Answer:
Assets = Liabilities + Stockholders' Equity = $68,600
Explanation:
Note: See the attached excel file for the tabular analysis of the effect of each transaction on the accounting equation.
From the attached excel file, we have:
Assetes = Total assets balance = = $18,800 + $17,900 + 31,900 = $68,600
Liabilities = Total liabilities balance = $1,600
Stockholders' Equity = Total Common Stock balance + Total Net Income balance = $42,500 + $25,500 = $67,000
Liabilities + Stockholders' Equity = $1,600 + $67,000 = $68,600
Therefore, we have:
Assets = Liabilities + Stockholders' Equity = $68,600
A market will be efficient even if there is imperfect information as long as the market is competitive.
a. True
b. False
Using the attached sheet (or a spreadsheet if you prefer), prepare a classified balance sheet for the ABC, LLC for the year ended December 31, 2020 using the following data.
Accounts Payable 4,000
Accounts Receivable 3,000
Cash 20,000
Common Stock 1,000
Land 25,000
Notes Payable (due in 5 years) 10,000
Paid in Capital in Excess of Par - Common Stock 17,000
Paid in Capital in Excess of Par - Preferred Stock 2,000
Preferred Stock 8,000
Retained Earnings 7,000
Salaries Payable 5,000
Treasury Stock 6,000
Answer:
ABC, LLC
Classified balance sheet as at December 31, 2020
$
ASSETS
Non - Current Assets
Land 25,000
Total Non - Current Assets 25,000
Current Assets
Accounts Receivable 3,000
Cash 20,000
Total Current Assets 23,000
TOTAL ASSETS 48,000
EQUITY AND LIABILITIES
LIABILITIES
Non - Current Liabilities
Notes Payable (due in 5 years) 10,000
Total Non - Current Liabilities 10,000
Current Liabilities
Accounts Payable 4,000
Salaries Payable 5,000
Total Current Liabilities 9,000
TOTAL LIABILITIES 19000
EQUITY
Common Stock 1,000
Preferred Stock 8,000
Treasury Stock 6,000
Retained Earnings 7,000
Paid in Capital in Excess of Par - Common Stock 17,000
Paid in Capital in Excess of Par - Preferred Stock 2,000
TOTAL EQUITY 41,000
TOTAL EQUITY AND LIABILITIES 60,000
Explanation:
A classified balance sheet shows the Assets, Liability and Equity Balances in their respective categories as shown above.
What do Media Salespeople do?
A. They sell space at sport events.
B. They sell advertising space to different companies.
C. They sell-media related products online.
D. They sell websites to media companies.
Answer:
correct answer is B-they sell advertisement space to different companies
Explanation:
A wedding party hired a sole proprietorship to cater their wedding, and the sole proprietorship had an employee handle the entire job. If the entire wedding party gets food poisoning, the principal is liable. The employee of the sole proprietorship is also liable because he handled the entire job.
pls dont spam me need halp
Answer:
yes because he was put in charge of the whole operation
What is a factor that does NOT go into an economic analysis?
1. marginal analysis
2. societal concerns
3 ethical concerns
4 sunk costs
On June 30, 2018, Streeter Company reported the following account balances:
Receivables $ 83,900 Current liabilities $ (12,900 )
Inventory 70,250 Long-term liabilities (54,250 )
Buildings (net) 78,900 Common stock (90,000 )
Equipment (net) 24,100 Retained earnings (100,000 )
Total assets $ 257,150 Total liabilities and equities $ (257,150 )
On June 30, 2021, Princeton Company paid $316,500 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $12,700 in legal fees. Princeton also agreed to pay $63,800 to the former owners of Streeter contingent on meeting certain revenue goals during 2022. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $20,100.
In determining its offer, Princeton noted the following pertaining to Streeter:
It holds a building with a fair value $43,100 more than its book value.
It has developed a customer list appraised at $25,200, although it is not recorded in its financial records.
