Answer:
total sales $820 million
net income $425 million
total assets $750 million
total liabilities $735
1.2 million outstanding common stocks
an offer was made to buy their assets at $742.5 million
company's book value per share:
= (total assets - total liabilities) / total number of outstanding common stocks
= ($750,000,000 - $735,000,000) / 1,200,000 = $12.50 per stock
company's liquidation value per share:
= (total offer - total liabilities) / total number of outstanding common stocks
= ($742,500,000 - $735,000,000) / 1,200,000 = $6.25 per stock
On December 31, 2015, a company had assets of $36 billion and stockholders' equity of $32 billion. That same company had assets of $48 billion and stockholders' equity of $10 billion as of December 31, 2016. During 2016, the company reported total sales revenue of $29 billion and total expenses of $27 billion. What is the company's debt-to-assets ratio on December 31, 2016
Answer:
0.79 times
Explanation:
The computation of debt-to-assets ratio is shown below:-
For computing the debt-to-assets ratio first we need to find out the total debt which is given below:-
Total Debt = Assets - Stockholders' equity
= $48 billion - $10 billion
= $38 billion
Debt-to-assets ratio = Total Debt ÷ Total Assets
= $38 billion ÷ $48 billion
= 0.79 times
So, for computing the debt-to-assets ratio we simply applied the above formula.
The Abrams, Bartle, and Creighton partnership began the process of liquidation with the following balance sheet:
Cash 16,000
Noncash asset 434,000
Total- 450,000
Liability-150000
Abrams-80,000
Bartle- 90,000
Creighton-130,000
total- 450,000
Abrams, Bartle, and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expenses are expected to be $12,000.
The noncash assets were sold for $134,000. Which partner(s) would have had to contribute assets to the partnership to cover a deficit in his or her capital account, prior to considering the liquidation expenses incurred?
Answer and Explanation:
The contribution of assets to the partnership to cover a deficit is presented below:
Particulars Abram Bartle Creighton
Capital Balance $80,000 $90,000 $130,000
Less:
Allocation of non cash assets sold ($434,000 - $134,000) = $300,000 in 3 : 2 :5 ratio
-$90,000 -$60,000 -$150,000
Liquidation expense -$3,600 -$2,400 -$6,000
Liabilities ($150,000 - $16,000) = $134,000 in 3 : 2 :5 ratio
-$40,200 -.$26,800 -$67,000
Adjusted capital balance -$53,800 $800 -$93,000
So based on the above calculation the Abram and Creighton have to contribute the assets
Final answer:
Abrams and Creighton would both need to contribute assets to the partnership to cover deficits of $10,000 and $20,000 respectively in their capital accounts after the sale of noncash assets and before accounting for liquidation expenses.
Explanation:
Liquidation Deficit Calculation
Before considering liquidation expenses, we need to determine how the sale of noncash assets impacts the partners' capital accounts. The noncash assets were sold for $134,000, which is $300,000 less than the book value of $434,000. This loss needs to be allocated to the partners according to their profit and loss sharing ratio, which is 3:2:5 for Abrams, Bartle, and Creighton respectively.
The total loss is $300,000, which is shared as follows:
Abrams' share: $300,000 x 3/10 = $90,000
Bartle's share: $300,000 x 2/10 = $60,000
Creighton's share: $300,000 x 5/10 = $150,000
Adjusting their capital accounts for these losses results in:
Abrams: $80,000 - $90,000 = -$10,000 (deficit)
Bartle: $90,000 - $60,000 = $30,000
Creighton: $130,000 - $150,000 = -$20,000 (deficit)
Abrams and Creighton would both have to contribute assets to the partnership to cover their deficits in their capital accounts, prior to considering the $12,000 liquidation expenses.
The advantage of being self-employed (rather than being an employee) is: A. The overall limitation (50%) on meals does not apply. B. Job-related expenses are deductions for AGI. C. The self-employment tax is lower than the Social Security tax. D. To avoid the self-employment tax. E. All of the self-employment tax deductible for income tax purposes.
Answer:
B. Job-related expenses are deductions for AGI.
Explanation:
A person is said to be self-employed if he is working for oneself rather than for an employer as a freelancer or the owner of a business.
Adjusted gross income (AGI) refers to the measure of income calculated from your gross income. AGI is used to determine the amount of tax.
