Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 50,000 shares of preferred 2% stock, $40 par and 750,000 shares of $7 par common stock. The following selected transactions were completed during the first year of operations:
Journalize the transactions.
a. July 1. Issued 400,000 shares of common stock at par for cash.
b. July. 1. Issued 1,000 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
c. Aug. 7. Issued 80,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $250,000, $400,000, and $70,000, respectively. For a compound transaction, if an amount box does not require an entry, leave it blank.
d. Sept. 20. Issued 25,000 shares of preferred stock at $44 for cash. For a compound transaction, if an amount box does not require an entry, leave it blank.

Answers

Answer 1

Answer and Explanation:

The Journal entries are shown below:-

1. Cash Dr,  $2,800,000 (400,000 × $7)

          To Common stock $2,800,000

(Being issue of common stock is recorded)

Here we debited the cash as as it increased the assets and we credited the common stock as it also increased stockholder equity

2. Organisation expenses Dr, $7,000 (1,000 × $7)

         To Common stock $7,000

(Being issue of common stock for organisation expenses is recorded)

Here we debited the organization expenses as  it increased the expenses  and we credited the common stock as it also increased stockholder equity

3. Land Dr,  $250,000  

Building Dr, $400,000  

Equipment $70,000  

       To Common stock  $560,000

      To Paid in capital in excess of par value- Common stock $160,000

(Being exchange of common stock with Land, building and equipment is recorded)

Here we debited the land, building, equipment as it increased the assets  and we credited the common stock and paid in capital in excess of par value as it also increased stockholder equity

4. Cash Dr,  $1,100,000 (25,000 × $44)

       To Preferred stock  $1,000,000  (25,000 × $40)

       To Paid in capital in excess of par value-preferred stock $100,000

(Being issue of preferred stock is recorded)  

Here, we debited the cash as it increased the assets  and we credited the preferred stock and paid in capital in excess of par value as it also increased stockholder equity


Related Questions

Alphonse Company manufactures staplers. The budgeted sales price is $ 12 per​ stapler, the variable costs are $ 3 per​ stapler, and budgeted fixed costs are $ 12 comma 000. What is the budgeted operating income for 4 comma 500 ​staplers?

Answers

Answer:

Operating income $28,500

Explanation:

The budgeted income is the difference between the budgeted sales revenue and budgeted costs

                                                                      $

Budgeted revenue ( 12× 500)                  54,000

Variable cost        (3× 4500)                     (1,500)

Contribution                                               52500

Budgeted fixed cost                                 (12,000)

operating income                                       28,500

Operating income $28,500

You are looking to buy a car. You can afford $700 in monthly payments for five years. In addition to the loan, you can make a $800 down payment. If interest rates are 9.25 percent APR, what price of car can you afford (loan plus down payment)

Answers

Answer:

$34,333

Explanation:

A fix periodic payment for a specific period of time is an annuity payment. Price of the car can be determined by the sum of the present value of all payments and down payment made.

First we need o calculate the present value of annuity using following formula

Present value of annuity = P x [ 1 - ( 1 + r )^-n / r ]

P = periodic payment = $700

r = APR = 9.25 /12% = 0.77%

n = numbers of periods = 5 years x 12 months per year = 60 months

Placing values in the formula

Present value of annuity = $700 x [ 1 - ( 1 + 0.77% )^-60 / 0.77% ]

Present value of annuity = $33,532.88

Price of the car = Present value of annuity + Down Payment

Price of the car = $33,532.88 + $800 = $34,332.88

The statement of owner's equity shows a. only net income, beginning capital, and withdrawals b. only net income, beginning and ending capital c. only total assets, beginning and ending capital d. beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals

Answers

Answer:

d. beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals

Explanation:

The statement of owner's equity is a financial report that is prepared to indicate the changes in the owner's capital as a result of withdrawals, contributions, and net income or net loss. The structure of this report is beginning capital plus contributions plus net income less withdrawals which is equal to the ending capital. According to this, the answer is that the statement of owner's equity shows beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals.

Cinnamon Buns Co. (CBC) started 2018 with $52,600 of merchandise on hand. During 2018, $297,000 in merchandise was purchased on account with credit terms of 3/10 n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,400. Merchandise with an invoice amount of $2,100 was returned for credit. Cost of goods sold for the year was $309,000. CBC uses a perpetual inventory system. Assuming CBC uses the gross method to record purchases, ending inventory would be:

Answers

Answer:

$39,053

Explanation:

The computation of the ending inventory is shown below:

Beginning inventory $52,600  

Add: Inventory purchased $297,000

Add: Freight in $9,400

Less: Merchandise returned -$2,100

Less: Discounts -$8,847 ($297,000 - $2,100) × 3%

Less: Cost of goods sold -$309,000

Ending inventory $39,053

Hence, the ending inventory using the gross method is $39,053

Cane Company manufactures two products called Alpha and Beta that sell for $185 and $120, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 112,000 units of each product. Its unit costs for each product at this level of activity are given below:

Alpha Beta
Direct materials $ 30 $ 10
Direct labor 22 29
Variable manufacturing overhead 20 13
Traceable fixed manufacturing overhead 24 26
Variable selling expenses 20 16
Common fixed expenses 23 18
Total cost per unit $ 139 $ 112
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars.

