Answer:
190.27 days
Explanation:
Average accounts receivable = (Ending accounts receivable 2018 + Ending accounts receivable 2019) / 2
Average accounts receivable = ($46,000 + $48,000)/2
Average accounts receivable = $47,000
Average accounts payable = (Ending accounts payable 2018 + Ending accounts payable 2019) / 2
Average accounts payable = ($38,000 + $36,000)/2
Average accounts payable = $37,000
Average inventory = (Ending inventory 2018 + Ending inventory 2019) / 2
Average inventory = ($154,000 + $149,000)/2
Average inventory = $151,500
Days sales outstanding = (Average accounts receivable*365 days)/Sales
Days sales outstanding = ($47,000*365 days)/$413,000
Days sales outstanding = $17,155,000/$413,000
Days sales outstanding = 41.54 days
Days payable outstanding = (Average accounts payable*365 days)/Cost of goods sold
Days payable outstanding = ($37,000*365 days)/$281,000
Days payable outstanding = $13,505,000/$281,000
Days payable outstanding = 48.06 days
Days inventory outstanding = (Average inventory*365 days)/Cost of goods sold
Days inventory outstanding = ($151,500*365 days)/$281,000
Days inventory outstanding = $55,297,500/$281,000
Days inventory outstanding = 196.79 days
Cash cycle = Days sales outstanding + Days inventory outstanding - Days payable outstanding
Cash cycle = 41.54 days + 196.79 days - 48.06 days
Cash cycle = 190.27 days
Hence, the cash cycle for 2019 based on a 365-day year is 190.27 days
Required information Skip to question [The following information applies to the questions displayed below.] ABC Company prepared the following aging of receivables analysis at December 31. Days Past Due Total 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 640,000 $ 410,000 $ 104,000 $ 50,000 $ 32,000 $ 44,000 Percent uncollectible 3 % 4 % 7 % 9 % 12 % a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $13,400 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $2,400 debit. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.
Answer:
A. $32,000
B. Dec 31
Dr Bad debts expense $18,600
Cr Allowance for doubtful accounts $18,600
C. Dec 31
Dr Bad debts expense $34,400
Cr Allowance for doubtful accounts $34,400
Explanation:
a. Calculation to Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method
Accounts receivable
Not due $ 410,000
1 to 30 $ 104,000
31 to 60 $ 50,000
61 to 90 to$ 32,000
Over 90 $44,000
Total Accounts receivable $640,000
Estimate the balance of the Allowance for Doubtful Accounts=$640,000*5%
Estimate the balance of the Allowance for Doubtful Accounts=$32,000
Therefore the Estimated balance of the Allowance for Doubtful Accounts will be $32,000
b. Preparation of the adjusting entry to record Bad Debts Expense from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $13,400 credit.
Dec 31
Dr Bad debts expense $18,600
Cr Allowance for doubtful accounts $18,600
($32,000-$13,400)
(To record Bad Debts Expense)
c. Preparation ofn the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $2,400 debit.
Dec 31
Dr Bad debts expense $34,400
Cr Allowance for doubtful accounts $34,400
($32,000+$2,400)
(To record bad debts expense )
The mayor of your city is considering building a new toll road to reduce congestion. The cost of the toll road is $10 million and is estimated to generate a profit (from tolls collected less expenses collecting the tolls and maintaining the road) of $2 million per year. A. What is the present value of the first year's profit of $2 million? (if discount rate is 8% (0.08)) (2points) B. If the discount rate is 8%, how many years would it take before the road is paid for? The number of years it will take to recover the initial $10 million investment. (8points)
The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (50% of profits and losses)$70,000Phil (40%) 40,000Ernie (10%) 55,000 Each of the following questions should be viewed independently. If Sergio invests $60,000 in cash in the business for a 25 percent interest, what journal entry is recorded
Answer:
Cash A/c (Dr) $60,000
Sergio Capital A/c (Cr) $41,250
Tiger Capital A/c (Cr) $9,375
Phil Capital A/c (Cr) $7,500
Ernie Capital A/c (Cr) $1,875
(To record admission of new partner)
Explanation:
The total investment by Sergio is $60,000 in cash will be debited in the journal entry recorded. His interest in the business is 25% which would be credited. So, first we calculate the total investment already made by the partners which is $165,000 (70,000 + 40,000 + 55,000).
Now, Sergio's investment is 25% of the total share of investment made by the partners which accounts to $41,250 (165,000 * 25%). This amount will be credited as Sergio Capital A/c.
