Kingbird, Inc.'s cash flow from operating activities for the year 2022 is calculated at $231,970, attained through adjustments in net income, depreciation, losses from asset disposals and changes in account receivables, payables and prepaid expenses.
Explanation:To calculate the cash flow from operating activities using the indirect method, we start with the net income and add or subtract changes in balance sheet items. The indirect method adjusts net income for items that affected reported net income but did not affect cash. Here are the calculations:
Start with net income: $195,450 Add depreciation expense: $195,450 + $33,810 = $229,260 Add loss from disposal of plant assets: $229,260 + $5,040 = $234,300 Subtract increase in accounts receivable: $234,300 - $14,650 = $219,650 Add increase in accounts payable: $219,650 + $16,350 = $236,000 Subtract increase in prepaid expenses: $236,000 - $4,030 = $231,970So, the cash flow from operating activities according to the indirect method is $231,970.
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Mervon Company has two operating departments: Mixing and Bottling. Mixing has 350 employees and Bottling has 350 employees. Indirect factory costs include administrative costs of $162,000. Administrative costs are allocated to operating departments based on the number of workers. Determine the administrative costs allocated to each operating department.
Answer:
Allocated administrative cost for mixing is $81000
And allocated administrative cost for for bottling is $81000
Explanation:
We have given total number of employs for mixing = 350
And total number of employs for bottling = 350
Administrative cost = $162000
So total number of employs = 350+350 = 700
So allocation base for mixing [tex]=\frac{350}{700}=0.5[/tex]
So allocated amount for mixing = 0.5×$162000 = $81000
Allocation base for bottling = [tex]=\frac{350}{700}=0.5[/tex]
So allocated amount for bottling = 0.5×$162000 = $81000
Shaw Company sells goods that cost $300,000 to Ricard Company for $410,000 on January 2, 2017. The sales price includes an installation fee, which has a standalone selling price of $40,000. The standalone selling price of the goods is $370,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete.
a. (a) Prepare the journal entry (if any) to record the sale on January 2, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
b. Shaw prepares an income statement for the first quarter of 2017, ending on March 31, 2017 (installation was completed on June 18, 2017). How much revenue should Shaw recognize related to its sale to Ricard?
The journal entry on January 2, 2017, should be the debiting of Accounts Receivable for $410,000 and the crediting of Sales for $370,000 and Unearned Revenue for $40,000. In terms of revenue recognized in the first quarter of 2017, it should be only the revenue from the sale of the goods, totaling $370,000, as the installation service is not yet completed.
Explanation:The question relates to the topic of revenue recognition. In this scenario, Shaw Company has two distinct performance obligations: the delivery of goods and the installation service. The total transaction price of $410,000 should be allocated between these two obligations based on their standalone selling prices (in proportion to their relative standalone selling prices).
Journal Entry on January 2, 2017: Debit Accounts Receivable $410,000; Credit Sales (Goods) $370,000; Credit Unearned Revenue (Installation) $40,000. The revenue recognized in the first quarter of 2017, ending March 31st, 2017 should be calculated based on the percentage of completion of the installation. However, as the installation is not completed by the end of March, Shaw shouldn’t recognize any of the installation income yet. The only recognized income would be from the sale of goods which amounts to $370,000.Learn more about Revenue Recognition here:
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Element Corporation reported the following equity section on its current balance sheet.
The common stock is currently selling for $20.25 per share.
Common Stock, $5 par, 337,000 shares authorized, 157,000 shares issued and outstanding $785,000
Paid-In Capital in Excess of Parlong dashCommon 140,000
Retained Earnings 301,000
Total Stockholders' Equity $1,226,000
After a 2-for-1 stock split, what is the number of issued shares?
Answer:
314,000 shares
Explanation:
The number of issued shares in case of 2 for 1 stock split would be
= Number of issued shares × stock split ratio
= 157,000 shares × 2
= 314,000 shares
Simply we multiply the Number of issued shares with the stock split ratio so that the accurate number of shares can come
All other information which is given is not relevant. Hence, ignored it
Final answer:
The number of issued shares of Element Corporation after a 2-for-1 stock split will be 314,000 shares, doubling from the original 157,000 shares.