It has research and development activity in process with an appraised fair value of $36,400. However, the project has not yet reached technological feasibility and the assets used in the activity have no alternative future use.
Book values for the receivables, inventory, equipment, and liabilities approximate fair values.
Prepare Princeton’s accounting entry to record the combination with Streeter. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. First Entry Record the acquisition of Streeter company.
2. Second Entry Record the legal fees related to the combination.
Answer:
1. Dr Receivables $ 83,900
Dr Inventory $70,250
Dr Building (net) $122,000
Dr Equipment (net) $24,100
Dr Customer list $25,200
Dr Capitalized R&D $36,400
Dr Goodwill $41,900
Cr Current liabilities $12,900
Cr Long-term liabilities $54,250
Cr Contingent obligation performance $20,100
Cr Acquisition cost $316,500
2. Dr Combination expense (Legal fees) $12,700
Cr Cash $12,700
Explanation:
1. Preparation of the First Entry to Record the acquisition of Streeter company.
First step is to calculate Goodwill on Acquisition
Acquisition cost $316,500
Add Contingent obligation performance $20,100
Total Acquisition cost $336,600
Less Fair value of Streeter company:
Receivables $ 83,900
Inventory $70,250
Building (net) $122,000
($78,900+$43,100)
Equipment (net) $24,100
Customer list $25,200
Capitalized R&D $36,400
Current liabilities ($12,900 )
Long-term liabilities ($54,250 ) ($294,700)
Goodwill $41,900
($336,600-$294,700)
Now let prepare the First Entry to Record the acquisition of Streeter company.
Dr Receivables $ 83,900
Dr Inventory $70,250
Dr Building (net) $122,000
($78,900+$43,100)
Dr Equipment (net) $24,100
Dr Customer list $25,200
Dr Capitalized R&D $36,400
Dr Goodwill $41,900
Cr Current liabilities $12,900
Cr Long-term liabilities $54,250
Cr Contingent obligation performance $20,100
Cr Acquisition cost $316,500
(To record acquisition of Streeter Company)
2. Preparation of the Second Entry to Record the legal fees related to the combination
Dr Combination expense (Legal fees) $12,700
Cr Cash $12,700
(To record payment of Legal fees)
Russell Retail Group begins the year with inventory of $65,000 and ends the year with inventory of $55,000. During the year, the company has four purchases for the following amounts. Purchase on February 17 $ 220,000 Purchase on May 6 140,000 Purchase on September 8 170,000 Purchase on December 4 420,000 Required: Calculate cost of goods sold for the year.
Answer:
COGS= $960,000
Explanation:
Giving the following information:
Beginning inventroy= $65,000
Ending inventory= $55,000
Total Purchase= 220,000 + 140,000 + 170,000+ 420,000= $950,000
To calculate the cost of goods sold, we need to use the following formula:
COGS= beginning inventory + cost of goods purchased - ending inventory
COGS= 65,000 + 950,000 - 55,000
COGS= $960,000
If you could start your own business, WHAT type of business would you start and WHY? Be sure your idea is a business and not a charity (animal shelter, helping homeless, etc.) The goal of your business should be to make a profit. Please answer in 3-4 sentences. "Henry Ford wanted to produce cars more efficiently; Oprah Winfrey wanted to help people make their lives better; Steve Jobs wanted to provide customers with user- friendly personal computers and new entertainment ideas." I А.
