Answer:
b
Explanation:
An employee earns $5,750 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $128,400 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $192 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $160 and contributes $80 to a retirement plan each month. What is the amount of net pay for the employee for the month of January? (Round your intermediate calculations to two decimal places.)
(A) $4,832.12
(B) $4,878.12
(C) $4,567.62
(D) $4,961.50
(E) $4,521.62
Answer:
Option (B) is correct.
Explanation:
Net Pay for the employee:
= Wages Per Month - Federal Income Taxes Withheld - FICA Social Security - FICA Medicare - Health Insurance - Health Insurance
= $5,750 - $192 - $356.5 - $83.38 - $160 - $80
= $4,878.12
Therefore, the amount of net pay for the employee for the month of January is $4,878.12.
Luther is a successful logistical services firm that currently has $5 billion in cash. Luther has decided to use this cash to repurchase shares from its investors, and has already announced the stock repurchase plan. Currently Luther is an all equity firm with 1.25 billion shares outstanding. Luther's shares are currently trading at $20 per share.With perfect capital markets, what is the market value of Luther's equity after the share repurchase?A) $15 billionB) $10 billionC) $25 billionD) $20 billion
Answer:
Total market value of equity = 1.25 billion x $20 = 25 billion
Value of shares repurchased = $5 billion
Total market value after share repurchase
= $25 billion - $5 billion
= $20 billion
The correct answer is D
Explanation:
In this question, we need to calculate the total market value of equity. Then, we will deduct the value of shares repurchased from the total market value of equity. This gives the market value of equity after repurchase.
A bank's assets consist of $1,000,000 in total reserves, $2,100,000 in loans, and a building worth $1,200,000. Its liabilities and capital consist of $3,000,000 in demand deposits and $1,300,000 in capital. Refer to Exhibit 17-2. If the bank is required to keep reserves equal to one-third of deposits, what is the level of the bank's excess reserves? How much could it loan out as a result?
a. $700,000; $2,100,000
b. $300,000; $900,000
c. zero; zero
d. $300,000; $300,000
Answer:
Option (c) zero ; zero
Explanation:
Data provided in the question:
Bank's assets in total reserve = $1,000,000
Loans = $2,100,000
Building worth = $1,200,000
Demand deposits = $3,000,000
Capital = $1,300,000
Required reserves = one-third of deposits
Now,
Required reserves = one-third of $3,000,000
or
Required reserves = $3,000,000 ÷ 3
= $1,000,000
Thus, excess reserves = Total reserve - Required reserves
= $1,000,000 - $1,000,000
= $0 i.e zero
also,
Amount bank could loan = Amount of excess reserve
= zero
Hence,
Option (c) zero ; zero
Which of the following statements about the Phonemic Chart for English is incorrect? Select one:
a. Each symbol represents an individual sound of the language irrespective of the way it appears in the standard written script.
b. The phonemic chart provides a set of symbols, each one intended to represent an individual sound of the language
c. There is always a correspondence between the number of letters and number of sounds
d. There are a few different phonemic charts for English
There are a few different phonemic charts for English is the following statements about the Phonemic Chart for English is incorrect.
d. There are a few different phonemic charts for English
Explanation:
The 'phonemic chart' is a lot of images that speak to every one of the sounds in communicating in English. The phonemic graph is likewise valuable for rehearsing elocution since it empowers you to imagine the individual sounds you are experiencing difficulty inside English and practice those sounds precisely.
There are 44 Phonemes in English. In spite of there being only 26 letters in the English language, there are roughly 44 one of a kind sounds, otherwise called phonemes.
The 44 sounds help recognize a single word or significance from another. Different letters and letter mixes are known as graphemes are utilized to speak to the sounds.
Answer:
C
Explanation:
#1 Your retirement portfolio comprises 200 shares of the S&P 500 fund (SPY) and 100 shares of iShares Barclays Aggregate Bond Fund (AGG). The price of SPY is $134 and that of AGG is $110. If you expect the return on SPY to be 10% in the next year and the return on AGG to be 8%, what is the expected return for your retirement portfolio?