Required:

7.
Assume that Cane normally produces and sells 48,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?

8.
Assume that Cane normally produces and sells 68,000 Betas and 88,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 12,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease?

9.
Assume that Cane expects to produce and sell 88,000 Alphas during the current year. A supplier has offered to manufacture and deliver 88,000 Alphas to Cane for a price of $112 per unit. If Cane buys 88,000 units from the supplier instead of making those units, how much will profits increase or decrease?

10.
Assume that Cane expects to produce and sell 58,000 Alphas during the current year. A supplier has offered to manufacture and deliver 58,000 Alphas to Cane for a price of $112 per unit. If Cane buys 58,000 units from the supplier instead of making those units, how much will profits increase or decrease?

13.
Assume that Cane’s customers would buy a maximum of 88,000 units of Alpha and 68,000 units of Beta. Also assume that the company’s raw material available for production is limited to 172,000 pounds. How many units of each product should Cane produce to maximize its profits?

14.
Assume that Cane’s customers would buy a maximum of 88,000 units of Alpha and 68,000 units of Beta. Also assume that the company’s raw material available for production is limited to 172,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?

15.
Assume that Cane’s customers would buy a maximum of 88,000 units of Alpha and 68,000 units of Beta. Also assume that the company’s raw material available for production is limited to 172,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)

Answers

Answer:

7.  profits will decrease by:

lost profits = total revenue - total costs = $5,760,000 - $5,376,000 = $384,000unavoidable fixed costs = $18 x 48,000 units = $864,000total decrease in profits ($1,248,000)

8.  profits will decrease by:

lost profits from Beta product line = $8,160,000 - $7,616,000 = ($544,000)increased profits from Alpha sales = $2,220,000 - $1,668,000 = $552,000unavoidable fixed costs = (68,000 x $18) - (12,000 x $23) = (948,000)total decrease in profits ($940,000)

9.  profits will increase by:

avoidable costs of producing 88,000 Alphas = 88,000 x $116 = $10,208,000cost of purchasing 88,000 x $112 = ($9,856,000)total increase in profits = $10,208,000 - $9,856,000 = $352,000

10.  profits will increase by:

avoidable costs of producing 58,000 Alphas = 58,000 x $116 = $6,728,000cost of purchasing 58,000 x $112 = ($6,496,000)total increase in profits = $6,728,000 - $6,496,000 = $232,000

13.  Since the profit margin per pound of direct materials used for Alphas = $7.67 and Betas = $4, the company should produce Alphas. It should produce 28,666 Alphas and 2 Betas. Total profits = $1,318,636 + $16 = $1,318,652

14.  Maximum contribution margin:

Contribution margin Alphas = 28,666 units x $92 = $2,637,272Contribution margin Betas = 2 units x $52 = $104total contribution margin = $2,637,376

15.  Since the profit margin per pound of materials used Betas is only $4, there is not much room for increasing the materials costs. If you want to produce Betas, you would be willing to pay less than $9 per pound of direct materials.

But since the profit margin per pound of direct materials used on Alphas is much higher ($7.67), as long as you pay less than $12.97 per pound of direct materials you can still make a profit producing Alphas. So you could pay a much higher price if you wanted to produce Alphas and still make a profit.

Explanation:

                                                                Alpha          Beta

Sales price                                                $185         $120

Direct materials ($5 per pound)               $30           $10

pounds of materials used                           6               2

profit margin per pound                          $7.67          $4

Direct labor                                                $22          $29

Variable manufacturing overhead           $20           $13

Traceable fixed man. overhead               $24          $26

Variable selling expenses                        $20           $16

Common fixed expenses (unavoidable)  $23           $18

Total cost per unit                                    $139          $112

total production capacity 112,000 units per year

contribution margin = sales revenue - variable costs:

contribution margin Alpha = $185 - $93 = $92

contribution margin Beta = $120 - $68 = $52

A type of manager that supports first line managers is known as

Answers

Answer:

First-line managers operate their departments. They assign tasks, manage work flow, monitor the quality of work, deal with employee problems, and keep the middle managers and executive managers informed of problems and successes at ground level in the company.

Explanation:

Consider the market for mobile applications, smartphones, and conventional phones. For each pair, identify whether they are complements or substitutes:
Pairs of Goods and Services Complements Substitutes
Mobile applications and smartphones
Mobile applications and conventional phones
Smartphones and conventional phones

Answers

Answer:

Mobile Applications and Smart Phones are Complements

Smart Phones and Conventional Phones are Substitutes

Mobile Applications and Conventional Phones are substitutes.

Explanation:

Complement goods are goods that can be used or consumed together. E.g. car and gas. A car would not work without gas. A rise in price of a good leads to a fall in demand of the complement good.