Explanation:
After a 2-for-1 stock split, the number of issued shares of Element Corporation will double. Originally, there were 157,000 shares issued and outstanding. When a company performs a 2-for-1 stock split, each share is divided into two, so the new number of issued shares will be 314,000 (157,000 shares x 2).
Garnett Co. expects to purchase $180,000 of materials in July and $210,000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be?
Answer:
Total= $202,500
Explanation:
Giving the following information:
Garnett Co. expects to purchase $180,000 of materials in July and $210,000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase.
To calculate the August cash disbursement, we need to use the following formula:
Cash= total August cash required + cash from July
Cash for August:
August= 210,000*0.75= 157,500
From July= 180,000*0.25= 45,000
Total= $202,500
Which of the following is most likely considered a weakness of present value models?
a.Present value models cannot be used for companies that do not pay dividends
b.Small changes in model assumptions and inputs can result in large changes in the computed intrinsic value of the security
c.The value of the security depends on the investor’s holding period; thus comparing valuations of different companies for different investors is difficult
Answer:a
Explanation:
One weakness of present value models is that small changes in model assumptions and inputs can lead to significant changes in valuation. Additionally, comparing valuations of different companies for different investors is challenging due to the dependence on the investor's holding period.
Explanation:A weakness of present value models is that small changes in model assumptions and inputs can result in large changes in the computed intrinsic value of the security. This means that even slight variations in factors such as interest rates or dividend expectations can significantly impact the valuation of a security.
Furthermore, the value of a security depends on the investor's holding period, making it difficult to compare valuations of different companies for different investors. Each investor may have different expectations and investment strategies, which can lead to different valuation outcomes.
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Which of the following would have the least amount of influence on a manager's choice of whichinputs to employ in a production process?
Select one:
A. The price of a competitor's output.
B. The technology of the production process.
C. The marginal productivity of the inputs that can be used in the production process.
D. The prices of the inputs that can be used in the production process.
Answer:
The least important is the Option A "The price of a competitor's output". It has no influence in the decision of the manager about the inputs in the production process. The choice of inputs will depend on the technology, prices of the inputs and their marginal productivities.
Explanation:
The least important is the Option A "The price of a competitor's output". It has no influence in the decision of the manager about the inputs in the production process. The choice of inputs will depend on the technology, prices of the inputs and their marginal productivities.
Option B: The technology of the production process could affect the decision about the inputs employed because they are closely related.
Option C: The marginal productivity affect the decision about the inputs because it determines how the productivity can be maximized.
Option D: The prices of the inputs affect the decision because low price inputs (related with their marginal productivity) will be prefer to the high price inputs.
The technology of the production process would have the least amount of influence on a manager's choice of which inputs to employ.
Explanation:The correct answer is B. The technology of the production process. A manager's choice of which inputs to employ in a production process is usually influenced by several factors, such as the price of a competitor's output, the marginal productivity of the inputs, and the prices of the inputs. However, out of the given options, the technology of the production process would have the least amount of influence on a manager's choice. This is because the technology determines how the inputs are used but does not directly affect the selection of inputs.
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Upton Umbrellas has a cost of equity of 12.7 percent, the YTM on the company's bonds is 5.6 percent, and the tax rate is 40 percent. The company's bonds sell for 104.3 percent of par. The debt has a book value of $441,000 and total assets have a book value of $963,000. If the market-to-book ratio is 3.07 times, what is the company's WACC?
Answer:
WACC = 9.76%
Explanation:
First lets calculate the Market value of a firms equity and debt.
Market value of Equity = 963,000 * 3.07 = $2,956,410
Market value of Debt = 441,000 * 3.07 = $1,353,870
WACC =
Weight of equity * return on equity + weight of debt * return on debt * (1 - tax rate)
This gives us,
=[(2956410/(2956410 + 1353870))*0.127]+[(1353870/(2956410+1353870)*0.056] * (1 - 0.40)
WACC = 0.087 + 0.0106 = 0.0976 or 9.76%
Hope that helps.
Vista newspapers sold 6,000 of annual subscriptions at $125 each on September 1.
How much unearned revenue will exist as of December 31?
a. $0.
b. $500,000.
c. $250,000.
d. $750,000.
Answer:
Option (B) is correct.