Mongar Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below:
Original Budget Actual Costs
Variable overhead costs:
Supplies $7,980 $8,230
Indirect labor 29,820 29,610
Total variable manufacturing overhead cost $37,800 $37,840
The original budget was based on 4,200 machine-hours. The company actually worked 4,350 machine-hours during the month and the standard hours allowed for the actual output were 4,190 machine-hours. What was the overall variable overhead efficiency variance for the month?
a. $130 Unfavorable
b. $950 Favorable
c. $1,440 Unfavorable
d. $1,310 Favorable
Answer:
c. $1,440 Unfavorable
Explanation:
Variable overhead efficiency variance = (Standard hours - Actual working hours) * Standard Rate
Variable overhead efficiency variance = ($4,190 hours - $4,350 hours)*($37,800/4,200 hours)
Variable overhead efficiency variance = ($4,190 hours - $4,350 hours)*$9 per hour
Variable overhead efficiency variance = 160 hours*$9 per hour
Variable overhead efficiency variance = $1,440 Unfavorable
g Travis and Jeff own an adventure company called Whitewater Rafting. Due to quality and availability problems, the two entrepreneurs have decided to produce their own rubber rafts. The initial investment in plant and equipment is estimated to be $2,000. Labor and material cost is approximately $5 per raft. Of the rafts can be sold at a price of $10 each, what volume of demand would be necessary to break even
You are the manager of a firm that sells a leading brand of alkaline batteries. Click on the link below to access data on the demand for your product. Specifically, the file contains data on the natural logarithm of your quantity sold, price, and the average income of consumers in various regions around the world. Use the information provided in the excel spreadsheet to perform a log-linear regression. Excel Data File Fill in your estimates below:
Instruction:
Enter a negative number if the coefficient estimate is negative, and round your response to two decimal places.
lnQ=C ____ + _____ InP+ _____ InM
Determine the likely impact of a 3 percent decline in global income on the overall demand of your product.
a. Demand will decline by approximately 0.1%, but since income elasticity isn't significantly different from zero, it likely won't fall at all.
b. Demand will fall by nearly 10%, and income elasticity is significantly less than zero.
c. Demand will fall by nearly 1%, and income elasticity is significantly less than zero.
d. Demand will decline by approximately 3%, but since income elasticity isn't significantly different from zero, it likely won't fall at all.
Answer:
lnQ=C 1.29 + -0.07 lnP + -0.03 lnM
c. Demand will fall by nearly 1% and income elasticity is significantly less than zero.
Explanation:
Income elasticity is a major factor which impact the demand of a product. It measures the change in quantity demanded due to change in income. In the given scenario the demand for product will decline due to change in income. The income elasticity is smaller there will not be major change in demand but there will be some impact observed on the quantity demanded.
Calculate the contribution to total performance from currency, country, and stock selection for the manager in the example below. All exchange rates are expressed as units of foreign currency that can be purchased with 1 U.S. dollar. (Do not round intermediate calculations. Round your answers to 2 decimal places. Input all amounts as positive values.) EAFE Weight Return on Equity Index E1/E0 Manager's Weight Manager's Return Europe 0.6 15 % 1 0.6 12 % Australasia 0.3 16 1.4 0.1 17 Far East 0.1 20 1.2 0.3 17
Answer:
A. Currency selection 4% loss relative to EAFE
B. Country Selection 1.80% loss relative to EAFE
C. Stock Selection -2.6%loss relative to EAFE
Explanation:
Calculation to determine the contribution to total performance from currency, country, and stock selection for the manager in the
A. Calculation for CURRENCY SELECTION
Using this formula
EAFE / Manager weight * Currency appreciation ( E1 / E0 - 1 )
Let plug in the formula
EAFE =[ 0.6 * ( 1 - 1 ) ] + [ 0.3 * ( 1.4 - 1 ) ] + [ 0.1 * ( 1.2- 1 ) ]