The difference $18,750 (60,000 - 41,250) will credited in the capital A/c of other partners which would be divided proportionately to their business share. As done below:
Tiger Capital A/c - $9,375 (18,750 * 50%)
Phil Capital A/c - $7,500 (18,750 * 40%)
Ernie Capital A/c - $1,875 (18,750 * 10%)
During its first year of operations, Silverman Company paid $15,085 for direct materials and $10,200 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,200 while general, selling, and administrative expenses totaled $4,700. The company produced 6,050 units and sold 3,700 units at a price of $8.20 a unit. What is the amount of finished goods inventory on the balance sheet at year-end
Answer:
$13,395
Explanation:
Finished Goods Inventory = Production Cost x Ending Units / Units Produced
where,
Production Cost is Calculated as :
Consider only production costs.
Production Cost = $15,085 + $10,200 + $9,200 = $34,485
Ending Units = 6,050 units - 3,700 units = 2,350 units
Units Produced = 6,050 units
therefore,
Finished Goods Inventory = $34,485 x 2,350 units/ 6,050 units = $13,395
Blue Point Company is formulating its marketing expense budget for the month of September. Sales in units for August amounted to 4,000; sales volume in September is expected to increase by 10%. So far for the current year, fixed marketing expense per month amounted to $5,000 of salaries and $1,500 of depreciation. Variable marketing expense amount to $.15 paid in cash in the month of sale. What is the estimated cash payment for marketing expense in the month of September
Answer:
See below
Explanation:
Computation of estimated cash payment expense is seen below
Variable expenses
Sales in unit for August 4,000
Sales in unit September 4,000 × 110% = 4,400
Total variable expense 4,400 × $0.15 = $660
Fixed expense per quarter
Salaries $5,000 × 3 = $15,000
Depreciation $1,500 × 3 = $4,500
Total = $19,500
Budget total = $20,160
Estimated cash payment = $20,160 - $4,500 = $15,660
Blues Inc. manufactures jeans in the cutting and sewing process. Jeans are manufactured in 40-jean batch sizes. The cutting time is 5 minutes per jean. The sewing time is 20 minutes per jean. It takes 2 minutes to move a batch of jeans from cutting to sewing. a. Compute the value-added, non-value-added, and total lead time of this process. Value-added lead time fill in the blank 1 minutes Non-value-added lead time fill in the blank 2 minutes Total lead time fill in the blank 3 minutes b. Compute the value-added ratio. Round to one decimal place.
Answer:
a. Value added time = Cutting time + Sewing time
Value added time = 5 minutes + 20 minutes
Value added time = 25 minutes
Non-value added time = Total within batch wait time + Move time
Non-value added time = [25 minutes * (40 - 1) + 2 minutes
Non-value added time = 977 minutes
Total lead time = Value added time + Non-value added time
Total lead time = 25 minutes + 977 minutes
Total lead time = 1,002 minutes
b. Value added ratio = Value added time / Total lead time
Value added ratio = 25 minutes / 1,002 minutes
Value added ratio = 0.02495
Value added ratio = 2.5%
Sunrise, Inc., has no debt outstanding and a total market value of $245,000. Earnings before interest and taxes, EBIT, are projected to be $19,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 25 percent higher. If there is a recession, then EBIT will be 40 percent lower. The company is considering a $58,800 debt issue with an interest rate of 8 percent. The proceeds will be used to repurchase shares of stock. There are currently 5,000 shares outstanding. Ignore taxes for this problem. Assume the stock price is constant under all scenarios.
Required:
a. Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued. Also calculate the percentage changes in EPS when the economy expands or enters a recession.
b. Repeat part (a) assuming that the company goes through with recapitalization. What do you observe?
Answer:
Sunrise, Inc.
a. Earnings per share (EPS) under the three economic scenarios before debt is issued:
Scenarios EBIT EPS Percentage Changes
Normal $19,000 $3.80 ($19,000/5,000)
Expansion $23,750 $4.75 ($23,750/5,000) 25% ($0.95/$3.80 * 100)
Recession $11,400 $2.28 ($11,400/5,000) 40% ($1.52/$3.80 * 100)
b. After capitalization, Earnings per share (EPS) under the three economic scenarios:
Repurchase of stock = $58,800/$49 = 1,200 shares
Outstanding shares = 3,800 (5,000 - 1,200)
Interest expense = $4,700 approx.
