Final answer:
Antle Inc. would record a goodwill impairment loss of $128 million for Antle's acquisition of Demski Co., as the carrying value of the goodwill ($275 million) exceeds its implied fair value ($147 million) determined by the fair value of the reporting unit ($730 million) minus the fair value of identifiable assets ($583 million).
Explanation:
To determine the amount of goodwill impairment, we must assess the carrying value of the reporting unit against its fair value. According to the information provided, Antle Inc. recorded goodwill for the acquisition of Demski Co. at $275 million. The fair value of the reporting unit, which includes Demski Co., is $730 million, and the fair value of its identifiable tangible and intangible assets (excluding goodwill) is $583 million.
Initially, we calculate the implied fair value of goodwill by subtracting the fair value of identifiable assets from the fair value of the reporting unit:
Fair value of the reporting unit: $730 millionFair value of identifiable assets: $583 millionImplied fair value of goodwill: $730 million - $583 million = $147 millionNow, compare the carrying value of the goodwill with the implied fair value. The carrying value of goodwill is $275 million and the implied fair value is $147 million. Therefore, Antle must record an impairment loss to write down the carrying value of goodwill to the lower implied fair value.
Goodwill impairment loss = Carrying value of goodwill - Implied fair value of goodwill = $275 million - $147 million = $128 million.
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,650,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below:
2021 2022
Costs incurred during the year $ 352,000 $ 2,025,000
Estimated costs to complete as of 12/31 1,408,000 0
Billings during the year 470,000 1,750,000
Cash collections during the year 405,000 1,815,000
Required:
1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion.
2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion.
4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time.
Answer:
Multiple Answers
Explanation:
1. Over Time
a) Begin w/ Percentage of Revenue Method:
Actual Costs to Date / Estimated Total Costs = % Complete to Date
2021:
$352,000 / ($352,000 + $1,408,000) =
$352,000 / $1,760,000 = 20%
2022:
($352,000 + $2,025,000) / ($352,000 + $2,025,000)
$2,377,000 / $2,377,000 = 100%
b)
2021:
Construction Revenue: (20% * $2,650,000) = $530,000
Less: Construction Expenses: $352,000
Gross Profit: $178,000
c)
2022 (subtract out 2021 costs):
Construction Revenue: $2,650,000 - $530,000 = $2,120,000
Less: Construction Expenses: $2,377,000 - $352,000 = $2,025,000
Gross Profit: $273,000 - $178,000 = $95,000
2. Upon Completion:
2021:
Revenue: $0
Gross Profit: $0
2022:
Revenue: $2,650,000
Gross Profit: $273,000
3. Over Time:
Current Assets:
A/R: $470,000 - $405,000 = $65,000
Costs & Profits in Excess of Billings: $530,000 - $470,000 = $60,000
4. Upon Completion:
Current Assets:
A/R: $470,000 - $405,000 = $65,000
Current Liabilities:
Billings in Excess of Profit & Cash: $470,000 - $352,000 = $118,000
Culver Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2020 are as follows. Employee Future Years of Service Jim 3 Paul 4 Nancy 5 Dave 6 Kathy 6 On January 1, 2020, the company amended its pension plan, increasing its projected benefit obligation by $86,400. Compute the amount of prior service cost amortization for the years 2020 through 2025 using the years-of-service method, setting up appropriate schedules. Year Annual Amortization 2020 $enter a dollar amount 2021 enter a dollar amount 2022 enter a dollar amount 2023 enter a dollar amount 2024 enter a dollar amount 2025 enter a dollar amount
Answer: Please see below for answer
Explanation:
Employee Future Years of Service
Jim 3
Paul 4
Nancy 5
Dave 6
Kathy 6
Total years of service = 24
increase in projected benefit obligation = $86,400
Cost per year = $86,400/ 24 =$3,600
Year 2020, jim =1 paul=1, nancy=1 dave=1 Kath=1
total years=5
cost per year= $3,600
amortization for Year 2020 5x3600= $18,000
Year 2021, jim =1 paul=1, nancy=1 dave=1 Kath=1
total years=5
cost per year= $3,600
amortization for Year 2021 5x3600= $18,000
Year 2022, jim =1 paul=1, nancy=1 dave=1 Kath=1
total years=5
cost per year= $3,600
amortization for Year 2022= 5x3600= $18,000
Year 2023, jim =0 paul=1, nancy=1 dave=1 Kath=1
total years=4
cost per year= $3,600
amortization for Year 2023 =4x3600= $14,400
Year 2024, jim =0paul=0, nancy=1 dave=1 Kath=1
total years=3
cost per year= $3,600
amortization for Year 2024= 3x3600= $10,800
Year 2025, jim =0paul=0, nancy=0 dave=1 Kath=1
total years=2
cost per year= $3,600
amortization for Year 2025= 2x3600= $7,200
Redwood Corporation is considering two alternative investment proposals with the following data: Proposal X Proposal Y Investment $900,000 $488,000 Useful life 9 years 9 years Estimated annual net cash inflows for 9 years $130,000 $84,000 Residual value $42,000 $minus Depreciation method Straightminusline Straightminusline Required rate of return 15% 12% What is the accounting rate of return for Proposal Y? (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)
Answer:
6.1%
Explanation:
As per given data
Proposal X Proposal Y
Investment $900,000 $488,000
Useful life 9 years 9 years
Annual net cash inflows for 9 years $130,000 $84,000
Residual value $42,000 $0
Depreciation method Straight-line Straight-line
Required rate of return 15% 12%
Accounting rate of return is the ratio of average net income of a project and the average investment made in the project.