Answer:
Explanation:
Expected return of portfolio is weighted average return of the components of portfolio.
Total portfolio = (200 * $134) + (100 * $110) = $37,800
Weight of S&P 500 = 26,800/37,800 = 70.90%
Weight of AGG = 11,000/37,800 = 29.10%
Expected return = (70.90% * 10%) + (29.10% * 8%) = 9.42%
Famous Productions performs London shows. The average show sells 900 tickets at $ 65 per ticket. There are 115 shows per year. No additional shows can be held as the theater is also used by other production companies. The average show has a cast of 55, each earning a net average of $ 330 per show. The cast is paid after each show. The other variable cost is a program-printing cost of $ 9 per guest. Annual fixed costs total $ 580 comma 500.
Compute revenue and variable costs for each show.
Final answer:
Revenue per show for Famous Productions is $58,500, and the variable costs per show are $26,250, which includes $18,150 for the cast and $8,100 for printing programs.
Explanation:
To compute the revenue and variable costs for each show for Famous Productions, we first calculate their revenue by multiplying the average tickets sold per show by the price per ticket. So, revenue per show would be 900 tickets × $65 = $58,500. Next, we calculate the variable costs which include the payment to the cast and the program-printing costs. Payment to the cast is 55 cast members × $330 each = $18,150, and program-printing costs are $9 × 900 guests = $8,100. Adding these together gives us the total variable costs per show: $18,150 for the cast plus $8,100 for programs, which equals $26,250.
A stock has a beta of 1.4, an expected return of 17.2 percent, and lies on the security market line. A risk-free asset is yielding 3.2 percent. You want to create a portfolio that is comprised of the stock and the risk free and will have a portfolio beta of 0.6. What is the expected return on this portfolio?
Answer:
the portfolio's return will be Ep(r)= 9.2 %
Explanation:
if the stock lies on the security market line , then the expected return will be
Ep(r) = rf + β*( E(M)- rf)
where
Ep(r) = expected return of the portfolio
rf= risk free return
E(M) = expected return of the market
β = portfolio's beta
then
Ep(r) = rf + β*( E(M)- rf)
E(M) = (Ep(r) - rf ) / β + rf
replacing values
E(M) = (Ep(r) - rf ) / β + rf
E(M) = ( 17.2% - 3.2%) /1.4 + 3.2% = 13.2%
since the stock and the risk free asset belongs to the security market line , a combination of both will also lie in this line, then the previous equation of expected return also applies.
Thus for a portfolio of β=0.6
Ep(r) = rf + β*( E(M)- rf) = 3.2% + 0.6*(13.2%-3.2%) = 9.2 %
Ep(r)= 9.2 %
Section 16(b) of the 1934 Securities Exchange Act _____
(A) requires that foreign nationals buying U.S.corporate stock register with the Securities Exchange Commission (SEC).
(B) regulates proxy statements.
(C) provides for recapture by the corporation of all profits realized by an insider from the purchase or sale of corporate stock within a 6 month period.
(D) allows foreign nationals to seek an SEC exemption from securities registration requirements.
Answer:
Section 16(b) of the 1934 Securities Exchange Act provides for recapture by the corporation of all profits realized by an insider from the purchase or sale of corporate stock within a 6 month period.
Explanation:
This section of the 1934 Securities Exchange Act was put in place to uphold fairness and equity in the financial markets. Without its provision, insiders could advantage of privileged information and exploit it for personal gain.
Jay has a tax basis of $26,000 in his partnership interest at the beginning of the partnership tax year. The following amounts of partnership debt were allocated to Jay and are included in his beginning-of-the-year tax basis: (1) recourse debt—$15,000, (2) qualified nonrecourse debt—$3,000, and (3) nonrecourse debt—$1,700. There were no changes to the debt allocated to Jay during the tax year. If Jay is allocated a $29,000 loss for the current year, how much of the loss will be suspended under the tax basis and at-risk limitations?
