Answer:
$5,580
Explanation:
Straight line method charges a fixed amount of depreciation for each and every year the asset is in use in the business.
Depreciation expense = (Cost - Salvage Amount) ÷ Estimated useful life
therefore,
Depreciation expense = ($34,100 - $620) ÷ 6
= $5,580
Using the straight-line method, the amount of one year's depreciation is $5,580.
What is the present value of a constant perpetuity of 25 per year where the required rate of return is 5%
Answer:
The present value of a constant perpetuity of 25 per year where the required rate of return is 5% is:
$500
Explanation:
a) Data and Calculations:
A constant perpetuity = $1
Present value factor of a constant perpetuity for 25 per year at 5% is $1/0.002
Number of periods for the perpetuity per year = 25
Required rate of return = 5%
Rate of return per period = 5%/25 = 0.002
Therefore, the value of a constant perpetuity = $1/0.002
= $500
The $500 can be used to multiply any amount given obtain the total value of the perpetuity.
The present value of a constant perpetuity of 25 per year where the required rate of return is 5% is $500
Given the information below :
We know that a constant perpetuity(payments) = $1
Required rate of return = 5%
Rate of return per period = 5%/25 = 0.002
Number of periods for the perpetuity per year = 25
Therefore, the value of a constant perpetuity
= Payments / Rate of return per period
= $1 / 0.002
= $500
Hence, present value of a constant perpetuity of 25 per year where the required rate of return is 5% is $500
Learn more about constant perpetuity here : https://brainly.com/question/17157614
assuming the hiking shoes division of the all about shoes corporation had the following results last year managements target rate of return 10% and the weighted average cost of capital is 30%. its effective rac rate is 25% what is the divisions return on investment roi
Answer:
116.67%
Explanation:
Note: Complete question is attached as picture below
Capital Turnover = Sales / Total Assets
Capital Turnover = $7,000,000 / $1,500,000
Capital Turnover = 4.67
Sales Margin = Operating Income / Sales
Sales Margin = $1,750,000/$7,000,000
Sales Margin = 0.25
Sales Margin = 25%
Division Rate of Investment = Capital Turnover * Sales Margin
Division Rate of Investment = 4.67 * 25%
Division Rate of Investment = 116.67%
It takes Suzi 6 hours to sew a shirt and 4 hours to bake a cake. Anna can sew a shirt in 3 hours and bake a cake in 1 hour. If Anna and Suzi decide to specialize and trade, who should make shirts?
Answer:
Suzi
Explanation:
Comparative advantage is the relative edge that a person has over another in the production of a product. They use less resources to produce the product than others.
When two parties corporate in production the good to produce can be shared base on who has comparative advantage or the person that loses less in a production process.
In the give instance
Suzi can produce a shirt in 6 hours while Anna produces it in 3 hours. Anna is twice as fast as Suzi.
Suzi can bake a cake in 4 hours while Anna can do so in 1 hour. So Anna is 4 times faster than Suzi in baking cakes.
It will be best for Suzi to make shirts since she is only twice as slow as Anna.
Anna will be better off baking cakes as she is four times as fast here.
A firm has fixed costs of $1.2 million and depreciation of $1 million. At a sales level of $3.6 million, the variable costs of $2.304 million. What is the accounting break-even level of sales
Answer: 6.11 million
Explanation:
The accounting break-even level of sales will be calculated as:
= (depreciation + fixed costs) / (1 - (variable costs/sales))
= (1.2million + 1million) / [1 - (2.304million / 3.6million))
= 2.2 million / (1 - 0.64)
= 2.2million /0.36
= 6.11 million
Therefore, the the accounting break-even level of sales is $6.11 million.
During March 2020, Toby Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data. Actual StandardJob Number Hours Cost Hours Costs Totla varianceA257 210 $4,830 216 $4,968 $138 F A258 480 12,000 464 10,672 1,328 U A259 330 7,953 330 7,590 363 U A260 110 2,310 102 2,346 36 F Total variance $1,517 U Analysis reveals that Job A257 was a repeat job. Job A258 was a rush order that required overtime work at premium rates of pay. Job A259 required a more experienced replacement worker on one shift. Work on Job A260 was done for one day by a new trainee when a regular worker was absent.Required:Prepare a report for the plant supervisor on direct labor cost variances for March.
