a highway, others bear the negative externality of having to clean it up.
c. Littering in your own yard imposes costs to you, so you are less likely to do it.
Answer:
b
c
Explanation:
A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced. Government can discourage the production of activities that generate negative externality by taxation. Taxation increases the cost of production and therefore discourages overproduction. Tax levied on externality is known as Pigouvian tax.
Government can regulate the amount of externality produced by placing an upper limit on the amount of negative externality permissible
Coase theorem has been proposed as a solution to externality. According to this theory, when there are conflicting property rights, bargaining between parties involved can lead to an efficient outcome only if the bargaining cost is low
Another solution to negative externality is through the activities of charities. Charities can raise donations to limit or regulate the activities of firms that constitutes a negative externality.
Break-Even Units: Units for Target Profit Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 16,000 units at a price of $320 each. Product costs include: Direct materials $68
Direct labor $40
Variable overhead $12
Total fixed factory overhead $500,000
Variable selling expense is a commission of 5 percent of price; fixed selling and administrative expenses total $116,400.
Required:
1. Calculate the sales commission per unit sold. Calculate the contribution margin per unit.
2. How many units must Jay-Zee Company sell to break even? Prepare an income statement for the calculated number of units.
3. Calculate the number of units Jay-Zee Company must sell to achieve target operating income (profit) of $333,408.
4. What if the Jay-Zee Company wanted to achieve a target operating income of $322,000? Would the number of units needed increase or decrease compared to your answer in Requirement 3? Compute the number of units needed for the new target operating income.
Answer:
Jay-Zee Company
1. Sales commission per unit sold is:
= $16.
The Contribution margin per unit is:
= $184.
2. Break-even units are:
= 3,350 units
Income Statement for 3,350 units:
Sales revenue $1,072,000 ($320 * 3,350)
Variable cost of goods sold 455,600 ($136 * 3,350)
Contribution margin $616,400 ($184 * 3,350)
Fixed costs:
Factory overhead $500,000
Selling and administrative 116,400
Total fixed costs $616,400
Net operating income $0
3. Units to sell to achieve income of $333,408 are:
= 5,162 units
4. The number of units needed would decrease.
The number of units needed for the new target operating income is:
= 5,100 units.
Explanation:
a) Data and Calculations:
Planned sales unit for the next year = 16,000
Sales price per unit = $320
Product costs:
Direct materials $68
Direct labor $40
Variable overhead $12
Total fixed factory overhead $500,000
Variable selling expense = $16 ($320 * 5%)
Fixed selling and administrative expenses = $116,400
Total variable costs per unit = $136
Contribution margin per unit = $184 ($320 - $136)
Total fixed costs = $616,400 ($500,000 + $116,400)
To break-even, units to sell = $616,400/$184 = 3,350 units
Units to sell to achieve a profit target of $333,408:
= $616,400+ $333,408/$184
= 5,162 units
Units to sell to achieve a profit target of $333,408:
= $616,400+ $322,000/$184
= 5,100 units
Your father offers you a choice of $120,000 in 11 years or $48,500 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 11 percent, what is the present value of the $120,000
Answer:
$38,074
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 to 10 = 0
Cash flow in year 11 = $120,000
I = 11
PV = 38,074
To determine PV using a financial calculator take the following steps:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Given the choice, i would choose $48,500 today.
An income statement under absorption costing includes which of the following: ______________
a. Direct materials
b. Direct labor
c. Variable overhead
d. Fixed overhead
Answer:
a. Direct materials
b. Direct labor
c. Variable overhead
d. Fixed overhead
Explanation:
The absorption costing is the costing in which the income statement should includes all types of production cost i.e. direct material cost, direct labor cost, variable overhead and the fixed overhead
So as per the given statement, all the four types of costing should be involved while preparing the income statement under the absorption costing
Hence, all 4 options should be considered
Direct labor variances Bellingham Company produces a product that requires 3 standard direct labor hours per unit at a standard hourly rate of $22.00 per hour. 15,000 units used 61,900 hours at an hourly rate of $19.85 per hour. What is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
a. Direct labor rate variance $ Favorable
b. Direct labor time variance $ Unfavorable
c. Direct labor cost variance $ Favorable
Answer:
Results are below.