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
A lumber mill bought a shipment of logs for $58,000. When cut, the logs produced a million board feet of lumber in the following grades. Compute the cost to be allocated to Type 1 and Type 2 lumber, respectively, if the value basis is used. (Do not round your intermediate calculations.) Type 1 - 400,000 bd. ft. priced to sell at $0.12 per bd. ft. Type 2 - 400,000 bd. ft. priced to sell at $0.06 per bd. ft. Type 3 - 200,000 bd. ft. priced to sell at $0.04 per bd. ft.
a. $58,000; $24,000.
b. $34,800; $17,400.
c. $10,944;$5,800.
d. $24,000; $8,000.
e. $16,000; $16,000.
Answer:
b. $34,800; $17,400.
Explanation:
The computation of the allocation cost is shown below:
For type 1:
= 400,000 × $0.12 per bd.ft
= $48,000
For type 2
= 400,000 × $0.06 per bd.ft
= $24,000
For type 2
= 200,000 × $0. p04er bd.ft
= $8,000
The For type 1
= $48,000 ÷ $80,000 × $58,000
= $34,800 would be
= $48,000 +$24,000 + $8,00
= $80,000
Now the allocation cost would be
For type 1
= Type 1 cost ÷ Total cost × shipment cost
= $48,000 ÷ $80,000 × $58,000
= $34,800
For type 2
= Type 2 cost ÷ Total cost × shipment cost
= $24,000 ÷ $80,000 × $58,000
= $17,400
Learning curve theory states that as the quantity of a product produced________ , the man-hours per unit expended producing the product_________-
Answer:
Learning curve theory states that as the quantity of a product produced increase , the man-hours per unit expended producing the product decrease.
Explanation:
The learning curve states that if a person performs similar task again and again, then after a period of time there will be an improvement in his/her performance.
It is calculated using following formula.
Y = ax^b
.
Y = cumulative average time per unit or batch.
a = time taken to produce initial quantity.
X = the cumulative units of production or, if in batches, the
cumulative number of batches.
b = the learning index or coefficient, which is calculated as:
log learning curve percentage ÷ log 2. So b for an
90 per cent curve would be log 0.9 ÷ log 2 = – 0.152
Spending on the structures, equipment, and software that provide the industrial capacity to produce goods and services for all sectors of the economy is called ___.
Answer:
Investment Spending
Explanation:
Investment spending are expenditures on equipment that are used to create or produce more goods and services. Investment spending are also capital intensive, and sometimes called capital consumption.
A company purchased factory equipment on April 1, 2017 for $168000. It is estimated that the equipment will have a $22000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2017 is a. $16800. b. $12600. c. $10950. d. $14600.
Answer:
c.10950
Explanation:
The depreciation expense in a particular year is charged from the date on which the asset is purchased by the entity. In this case, the factory equipment is purchased on April 1, 2017, so the depreciation expense for the year ended December 31, 2017 will be charged from April 1, 2017 to December 31, 2017 i.e. 9 months.
The Depreciation expense is calculated using the following formula:
(Cost of factory equipment-salvage value/useful life)*9/12
Depreciation expense=(168000-22000/10)*9/12=$10,950
Answer is c.$10950
Farrah owns 5,000 shares of stock in DAS, Inc. with a market value of $15,000. DAS declares a 20% stock dividend. After the dividend is paid, Farrah owns :
a. 5,000 shares with a market value of $18,000.
b. 6,000 shares with a market value of $15,000.
c. 6,000 shares with a market value of $18,000.
d. 5,100 shares with a market value of $15,300.
Answer:
Number of shares own will be 6000 and market value will be $15000
So option (b) will be the correct option
Explanation:
We have given that Farrah owns 5000 shares with a market value of $15000
Now it is declare that dividend = 20 % stock dividend
Now after the dividend paid number of shares own by Farrah [tex]=5000\times 1.2=6000[/tex]
As the dividend has only effect on number of shares own so the market value will be the same as $15000
So number of shares own will be 6000 and market value will be $15000
So option (b) will be the correct option
Which would likely require a cost development using reproduction cost?