Net Income (taxes ignored) = $14,300
Scenarios Net income
Normal $14,300 ($19,000 - $4,700 Interest)
Strong Expansion $17,875 ($14,300 * 1.25)
Recession $8,580 ($14,300 * 0.60)
Scenarios Net income EPS Percentage Changes
Normal $14,300 $3.76 ($14,300/3,800)
Expansion $17,875 $4.70 ($17,875/3,800) 25% ($0.94/$3.76 * 100)
Recession $8,580 $2.25 ($8,580/3,800) 40% ($1.51/$3.76 * 100)
Observation:
The EPS changed under each scenario when the debt was issued, but the percentage changes remained similar to the changes before the debt issue. This can be attributed to the change in the outstanding shares from 5,000 to 3,800. With the debt issue, the EBIT is not used in the calculations but the income after taxes.
Explanation:
a) Data and Calculations:
Total market value = $245,000
Outstanding shares = 5,000
Market price per share = $49 ($245,000/5,000)
EBIT (Earnings before interest and taxes) = $19,000 (normal economic condition)
Scenarios EBIT
Normal $19,000
Strong Expansion $23,750 ($19,000 * 1.25)
Recession $11,400 ($19,000 * 0.60)
Debit issue = $58,800
Interest rate of debt = 8%
The selling price per unit is $3,500. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,400 units. There are no price, efficiency, or spending variances. Any pro- duction-volume variance is written off to cost of goods sold in the month in which it occurs. 360 CHAPTER 9 INVENTORY COSTING AND CAPACITY ANALYSIS 1. Prepare income statements for Crystal Clear in January, February, and March 2014 under (a) variable costing and (b) absorption costing. 2. Explain the difference in operating income for January, February, and March under variable costing and absorption costing.
Question Completion:
Crystal Clear Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2014 are as follows:
Unit data January February March
Beginning inventory 0 100 100
Production 1,400 1,375 1,430
Sales 1,300 1,375 1,455
Variable Costs
Manufacturing cost
per unit produced 950 950 950
Operating (marketing)
cost per unit sold 725 725 725
Fixed Costs
Manufacturing costs 490,000 490,000 490,000
Operating (marketing) costs 120,00 120,000 120,000
Answer:
Crystal Clear
1. Income Statements in January, February, and March 2014:
a. Variable Costing Income Statement
January February March
Sales Revenue $4,550,000 $4,812,500 $5,092,500
Variable cost of goods 2,177,500 2,303,125 2,437,125
Contribution margin $2,372,500 $2,509,375 $2,655,375
Fixed Costs
Manufacturing costs 490,000 490,000 490,000
Operating (marketing) 120,000 120,000 120,000
Total fixed costs $610,000 $610,000 $610,000
Net operating income $2,371,800 $1,899,375 $2,045,375
b. Absorption Costing Income Statement
January February March
Sales Revenue $4,550,000 $4,812,500 $5,092,500
Cost of goods sold 1,690,000 1,795,750 1,881,315
Gross profit $2,860,000 $3,016,750 $3,211,185
Total operating costs 1,062,500 1,116,875 1,174,875
Net operating income $1,797,500 $1,899,875 $2,036,310
2. The difference in the operating incomes for January, February, and March under variable costing and absorption costing is due to the way the fixed cost per month is accounted for in cost of goods sold and ending inventory. With variable costing, all variable costs are included, while absorption includes both variable and fixed manufacturing costs. This makes the ending inventory of variable costing to be carried forward to the next period while absorption costing includes every fixed cost as period costs.
Explanation:
a) Data and Calculations:
Unit data January February March
Beginning inventory 0 100 100
Production 1,400 1,375 1,430
Sales 1,300 1,375 1,455
Ending inventory 100 100 75
Variable Costs
Manufacturing cost
per unit produced 950 950 950
Operating (marketing)
cost per unit sold 725 725 725
Fixed Costs
Manufacturing costs 490,000 490,000 490,000
Operating (marketing) costs 120,00 120,000 120,000
Cost of production:
Variable Costs
Manufacturing cost
per unit produced $1,330,000 $1,306,250 $1,358,500
(1,400 * $950) (1,375 * $950) (1,430 * $950)
Fixed Costs
Manufacturing costs 490,000 490,000 490,000
Total production costs $1,820,000 $1,796,250 $1,848,500
Production units 1,400 1,375 1,430
Unit cost of production $1,300 $1,306 $1,293
Sales Units 1,300 1,375 1,455
Cost of goods sold $1,690,000 $1,795,750 $1,881,315
Operating (marketing) (1,300*$725) (1,375*$725) (1,455*$725)
cost per unit sold
Variable operating cost $942,500 $996,875 $1,054,875
Fixed Costs
Operating (marketing) costs 120,000 120,000 120,000
Total operating costs $1,062,500 $1,116,875 $1,174,875
Variable Costs
Manufacturing cost
per unit produced 950 950 950
Operating (marketing)
cost per unit sold 725 725 725
Total per unit variable cost $1,675 $1,675 $1,675
Sales Units 1,300 1,375 1,455
Total variable cost of goods
sold = $2,177,500 $2,303,125 $2,437,125
Which of the following is true? In a one-shot game, a collusive strategy always represents a Nash equilibrium. A subgame perfect equilibrium occurs when each player is doing the best he can regardless of what the other player is doing. Each Nash equilibrium is a subgame perfect equilibrium. Correct! Every subgame perfect equilibrium is a Nash equilibrium.