Accounting rate of return = Average Net income / Average Investment
As net cash inflows are given we need to deduct the depreciation from the cash flows to arrive at the net income for the period. As all cash flows are constant so, the average value will be equal to the single years value.
Average net income = Net cash inflows - Depreciation = Net cash inflows - ( Cost of Asset - Residual value ) / Useful life of asset = $84,000 - ( $488,000 - $0) / 9 = $84,000 - $54,222 = $29,778
Average Investment = $488,000
Placing Values in the formula
Accounting rate of return = $29,778 / $488,000 = 6.1%
The Accounting Rate of Return (ARR) for Proposal Y was calculated by first determining the Average Annual Accounting Profit, which is the annual net cash inflow minus the annual depreciation. With this value, the ARR formula was applied, resulting in an ARR of 6.1% for Proposal Y.
Explanation:The Accounting Rate of Return (ARR) for Proposal Y can be calculated using the following formula:
ARR = (Average Annual Accounting Profit/ Initial Investment) x 100
The Average Annual Accounting Profit is the annual net cash inflow less the annual depreciation. In this case, the initial investment is $488,000, the net cash inflow is $84,000, and depreciation is calculated as (initial investment - residual value) divided by the useful life: which is ($488,000 - 0) / 9, equaling about $54,222 (rounded to the nearest dollar).
Therefore, the Average Annual Accounting Profit is $84,000 - $54,222 equals to about $29,778 (to the nearest dollar).
Substituting these values into the formula gives: ARR = ($29,778 / $488,000) x 100 = 6.1%
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Barry's Hobbies produces and sells a luxury animal pillow for $80.00 per unit. In this month of operation, 3,000 units were produced (2,800 were budgeted) and 2,750 units were sold. Barry’s uses FIFO and per-unit costs for beginning inventory are available below. Actual fixed costs are the same as the amount budgeted for the month. The allocation base for overhead is units. There is no inventory of direct materials or work in process. Other information for the month includes:
Variable manufacturing costs $38 per unit
Variable marketing costs $ 2 per unit
Fixed manufacturing costs $60,000 per month
Administrative expenses, all fixed $12,000 per month
Ending inventories:
Direct materials -0-
WIP -0-
Finished goods 750 units
What is operating income when using absorption costing?
Answer:
Net operating income= 43,000
Explanation:
Giving the following information:
Selling price= $80
Production= 3,000 units
Sales= 2,750 units
Variable manufacturing costs $38 per unit
Variable marketing costs $ 2 per unit
Fixed manufacturing costs $60,000 per month
Administrative expenses, all fixed $12,000 per month
Ending inventories:
Finished goods 750 units
Under the absorption costing method, the cost of goods sold includes the fixed manufacturing overhead. We need to calculate the unitary fixed overhead:
Fixed unitary overhead= 60,000/3,000= $20 per unit
Income statement:
Sales= 2,750*80= 220,000
COGS= 2,750*(38 + 20)= (159,500)
Gross profit= 60,500
Variable marketing= 2,750*2= (5,500)
Administrative expenses= (12,000)
Net operating income= 43,000
The operating income using absorption costing for Barry's Hobbies is [tex]\( {\$63,500} \)[/tex].
To calculate operating income using absorption costing, we need to account for both fixed and variable manufacturing costs that are absorbed into the cost of goods sold (COGS).