A. Condominium
B. Historic landmark
C. Manufactured dwelling
D. Modern retail building
Answer: Option C
Explanation: Manufactured dwelling implies a trailer, a camper van or perhaps an engineered residence. It relates to a formation, portable in one or maybe more parts, that is built on a continuous frame and, when linked to the necessary services, is intended to be used even without a perpetual structure.
In simple words, Manufactured accommodation (usually referred to as U.S. mobile homes) is a form of precast concrete accommodation that is primarily constructed in manufacturing plants and then transferred to use locations. Thus, from the above we can conclude that the correct option is C.
As part of your plan you want to build momentum by generating short-term wins. What is not a characteristic of a short-term win?
Answer:
The correct answer is letter "B": Visible to senior leadership, but not lower levels of the organization.
Explanation:
Short-term wins are organizational improvement plans that can be implemented in short periods. For the short-win to be successful it must be clear, available to all levels within the organization, and change effort should be pointed out as the key to achieving the objective.
Summarize the consequentialist arguments for and against affirmative action.
Answer:
Explanation:
Arguments supporting Affirmative Action:
1) Affirmative action is a method that ensure the diversity is obtained and maintained in schools and workplaces. Moreover, it also helps to create tolerant communities therefore, it exposes people to a variety of cultures and ideas that are different from their own.
2)Affirmative action assists disadvantaged people that come from areas of the country where opportunities are limited be able to advance and they otherwise could not. In other words, it bestows everybody the same playing field.
3)Affirmative action is for to help by compensating to some races who are"started late in the race" , due to many years of oppression, and it also helps level the playing field.
Arguments against Affirmative Action:
1) Affirmative Action can be described as reverse discrimination. More specifically, past discrimination against some minority groups does not justify existing discrimination against them.
2) It weakens the notion of meritocracy and instead weakens races as a dominant factor in recruitment and recruitment procedures. Regardless of the situation, the best people for the position should be placed there.
3) Students / staff involved in the approval process are often not fully prepared for the assignment.
4) Affirmative Action strengthens stereotypes and racism compared to the previous point. People who give a position almost positively because of their activity are often unsuitable and the idea that all people in this race are "stupid" is endless.
5) People of different races or ethnic backgrounds do not need to have differences of opinion in the workplace / university. People with the same skin color are not necessarily the same in terms of vision or culture.
The summary of the consequentialist arguments for and against affirmative action is:
Diversity is said to be gotten (FOR)It enables equality (FOR)It is seen as reverse discrimination (AGAINST)It eliminates meritocracy (AGAINST)What is Affirmative Action?This refers to the policy of favoring people who have been discriminated against before.
Hence, we can see that there are arguments FOR and AGAINST affirmative action and they are aptly summarized in the points given above.
Read more about affirmative actions here:
https://brainly.com/question/1163395
At a ________ interest rate people would hold more funds in cash since the opportunity cost of having cash is low..
Answer:
low
Explanation:
The opportunity cost of having cash is the amount that we can earn from the interest of the deposited funds. If the interest rate is low, the earning from depositing money will not enough to buy goods that more expensive in the future due to inflation. Thus, it is better to hold cash to buy things at present when the prices have not gone up yet.
Kaila Company's financial statements show a net income of $567,000 in 2019. The following items also appear on Kaila's balance sheet: Depreciation expense $120,000 Accounts receivable decrease 36,000 Inventory increase 84,000 Accounts payable increase 24,000
Using the indirect method, what is Tu's net cash flow from operating activities in 2019?
