Final answer:
The detailed answer provides a breakdown of costs and revenue for Job A and Job B, advising to accept Job A and reject Job B due to profit considerations.
Explanation:
Decision:
Job A:Contract price: $870,000Total Costs:Unit-level materials: $257,000Unit-level labor: $274,000Unit-level overhead: $47,000 Supervisor’s salary: $77,000 Rental equipment costs: $29,500 Depreciation on tools: $23,400 Allocated portion of facility-sustaining costs: $11,100 Insurance cost for job: $19,600Calculating Total Costs for Job A:Total Costs for Job A = Sum of all costsTotal Costs for Job A = $257,000 + $274,000 + $47,000 + $77,000 + $29,500 + $23,400 + $11,100 + $19,600 = $739,600Contribution to Profit for Job A = Contract price - Total Costs for Job AContribution to Profit for Job A = $870,000 - $739,600 = $130,400Job B:Contract price: $820,000Total Costs: Unit-level materials: $227,000 Unit-level labor: $324,000 Unit-level overhead: $37,000 Supervisor’s salary: $77,000 Rental equipment costs: $32,500 Depreciation on tools: $23,400 Allocated portion of facility-sustaining costs: $9,300 Insurance cost for job: $19,600Calculating Total Costs for Job B:Total Costs for Job B = Sum of all costsTotal Costs for Job B = $227,000 + $324,000 + $37,000 + $77,000 + $32,500 + $23,400 + $9,300 + $19,600 = $749,800Contribution to Profit for Job B = Contract price - Total Costs for Job BContribution to Profit for Job B = $820,000 - $749,800 = $70,200Decision for Job A:Contribution to Profit for Job A: $130,400Recommendation: Accept Job A as it yields a higher contribution to profit.Decision for Job B (if Job A is no longer available):Contribution to Profit for Job B: $70,200Recommendation: Accept Job B alone if Job A is no longer available as it generates a positive contribution to profit, albeit lower than Job A.The board of directors of Weston Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2007. The dividend is to be paid on August 15, 2007, to stockholders of record on July 31, 2007. The correct entry to be recorded on August 15, 2007, will include a Group of answer choices debit to Retained Earnings. credit to Retained Earnings. credit to Dividends Payable. debit to Dividends Payable.
Answer:
The correct option is debit to Dividends Payable
Explanation:
On the declaration date of dividends,the appropriate entries in the books of accounts would be to debit retained earnings since dividends are appropriated from retained earnings and a credit to dividends payable as an outstanding obligation owed to shareholders.
On payment date(August 15,2007),a debit would be passed in the dividends payable account and a credit sent to cash/bank account as an outflow of cash from the business to stockholders.
Acme Enterprises began the new year owing its suppliers $3,000 for merchandise purchased last year. Acme then sold half of this merchandise for $5,000 on account. Two weeks later, Acme paid its suppliers $1,000 and bought another $4,000 of merchandise on account. Acme now has an Accounts payable balance of ______. $4,500 $5,500 $11,000 $6,000 $1,000
Answer:
Acme's current balance of accounts payable is $6000
Explanation:
The closing balance of accounts payable can be calculated using the opening balance and adjusting the changes during the period to the opening balance.
The closing balance can thus be calculated as:
Closing balance = Opening balance + Credit purchases - Payment to Accounts payable
Closing balance = 3000 + 4000 - 1000
Closing balance = $6000
"Why do transportation costs initially decrease as the number of warehouses in a system increases? Why do transportation costs eventually increase as the number of warehouses increase? Why do inventory costs increase as the number of warehouses in a system increases? "
Answer:
In simple words, The general explanation is that efficiency gains do exist. Which lowers the cost of transport. In addition, as products are delivered to the facilities, one boat load will support more just one storage facility, lowering the expense of transport. In addition, as products are delivered to the facilities, one boatload will support rather than one supermarket, lowering the cost of transport.
It is January 2nd. Senior management of Digby meets to determine their investment plan for the year. The current long-term debt is equal to $33,862,062. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of stock plus a new bond issue. The CFO happily notes this will raise their Leverage (Assets/Equity) to a new target of 2.45. Assume the stock can be issued at yesterday's stock price $20.54.
Which of the following statements are true? (Select 2 answers)
A) Total investment for Digby will be $2,518,806
B) Total Assets will rise to $140,042,395
C) Digby bond issue will be $48,116
D) Long term debt will increase from $33,862,062 to $34,888,934
E) Digby will issue stock totaling $1,026,872
F) Digby working capital will be unchanged at $14,847,979
Answer:
E, F
Explanation:
1) The working capital remain unchanged as new stock issue and the the share issues are purposely to fund the purchase of plant and equipment. Please note that the components of working capital which are cash , inventory , receivable and payable are not affected by this.
2)The total share stock issued issued is close to 1,026,872. (50000*20.54)
Answer:
A) Total investment for Digby will be $2,518,806
D) Long term debt will increase from $33,862,062 to $34,888,934
Explanation:
The current Long-term debt is $33,862,062
Digby issues new shares of 50,000 with stock price $20.54.
