Answer:
30.56%
Explanation:
Net asset value of $13.87 per share
Flying mutual fund at a net asset value of $12.50
Dividend income distributions of $0.78 per share
Capital gains distributions of $1.67 per share
Hence;
R = ($13.87 - $12.50 + 0.78 + 1.67)/$ 12.50
R= 30.56%
Therefore your after-"tax" rate of return on this investment will be 30.56%
LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.3 hours of direct labor at the rate of $19.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The budgeted direct labor cost per unit of Product WZ would be: Multiple Choice $19.00 $5.60 $20.10 $43.70
Answer:
$43.70
Explanation:
Data provided
Each Unit Require = 2.3 hours
Direct Labor Rate Per Hour = $19.00
The computation of budgeted direct labor cost per unit is shown below:-
Budgeted direct labor cost per unit = Each Unit Require × Direct Labor Rate Per Hour
= 2.3 hours × $19.00 rate per hour
= $43.70
Therefore for computing the budgeted direct labor cost per unit we simply multiply the each unit require with direct labor rate per hour
The COB Division of Northern Corp. produces and sells a product to both external customers and other Northern divisions. Per-unit data collected from COB's operations include: Outside sales price $800 Direct materials 350 Direct labour 75 Fixed overhead 180 If COB has excess capacity available to fulfill an inter-company order, what transfer price should be set
Answer:
$425
Explanation:
Data provided as per the question
Direct material = $350
Direct labor = $75
The computation of transfer price should be set is shown below:-
Transfer price should be = Direct materials + Direct labor
= $350 + $75
= $425
Note :- The minimum transfer price shall be "Variable Rate" if there is an excess capacity to produce for internal transfer.
Classify each of the following in terms of their effect on interest rates (increase or decrease): I. Covenants on borrowing become more restrictive. II. The Federal Reserve increases the money supply. III. Total household wealth increases. I increases; II increases; III increases I decreases; II increases; III increases I decreases; II decreases; III decreases I increases; II decreases; III decreases None of these choices are correct.
Answer: I decreases; II decreases; III decreases
Explanation:
Debt Covenants becoming more restrictive means that less people want to borrow money. This shifts the demand curve to the left and this Decreases interest rates.
The Fed increasing money supply means that there is more money in the economy. This shifts the supply curve to the right thus having the effect of reducing Interests rates as there is more money available for loans.
Total Household Wealth increasing means that Households have less of an incentive to borrow money. This reduces the demand for interest rates so interest rates decrease.
The effect on interest rates is as follows: More restrictive borrowing covenants decrease rates, an increased money supply by the Federal Reserve decreases rates, and an increase in total household wealth can potentially increase rates, but the effect isn't always certain.
Explanation:Let's examine each situation to determine its effect on interest rates:
Covenants on borrowing become more restrictive: When covenants on borrowing are tightened, it decreases the number of qualified borrowers, reducing the demand for money and thereby decreasing interest rates.The Federal Reserve increases the money supply: When the Federal Reserve increases the money supply, it decreases the interest rate because more money available translates to lower cost of borrowing.Total household wealth increases: If total household wealth increases, it might increase the demand for loans as families may feel more financially secure in borrowing. This could lead to an increase in interest rates, but the effect is uncertain as it usually depends on several other factors like overall market conditions and economic sentiment.Learn more about Effects on Interest Rates here:https://brainly.com/question/33508867
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Joslyn Company manufactures metal brackets. The estimated number of metal bracket sales for the first three months of the current year is: Month Unit Sales January 1,250 February 1,400 March 1,200 Finished goods inventory at the end of last December was 300 units. Desired ending finished goods inventory is equal to 20 percent of the next month's sales. Joslyn Company expects to sell the brackets for $20 each. How many brackets should Joslyn produce in February?
Answer:
Production= 1,240 units
Explanation:
Giving the following information:
Sales:
February= 1,250
March= 1,200
Desired ending finished goods inventory is equal to 20 percent of the next month's sales.
To determine the production required for February, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 1,250 + (1,200*0.2) - (1,250*0.2)
Production= 1,240 units
Some traits of successful individuals in our industry, as mentioned by Aimee Mangold of KOLTER Hospitality included: drive, intelligence, self-confidence, the desire to influence others, relevant knowledge, and honesty/moral character. Unfortunately, these same traits do not apply to other fields outside of the hospitality and tourism industry to any great extent.
A. True
B. False
Answer:
The answer is false (B)
Explanation:
From the question given, the answer is false.
Traits is used in many other fields outside hospitality, this is because, being intelligent, confidence, influencing, honest, and high morality, helps to build and develop strong, better relationships, and also trust which can take the business to a higher level or heights of success.
Iaci Company makes two products from a common input. Joint processing costs up to the split-off point total $42,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Required: What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point
Questions
Iaci Company makes two products from a common input. Joint processing costs up to the split-off point total $42,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Product X Product Y Total Allocated joint processing costs $22,400 $19,600 $42,000 Sales value at split-off point $32,000 $28,000 $60,000 Costs of further processing $11,600 $25,300 $36,900 Sales value after further processing $44,800 $53,200 $98,000 Required: (a) What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?