Answer: Each Nash equilibrium is a subgame perfect equilibrium.
Explanation:
The Nash Equilibrium in a game is the outcome of which neither of the players would want to deviate from because they are making the highest payoff that they can given the other player's possible choice and leaving this outcome would result in a lower payoff.
In every subgame that is based on the original game therefore, the Nash equilibrium represents the perfect equilibrium for the players as it is giving the highest payoff given the circumstances.
Miller, Inc. has 5,000 shares of 6%, $400 par value, cumulative preferred stock and 100,000 shares of $4 par value common stock outstanding. There were no dividends declared in 2015. The board of directors declared and paid dividends of $200,000 each in 2016 and 2017. What is the amount of dividends received by the common stockholders in 2017
Answer:
$40,000
Explanation:
Calculation to determine the amount of dividends received by the common stockholders in 2017
First step is to calculate the preferred stock
Preferred stock=(5,000 shares*$400)*6%
Preferred stock=$2,000,000*6%
Preferred stock=$120,000
Now let calculate the amount of dividends received by the common stockholders in 2017
Dividend Received=($200,000-$120,000)/2
Dividend Received=$80,000/2
Dividend Received=$40,000
Therefore the amount of dividends received by the common stockholders in 2017 will be$40,000
Leaders at ElectroExpo Inc. want to develop a results-oriented organizational culture. To do this, they devise a new system to maintain project logs in order to record any lags in project execution. They also encourage their employees to work on every alternate Saturday of a month in order to increase productivity in exchange for additional compensation. However, the leaders face stiff resistance from the employees because they are not comfortable with this change. In this case, which of the following steps should the leaders take?
a. The leaders should take legal actions against the employees who oppose the change or who instigate other employees to resist the change.
b. The leaders should find ways to enable the employees to see the value in changes that are needed for the organization to succeed.
c. The leaders should promise to fulfill all the demands of the employees and empower them to make important business decisions.
d. The leaders should lay off the employees who are resisting the changes in the organization.
Answer: b. The leaders should find ways to enable the employees to see the value in changes that are needed for the organization to succeed
Explanation:
With regards to the information given in the question, the best option will be for the leaders to find ways to enable the employees to see the value in changes that are needed for the organization to succeed.
In every organization, communication is key between the management and the employees. In this case, the leaders should inform the employees about the reason that they are taking the decision and how the decision will have an impact on the organization.
Taking legal steps against the employees or laying them off isn't the right thing to do. The employees should be made to see the value in the changes to be made.
Therefore, the correct option is B.
In one sentence, briefly explain why a secretary must finalise his or her minutes in the shortest possible time after a meeting has ended
Answer:
Every set of minutes should include basic information about the meeting, starting with the meeting type -- committee or general -- and the time and date at which it started. The secretary should also record the names of all parties present as well if any members were excused from the meeting before it opened. If members arrive late to the meeting, note the time at which they arrived. In addition, if a proxy represents a member or a quorum of members, such as the case of a shareholder's meeting, the minutes should reflect his presence. The secretary should also record the time at which the meeting adjourns
Explanation:
Couldn't have been in one sentence but i hope i helped! xoxo
Knight forward, a division of King Corp., has a net operating income of $60,000 and average operating assets of $300,000. The minimum required rate of return for the company is 15%. If the manager of the Knight forward division is evaluated based on residual income, will she want to make an investment of $100,000 that would generate additional net operating income of $14,000 per year
Required:
What is the division’s ROI?