Answer:
$663,000
Explanation:
Using the indirect method Kaila Company's financial statements
Cash flows from operating activities Amount in $
Net income 567,000.00
Depreciation expense 120,000.00
Decrease in account receivables 36,000.00
Increase in inventory (84,000.00)
Increase in account payable 24,000.00
Net cash flow from operating activities 663,000.00
Depreciation expense is added back as it was deducted from the computation of net income. it is a non cash item hence the addition back. A decrease in current asset represents and inflow of cash while an increase represents an outflow of cash hence, the treatment given to Decrease in account receivables and increase in inventory. An increase in a current liability represents an inflow of cash hence the treatment of Increase in account payable above.
Net cash flow from operating activities is $663,000
First-degree price discrimination:
a. None of the answers are correct.
b. results in the firm extracting all surplus from consumers.
c. occurs when a firm charges each consumer the maximum price he or she would be willing to pay for each unit of the good purchased.
d. occurs when a firm charges each consumer the maximum price he or she would be willing to pay for each unit of the good purchased and results in the firm extracting all surplus from consumers.
Answer:
C ) occurs when a firm charges each consumer the maximum price he or she would be willing to pay for each unit of the good purchased and results in the firm extracting all surplus from consumers.
Explanation:
First-degree price discrimination is known as the perfect price discrimination because firm charges maximum price for each unit of good purchased by the customer. So the firm ables to extract all cosumer surplus.
Audio City, Inc., is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized below: Current Year Previous Year Balance Sheet at December 31 Cash $ 70,100 $ 73,800 Accounts Receivable 16,600 22,000 Inventory 24,400 22,000 Equipment 231,000 154,000 Accumulated Depreciation—Equipment (66,000 ) (49,000 ) Total Assets $ 276,100 $ 222,800 Accounts Payable $ 8,400 $ 19,800 Salaries and Wages Payable 2,100 1,000 Note Payable (long-term) 62,000 79,000 Common Stock 108,000 74,000 Retained Earnings 95,600 49,000 Total Liabilities and Stockholders’ Equity $ 276,100 $ 222,800 Income Statement Sales Revenue $ 212,000 Cost of Goods Sold 94,000 Other Expenses 66,000 Net Income $ 52,000 Additional Data: Bought equipment for cash, $77,000. Paid $17,000 on the long-term note payable. Issued new shares of stock for $34,000 cash. Dividends of $5,400 were paid in cash. Other expenses included depreciation, $17,000; salaries and wages, $22,000; taxes, $27,000. Accounts Payable includes only inventory purchases made on credit. Because a liability relating to taxes does not exist, assume that they were fully paid in cash. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Closing Cash and Cash equivalents balance is $70,100 as per the statement of cash flows presented below in indirect format. the closing figure matches the balance sheet sheet figure of cash and cash equivalents for the current year.
For year reference, solution in excel format is also attached
Explanation:
Statement of Cash Flows for year ended 31 December 20x1
Net Profit before tax (Net Income + Tax) $79,000
Adjustment of Non Cash Expenses:
Depreciation $17,000
Increase in Salaries & Wages Payable $1,100
Working Capital Changes:
Increase in Inventory $(2,400)
Decrease in Accounts Receivables $5,400
Decrease in Accounts Payable $(11,400)
Cash generated from Operations $88,700
Tax Paid $(27,000)
Net cash from operating activities $61,700
Cash Flows from Investing Activities:
Purchase of equipment $(77,000)
Net cash from investing activities $(77,000)
Cash Flows from Financing Activities:
Proceeds from issue of shares $34,000
Payment of long term loans $(17,000)
Dividends paid $(5,400)
Net cash from Financing Activities $11,600
Net decrease in cash and cash equivalents $(3,700)
Opening cash and cash equivalents $73,800
Closing Cash and Cash Equivalents $70,100
n January 1, 2018, Waller Sales issued $ 20 comma 000 in bonds for $ 18 comma 300. These are eightminusyear bonds with a stated rate of 12%, and pay semiannual interest. Waller Sales uses the straightminusline method to amortize the bond discount. After the second interest payment on December 31, 2018, what is the bond carrying amount?