Explanation:
Annual Subscription:
= 6000 × $125
= $750,000
Since, the payment was received for 1 Year, we will recognize 4 months revenue (1 September till 31st December) in the given year:
= $750,000 × (4/12)
= $250,000
Unearned Revenue as on 31st December:
= Total Payment Received - Revenue Recognized for 4 months
= $750,000 - $250,000
= $500,000
The unearned revenue for Vista newspapers as of December 31 is $500,000, which is the correct choice. This is found by calculating the monthly revenue from the total annual subscriptions and then multiplying it by the remaining eight months of the subscription period.
Explanation:The question pertains to the accounting concept of unearned revenue, which is relevant when a company receives payment for goods or services that have not yet been delivered or rendered. In this scenario, Vista newspapers sold 6,000 annual subscriptions at $125 each, totaling $750,000 in revenue on September 1. Since subscriptions cover an entire year, as of December 31, four months of the service will have been provided, leaving eight months unearned.
To calculate the unearned revenue as of December 31, we divide the total revenue by 12 months to get the monthly revenue and then multiply by the 8 months of service that will remain unprovided at that date:
Total Annual Revenue: $750,000Monthly Revenue: $750,000 / 12 = $62,500Unearned Revenue (8 months): $62,500 x 8 = $500,000Therefore, option b, $500,000, is the correct amount of unearned revenue that will exist as of December 31.
On January 1, Year 1, Toy Factory purchases a patent for a printing process for $40,000. The original legal life of the patent was 10 years, and there are 8 years remaining. However, due to expected technological obsolescence, the company estimates that the useful life of the patent is only 5 more years. What will be the amortization expense for the patent in Year 1?
Answer:
Annual depreciation= $8,000
Explanation:
Giving the following information:
On January 1, Year 1, Toy Factory purchases a patent for a printing process for $40,000.
The company estimates that the useful life of the patent is only 5 more years.
To calculate the depreciation for the year, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= 40,000/5= $8,000
An index fund manager is expected to generate a return that:
Answer:
An index fund manager is expected to generate a return that matches the particular index he has chosen.
Explanation:
An index fund manager is required to generate a return that matches a chosen index so as to cover all the expenses relating to the index he is managing.
You have a project that will involve the purchase of real estate and renovation of the real estate.
Your our analysis indicates the project should have an IRR of 10 percent. Financing will consist of a mortgage (debt) of $90,000 dollars which represents 80 percent of the financing. The pretax cost of debt is estimated to be 8.5 percent. The remaining proportion of the financing will come from selling shares of your stock portfolio. Historically, your return has been 11 percent. Your marginal tax rate is 21 percent.
How would excel be used to figure this out?
Should you pursue the project?
Answer:
Yes the company should you pursue the project.
Explanation:
This problem requires us to tell whether we should pursue the project or not. The IRR of the project is given in the question and WAAC is required to be calculated. The company should accept the project if IRR (10%) is greater than or equal to company's WAAC.
So let calculate waac first.
WAAC = 80%* 8.5% (100% -21%) + 20% * 11%
= 5.4% + 2.2 %
= 7.6%
based on above mentioned rule the company should pursue the project.
Your firm manufactures motorcycles for the consumer market. You purchase raw materials to build the motorcycles from a variety of suppliers in the U.S. and abroad. The volume of your raw materials purchases is a function of the customer demand for your firm’s motorcycles. Which of the following best describes the type of demand your firm has for these raw materials?
Answer:
The correct answer is letter "E": Derived demand.
Explanation:
Derived demand implies the quantity requested to manufacture a good is directly related to the supply requested from the market. If the demand for the good increases, it means the quantity of the materials needed to manufacture that good will increase as well.
Suppose that identical duopoly firms have constant marginal costs of $10 per unit. Firm 1 faces a demand function of q1=100-2p1+p2 where p and q denote price and quantity and subscripts denote firm 1 and 2. Similarly, firm 2 faces q2=100-2p2+p1. Solve for Nash-Bertrand Equilibrium.
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
You bought one of Great White Shark Repellant Co.’s 5.8 percent coupon bonds one year ago for $1,030. These bonds make annual payments and mature 14 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 5.1 percent. What was the total return?