The advantage of being self-employed (rather than being an employee) is job-related expenses are deductions for AGI.
To which type of system the “Analytical Power” software belongs? *
DSS
ESS
MIS
TPS
Answer:
MIS
Explanation:
The Management information System (MIS) is a decision making tool that uses the computer to hardware and software to gather from various online system . Theses data are then analyzed and visualized to ease the process of decision making by the management.
One key component of the MIS is the Analytical power Software which differentiate it from other forms of information systems
As a country begins to liberalize its capital account (become more financially open), what would you expect to happen to the difference between the interest rates for similar assets in this country and another country with open capital markets? Group of answer choices get smaller stay the same exponential divergence it depends on the existing exchange rate. get larger
Answer:
Get smaller.
Explanation:
This process is easily explained by relaxing of the economy towards the the private sector. In some countries emerging markets, it provides new opportunities for investors to increase their diversification and profit. Economic liberalization refers to a country "opening up" to the rest of the world with regards to trade, regulations, taxation and other areas that generally affect business in the country.
As a general rule, you can determine to what degree a country is liberalized economically by how easy it is to invest and do business in the country.
Freitas Corporation was organized early in 2021. The following expenditures were made during the first few months of the year: Attorneys’ fees in connection with the organization of the corporation $ 12,000 State filing fees and other incorporation costs 3,000 Purchase of a patent 20,000 Legal and other fees for transfer of the patent 2,000 Purchase of equipment 30,000 Preopening salaries and employee training 40,000 Total 107,000 Required: Prepare a summary journal entry to record the $107,000 in cash expenditures.
Answer:
Dr Organization costs ($12,000 + $3,000) 15,000
Dr Patent ($20,000 + $2,000) 22,000
Dr Equipment 30,000
Dr Preopening expenses 40,000
Cr Cash 107,000
Explanation:
Organization costs are the initial costs incurred to start a business. They include attorney fees, and any other legal and registration fees required by both municipal state and federal government.
Any fees related to the purchase of the patent, e.g. commissions paid or attorney fees must be included in the purchase cost of the patent.
"Bank Three currently has $500 million in transaction deposits on its balance sheet. The Federal Reserve has currently set the reserve requirement at 6 percent of transaction deposits. a. If the Federal Reserve decreases the reserve requirement to 4 percent, show the balance sheet of Bank Three and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume Bank Three withdraws all excess reserves and gives out loans and that borrowers eventually return all of these funds to Bank Three in the form of transaction deposits. b. Redo part (a) using a 8 percent reserve requirement."
Answer:
FED - Balance Sheet
Assets- Securities: $30
Liabilities- Reserve Accounts: $30
Bank Three - Balance Sheet
Assets- Loans: $470
Reserve Deposits at Fed: $30
Liabilities- Transaction deposits: $500
If reserve requirement is 4%
FED - Balance Sheet
Assets- Securities: $20
Liabilities- Reserve Accounts: $20
Bank - Balance Sheet
Assets- Loans: $480
Reserve Deposits at Fed: $20
Liabilities- Transaction deposits: $500
If reserve requirement is 8%
FED - Balance Sheet
Assets- Securities: $40
Liabilities- Reserve Accounts: $40
Bank - Balance Sheet
Assets- Loans: $460
Reserve Deposits at Fed: $40
Liabilities- Transaction deposits: $500
Explanation:
Before:
500 million x 6% = 30 million
available for loan 500 - 30 = 470 million
after, with 4%:
500 millon x 0.04 = 20 million
500 - 20 = 480 available
after, with 8%:
500 millon x 0.08 = 60 million
500 - 40 = 460 available
Bank Three's balance sheet and the Federal Reserve System's balance sheet are affected by changes in the reserve requirement. The balance sheets need to be adjusted based on the new reserve requirement percentage. Decreasing or increasing the reserve requirement will impact the amount of excess reserves, loans, and transaction deposits.