Answer:
Net advantage from further processing $1,200
Explanation:
A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.
Also note that all the joint costs incurred up to the split-off point are irrelevant to the decision to process further any of the .
Net monetary advantage of product X
$
Sales revenue after the split-off point 44,800
Sales revenue at the split-off point (32,000)
Additional sales revenue 12,800
Further processing cost (11,600)
Net advantage from further processing 1,200
Net advantage from further processing $1,200
UPS, a delivery services company, has a beta of 1.4, and Wal-Mart has a beta of 0.9. The risk-free rate of interest is 4% and the market risk premium is 6%. What is the expected return on a portfolio with 50% of its money in UPS and the balance in Wal-Mart? Group of answer choices
Answer:
10.9%
Explanation:
to calculate the expected return of the portfolio, we first need to calculate the portfolio's beta:
the portfolio beta = (beta UPS stock x weight UPS stock) + (beta Walmart stock x weight Walmart) = (1.4 x 50%) + (0.9 x 50%) = 0.7 + 0.45 = 1.15
portfolio's expected return = risk free rate + (portfolio beta x market risk premium) = 4% + (1.15 x 6%) = 4% + 6.9% = 10.9%
The expected return on the portfolio is calculated using the CAPM for each stock and then finding the weighted average. For the given portfolio with 50% in UPS and 50% in Wal-Mart, the expected return is 10.9%.
Explanation:To calculate the expected return on a portfolio with different investments, we can use the concept of a weighted average of the individual expected returns. Each investment's expected return is calculated using the Capital Asset Pricing Model (CAPM), which takes into account the risk-free rate, beta (a measure of volatility or systematic risk compared to the market), and the market risk premium.
Using the CAPM, the expected return for UPS (with a beta of 1.4) is:
Expected ReturnUPS = Risk-Free Rate + BetaUPS x Market Risk Premium = 4% + 1.4 x 6% = 12.4%
And for Wal-Mart (with a beta of 0.9):
Expected ReturnWal-Mart = Risk-Free Rate + BetaWal-Mart x Market Risk Premium = 4% + 0.9 x 6% = 9.4%
Now, to find the expected return of the portfolio:
Expected ReturnPortfolio = (WeightUPS x Expected ReturnUPS) + (WeightWal-Mart x Expected ReturnWal-Mart)
= (0.5 x 12.4%) + (0.5 x 9.4%)
= 6.2% + 4.7%
= 10.9%
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A process with no beginning work in process, completed and transferred out 60,000 units during a period and had 50,000 units in the ending work in process inventory that were 20% complete. The equivalent units of production for the period were: a. 70,000 equivalent units. b. 112,000 equivalent units. c. 100,000 equivalent units. d. 62,000 equivalent units.
Answer:
The correct answer is:
70,000 equivalent unit (a.)
Explanation:
The following information were given:
completed and transferred inventory units = 60,000
ending work in process inventory units = 50,000
percentage completion of ending work in process inventory = 20%
∴ % of completed ending work in process inventory = 20% of ending work in process inventory
= 20% of 50,000
= 20/100 × 50,000 = 0.2 × 50,000 = 10,000 units
Finally, the total equivalent units of production for the period is calculated as: completed and transferred inventory units + % of completed ending work in process inventory
= 60,000 + 10,000 = 70,000 equivalent units.
Information related to Mingen back Company for 2015 is summarized below: Instructions: A. What amount of bad debt expense will Mingen back Company report if it uses the direct write-off method of accounting for bad debts? B. Assume that Mingen back Company estimates its bad debt expense to be 2% of credit sales. What amount of bad debt expense will Mingen back record if it has an Allowance for Doubtful Accounts credit balance of $4,000? C. Assume that Mingen back Company estimates its bad debt expense based on 6% of accounts receivable. What amount of bad debt expense will Mingen back record if it has an Allowance for Doubtful Accounts credit balance of $3,000? D. Assume the same facts as in (c), except that there is a $3,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debt expense will Mingen back record? E. What is the weakness of the direct write-off method of reporting bad debt expense?
Answer:
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Explanation:
7. Identifying costs of inflation Shen manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value. What he can't spend, he converts into a more stable foreign currency for a steep fee. This is an example of the of inflation.
Answer:
Shoe-leather Costs.
Explanation:
In Business management, Shoe-leather costs can be defined as the costs of time and effort people take to counteract the effect of high inflation on the depreciative purchasing power of money by visiting banks or other financial institutions regularly in order to limit inflation tax they pay on holding cash.
Metaphorically speaking, in a bid to protect the value of money or assets, people wear out the sole of their shoes by going to the bank regularly.
Hence, Shen is practicing a shoe-leather cost.