Answer:
total rate of return on the Bond = 9.40%
Explanation:
given data
coupon bonds = 5.8%
bonds price = $1,030
maturity time = 14 year
required return on the bonds = 5.1 percent
solution
we know here market price of the bond is Present Value of Coupon Payments + Present face Value
so that face Valueof bond = $1,000
and here annual Coupon Amount will be
annual coupon amount = $1000 × 5.80%
annual coupon amount = $58
and here Market Price of the Bond will be
Market Price of Bond = Present Value of Coupon Payments + Present face Value ......................1
here Present Value of Coupon Payments at PVIFA 5.10% and 14 Years
Present Value Annuity Inflow Factor (PVIFA) = [tex]\frac{1-(1/(1+r)^t}{r}[/tex] ....2
Present Value Annuity Inflow Factor = [tex]\frac{1-(1/(1+0.0510)^14}{0.0510}[/tex]
Present Value Annuity Inflow Factor = 9.83566
and
Present Value Inflow Factor (PVIF) 5.10%, 14 Years= [tex]\frac{1}{(1+r)^t}[/tex] ...........3
Present Value Inflow Factor (PVIF) = [tex]\frac{1}{(1+0.0510)^14}[/tex]
Present Value Inflow Factor = 0.49838
so
Market Price of Bond = ( $58 × 9.83566 ) + ( $1,000 × 0.49838 )
Market Price of Bond = $1,068.85
so total rate of return on the Bond will be
total rate of return on the Bond = [ { Annual Coupon Amount + ( Change in Bond Price ) } ÷ Current Price] ...............4
total rate of return on the Bond = [tex]\frac{58+(1068.85-1030)}{1030}[/tex]
total rate of return on the Bond = 9.40%
A person who saves money for the future by buying a whole life policy A. pays the same premium for the same amount of term coverage. B. is able to accumulate tax-free interest earnings on cash values. C. buys more insurance for a given premium compared to term. D. probably earns a rate of return on cash values greater than in an equivalent universal life policy.
Answer:
B. is able to accumulate tax-free interest earnings on cash values.
Explanation: whole life insurance policy also known as permanent life insurance,is an insurance policy where people who buy the policy are deferred from paying tax,this policy ensure that you pay the same amount of premium throughout the policy,it is a policy that is not termed and it doesn't expire it can last up to 120years.
Xia Co. currently buys a component part for $10 per unit. Xia believes that making the part would require $7.20 per unit of direct materials and $1.05 per unit of direct labor. Xia allocates overhead using a predetermined overhead rate of 245% of direct labor cost. Xia estimates an incremental overhead rate of $0.75 per unit to make the part.
What are the relevant costs for Xia to make or buy the part? (Round your answers to 2 decimal places.) Should Xia make or buy the part?
Xia should make the part because it would be more cost-effective compared to buying the part.
Explanation:The relevant costs for Xia to make or buy the part include the direct materials, direct labor, overhead, and incremental overhead. Xia believes that making the part would require $7.20 per unit of direct materials, $1.05 per unit of direct labor, and an incremental overhead rate of $0.75 per unit. To calculate the overhead cost, Xia uses a predetermined overhead rate of 245% of direct labor cost.
Therefore, the relevant costs for Xia to make the part would be -
$7.20 (direct materials) + $1.05 (direct labor) + (245% * $1.05) (overhead) + $0.75 (incremental overhead). On the other hand, if Xia were to buy the part, the relevant cost would be $10 per unit.
Comparing the relevant costs, Xia should make the part if the cost of making is lower than the cost of buying. In this case, the cost of making the part is $9.508125 (rounded to 2 decimal places) per unit, while the cost of buying the part is $10 per unit. Therefore, Xia should make the part, as it would be more cost-effective.
A company is planning to purchase a machine that will cost $29,400 with a six-year life and no salvage value. The company uses straight-line depreciation. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine?
Sales............................................................................ $117000
Cost:
Manufacturing...................................... $52,000
Depreciation on machine...................... 4900
Selling and administrative expenses..... 39,000 96,800
Income before Tax....................................................... 20,200
Income Tax(40%)......................................................... 8080
Net Income..................................................................$12,120
a. 6.00 years
b. 4.85 years.
c. 2.43 years.
d. 173 years.