Explanation:In this question, we are asked to show the balance sheet of Bank Three and the Federal Reserve System just before and after a change in the reserve requirement set by the Federal Reserve. We need to assume that Bank Three withdraws all excess reserves and gives out loans, and that borrowers eventually return all of these funds to Bank Three in the form of transaction deposits. The reserve requirement is given as a percentage of transaction deposits. We need to calculate the new reserve required, and adjust the balance sheets accordingly, for two different scenarios: a decrease to 4 percent and an increase to 8 percent.
a. Decrease to 4 percent:Before the change:Bank Three: Transaction deposits = $500 million; Reserve requirement = 6% of $500 millionFederal Reserve System: Total reserves = Reserve requirement for Bank ThreeAfter the change:Bank Three: Excess reserves = Total reserves - New reserve requirement; Loans = Excess reserves; Transaction deposits = LoansFederal Reserve System: Reserve requirement for Bank Three = 4% of new transaction deposits; Total reserves = Reserve requirement for Bank Threeb. Increase to 8 percent:Before the change:Bank Three: Transaction deposits = $500 million; Reserve requirement = 6% of $500 millionFederal Reserve System: Total reserves = Reserve requirement for Bank ThreeAfter the change:Bank Three: Excess reserves = Total reserves - New reserve requirement; Loans = Excess reserves; Transaction deposits = LoansFederal Reserve System: Reserve requirement for Bank Three = 8% of new transaction deposits; Total reserves = Reserve requirement for Bank ThreeLearn more about balance sheets here:https://brainly.com/question/34287613
#SPJ3
The traditional view of monopolistic competition holds that this type of industrial structure is inefficient because a. more advertising is needed to inform customers about product differences. b. consumers do not have enough choice among the product varieties available. c. firms do not operate at the output that minimizes average costs. d. there are too few firms to reach an efficient level of production.
Answer:
c. firms do not operate at the output that minimizes average costs.
Explanation:
Monopolistic competition is when suppliers sell products that are similar but not equal and they are not perfect substitutes. This type of market is inneficient because companies operate at a profit maximizing output that is less than the output where they have the minimum average cost. According to this, the answer is that the traditional view of monopolistic competition holds that this type of industrial structure is inefficient because firms do not operate at the output that minimizes average costs as they work with excess capacity with an output in which they can maximize their profit.
Kelly Industries issued 9% bonds, dated January 1, with a face value of $150,000 on January 1, 2021. The bonds mature in 2031 (10 years). Interest is paid semiannually on June 30 and December 31. For bonds of similar risk and maturity the market yield is 11%. What was the issue price of the bonds? 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.)
Answer:
Price of Bonds= $132,074.43
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
Semi -annual Interest Payment = 9%× 150,000 × 1/2 = 6750
Semi-annual market yield = 11%/2 = 5.5%
Present Value = PV of interest payment = A× (1+r)^(-n)/ r
A- interest payment= r- semi annual yield - 5.5%, n- number of periods - 2× 10 = 20
PV of interest payment = 6750 × (1 - 1.055^(-20))/0.055= 80,665.08
PV of Redemption Value = Face Value × (1+r)^(-n)
= 150,000 × (1.055)^(-20)= 51,409.34
Price of Bonds = 51,409.34 + 80,665.08 = $132,074.43
Price of Bonds= $132,074.43
Your friend Harold is trying to decide whether to buy or lease his next vehicle. He has gathered information about each option but is not sure how to compare the alternatives. Purchasing a new vehicle will cost $33,500, and Harold expects to spend about $1,200 per year in maintenance costs. He would keep the vehicle for five years and estimates that the salvage value will be $13,300. Alternatively, Harold could lease the same vehicle for five years at a cost of $4,355 per year, including maintenance. Assume a discount rate of 12 percent. Required: 1. Calculate the net present value of Harold’s options. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign. Round your final answers to 2 decimal places. Do not round intermediate calculations.) 2. Advise Harold about which option he should choose. Lease Option Purchase Option
Final answer:
To compare Harold's options for leasing vs. purchasing a vehicle, we calculate the Net Present Value (NPV) of both options using a 12% discount rate. Harold should choose the option with the higher NPV, indicating the lower cost over time, calculated by considering the initial cost, maintenance, and salvage or lease payments.
Explanation:
To compare leasing vs. purchasing a vehicle, we need to calculate the Net Present Value (NPV) of each option for Harold, considering the discount rate of 12%. The NPV is the sum of the present values of all cash flows associated with the investment, including the initial investment, any periodic payments, and any final salvage value or cost.