EAFE= 0+0.12+0.02
EAFE=14%
Manager =[ 0.6 * ( 1- 1 ) ] + [ 0.1 * ( 1.4 - 1 ) ] + [ 0.3 * ( 1.2- 1 ) ]
Manager=0+0.04+0.06
Manager=10%
Loss relative to EAFE=(10%-14%)
Loss relative to EAFE=4%
4% loss relative to EAFE
B. Calculation for COUNTRY SELECTION
Using this formula
EAFE/ Manager weight × Return on Equity Index
Let plug in the formula
EAFE = [ 0.6 * 15% + 0.3 * 16% + 0.1* 20% ]
EAFE = 0.09+0.048+0.02
EAFE = 15.8%
Manager = [ 0.6 * 12% + 0.1 * 17% + 0.3 * 17% ] Manager =0.072+0.017+0.051
Manager =14%
Loss relative to EAFE=15.8%-14%
Loss relative to EAFE=1.80%
1.80% loss relative to EAFE
C. Calculation for STOCK SELECTION
Using this formula
Stock Selection=( Manager’s return - Return on Equity Index ) × Manager weight
Let plug in the formula
Stock Selection=[ ( 12% - 15% ) * 0.6 ] + [ ( 17% - 16% ) * 0.1 ] + [ ( 17% - 20% ) * 0.3 ]
Stock Selection=-0.018+0.001+-0.009
Stock Selection=-2.6%
-2.6% loss relative to EAFE
Jensen Automotive produces alternators for American-made cars. They generally use a static budget with the following costs based on 8,000 units per month: indirect materials, $22,000; indirect labor, $25,000; utilities, $12,000; supervision, $4,000; depreciation, $18,000. If Jensen wanted to create a flexible budget for 9,000 units, what value would they record for variable costs
Answer:
the value that should be recorded for variable cost is $66,375
Explanation:
The computation of the value that should be recorded for variable cost is shown below:
= Total variable cost ÷ budgeted units × flexible budget units
= ($22,000 + $25,000 + $12,000) ÷ 8,000 units × 9,000 units
= $59,000 ÷ 8,000 units × 9,000 units
= $66,375
hence, the value that should be recorded for variable cost is $66,375
The above formula is used
Following are data for BioBeans and GreenKale, which sell organic produce and are of similar size. BioBeans GreenKale Average total assets $ 215,000 $ 166,500 Net sales 105,000 33,300 Net income 15,050 3,900 Required: 1a. Compute the profit margin for both companies. 1b. Compute the return on total assets for both companies. 2. Based on analysis of these two measures, which company is the preferred investment
Answer:
1a. We have:
BioBeans' profit margin = 14.33%
GreenKale's profit margin = 11.71%
1b. We have:
BioBeans' return on total assets = 7%
GreenKale's return on total assets = 2.34%
2. BioBeans is the preferred investment.
Explanation:
1a. Compute the profit margin for both companies.
Profit margin = Net income / Net sales ........... (1)
Using equation (1), we have:
BioBeans' profit margin = $15,050 / $105,000 = 0.1433, or 14.33%
GreenKale's profit margin = $3,900 / $33,300 = 0.1171, or 11.71%
1b. Compute the return on total assets for both companies.
Return on total assets = Net income / Average total assets ............ (2)
Using equation (1), we have:
BioBeans' return on total assets = $15,050 / $215,000 = 0.07, or 7%
GreenKale's return on total assets = $3,900 / $166,500 = 0.0234, or 2.34%
2. Based on analysis of these two measures, which company is the preferred investment?
Since the profit margin and return on total assets of BioBeans are greater than the profit margin and return on total assets of GreenKale, this indicates that BioBeans is the preferred investment.
You have your choice of two investment accounts. Investment A is a 6-year annuity that features end-of-month $1,980 payments and has an interest rate of 7 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an interest rate of 9 percent, also good for 6 years.
How much money would you need to invest in B today for it to be worth as much as Investment A 6 years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
$112,166
Explanation:
the future value of Investment A:
payment = $1,980
n = 6 x 12 = 72
i = 9% / 12 = 0.75%
FVIFA = [(1 + i)ⁿ- 1 ] / i = [(1 + 0.0075)⁷² - 1 ] / 0.0075 = 95.007
future value = $1,980 x 95.007 = $188,114
now we need to determine the PV of investment B:
PV = $188,114 / (1 + 9%)⁶ = $112,166
Answer: $105,264.24
Explanation:
Step 1) Calculate Future Value of Investment A
Rate: .07/12 = .58%
Payment: $1,980
Term: 72 (6 years * 12 months)
Future Value: ?