The accounting rate of return (ARR) for the machine is calculated to be 41.22%. However, none of the provided options a-d match this calculation, suggesting there's an error with the options given. ARR measures the profitability of an investment in percentage terms.
Explanation:To calculate the accounting rate of return (ARR) for the machine, we use the formula:
ARR = (Average Annual Profit / Initial Investment) x 100
First, we calculate the average annual profit (Net Income) after depreciation and taxes, which is given as $12,120. The initial investment is the cost of the machine, which is $29,400. Plugging these into the formula gives us:
ARR = ($12,120 / $29,400) x 100
ARR = 41.22%
The ARR is used to determine the profitability of an investment, and it is clear that none of the choices (6.00 years, b 4.85 years, c 2.43 years, d 173 years) represent a rate, so there seems to be an error in the provided options.
On the basis of the given data and standard ARR calculation, none of options a-d are correct, as they do not reflect a percentage rate of return. The computed ARR here is 41.22%.
Soon after settling into her office for the day, Serish finds a note in her inbox from her supervisor. It says, "Here is a list of ideas that I have generated on how we can stop the bottleneck problem. Please feel free to ask questions or offer suggestions." By presenting her with some ideas and offering some assistance, Serish's boss has made it evident that he has more of a(n) _________ style of leadership as described by the leadership continuum model.
a. autocratic
b. relationship-oriented
c. task-oriented
d. situational
Answer:
The Sehrish's boss has leadership style of
b. relationship-oriented
Explanation:
The option a is not correct as autocratic leadership style is such style of an individual who takes decision and make judgments without asking from his or her team. If that person asks his or her team then don't take serious of their opinion.The option b is correct as a relationship-oriented leader is such a leader who takes care of his or her team, motivates them and work on their growth. Similarly, Sehrish's boss told her that he will help her to overcome the problems.The option c not correct as task-oriented leaders are those who focus on the solutions to get the task done and doesn't pay attention towards their team.The option d is also not correct as situational leadership is such a style of leadership in which the leaders choose the leadership strategy that is relevant to the situation.Due to political instability in the country of East Gerdon, the strategic leaders at the headquarters of Mako Manufacturing have decided to close all production facilities in the country until stability returns. Mako's managers have formulated a _____-level strategy.
Answer: Corporate
Explanation:
The corporate level strategy is one of the business strategy which is used for maximizing the organization profitability by managing the status of the selling the products and the services in the market.
This types of strategy also helps in maintaining the future financial status of the company and it also increase the competition in the market by selling the unique products and the services.
According to the given scenario, the Mako's manager is using the corporate level strategy as the company decided to closing all the production due to the political instability in the market.
Therefore, Corporate level strategy is the correct answer.
Which of the following is an example of the assetasset demand for money?
(A) Marianne uses money in her checking account to buy groceries every week.Marianne uses money in her checking account to buy groceries every week.
(B) Joan believes that gold is an excellent store of value.
(C) Since the stock market has been volatile lately comma Jean holds most of her savings in a bank account.Since the stock market has been volatile lately, Jean holds most of her savings in a bank account.
(D) Carla keeps $ 2,000 in a bank account in case of emergencies.Carla keeps $2,000 in a bank account in case of emergencies.
Answer:
(D) Carla keeps $ 2,000 in a bank account in case of emergencies.
Explanation:
In general, we could say that money have these necessary functions on the economy:
1) Money is a medium of exchange
2) Money is a measure of value
3) Money is a store of value
Depending upon the functions above, there will be appearing of the demand for the money. Now, there are 2 types of demand for money:
1) Transactional Demand- is the keeping the money for purchasing. It means you always need some money to conduct your transactions as well. So we could say that, a medium of exchange function of money coincides with this demand type.
2) Asset Demand-is something about keeping the money as a financial asset or creating a store of value for later use. So the liquidity of the money is very essential for this type of demand. Additionally, measure of value and store of value functions will be the characteristics of this type of demand.