Explanation:
To calculate the direct labor rate variance, we need to use the following formula:
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (22 - 19.85)*61,900
Direct labor rate variance= $133,085
Now, the direct labor time (efficiency variance):
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (45,000 - 61,900)*22
Direct labor time (efficiency) variance= $371,800 unfavorable
Standard quantity= 15,000*3= 45,000
Finally, the total direct labor cost variance:
Total direct labor cost variance= Direct labor rate variance - Direct labor time (efficiency) variance
Total direct labor cost variance= 133,085 - 371,800
Total direct labor cost variance= $238,715 unfavorable
Gillian reprimands an employee in front of his peers for speaking out of turn during a sales meeting. Which of the following types of reinforcement does this scenario demonstrate?
a. Extinction
b. Negative reinforcement
c. Positive reinforcement
d. Positive punishment
Answer:
The correct answer is the option B: Negative reinforcement.
Explanation:
To begin with, in the field of behavioral psychology and business management the concept known as "Reinforcement" refers to the action or process of changing or keeping someone's behavior by the action of having an specific reaction that will be negative or positive accepted by the individual whose behavior we are looking to change or maintain. Therefore that the reinforcement is followed by a particular stimulus that the individual normally has when making the action that we want to change or keep.
The negative reinforcement refers to the process of producing a consequence with the purpose of avoiding or trying to stop certain stimulus so that the individual will stop that behavior in order to avoid the consequence.
Retained earnings, December 31, 2013 $342,700
Cost of buildings purchased during 2014 44,100
Net income for the year ended December 31, 2014 56,200
Dividends declared and paid in 2014 32,800
Increase in cash balance from January 1, 2014, to December 31, 2014 22,700
Increase in long-term debt in 2014 45,300
Required:
Calculate the Retained Earnings balance as of December 31, 2014.
Answer:
the ending retained earning balance is $366,100
Explanation:
The computation of the ending retained earning balance is given below:
= Opening balance of retained earnings + net income - dividend paid
= $342,700 + $56,200 - $32,800
= $366,100
Hence, the ending retained earning balance is $366,100
The same should be considered and relevant
A machine costs $5240 and produces benefits of $1000 at the end of each year for eight years. Assume an annual interest rate of 10%. Use engineering economics principals a.) What is the payback period in years
Answer:
5.24 YEARS
Explanation:
Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows
Payback period = Amount invested / cash flow
5240 / 1000 = 5.24 YEARS
The Nearside Co. just paid a dividend of $1.65 per share on its stock. The dividends are expected to grow at a constant rate of 5 percent per year, indefinitely. Investors require a return of 12 percent on the stock. a. What is the current price
Answer:
$24.7
Explanation:
The first step is to calculate D1
1.65(1+5/100)
1.65(1+0.05)
1.65(1.05)
=>1.73
Therefore the current price can be calculated as follows
= D1/required rate-growth rate
= 1.73/0.12-0.05
= 1.73/0.07
= 24.7
Hence the current price is $24.7
Initially this seen as a temporary crop until the colonists learned that they could diversify it wine and other food crops. Colonists wanted to grow this crop because it made them money in short time with little investment. What was this crop?
Answer:
Tobacco
Explanation:
Tobacco, grown from seeds stolen from the Spanish, was the cash crop that saved the colonists in the New World. Because growing tobacco required lots of hard work and labor, more people were needed to work in the fields. The more workers one had, the more tobacco they could grow and the greater the profit they could gain.
Kanye Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $178,000, has an estimated useful life of 7 years, a salvage value of zero, and will increase net annual cash flows by $36,562.
What is its approximate internal rate of return? (Round answer to 0 decimal place, e.g. 13%.)
Internal rate of return
Answer: 10%
Explanation:
You can use Excel to solve for this.
The investment will be in negative as shown below.
Input the increase in net annual cash flows 7 times to represent 7 years.