Answer:
20% and no
Explanation:
The computation of the return on the investment is shown below:
= Net operating income ÷ average operating assets
= $60,000 ÷ $300,000
= 20%
Now based on the investment and extra net operating income
The return on the investment is
= Net operating income ÷ average operating assets
= ($60,000 + $14,000) ÷ ($300,000 - $100,000)
= $74,000÷ $400,000
= 18.5%
Since this ROI would be less than the above ROI so the investment should not be made
Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,750,000 in 2021 for the mining site and spent an additional $750,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately four years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs:
Cash Outflow Probability
1 $ 450,000 15 %
2 550,000 45 %
3 750,000 40 %
To aid extraction, Jackpot purchased some new equipment on July 1, 2021, for $270,000. After the copper is removed from this mine, the equipment will be sold. The credit-adjusted, risk-free rate of interest is 12%.
Required:
1. Prepare the journal entries to record the acquisition costs of the mine and the purchase of equipment.
2. Prepare journal entries for :
a. Record the acquisition costs of the mine.
b. Record the purchase of equipment.
Answer:
Jackpot Mining Company
1. Journal Entries to
a) record the acquisition cost of ths mine:
Debit Investment in Copper Mine $1,750,000
Credit Cash $1,750,000
To record the cost of acquiring the mining site
Debit Investment in Copper Mine $750,000
Credit Cash $750,000.
To record the cost of preparing the mine site.
Debit Investment in Copper Mine $390,844
Credit Restoration Liability $390,844
To record the provision for mine restoration liability.
b) the purchase of equipment:
July 1, 2021
Debit Equipment $270,000
Credit Cash $270,000
To record the purchase of equipment.
Explanation:
a) Data and Analysis:
2021 Investment in Copper Mine $1,750,000 Cash $1,750,000
2021 Investment in Copper Mine $750,000 Cash $750,000
Restoration cost:
Cash Outflow Probability Expected Cost
1 $ 450,000 15 % $67,500
2 550,000 45 % 247,500
3 750,000 40 % 300,000
Expected restoration cost = $615,000
Adjusted risk-free interest rate = 12%
Mining period before restoration = 4 years
PV of restoration cost = $390,844
N (# of periods) 4
I/Y (Interest per year) 12
PMT (Periodic Payment) 0
FV (Future Value) $615,000
Results
PV = $390,843.62
Total Interest $224,156.38
Purchase of new equipment"
July 1, 2021 Equipment $270,000 Cash $270,000
Total cost of copper mine:
Acquisition cost $1,750,000
Additional cost 750,000
Restoration cost 390,844
Total cost of mine $2,890,844
Suppose you invest $20,000 by purchasing 200 shares of Abbott Labs (ABT) at $50 per share, 200 shares of Lowes Companies, Inc. (LOW) at $30 per share, and 100 shares of Ball Corporation (BLL) at $40 per share. Suppose over the next year Ball Corporation has a return of 12.5%, Lowes Companies has a return of 20%, and Abbott Labs has a return of -10%. The return on your portfolio over the year is:
Answer:
Portfolio return = 0.035 or 3.5%
Explanation:
The portfolio return is a function of the weighted average of individual stocks' returns that form up the portfolio. The formula to calculate the portfolio return is as follows,
Portfolio return = wA * rA + wB * rB + ... + wN * rN
Where,
w represents the weight of each stock in the portfolior represents the return of each stockFirst we need to calculate the investment of each stock,
Abbott = 200 * 50 = $10000
Lowes = 200 * 30 = $6000
Ball = 100 * 40 = $4000
Portfolio return = (10000 / 20000) * -0.10 + (6000/20000) * 0.20 +
(4000/20000) * 0.125
Portfolio return = 0.035 or 3.5%
Clothing Company wants to produce a new line of light weight winter coats. They currently have 2 models of winter coats: a medium weight winter coat and a heavy weight winter coat. They currently sell 55,500 medium weight winter coats each year at a price of $250 per coat. They currently sell 80,200 heavy weight winter coats each year at a price of $320 per coat. If the clothing company decides to sell the light weight winter coat, then they expect to sell 35,700 coats at a price of $190 per coat. If Clothing company sells the light weight winter coat, then they expect to sell only 50,200 medium weight winter coats and 70,800 heavy weight winter coats. What is the incremental revenue generated from potential project
Answer:
Clothing Company
The incremental revenue generated from potential project is:
= $2,450,000.
Explanation:
a) Data and Calculations:
Alternative 1 Alternative 2
Units to be sold:
Sale of light-weight winter coat 35,700
Sale of medium weight winter coat 55,500 50,200
Sale of heavy weight winter coat 80,200 70,800
Total coats sold 135,700 156,700
Selling prices:
Lightweight winter coat = $190 per coat
Medium weight winter coat = $250 per coat
Heavy weight winter coat = $320 per coat
Revenue from Sales:
Alternative 1 Alternative 2 Increment
Units to be sold:
Light-weight winter coat $6,783,000 $6,783,000
(35,700*$190)
Medium weight winter coat $13,875,000 12,550,000 (1,325,000)
(55,500*$250) (50,200*$250)
Heavy weight winter coat 25,664,000 22,656,000 (3,008,000)
(80,200*$320) (70,800*$320)
Total sales revenue $39,539,000 $41,989,000 $2,450,000
b) The computations show that Clothing Company would earn additional $2,450,000 in revenue if it embarked on the new project of making and selling 35,700 lightweight winter coats.