50,000 shares * $20.45 = $1,027,000
Assets of Digby will rise by,
Assets / Equity = 2.45
Assets / $1,027,000 = 2.45
Assets = 2.45 * $1,027,000
Assets = $2,516,150
On July 31, 2022, Sunland Company had a cash balance per books of $6,275.00. The statement from Dakota State Bank on that date showed a balance of $7,825.80. A comparison of the bank statement with the Cash account revealed the following facts.
1. The bank service charge for July was $17.00.
2. The bank collected $1,655.00 from a customer for Sunland Company through electronic funds transfer.
3. The July 31 receipts of $1,336.30 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31.
4. Company check No. 2480 issued to L. Taylor, a creditor, for $384.00 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $348.00.
5. Checks outstanding on July 31 totaled $1,995.10.
6. On July 31, the bank statement showed an NSF charge of $710.00 for a check received by the company from W. Krueger, a customer, on account.
Prepare the bank reconciliation as of July 31. (List items that increase balance as per bank & books first.)
SUNLAND COMPANY
Bank Reconciliation
choose the accounting period For the Year Ended July 31, 2022July 31, 2022For the Month Ended July 31, 2022
select an opening name for section one Deposits in transitElectronic funds transfer receivedBank service chargeCash balance per bank statementOutstanding checksError in recording check No. 2480NSF checkAdjusted cash balance per bank
$enter a dollar amount
select between addition and deduction AddLess:
select a reconciling item Error in recording check No. 2480Cash balance per bank statementAdjusted cash balance per bankBank service chargeDeposits in transitOutstanding checksElectronic funds transfer receivedNSF check
enter a dollar amount
enter a subtotal of the two previous amounts
select between addition and deduction AddLess:
select a reconciling item NSF checkError in recording check No. 2480Deposits in transitCash balance per bank statementElectronic funds transfer receivedOutstanding checksBank service chargeAdjusted cash balance per bank
enter a dollar amount
select a closing name for section one Outstanding checksCash balance per bank statementBank service chargeNSF checkElectronic funds transfer receivedDeposits in transitAdjusted cash balance per bankError in recording check No. 2480
$enter a total amount for the first section
select an opening name for section two Deposits in transitBank service chargeError in recording check No. 2480NSF checkAdjusted cash balance per booksCash balance per booksElectronic funds transfer receivedOutstanding checks
$enter a dollar amount
select between addition and deduction AddLess:
select a reconciling item Cash balance per booksOutstanding checksError in recording check No. 2480Deposits in transitAdjusted cash balance per booksElectronic funds transfer receivedBank service chargeNSF check
enter a dollar amount
enter a subtotal of the two previous amounts
select between addition and deduction AddLess:
select a reconciling item Adjusted cash balance per booksElectronic funds transfer receivedNSF checkError in recording check No. 2480Deposits in transitCash balance per booksOutstanding checksBank service charge
$enter a dollar amount
select a reconciling item Deposits in transitError in recording check No. 2480Adjusted cash balance per booksOutstanding checksNSF checkElectronic funds transfer receivedBank service chargeCash balance per books
enter a dollar amount
select a reconciling item NSF checkBank service chargeElectronic funds transfer receivedCash balance per booksError in recording check No. 2480Deposits in transitAdjusted cash balance per booksOutstanding checks
enter a dollar amount
enter a subtotal of the three previous amounts
select a closing name for section two Deposits in transitAdjusted cash balance per booksElectronic funds transfer receivedOutstanding checksError in recording check No. 2480NSF checkCash balance per booksBank service charge
$enter a total amount for the second section
Answer:
CASH
Balance 6275
Service Charge -17
mistake -36
NSF -710
collection 1655
Adjusted Balance 7167.00
BANK
Balance 7825.8
Outstanding Check - 1995.1
Deposit in transit 1336.3
Adjusted Balance 7167.000
Explanation:
We adjust each statement for the unknow information
For the bank these are the outstanding check as the bank only see the checks when the holder goes to cleared and the deposit in transit.
Now, for the company will be the service cash, the collected account in their behalf pretty straight-forward.
Next, the NSF means the company accept this check as a way to settle and account but it wasn't honor It bounce making the cash in the accounting to decrease the check conversion for cash wasn't possible
Finally, the mistake we remove the mistkae by adding the 348 to cash and then, removing the 384 actual check value in both cases against, account payable as we deliver it to a supplier.
Suppose you examine the central bank’s balance sheet and observe that since the previous day, reserves had fallen by $100 million. In addition, on the asset side of the central bank’s balance sheet, securities had fallen by $100 million. Do you think the central bank was aiming to increase, decrease, or maintain the size of the money supply by carrying out the changes described to its balance sheet
Answer:
The Central Bank is trying to increase money supply.