In the option A, the point is about purchasing so it is transaction demand. In the option B, there is not any talking about storing the money, but even if he stores the money as gold investment, it will not be liquidity meaning that is why not the asset demand because the prices and values of gold will be changed easily according to the currency. In the option C, the case is about the stocks so there is volatility and the volume of the money will be very volatile and this cannot be considered as an asset. However, in the option D, there is money on the bank account just the store of cash and it could be used as an asset on emergent moments.
the countries of Orion and Scorpius are small mountainous nations. Both produce granite and blueberries. Each nation has a labor force of 800. The table below gives production per month for each worker in each country. Assume productivity is constant and identical for each worker in each country.
Tons of Granite Bushels of Blueberies
Orion workers 6 9
Scorpius workers 3 7
(1) ______ has a comparative advantage in the production of granite
(2) ______ has a comparative advantage in the production of Blueberies.
Answer:
Orion has a comparative advantage in the production of granite .
Scorpius has a comparative advantage in the production of Blueberries.
Explanation:
We have the relative cost for Orion of producing one Ton of Granite is: 9/6 = 1.5 Bushels of Blueberries, while the relative cost for Scorpius of producing one ton of Granite is : 7/3 = 2.33 Bushels of Blueberries. Thus, Orion has comparative advantage of producing Granite.
We have the relative cost for Orion of producing one Bushels of Blueberries is: 6/9 = 0.67 ton of granite, while the relative cost for Scorpius of producing one Bushels of Blueberries is : 3/7 = 0.43 ton of granite. Thus, Scorpius has comparative advantage of producing Blueberries.
Orion has a comparative advantage in both the production of granite and blueberries as its workers are more productive in producing both goods in comparison to Scorpius.
Explanation:In the context of this question, comparative advantage refers to a country's ability to produce a particular good more efficiently (using less labor) relative to other goods. To determine who has a comparative advantage, we compare labor productivity of each worker in both countries.
(1) Orion workers produce 6 tons of granite compared to 3 tons by Scorpius workers, so Orion has a comparative advantage in the production of granite.
(2) A comparison of blueberry production shows that an Orion worker produces 9 bushels of blueberries, while a Scorpius worker produces 7. So, Orion also has a comparative advantage in the production of Blueberries.
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Evans Products uses a process costing system with two processing departments: the Mixing Department and the Finishing Department. In June, unit costs incurred by the Mixing Department amounted to $4.00 per unit. Unit costs transferred to the finished goods warehouse during the month amounted to $22. Work-in-process inventories are reduced to zero each month. The entry to record the sale of 3,500 units in June would include:
To record the sale of 3,500 units by Evans Products, you calculate the total cost of goods sold (COGS) by multiplying the number of units sold by the unit cost, resulting in a COGS of $77,000. The journal entry would involve debiting the Sales account and crediting Revenue for the total sales amount, and debiting COGS and crediting Inventory for $77,000.
The question involves the accounting process of recording the sale of goods in a company that uses a process costing system. The unit costs incurred by the Mixing Department are $4.00 per unit, and the costs transferred to the finished goods warehouse are $22 per unit. Since work-in-process inventories are reduced to zero each month, and the sale involves 3,500 units, to record the sale, you'd first need to calculate the total cost of the goods sold (COGS) which would be 3,500 units x $22/unit. Then, you would debit the Sales account and credit the Revenue account for the total sales amount, and debit the COGS account and credit the Inventory account for the total COGS.
Using accounting equations:
Total COGS = Number of units sold x Cost per unit
Total COGS = 3,500 units x $22/unit
Total COGS = $77,000
The journal entry would be:
Debit Sales (for the total sales amount)
Credit Revenue (for the total sales amount)
Debit COGS (for $77,000)
Credit Inventory (for $77,000)
Evans Products records the sale of units by debiting Accounts Receivable or Cash and crediting Sales Revenue for the total sales amount. It additionally debits Cost of Goods Sold and credits Finished Goods Inventory for the cost associated with the number of units sold, in this case, 3,500 units at $22 each.
The subject of this question involves understanding process costing in the manufacturing industry, specifically within a company named Evans Products. The student is asked about the accounting entry related to sales in the context of a company that has a process costing system with two processing departments.