Answer:
Toby Tool & Die Company
A Report on the Direct Labor Cost Variances for March, 2020:
Variances Variance
Job Number Quantity Rate Total
1. A257 $138 F $138 F
2. A258 $368 U $960 U $1,328 U
3. A259 $363 U $363 U
4. A260 $184 U $220 F $36 F
Total $414 U $1,103 U $1,517 U
Explanation:
a) Data and Calculations:
Actual Standard
Job Number Hours Cost Hours Costs Total variance
A257 210 $4,830 216 $4,968 $138 F
A258 480 12,000 464 10,672 1,328 U
A259 330 7,953 330 7,590 363 U
A260 110 2,310 102 2,346 36 F
Total variance $1,517 U
Actual Standard
Job Number Hours Cost Rate Hours Costs Rate Total variance
A257 210 $4,830 $23 216 $4,968 $23 $138 F
A258 480 12,000 25 464 10,672 23 1,328 U
A259 330 7,953 24.1 330 7,590 23 363 U
A260 110 2,310 21 102 2,346 23 36 F
Total variance $1,517 U
1. A257's favorable variance of $138 was quantity variance as less hours were used when compared to the standard hours for the job.
= (Standard hours - Actual hours) * Standard rate = (216 - 210) * $23
= 138 F
2. A258 rush order with overtime at premium rates of pay
Direct labor rate variance = (Standard Rate - Actual Rate) * Actual hours
= ($23 - $25) * 480 = $960 U
Direct labor quantity variance = (Standard hours - Actual hours) * Standard Rate
= 464 - 480 * $23 = $368 U
Total variance = 1,328 U ($960 U + $368 U)
3. A259 more experienced replacement worker required on one shift
Direct labor rate variance = (Standard Rate - Actual Rate) * Actual hours
= ($23 - $24.1) * 330 = $363 U
4. A260 done by a new trainee
Direct labor rate variance = (Standard Rate - Actual Rate) * Actual hours
= ($23 - $21) * 110 = $220 F
Direct labor quantity variance = (Standard hours - Actual hours) * Standard Rate
= (102 -110) * $23 = $184 U
Total variance = $220 F - $184 U = $36 F
On June 1, 2021, Dirty Harry Co. borrowed cash by issuing a 6-month noninterest-bearing note with a maturity value of $420,000 and a discount rate of 10%. Assuming straight-line amortization of the discount, what is the carrying value of the note as of September 30, 2021
Answer:
$413,000
Explanation:
Calculation to determine the carrying value of the note as of September 30, 2021
Carrying value=[$420,000 - ($420,000 .010*6/12)]+ [($420,000 .010*6/12)*4/6]
Carrying value=[$420,000-$21,000]+ ($21,000*4/6)
Carrying value=[$420,000-$21,000]+ $14,000
Carrying value=$399,000+ 14,000
Carrying value=$413,000
Therefore the carrying value of the note as of September 30, 2021 is $413,000
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 was Silverman's net income for the first year in operation
Answer:
$4,550
Explanation:
First, we need to calculate the product cost per unit
Product cost per unit = Total production costs / Units produced
= ($15,085 + $10,200 + $9,200) / 6,050 units
= $5.7 per unit
Cost of goods sold = $5.7 × 3,700 units
= $21,090
Net income = Sales - Cost of goods sold - Operating expenses
= ($8.2 × 3,700) - $21,090 - $4,700
= $30,340 - $21,090 - $4,700
= $4,550
Why might it be argued that corporations do not have a comparative advantage when investing in real estate as a means of diversification from the core business?
Solution :
Real estate is defined as something that is related to the buildings or lands. All the properties that are physically present forms real estate in terms of land and buildings. It includes, vacant land or buildings, commercial real estate, industrial as well as residential real estate.