For the purchase option, we have:
Initial cost = -$33,500 (negative because it's an outflow)
Maintenance cost per year = -$1,200 for five years
Salvage value after five years = +$13,300
For the lease option, we have:
Annual lease cost (including maintenance) = -$4,355 for five years
To calculate the NPV of the purchase option, we need to find the present value of the annual maintenance costs and add it to the present value of the initial investment and the future salvage value, discounted at the 12% rate.
For the lease option, we need to calculate the present value of the annual lease payments at the 12% discount rate.
After calculating these values, Harold should choose the option with the higher NPV, which represents the lower cost over the time period when discounted back to present value terms.
good theory should have the virtue of , or refutability. In other words, not only must a theory predict thing that we should observe if it is right, but it should predict things that we should observe if it is wrong. Theory X predicts that individuals will buy more of a particular good if their incomes rise. This is a theory that can be falsified. True or false
Answer:
True. Yes, the theory can be falsified.
Explanation:
Theory X would more specifically refer to the theory of supply and demand, which states that individuals will buy more of a particular good if their income rises. From this theory, comes the concept of "normal good", which are precisely the goods that people buy more as their income rises.
This theory could be falsified by empirical observation: a study could be made, including a good number of subjects, to see whether their purchasing habits are directly related to their income.
Ultra Day Spa provided $94,850 of services during Year 1. All customers paid for the services with credit cards. Ultra submitted the credit card receipts to the credit card company immediately. The credit card company paid Ultra cash in the amount of face value less a 1 percent service charge. Required a. Show the credit card sales (Event 1) and the subsequent collection of accounts receivable (Event 2) in a horizontal statements model like the one shown next. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). (Enter any decreases to account balances with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.)
Answer and Explanation :
The presentation is shown below:
As per the data given in the question,
Assets = Liabilities + Equity Revenue - Expenditure = Net income Cash flow
Cash + Acc. Rev.
NA $94,850 NA $94,850 $94,850 NA $94,850 NA
$93,901.5 -$94,850 NA -$948.5 NA -$948.5 -$948.5 $93,901.5
We simply present the transactions on the financial statements
In October, Glazier Inc. reports 42,000 actual direct labor hours, and it incurs $194,000 of manufacturing overhead costs. Standard hours allowed for the work done is 40,000 hours. The flexible manufacturing overhead budget shows that budgeted costs are $3.80 variable per direct labor hour and $60,000 fixed. Compute the manufacturing overhead controllable variance. Identify whether the variance is favorable or unfavorable?
Answer:
$18,000 F
Explanation:
Actual overhead– Overhead Budgeted=
Overhead Controllable Variance
Actual overhead=$194,000
Overhead Budgeted=$212,000
$194,000–$212,000
=$18,000 F
(40,000 ×$3.80) + $60,000
=$152,000+$60,000
= $212,000
Therefore the manufacturing overhead controllable variance is $18,000 F
One of the previous scenarios is an example of affirmative action, while the other is an example of diversity. Now you can compare the two scenarios in order to recognize one of the differences between affirmative action and diversity: Affirmative action is intended to_______________ , whereas diversity is intended to ________________.
Answer:
Affirmative action is intended to curb employment discrimination against a minority group, whereas diversity is intended to promote the interest of a diverse group of people within an organization.
Explanation:
Affirmative action was introduced to curb discrimination in the work force. It seeks to establish fair access to employment opportunities which will favor the marginalized minority or a particular demographic that is at a disadvantage.
Diversity is intended to promote the interest of the entire organization by repealing any policy that infringes on the rights of every citizen irrespective of race to have equal access to equal benefits.
Diversity and affirmative action deal with issues related to discrimination in different ways,
Whereas affirmative action focuses on taking positive steps to get individuals into the organization, diversity in the workplace seeks to change the organizational culture within an organizational space.
he Wood Valley Dairy makes cheese to supply to stores in its area. The dairy can make 485 pounds of cheese per day (358 days per year), and the demand at area stores is 67 pounds per day. Each time the dairy makes cheese, it costs $290 to set up the production process. The annual cost of carrying a pound of cheese in a refrigerated storage area is $0.92. Determine the minimum total annual cost.