Ann Company borrowed $240,000 to buy an equipment on January 1, 2019, and signed a 7% instalment note requiring annual equal payments, including principal and interest at the end of every year for 15 years. Rounded to the nearest dollar, determine the balance in the Instalment Note Payable account after making the first annual payment.
Answer:
$2,000
Explanation:
Payment include repayment of Capital Amount and Payment of Interest expense
Therefore the balance in the Instalment Note Payable account after making the first annual payment is
Paid $4,200 for utilities. Performed services for $21,000 on account. Received $13,000 from charge account customers. Paid salaries of $9,000 to employees. Paid $16,000 to a creditor on account. Owner invested $180,000 in the business. Purchased $53,400 of supplies on account. Purchased equipment for $42,000 cash. Paid $12,000 for rent (in advance). Performed services for $15,600 cash.
Indicate the impact of each of the transactions on the fundamental accounting equation (Assets = Liabilities + Owner's Equity) by placing a ""to indicate an increase and a "D" to indicate a decrease. The first transaction is entered as an example. (If transaction causes one account to increase and another to decrease within the same classification of the accounting equation, select 1/D.)
Transaction Assets = Liabilities + Owner's Equity
1 D = D
2. 3. 4. 5. 6. 7. 8. 9. 10.
Answer:
1. Cash (Assets) DECREASES
Expenses INCREASE
Owner’s Equity DECREASES.
2. Accounts Receivable (Assets) INCREASES
Revenue INCREASES
Owner’s Equity INCREASES
3. Cash (Assets) INCREASES.
Accounts Receivable (Assets) DECREASES.
4. Cash (Assets) DECREASE
Expenses INCREASE
Owner’s Equity DECREASES
5. Cash (Assets) decreases.
Accounts Payable (Liabilities) decreases.
6. Assets INCREASE
Owner’s Equity INCREASES
7. Supplies (Assets) INCREASES.
Accounts Payable (Liabilities) INCREASES
8. Equipment (Assets) INCREASES
Cash (Assets) DECREASES
9. Prepaid Rent (Assets) INCREASES
Cash (Assets) DECREASES
10. Cash (Assets) INCREASE
Revenue INCREASES
Owner’s Equity INCREASES
Explanation:
To Indicate the impact of each of the transactions on the fundamental accounting equation
1. Paid the amount of $4,200 for utilities.
Cash (Assets) DECREASES
Expenses INCREASE
Owner’s Equity DECREASES.
2. Performed services for the amount of $21,000 on account.
Accounts Receivable (Assets) INCREASES
Revenue INCREASES
Owner’s Equity INCREASES
3. Received the amount of $13,000 from charge account customers.
Cash (Assets) INCREASES.
Accounts Receivable (Assets) DECREASES.
4. Paid salaries of the amount of $9,000 to employees.
Cash (Assets) DECREASES
Expenses INCREASE
Owner’s Equity DECREASES
5. Paid the amount of $16,000 to a creditor on account.
Cash (Assets) decreases.
Accounts Payable (Liabilities) decreases.
6. Owner invested the amount of $180,000 in the business.
Assets INCREASE.
Owner’s Equity INCREASES
7. Purchased the amount of $53,400 of supplies on account
Supplies (Assets) INCREASES.
Accounts Payable (Liabilities) INCREASES
8. Purchased equipment for the amount of $42,000 cash
Equipment (Assets) INCREASES
Cash (Assets) DECREASES
9. Paid the amount of $12,000 for rent (in advance).
Prepaid Rent (Assets) INCREASES
Cash (Assets) DECREASES
10. Performed services for the amount of $15,600 cash
Cash (Assets) INCREASE
Revenue INCREASES
Owner’s Equity INCREASES
Stephen Company had the following partial list of account balances at year-end: Accounts Receivable: $9,000 Cost of Goods Sold: $34,100 Sales Revenue: $57,200 Accounts Payable: $7,500 Sales Discounts: $1,600 Merchandise Inventory: $5,900 Operating Expenses: $8,400 Sales Returns and Allowances: $4,300 The amount of Gross Profit shown on the income statement would be: A) $ 26,200 B) $ 8,800 C) $ 17,200 D) $ 8,200 E) $ 11,300
Answer:
The correct option is C) $17,200.