In excel -> FV(.58,72,-1980,0)
Future Value = $176,538.67
Step 2) Calculate Present Value of Investment B using Investment A Future Value
Rate: .09
Payment: $0
Term: 6
Future Value: $176,538.67 (from step 1)
PV(.09,6,0,-176538.67)
Present Value = $105,264.24
Thats your answer!! ^^^^^
You can also use the formula or calculator, but I've found excel is the easiest/fastest.
Cheers!
management must be applied according to the needs of the organization. This implies that management is .....
Answer:
Explanation:
Management is the coordination and management of tasks to achieve a goal. Such management activities include setting the organization's strategy and coordinating employees' efforts to achieve these goals using available resources. Management can also refer to the seniority structure of employees in the organization.
Kim works for a clothing manufacturer as a dress designer. During 2020, she travels to New York City to attend five days of fashion shows and then spends three days sightseeing. Her expenses are as follows:
Airfare $1,800
Lodging (8 nights) 2,340
Meals (8 days) 2,160
Airport transportation 115
Assume lodging/meals are the same amount for the business and personal portion of the trip ($293 per day for lodging and $270 per day for meals).
Required:
a. Presuming no reimbursement, how much can kim deduct as to the trip?
b. Would the tax treatment of Kim's deduction differ if she was an independent contractor (rather than an employee)? Explain.
Answer: See explanation
Explanation:
a. Presuming no reimbursement, how much can kim deduct as to the trip?
Airfare = $1,800
Add: Lodging = $2340 × 5/8 = $1462.50
Add: Meals = $2160 × 5/8 × 50% = $675
Add: Airport transportation = $115
Total deduction = $4052.50
b. Would the tax treatment of Kim's deduction differ if she was an independent contractor (rather than an employee)? Explain
The tax treatment of Kim's deduction if she was an independent contractor will be:
Airfare = $1,800
Add: Lodging = $2340 × 5/8 = $1462.50
Add: Meals = $2160 × 5/8 × 50% = $675
Add: Airport transportation = $115
Total deduction = $4052.50
Therefore, the tax treatment of Kim's deduction still remains the same.
On January 5, Barnaby, Inc., purchased a patent costing $100,000 with a useful life of 20 years. The company records its adjusting entries at the end of each year on December 31.
Complete the necessary adjusting entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer and Explanation:
The adjusting entries are shown below
On Jan 1
Patent Dr $100,000
To Cash $100,000
(Being patent purchased on cash is recorded)
Here patent is debited as it increased the assets and credited the cash as it decreased the assets
On Dec 31
Amortization expense - Patent ($100,000 ÷ 20 years) $5,000
To Accumulated amortization - Patent $5,000
(being amortization expense is recorded)
Here amortization expense is debited as it increased the expense and credited the accumulated depreciation as it decreased the assets
According to the standard cost card, each helmet should require 0.52 kilograms of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,400 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,400 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance?
Answer:
Please find the complete question in the attached file and its solution can be defined as follows:
Explanation:
The standard kgs permitted[tex]= 3100 \times 0.62 = 1922[/tex]
Current production Standard cost permitted [tex]=1922\times 7= 13454[/tex]
Variance of materials for expenditure [tex]= 13708-13454= 254 \ \ \ U[/tex]
Outlined various of materials [tex]= 13708-(2077\times 7)= 831 \ \ \ F[/tex]
Variability of additional channel [tex]= 7\times (2077-1922)= 1085\ \ \ U[/tex]
An economy is in long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs: a. A stock market boom increases the value of stocks held by households. b. Firms come to believe that a recession is likely in the near future. c. Anticipating the possibility of war, the government increases its purchases of military equipment. d. The quantity of money in the economy declines, and interest rates increase.