Answer:
$18,106.25
Explanation:
For computing the carrying value of the bonds , first we have to determine the discount amortization for 8 years which are shown below:
= (Issued amount - proceeds from the bonds) ÷ time period
= ($20,000 - $18,300) ÷ 8 years × 2 years
= $106.25
Now the carrying value would be
= Proceeds from the bonds + discount amortization for 8 years
= $18,000 + $106.25
= $18,106.25
Since the time period is 8 which are paid in semi-annual so we double the time period
NewLinePhone Corp. is very risky, with a beta equal to 2.8 and a standard deviation of returns of 32%. The risk-free rate of return is 3% and the return on the market is 11%. NewLinePhone's marginal tax rate is 35%. Use the capital asset pricing model to estimate NewLinePhone's cost of retained earnings. 19.7% 23.9% 22.1% 25.4%
Answer:
Risk-free rate (Rf) = 3%
Market return (Rm) = 11%
Beta (β) = 2.8
Ke = Rf +β(Rm - Rf)
Ke = 3 + 2.8(11 - 3)
Ke = 3 + 2.8(8)
Ke = 3 + 22.4
Ke = 25.4%
Explanation:
Cost of retained earnings is a function of risk-free rate plus beta multiplied by risk-premium. Risk premium is the difference between market return and risk-free rate,
To estimate NewLinePhone Corp.'s cost of retained earnings using the capital asset pricing model (CAPM), we can use the formula: Cost of Retained Earnings = Risk-Free Rate + Beta x (Market Return - Risk-Free Rate). Given the provided values, the cost of retained earnings for NewLinePhone Corp. is estimated to be 25.4%.
Explanation:To estimate NewLinePhone Corp.'s cost of retained earnings using the capital asset pricing model (CAPM), we can use the formula:
Cost of Retained Earnings = Risk-Free Rate + Beta x (Market Return - Risk-Free Rate)
Given that NewLinePhone Corp. has a beta of 2.8, a risk-free rate of return of 3%, and a market return of 11%, we can plug in the values:
Cost of Retained Earnings = 0.03 + 2.8 x (0.11 - 0.03) = 0.03 + 2.8 x 0.08 = 0.03 + 0.224 = 0.254 or 25.4%
One of the most talented managers to ever work at ABC Inc. is Amy Holmes. Combining graciousness intelligence and creativity. Amy has been successful in attracting and building a highly committed and, division of employees. When interviews by the national news media for insight into her success, one of the, topics that became a primary focus was the challenge of. Communicating effectively.Amy believes that successful managers solicit and respond to upward communication. Information that can be expected with upward communication includes all of the following EXCEPT which one? a. Procedures and practices b. Suggestions for improvement c. Financial and accounting information d. Performance reports e. All of these are included.
Answer:
The correct answer is letter "A": Procedures and practices.
Explanation:
Upward communication is a sharing-information method widely spread in nowadays organizations. It consists of obtaining feedback from employees from the lowest hierarchy to the top executive. This information flows in each level through a responsible for that matter so that the representative takes the pieces of information to the next level of the hierarchy. Suggestions for improvement, performance reports, financial and accounting information are shared under this format.
Procedures and practices are given into a firm from executives to employees which aims in the opposite direction than the upward communication technique.
What is the point of difference between illegal gratuity and bribery scheme?a. Illegal gratuities are made before deals are approved.b. Compared to illegal gratuities, briberies occur relatively infrequently and are usually quite small.c. Illegal gratuities usually involve the use of actual or threatened force, fear, or economic duress.d. Illegal gratuities do not necessarily involve an intent to influence a business decision but rather to reward someone for making a favorable decision.
Answer:
d. Illegal gratuities do not necessarily involve an intent to influence a business decision but rather to reward someone for making a favorable decision.
Explanation:
Bribery schemes are used in order to directly influence a business decision making by offering money or other benefits; bribes may be accompanied by the use of actual or threatened force, fear, or economic duress. Illegal gratuities do not necessarily involve that influence intent and can, sometimes, be dished out aiming to reward a person or company for a favorable decision.