Step-by-Step Calculation:
1. Calculate Total Variable Costs:
- Variable manufacturing costs per unit: [tex]\( \$38 \)[/tex]
- Variable marketing costs per unit: [tex]\( \$2 \)[/tex]
- Total variable cost per unit: [tex]\( \$38 + \$2 = \$40 \)[/tex]
- Total variable manufacturing costs for 2,750 units sold:
[tex]\[ 2,750 \times \$38 = \$104,500 \][/tex]
- Total variable marketing costs for 2,750 units sold:
[tex]\[ 2,750 \times \$2 = \$5,500 \][/tex]
- Total variable costs:
[tex]\[ \$104,500 + \$5,500 = \$110,000 \][/tex]
2. Calculate Fixed Manufacturing and Administrative Costs:
- Fixed manufacturing costs (budgeted and actual): [tex]\( \$60,000 \)[/tex]
- Fixed administrative costs: [tex]\( \$12,000 \)[/tex]
- Total fixed costs:
[tex]\[ \$60,000 + \$12,000 = \$72,000 \][/tex]
3. Calculate Total Manufacturing Costs (absorption costing):
- Total variable manufacturing costs: [tex]\( \$104,500 \)[/tex]
- Total fixed manufacturing costs: [tex]\( \$60,000 \)[/tex]
- Total manufacturing costs:
[tex]\[ \$104,500 + \$60,000 = \$164,500 \][/tex]
4. Calculate Cost of Goods Sold (COGS):
- COGS includes variable and fixed manufacturing costs absorbed:
[tex]\[ \text{COGS} = \text{Variable manufacturing costs} + \text{Fixed manufacturing costs} \][/tex]
[tex]\[ \text{COGS} = \$104,500 + \$60,000 = \$164,500 \][/tex]
5. Calculate Operating Income (Profit) using Absorption Costing:
- Sales revenue (3,000 units produced and $80 per unit):
[tex]\[ 3,000 \times \$80 = \$240,000 \][/tex]
- Calculate Gross Profit:
[tex]\[ \text{Sales} - \text{COGS} = \$240,000 - \$164,500 = \$75,500 \][/tex]
- Subtract fixed administrative expenses:
[tex]\[ \$75,500 - \$12,000 = \$63,500 \][/tex]
You manage a pension fund that promises to pay out $10 million to its contributors in five years. You buy $7472582 worth of par-value bonds that make annual coupon payments of 6% and mature in five years. Right after you make the purchase, the interest rate on same-risk bonds decreases to 4.5%. If the rate does not change again and you reinvest the coupon payments that you receive in same-risk bonds, how much will you fall short of the money that you promised
Answer :
Shortfall of money = $74,598
Explanation :
As per the data given in the question,
Par value of bond = $7,472,582
To determine the future value of annual coupon payments received, we will use FV of annuity's formula
FV of Annuity = P [(1 + r)^n- 1 ÷ r]
where,
P = Periodic payment
r = interest rate
n = Time period
here P = 6% of $7,472,582 = $448,354.92
r = 4.50%
n = 5 years
FV of Annuity = $448,354.92 × [(1 + 4.50%)^5 - 1) ÷ 4.50%]
=$2,452,820
Shortfall at the end of 5 years is
= $10,000,000 - $7,472,582 - $2,452,820
= $74,598
Delaware Corp. prepared a master budget that included $16,360 for direct materials, $28,100 for direct labor, $14,315 for variable overhead, and $38,900 for fixed overhead. Delaware Corp. planned to sell 4,090 units during the period, but actually sold 4,300 units. What would Delaware’s variable overhead cost be if it used a flexible budget for the period based on actual sales? (Do not round your intermediate calculations.)
Answer:
$15,050
Explanation:
The computation of the variable overhead cost in case of flexible budget is shown below:
= Actual sales units × Variable overhead at budgeted sales ÷ Budgeted sales units
= 4,300 units × $14,315 ÷ 4,090 units
= $15,050
We simply applied the above formula so that the variable overhead cost could come for flexible budget
Using the allowance method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs, $6,900. The cost of the merchandise is $2,760. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment. Required: Journalize the above transactions. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to nearest dollar amount.
Answer and Explanation:
As per the data given in the question,
Apr-01 Accounts receivable A/c Dr. $6,900
To Sales A/c $6,900
Apr-01 Cost of goods sold A/C Dr. $2,760
To Inventory A/c $2,760
( Being cost of goods on merchandise is recorded)
Jun-10 Allowance for doubtful debt A/c Dr. $ 4,600
Cash A/c Dr. $2,300
To Accounts receivable A/c $6,900
( Being bad debt expense is recorded)
Oct-11 Accounts receivable A/c Dr. $4,600
To Allowance for doubtful debt A/c $4,600
( Being bad debt recovered is recorded)
Oct-11 Cash Dr. $4,600
To Accounts receivable A/c $4,600
( Being cash recovered from bad debt is recorded)
Zippy Company has a product that it currently sells in the market for $60 per unit. Zippy has developed a new feature that, if added to the existing product, will allow Zippy to receive a price of $75 per unit. The total cost of adding this new feature is $38,000 and Zippy expects to sell 2,400 units in the coming year. What is the net effect on next-year's operating income of adding the feature to the product?
Answer:
Effect on income= $2,000 increase
Explanation:
Giving the following information:
Previous selling price= $60
New selling price= $75
Increase in fixed costs= $38,000
Units sold= 2,400
We weren't provided with information regarding unitary variable costs. We need to determine the effect on income based on the selling price difference:
Effect on income= 2,400*(75-60) - 38,000
Effect on income= $2,000 increase
A company purchased land for $92,000 cash. Commissions of $13,000, property taxes of $13,500, and title insurance of $4,200 were also incurred. The $13,500 in property taxes includes $7,400 in back taxes paid by the company on behalf of the seller and $6,100 due for the current year after the purchase date. For what amount should the company record the land? a. $112,400. b. $116,600. c. $122,700. d. $92,000.