Subsituite goods rival one another in consumption. They can be used in place of another good.

A rise in price of a good leads to a rise in demand of the other good.

I hope my answer helps you

Composing powerful paragraphs is essential when striving for dear communication. Familiarize yourself with basic paragraph elements, various paragraph patterns, and strategies for building coherence. Use the following paragraphs to answer the questions that follow
Paragraph A: Last week, three of our Xdite executives closed a lucrative merger deal with Editionplus. The merger will add more than 500 accounts to our business and will increase our profits by 39 percent in less than a year. Additionally, the executives met with several Editionplus product designers and agreed on three new computer prototypes that we will produce during the next five years. This means we will expand our business to both Los Angeles and Las Vegas.
Paragraph B: Employee reaction has been mixed about our recent plans to expand to Las Vegas and Los Angeles. Many Xcite employees are concerned that the Los Angeles site will not have the same relaxed corporate environment as the current site. However, this is not the case: The relaxed corporate environment at the San Francisco site will be replicated in Los Angeles. The culture we have developed works for the company and our employees, and we don't plan to change it. Human resources executives are already interviewing San Francisco employees so they can capture and replicate the culture with ease.

Answers

Answer: 1. A, C

2. "Everyone in senior-level positions has worked his or her way up the corporate ladder and has contributed greatly to the company's success. This team has increased our profits by 6 percent, expanded office space, hired additional IT support, and strengthened our IT infrastructure. These are just a few of this leadership team's many accomplishments."

Explanation:

1. The Direct Approach is also known as a Deductive Approach. This is because when using the Direct Approach, the writer or speaker begins with the main point of the article and then gives supporting evidence and explanations as they go further along.

Paragraph A uses the Direct approach because the writer began by talking about the main point of the sealing of the deal with Editionplus. It then speaks on how it will increase their profits and how they even met with some of their product designers.

Paragraph C also uses the Direct Approach as it speaks to the effectiveness of the leadership first and then gives evidence of why they are effective by stating that they worked hard for it and that they have increased profits, office space and strengthened infrastructure.  

2. Supporting sentences are made with the purpose of supporting the main point. They expound on the point and give it meaning by showing evidence of the original point.

Option C would be the correct answer because it gave evidence of the main point in Paragraph C. The Main Point noted how the leadership in San Francisco has been phenomenal for the past decade. Option C then speaks on how they have done so by stating that they had worked their way up and contributed to the success of the company by having increased profits by 6 percent, expanded office space, hired additional IT support, and strengthened IT infrastructure.

I have attached the full question to this answer.

Trade-Off Theory. Smoke and Mirrors currently has EBIT of $25,000 and is all-equity- financed. EBIT is expected to stay at this level indefinitely. The firm pays corporate taxes equal to 35% of taxable income. The discount rate for the firm’s projects is 10%.(LO3)

a. What is the market value of the firm?

b. Now assume the firm issues $50,000 of debt paying interest of 6% per year, using the proceeds to retire equity. The debt is expected to be permanent. What will happen to the total value of the firm (debt plus equity)?

c. Recompute your answer to (b) under the following assumptions: The debt issue raises the probability of bankruptcy. The firm has a 30% chance of going bankrupt after 3 years. If it does go bankrupt, it will incur bankruptcy costs of $200,000. The discount rate is 10%. Should the firm issue the debt?

Answers

Answer:

a. What is the market value of the firm?

$162,500

b. Now assume the firm issues $50,000 of debt paying interest of 6% per year, using the proceeds to retire equity. The debt is expected to be permanent. What will happen to the total value of the firm (debt plus equity)?

$200,123

c. Recompute your answer to (b) under the following assumptions: The debt issue raises the probability of bankruptcy. The firm has a 30% chance of going bankrupt after 3 years. If it does go bankrupt, it will incur bankruptcy costs of $200,000. The discount rate is 10%. Should the firm issue the debt?

The firm should not issue the debt because the risk of bankruptcy eliminates any possible gains obtained from issuing debt. It actually decreases the value of equity.

Explanation:

the firm's current value = [EBIT x (1 - tax rate)] / WACC = [$25,000 x 0.65] / 10% = $162,500

firm's new WACC = ($112,500/$162,500 x 10%) + ($50,000/$162,500 x 6% x 0.65) = 6.92% + 1.2% = 8.12%

the firm's new value = [$25,000 x 0.65] / 8.12% = $200,123

expected cost of bankruptcy = (30% x $200,000) / 1.1³ = $45,079

firm's total value is still $200,123, but the stockholders' equity has been reduced from ($200,123 - $50,000 = $150,123) to $150,123 - $45,079 = $105,044

the gain from issuing debt will be eliminated due to the risk of bankruptcy, before equity had risen from $112,500 to $150,123, but now it decreases to $105,044.

The market value of the firm will be $162500.