In this scenario, Evans Products has no remaining work-in-process inventories at the end of the month, and the unit costs after processing in the Mixing Department and Finishing Department sum up to $22 per unit. For the sale of 3,500 units, the total cost of goods sold (COGS) will be 3,500 units multiplied by $22, which is $77,000. Assuming the sales revenue per unit is greater than or equal to COGS, the entry to record sales would include a debit to Accounts Receivable or Cash (depending on whether the sale was on credit or for cash), and a credit to Sales Revenue for the total sales amount. Additionally, a debit to Cost of Goods Sold and a credit to Finished Goods Inventory would be recorded for $77,000.
g. Which inventory method would you recommend for reporting for income tax purposes to minimize taxable income? Why? 3. The company is operating in an inflationary environment. Which method should the company use to maximize inventory valuation? Why? 4. Looking at the purchasing volume versus demand, what guidance would you offer to the operations manager regarding inventory management and cash flow?
Answer:
g.- LIFO as the cost of good sold will be based on the lattest unit thus, the more expensive under inflationary environment.
3.- FIFO as will declare cost the oldest unit (cheapest) and keep under inventory the newest (more expensive) units
4.- It should minimize holding and order cost using the economic quantity order
Then it will have to match their payment cycle with the collection cycle.
It will be better to pay just before 30 days so it pays nominal but after 30 days it will benefit from the inflation thus, it will be like 2% or 3% cheap as inflation per month is abotu that. I would be like paying with discount
Is important to do not led the invoice outdate as the supplier will charge high interest to compensate the inflation (inlation premium )
Explanation:
Under what scenario could fiscal policy make a recession even worse?
Select one:
a. If tax cuts are not evenly distributed across income groups.
b. If the multiplier is bigger than 1
c. If there is no crowding out of private spending
d. If deficit financed fiscal policy increases the national debt to the point it scares investors away and decreases spender confidence
Answer:
The correct answer is letter "A": If tax cuts are not evenly distributed across income groups.
Explanation:
Fiscal policy refers to the combined governmental decisions regarding a country's taxing and spending. The term fiscal policy is associated with British economist John Maynard Keynes (1883-1946) who believed governments should influence macroeconomic productivity levels. Though, it could be a trap if it is not allocated correctly among different income groups. Economies such as Brazil, for instance, have allocated higher taxes for low-income people creating economic disparity.
The Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2018, the company decided to change to the average cost method. Data for 2018 are as follows: Beginning inventory, FIFO (6,500 units @ $45.00) $ 292,500 Purchases: 6,500 units @ $51.00 $ 331,500 6,500 units @ $55.00 357,500 689,000 Cost of goods available for sale $ 981,500 Sales for 2018 (11,000 units @ $85.00) $ 935,000 Additional information: The company's effective income tax rate is 30% for all years. If the company had used the average cost method prior to 2018, ending inventory for 2017 would have been $266,500. 8,500 units remained in inventory at the end of 2018. Required: 1. Prepare the journal entry at the beginning of 2018 to record the change in principle. 2. In the 2018–2016 comparative financial statements, what will be the amounts of cost of goods sold and inventory reported for 2018?
Answer:
Retained earnings 26,000 debit
Inventory 26,000 credit
--to adjust for change of method--
Average cost per unit $49
COGS: 11,000 units x $ 49 = 539,000
Ending Inventory 8,500 units x $ 49 = 416,500
Explanation:
Beginning inventory, FIFO (6,500 units @ $45.00) $ 292,500
Beginning inventory Average $ 266,500
Difference between methods 26,000
We will adjust inventory against retained earnings as a lower or higher inventory will represent higher or lower COGS respectively
beginning inventory $ 266,500
Purchases:
6,500 units @ $51.00 $ 331,500
6,500 units @ $55.00 $ 357,500
689,000
Total good avilable for sale: 955,500
Units available for sale: 19,500
Average cost per unit: 955,500 / 19,500 = $ 49
COGS: 11,000 x $ 49 = 539,000
Ending Inventory 8,500 x $ 49 = 416,500
Digger Company purchased a truck that cost $26,000. The company expected to drive the truck 100,000 miles. The truck had an estimated salvage value of $2,000. If the truck is driven 36,000 miles in the current accounting period, which of the following amounts should be recognized as depreciation expense?