The corporations does not have a comparative advantage when they invest in the real estate by a means of the diversification from its core business. This is because the organizations do not hold the real estate in the large number of the geographical area. They also do not hold a number of different types of the properties. Therefore, they do not tend to diversify from their real estate holdings as the large institutional investor who hold a more diversified and a larger portfolio.
The ________ paid for products and services goes by many names, like tuition for your education, rent for an apartment, interest on a bank credit card, and a premium for car insurance. Multiple Choice fee value cost price exchange rate
Answer:
price.
Explanation:
Price can be defined as the amount of money that is required to be paid by a buyer (customer) to a seller (producer) in order to acquire goods and services. Thus, it refers to the amount of money a customer or consumer buying goods and services are willing to pay for the goods and services being offered. Also, the price of goods and services are primarily being set by the seller or service provider.
Generally, the price paid by consumers for products and services are referred to as by many names such as tuition for your education (school fee), rent for an apartment (house rent), interest on a bank credit card, and a premium for car insurance.
In sales and marketing, pricing of products is considered to be an essential element of a business firm's marketing mix because place, promotion and product largely depends on it.
Additionally, one of the importance associated with the pricing of products is that, it improves the image of a business firm.
At the end of year 8, Shore Co. held trading securities that cost $17,500 and which had a year-end market value of $19,000. All of these securities were sold during year 9 for $22,000. For the year ended on December 31, year 8, Shore should report a gain of
Answer:
$1,500
Explanation:
Calculation to determine what Shore should report as a gain
Using this formula
Unrealized gain=Market value-Trading securities value
Let plug in the formula
Unrealized gain=$19,000-$17,500
Unrealized gain=$1,500
Therefore Shore should report a gain of $1,500
a) Suppose a country is able to produce a maximum of either 300 units of lumber or 100 units of rice. This country is currently allocating its labor resources to produce 75 units of lumber and 75 units of rice. To increase its lumber production by 6 units to 81, the country faces an opportunity cost of
Answer: 2 units of rice
Explanation:
Opportunity cost simply means the real cost of something else that we forgo or benefit lost. .
a) Based on the information given above, the opportunity cost of producing lumber with regards to the units of rice will be:
= 100/300
= 1/3 units of rice
This means that 1/3 unit of rice will be given up for every 1 unit of lumber
To increase its lumber production by 6 units, then the units of rice that'll be sacrificed will be:
= 6 × 1/3
= 2 units of rice
Therefore, country faces an opportunity cost of 2 units of rice.
The following data were extracted from the income statement of Keever Inc.:
Current Year Previous Year
Sales $18,500,000 $20,000,000
Beginning inventories 940,000 860,000
Cost of goods sold 9,270,000 10,800,000
Ending inventories 1,120,000 940,000
Required:
Determine for each year (1) the inventory turnover and (2) the number of days' sales in inventory.
Answer:
current year 9
previous year = 12
2. current year = 40.56
previous year = 30.42
Explanation:
Inventory turnover is an example of an activity ratio
Activity ratios calculate the efficiency of performing daily task of a firm
Inventory turnover = cost of goods sold / average inventory
Average inventory = (beginning inventory + ending inventory) / 2
the number of days' sales in inventory = number of days in a period / inventory turnover
Current year = (1,120,000 + 940,000) / 2 = 1,030.000
turnover = 9,270,000 / 1,030.000 = 9
365 / 9 =40.56
Previous year
Average inventory = (940,000 + 860,000) / 2 = 900,000
Inventory turnover = 10,800,000 / 900,000 = 12
365 / 12 = 30.42
Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 780 direct labor-hours each month and produce 3,900 robes. The standard costs associated with this level of production are as follows:
Total Per Unit of Product
Direct materials $ 78,624 $ 20.16
Direct labor $ 12,870 3.30
Variable manufacturing overhead
(based on direct labor-hours $ 2,340 0.60
$ 24.06
During April, the factory worked only 755 direct labor-hours and produced 4,000 robes. The following actual costs were recorded during the month:
Total Per Unit of Product
Direct materials (14,000 yards) $ 84,000 $ 21.00
Direct labor $ 14,000 3.50
Variable manufacturing overhead $ 7,200 1.80
$ 26.30
At standard, each robe should require 3.2 yards of material. All of the materials purchased during the month were used in production.