Explanation:
When the Central Bank makes moves to increase reserves, it means that it is simply trying to mop up excess cash from the economy to fight inflation. Spiking inflation means that the power of a currency is gradually being eroded. The Central Bank cannot allow this to happen so it hits the "Reduce Money In Circulation" button. It does this by reviewing upwards, the money reserves which commercial banks must hold with the Central Bank.
It can also increase the rate at which it lends to the Commercial Banks and Investment houses. Commercial Banks, in turn, transfer the additional cost of borrowing to businesses who will seek loans. This slows down the rate at which money is pumped into the economy.
In the question, however, we notice that the Central Bank has enervated its reserves. This means that it is pumping more money into the economy. This economic move may have been executed to prevent the economy from slipping into a recession or simply to stimulate the economy.
In the short run, increased money supply means, businesses have more access to funds from commercial banks. More funds mean, more investment. Increased investment spending means the businesses will need to expand operations, hire more staff, and the multiplier effect goes on and on.
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Kuzio Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 130 100 % Variable expenses 78 60 % Contribution margin $ 52 40 % The company is currently selling 6,000 units per month. Fixed expenses are $184,000 per month. The marketing manager believes that a $5,800 increase in the monthly advertising budget would result in a 200 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change
Answer:
The company's monthly net operating income increases $4,600
Explanation:
The company is currently selling 6,000 units per month:
Total sales = $130 x 6,000 = $780,000
Total Variable expenses = $78 x 6,000 = $468,000
Net operating income = Total sales - Total Variable expenses - Fixed expenses = $780,000 - $468,000 - $184,000 = $128,000
If Kuzio Corporation increases in the monthly advertising budget of $5,800:
Total sales = $130 x 6,200 = $806,000
Total Variable expenses = $78 x 6,200 = $483,600
Fixed expenses = $184,000 + $5,800 = $189,800
Net operating income = $806,000 - $483,600 - $189,800 = $132,600
The company's monthly net operating income increases = $132,600 - $128,000 = $4,600
Final answer:
Increasing advertising by $250 would result in a profit increase of $2,920.
Explanation:
Your average variable cost (AVC) is $16 per unit.
Your elasticity of demand with respect to advertising is 0.5.
If you increase advertising by $250, your profit will increase by $2,920 (after accounting for the increase in advertising costs).
Copies Plus Print operates a copy business at two different locations. Copies Plus Print has one support department that is responsible for cleaning, service, and maintenance of its copying equipment. The costs of the support department are allocated to each copy center on the basis of total copies made. During the first month, the costs of the support department were expected to be $200,000. Of this amount, $60,000 is considered a fixed cost. During the month, the support department incurred actual variable costs of $128,000 and actual fixed costs of $72,000. Normal and actual activity (copies made) are as follows: Copy Center 1 Copy Center 2 Normal activity (copies) 600,000 400,000 Actual activity (copies) 500,000 440,000 For purposes of performance evaluation, fixed costs allocated to Copy Center 2 are: a. $24,000 b. $28,800 c. $51,200 d. $60,000
Answer:
a. $24,000
Explanation:
60,000 fixed cost which, are allocated in the base of expected copies:
total expected copies: 600,000 + 400,000 = 1,000,000
Copy Center 2 represent 400,000 / 1,000,000 = 40% of the total copies volume for the period
Therefore from the 60,000 fixed cost the 40% was applied.
60,000 x 40 % = 24,000
For performance evaluation, the fixed costs allocated to Copy Center 2 amount to $24,000, calculated by applying the center's share of normal activity (40% of total copies) to the expected total fixed costs.
Allocating fixed costs to a copy center depends on the predetermined allocation rate based on expected activity levels. In this scenario, Copies Plus Print has one support department and the fixed costs are allocated based on the number of copies made. Hence, the fixed costs allocated to Copy Center 2 can be determined following these steps:
Calculate the proportion of copies made by each center out of the normal total.Apply this ratio to the total fixed costs to determine the allocation to each center.Fixed costs for the support department were expected to be $60,000 out of the total expected costs of $200,000.Normal activity for Copy Center 1 is 600,000 copies, and for Copy Center 2 is 400,000, making a total of 1,000,000 expected copies.Therefore, Copy Center 2, responsible for 40% of the total copies (400,000/1,000,000), would get 40% of the fixed costs.This amounts to $60,000 x 0.40, which equals $24,000.Therefore, for performance evaluation purposes, the fixed costs allocated to Copy Center 2 are $24,000.
Windsor Locomotive Corporation purchased for $550,000 a 40% interest in Lopez Railways, Inc. This investment enables Windsor Locomotive to exert significant influence over Lopez Railways. During the year, Lopez Railways earned net income of $149,000 and paid dividends of $27,000. Prepare Windsor Locomotive’s journal entries related to this investment.