Lois Bragg owns a small restaurant in Boston. Ms. Bragg provided her accountant with the following summary information regarding expectations for the month of June. The balance in accounts receivable as of May 31 is $56,000. Budgeted cash and credit sales for June are $145,000 and $591,000, respectively. Credit sales are made through Visa and MasterCard and are collected rapidly. Sixty five percent of credit sales is collected in the month of sale, and the remainder is collected in the following month. Ms. Bragg's suppliers do not extend credit. Consequently, she pays suppliers on the last day of the month. Cash payments for June are expected to be $710,000. Ms. Bragg has a line of credit that enables the restaurant to borrow funds on demand; however, they must be borrowed on the last day of the month. Interest is paid in cash also on the last day of the month. Ms. Bragg desires to maintain a $38,000 cash balance before the interest payment. Her annual interest rate is 10 percent. Required Compute the amount of funds Ms. Bragg needs to borrow for June. Determine the amount of interest expense the restaurant will report on the June pro forma income statement. What amount will the restaurant report as interest expense on the July pro forma income statement
Answer:
Compute the amount of funds Ms. Bragg needs to borrow for June.
$162,850Determine the amount of interest expense the restaurant will report on the June pro forma income statement.
$0, money is borrowed on June 30th there is no interest expense during JuneWhat amount will the restaurant report as interest expense on the July pro forma income statement
$1,357Explanation:
accounts receivable May 31 is $56,000.
budgeted cash sales for June $145,000
credit sales for June $591,000
65% of credit sales are collected in current month, 35% collected next month
suppliers are paid on the last day of the month
budgeted cash payments for June 30th = $710,000
cash balance $38,000
how much money does Ms. Bragg need to borrow on June 30?
total cash collections in June = $56,000 (from previous month) + $145,000 (cash sales) + $384,150 (65% of $591,000) = $585,150
payments - cash collected = $710,000 - $585,150 = $124,850
money borrowed on June 30 = $124,850 + $38,000 (desired cash balance) = $162,850
interest expense during July = $162,850 x 10% x 1/12 = $1,357
FastNet Systems is a start-up company that makes connectors for high-speed Internet connections. The company has budgeted variable costs of $ 110 for each connector and fixed costs of $ 4 comma 500 per month. FastNet's static budget predicted production and sales of 100 connectors in August, but the company actually produced and sold only 74 connectors at a total cost of $ 25 comma 000. FastNet's flexible budget variance for total costs is
Answer:
Cost variance= $12,360 unfavorable
Explanation:
Giving the following information:
Standard costs:
Budgeted variable costs of $ 110 for each connector
Fixed costs of $4,500 per month.
Actual production= 74 connectors
Total cost= $25,000
First, we need to calculate the standard total cost:
Standard total cost= 4,500 + 110*74= $12,640
Now, we can determine the flexible budget cost variance:
Cost variance= 12,640 - 25,000= $12,360 unfavorable
Johnstone Company is facing several decisions regarding investing and financing activities. Address each decision independently. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. On June 30, 2021, the Johnstone Company purchased equipment from Genovese Corp. Johnstone agreed to pay Genovese $27,000 on the purchase date and the balance in eight annual installments of $4,000 on each June 30 beginning June 30, 2022. Assuming that an interest rate of 10% properly reflects the time value of money in this situation, at what amount should Johnstone value the equipment? 2. Johnstone needs to accumulate sufficient funds to pay a $570,000 debt that comes due on December 31, 2026. The company will accumulate the funds by making five equal annual deposits to an account paying 7% interest compounded annually. Determine the required annual deposit if the first deposit is made on December 31, 2021. 3. On January 1, 2021, Johnstone leased an office building. Terms of the lease require Johnstone to make 20 annual lease payments of $137,000 beginning on January 1, 2021. A 10% interest rate is implicit in the lease agreement. At what amount should Johnstone record the lease liability on January 1, 2021, before any lease payments are made?
Answer and Explanation:
As per the data given in the question,
1)
Cash flow Amount PV Factor at 10% for 8 annual installments Present Value
Installments $4,000 5.3349 $21,339.60
Down Payment $27,000 1 $27,000
Value of equipment $48,339.60
Refer to the PVIFA factor
2)
Table or calculator function FVAD of $ 1
Future value $570,000
n = 5
i = 7.00%
Divided it by FV factor 6.1533
Annual Deposit $92,633.22
Refer to the FVAD table
3)
Table or calculator function PVAD of $ 1
Payment $137,000
n = 20
i = 10.00%
Multiplied by PV factor 9.36492
Liability $1,282,994.04
Refer to the PVAD table
Johnstone Company's decisions about the equipment purchase, annual deposit, and leased office building are answered by using the Present Value Annuity (PVA) and Future Value Annuity (FVA) to find present values and annual deposits, respectively, at specified interest rates and time periods.
Explanation:1. To find the value of the equipment that Johnstone should record, we need to calculate the present value of the series of payments. The upfront payment of $27,000 is already in present value terms, so we just have to find the present value of the 8 annual installments of $4,000. We use the Present Value Annuity (PVA) table at a 10% interest rate for 8 periods. Then, add $27,000 to this present value to find the total equipment cost.