Required:
1. Compute the materials price and quantity variances for April: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)
Materials price variance $ (Click to select)UFNone
Materials quantity variance $ (Click to select)NoneFU
2. Compute the labor rate and efficiency variances for April: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round your intermediate calculations. Round your final answers to the nearest dollar.)
Labor rate variance $ (Click to select)NoneFU
Labor efficiency variance $ (Click to select)UNoneF
3. Compute the variable manufacturing overhead rate and efficiency variances for April: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)
Variable overhead rate variance $ (Click to select)UFNone
Variable overhead efficiency variance $ (Click to select)NoneUF
Answer and Explanation:
The computation is shown below;
1
Material price variance= (Standard Price-Actual Price) × Actual Qty
= (20.16 ÷ 3.2 - 84000 ÷ 14000) × 14000
= $4200 Favorable
Material Quantity variance= (Standard Qty -Actual Qty ) ×Standard Price
= (4000 ×3.2 - 14000) ×6.3
= $7560 Unfavorable
2
Labour rate variance= (Standard Rate-Actual Rate) ×Actual Hour
= (12870 ÷ 780-14000 ÷ 755) ×755
= $1542.50 Unfavorable
Labour efficiency variance= (Standard Hour -Actual Hour ) × Standard Rate
= (780 × 4000 ÷ 3900 - 755) × 16.50
= $742.50 Favorable
3
Variable Overhead rate variance= (Standard Rate-Actual Rate) × Actual Hour
= (2340 ÷ 780-7200 ÷ 755) × 755
= $4935 Unfavorable
Variable Overhead efficiency variance= (Standard Hour -Actual Hour ) × Standard Rate
= (780 × 4000 ÷ 3900 - 755) × 3
= $135 Favorable
Concord is a nonprofit organization that captures stray deer bewildered within residential communities. Fixed costs are $10000. The variable cost of capturing each deer is $10 each. Concord is funded by a local philanthropy in the amount of $56000 for 2020. How many deer can Concord capture during 2020?
Answer: 4600
Explanation:
The number of deer that Concord can capture during 2020 will be calculated thus:
Let the number of deers that'll be captured be represented by x.
Based on the information given in the question, we can form an equal which will be:
Fixed cost + Variable cost = Total cost
10000 + 10x = 56000
10x = 56000 - 10000
10x = 46000
x = 46000/10
x = 4600
Therefore, 4600 deers can be captured
Applications that integrate business activities across departmental boundaries are often referred to as _____________ planning systems.
Answer:
Enterprise resource.
Explanation:
Enterprise Resource Planning (ERP) is a business strategy process where organizations manage and integrate the main parts of their day-to-day business activities by using software applications.
The ERP software system is used to integrate planning, accounting, finance, marketing and human resources.
For instance, when an organization is replacing a payroll program that it developed in house, with the relevant subsystem of a commercial Enterprise Resource Planning (ERP) system, It should be noted that a faulty migration of historical data from the old system to the new system represent the highest potential risk because you won't be able to measure and analyze performance.
Hence, software applications or programs that integrate all business activities across departmental boundaries such as marketing, procurement, customer relationship, sales, etc., are often referred to as enterprise resource planning systems.
Even though Firm A's current ratio exceeds that of Firm B, Firm B's quick ratio might exceed that of A. However, if A's quick ratio exceeds B's, then we can be certain that A's current ratio is also larger than that of B. True False
Answer: False
Explanation:
If Firm A's current ratio exceeds that of Firm B, it is still possible that B's quick ratio is larger than A's. If A's quick ratio is larger than B's however, then there is still a possibility that B's current ratio can be larger than A's.
The current ratio is the Current Assets divided by Current liabilities. The Quick ratio is Current Assets less inventory divided by Current liabilities.
B's current ratio can therefor be larger than A's if it has more inventory than A such that when we calculate the current ratio of B, the extra inventory would give it a higher current ratio than A.