Answer:
Journal Entries
Dr. Investment in Lopez Railways Inc. $600,000
Cr. Cash $600,000
Dr. Investment in Lopez Railways Inc $59,600
Cr. Income of Investment in Lopez Railways Inc $59,600
Dr. Cash $10,800
Cr. Investment in Lopez Railways Inc $10,800
Explanation:
As Windsor Locomotive Corporation has purchased 40% interest in Lopez Railway Inc.Lopez Inc. is classified as the associate company of Windsor Corp.
Share in net Income = $149,000 x 40% = $59,600
Share In Dividend = $27,000 x 40% = $10,800
World Company expects to operate at 80% of its productive capacity of 66,250 units per month. At this planned level, the company expects to use 26,500 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.500 direct labor hours per unit. At the 80% capacity level, the total budgeted cost includes $53,000 fixed overhead cost and $331,250 variable overhead cost. In the current month, the company incurred $389,000 actual overhead and 23,500 actual labor hours while producing 50,000 units. (1) Compute the overhead volume variance. (2) Compute the overhead controllable variance.
Answer:
Overhead volume variance = $3,000 Unfavorable
Overhead controllable variance = $26,500 unfavorable
Explanation:
As per the data given in the question,
a)
Number of units produced = 80% × 66,250
= 53,000 units
Standard = 26,500 hours ÷ 53,000 units
= 0.5 direct labor hour per unit
Particulars a b Direct labor hour(a ÷ b)
Variable overhead rate $331,250 26,500 $12.5 per hour
Fixed overhead rate $53,000 26,500 $2 per hour
Total overhead rate $384,250 $15 per hour
The standard hours to produce 50,000 units = 25,000 (50,000 units × 0.50 hours per unit.)
Applied fixed overhead = $2 × 25,000
= $50,000
Overhead fixed volume variance is
= $53,000 - $50,000
= 3,000 unfavorable
Now
b) Standard hour = 50,000 units × 0.5 direct labor hour per unit
= 25,000
Overhead rate(a) Standard hours(b) Applied overhead(a × b) Actual variance
Variable overhead $12.5 25,000 $312,500
Fixed overhead $2 25,000 $50,000
Total overhead $14.5 25,000 $362,500 $389,000
= $362,500 - $389,000
$26,500 unfavorable
If the actual cost is more than the standard one than the variance should be unfavorable and If the actual cost is less than the standard one than the variance should be favorable
Airbolt Avionics makes aircraft instrumentation. Their basic navigation radio requires $ 120 in variable costs and requires $ 3 comma 000 per month in fixed costs. If it processes the radio further to enhance its functionality, it will require an additional $ 20 per unit of variable costs and $ 400 per month in fixed costs. The marketing manager believes the sales price of the radio can be increased from $ 270 to $ 300. In making this decision, the amount of additional fixed costs per month is a relevant cost.
Answer:
regular sales price $270, total sales per month = 10 units
basic manufacturing costs:
variable cost per unit $120
fixed costs $3,000
if further processed, sales price $300
if further processed:
additional variable cost $20 per unit
additional fixed costs $400
At what sales price level would the new, improved radio begin to improve operating earnings?
sales price $270
revenue $2,700
variable costs -$1,200
fixed costs -$3,000
operating income -$1,500
sales price $300
revenue $3,000
variable costs -$1,400
fixed costs -$3,400
operating income -$1,800
Since relevant costs increase by $60 per unit (= $20 variable costs and $400/10 in fixed costs), then the sales price should increase more than $60 in order to lower the company's losses.
If the company wants to make a profit, then it should increase its sales price by more than $180 per unit. If the radio is processed further, in order to break even its sales price should be $480 per unit.
sales price $480
revenue $4,800
variable costs -$1,400
fixed costs -$3,400
operating income $0
Any sales price above $480 will result in an operating profit.
Kim will only buy cars from Japanese automakers because she thinks cars made in the United States are of inferior quality. She has this belief even though she has never studied the ratings of cars made in the United States. What type of communication barrier does this represent?
Answer:
Perception barrier
Explanation:
Perception barrier in communication occurs when the preconceived idea that a person holds about a particular situation influences his choice of decision.
In such a situation , the perceiver makes a less effort in arriving at a choice as he already has a formed opinion as a driver of his choice which can always lead to a wrong choice except in a few cases.
This explains Kim's action as she is already biased about cars from United states.
Which description identifies the controlling function of the management process? Group of answer choices monitoring a firm's performance to ensure that it is meeting its goals scanning the business environment for threats and opportunities guiding and motivating employees to meet organizational objectives determining how to arrange a firm's resources into a coherent structure determining what an organization needs to do and how best to get it done
Answer:
Monitoring a firm's performance to ensure that it is meeting its goals
Explanation:
The controlling function refers to evaluating the progress the company has to make sure that it wil be able to achieve its goals and determining actions to be taken when there are deviations. According to this, the answer is that the description that identifies the controlling function of the management process is monitoring a firm's performance to ensure that it is meeting its goals.