Answer:
Following are the solution to these question:
Explanation:
In point a:
The population feels wealthier and seems to be socially secure. This will boost consumption, moving AD to the correct. There is a difference in deflation. Govt must adopt a discretionary monetary policy to fight deflation, that will change AD left.
In point b:
Expenditure has been decreased to increasing jobs or costs. Disinflationary distance exists. To improve DA (shift rectors) and restore full job production, Govt must pursue the expansionary monetary policy.
In point c:
It will once again raise NPA because part A contributes to even more competition with higher public expenditure. The deflation divide is that there is. That alternative is an expansionary tax reform to move to the left.
In point d:
The rise in interest rates declines expenditure and, as part B, reduces AD. The deflationary difference remains. Government must use expansionary monetary policy to fight it, moving AD to a correct.
Lumpkin Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Lumpkin’s policy is to maintain an ending inventory balance equal to 10 percent of the following month’s cost of goods sold. April’s budgeted cost of goods sold is $40,000. Required Complete the inventory purchases budget by filling in the missing amounts.
Answer:
February.
Desired ending inventory = 10% of March Cost of goods(COGS):
= 10% * 35,000
= $3,500
Inventory needed = COGS + ending inventory
= 32,000 + 3,500
= $35,500
Beginning inventory = January ending inventory = $3,200
Required Purchases = Inventory needed - Beginning inventory
= 35,500 - 3,200
= $32,300
March
Desired ending inventory = 10% of April COGS:
= 10% * 40,000
= $4,000
Inventory needed:
= 35,000 + 4,000
= $39,000
Beginning inventory = February ending inventory = $3,500
Required purchases:
= 39,000 - 3,500
= $35,500
Essence of Skunk Fragrances, Ltd., sells 5,750 units of its perfume collection each year at a price per unit of $445. All sales are on credit with terms of 1/10, net 40. The discount is taken by 35 percent of the customers.
Required:
What is the amount of the company's accounts receivable?
Answer:
The amount of the company's accounts receivable is $2,558,750.
Explanation:
Accounts Receivables are amounts owed to the company. They are measured at amounts that the company expects to be entitled to after a sale.
The sale journal is :
Debit : Accounts Receivables (5,750 units x $445) $2,558,750
Credit : Sales Revenue (5,750 units x $445) $2,558,750
Diamond Company manufactures two models of cassette recorders: VCH and MTV. Based on the following production data for April, prepare a production budget.
VCH MTV
Estimated inventory (units), April 1 2,900 4,000
Desired inventory (units), April 30 6,900 5,250
Expected sales volume (units):
Eastern zone 12,500 12,960
Midwest zone 19,000 19,800
Western zone 14,500 9,840
Answer and Explanation:
The preparation of the production budget is presented below:
Particulars VCH MTV
Expected Sales:
Eastern zone 12500 12960
Midwest zone 19000 19800
Western zone 14500 9840
Add: Desired inventory 6900 5250
Less: Opening inventory (2900) (4000)
Production in units 50,000 43,850
Bismark Inc, a large manufacturer of heavy equipment components, has determined the following activity cost pools and cost driver levels for the year:
Activity Cost Pool Activity Cost Activity Cost Driver
Machine Setup $600,000 15,000 setup hours
Material handling 90,000 3,000 tons of materials
Machine operation 420,000 12,000 machine hours
The following data are for the production of single batches of two products, Camshafts and Swing Drives during the month of August:
Camshafts Swing Drives
Units produced 1,500 900
Machine hours 4 5
Direct labor hours 300 500
Direct labor cost $7,000 $12,000
Direct materials cost $40,000 $30,000
Tons of materials 10 7
Setup hours 5 8
Determine the unit costs of Camshafts and Swing Drives using ABC. Round answers to the nearest cent.
Camshafts $ _____
Swing Drives $_____
Answer:
Results are below.