Answer :
Minimum total annual cost = $3,321.26
Explanation :
The computation of the minimum total annual cost is shown below:
As per the data given in the question,
Annual demand (D) = 67 × 358 days = 23,986
Setup cost (C) = $290
Production rate (R) = 358 days × 485 = 173,630
Holding cost(H) = $0.92
Economic production quantity(Q) = sqrt((2 × D × C) ÷ H × (1-(D ÷ R)))
= sqrt(((2 × 23,986 × $290) ÷ $0.92 × (1 -(23,986 ÷ 173,630)))
= 4,188.7
= 4,189
Minimum total annual cost is
= (Q ÷ 2) × (1 - D ÷ R) × H + (D ÷ Q) × C
=4,189 ÷ 2 × (1 - (23,986 ÷ 173,630) × $0.92+ (23,986 ÷ 4,189) × 290
= $3,321.26
Bennett Co. has a potential new project that is expected to generate annual revenues of $253,100, with variable costs of $140,000, and fixed costs of $58,300. To finance the new project, the company will need to issue new debt that will have an annual interest expense of $19,500. The annual depreciation is $23,200 and the tax rate is 40 percent. What is the annual operating cash flow?
Answer:
Hence, the annual operating cash flow is: $44860
Explanation:
Year 0 Year 1
Initital investment
Inflows $253,100
variable costs ($140,000)
fixed cost (53800)
Depreciton ($23,200)
Interest expense ($19,500)
Net cash inflows $16600
Tax at 40% ($6640)
Net Cashinflows after tax $9960
Add Depreciation $23,200
Interest net of tax $11.700
Operating cashflows $44860
Hence, the annual operating cash flow is: $44860
The marketing managers at Omaha Steaks used airlines' databases to mail a special offer to frequent flyers. Eight weeks after shipping the steaks to the frequent flyers who placed orders as a result of the initial offer, the company's salespeople followed up by telephoning customers to ask for new orders. This is an example of which two types of non-store retailing? a. direct mail and telemarketing b. direct selling and telemarketing c. telemarketing and online retailing d. online retailing and automatic vending
Answer:
A. Direct mail and telemarketing
Explanation:
Direct mail can be defined as a form of marketing in which the sender tends to send a direct advertisement to the recipient. It is also known as junk mail as it arrives uninvitedly, so the recipient's call it junk mail. In this form of direct marketing, the sender sends out physical promotional materials such as flyers, letters, brochures, etc through postal services.
Telemarketing, on the other hand, is another form of direct marketing in which telemarketers phone, tax, of mail their potential customers. In this form of direct marketing, telemarketers either use direct way of calling the customers or even the robocalls.
In the given case, the manager of Omaha Steaks has used direct mail and telemarketing form of non-store retailing. Direct mail is used by sending flyers to the customers and telemarketing by telephoning the customers.
So, the correct answer is option A.
Delhoyo Corporation, a manufacturing company, has provided data concerning its operations for September. The beginning balance in the raw materials account was $37,000 and the ending balance was $29,000. Raw materials purchases during the month totaled $57,000. The direct materials cost for September was:
Answer:
$65,000
Explanation:
Computation of the given data are as follows:
Direct material cost = Beginning balance + Purchase - Ending balance
Where, Beginning balance = $37,000
Purchase = $57,000
Ending balance = $29,000
So, by putting the value in the formula, we get
Direct material cost = $37,000 + $57,000 - $29,000
= $65,000
The direct materials cost for Delhoyo Corporation for September is calculated by adding the beginning inventory of raw materials and the purchases during the month, then subtracting the ending inventory. The total comes to $65,000.
The direct materials cost for September for the Delhoyo Corporation can be calculated using the given data. We need to consider the beginning balance of raw materials, the purchases made during the month, and the ending balance. The formula to calculate the direct materials cost is:
Direct Materials Cost = (Beginning Inventory + Purchases) - Ending Inventory.
Using the numbers provided:
Direct Materials Cost = ($37,000 + $57,000) - $29,000
Direct Materials Cost = $94,000 - $29,000
Direct Materials Cost = $65,000.
Therefore, the direct materials cost for Delhoyo Corporation for September is $65,000.