Based on the information given, the market value will be calculated thus:

= [EBIT × (1 - Tax rate(] / WACC

= [25000 × (1 - 0.35)] / 10%

= [25000 × 0.65] / 0.10 = $162500

Since the firm's new WACC is 8.12%, then the new value of the firm will be:

= (25000 × 0.65) / 8.12%

= 200,123

Therefore, the total value of the firm is $200,123.

In conclusion, the firm should not issue the debt due to the fact that the risk of bankruptcy will eliminate the gains gotten from the issuance.

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Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are $ 60 comma 000 for proposal A and $ 75 comma 000 for proposal B. The variable cost is $ 12.00 for A and $ 10.00 for B. The revenue generated by each unit is $ 22.00.

Required:
a. What is the break-even point in units for proposal A?
b. What is the break-even point in units for proposal B?

Answers

Answer:

                                             Break-event point

Product A                                      6,000 units

Product B                                      6,250 units

Explanation:

The break-even point is the level of activity that a business must operate to equate total revenue to total cost . At the break even point, the business makes no profit or loss., and the total contribution is equal to total fixed cost

The break-even point is calculated as follows:

Total general fixed cost/(selling price - variable cost)

Break-even point = 60,000/(22-12)=6000  units

Product B

Beak-even point = 75,000/(22-10)=6250  units

                                          Break-event point

Product A                                      6,000 units

Product B                                      6,250 units

Hardwig Inc. is considering whether to pursue a restricted or relaxed current asset investment policy. The firm's annual sales are expected to total $3,600,000, its fixed assets turnover ratio equals 4.0, and its debt and common equity are each 50% of total assets. EBIT is $150,000, the interest rate on the firm's debt is 10%, and the tax rate is 40%. If the company follows a restricted policy, its total assets turnover will be 2.5. Under a relaxed policy its total assets turnover will be 2.2. Refer to the data for Hardwig, Inc. Assume now that the company believes that if it adopts a restricted policy, its sales will fall by 15% and EBIT will fall by 10%, but its total assets turnover, debt ratio, interest rate, and tax rate will all remain the same. In this situation, what's the difference between the projected ROEs under the restricted and relaxed policies? a. 2.46% b. 2.98% c. 3.27% d. 2.24% e. 2.70%

Answers

Answer:

d. 2.24%

Explanation:

total annual sales = $3,600,000

fixed asset turnover = total sales / fixed assets = 4, that means that total fixed assets = $3,600,000 / 4 = $900,000

debt = 50% = $450,000

equity = 50% = $450,000

EBIT = $150,000

net income = $150,000 x (1 - 40%) = $90,000

restricted policy:

asset turnover = 2.5

sales = $3,600,000 x (1 - 15%) = $3,060,000

EBIT = $135,000

net income = $81,000

assets = $3,060,000 / 2.5 = $1,224,000

equity = $1,224,000 x 50% = $612,000

ROE = $81,000 / $612,000 = 13.24%

relaxed policy:

asset turnover = 2.2

EBIT = $150,000

net income = $90,000

assets = $3,600,000 / 2.2 = $1,636,364

equity = 50% x $1,636,364 = $818,182

ROE = $90,000 / $818,182 = 11%

difference between ROEs = 13.24% - 11% = 2.24%

The Eastern District of Adelson Inc. is organized as a cost center. The budget for the Eastern District of Adelson Inc. for the month ended December 31 is as follows:

Sales salaries $819,840
System administration salaries 448,152.00
Customer service salaries 152,600.00
Billing salaries 98,760.00
Maintenance 271,104.00
Depreciation of plant and equipment 92,232.00
Insurance and property taxes 41,280.00
Total $1,923,968.00

During December, the costs incurred in the Eastern District were as follows:

Sales salaries $818,880.00
System administration salaries 447,720.00
Customer service salaries 183,120.00
Billing salaries 98,100.00
Maintenance 273,000.00
Depreciation of plant and equipment 92,232.00
Insurance and property taxes 41,400.00
Total $1,954,452.00

Required:
Prepare a budget performance report for the manager of the Eastern District of Adelson for the month of December.

Answers

Answer:

                         Eastern District: Adelson Inc.

                         Budget Performance Report

                   For the Year Ended December 31, XX

                                             Actual               Static             Variance

                                             results              budget                          

Sales salaries                       $818,880       $819,840              -$960

System adm. salaries          $447,720       $448,152               -$432

Customer service salaries   $183,120       $152,600          $30,520

Billing salaries                        $98,100        $98,760               -$660

Maintenance                       $273,000         $271,104             $1,896

Depreciation of P & E           $92,232         $92,232                    $0

Insurance and prop. taxes    $41,400          $41,280                $120

Total                                  $1,954,452       $1,923,968       $30,484  

Explanation:

A budget performance report shows how the actual costs and/or revenues perform according to the planned budget. A negative sign on the variance column shows a favorable variance (lower costs or higher revenues), while a positive sign shows an unfavorable variance (higher costs or lower revenues).