Explanation:
First, we need to calculate the activities rates:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine Setup= 600,000 / 15,000= $40 per setup hour
Material handling= 90,000 / 3,000= $30 per ton of material
Machine operation= 420,000 / 12,000= $35 per machine hour
Now, we can allocate costs to each product:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Camshafts:
Machine Setup= 40*5= $200
Material handling= 30*10= $300
Machine operation= 35*4= $140
Total allocated costs= $640
Swing Drives:
Machine Setup= 40*8= $320
Material handling= 30*7= $210
Machine operation= 35*5= $175
Total allocated costs= $705
Finally, the unitary cost:
Camshafts:
Total cost= 40,000 + 7,000 + 640= $47,640
Unitary cost= 47,640 / 1,500= $31.76
Swing Drives:
Total cost= 30,000 + 12,000 + 705= $42,705
Unitary cost= 42,705 / 900= $47.45
Contribution Income Statement and Cost-Volume-Profit Graph Picnic Time produces a picnic basket that is sold for $100 per unit. Assume the company produced and sold 4,000 baskets during July. There were no beginning or ending inventories. Variable and fixed costs follow. Variable Costs per Unit Fixed Costs per Month Manufacturing: Manufacturing overhead $36,000 Direct materials $25 Selling and administrative 68,000 Direct labor 15 Total $104,000 Manufacturing overhead 5 $45 Selling and administrative 4 Total $49
Required
Prepare a contribution income statement for July.
Do not use any negative signs with your answers.
Picnic Time
Contribution Income Statement
For the Month of July
Sales Answer
Less variable costs
Direct materials Answer
Direct labor Answer
Manufacturing overhead Answer
Selling and administrative Answer Answer
Contribution margin Answer
Less fixed cost:
Manufacturing overhead Answer
Selling and administrative Answer Answer
Profit Answer
Answer:
Graph Picnic Time
Contribution Income Statement
For the Month of July
Sales $400,000
Less variable costs:
Direct materials $100,000
Direct labor 60,000
Manufacturing overhead 20,000
Selling and administrative 16,000
Total variable costs $196,000
Contribution margin $204,000
Less fixed cost:
Manufacturing overhead $36,000
Selling and administrative 68,000
Total fixed costs $104,000
Profit $100,000
Explanation:
a) Data and Calculations:
Selling price per picnic basket = $100
July Production and sales = 4,000 baskets
Variable Costs per Unit:
Manufacturing:
Direct materials $25
Direct labor 15
Manufacturing overhead 5
Total $45
Selling and administrative 4
Total $49
Fixed Costs per Month
Manufacturing overhead $36,000
Selling and administrative 68,000
Total $104,000
Contribution Income Statement
For the Month of July
Sales $400,000 ($100 * 4,000)
Less variable costs:
Direct materials $100,000 ($24 * 4,000)
Direct labor 60,000 ($15 * 4,000)
Manufacturing overhead 20,000 ($5 * 4,000)
Selling and administrative 16,000($4 * 4,000)
Total variable costs $196,000
Contribution margin $204,000
Less fixed cost:
Manufacturing overhead $36,000
Selling and administrative 68,000
Total fixed costs $104,000
Profit $100,000
Baiman, Inc. issues $1,000,000 of zero-coupon bonds that mature in 10 years. Compute the bond issue price assuming that the bonds' market rate is:
a. 10% per year compounded semiannually.
Round your answers to the nearest dollar.
Answer:
Zero-cupon bond= $376,889.48
Explanation:
Giving the following formula:
Face value= $1,000,000
Mature= 10*2= 20 semesters
Market rate= 0.1/2= 0.05
To calculate the price of the bond, we need to use the following formula:
Zero-cupon bond= [face value/(1+i)^n]
Zero-cupon bond= [1,000,000 / (1.05^20)]
Zero-cupon bond= $376,889.48
Polson Pool Company is involved in a number of competitive bidding situations. The following costs are anticipated for a project to be bid for Terrance Manufacturing:
Direct material $ 680,000
Direct labor 2,450,000
Allocated variable overhead 570,000
Allocated fixed cost 230,000
Which of these costs would be treated differently if Polson had either excess capacity or no excess capacity?
a. Allocated variable overhead, $570,000
b. Direct labor, $2,450,000
c. Allocated fixed cost, $230,000
d. Direct materials used, $680,000.