Therefore, the answer is alternative d.
Burnett Corp. pays a constant $8.75 dividend on its stock. The company will maintain this dividend for the next 10 years and will then cease paying dividends forever. If the required return on this stock is 12 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Final answer:
The current share price calculation for Burnett Corp. involves discounting the promised $8.75 dividends over 10 years at a required return rate of 12 percent, using the present value formula for an annuity.
Explanation:
The student's question involves calculating the current share price of Burnett Corp., which pays a constant dividend and has a finite dividend-paying period. To find the share price, we must discount the stream of $8.75 dividends that will be received over the next 10 years back to present value terms using the required return rate of 12 percent. This is a typical problem encountered in finance and investment courses and involves the use of the present value formula for a finite annuity.
Dividends are a way for companies to share profits with shareholders, and the amount a shareholder receives is proportional to the number of shares owned. As noted, stable companies, like utility firms and well-known brands, often provide dividends as a way to return value to shareholders. The historic trends show a shift from higher dividends in the past to a focus on capital gains in more recent times.
On August 1, 2016, ACE Corp. purchased parts from SUPPLY Corp. In payment for the $54,000 purchase, ACE issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%.
1. What entry will ACE make to record the August 1, 2016 purchase of the parts?
2. What entry will ACE make to record the 1st installment payment on August 31, 2016? 3. How much interest expense will ACE report in its income statement for the year ended 12/31/2016?
Answer:
a- Parts - (asset) Dr $54000
Note payable Cr $54000
b- Note payable Dr $4500
Cash/Bank Cr 4500
c- Interest expense for the year end= $2700
Explanation:
The entry to record the purchase of parts from SUPPLY Corp will result in, an increase in asset and liability because ACE Corp isn't settling the purchase via a cash/bank payment rather it's issuing a 1-year installment note. Therefore the entry is as follows:
Parts - (asset) Dr $54000
Note payable Cr $54000
Now the payments on the 1-year note are installment based which means the $54000 note payments would have to be split between twelve months (i.e one year). The monthly payment would be $4500 against note payable.
The entry to record first installment payment on august is as follows:
Note payable Dr $4500
Cash/Bank Cr 4500
Moreover, along with payment of $4500 ACE Corp is also liable to pay interest on the payments made. Therefore, interest shall be calculated on monthly payment of $4500 at the rate of 12% as follows:
Interest on payment = $4500×12%
Interest on monthly payment = $540
The interest expense to be reported by ACE in its income statement for the year ended 12/31/2016 is of Five months (i.e from Aug till Dec), see as follows:
Interest expense for the year end= $540×5
Interest expense for the year end= $2700
Your client has been given a trust fund valued at $1.07 million. He cannot access the money until he turns 65 years old, which is in 30 years. At that time, he can withdrawal $28,500 per month. If the trust fund is invested at a 5.0 percent rate, how many months will it last your client once he starts to withdraw the money?
Answer:
285 Months
Explanation:
n = 30 years × 12 = 360
percent rate = 5.0 % divided by 12 = 0.417.
Now recalling the statement of time value for money,
We have future value = present value × ( 1 + rate) ∧ n
future value = 1, 070,000 × ( 1 + 0.417 ) ∧ 360
future value = 3.33065667 E 60
At age 65, the value 3.33065667 E 60 will be the present monthly withdrawal at $28,500.
present value of ordinary annuity, = annuity ( 1 - (1 + r) ∧ -n ÷ r
= 3.33065667 E 60 = 28500 (1 - ( 1 + 0.417) ∧ - n ÷ 0.417
= 3.33065667 E 60 ÷ 28500 = (1 - ( 1 + 0.417) ∧ - n ÷ 0.417
1.168651462 E 56 = (1 - ( 1 + 0.417) ∧ - n ÷ 0.417
we now introduce logs to determine the value of n
Solving further, we discovered that n= 285.