Answer:
The answer is option (b) $116,600.00
Explanation:
Solution
The Cash price =$92,000.00
Commission on purchase of land $ = 13,000.00
Property taxes =$7,400.00
Title insurance is=$ 4,200.00
Total cost of land to be recorded is =$116,600.00
The property taxes paid for back date will be added to the land cost but not $6100 which is related to present year.
The property taxes $6100 will be filled to income statement in present year.
Title insurance and commission will be included to cost of land.
Final answer:
The company should record the land at $116,600, which includes the purchase price, commissions, title insurance, and back taxes paid.
Explanation:
When recording the purchase of land on the company's books, all expenditures that are necessary to get the land ready for use should be included in the land's cost. The correct value of the land should include the cash paid for the land itself, commissions, property taxes (which are part of the land acquisition costs), and title insurance. Current property taxes should not be included as they are an expense related to the period after purchase.
The initial purchase price of the land is $92,000. Commissions were $13,000, and title insurance was $4,200. Of the property taxes paid, only the back taxes of $7,400 are considered part of the acquisition cost because they relate to the period before the acquisition. Therefore, the company should record the land at $92,000 + $13,000 + $4,200 + $7,400 = $116,600.
Pirate Seafood Company purchases lobsters and processes them into tails and flakes. It sells the lobster tails for $20.30 per pound and the flakes for $15.30 per pound. On average, 100 pounds of lobster are processed into 58 pounds of tails and 26 pounds of flakes, with 16 pounds of waste. Assume that the company purchased 3,200 pounds of lobster for $4 per pound and processed the lobsters with an additional labor cost of $7,400. No materials or labor costs are assigned to the waste. If 1,722 pounds of tails and 752 pounds of flakes are sold, calculate the allocated cost of the sold items and the allocated cost of the ending inventory. The company allocates joint costs on a value basis. (Round your answers to nearest whole number. Round cost per pound answers to 2 decimal places.)
Answer:
Pirate Seafood Company
1) Calculation of the Allocated Cost of Sold Items:
a) Production Units:
Lobster tails = 3,200/100 * 58 = 1,856 units
Lobster flakes = 3,200/100 * 26 = 832 units
Total units = 2,688 units, costing $12,800
b) Material costs:
Lobster tails = 1,856/2,688 * $12,800 = $8,838
Lobster flakes = 832/2,688 * $12,800 = $3,962
c) Labor costs:
Lobster tails = 1,856/2,688 * $7,400 = $5,110
Lobster flakes = 832/2,688 * $7,400 = $2,290
d) Total Production costs (Materials & Labor):
i) Lobster tails = $8,838 + $5,110 = $13,948
per unit cost = $13,948/1,856 = $7.52
ii) Lobster flakes = $3,962 + $2,290 = $$6,252
per unit cost = $6,252/832 = $7.51
e) Cost of Sales:
Lobster tails = $7.52 x 1,722 = $12,949.44
Lobster flakes = $7.51 x 752 = $5,647.52
2) Calculation of the Allocated Cost of Ending Inventory:
a) Ending Inventory units:
Lobster tails = Production unit Minus Sales unit = 1,856 - 1,722 = 134
Lobster flakes = Production unit Minus Sales unit = 832 - 752 = 80
b) Ending Inventory costs:
Lobster tails = 134 x $7.52 = $ 1,007.68
Lobster flakes = 80 x $7.51 = $600.80
Explanation:
To calculate the costs of sales and the costs of ending inventory, the first step is to calculate the units produced. The material and labour costs are then apportioned based on the units produced since no costs are allocated to the waste.
Then, the unit costs of tails and flakes are calculated. These form the bases for computing the cost of items sold and the ending inventory.
The manager of Synergy Company's Stock Division projects the following for next year: Sales $195,000 Operating income 70,000 Average Operating assets 385,000 The manager can invest in an additional project that would require $50,000 investment in additional assets and would generate $9,000 of additional income. The company's minimum rate of return is 15%. What is the residual income for the Stock Division without the additional investment?
Answer: $12,250
Explanation:
Given Data;
Sales = $195,000
Operating income = $70,000
Average Operating assets = 385,000 Additional investment = $50,000
minimum rate of return is = 15%.
Residual income = operating income - (minimum required return x operating assets).
= $70,000 - ( 0.15 * 385,000)
= $12,250
Residual income without the Added investments is $12,250
On December 31st, Datton, Inc. has cost of goods sold of $ 550000, ending inventory is $ 101000, beginning inventory is $ 120000; and average accounts payable is $ 105000. What is the accounts payable turnover expressed as days? (Round any intermediary calculations to two decimal places, and round your final answer to the nearest day.) A. 72 B. 44 C. 117 D. 67
Answer:
72 days
Explanation:
The computation of the accounts payable turnover ratio is shown below:
Accounts payable turnover ratio = Total Purchases ÷ Average Accounts payable
As we know that
Cost of goods sold = Beginning inventory + total purchases - Ending inventory
i.e
Total Purchases = Cost of goods sold + Ending Inventory – Beginning Inventory
= $550,000 + $101,000 - $120,000
= $531,000
So, the account payable turnover ratio is
= $531,000 ÷ $105,000
= 5.06 times
Now in days it is
= 365 days ÷ 5.06 times
= 72 days
A physical count of Ayayai Company’s inventory at year-end determined that inventory on hand had a value of $1,628,000. Upon further investigation, it was determined that this amount included the following: An inventory purchase of $51,900 made by Ayayai shipped from Sandhill Company on December 28 with terms FOB destination, but not due to be received until January 3. Goods shipped to a customer with a cost of $74,700 with terms FOB destination on December 29, but not expected to reach their destination until January 3. Goods shipped to a customer with a cost of $55,500 with terms FOB shipping point on December 30, but not expected to reach their destination until January 5. Goods held on consignment from Florence Company with a cost $16,300. Compute the amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022.