The other options are not right because guiding and motivating employees to meet organizational objectives refers to the leading function, determining how to arrange a firm's resources into a coherent structure refers to the organizing function and determining what an organization needs to do and how best to get it done refers to the planning function. Also, scanning the business environment for threats and opportunities refers to environmental scanning.
Statement that explains controlling function of the management process as regards this question A: monitoring a firm's performance to ensure that it is meeting its goals.
Controlling function of management can be regarded as function of management that measure the progress of the organization towards her goals.It also brings in corrective action incase there is any deviation from pursuing the set goals. It takes charge if the control of the organization goals.Therefore, option A is correct.
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For each of the goods, identify the characteristics that describe each good. Note that each good will be described with two characteristics. Rivalrous is also referred to as rival in consumption. Consider only the immediate benefits and costs, not any externalities.
national defense
Pay-Per-View cable television
a Hot Pocket sandwich
private classroom education
pajamas
a unicycle
Excludable
Nonexcludable
Rivalrous
Nonrivalrous
Answer: PLEASE see below for answer
Explanation: An excludable good is referred to as a private good which restrict people from using them while a non excludable goods are public goods that do not place restriction an so people can access them eg park .
Also, Non-rivalrous goods are those goods that even though consumed by the people will not cause shortage of the availability of the same goods to others. A rivalrous good is the opposite as it causes shortage in availability to others when used.
National Defence----Non excludable and Non Rivalrous
Pay-Per-View cable television---Excludable and NonRivalrous
a Hot Pocket sandwich--- Excludable and Rivalrous
private classroom education--- Excludable and Rivalrous
pajamas--- Excludable and Rivalrous
a unicycle ---- Excludable and Rivalrous
Markland First National Bank of Rolla utilizes Kanban techniques in its check processing facility. The fol-lowing information is known about the process. Each Kanban container can hold 50 checks and spends 24 minutes a day in processing and 2 hours a day in materials handling and waiting. Finally, the facility operates 24 hours per day and utilizes a policy variable for unforeseen contingencies of 0.25.
If there are 23 kanban containers in use the current daily demand of the check processing facility is ______ units
The current daily demand of the check processing facility using Kanban techniques is 22,750 units.
Explanation:The current daily demand of the check processing facility, operating on Kanban techniques, can be calculated using the formula: Kanban Quantity = Demand x Lead Time x (1 + Policy Variable). In this case:
The Demand is the number of units that need to be processed daily.The Lead Time is the amount of time a Kanban container spends in processing and materials handling (24 minutes for processing + 120 minutes for handling = 144 minutes in total).The Policy Variable is an additional amount of time added for unforeseen contingencies, which is 0.25 in this case.Given that there are 23 Kanban containers in use and each kanban container can hold 50 checks, it suggests that the facility can process 1,150 checks (23 kanbans * 50 checks) during the sum of the processing and waiting time (144 minutes) in a day. Therefore, considering the facility operates 24 hours, the current daily demand would be (1,150 checks * (24*60 minutes/144 minutes) * (1+0.25)) = 22,750 units.
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The following selected information is from Princeton Company’s comparative balance sheets. At December 31 2017 2016 Common stock, $10 par value $ 131,000 $ 126,000 Paid-in capital in excess of par 593,000 355,000 Retained earnings 339,500 313,500 The company’s net income for the year ended December 31, 2017, was $61,000. 1. Complete the T-accounts to calculate the cash received from the sale of its common stock during 2017. 2. Complete the T-account to calculate the cash paid for dividends during 2017.
Answer:
Princeton Company
The T-accounts are attached.
Explanation:
They can also be obtained as follows:
1. T-accounts to calculate the Cash received from the sale of its common stock during 2017:
Common Stock & APIC
Closing balance of common stock = $131,000
Closing balance of APIC = $593,000
less Opening balance of common stock = $126,000
less Opening balance of APIC = $355,000
Cash collected = $243,000
2. T-account to calculate the cash paid for dividends during 2017:
Retained Earnings:
Opening balance = $313,500
Add net income = $61,000
Less closing balance = $339,500
Cash Dividends paid = $35,000
nder the general transfer pricing rule with excess capacity, the opportunity cost would be equal: Multiple Choice zero. the direct expenses incurred in producing the goods. the total difference in the cost of production between two divisions. the contribution margin forgone from the lost external sale. the summation of variable cost plus fixed cost.
Answer:
ZERO.
Explanation:
A transfer price normally is used to determine the cost to charge another division, subsidiary, or holding company for services rendered. It is said that transfer prices are priced based on the going market price for that good or service. Transfer pricing can also be applied to intellectual property such as research, patents, and royalties.
However, companies at times can also use (or misuse) this practice by altering their taxable income, thus reducing their overall taxes. The transfer pricing mechanism is a way that companies can shift tax liabilities to low-cost tax jurisdictions.
Answer:
zero
Explanation:
When there is an excess capacity available, the opportunity cost will be zero, company can use this capacity to make the potential benefit from an alternative. Transfer pricing is the price charged to a subsidiary division of a company. This price can also be charged by the subsidiary to the parent company. Some companies use this to manage the tax matters. It may also applicable to the transfer of assets of the companies.