The balance sheet for Campbell Corporation follows:________.
Current assets $238,000
Long-term assets (net) 756,000
Total assets $994,000
Current liabilities $156,000
Long-term liabilities 444,000
Total liabilities 600,000
Common stock and retained earnings 394,000
Total liabilities and stockholders’ equity $994,000
Required Compute the following. (Round ""Ratios"" to 1 decimal place.)
a. Working Capital?
b. Current Ratio?
c. Debt to assets Ratio?
d. Debt to equity Ratio?

Answers

Answer:

a.

$82,000

b.

1.53

c.

0.6

d.

1.52

Explanation:

a.

Working capital is the net of current assets and current liabilities.

Working Capital = Current Asset - Current Liabilities

Placing values in the formula

Working Capital = $238,000 - $156,000

Working Capital = $82,000

b.

Current ratio is the ratio of current asset and liabilities.

Current Ratio = Current Assets / Current Liabilities

Placing values in the formula

Current Ratio = $238,000 / $156,000

Current Ratio = 1.53

c.

Debt to asset ratio is the ratio of debt to total assets of the company.

Debt to assets Ratio = Total Liabilities / Total Assets

Placing values in the formula

Debt to assets Ratio = $600,000 / $994,000

Debt to assets Ratio = 0.60

d.

Debt to equity ratio is the ratio of debt to equity of the company.

Debt to equity Ratio = Total Liabilities / equity

Placing values in the formula

Debt to equity Ratio = $600,000 / $394,000

Debt to equity Ratio = 1.52

Rank the following instruments in terms of credit risk. In your rankings, use 1 for the greatest credit risk and 4 for the smallest credit risk. Assume a 10 year Treasury trades with a YTM of 5%.a. A Ba1 corporate bond ______b. A ten-year BBB- corporate bond with a YTM of 7% ______c. A secured loan from Argosy Gaming, which is a B- rated firm ______d. A senior subordinated bond from Argosy Gaming

Answers

Answer:

a. A Ba1 corporate bond 2 (not investment grade)

b. A ten-year BBB- corporate bond with a YTM of 7% 3 (medium risk but still investment grade)

c. A secured loan from Argosy Gaming, which is a B- rated firm 4 (less risky since it is backed by a collateral)

d. A senior subordinated bond from Argosy Gaming 1 (highest risk)

Explanation:

There are two major bond rating agencies in the US: Moody's and Standard & Poor's.

Their rankings are very similar, although the letters vary a little:

AAA: safest

AA: low risk

A: low risk

BBB: medium risk

BB: a little bit more riskier

B: risky

CCC: very high risk

CC: even riskier

C: riskiest

D: junk, in default

Torino Company has 1,300 shares of $50 par value, 6.0% cumulative and nonparticipating preferred stock and 13,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $3,500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

Answers

Answer:

The answer is $4,300

Explanation:

Solution

We recall that:

Torino company has 1,200 shares of = $50 per value

The cumulative and nonparticipating preferred stock of = 6.0%

They also have 13,00 shares

Common stock outstanding = $10 per value

Total dividends = $3,500

Now,

The first year amount of dividend that was paid in the first year of working is  stated as follows:

6% * 1300 * 50 = $3900

The paid dividend = $3,500

The amount amount payable during the second year to the common stakeholders is

=$3900 + 400 = $4,300

Note: preferred shares are cumulative, for this the amount paid to the stakeholders was $4,300

Roadside, Inc. had the following balances and transactions during​ 2018:Beginning Merchandise Inventory10units at $ 72March 10Sold 8unitsJune 10Purchased 20units at $ 82October 30Sold 14unitsWhat is the amount of the​ company's ending Merchandise​ Inventory, as disclosed in the December​ 31, 2018 balance​ sheet, using the periodic LIFO inventory costing​ method?

Answers

Answer:

$576

Explanation:

The computation of the ending inventory using the periodic LIFO inventory costing​ method is shown below:

But before determining the ending inventory first we have to find out the ending inventory units which is

Units of ending inventory = Opening Stock + Units purchased - Units sold

= 10 + 20 - (8 + 14)

= 8 units

The Ending inventory is 8 units. So, These  should be the units out of opening stock

Therefore

Ending inventory  is

= 8 units ×  $72

= $576

Digger Inc. sells a high-speed retrieval system for mining information. It provides the following information for the year.

Budgeted Actual
Overhead cost $975,000 $950,000
Machine hours 50,000 45,000
Direct labor hours 100,000 92,000

Required:
a. Compute the predetermined overhead rate.
b. Determine the amount of overhead applied for the year.

Answers

Answer:

 Predetermined overhead rate = $ 9.75 per direct labor hours

 Overhead applied = $897,000

Explanation:

Given:

Budgeted Overhead cost = $975,000

Actual Overhead cost = $950,000

Budgeted Machine hours = 50,000

Actual Machine hours = 45,000

Budgeted Direct labor hours = 100,000

Actual Direct labor hours = 92,000

Computation:

(a) Predetermined overhead rate.