Answer: c. Allocated fixed cost, $230,000
Explanation:
The Allocated fixed cost is fixed based on a certain level of production. If Polson had excess capacity to produce more goods or no excess capacity, the allocated fixed costs would have to be treated differently to account for this.
The variable costs however would not have to change because they are already based on the quantity of goods produced so even if there is excess or no excess capacity, their cost per unit would not change.
The CEO is considering your recommendations, and it will take time to make some of these changes. However, you know that it's not just the structure of the department that is stifling creativity. You believe that the culture could be significantly improved, and you want to start working on these issues ASAP. It will be a slow process to make some of these changes, but the time to get started is now. You have a lot of ideas, but only a few should be implemented initially. Which three do you think should be started immediately
Explanation:
1- Hire an organizational consultancy specialized in diagnostics and solutions to improve the organizational culture, as an external view can be beneficial to perceive the organization free of bias.
2- Planning of the teams' routine and better redesign and definition of the functions of each employee, seeking greater integration and personal satisfaction with the work, which increases productivity and the valorization of the work.
3- Implementing changes in the way of communicating with the teams and providing feedback, clear and objective communication is essential for there to be a correct understanding of what is expected of each team and how to carry out the tasks to achieve the organizational objectives and goals.
On January 1, 2018, Alamar Corporation acquired a 39 percent interest in Burks, Inc., for $228,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $327,000. During 2018, Burks reported net income of $79,000 and declared and paid cash dividends of $29,000. Alamar sold inventory costing $26,000 to Burks during 2018 for $42,000. Burks used all of this merchandise in its operations during 2018. Prepare all of Alamar's 2018 journal entries to apply the equity method to this investment.
Answer:
Date Account Title Debit Credit
Jan 1, 2018 Investment in Burks, Inc $228,000
Cash $228,000
Date Account Title Debit Credit
Dec. 31, 2018 Investment in Burks, Inc $30,180
Revenue from investment $30,180
Working:
= Net income of Burks * Ownership percentage
= 79,000 * 39%
= $30,180
Date Account Title Debit Credit
Dec. 31, 2018 Dividend receivable $11,310
Investment in Burks, Inc $11,310
Working
= Dividends declared * Ownership percentage
= 29,000 * 39%
= $11,310
Date Account Title Debit Credit
Jan 1, 2018 Cash $11,310
Dividend Receivable $11,310
ZIP Company owns 46,000 shares of the common stock of PIK Company. ZIP decided to divest itself of this investment by distributing the PIK shares in the form of a property dividend. The dividend ratio is one share of PIK for every four shares of ZIP common held by shareholders. ZIP has 184,000 common shares outstanding. On April 15, 2016, the date of declaration, PIK stock had a par value of $5 per share, a book value of $12.6 per share, and a market value of $17.6 per share.
Required:
1. Prepare any necessary journal entries. The shares were distributed on May 15, 2016, to stockholders of record on May 1, 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
2. Record appreciation of investment.
3. Record declaration of property dividend.
4. Record the entry on date of record.
5. Record the payment of the property dividend.
Answer and Explanation:
The journal entries are shown below:
2 On April 15,2016
Investment in PK common stock Dr (46,000 × ($17.6 - $12.6)) $230,000
To Gain on investment $230,000
(Being appreciation of investment is recorded)
3. On April 15,2016
Retained earnings Dr (184,000 ÷ 4 × $17.6) $809,600
To Property dividend payable $809,600
(Being declaration of property dividend)
4. No journal entry is required for date of record
5. Property dividend payable Dr $809,600
To Investment in PK common stock $809,600
(Being the payment of the property dividend is recorded)