2. To find the required annual deposit, we're interested in the future value of an annuity (FVA). We want it to equal $570,000 at a 7% annual interest rate in 5 years. We use the FVA table to back into the required annual deposit amount.
3. For the amount Johnstone should record for the lease liability, we need to find the present value of the lease payments. Since the lease period is 20 years and the interest rate is 10%, we use the Present Value Annuity (PVA) table at a 10% interest rate for 20 periods to find this present value.
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(1 pt.) Bell, Inc. buys 1,000 computer game CDs from a distributor who is discontinuing those games. The purchase price for the lot is $8,000. Bell will group the CDs into three price categories for resale, as indicated below: Group No. of CDs Price per CD 1 100 $5 2 800 10 3 100 15 Instructions: Determine the cost per CD for each group, using the relative sales value method. CDs
Answer:$4, $8, $12
Explanation: we will first find the sales value of each CD price group
Group CD1= 100x5/(100x5+800x10+10015) = $500/$10,000= 0.05X 100= 5%
Group CD 2 = 10x800/ (100x5+800x10+100x15) =$800/%10,000= 0.8X 100=80%
Group CD 3 = 100x15/(100x5+800x10+100x15)= $1500/ $10,000 = 0.15X 100%=15%
So the costs per CD are:
CD 1= 8000 X.05/100= $4.00
CD 2=8000 x 0.80/800= $8.00
CD 3= 8000x 0.15/100= $12.00
Final answer:
To calculate the cost per CD using the relative sales value method, multiply the number of CDs by the respective price per CD for each group, add the total revenue, find percentages, allocate the total cost accordingly, and then divide the allocated cost by the number of CDs in each group.
Explanation:
To determine the cost per CD for each group using the relative sales value method, we must first calculate the total expected revenue from each group by multiplying the number of CDs by their respective price per CD:
Group 1: 100 CDs × $5 = $500
Group 2: 800 CDs × $10 = $8,000
Group 3: 100 CDs × $15 = $1,500
Next, we calculate the total expected revenue from all groups by adding the revenue from each group:
$500 (Group 1) + $8,000 (Group 2) + $1,500 (Group 3) = $10,000
Now, we divide the cost paid for each group of CDs by the total expected revenue to determine the cost per CD as a percentage of price:
Group 1: $500 / $10,000 = 5%
Group 2: $8,000 / $10,000 = 80%
Group 3: $1,500 / $10,000 = 15%
Finally, we allocate the total cost paid ($8,000) to each group based on these percentages:
Group 1: 5% of $8,000 = $400
Group 2: 80% of $8,000 = $6,400
Group 3: 15% of $8,000 = $1,200
And to find the cost per CD for each group, we divide the allocated cost by the number of CDs in each group:
Group 1 cost per CD: $400 / 100 CDs = $4 per CD
Group 2 cost per CD: $6,400 / 800 CDs = $8 per CD
Group 3 cost per CD: $1,200 / 100 CDs = $12 per CD
Benefits of free-trade agreements Suppose that Indonesian consumers previously faced higher prices on shoes than they do under the free-trade agreement to which the nation currently adheres because there were only a few domestic firms supplying shoes to the Indonesian market due to trade restrictions.
Which of the following benefits of international trade describes this free-trade benefit that Indonesian consumers enjoy?
A. Enhanced flow of ideas
B. Increased competition
C. Lower unit costs through economies of scale
D. Increased variety of goods
Answer:
D. Increased variety of goods
Explanation:
A free trade agreement is when two or more economies lessen their trade barriers.
In this question, it was said that prices were higher before the trade agreement but prices fell after the trade agreement.
One of the causes of this price change could be an increase in the goods and services available to consumers and this would lead to a fall in price.
I hope my answer helps you
Answer: B. Increased competition
Explanation:
Due to Free Trade agreements, producers from outside the country are on equal footing with producers in Indonesia barring transportation costs. This means that the number of producers for shoes in total is high as there are both the local and foreign shoemakers to consider. This gives the industry a Perfect Competition market distinction which means that prices are set by the market to be at a point where it is lowest due to competition. In other words, because of the extra competition, Indonesians are enjoying cheaper shoes.
Swan Textiles Inc. produces and sells a decorative pillow for $98.00 per unit. In the first month of operation, 2,300 units were produced and 1,800 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes: Variable manufacturing costs $23.00 per unit Variable marketing costs $6.00 per unit Fixed manufacturing costs $15 per unit Administrative expenses, all fixed $21.00 per unit Ending inventories: Direct materials -0- WIP -0- Finished goods 500 units What is the contribution margin using variable costing
Answer:
$124,200
Explanation:
Sales revenue = $98 * 1,800 = $176,400
Total variable costs = Total variable manufacturing costs + Total variable marketing costs = ($23 * 1,800) + ($6 * 1,800) = $ 52,200
Contribution margin using variable cost = Sales revenue - Total variable costs = $176,400 - $52,200 = $124,200.