Predetermined overhead rate = budgeted overhead cost / budgeted direct labor hours

 Predetermined overhead rate = $975,000 / 100,000

 Predetermined overhead rate = $ 9.75 per direct labor hours

(b) Amount of overhead applied for the year.

Overhead applied = Actual hours × Predetermined overhead rate

Overhead applied   = 92000 × $9.75

 Overhead applied = $897,000

Use the following 10% interest factors. Present Value of Ordinary Annuity Future Value of Ordinary Annuity 7 periods 4.86842 9.48717 8 periods 5.33493 11.43589 9 periods 5.75902 13.57948 What amount should be recorded as the cost of a machine purchased December 31, 2020, which is to be financed by making 8 annual payments of $16000 each beginning December 31, 2021? The applicable interest rate is 10%. $182974 $92144 $85359 $112000

Answers

Answer:

The cost of the machine will be $85,358.88‬

Explanation:

To calculate the present value of the machine is given by:

Present value=$16000*Present value of annuity factor(10%,8)

=$16000*5.33493

= $85,358.88‬

Miguel works at LoftCo, Inc., and has been asked to help lead the development of the company's new balanced scorecard. He and his multifunctional team developed strategic objectives and performance metrics for each of the four perspectives. This work constitutes the complete set of steps in developing a BSC performance management system.
a. true
b. false

Answers

Answer:

The correct answer is A. True

Explanation:

Solution

Balanced scorecard performance management system: It is define as a management system and strategic planning that companies or firms use in communicating their set target and objectives.

Furthermore, a balanced scorecard is a measurement of management performance which can recognize and refine internal functions and external results.

The poverty rate would be substantially lower if the market value of in-kind transfers were added to family income. The largest in-kind transfer is Medicaid, the government health program for the poor. Suppose the program costs $10,000 per recipient family. True or False: If the government gave each recipient family a $10,000 check instead of enrolling them in the Medicaid program, most of these families likely would spend that amount of money on health insurance. True False True or False: This result suggests that we should value in-kind transfers at the price the government pays for them in determining the poverty rate. True False Because the benefit of Medicaid to its recipients is likely than its cost, it to give the poor cash transfers instead.

Answers

Answer: False; False; True.

Explanation:

a. False.

If the government gave every recipient family a $10,000 check rather than enrolling them in the Medicaid program, majority of the families would not spend the money on health insurance. The money will rather be spent on foods that the customer hasn't reached a satiation point in e.g foods, housing etc.

b. False.

We should determine poverty rate by valuing the in-kind transfers at the price which the family would have paid for the same amount of the good not taking into consideration of how the family spend the cash transfer.

c. True.

The poor would be better off in situations where they receive cash transfer rather than in-kind transfer. They could spend the cash on things apart from medical care. The poor value other things more than the health insurance and would be better off with the cash.

You’re about ready to sign a big new client to a contract worth over $50,000. Your boss is under a lot of pressure to increase sales. He calls you into his office and tells you his job is on the line, and he asks you to include the revenue for your contract in the sales figures for the quarter that ends tomorrow. You know the contract is a sure thing but the client is out of town and cannot possibly sign by tomorrow. What do you do?

Answers

Answer:

This is a complicated ethical dilemma because generally you wouldn't want to hurt or do things that can be negative for your boss, specially if he is a good boss. But including unrealized sales is also a bad thing.

This is not only unethical but also violates accounting principles (known as accounting fraud). This can lead to several and severe penalties, which in some cases include jail time. In this case and for this amounts that would not be the case, but other negative consequences can result.

What happens if something goes wrong and the sales is not closed. The answer is simple, you will lose your job. If other employees learn about this your credibility will suffer a lot. Everyone will believe that you always lie about your sales figures.

Personally, I would find an excuse for not including that sales contract in the current month. No choice is easy, but you should do the right and legal thing.

This is a difficult ethical problem because you normally don't want to damage or do things that could harm your boss, especially if he is a nice one. However, counting anticipated sales is also problematic.

Not only is immoral, but it also goes against accounting standards . This can result in a variety of harsh sanctions, including jail time in some situations. That would not be the case in this circumstance and for these amounts, but other undesirable repercussions could occur.

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Digital Corp is considering investing in project A. Their accountants gave them the following information: Initial investment: $1,200,000 Salvage Value: $340,000 Contribution Margin: $320,000 Present Value of Cash Flows: 4,580,000 Annual Cash Inflow: $850,000 Cost of Capital: 9% Length of project: 5 years What is the payback period

Answers

Answer:

The payback period for the investment is 1.41 years

Explanation:

The payback period is the length of time it takes an investment to repay back the investment capital outlay committed to it at the inception of the project.

The payback period is computed as the initial investment divided by annual cash inflow

Initial investment is $1,200,000

Annual cash inflow  is $850,000

Payback period=$1,200,000/$850,000= 1.41   years

We can express the 0.41 in months=0.41*12=4.92  approximately 5 months

Which of the following is a disadvantage of growth by means of external growth strategies? Group of answer choices Diversification of business risk Economies of scale Getting access to proprietary products or services Reducing competition Loss of organizational flexibility

Answers

Answer:

- Loss of organizational flexibility

- Diversification of business

Explanation:

Remember, External growth strategies unlike the Internal growth strategies involves using external assistance to grow the organization, such as merging or acquiring other companies, franchising or forming joint ventures.