Gena Manufacturing Company has a fixed cost of $225,000 for the production of tubes. Estimated sales are 150,000 units. A before tax profit of $125,000 is desired by the controller. If the tubes sell for $5 each, what unit contribution margin is required to attain the profit target?
$1.47.
$2.33.
$3.00.
$0.90.
Answer: $2.33
Explanation:
The unit contribution margin that is required to attain the profit target will be calculated thus:
= (Fixed cost + Desired profit) / Estimated units
= ($225,000 + $125,000) / 150,000
= $350,000 / 150,000
= $2.33
Therefore, the unit contribution margin is $2.33
The allocatively efficient quantity of product Z for the whole market is 2 million units. At that quantity, the demand for Z is at $5 and the average total cost for its single supplier is $7. The average total cost does not fall to $5 until 3.5 million units. Based on this data, the market for product Z is
Question Completion:
ANSWER CHOICES
A. operating with decreasing returns to scale
B. a natural monopoly
C. a legal monopoly
D. monopolistically competitive
E. productively efficient
Answer:
Based on this data, the market for product Z is:
A. operating with decreasing returns to scale.
Explanation:
For the Average Revenue (Price) to equal the Average Total Cost (ATC) and enable the firms operating in the market to break-even, the firms must increase their production units from 2 million to 3.5 million units. The conclusion that the market for product Z is operating with decreasing returns to scale for a single supplier is because it will take a 75% increase in production for the average total cost to fall from $7 to $5 for the single producer. In other words, the percentage increase in production does not result in a proportionate decrease in average total cost.
The purpose or objectives of competition policy
Answer:
to encourage creativity
Inez is compensated based on a plan that pays a base salary, with commission in addition. Inez receives $40,000/year salary (and is paid monthly); additionally, she receives 8% on all sales in excess of $50,000 in sales/month. In April, Inez sold $69,500 of product. Calculate her monthly earnings.
Answer:
$4,893.33
Explanation:
Inez's monthly earnings in April comprises of her monthly salary and the performance bonus which are both computed as shown below:
monthly salary=annual salary/12 months
annual salary
monthly salary=$40,000/12
monthly salary=$3,333.33
Note that the performance bonus is not based on the entire sales revenue generated by her but on the sales revenue above the threshold of $50,000
sales performance bonus=($69,500-$50,000)*8%
sales performance bonus=$1,560
monthly earnings=$3,333.33+$1,560
monthly earnings=$4,893.33
The opportunity cost of buying a ticket to a major league baseball game and then going to the game is: the time spent at the game. the next best alternative that could have been undertaken. all other alternative activities that could have been undertaken. the price of the ticket.
Answer:
. the next best alternative that could have been undertaken.
Explanation:
Opportunity cost of the next best option forgone when one alternative is chosen over other alternatives
Assume that the next best option instead of attending the game is to study for a test. this is the opportunity cost
the price of the ticket is known as the explicit cost. Explicit cost includes the amount expended in carrying out a particular activity
Our company makes and sells a single product at the selling price of $97 per unit. In January, we upgraded our manufacturing facility to increase capacity and reduce variable costs per unit (this significantly increased our fixed manufacturing costs). We now have the capacity to make 1,000 units per month. Over the next three months, we expect our production and sales to average 700 units per month. We recently received a take-it-or-leave-it offer for 100 units from a one-time customer. The customer offers to pay us $65 per unit. To help us evaluate this offer, our accounting staff provided the following information (identical for our regular sales and the special order): our normal absorption manufacturing cost per unit equals $50, and our variable selling cost per unit equals $15. Which of the following is correct?