Answer:
The amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022 is $1,504,800
Explanation:
In order to calculate the amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022 we would have to make the following calculation:
amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022= Inventory as per physical count -inventory purchase-goods shipped-goods held on consignment
amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022= $1,628,000-$51,900-$55,500$-$16,300
amount that should be reported for inventory on Ayayai Company’s balance sheet at December 31, 2022=$1,504,800
You have just completed a $20,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $100,000, but if you sold it today, you would net $115,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $30,000 plus an initial investment of $5,000 in inventory. What is the initial incremental cash flow for opening the coffee shop today? Answer a negative number if the cash flow is a cost.
Answer:
$150,000
Explanation:
Data provided
Expected after tax cash flows from sale of space = $115,000
Increase in working capital = $5,000
Outfitting expenses = $30,000
The calculation of initial incremental cash flow is shown below:-
Initial incremental cash flow = Expected after tax cash flows from sale of space + Increase in working capital + Outfitting expenses
= $115,000 + $5,000 + $30,000
= $150,000
So, for calculating the initial incremental cash flow we simply applied the above formula.
The initial incremental cash flow for opening the coffee shop today would be $60,000, calculated by subtracting the total costs ($55,000) from the potential revenue from selling the property ($115,000).
Explanation:The initial incremental cash flow for opening the coffee shop today can be calculated by adding up the explicit costs and the potential revenue from selling the property. The explicit costs, in this case, include the cost of the feasibility study ($20,000), the capital expenditure to outfit the retail space ($30,000), and the initial inventory investment ($5,000). These add up to a total cost of $55,000. As for potential revenue, if the property were sold today, it would net $115,000. Therefore, the initial incremental cash flow would be the potential revenue ($115,000) minus the total costs ($55,000), which equals <$strong>60,000.
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Aqua Primavera, Inc. has provided the following information for the year. Units produced 6 comma 000 units Sales price $ 200 per unit Direct materials $ 30 per unit Direct labor $ 45 per unit Variable manufacturing overhead $ 20 per unit Fixed manufacturing overhead $ 470 comma 000 per year Variable selling and administration costs $ 70 per unit Fixed selling and administration costs $ 270 comma 000 per year What is the unit product cost using variable costing?
Answer:
Unit product cost= $95
Explanation:
Giving the following information:
Direct materials $30 per unit
Direct labor $45 per unit
Variable manufacturing overhead $20 per unit
Under the variable costing method, the unit product cost is calculated using the direct material, direct labor, and variable manufacturing overhead:
Unit product cost= 30 + 45 + 20= $95
On January 1, Year 1, the Mahoney Company borrowed $164,000 cash from Sun Bank by issuing a five-year 8% term note. The principal and interest are repaid by making annual payments beginning on December 31, Year 1. The annual payment on the loan based on the present value of annuity factor would be $40,625. The amount of principal repayment included in the December 31, Year 1 payment is:
Answer:
Principal payment = $27,505.00
Explanation:
Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.
The principal repayment in year 1 = Annual payment - Interest payment in year 1
Interest payment in year = Interest rate × Principal Amount
=8% × 164,000
= $13,120.00
Principal payment = $40,635 - 13,120 = $27,505.00
Principal payment = $27,505.00
The government of Junta took Fuel Safe Corp., a domestic energy firm, into state ownership to save the company from bankruptcy. However, the other private competitors in the energy industry were enraged by this decision. As a result, the government had to reduce the tax burden on all private energy firms so that both the state-owned enterprise and private firms could coexist. What type of economy does this portray?
Answer:
These are the options for the question:
market-based
communist
command
laissez-faire
mixed
And this is the correct answer:
mixed
Explanation:
A mixed economy is an economy that either:
Mixes state intervention with a free-market economy.Has some sectors of the economy run in market-based style, and other sectors in a planned-style.Has coexistence of public enterprises and private enterprises.In the question, we have an example of a mixed economy because in the energy sector (a crucial sector in any economy), there is one public company competing against private companies.
The economy becomes even more mixed when the government lowers the tax rates of the private companies, so that both the public firm and the private firms compete under the same conditions.