In such a case, organisational flexibility could be lost since the organization becomes more complex as a result of bringing in more people into the organization. Also, another disadvantage is that with a restructured management team, the business may experience unexpected diversification into other products as in the case of joint ventures.

On December 31, the following data were accumulated for preparing the adjusting entries for Bellingham Realty: • The supplies account balance on December 31 is $5,635. The supplies on hand on December 31 are $1,495. • The unearned rent account balance on December 31 is $4,600 representing the receipt of an advance payment on December 1 of four months’ rent from tenants. • Wages accrued but not paid at December 31 are $2,035. • Fees earned but unbilled at December 31 are $15,450. • Depreciation of office equipment is $4,420. Required: 1. Journalize the adjusting entries required at December 31. Refer to the Chart of Accounts for exact wording of account titles. 2. What is the difference between adjusting entries and correcting entries?

Answers

Answer and Explanation:

Date       Adjusting entries Debit Credit Asset Liabilities Equity  

Dec 31 Supplies Expense $4,140                  Decrease

                          To  Supplies   $4,140 Decrease

(Being the supplies expense is recorded)

It is computed below:

= Account balance - still on hand

= $5,635 - $1,495

= $4,140    

Dec 31 Unearned Rent revenue $1,150   Decresae    

                       To Rent revenue  $1,150                             Increase

(Being the unearned rent revenue is recorded)

It is computed below:

= $4,600 ÷ 4 months

= $1,150

Dec 31 Wages Expense $2,035                                Decrease

                    To Wages payable $2,035   Increase

(Being the wages expense is recorded)  

Dec 31 Accounts Receivable $15,450 Increase  

               To  Fees earned $15,450                              Increase

(Being the fees earned is recorded)  

Dec 31 Depreciation expense   $4,420                      Decrease  

            To Accumulate depreciation                          

                    - Office Equipment $4,420 Decresae  

(Being the depreciation expense is recorded)  

2 Adjusting entries are the entries that are to be adjusted at the end of the accounting period but it is planed but the correcting entries are not planned it is required when we want to just correct the errors

Barbara owns a manufacturing plant with four facilities (North, South, East, and West) in the state of Indiana. The workers at one of those facilities, North, have just decided to join a union. The union negotiates with Barbara and receives average wages that are 5% higher than the workers at the South, East, and West facilities. This wage differential is a likely example of:

Answers

Answer:

Union power

Explanation:

The difference in wages is as a result of Union power because the North now belongs to a labor union that protects their interest. A labor union is an organization that plays the role of an intermediary between their members and their employers. The workers in the North through the union are able to negotiate for better wages. Through collective bargaining, the union gives workers In the North the power to request for better work pay than workers in the east, West and South facilities.

Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt; its beta is 1.10 (given its target capital structure). Vandell has $8.67 million in debt that trades at par and pays an 7.3% interest rate. Vandell’s free cash flow (FCF0) is $1 million per year and is expected to grow at a constant rate of 6% a year. Both Vandell and Hastings pay a 40% combined federal and state tax rate. The risk-free rate of interest is 6% and the market risk premium is 7%. Hastings Corporation estimates that if it acquires Vandell Corporation, synergies will cause Vandell’s free cash flows to be $2.5 million, $3.2 million, $3.5 million, and $3.57 million at Years 1 through 4, respectively, after which the free cash flows will grow at a constant 6% rate. Hastings plans to assume Vandell’s $8.67 million in debt (which has an 7.3% interest rate) and raise additional debt financing at the time of the acquisition. Hastings estimates that interest payments will be $1.5 million each year for Years 1, 2, and 3. After Year 3, a target capital structure of 30% debt will be maintained. Interest at Year 4 will be $1.465 million, after which the interest and the tax shield will grow at 6%. Indicate the range of possible prices that Hastings could bid for each share of Vandell common stock in an acquisition. Round your answers to the nearest cent. Do not round intermediate calculations.
The bid for each share should range between $ ______ per share and $ _______ per share.