IRR = 9.9999%
= 10%
Madison Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are: M N OUnit sales price$12 $10 $11Unit variable costs 9 8 9Total fixed costs are $585,000. The selling price per composite unit for the current sales mix (rounded to the nearest cent) is:
Answer:
Selling price per composite unit= $11.3
Explanation:
Giving the following information:
Madison Corporation sells three products (M, N, and O) in the following mix: 3:1:2.
Unit price and cost data are: M N OUnit sales price$12 $10 $11
First, we need to calculate the sales proportion for each product:
M= 3/6= 0.5
N= 1/6= 0.17
O= 2/6= 0.33
Now, the selling price per composite unit:
Selling price per composite unit= (0.5*12) + (0.17*10) + (0.33*11)
Selling price per composite unit= $11.3
Billy Bob Company manufactures fine furniture and grandfather clocks. Billy Bob has an excellent reputation, and each grandfather clock sells for several thousand dollars. Which of the following is an indirect cost, assuming the cost object is the Clock Department?
a) Salary of the clock production supervisor
b) Depreciation on the company's factory building
c) Depreciation on clock-making equipment.
d) All of the answers are correct
Answer:
Billy Bob Company
Indirect Costs are:
d) All of the answers are correct
Explanation:
The indirect costs cannot be directly identified with a single grandfather clock. They are not direct costs but are allocated to the Clock Department. For example, Billy Bob Company incurs these indirect costs for producing grandfather clocks: the Clock Department's supervisor's salary expenses, Depreciation on factory building and clock-making equipment, and other indirect materials and labor.
If the government changed the per-unit tax from $5.00 to $2.50, then the price paid by buyers would be $7.50, the price received by sellers would be $5, and the quantity sold in the market would be 1.5 units. Compared to the original tax rate, this lower tax rate would
Answer: Decrease government revenue and decrease deadweight loss from the tax.
Explanation:
Decrease gov rev and decrease deadweight loss from the tax.
At AB, the government revenue will be:
= Quantity × Tax rate
= 1 × 5
= 5
The deadweight loss will be:
Deadweight Loss= 0.5 × Change in quantity × Change in Price
= 0.5 × (9-4) × (2-1)
= 0.5 × 5 × 1
= 2.5
At CD,
the government revenue will be:
= 1.5 × 2.5
= 3.75
The deadweight loss will be:
= 0.5 × (7.5-5) × (2-1.5)
= 0.5 × 2.5 × 0.5
= 0.625
Based on the calculation above, both the government revenue and the deadweight loss decreases.
Payroll Entries
The payroll register for D. Salah Company for the week ended May 18 indicated the following:
Salaries $615,000
Federal income tax withheld 165,000
The salaries were all subject to the 6.0% social security tax and the 1.5% Medicare tax. In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.8%, respectively, on $45,000 of salaries.
For a compound transaction, if an amount box does not require an entry, leave it blank.
a. Journalize the entry to record the payroll for the week of May 18.
May 18 Salaries Expense
Social Security Tax Payable
Medicare Tax Payable
Employees Federal Income Tax Payable
Salaries Payable
Feedback
Gross pay is the amount that employees have earned before taxes and deductions. A portion of employees' earnings are owed for such items as state and federal taxes. Net pay is also known as take-home pay.
b. Journalize the entry to record the payroll tax expense incurred for the week of May 18.
May 18 Payroll Tax Expense
Social Security Tax Payable
Medicare Tax Payable
State Unemployment Tax Payable
Federal Unemployment Tax Payable
Answer:
A. Dr Salaries expense 615000
Cr Social security tax payable 36900
Cr Medicare tax payable 9225
Cr Employment federal income tax payable
165000
Cr Salaries payable 403875
B. Dr Payroll tax expenses 48915
Cr Social security tax payable 36900
Cr Medicare tax payable 9225
Cr State unemployment taxes payable 2430
Cr Federal unemployment taxes payable 360
Explanation:
A. Preparation of the journal entry to record the payroll for the week of May 18.
May 18
Dr Salaries expense 615000
Cr Social security tax payable 36900
(615000*6%)
Cr Medicare tax payable 9225
(615000*1.5%)
Cr Employment federal income tax payable
165000
Cr Salaries payable 403875
(615000-36900-9225-165000)
(To record the payroll for the week of May 18)
B. Preparation of the journal entry to record the payroll tax expense incurred for the week of May 18
May 18
Dr Payroll tax expenses 48915
(36900+9225+2430+360)
Cr Social security tax payable 36900
(615000*6%)
Cr Medicare tax payable 9225
(615000*1.5%)
Cr State unemployment taxes payable 2430
(45000*5.4%)
Cr Federal unemployment taxes payable 360
(45000*0.8%)
(To record the payroll tax expense incurred )
An important assumption that is made when constructing a supply schedule is only price and quantity matter in determining supply. supply is too important to be left to the marketplace. demand has a positive slope. firms always want to sell a certain amount of a product. all other determinants of supply are held constant.
Answer:
only price and quantity matter in determining supply
all other determinants of supply are held constant
Explanation:
At the time of constructing the supply schedule, only price and quantity should be considered and other factors should remain the same because the factors that impacts the supply other than the price so it shifted the supply curve but when only the price changed so there should be the movement also law of supply represent the direct relationship between tfhe price and the supply
The Doodad Company purchases a machine for $400,000. The machine has an estimated residual value of $20,000. The company expects the machine to produce two million units. The machine is used to make 400,000 units during the current period. Use the information above to answer the following question. If the units-of-production method is used, the depreciation expense for this period is: A. $80,000. B. $400,000. C. $380,000. D. $76,000.
Answer: $76,000
Explanation:
Depreciation per unit = (Cost - Residual value) / Number of units expected to be produced
= (400,000 - 20,000) / 2,000,000
= $0.19 per unit
40,000 units were used this period so the depreciation is:
= 400,000 * 0.19
= $76,000
A steam boiler is needed as part of the design of a new plant. The boiler can be fired by natural gas, fuel oil, or coal. A cost analysis shows that natural gas would be the cheapest at $30,000; for fuel oil it would be $55,000; and for coal it would be $180,000. If natural gas is used rather than fuel oil, the annual fuel cost will decrease by $7,500. If coal is used rather than fuel oil, the annual fuel cost will be $15,000 per year less. Assuming 8% interest, a 20-year analysis period, and no salvage value, which is the most economincal installation?
Answer:
Natural gas boiler
Explanation:
Alternative Installation cost Annual savings
natural gas $30,000 $7,500
fuel oil $55,000 not given
coal $180,000 $15,000
we need to find the PV of natural gas savings = $7,500 * 9.8181 (PVIFA, 8%, 20 periods) = $73,638
the PV of coal savings = $15,000 - 9.8181 (PVIFA, 8%, 20 periods) = $147,272
NPV of natural gas boiler = $73,638 - $30,000 = $43,638
NPV of coal boiler = $147,272 - $180,000 = -$32,728
The difference between domestic and international marketing lies in the different concepts of marketing.
Answer:
The difference between domestic and international marketing lies in the different concepts of marketing. An international marketer must deal with at least two levels of uncontrollable uncertainty. ... The foreign policies of a country have a direct effect on a firm's international marketing success
Use the following information to determine the break-even point in units (rounded to the nearest whole unit): Unit sales 53,000
Units Unit selling price $14.65
Unit variable cost $7.80
Fixed costs $189,000
12,901
27,591
8,419
46,545
24,231
Answer:
27,591 units
Explanation:
The computation of the break even point in units is shown below:
Contribution margin is
= (Sales - Variable costs)
= ($14.65 - $7.80)
=$6.85
Now
breakeven point in units is
= fixed cost ÷ Contribution margin
= ($189,000 ÷ $6.85)
= 27,591 units
MC Qu. 90 Marks Corporation has two operating... Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: Office ExpensesTotal Allocation Basis Salaries$44,000 Number of employees Depreciation 21,000 Cost of goods sold Advertising 44,000 Net sales ItemDrilling Grinding Total Number of employees 900 2,100 3,000 Net sales$350,000 $525,000 $875,000 Cost of goods sold$91,200 $148,800 $240,000 The amount of salaries that should be allocated to Grinding for the current period is:
Answer:
$30,800
Explanation:
Amount of salaries to allocated to Grinding = Total salary cost * Number of employees in grinding/Total Number of employees
Amount of salaries to allocated to Grinding = $44,000 * 2,100/3,000
Amount of salaries to allocated to Grinding = $44,000 * 0.7
Amount of salaries to allocated to Grinding = $30,800
So, the amount of salaries that should be allocated to Grinding for the current period is $30,800
Cash Dividends King Tut Corporation issued 19,000 shares of common stock, all of the same class; 12,000 shares are outstanding and 7,000 shares are held as treasury stock. On December 1, 2019, King Tut's board of directors declares a cash dividend of $0.50 per share payable on December 15, 2019, to stockholders of record on December 10, 2019. Required: Prepare the appropriate journal entries for the (a) date of declaration, (b) date of record, and (c) date of payment. If no entry is required, choose "No entry required" and leave the amount boxes blank. (a) fill in the blank 2 fill in the blank 4 (b) fill in the blank 6 fill in the blank 8 (c) fill in the blank 10 fill in the blank 12
Answer:
King Tut Corporation
Journal Entries:
December 1, 2019
Debit Cash dividend $2,500
Credit Dividend Payable $2,500
To record the declaration of $0.50 per share payable on December 15, 2019, to stockholders of record on December 10, 2019.
December 10, 2019 No journal entry
December 15, 2019
Debit Dividend Payable $2,500
Credit Cash $2,500
To record the payment of dividends.
Explanation:
a) Data and Calculations:
Issued 19,000 shares of common stock, all of the same class;
12,000 shares are outstanding and
7,000 shares are held as treasury stock.
December 1, 2019, Cash dividend $2,500 Dividend Payable $2,500
$0.50 per share payable on December 15, 2019, to stockholders of record on
December 10, 2019 No journal entry
December 15, 2019, Dividend Payable $2,500 Cash $2,500
The following information relating to a company's overhead costs is available.
Actual total variable overhead$73,000
Actual total fixed overhead$17,000
Budgeted variable overhead rate per machine hour$2.50
Budgeted total fixed overhead$15,000
Budgeted machine hours allowed for actual output 30,000
Based on this information, the total variable overhead variance is:_______.
Answer: $2,000 favorable
Explanation:
Total variable overhead variance = Budgeted variable overhead - Actual total variable overhead
Budgeted variable overhead = Budgeted machine hours allowed for actual output * Budgeted variable overhead rate per machine hour
= 30,000 * 2.50
= $75,000
Total variable overhead variance = 75,000 - 73,000
= $2,000 favorable
Favorable because the actual amount was less than the budgeted one.
An asset is purchased on January 1 for $44,700. It is expected to have a useful life of five years after which it will have an expected residual value of $6,000. The company uses the straight-line method. If it is sold for $32,000 exactly two years after it is purchased, the company will record a: Multiple Choice
Answer:
Gain of $2,780
Explanation:
Calculation to determine what The company will record If it is sold for $32,000 exactly two years after it is purchased
First step is to calculate the Annual depreciation expense using this formula
Annual depreciation expense = (Cost − Residual value) × (1 ÷ Useful life)
Let plug in the formula
Annual depreciation expense = ($44,700 − $6,000) × (1 ÷ 5)
Annual depreciation expense =$38,700× (1 ÷ 5)
Annual depreciation expense =$ 7,740
Second step is to calculate the Accumulated depreciation using this formula
Accumulated depreciation = Year 1 depreciation expense + Year 2 depreciation expense
Let plug in the formula
Accumulated depreciation = $7,740 +$7,740
Accumulated depreciation = $15,480
Now let calculate the Gain (loss) on disposal
Using this formula
Gain (loss) on disposal = Proceeds from sale − (Cost − Accumulated Depreciation at time of sale)
Let plug in the formula
Gain (loss) on disposal = $32,000 − ($44,700 − $15,480)
Gain (loss) on disposal =$32,000-$29,220
Gain (loss) on disposal=$2,780
Therefore If it is sold for $32,000 exactly two years after it is purchased, the company will record a GAIN of $2,780
Cash Flow Activity 1. Sold stock investments for cash. 2. Received cash payments from customers. 3. Paid cash for wages and salaries. 4. Purchased inventories with cash. 5. Paid cash dividends. 6. Issued common stock for cash. 7. Received cash interest on a note. 8. Paid cash interest on outstanding notes. 9. Received cash from sale of land. 10. Paid cash for property taxes on building.