The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $166,436. The bank statement indicated a balance of $195,688 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $19,427. b. A deposit of $12,300, representing receipts of June 30, had been made too late to appear on the bank statement. c. The bank collected $26,500 on a $25,000 note, including interest of $1,500. d. A check for $4,000 returned with the statement had been incorrectly recorded by Pala Medical Co. as $400. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. e. A check drawn for $195 had been erroneously charged by the bank as $915. f. Bank service charges for June amounted to $55.
Final answer:
The subject of this question is the reconciliation of cash accounts for Pala Medical Co. The company needs to analyze the differences between its cash account balance and the balance on the bank statement and consider various reconciling items.
Explanation:
The subject of this question is the reconciliation of cash accounts for Pala Medical Co. The question provides a list of reconciling items that need to be taken into account to reconcile the balance in the company's cash account with the balance on the bank statement. By analyzing the differences between the two balances and considering the reconciling items, the company can determine the correct balance of its cash account.
2020 2019 Cash $1,800 $1,150 Receivables 1,750 1,300 Inventory 1,600 1,900 Plant assets 1,900 1,700 Accumulated depreciation (1,200 ) (1,170 ) Long-term investments (held-to-maturity) 1,300 1,420 $7,150 $6,300 Accounts payable $1,200 $900 Accrued liabilities 200 250 Bonds payable 1,400 1,550 Common stock 1,900 1,700 Retained earnings 2,450 1,900 $7,150 $6,300 PAT METHENY COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,900 Cost of goods sold 4,700 Gross margin 2,200 Selling and administrative expenses 930 Income from operations 1,270 Other revenues and gains Gain on sale of investments 80 Income before tax 1,350 Income tax expense 540 Net income 810 Cash dividends 260 Income retained in business $550
Prepare a statement of cash flows using the direct method.
Answer and Explanation:
The presentation of the cash flow statement using the direct method is shown below:
Pat Methney Company
Statement of cash flow
For year ended Dec-31,2020
Cash flow from operating activities :
Cash collection from customers($1,300+$6,900-$1,750) $6,450
Less: Cash paid for merchandise($1,600+$4,700+$900-$1,900-$1200) $4,100
Cash paid for selling($250+$930-$30-$200) $950
Cash paid for income taxes $540 $5,590
Net cash provided by operating activities($6,450-$5,590) $860
Cash flow from investing activities :
Sale of held-to-maturity investments ($1420-$1300+$80) $200
Less: Purchase of plant assets ($1,900-$1,700-$70) $130
Net cash provided $70
Cash flow from financing activities :
Issuance of capital stock($1,900-$1700-$70) $130
Less: Retirements of bonds payable $150
Less: Payment of cash dividend $260
Net cash used by financing activities $280
Net increase in cash $650
Add Cash as on Jan-1,2020 $1,150
Cash as on Dec-31,2020 $1,800
Non-cash investing and financing activities :
Issuance of common stock for plant assets $70
A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning goods in process inventory; 110,000 units were started into production in January. There were 30,000 units that were 40% complete in the ending goods in process inventory at the end of January. What were the equivalent units of production for materials for the month of January?
Answer:
110,000 units
Explanation:
Given that
Started units in inventory = 110,000 units
Ending inventory units = 30,000 units
Completion percentage = 40%
Based on the above information, the equivalent units of production for the material is equal to the started units in inventory i.e 110,000 units as it already includes the ending inventory plus the given percentage is also considered for the same
On January 1 Primary Manufacturing had a beginning balance in WorkminusinminusProcess Inventory of $ 80 comma 700 and a beginning balance in Finished Goods Inventory of $ 21 comma 000. During the year, Primary incurred manufacturing costs of $ 353 comma 000. In addition, the following transactions occurred during the year: Job Aminus12 was completed for a total cost of $ 125 comma 000 and was sold for $ 126 comma 000. Job Aminus13 was completed for a total cost of $ 203 comma 000 and was sold for $ 212 comma 000. Job Aminus15 was completed for a total cost $ 62 comma 000 but was not sold as of yearminusend. The Manufacturing Overhead account had an unadjusted credit balance of $ 10 comma 000, and was adjusted to zero at yearminusend. What was the final balance in the Cost of Goods Sold account?
Answer:
$318,000
Explanation:
The formula to compute the final balance in the cost of goods sold is shown below:
= Total cost of Job A -12 + Total cost of Job A -13 - unadjusted credit balance of manufacturing overhead account
= $125,000 + $203,000 - $10,000
= $318,000
The cost of goods sold refers to the direct cost that includes the direct material , direct labor cost etc
The final balance in the Cost of Goods Sold account for Primary Manufacturing for the year is $328,000, which includes the costs of Job A-12 and Job A-13 which were sold within the year.