Farm Co. leased equipment to Union Co. on January 1, 2021, and properly recorded the sales-type lease at $135,000, the present value of the lease payments discounted at 10%. The first of eight annual lease payments of $20,000 due at the beginning of each year of the lease term was received and recorded on January 3, 2021. Farm had purchased the equipment for $110,000. What amount of interest revenue from the lease should Farm report in its 2021 income statement
Answer:
$5,750
Explanation:
For computing the interest revue first we have to determine the remaining amount which is shown below:
= Sale type lease of property - first eight annual lease payments
= $135,000 - $20,000
= $115,000
Now the interest revenue is
= Remaining amount × discounted rate × number of months ÷ total number of months in a year
= $115,000 × 10% × 6 months ÷ 12 months
= $5,750
The six months is calculated from June to December
We simply applied the above formula
Jeffrey wants to get his truck custom-painted, so he is researching prices for different painting companies. He has found the following information: Assume that all four companies will take 5 hours to complete the job and will use $240 in materials. Which company will give Jeffrey the lowest price? A : Company 1 B : Company 3 C : Company 2 D : Company 4
Answer:
D : Company 4
Explanation:
Since all the painting companies require 5 hours to paint the truck, and they all will use the same amount of materials, then you have to choose the company that charges the lowest rate per hour:
Company 1 charges $57 per hour x 4 hours = $285 + $240 = $525Company 2 charges $52.50 per hour x 4 hours = $262.50 + $240 = $502.50Company 3 charges $48.95 per hour x 4 hours = $244.75 + $240 = $484.75Company 4 charges $46.20 per hour x 4 hours = $231 + $240 = $471 ⇒ lowest priceFaraday Enterprises is a publicly traded company. It currently has 10 million shares trading at $12/share and $150 million in book value of equity. The firm also has book value of debt of $ 75 million and market value of debt of $ 80 million. The cost of equity for the company is 9%, the pre-tax cost of debt is 4% and the marginal tax rate is 40%. What is the cost of capital?
Answer:
6.36%
Explanation:
First we calculate the market value weights of debt and equity,
Debt to the capital ratio is calculated as,
80,000,000/(120,000,000+80,000,000) = 40%.
Therefore Equity ratio will be: (100%-40%) = 60%.
Now,
Cost of capital = (0.6*9%) + (0.4*4%)(1 - 40%) = 6.36%.
Hope this helps.
Goodluck buddy.
Answer:
6.36%
Explanation:
Weighted Average Cost of Capital (WACC) is the minimum return that is expected from a project.It shows the risk of the company
WACC = Cost of Equity + Cost of Debt
Capital Source Market Value Weight Cost Total Cost
Equity $120,000,000 60% 9% 5.40%
Debt $80,000,000 40% 2.40% 0.96%
Total $200,000,000 100% 6.36%
Cost of Debt = Market Interest rate × ( 1 - tax rate)
= 4 % × (1 - 0.40)
= 2.40%
Therefore, cost of capital is 6.36%
Juarez Corporation produces cleaning compounds and solutions for industrial and household use. While most of its products are processed independently, a few are related. Grit 337, a coarse cleaning powder with many industrial uses, costs $2.00 a pound to make and sells for $3.20 a pound. A small portion of the annual production of this product is retained for further processing in the Mixing Department, where it is combined with several other ingredients to form a paste, which is marketed as a silver polish selling for $5.30 per jar. This further processing requires 1/4 pound of Grit 337 per jar. Costs of other ingredients, labor, and variable overhead associated with this further processing amount to $2.10 per jar. Variable selling costs are $0.50 per jar. If the decision were made to cease production of the silver polish, $8,900 of Mixing Department fixed costs could be avoided. Juarez has limited production capacity for Grit 337, but unlimited demand for the cleaning powder.
Required:
Calculate the minimum number of jars of silver polish that would have to be sold to justify further processing of Grit 337. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.)
Minimum number of jars = ?