The initial cost of a packed-bed degassing reactor for removing trihalomethanes from potable water is $84,000. The annual operating cost for power, site maintenance, etc. is $13,000. If the salvage value of the pumps, blowers, and control systems is expected to be $9,000 at the end of 10 years, the AW of the packed-bed reactor, at an interest rate of 8% per year, is closest to:
Answer:
-$24,900
Explanation:
Solution
Given:
The annual payment is defined as:
A = F [i /(1 + i)^n -1
Where,
F = The sum of amount accumulated
i = The interest rate (annual)
n = the number of years
The standard notation equation becomes this
=A = F (A/F, i, n)
Now,
The annual payment is A = P [ i(1 + i)^n / (1 + i)^n -1
where
P = The present value,
i = The interest rate (annual)
n = the number of year
The standard notation equation becomes this
=A = P (A/P, i, n)
We recall that,
The first cost P is $84,000.
Now,
A = $13,000, S = $9,000, n = 10 years, and i = 8 %
Thus,
AW =- 84000 ( A/ P 8% 10 ) - 13000 + 9000 (A/F, 8%, 10)
=-84000 (0.149) - 13000 + 9000 (0.069)
= -$24,900
The AW of the packed-bed reactor is calculated by finding the PW of the initial cost, annual operating costs, and salvage value, and then subtracting the PW of the salvage value from the sum of the other two. The AW is calculated to be $136,616.54.
Explanation:The question asks for the Annual Worth (AW) of the packed-bed degassing reactor. To calculate the AW, we need to calculate the Present Worth (PW) of the initial cost, annual operating costs, and salvage value, and then subtract the PW of the salvage value from the PW of the costs.
To calculate the PW of the initial cost, we divide it by (1 + interest rate) to the power of the number of years. PW of initial cost = $84,000 / (1 + 0.08)^10 = $36,610.13.
The PW of the annual operating costs can be calculated as follows: Cost per year * [1 - (1 + interest rate)^(-number of years)] / interest rate. PW of annual operating costs = $13,000 * [1 - (1 + 0.08)^(-10)] / 0.08 = $103,894.42.
The PW of the salvage value is calculated using the same formula as the PW of the initial cost. PW of salvage value = $9,000 / (1 + 0.08)^10 = $3,888.01.
Finally, to find the AW, we subtract the PW of the salvage value from the sum of the PW of the initial cost and the PW of the annual operating costs. AW = $36,610.13 + $103,894.42 - $3,888.01 = $136,616.54. Therefore, the AW of the packed-bed reactor is closest to $136,616.54.
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Poodle Corporation was organized on January 3, 2021. The firm was authorized to issue 83,000 shares of $5 par common stock. During 2021, Poodle had the following transactions relating to shareholders' equity: Issued 26,000 shares of common stock at $6.40 per share. Issued 23,000 shares of common stock at $9.30 per share. Reported net income of $110,000. Paid dividends of $50,000. What is total paid-in capital at the end of 2021
Answer:
$380,300
Explanation:
Paid-in-capital is the amount of cash received from the investors of the company for issuance of stocks. Paid-in-capital is recorded for both common and preferred stock separately. The value st par is recorded separately from the value excess of par of each stock type.
Issue of stock
first issuance
Common stock = 26,000 shares x $5 = $130,000
Add-in capital excess of par- Common shares = 26,000 shares x ( $6.4 - $5 )
Add-in capital excess of par- Common shares = $36,400
second issuance
Common stock = 23,000 shares x $5 = $115,000
Add-in capital excess of par- Common shares = 23,000 shares x ( $9.3 - $5 )
Add-in capital excess of par- Common shares = $98,900
Total Paid-in-capital = ($130,000 + $36,400) + ($115,000 + $98,900)
Total Paid-in-capital = $166,400 + $213,900 = $380,300
To find the total paid-in capital for Poodle Corporation at the end of 2021, add the amounts received from the issuance of common stock. The total paid-in capital at the end of 2021 is $380,300.
Total Paid-In Capital Calculation:
Calculate the total paid-in capital by adding the amounts received from the issuance of common stock. $6.40 per share * 26,000 shares + $9.30 per share * 23,000 shares = Total Paid-In Capital.
Calculate the total paid-in capital: $166,400 + $213,900 = Total Paid-In Capital.
Total Paid-In Capital at the end of 2021 is $380,300.
On January 1, 2019, Commercial Equipment Sales issued $ 29 comma 000 in bonds for $ 21 comma 700. These are sixminusyear bonds with a stated interest rate of 10%, and pay semiannual interest on June 30 and December 31. Commercial Equipment Sales uses the straightminusline method to amortize the Bond Discount. What amount is debited to Interest Expense on June 30, 2019?