Explanation:To calculate the final balance in the Cost of Goods Sold (COGS) account, we need to look at the cost of Job A-12 and Job A-13, both of which were completed and sold within the year. The total cost of these jobs is $125,000 (for Job A-12) plus $203,000 (for Job A-13) which comes to $328,000. This amount represents the Cost of Goods Sold (COGS) for the year as it includes the manufacturing costs of the goods that were sold. The Job A-15, which was not sold, is not included in the COGS but will be part of the ending inventory of work in process or finished goods.
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What is the broad term that refers to all other terms listed below. The term can apply to all divisions and departments (such as "We are an equal opportunity employer"), or to a single department ("Employees in this department must take at least one training and development course each year").
A. Rules
B. Methods
C. Policies
D. Guidelines
E. Procedures
Answer:
C. Policies
Explanation:
Policy is the broad term that can apply to all divisions and departments (such as "We are an equal opportunity employer"), or to a single department ("Employees in this department must take at least one training and development course each year").
Policy can be defined as the set of rules, ideas and principles of action that are adopted to guide an organization.
Calculator Crawford Company's standard fixed overhead rate is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit. Last year, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is Crawford's fixed overhead spending variance for last year
Answer:
$30,000(U)
Explanation:
Calculator Crawford Company's
Fixed overhead cost $630,000
Less budgeted fixed costs $600,000
Fixed overhead spending variance $30,000(U)
Therefore Crawford's fixed overhead spending variance for last year will be
$30,000(U)
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 4%, on A bonds 5%, and on B bonds 8%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following conditions? A. The total investment is $28 comma 000, and the investor wants an annual return of $1 comma 460 on the three investments. B. The values in part A are changed to $38 comma 000 and $1 comma 990, respectively.
Answer:
let A = AAA bonds that yield 4%
let a = A bonds that yield 5%
let B = B bonds that yield 8%
A = 2B
A)
A + a + B = 28,000 (replace A with 2B)
0.04A + 0.05a + 0.08B = 1,460 (replace A with 2B)
2B + a + B = a + 3B = 28,000 ⇒ a = 28,000 - 3B
0.08B + 0.05a + 0.08B = 0.05a + 0.16B = 1,460 (replace a with 28,000 - 3B)
0.05(28,000 - 3B) + 0.16B = 1,400 - 0.15B + 0.16B =1,460
1,400 + 0.01B = 1,460
0.01B = 1,460 - 1,400 = 60
B = 60 / 0.01 = $6,000
A = $12,000
a = $28,000 - $6,000 - $12,000 = $10,000
AAA bonds = $12,000
A bonds = $10,000
B bonds = $6,000
B)
A + a + B = 38,000 (replace A with 2B)
0.04A + 0.05a + 0.08B = 1,990 (replace A with 2B)
2B + a + B = a + 3B = 38,000 ⇒ a = 38,000 - 3B
0.08B + 0.05a + 0.08B = 0.05a + 0.16B = 1,990 (replace a with 28,000 - 3B)
0.05(38,000 - 3B) + 0.16B = 1,900 - 0.15B + 0.16B =1,990
1,900 + 0.01B = 1,990
0.01B = 1,990 - 1,900 = 90
B = 90 / 0.01 = $9,000
A = $18,000
a = $38,000 - $9,000 - $18,000 = $11,000
AAA bonds = $18,000
A bonds = $11,000
B bonds = $9,000
At the beginning of the year, manufacturing overhead for the year was estimated to be $1,052,700. At the end of the year, actual direct labor-hours for the year were 36,400 hours, the actual manufacturing overhead for the year was $990,000, and manufacturing overhead for the year was overapplied by $65,600. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been: (Do not round intermediate calculation.)
Answer:
36,300 hours
Explanation:
For computing the estimated direct labor hours first we need to find out the manufacturing overhead applied and predetermined overhead applied which is shown below:-
Manufacturing overhead applied = Actual Overhead + Over applied Overhead
= $990,000 + $65,600
= $1,055,600
and
Predetermined overhead rate = Manufacturing overhead applied ÷ Actual direct labor hours
= $1,055,600 ÷ 36,400 hours
= 29
So,
Estimated direct labor hours = Estimated total manufacturing Overhead ÷ Predetermined overhead rate
= $1,052,700 ÷ 29
= 36,300 hours
So, for computing the estimated direct labor hours we simply applied the above formula.
Jan's Dry Cleaning holds $10,000 on a typical day, although only $2,000 is essential for carrying out business. Making a midday deposit is estimated to reduce cash holdings to $8,000 and cost an extra $80 per year in lost production. If, in addition, an armored car service is engaged to pick up cash more frequently for a fee of $120 per year, cash holdings will be further reduced to $6,000 per day. Employing a computerized cash management service for an annual fee of $180 would reduce cash holdings further to $4,000. If any reduction in cash holdings will be invested in government bonds earning 3 percent, then how much money should Jan's hold?