Answer:
4,684 jars
Explanation:
The computation of the minimum number of jars is shown below:
Minimum number of jars = Fixed cost ÷ Contribution margin per unit
where,
Fixed cost is $8,900
And,
Contribution margin per unit is
Sales revenue per jar $5.30
Less: Sales revenue lost per jar ($3.20 × 1 ÷ 4) $0.8
Net sales revenue per jar $4.50
Les: Variable processing cost per jar $2.10
Less: Variable selling cost per jar $0.50
Contribution margin per jar $1.90
Based on this, the minimum number of jars is
= $8,900 ÷ $1.90
= 4,684 jars
g Kleczynski Co. provided the following information on selected transactions during 2021: Purchase of land by issuing bonds 900,000 Proceeds from issuing bonds 2,900,000 Purchases of inventory from Johnson Inc. 3,700,000 Purchases of treasury stock 590,000 Increase in the equity method investment of Gonzales Corp. 130,000 Proceeds from issuing preferred stock 1,500,000 Proceeds from sale of equipment to McCutcheon Inc. 290,000 The net cash provided by or (used by) financing activities during 2021 is
Answer:
$3,940,000
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow. Depreciation and other non-cash expenses deducted in the income statements are added back while the non-cash income such gain on asset are deducted from net income.
The net cash provided by or (used by) financing activities during 2021
= $2,900,000 - $590,000 + $130,000 + $1,500,000
= $3,940,000
Other transactions are operating and investing activities.
Riverrun Co. provides medical care and insurance benefits to its retirees. In the current year, Riverrun agrees to pay $13,500 for medical insurance and contribute an additional $9,200 to a retirement program. Record the entry for these accrued (but unpaid) benefits on December 31.
Answer:
Dr. Employee Benefits expense $22,700
Cr. Medical Insurance payable $13,500
Cr. Employee retirement program payable $9,200
Explanation:
The cost of fringe benefit provided to the employee of the company and any tax component attached to it is known as the employee benefit expense.
Total employee benefit expense is the sum of medical insurance and employee retirement program. As medical insurance and retirement program is payable until now so, it is recorded as a liability.
Employee benefit expense = $13,500 + $9,200 = $22,700
ZZZ Corporation is issuing Common Stocks that are expected to pay $14 dividend per year and this company is expected to grow at 1% per year. Concurrently, the expected rate of return on stocks with similar risk is 9 % per year. Based on this data, find the pure price per share of common stock issued by ZZZ Corporation. Note: round your answer to two decimal places, and do not include spaces, currency signs, plus or minus signs, nor commas.
Answer:
The pure price per share of common stock issued by ZZZ is $175
Explanation:
According to the given data we have the following:
Expected dividend next year=D1=$14
Growth rate=g=1%
Expected rate of return=r=9%
To calculate the pure price per share of common stock issued by ZZZ Corporation Pure price of share will be equal to PV of all future dividends.
Therefore, Pure price per share=D1/(r-g)
Pure price per share= $14/(9%-1%)=$175
Most Solutions, Inc., issued 13% bonds, dated January 1, with a face amount of $540 million on January 1, 2021. The bonds mature in 2031 (10 years). For bonds of similar risk and maturity, the market yield is 15%. Interest expense is recorded at the effective interest rate. Interest is paid semiannually on June 30 and December 31.
Most recorded the sale as follows:
January 1, 2021
Cash (price) 484,947,999
Discount on bonds (difference) 55,052,001
Bonds payable (face amount) 540,000,000
Required:
1. What would be the net amount of the liability Most would report in its balance sheet at December 31, 2021?
2. What would be the amount related to the bonds that Most would report in its income statement for the year ended December 31, 2021?
3. What would be the amount(s) related to the bonds that Most would report in its statement of cash flows for the year ended December 31, 2021?
Answer:
Net amount of liability is $487,585,531.34
Income statement expense is $72,837,532.35
Cash flow amount is $70,200,000
Explanation:
The amount the company,Most Solutions Inc, would record in its balance sheet as at 31st December,2021 is the initial cash proceeds of $484,947,999 plus the 2 interest expenses for the year minus the 2 coupon payments in the year as shown in the schedule below:
Bal B/f Interest expense coupon payment Bal c/f
30-6 $484,947,999 $36,371,099.93 $ 35,100,000.00 $486,219,098.93
31-12 486,219,098.93 $36,466,432.42 $35,100,000 $487,585,531.34
The first interest expense=15%/2*$484,947,999=$36,371,099.93
coupon payment=$540,000,000*13%/2= $35,100,000
second interest expense= $486,219,098.93 *15%/2=$36,466,432.42
The bal c/f =opening balance+interest expense-coupon payment
total interest expense for the year=$36,371,099.93+$36,466,432.42=$ 72,837,532.35
total cash outflow=$35,100,000=$70,200,000
Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume that there is sufficient capacity for the special order. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. Round your answers to two decimal places. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign
Answer:
normal price $9.60 per unit
special order price $7.20 per unit
variable production costs = $5.00 per unit
additional export tariff = $7.20 x 15% = $1.08
Differential analysis (March 16)Not sell Sell Effect on income (sell)
Revenue per unit $0.00 $7.20 $7.20
- variable prod. costs ($0.00) ($5.00) ($5.00)
- variable export tariff ($0.00) ($1.08) ($1.08)
Income per unit $0.00 $1.12 $1.12
A differential analysis only considers additional revenues or costs generated by a specific project or special order.