Explanation:
The amount of Gross Profit shown on the income statement can be calculated as follows:
Net sales revenue = Sales Revenue - Sales Discounts - ales Returns and Allowances = $57,200 - $1,600 - $4,300 = $51,300
Gross profit = Net sales revenue - Cost of Goods Sold = $51,300 - $34,100 = $17,200
Therefore, the correct option is C) $17,200. That is, the amount of Gross Profit shown on the income statement would be $17,200.
During a time of inflation, what happens to the value of the dollar?
Answer:
The impact inflation has on the time value of money is that it decreases the value of a dollar over time. ... Inflation increases the price of goods and services over time, effectively decreasing the number of goods and services you can buy with a dollar in the future as opposed to a dollar today.
Explanation:
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Soprano Corporation allocates administrative costs on the basis of staff hours. Short-run monthly usage and anticipated long-run monthly usage of staff hours for Operating Departments 1 and 2 follow. Department 1 Department 2 Total Short-run usage (hours) 80,000 120,000 200,000 Long-run usage (hours) 90,000 110,000 200,000 If Soprano uses dual-cost accounting procedures and fixed administrative costs total $1,000,000, the amount of fixed administrative costs to allocate to Department 1 would be:
Answer:
$850,000
Explanation:
Total Hours of Department 1=$80,000+$90,000
=$170,000/$200,000*1000,0000
Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 69,000 units of RX5 follows. Direct materials $ 5.00 Direct labor 9.00 Overhead 10.00 Total costs per unit $ 24.00 Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the 69,000 units of RX5 for $19.00 per unit. Required: 1. Determine the total incremental cost of making 69,000 units of RX5. 2. Determine the total incremental cost of buying 69,000 units of RX5. 3. Should the company make or buy RX5
Answer:
It is cheaper to make the units in-house. The company will save $207,000.
Explanation:
Giving the following formula:
Production:
Direct materials $ 5.00
Direct labor 9.00
Varaible overhead= 10 - 8= $2
Total fixed overhead= (10*0.8)*69,000= $621,000
Direct materials and direct labor are 100% variable.
Overhead is 80% fixed.
An outside supplier has offered to supply the 69,000 units of RX5 for $19.00 per unit.
I will assume that none of the fixed overhead is avoidable.
First, we need to calculate the incremental cost of making 69,000 units. As it is incremental, we will take into account only the variable costs:
Make in-house:
Total variable cost= 69,000*(5 + 9 + 2)= $1,104,000
Now, the total cost of buying:
Buy:
Total cost= 69,000*19= $1,311,000
It is cheaper to make the units in-house. The company will save $207,000.
A new minor league baseball stadium is opening soon and the owner is only allowing local, family-owned restaurants to sell within the park. Two hotdog vendors are set to sell within the stadium: (i) The HOT Dog and (ii) Ballpark Frankies. The Baseball park necessitates that the vendors set their prices at the beginning of each season and then hold the price constant during the games that occur that season. The fans are not sensitive to the quality of the hotdog, just the price. The two vendors have every inclination to stay in the ballpark for the life of their firms, so imagine that this will be an infinitely repeated game. Based on relative prices, the potential payoffs for the season are listed below: The HOT Dog Ballpark Frankies Low Price High Price Low Price $10,000 , $10,000 $90,000 , -$3,000 High Price -$3,000 , $90,000 $20,000 , $20,000 Given the high current interest rate of 10%, The HOT Dog is considering to post a high price in the inaugural season and hope that Ballpark Frankies follows as well with a high price of their own. Evaluate if this is a risky strategy for The HOT Dog.
Answer:
This is a very risky strategy for The HOT Dog.
Explanation:
Seeing as how they must keep the price continuously throughout the season, if Frankies' sets a low price, The HOT Dog will lose almost all of their business.
Which of the following statements regarding SPT and WSPT is INCORRECT?
a. SPT always assigns the highest priority to the job to lowest processing time.
b. SPT does not consider the weight differences among different jobs.
c. WSPT may not assign the highest priority to the job with the highest weight because it also considers the processing time information.
d. WSPT assigns the highest priority to the job with the LOWEST weight/processing time ratio.
Answer:
D
Explanation:
WSPT assigns the highest priority to the job with the LOWEST weight/processing time ratio.
Match the items with the appropriate definitions. Items which are not definitions will be used.