Therefore, the number of months it will last one he start to withdraw the money is 285 month
Final answer:
To find out how many months a trust fund will last with monthly withdrawals, calculate the future value of the trust fund and divide it by the withdrawal amount. It requires understanding annuity distributions and applying formulas for both future value and annuity present value in financial mathematics.
Explanation:
The student's question pertains to determining the duration of monthly withdrawals from a trust fund invested at a 5.0 percent rate until the fund is depleted. To solve this question, we must employ the concept of annuity distributions in financial mathematics. The trust fund grows for 30 years and then the client starts withdrawing money monthly. This situation calls for a calculation where both future value and present value of annuities must be considered.
First, we calculate the future value of the trust fund after 30 years. After that, we use the present value of an annuity formula to determine how many months the withdrawals of $28,500 will last. However, a crucial detail that is missing from the question is whether the trust fund continues to earn interest at the same rate after the client begins to withdraw money. Assuming it does not, the calculation would be more straightforward - simply dividing the total future value of the trust fund by the monthly withdrawal amount.
Assuming the trust fund does not earn interest after withdrawals begin, the calculation is:
Future Value of the trust fund: FV = P \\times (1 + r)^n
Future Value of $1.07 million invested for 30 years at 5% annual interest rate: FV = 1,070,000 \\times (1 + 0.05)^30
Calculate the total amount available for withdrawal.
Divide this total by the monthly withdrawal amount of $28,500 to determine the number of months the fund will last.
Without the precise calculations, we cannot provide an exact number of months. Nevertheless, these steps outline the process the student should follow to determine the duration of the trust fund's payouts.
A company uses cash basis accounting. Their income statement for the year shows sales of $600,000 and net operating income of $200,000. Because similar companies report on an accrual basis, the business appraiser adjusts the statements to the accrual basis for comparison. He has accounts receivable of $120,000 and accounts payable of $40,000. Based on this information, the adjusted statements show sales of:
Answer:
$720,000
Explanation:
Data provided in the question:
Sales reported for the year = $600,000
Net operating income = $200,000
Accounts receivable = $120,000
Accounts payable = $40,000
Now,
The adjusted statements show sales of
= Sales reported for the year + Accounts receivable
or
= $600,000 + $200,000
or
= $720,000
hence,
The adjusted statements show sales of $720,000
Which of the following statements is NOT true regarding the requirements and objectives associated with an Integrated Baseline Review (IBR)?
A. The IBR identifies the risks associated with executing to the current Performance Measurement Baseline and integrated master schedule.
B. Subsequent IBRs may be required whenever an established Performance Measurement Baseline (PMB) is unachievable and a new PMB is required.
C. The IBR is conducted exclusively by the Government and contractor business management staff and technical staff are rarely included.
D. The IBR assesses the validity of the Performance Measurement Baseline (PMB) and the Integrated Master Schedule (IMS).
E. Participants in an IBR typically include the Government PM and technical staff, along with the related contractor's staff.
Answer:
D
Explanation:
The other options are true regarding the requirements and objectives associated with IBR
Statement C is not true concerning the Integrated Baseline Review (IBR). Despite government and contractor business management personnel's involvement, technical staff are not uncommon in the IBR process. They have a critical role in reviewing the project's technical objectives. The correct option is C.
Explanation:The statement C is NOT true regarding the requirements and objectives associated with an Integrated Baseline Review (IBR). The IBR process is not conducted exclusively by the Government and contractor business management staff.
Instead, it also includes technical staff—who are critical in reviewing the technical objectives of the project. Whilst statements A, B, D, and E are indeed true regarding the objectives and requirements of an IBR. A well-run IBR consists of individuals from various roles, including the Government PM and technical staff, and the related contractor's staff.
This dispersion of responsibility is essential to effectively monitor risks, validate baselines, and ensure baseline achievability. Therefore, technical staff play a crucial role in the IBR process and are not rarely included. The correct option is C.
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