a. We should reject the offer because the offered price is much lower than the normal selling price
b. We should accept the offer because it would reduce our excess capacity cost
c. We should reject the offer because it would reduce our ROI
d. We should accept the offer because it would increase our net operating income
e. Quantitatively, we are indifferent between accepting and rejecting the offer
Answer:
d. We should accept the offer because it would increase our net operating income
Explanation:
A differential analysis only includes relevant costs. This means that only costs that are affected by the special order are considered. In this case, variable costs are the only relevant costs, since fixed costs will occur regardless of the acceptance or rejection of the special order. This special order will increase the company's operating profits by ($65 - $15) x 100 = $5,000
what is the equivalent present amount of an eight year series of decreasing amaounts if the interest rate is 10% compounded annually, the first year amount is $20,000, and the rate of decrease is $800 per year
Answer: $93,876
Explanation:
The equivalent present amount of an 8year series of decreasing amounts when the interest rate is 10% compounded annually, the first year amount is $20,000, and the rate of decrease is $800 per year will be calculated thus:
PV = C / (1+r) ^ t
= 20,000/1.1 + 19,200/1.1² + 18,400/1.1³ + 17,600/1.1⁴ +16,800/1.1^5 + 16,000/1.1^6 + 15,200/1.1^7 + 14,400/1.1^8
= $93,876
Therefore, the equivalent present value is $93,876.
When you took over as the marketing manager for clothing manufacturer Harrison, it appeared that the existing social media strategy was not resonating with consumers so you launched a new interactive campaign inviting the brand's loyal fans to post pictures of themselves wearing Harrison merchandise. Which of the following would indicate that the user-generated content is getting a better response?
a. To date, nearly 3,000 users have posted photos or videos.
b. User-generated posts typically get at least 50 "likes" each.
c. Your conversion rate has been averaging 2-3 percent.
d. You've seen a 7-percent increase in online sales.
Answer: You've seen a 7-percent increase in online sales.
Explanation:
A 7-percent increase in online sales will iindicate that the user-generated content is getting a better response.
Option A is Incorrect as 3,000 users posting photos or videos doesn't indicate that there social media strategy used is working for the company.
Option B and C isn't correct as well. Option D shows that the social media strategy is having a positive impact as there's an increase in sales.
One-fifth of the population, rank ordered by income, is A) An income quintile B) A population quintile. C) An earnings-population quintile. D) None of the choices are correct.
Answer: income quintile
Explanation:
An income quintile is how the socioeconomic status of a population is measured. Here, the population is divided into 5 income groups which is from the lowest income group to the highest income group. One-fifth of the population are in each group, which is rank ordered by income.
The first quintile = 0 - 20%
Second quintile = 20% - 40%
Third quintile = 40% - 60%
Fourth quintile = 60% - 80%
Fifth quintile = 80% - 100%
Suppose the price of a BMW falls. Explain the law of demand based on the income and substitution effects.
Answer:
According to the law of demand, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.
It is expected that when the price of a BMW falls, the quantity of cars demanded increases.
there are two effect in place that affect the demand for BMW.
They are :
the substitution effect the income effectThe substitution effect looks at the change in price of a good relative to other goods. When the price of a BMW falls, it becomes cheaper relative to other goods. As a result, consumers buy more of BMWs and less of other goods. This leads to a movement down along the demand curve for that good.
The income effect looks at how a change in price affects real disposable income. When the price the BMW decreases, real disposable income increases. As a result, consumers can afford to buy more BMW cars as the consumers purchasing power has increased, holding money income constant.
These two effects lead to an increase in the quantity of BMW demanded
Explanation:
At market interest rate level of 2%, a ten-year and a 30-year bond ( both with 8% coupon rates and semiannual payment ) are selling at the prices $1,541.37 and $2,348.65, respectively. If you expected that interest rate will jump to 10% from the current level, which bond is risker and which bond is more profitable if interest rate drop significantly
Answer:
30 year Bond , 30 year Bond
Explanation:
Market interest rate = 2%
Coupon rates for both ten-year bond and 30-year coupon bound = 8%
semi-annual payments : $1541.37 , $2348.65 respectively
Determine which bond is riskier
Assuming interest rate rise to 10%
Given that both both bonds have the same Coupon rate but the semiannually payments are different ( i.e. Ten year bond = $1541.37 , 30-year Bond = $2348.65 )
The riskier Bond will be the Riskier Bond , The more profitable Bond if the interest rate drop drastically will be 30 year Bond as well
Blue Spruce Company is considering two new projects, each requiring an equipment investment of $101,800. Each project will last for three years and produce the following cash flows:
Year Cool Hot
1 $40,400 $44,400
2 45,400 44,400
3 50,400 44,400
136,200 $133,200
The equipment will have no salvage value at the end of its three-year life. Blue Spruce Company uses straight-line depreciation and requires a minimum rate of return of 12%.