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Answer: A
Explanation:
Answer:
D. There is a greater risk that a longer-term loan will not be repaid.
Explanation:
People are forgetful, so they may forget. Another reason is that the person may pass away, and if there is no close relatives, then the bank will have to take the loss. Also, having a longer term may also result in people fleeing the country before they repay, which may also lead to a loss for the bank.
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Salvatori, Inc., manufactures and sells two products: Product A4 and Product Q5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours Product A4 600 7.0 4,200 Product Q5 900 4.0 3,600 Total direct labor-hours 7,800 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product A4 Product Q5 Total Labor-related DLHs $ 163,058 4,200 3,600 7,800 Machine setups setups 10,550 800 700 1,500 Order size MHs 499,527 4,200 4,500 8,700 $ 673,135 The overhead applied to each unit of Product A4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer :
Overhead applied per unit = $557.61
Explanation :
As per the data given in the question,
Particulars A B C=A ÷B D C ×D
Activity cost Estimated Total expected Activity Product A4 Product A4
Pool OH cost Activities Rate Expected activities total OH cost
Labor related $163,058 $7,800 20.90 4,200 $87,780
Machine setup $10,550 $1,500 7.03 800 $5,624
Order size $499,527 $8,700 57.42 4,200 $241,164
Total overhead cost = $334,568
Activity rate = Estimated OH cost ÷ Total expected activity
Product A4 overhead = Product A4 expected activity ×activity rate
Overhead applied per unit = Total overhead applied ÷ Expected production of A4
= $334,568 ÷ 600 units
=$557.61
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce. Refer to Scenario 13-3. Ziva's economic profit from farming equals a. −$130. b. $170. c. $130. d. −$80.
Answer:
The correct answer is:
-$80 (d.)
Explanation:
in order to calculate this, we have to determine the total income earned from farming, and the total income that could have been earned if Ziva had done her consultancy service, and calculate the difference. This is shown as follows:
farming business
cost of seeds = $130
income from seeds = $300
Net income from farming = 300 - 130 = $170
Home-organizing service
charge per hour = $25
time spent on field that would have been used for consultancy = 10 hours
total amount that would have been earned for consultancy = 25 × 10 = $250
Difference between income earned for farming and the income that would have been earned for home-organizing serving = 170 - 250 = -$80
Note that the negative sign is there because Ziva indulged in the activity with the lesser income so she effectively made an economic loss instead of a profit (she made a negative profit).
Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $13,000 for 200 shares of Malti Company’s common stock. She received a $420 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $16,000. Kathy would like to earn a return of at least 14% on all of her investments. She is not sure whether the Malti Company stock provide a 14% return and would like some help with the necessary computations.
Answer:
(A) The net present value is -$1,225. (B) Kathy Myers did not earn 14% return on investment.
Explanation:
Solution
(A) Calculate the net present value as shown below:
Now 1 2 3
Purchase of stock = ($13,000)
Annual Cash Divided $420 $420 $420
the Sale of Stock $16,000
Total cash Flow ($13,000) $420 $420 $420
Discount Factor at 14% 1.000 0.877 0.769 0.675
The present value ($13,000) $368 $323 $11,083
Net present value
($368 +$323 + $11,083- 13,000 = ($1,225)
The net present value is -$1,225.
(b) The NPV is negative. It shows that the rate of return on income is lower than the minimum required rate of return. so, KM did not earn 14% return.
Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months: January February March Material purchases $12,040 14,150 10,970 Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $6,500. The expected January 30 Accounts Payable balance is: Group of answer choices $6,500. $7,075. $12,040. $6,020 $9,270.
Answer:
c) 6020
Explanation:
January purchase is 12040
50 % of this purchase will be due on January 30 as remaining 50 % will be paid in January itself
so amount due will be = 12040 x 50 %
= 6020
Sammy has worked for a company with a retirement program, and today is retiring from her job with the amount of $105 in her retirement account. She decides to withdrawal an equal amount from this account, once a year, beginning immediately, and ending 17 years from today (for a total of 18 payments). If the interest rate is 6.50%, solve for the annuity amount such that she uses up her full accumulation.
Answer:
Annuity amount is $9.45
Explanation:
The amount that Sammy can withdraw from the account each can computed using the PMT formula in excel as follows:
=pmt(rate,nper,pv,fv,type)
rate is the of return on the account which is 6.5%
nper is the number of withdrawals to be made from the account which is 18 withdrawals
pv is the amount in the account presently i.e $105
fv is the total amount of withdrawals from the account which is not known hence taken as zero
type is 1 for annuity due such as this one,0 for ordinary annuity
=pmt(6.5%,18,-105,0,1)
=$9.45
The Annuity amount is $9.45
Calculation of the annuity:Here we use the PMT formula:
=pmt(rate,nper,pv,fv,type)
here
rate = 6.5%
nper = 18 withdrawals
pv i.e $105
fv = zero
And, type is 1 for annuity due like this one,0 for ordinary annuity
So,
=pmt(6.5%,18,-105,0,1)
=$9.45
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Indicate which financial statements must be included in the comprehensive annual financial report (CAFR) in each set of fund statements or government-wide statements.