Barter Double coincidence of wants Money
Answer Bank
paper bills and coins
a situation where two individuals each want some good or service that the other can provide
trading one good for another without the use of money
whatever serves society in three functions: medium of exchange, store of value, and unit of account
an event that occurs in conjunction with an unrelated event
a situation in which money is used to facilitate economic transactions
Answer:
Double coincidence of wants - a situation where two individuals each want some good or service that the other can provide
Double coincidence of wants occurs when in a transaction between two or more individuals, each want to obtain the good or service that the other is offering.
Barter - trading one good for another without the use of money
In barter, people trade a good or service for another good or service, without the use of money as medium of exchange. An example of barter is trading a cow for a sheep.
Money - whatever serves society in three functions: medium of exchange, store of value, and unit of account
Money is any good that serves the three purposes of money, store of value to serve as a medium to save or to accumulate wealth, medium of exchange to trade goods and services, and unit of account to measure the value of goods and services under a common guide.
ABC Company holds a well-diversified portfolio in the amount of $90,000 that has an expected return of 11.0% and a beta of 1.28. It is buying 1,000 shares of DEF Company stock at $10 a share and adding them to its portfolio. DEF Company has an expected return of 13.0% and a beta of 1.50. Currently, the risk free rate is 2.5%, and the stock market return is 8.06%.
What will the beta on the portfolio be after the purchase of the Syngine stock?
a. 1.17
b. 1.29
c. 1.36
d. 1.42
e. 1.23
Beachfront property owners of the Town of Eden Beach requesteda financed through a note payable, which was to be repaid from taxes raised through a special assessment on their properties. The Town guarantees the debt and accounts for the special assessment through a debt service fund. Assume the special assessments were levied in 2016, recording a special assessment receivable an assessment is to be collected each year and used to pay the interest and principal on the note d deferred inflow in the amount of $480,000. One-third of the
Record the following transactions that occurred in 2017
1 June 30. S160000 of the assessments became due and currently receivable (Hint The special assessment tax is recorded as revenue in the debt service fund when it becomes due)
2. July 31, the $160.000 was collected
3 September 30, interest of $24.000 and principal of $136.000 were paid
4 December 31, the books were closed
If no entry is required for e transaction/event, select "No Journal Entry Required" in the first account field.)
Answer: See explanation
Explanation:
The journal entries for the transaction goes thus:
June30:
Debit Deferred revenue 160,000
Credit Special assessment revenue 160,000
July 31:
Debit Cash 160,000
Credit special assesement tax receivable 160,000
September 30:
Debit interest expenditure 24,000
Debit principal expenditure 136,000
Credit cash 160,000
December 31:
Debit Special assesement revenue 160,000.00
Credit interest expenditure 24,000
Credit Principal expenditure 136,000
Identify the type of bond based on each description given below:
a. These bonds are collateralized securities with first claims in the event of bankruptcy.
b. These bonds are not backed by any physical collateral.
c. They are backed by the reputation and creditworthiness of the issuing company.
d. These bonds are considered the riskiest of all corporate bonds and thus offer the highest interest rates.
Answer:
a. These bonds are collateralized securities with first claims in the event of bankruptcy. SENIOR MORTGAGE BONDS.
A senior mortgage bond is one whose collateral is one or more properties. Mortgage bonds generally have priority over other types of bonds and a senior mortgage bond has priority over other mortgage bonds.
b. These bonds are not backed by any physical collateral. They are backed by the reputation and creditworthiness of the issuing company. DEBENTURES
Debentures have no physical collateral backing them and are only back by the reputation of the company. This therefore makes them a bit high risk and so their rates are higher.
d. These bonds are considered the riskiest of all corporate bonds and thus offer the highest interest rates. SUBORDINATED DEBENTURES.
Debentures have higher than normal rates so subordinated debentures will be quite risky. They command the highest rates as a result because in the event of a default, their claim on assets is last.
16. The selling of goods and/or services to a customer is called
O A. purchasing
B. food service.
O C. service industry.
D. retail
Answer: retail
Explanation:
Retail refers to the sale of products and/or services to a customer. Thus option (D) is correct.
What are customer?A client is a person who purchases goods, services, or ideas from a seller, vendor, or supplier in exchange for money or another useful consideration. This definition applies to sales, commerce, and economics. A customer is an individual or business that purchases another company's goods or services
An individual or business that purchases goods or services from another company is known as a customer. Customers are crucial to businesses because they generate income; without them, they would cease to exist.
Therefore, option(D) is correct.
Learn more about customer here:
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Answer:
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Explanation:
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