Answers

Answer:

$40.79 per share and $52.90 per share

Explanation:

Cost of Debt (Kd) = Wd * Rd (1 - T)

Cost of Debt for Vandell Corporation is $7.30 * (1 - 0.40) = 4.38%

Cost of Equity (Ke) = Rf + [tex]\beta[/tex] * Rp

Cost of Equity for Vandell Corporation is 6 + 1.10 * 7 = 13.70%

Weighted Average Cost of Capital (WACC) = Wd * Kd + We * Ke

Cash Flow of Firm = $2.5m + $3.2m + $3.5m + $3.57m = $12.77

Weight of Equity = $8.94

WACC = 30% * 4.38% + 70% * 13.70% = 10.9%

CashFlows after discounting synergy will be = $40.79

Consider the following scenario and Identify which formal research method would be appropriate.
1. You are preparing a comprehensive report on telecommunication practices in your industry. You need some background information on the history of Internet use in professional environments.
A. Access traditional sources and electronic sources.
B. Conduct primary research for firsthand information.
C. Conduct a scientific experiment. Routine tasks often require informal research methods.
2. Identify which informal research technique would be most appropriate for each situation. After complaining about parking accommodations at your office, you have been asked by your boss to propose a simple solution that will satisfy your coworkers. The best informal information gathering technique for this situation would be to:_______.
A. Talk with your boss.
B. Conduct an informal survey
C. Look in the files.
3. Read the following scenario, and determine which is the best research approach.
While working for an international development agency, you must develop a presentation about primary and secondary education in the Middle East, a topic you are not familiar with. Which is the best research approach?
A. Formal. On the Internet, find statistics gathered by the United Nations showing the dropout rates of students by gender and age. Request that certain reports be sent to you, so you can examine the date yourself.
B. Informal. To get a local perspective on Middle Eastern affous, we nema to a professor there.
C. Informal. To get a local perspective on Middle Easter affairs, conduct a one survey of me who live in the area.

Answers

Answer: 1. A. Access traditional sources and electronic sources.

2. B. Conduct an informal survey

3. A. Formal. On the Internet, find statistics gathered by the United Nations showing the dropout rates of students by gender and age. Request that certain reports be sent to you, so you can examine the date yourself.

Explanation:

1. This is a research into the history of the internet in professional Environments. Considering how long the internet has been around which isn't too long but long enough that first hand information is not readily available, consulting Traditional sources and Electronic sources is the best way to go.

It will have information from the past that you can use to come up with a chronological report on the use of the internet in a professional setting.

2. This is not a serious research and involves your immediate surroundings so an informal method can be used. The best informal method would be an informal survey amongst your co-workers who are also affected by the problem. This survey will help you come up with a solution faster and easier because you are getting first hand information from those directly affected.

3. You are working for an International Development Agency and as such can not afford to present information that is false or void of due procedure in way because it will affect the reputation of the Agency if you do so.

For this reason your sources must be formal sources with definite information and the United Nations is a very good source for that. To go a step further you can request reports and double check the figures yourself to ensure that the information used is of the highest quality and accuracy.

In January 2012​, an investor purchased 400 shares of Engulf​ & Devour, a rapidly growing​ high-tech conglomerate. From 2012 through 2016​, the stock turned in the following dividend and share price​ performance:

Year Share Price Beginning of Year Dividends Paid during Year Share Price End of Year
2012 $39.26 $0.75 $49.02
2013 $49.02 $0.99 $63.45
2014 $63.45 $0.96 $61.06
2015 $61.06 $1.65 $44.23
2016 $44.23 $2.05 $111.07


Required:
On the basis of this​ information, find the annual holding period returns for 2012 through 2016. ​


Answers

Answer:

The annual holding period returns for 2012 through 2016 is 199.21%

Explanation:

In order to Calcualte the Holding Period Return for 2012 through 2016

we would have to use and calculate the following formula :

HPR = [(P1-P0) +D] / P0

P0 = Beginning value of stock = $39.26

P1 = The closing value of stock = $111.07

D = Dividends received during the year =($0.75 + $0.99 + $0.96 + $1.65 + $2.05) = $6.40

Substituting all the values in the formula , we will get Holding period return

HPR = [($111.07 - $39.26) + $6.40] / $39.26

= $78.21/ $39.26

= 1.9921

= 199.21%

Therefore, the annual holding period returns for 2012 through 2016 is 199.21%

Mila is helping to set performance targets for her company, Urban Supply. The target of increasing the company's online customer satisfaction rate by 1% in the next quarter is an example of a performance target focused on the customer perspective of the balance scorecard.
a. true
b. false

Answers

Answer: True

Explanation:

The balanced scorecard perspective implies that the company has to satisfy their customer through the provision of quality products and services.

From the question, the target of increasing customers satisfaction is a good example of a performance target that is focused on customer's perspective of the balance scorecard. This means that the statement is true.

g A decrease in the price of a good would a. increase the supply of the good. b. increase the quantity demanded of the good. c. give producers an incentive to produce more to keep profits from falling. d. shift the supply curve for the good to the left.

Answers

Answer:

. b. increase the quantity demanded of the good

Explanation:

An decrease in the price of the good increases the demand for the good according to the law of demand.

The law of demand states that the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.

An increase in price would increase supply.

A change in price leads to a movement along either the demand or supply curve.

Other factors other than the change in price leads to a movement of these curves.

I hope my answer helps you

Answer:

A decrease in the price of a good would increase the supply of the good.

A decrease in the price of a good would NOT increase the quantity demanded of the good.

A decrease in the price of a good would NOT give producers an incentive to produce more to keep profits from falling.

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