Answer:
$2,058.33
Explanation:
bond's face value = $29,000
bond's market value = $21,700
interest rate = 10%
n = 6 x 2 coupons = 12
discount on bonds payable = $29,000 - $21,700 = $7,300
discount amortized per coupon payment = $7,300 / 12 = $608.33
total interest expense = ($29,000 x 10% x 1/2) + $608.33 = $1,450 + $608.33 = $2,058.33
the journal entry to record the coupon payment in June 30,2019:
Dr Interest expense 2,058.33
Cr Cash 1,450
Cr Discount on bonds payable 608.33
Sheffield Corp. budgeted costs for 65000 linear feet of block are: Fixed manufacturing costs $24000 per month Variable manufacturing costs $16 per linear foot Sheffield installed 60000 linear feet of block during March. How much is budgeted total manufacturing costs in March
Answer:
$984,000
Explanation:
The computation of the budgeted total manufacturing cost is shown below:
Budgeted total manufacturing costs in March = Fixed cost + Variable cost
= $24,000 + ($16 × 60,000)
= $24,000 + $960,000
= $984,000
We simply added the fixed cost and the variable cost in order to find out the budgeted total manufacturing cost
Find the answer to the last general journal entry on December 31, 2017.
Jan. 1 Paid $287,600 cash plus $11,500 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $20,600 salvage value. Loader costs are recorded in the Equipment account.
Jan. 3 Paid $4,800 to install air-conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,400.
Dec. 31 Recorded annual straight-line depreciation on the loader.
2017
Jan. 1 Paid $5,400 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years.
Feb. 17 Paid $820 to repair the loader after the operator backed it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.
The straight-line depreciation of the loader on December 31, 2017, is calculated by subtracting the total increased salvage value from the total cost, divided by the new total useful life, yielding $47,233.33 for that year.
Explanation:The question requires calculating the straight-line depreciation for the loader on December 31, 2017. The total cost of the loader is the initial cash cost of $287,600 plus the sales tax of $11,500 and transportation cost of $1,500, and the cost of installing air conditioning in the loader at $4,800, giving a total of $305,400. The salvage value of the loader has been increased due to the installation of air conditioning, from $20,600 to $22,000. The total useful life of the loader is four years, extended by two years due to the engine overhaul. Therefore, the straight-line depreciation rate is calculated by subtracting the salvage value from the total cost and dividing it by the total useful life. The answer according to these calculations is ($305,400 - $22,000) / 6 years = $47,233.33 per year. Hence, on December 31, 2017, the general journal entry would be the annual straight-line depreciation of $47,233.33.
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Final answer:
The last general journal entry for the loader's annual straight-line depreciation on December 31, 2017, involves debiting the Depreciation Expense account and crediting the Accumulated Depreciation–Equipment account for $63,270
Explanation:
To find the last general journal entry on December 31, 2017, for the annual straight-line depreciation of the loader, we need to calculate the total depreciable base by adding all costs that increase the value of the loader and subtracting any salvage value changes caused by the added costs. We start with the initial cost of $287,600 plus sales tax of $11,500 and transportation costs of $1,500, resulting in a total of $300,600. Since costs for going beyond the initial purchase to increase the value of the loader, the installation of air-conditioning of $4,800 and overhauling the loader's engine of $5,400, should be added as well. The original salvage value was $20,600, and the air conditioning installation increased it by $1,400, making the salvage value $22,000. The revised useful life of the loader has been extended to 6 years due to the engine overhaul.
Cost of the asset - salvage value / useful life
= ($287,600 + $11,500 + $1,500 + $4,800 + $820) - ($20,600 + $1,400) / 6 years (4 + 2)
= $63,270
So, the journal entry to record annual straight-line depreciation on the loader on December 31, 2017, is:
Depreciation expense $63,270
Accumulated depreciation $63,270
Baker Inc. has provided the following data for the month of June. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Work In Finished Cost of Total
Process Goods Goods Sold
Direct materials. $2,260 $7,100 $26,500 $35,860
Direct labor 4,650 15,620 58,300 78,570
Manufacturing overhead 2.640 6,600 23,760 33,000
applied
Total $9,550 $29,320 $108.560 $147430
Manufacturing overhead for the month was underapplied by $4,000. The
Corporation allocates any underapplied or overapplied manufacturing overhead
among work in process, finished goods, and cost of goods sold at the end of
the month on the basis of the manufacturing overhead applied during the month
in those accounts. The journal entry to record the allocation of any underapplied
or overapplied manufacturing overhead for March would include the following:
a. debit to Cost of Goods Sold of $3,080.
b. debit to Cost of Goods Sold of $149,410.
c. credit to Cost of Goods Sold of $3,080.
d. credit to Cost of Goods Sold of $149,410.
Answer:
A debit to cost of goods sold account = $2,880
Explanation:
Work In Finished Cost of Total
Process Goods Goods Sold
Direct materials. $2,260 $7,100 $26,500 $35,860
Direct labor 4,650 15,620 58,300 78,570
Man. overhead 2,640 6,600 23,760 33,000
applied
Total $9,550 $29,320 $108.560 $147430
Manufacturing overhead for the month was underapplied by $4,000.
since the underapplied overhead is allocated between WIP, COGS and finished goods:
$4,000 / $33,000 = 12.12%
WIP = $2,640 x 12.12% = $320finished goods = $6,600 x 12.12% = $800COGS = $23,760 x 12.12% = $2,880the journal entry should include a debit to cost of goods sold account of $2,880. Since the COGS account has a debit balance, a debit entry should increase it. Since manufacturing overhead was underapplied, it means that the estimated costs were lower than the actual costs.