Answer:
Question is to classify each entry as either operating, investing, or financing activities assuming the indirect method.
Operating activities are those that involve the company's day to day activities of selling their goods and services.
Investing activities refer to those that involve the company buying or selling fixed assets or the securities of other companies.
Financing activities are those that have to do with Equity and long term debt which means that dividends fall here.
1. Sold stock investments for cash. ⇒ INVESTING
2. Received cash payments from customers. ⇒ OPERATING
3. Paid cash for wages and salaries. ⇒ OPERATING
4. Purchased inventories with cash.⇒ OPERATING
5. Paid cash dividends. FINANCING
6. Issued common stock for cash. ⇒ FINANCING
7. Received cash interest on a note. ⇒ OPERATING
8. Paid cash interest on outstanding notes. ⇒ OPERATING
9. Received cash from sale of land. ⇒ INVESTING
10. Paid cash for property taxes on building. ⇒ OPERATING
Collegiate Publishing Inc. began printing operations on March 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $7,500 of indirect materials and $11,800 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form:
Job 301
Direct materials $10,000
Direct labor 8,000
Factory overhead 6,000
Total $24,000
Job 302
Direct materials $20,000
Direct labor 17,000
Factory overhead 12,750
Total $49,750
Job 303
Direct materials $24,000
Direct labor 18,000
Factory overhead â
Job 304
Direct materials $14,000
Direct labor 12,000
Factory overhead â
Required:
Journalize the Jan. 31 summary entries
.
Answer:
Collegiate Publishing Inc.
Journal Entries:
Debit Finished Goods Inventory $73,750
Credit Work in Process:
Job 301 $24,000
Job 302 $49,750
To record the transfer of completed jobs to Finished Goods Inventory.
Debit Work in Process:
Job 303 $24,000
Job 304 $14,000
Credit Raw materials $38,000
To record raw materials used in production.
Debit Work in Process:
Job 303 $18,000
Job 304 $12,000
Credit Payroll $30,000
To record direct labor incurred in production.
Debit Manufacturing Overhead $19,300
Credit Raw materials $7,500
Credit Payroll $11,800
To record manufacturing overhead costs for indirect materials and labor.
Explanation:
a) Data and Calculations:
Indirect materials = $7,500
Indirect labor = $11,800
Job Cost Sheets: Job 301 Job 302 Job 303 Job 304
Direct materials $10,000 $20,000 $24,000 $14,000
Direct labor 8,000 17,000 18,000 12,000
Factory overhead 6,000 12,750
Total $24,000 $49,750
Summary Entries:
Finished Goods Inventory $73,750 Work in Process: Job 301 $24,000 Job 302 $49,750
Work in Process: Job 303 $24,000 Job 304 $14,000 Raw materials $38,000
Work in Process: Job 303 $18,000 Job 304 $12,000 Payroll $30,000
Manufacturing Overhead $19,300 Raw materials $7,500 Payroll $11,800
The Jan. 31 summary journal entries are:
a. Dr Work in process $68,000
($10,000+$20,000+$24,000+$14,000)
Dr Factory Overhead $ 7,500
Cr Materials $75,500
($68,000+$7,500)
(To record material used)
b. Dr Work in process $55,000
($8,000+$17,000 +$18,000+$12,000)
Dr Factory Overhead $11,800
Cr Wages Payable $66,800
($55,000+$11,800)
(To record labor used)
c. Dr Work in process $41,250
($55,000×75%)
Cr Factory Overhead $41,250
(To record overhead applied)
Job 301:( $6,000/$8,000=75%)
Job 302:($12,750/$17,000=75%)
d. Dr Finished Goods $73,750
Cr Work in process $73,750
($24,000+$49,750)
(To record goods completed)
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