Financial statement Governmental funds Proprietary funds Fiduciary funds Government-wide
1. Balance sheet
2. Statement of activities
3. Statement of cash flows
4. Statement of changes in fiduciary net position
5. Statement of fiduciary net position
6. Statement of net position
7. Statement of revenues, expenditures, and changes in fund balances
8. Statement of revenues, expenses, and changes in fund net position
Answer:
Explanation:
1. Management Discussion and Analysis (MD&A)
2. Basic Financial Statements
3. Note to Financial Statements
4. Required Supplementary Information (RSI)
5. Combining Statements for Non-major Fund & Non-major Components
6. Individual Fund statements and Schedules for Primary Government Funds
. Problems and Applications Q7 Consider a monopolistically competitive market with N firms. Each firm's business opportunities are described by the following equations: Demand: Q=100N−P Marginal Revenue: MR=100N−2Q Total Cost: TC=50+Q2 Marginal Cost: MC=2Q As N rises, the demand for each firm's product . How many units does each firm produce? 400N 25N 25 25N What price does each firm charge? 125N 75N 75N 100N How much profit does each firm make? 50+625N2 1,875N2 2,500N2−50 1,250N2−50 In the long run, firms will exist in this market.
Answer :
a.As N rises, the demand for each firm’s product will falls as a result of this each firm’s demand curve will shift left.
b.Q = 25/N
c.75/N
d.1250/N2 – 50
e.N = 5
Explanation:
a.As N rises, the demand for each firm’s product will falls as a result of this each firm’s demand curve will shift left.
b.The firm will produce where MR = MC:
100/N – 2Q
= 2Q
Q = 25/N
c.25/N
= 100/N – PP
= 75/N
d.Total revenue
= P + Q = 75/N +25/N = 1875/N2
Total cost = 50 + Q2 = 50 + (25/N)2
= 50 + 625/N2
Profit = 1875/N2 – 625/N2 – 50
= 1250/N2 – 50
e.In the long run, profit will be zero. T
Therefore:
1250/N2 – 50 = 0
1250/N2
= 50
N = 5
The answers of the various sub-parts are:
a. As N rises, the demand for each firm’s product will fall as a result of this each firm’s demand curve will shift left.
b. Q = 25/N
c. 75/N
d. 1250/N2 – 50
e. N = 5
The calculations of the various sub-parts:
a. As N increases, demand for each company's customers declines, leading each firm's demand curve to switch sides.
b.The firm will produce where MR = MC:
[tex]\frac{100}{N}[/tex]– 2Q = 2Q
Q = [tex]\frac{25}{N}[/tex]
c.[tex]\frac{25}{N}[/tex] = [tex]\frac{100}{N}[/tex] – PP =[tex]\frac{75}{N}[/tex]
d.Total revenue = P + Q = [tex]\frac{75}{N}[/tex] +[tex]\frac{25}{N}[/tex] =[tex]\frac{1875}{N2}[/tex]
Total cost = 50 + Q2 = 50 +[tex]\frac{25}{N} \times 2[/tex] = 50 +[tex]\frac{625}{N2}[/tex]
Profit = [tex]\frac{1875}{N2}[/tex] –[tex]\frac{625}{N2}[/tex] – 50 = [tex]\frac{1250}{N2}[/tex] – 50
e.In the long run, profit will be zero.
Therefore:
[tex]\frac{1250}{N2}[/tex] – 50 = 0
[tex]\frac{1250}{N2}[/tex] = 50
N = 5
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Murphy's has shares of stock outstanding with a par value of $1 per share and a market value of $24.60 per share. The balance sheet shows $32,500 in the capital in excess of par account, $12,000 in the common stock account, and $68,700 in the retained earnings account. The firm just announced a 10 percent stock dividend. What will the balance be in the retained earnings account after the dividend
Answer:
$39,180
Explanation:
The computation of the retained earning is shown below:
= Stock dividend percentage × common stock shares × market value per share × - par value per share + balance in retained earning account
= 10 % × 12,000 shares × $ 24.6 × -$1 + $ 68,700
= - $29,520 + $68,700
= $39,180
We simply applied the above formula so that the balance in the retained earning could come
Final answer:
Without knowing the exact number of shares outstanding for Murphy's, we cannot calculate the specific retained earnings balance post-dividend. A stock dividend is recorded at the par value, thus the amount deducted is the number of shares times the par value times the dividend percentage. Without the number of shares, we can only explain the method for calculation.
Explanation:
The student asked what will the balance be in the retained earnings account after Murphy's announces a 10 percent stock dividend. To calculate this, we need to understand that a stock dividend will not be paid in cash, but instead with additional shares of stock. Given Murphy's current market value per share of $24.60, a 10 percent stock dividend means that for every 100 shares owned, an investor receives an additional 10 shares. However, this value must be transferred from the retained earnings account into the common stock account.