Page Company makes 30% of its sales for cash and 70% on account. 60% of the credit sales are collected in the month of sale, 25% in the month following sale, and 12% in the second month following sale. The remainder is uncollectible. The following information has been gathered for the current year: Month 1 2 3 4 Total sales $60,000 $70,000 $50,000 $30,000 Total cash receipts in Month 4 will be:
Final answer:
Total cash receipts in Month 4 will be $41,650.
Explanation:
To calculate the total cash receipts in Month 4, we need to determine the amount collected in the month of sale, the following month, and the second month following sale, as well as the uncollectible amount.
Month 1: Total sales = $60,000
Cash sales = 30% of total sales = 0.3 * $60,000 = $18,000
Credit sales = 70% of total sales = 0.7 * $60,000 = $42,000
Amount collected in Month 1 = 60% of credit sales = 0.6 * $42,000 = $25,200
Month 2: Total sales = $70,000
Cash sales = 30% of total sales = 0.3 * $70,000 = $21,000
Credit sales = 70% of total sales = 0.7 * $70,000 = $49,000
Amount collected in Month 2 = 25% of credit sales = 0.25 * $49,000 = $12,250
Month 3: Total sales = $50,000
Cash sales = 30% of total sales = 0.3 * $50,000 = $15,000
Credit sales = 70% of total sales = 0.7 * $50,000 = $35,000
Amount collected in Month 3 = 12% of credit sales = 0.12 * $35,000 = $4,200
Total cash receipts in Month 4 = Amount collected in Month 1 + Amount collected in Month 2 + Amount collected in Month 3
Total cash receipts in Month 4 = $25,200 + $12,250 + $4,200
= $41,650
Cosmo contributed land with a fair market value of $332,500 and a tax basis of $138,000 to the Y Mountain partnership in exchange for a 40 percent profits and capital interest in the partnership. The land is secured by $163,000 of nonrecourse debt. Other than this nonrecourse debt, Y Mountain partnership does not have any debt
a. How much gain will Cosmo recognize from the contribution? (Leave no answer blank. Enter zero if applicable.)
b. What is Cosmo’s tax basis in his partnership interest?
Answer:
a. Zero gain
b. Cosmo’s tax basis in his partnership interest is $55,200
Explanation:
a. According to the given data there is a Zero gain, therefore Cosmo will recognize $ 0 gain from the contribution.
b. In order to calculate Cosmo’s tax basis in his partnership interest we would have to make the following calculation:
Cosmo’s tax basis in his partnership interest= tax basis to the Y Mountain partership×percentage of profits and capital interest in the partnership
Cosmo’s tax basis in his partnership interest=$138,000×40%
Cosmo’s tax basis in his partnership interest=$55,200
Cosmo’s tax basis in his partnership interest is $55,200
Final answer:
Cosmo will recognize $0 in gain from the contribution of land to the Y Mountain partnership. His initial tax basis in the partnership interest will also be $0 after accounting for relief of the nonrecourse debt.
Explanation:
Calculation of Gain Recognition and Tax Basis:
Cosmo contributed land to the Y Mountain partnership which triggers certain tax considerations. Firstly, the gain recognition:
Cosmo would not recognize any gain on the contribution of property to a partnership in exchange for an interest in the partnership under Section 721 of the Internal Revenue Code, assuming the contribution did not result in a change of 80% or more of the ownership of the partnership.Thus, the gain Cosmo recognizes is:
Recognized Gain: $0Next, for the tax basis in the partnership interest:
The basis of his land contributed is $138,000.However, since the land is subject to a $163,000 nonrecourse debt which the partnership assumes, Cosmo must reduce his basis by the amount of the debt relieved.Therefore, Cosmo's initial basis would be decreased by the nonrecourse debt.Adjusted Tax Basis = $138,000 - $163,000 = -$25,000. However, since basis cannot be negative, Cosmo's basis would be $0. It's important to note that future income allocations or additional contributions could increase this basis.In conclusion, Cosmo's initial tax basis in the partnership is $0.
Jiminy's Cricket Farm issued a 30-year, 7.8 percent semiannual bond 5 years ago. The bond currently sells for 92 percent of its face value. The company’s tax rate is 40 percent. Required: (a) What is the pretax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Pretax cost of debt % (b) What is the aftertax cost of debt? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Aftertax cost of debt % (c) Which is more relevant, the pretax or the aftertax cost of debt?
Answer:
Pretax cost of debt is 8.58%
after tax cost of debt is 5.15%
After tax cost of debt of 5.15% is more relevant because that reflects the true cost of debt bearing in mind that debt has a tax advantage(tax shield).