Answer: $6000
Explanation:
If holding is $10000,
Reduction in cash holding = (10000-10000) = 0
Interest earned in government bonds=(Reduction in holdings) × 0.03 =0
Cost of deposits = 0
Additional benefit = (interest earned - cost of deposit)
Additional benefit = 0-0 = 0
Making a mid day deposit;
Reduction in cash holding = (10000-8000) = $2000
Interest earned in government bonds = Reduction in holdings × 0.03
= 2000 × 0.03 =$60
Cost of deposits=$80
Additional benefit=$60-80=-$20
Using a armored car service;
Reduction in cash holding=(10000-6000)=4000
Interest earned in government bonds= 4000 × 0.03 = $120
Cost of deposits=$120
Additional benefit=120 - 120= $0
Using computerized cash management service;
Reduction in cash holding=(10000-4000)=6000
Interest earned in government bonds;
6000 × 0.03 = $180
Cost of deposits=$180
Additional benefit=180 - 180=$0
Additional benefit is maximized in case of both computerized management service and armor vehicle . So, Optimal cash holding is $6000
Equipment with a book value of $80,000 and an original cost of $164,000 was sold at a loss of $34,000. Paid $103,000 cash for a new truck. Sold land costing $330,000 for $410,000 cash, yielding a gain of $80,000. Long-term investments in stock were sold for $94,200 cash, yielding a gain of $15,500. Use the above information to determine this company's cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
Cash flows from investing activities is $653,200.
Explanation:
XYZ Company
Statement of cash flows (extract)
Proceed from sale of equipment ($80,000 - $34,000) $46,000
Purchase of vehicle $103,000
Proceed from sale of land $410,000
Proceed from sale of long-term investments in stock $94,200
Cash flows from investing activities $653,200
Suppose the price of salt increases by 25 percent and, as a result, the quantity of pepper demanded (holding the price of pepper constant) increases by 4 percent. The cross-price elasticity of demand between salt and pepper is nothing. (Enter your response rounded to two decimal places and include a minus sign if appropriate.) In this example, salt and pepper are ▼ substitutes not related complements . Instead, suppose salt and pepper were complements. If so, then the cross-price elasticity of demand between salt and pepper would be A. negative. B. zero. C. positive. D. greater than 1. E. greater than minus1.
Answer:
Option (C)
Explanation:
As per the data given in the question,
Price of salt increases by = 25%
Quantity of pepper demanded increases by = 4%
Cross price elasticity = Quantity of demand increases ÷ Price of salt increases
= 4% ÷ 25%
=0.16
Hence Cross-price elasticity of demand between salt and pepper would be positive.
So option (C) is answer
The cross-price elasticity of demand between salt and pepper determines whether they are substitutes or complements. If the cross-price elasticity is zero, they are substitutes. If it is negative, they are complements.
Explanation:In this scenario, the cross-price elasticity of demand between salt and pepper is zero, indicating that they are not related complements. If salt and pepper were complements, the cross-price elasticity of demand between them would be negative. This means that as the price of one product increases, the quantity demanded of the other product would decrease.
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Vaughn Manufacturing received cash of $63600 on August 1, 2017 for one year's rent in advance and recorded the transaction with a credit to Rent Revenue. The December 31, 2017 adjusting entry is:
A. debit Cash and credit Unearned Rent Revenue, $37100.
B. debit Unearned Rent Revenue and credit Rent Revenue, $26500.
C. debit Rent Revenue and credit Unearned Rent Revenue, $26500.
D. debit Rent Revenue and credit Unearned Rent Revenue, $37100.
Answer:
C. debit Rent Revenue and credit Unearned Rent Revenue, $26500.
Explanation:
The adjusting entry is shown below:
Rent revenue
To Unearned rent revenue
(Being the unearned rent revenue is recorded)
For recording this we debited the rent revenue as it reduced the sales and credited the unearned rent revenue as it increased the liability
Since the cash is received on August 1 and we need to record the adjusting entry on December 31,2017 so we considered the 5 months instead of taking 12 months i.e
= $63,600 × 5 months ÷ 12 months
= $26,500
Marciano Manufacturing uses a standard cost system. Standards for direct materials are as follows: Direct materials (pounds per unit of output) 3 Cost per pound of direct materials $ 6 The company plans to produce 2 comma 000 units and has purchased on account 12 comma 000 pounds of direct materials at a net cost of $ 43 comma 800. What is the journal entry to record this transaction?
Answer:
Debit Raw Materials Inventory with $72,000; Credit Direct materials Cost Variance with 28,200, and Credit Accounts Payable with $43,800.
Explanation:
Direct materials purchase on account = $43,800
Standard cost of direct materials = 12,000 * $6 = $72,000
Direct materials cost variance = $72,000 - $43,800 = $28,200
The journal entries will therefore be as follows:
Details Dr ($) Cr ($)
Raw Materials Inventory 72,000
Direct materials Cost Variance 28,200
Accounts Payable 43,800
To record direct materials cost and variance.