To calculate the amount that will be deducted from the retained earnings, we need to know how many shares are outstanding. Since we are not provided with the number of outstanding shares, we cannot compute the exact value to be deducted. Assuming theoretically that we know the number of shares, we would multiply the number of shares by the par value of $1 per share (since stock dividends are recorded at par value) and then by 10 percent to get the value of the stock dividend. This amount would then be deducted from the retained earnings account.
Without the number of shares outstanding, we can only describe the process: The calculation would be as follows: number of shares imes par value per share imes 10%. The result is the amount to be subtracted from the retained earnings. If we had the number of outstanding shares, we could find the balance that will remain in the retained earnings account after the stock dividend distribution.
The income statement and the cash flows from the operating activities section of the statement of cash flows are provided below for Syntric Company. The merchandise inventory account balance neither increased nor decreased during the reporting period. Syntric had no liability for insurance, deferred income taxes, or interest at any time during the period. SYNTRIC COMPANY Income Statement For the Year Ended December 31, 2021 ($ in thousands) Sales $ 292.3 Cost of goods sold (177.6 ) Gross margin 114.7 Salaries expense $ 29.0 Insurance expense 18.7 Depreciation expense 11.5 Depletion expense 5.4 Interest expense 12.3 (76.9 ) Gains and losses: Gain on sale of equipment 17.5 Loss on sale of land (7.3 ) Income before tax 48.0 Income tax expense (24.0 ) Net income $ 24.0 Cash Flows from Operating Activities: Cash received from customers $ 228.0 Cash paid to suppliers (165.0 ) Cash paid to employees (24.0 ) Cash paid for interest (10.4 ) Cash paid for insurance (14.3 ) Cash paid for income tax (12.4 ) Net cash flows from operating activities $ 1.9 Required: Prepare a schedule to reconcile net income to net cash flows from operating activities. (Enter your answers in thousands rounded to 1 decimal place (i.e., 5,500 should be entered as 5.5). Amounts to be deducted should be indicated with a minus sign.)
Answer and Explanation:
The preparation of the schedule to reconcile the net income to net cash flow from operating activities is presented below:
Cash from operating activities
Net income $24
Adjustment to reconcile
Add: Depreciation expense $11.5
Add: Depletion expense $5.4
Less: Gain on sale of Equipment -$17.5
Add: Loss on sale of land $7.3
Less: increase in account receivable ($292.30 - $228) -$64.30
Add: increase in accounts payable ($177.60 - $165) $12.6
Add: increase in salaries payable ($29 - $24) $5
Add: decrease In prepaid insurance ($18.7 - $14.3) $4.4
Add: Decrease in bond discount ($12.3 - $10.4) $1.9
Add: increase in income tax payable ($24 - $12.4) $11.60
net cash flow from operating activities $4.20
The cash outflow represents in a negative sign while the cash inflow represents in a positive sign
The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,800 direct labor-hours will be required in February. The variable overhead rate is $9.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $109,120 per month, which includes depreciation of $18,240. All other fixed manufacturing overhead costs represent current cash flows. The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Answer:
$171,840
Explanation:
To reach the number, we first add up variable manufacturing overhead and fixed overhead, and then, substract depreciation.
February
Budgeted direct labor hours 8,800
Variable overhead rate per direct labor hour $9.20
Variable manufacturing overhead $80,960
Fixed manufacturing overhead $109,120
Total manufacturing overhead $190,080
Less depreciation ($18,240)
Cash disbursement for manufacturing overhead $171,840
The master budget of Windy Co. shows that the planned activity level for next year is expected to be 50,000 machine hours. At this level of activity, the following manufacturing overhead costs are expected:
Indirect labor Machine supplies Indirect materials Depreciation on factory building Total manufacturing overhead
$720,000 180,000 210,000 150,000 $1,260,000
A flexible budget for a level of activity of 60,000 machine hours would show total manufacturing overhead costs of:_______
a. $1,482,000.b. $1,260,000.c. $1,512,000.d. $1,362,000.
Answer:
a. $1,482,000
Explanation:
The computation of the total manufacturing overhead cost is shown below;
But before that first we need to do following calculations
The Variable overhead for 50000 machine hours is
= $1,260,000 - $150,000
= $1,110,000
As depreciation is not variable cost so it would be excluded
Now for 60,000 machine hours, the variable overhead is
= ($1,110,000 ÷ 50,000) × 60,000
= $1,332,000
And, the fixed overhead is $150,000 i.e depreciation expense
So, the total manufacturing overhead cost is
= Fixed manufacturing overhead + variable manufacturing overhead
= $150,000 + $1,332,000
= $1,482,000
Chace is a manager at Westwick Inc., an advertising company. He regularly holds meetings with his subordinates to track their work progress and address issues that they might be facing. This way, Chace tries to ensure that issues are identified early and work is completed on time. In this case, Chace is using _____.
Answer:
concurrent control
Explanation:
Concurrent control (also known as steering or preventive control) is the process of monitoring activities in real time so as to identify and preventing problems from happening thereby producing the desired result and completion of activity in time. This involves applying regulations on the ongoing process based on standards, rules, codes, and policies so that they conform to the organization or company standards