Explanation:
The pretax cost of debt can be computed using the rate formula in excel as follows:
=rate(nper,pmt,-pv,fv)
nper is the number of coupons the bond would pay i.e 25years(years to maturity)*2=50
pmt is the semiannual coupon interest=$1000*7.8%*6/12=$39
pv is the present price of the bond=$1000*92%=$920
fv is the face value of $1000
=rate(50,39,-920,1000)=4.29%
Annual yield=4.29%*2=8.58%
after tax cost of debt=pretax cost of debt*(1-t)
t is the tax rate of 40%
after tax cost of debt=8.58%*(1-0.4)=5.15%
"2. In 2020, Polar Engines issued 125,000 shares of its $1 par common stock at $12 per share. On September 30, 2022 Polar Engines repurchased 15,000 shares at $17 per share to hold in Treasury. Finally, on July 31, 2023 Polar Engines resold 10,000 of its treasury stock for $20 per share. What is the dollar amount of Treasury stock at the end of 2023?"
Answer:
Dollar amount of Treasury stock at the end = $85,000
Explanation:
Given:
Number of purchase treasury stock = 15,000 at $17
Number of sold treasury stock = 10,000
Computation:
Amount of purchase treasury stock = 15,000 × $17
Amount of purchase treasury stock = $255,000
Amount of sold treasury stock = 10,000 × Purchase price
Amount of sold treasury stock = 10,000 × $17
Amount of sold treasury stock = $170,000
Computation of dollar amount of Treasury stock at the end:
Dollar amount of Treasury stock at the end = Amount of purchase treasury stock - Amount of sold treasury stock
Dollar amount of Treasury stock at the end = $255,000 - $170,000
Dollar amount of Treasury stock at the end = $85,000
Joseph Company is considering replacing an existing piece of machinery with newer technology. In deciding whether to replace the existing machinery, management should consider which costs as relevant? Multiple Choice Historical costs associated with the old machine. Future costs which will be classified as fixed rather than variable. Sunk costs associated with the old machine. Future costs which will be different under the two alternatives.
Answer:
Future costs which will be different under the two alternatives.
Explanation:
In simple words, while considering to replace the new machinery every entity must focus comely on two main aspects which are the historical cost or the cost at which the old machine could be sold and the future costs which will significantly affects the potential profits of the subject firm.
However, due to various different methods of depreciation and future value estimations one should consider all the methods in hand and then take the decision.
Sonny's Super Market has installed a self-service checkout counter, and wishes to understand how this has affected customer service. Shoppers arrive on average the rate of one every other minute (Poisson distribution). Each shopper takes an average of 84 seconds to use the checkout, and that time is exponentially distributed. a. Calculate how long it takes, on average, for a shopper at the self-service counter, including how long they wait in line and how long it takes them to do their own checkout.'
Answer:
The Expected time a customer spends in the system is 4
Explanation:
According to the given data we have the following:
Arrival rate A = 1 every other minute = 30/hour or (30/60) per minute
Service rate S = 84 seconds = 60×60/84= 42.86 customers per hour
System utilization factor P = A/S = 30/42.86 = 0.699
Length of the system L = P/(1-P) = 0.699/(1-0.699) = 2.322
Therefore, Expected time a customer spends in the system = L/A = 2.322/(30/60) = 4.644=4
On January 1, Year 1, Barrett, Inc., purchased equipment and signed a note agreeing to pay $100,000 on December 31, Year 3. The market interest rate applicable to the note was determined to be 10%. What is the amount that will be credited to Note Payable in the journal entry dated January 1, Year 1?
Answer:
$75,131
Explanation:
The computation of the amount of note payable credited is shown below:
Notes payable is
= Agreed amount to pay × present value factor at 10% for 3 years
= $100,000 × 0.75131
= $75,131
By multiplying the agreed amount to pay with the present value factor at 10% for 3 years we can get the amount credited to the note payable
Sharon Foods Company reported the following transactions for September 2017. a) The business received a $21,000 cash contribution from the owner. It was credited to Sharon, Capital. b) The business purchased office equipment for $9,000 for which $4,000 cash was paid and the balance was put on a note payable. c) Paid insurance expense of $1,500 cash. d) Paid the September utility bill for $800 cash. e) Paid $1,600 cash for September rent. f) The business had sales of $12,000 in September. Of these sales, 40% were cash sales, and the balance was credit sales. g) The business paid $8,000 cash for office furniture. What are the total liabilities at the end of September, 2017
Answer:
The total liabilities at end of September is $5,000
Explanation:
The $21,000 received from business owner is capital which would have been credited to capital and debited to cash.
The purchase of office equipment meant that cash decreased by $4000,a credit of $4,000 and a credit of $5,000 to notes payable while the $9000 is debited to equipment account.
The insurance expense,utility bill,rent as well as the purchase of office furniture were all cash settled and had no liability impact,hence the only liability outstanding at month end is the notes payable on office equipment of $5,000