Paney Company makes and sells calendars. The information on the cost per unit is as follows: Direct materials $1.50 Direct labor 1.20 Variable overhead 0.90 Variable marketing expense 0.40 The fixed marketing expense totaled $13,000, and the fixed administrative expense totaled $35,000. The price per calendar is $10. What is the break-even point in sales dollars? a.$58,330 b.$80,000 c.$120,000 d.$28,000 e.$21,670
Answer:
Break-even point (dollars)= $80,000
Explanation:
Giving the following information:
Variable costs:
Direct materials $1.50
Direct labor 1.20
Variable overhead 0.90
Variable marketing expense 0.40
Total variable costs= 4
Fixed costs:
The fixed marketing expense totaled $13,000
The fixed administrative expense totaled $35,000.
Total fixed costs= $48,000
The price per calendar is $10.
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 48,000/ [(10 - 4)/10]
Break-even point (dollars)= 48,000/0.6
Break-even point (dollars)= $80,000
Marko, Inc., is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $4,800, $9,800, and $16,000 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determined that a rate of return of 11 percent is applicable to this potential purchase. What is Marko willing to pay today to buy ABC Co.?
Answer:
$23,977.29
Explanation:
In order to determine how much Marko would be willing to pay, we have to calculate the present value of the ABC Co.
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator:
Cash flow in year 1 =$4,800
Cash flow in year 2 = $9,800
Cash flow in year 3 = $16,000
I = 11%
Present value = $23,977.29
To find the PV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Final answer:
Marko, Inc. should be willing to pay a maximum of $23,768.81 today for ABC Co. to achieve an 11% rate of return, which is the sum of the discounted cash flows expected over the next three years.
Explanation:
The student is asking how to calculate the present value of the cash flows generated by ABC Co. that Marko, Inc. expects to receive over the next three years using a discount rate of 11%. To find out how much Marko is willing to pay for ABC Co. today, we need to discount the future cash flows back to their present value.
To calculate the present value (PV) of each cash flow, we use the formula PV = CF / (1 + r)ⁿ, where CF is the cash flow in a given year, r is the discount rate, and n is the number of years in the future the cash flow occurs.
Applying this formula, we find:
Year 1: PV = $4,800 / (1 + 0.11)¹ = $4,324.32
Year 2: PV = $9,800 / (1 + 0.11)² = $7,936.97
Year 3: PV = $16,000 / (1 + 0.11)³ = $11,507.52
The total present value of the cash flows is the sum of the individual present values: $4,324.32 + $7,936.97 + $11,507.52 = $23,768.81.
Therefore, the most that Marko, Inc. should be willing to pay to purchase ABC Co. today is $23,768.81 to achieve an 11% rate of return on the investment.
Linda is trying to figure out her conversion cost. She knows her cost per click her
number of unique visitors, and the number of purchases they made. What does she
need to calculate in order to get the information she wants?
To determine her conversion cost, Linda must calculate her total ad campaign cost by multiplying her cost per click with the number of unique visitors, and then divide this total by the number of purchases made.
Linda needs to calculate her conversion cost, which is a metric used in online advertising and marketing to measure the cost of acquiring a customer through a digital campaign. To do this, she needs to know two things: the total cost of her advertising campaign and the number of conversions (purchases) it generated. The formula for conversion cost is the total ad campaign cost divided by the number of conversions. Given that Linda knows her cost per click (CPC), the number of unique visitors, and the number of purchases, she can calculate the total ad campaign cost by multiplying the cost per click by the number of unique visitors. Then, using the number of purchases (conversions), she can calculate the conversion cost by dividing the total ad campaign cost by the number of purchases.