Present value data are as follows:
Period 12%
1 0.89286
2 0.79719
3 0.71178
Present Value of an Annuity of 1
Period 12%
1 0.89286
2 1.69005
3 2.40183
Required:
Compute the net present value of each project.
Answer:
50,400 44,400
0.79719
1.69005
Answer:
1.00.87.3
Explanation: i dont know
Coronado Company maintains a petty cash fund for small expenditures. These transactions occurred during the month of August.
Aug. 1 Established the petty cash fund by writing a check payable to the petty cash custodian for $205.
15 Replenished the petty cash fund by writing a check for $200.90. On this date, the fund consisted of $4.10 in cash and these petty cash receipts: freight-out $94.00, entertainment expense $47.60, postage expense $42.60, and miscellaneous expense $14.90.
16 Increased the amount of the petty cash fund to $305 by writing a check for $100.00.
31 Replenished the petty cash fund by writing a check for $288.90. On this date, the fund consisted of $16.10 in cash and these petty cash receipts: postage expense $140.60, entertainment expense $92.40, and freight-out $54.40.
Required:
Journalize the petty cash transactions.
Answer:
Aug 1
Dr Petty Cash $205.00
Cr Cash in bank $205 00
Aug 15
Dr Freight-out $94.00
Dr Entertainment expense $47.60
Dr Postage expense $42.60
Dr miscellaneous expense $14.90
Dr Cash over and short $1.8
Cr Cash $200.90
Aug 16
Dr Petty Cash 205.00
Cr Cash $205.00
Aug 31
Dr Postage expense $140.60
Dr Entertainment expense $92.40
Dr Freight-out $54.40
Dr Cash over and short $1.5
Cr Cash $288.90
Explanation:
Preparation of the journal entries for petty cash transactions
Aug 1
Dr Petty Cash $205.00
Cr Cash in bank $205 00
Aug 15
Dr Freight-out $94.00
Dr Entertainment expense $47.60
Dr Postage expense $42.60
Dr miscellaneous expense $14.90
Dr Cash over and short $1.8
($200.90-$94.00-$47.60-$42.60-$14.90)
Cr Cash $200.90
Aug 16
Dr Petty Cash $205.00
Cr Cash $205.00
($305.00-$100.00)
Aug 31
Dr Postage expense $140.60
Dr Entertainment expense $92.40
Dr Freight-out $54.40
Dr Cash over and short $1.5
($288.90-$140.60-$92.40-$54.40)
Cr Cash $288.90
Mesa County contracts with New Construct Inc. to build a courthouse. New Construct hires Odell to excavate the site. Odell’s work damages adjacent properties. Mesa files a suit against the excavator, who argues that the county is not named in his contract with New Construct. Most likely, the court will hold that Odell is:_________
a. not liable because Mesa is not named in Odell’s contract.
b. liable on the ground that Mesa is an incidental third-party beneficiary.
c. liable on the ground that Mesa is an intended third-party beneficiary.
d. not liable because Odell’s contract was with New Construct, not Mesa.
Answer:
c. liable on the ground that Mesa is an intended third-party beneficiary
Explanation:
In a contract, the third-party beneficiary is a business or a person that benefits from the agreement and the terms of the contract that is made between the two other parties. According to law, third-party beneficiary have certain rights which they can enforced if the contract is not fulfilled.
In the context, Mesa is a third party beneficiary. The Mesa County enters into a contract with New Construct Inc. to construct a court house. Now New Construct Inc. again hires the firm Odell to excavate the land site.
While excavating Odell damages few nearby properties, so Mesa County files a law suit against Odell. But Odell argues that Odell is not in agreement with Mesa County or have not entered into with any contract with the County, so Mesa cannot sue the excavator.
But the court hold that as Mesa County is the third party beneficiary of the contract and have certain rights, Odell is held liable for the loss and should compensate for the loss to the County.