A. $8,640.
B. $9,360.
C. $8,000.
D. $8,280.
Answer:
A. $8,640.
Explanation:
Formula: Units of Production Depreciation
Annual Depreciation=Depreciable Value×Units produced during the year/Estimated total production
Annual Depreciation = $24,000 *36,000/100,000= $ 8640
Depreciable Value = Original cost – Scrap value= $26,000- $ 2000= $ 24000
Illustrate the following with supply and demand curves: In March 2015, hogs in the United States were selling for 81 cents per pound, up from 58 cents per pound a year before. This was due primarily to the fact that supply had decreased during the period. Show this change in the figure on the right. 1.) Using the point drawing tool, locate the equilibrium point for 2015 in the U.S. hog market. Label your point 'E'. 2.) Using the line drawingtool, illustrate the change in the U.S. hog market between 2014 and 2015. Properly label your line 'S2015'. (Hint: Perform the steps in the order given.) Carefully follow the instructions above and only draw the required objects.
With the decrease in the supply of the hogs in the market, there was an excess demand due to which the price of hogs in the market rose from the previous level.
Explanation:
In the year 2014, the price of the hogs in the market of the United States of America was 58 cents per pound. But with the decrease in the supply of the hogs in the market of the country, the supply curve of the same shifted towards the left side.
This created a situation of excess demand in the country because the supply in the market could not fulfill the supply of the hogs in the market. So this led to the price of the hogs rise. In the year 2015, there fore the price of hogs in the market was 81 cents per pound. This was higher than the price compared to the previous year.
Other things being equal, if the reserve ratio is raised from 10 percent to 20 percent Select one: a. maximum potential value of the money multiplier falls from 10 to 5. b. minimum potential value of the money multiplier rises from 0.10 to 0.20. c. minimum potential value of the money multiplier falls from 100 to 50. d. maximum potential value of the money multiplier rises from 10 to 20.
Answer:
A
Explanation:
Explanation of how an increase in the reserve ratio impacts the money multiplier, leading to a decrease in its maximum potential value.
The higher the required reserve ratio, the lower the deposit multiplier.
For example, with a required reserve ratio of 0.1, the deposit multiplier is 10. If the ratio increases to 0.2, the deposit multiplier would be 5.
Therefore, if the reserve ratio is raised from 10% to 20%, the maximum potential value of the money multiplier falls from 10 to 5.
Coat's product manager continues to perform well in the market. However, a competing product is coming on strong and is looking to take over as the market share leader in the segment. Without sacrificing contribution margin, what can the Coat product manager do in order to improve upon the buying criteria, and thus potentially increase demand?
Increase the promotion budget to gain greater awareness
Explanation:
Coat's manager continues to perform well in the market competing product as strong and is looking to take over the market share leader in segment.The coat product manger in order to improve the buying criteria, and thus potentially increase demand the best product manager should purchased. Marketing and promoting is a strategy in which one can communicate the customers and target prospective customers to buy the products.Thus increasing the demand of the product and thereby increase the promotion budget and gain greater awareness.After determining its profit-maximizing quantity of output, how does a monopolistic competitor choose its price? Group of answer choices
a. The firm will look at the demand curve to find out what it could charge for that quantity of output.
b. The firm will look at the average cost curve to find out what it could charge for that quantity of output.
c. The firm will look at the marginal revenue curve to find out what it could charge for that quantity of output.
Answer:
a. The firm will look at the demand curve to find out what it could charge for that quantity of output.
Explanation:
The monopolistic competition market has a large number of competing vendors and producers. In this type of market, firms compete by producing substitute (differentiated) goods that can replace each other, not homogeneous goods, while competing. The production of differentiated goods gives this market a competitive and monopolistic character, but because there are many vendors in the market, prices cannot be determined by a small number of companies. What is important in the monopolistic competition market is that the goods are attractive, preferable and indispensable. Characteristics of monopolistic competition:
1) Many sellers.
2) Differentiated products, products are not exactly the same as in the competitive market. Firms are not the determinants of the price.
3) Companies can enter and exit the market without restrictions. This traffic continues until the profit of the firms is worthless.
A profit-maximizing monopolistic competitor will have a target of the quantity in that case, marginal revenue should be equal to marginal cost and then he monopolistic competitor will start generate that level of output and finally, will decide charge the price which is indicated by the firm's demand curve. That demand curve will not be flat but downward sloped.