Answer: Please refer to Explanation
Explanation:
First calculate the amount made from Issuing the common stock
Value of Common Stock = 17,500 shares * 1.50
= $1,125,000
Additional Paid In capital (excess that was paid for common stock)
= 4 (price sold at) - 1.5 ( stated price)
= $2.5
= 2.5 * 750,000
= $1,875,000
Tota cash received for Common Stock is therefore,
= $1,875,000 + $1,125,000
= $3,000,000
Then calculate amount made from Issuing Preferred stock
Preferred Stock = 17,500 * 50
= $875,000
Additional Paid In capital (excess that was paid for preferred stock)
=60 (price sold at) - 50 ( par value)
= $10
= 10 * 17,500
= $175,000
The Total cash realised from Issuing Preferred stock is therefore,
= 875,000 + 175,000
= $1,050,000
Transactions can then be Journalized as follows,
Date
May 15
DR Cash $3,000,000
CR Common Stock $1,125,000
CR Additional Paid In Capital in excess of stated value $1,875,000
( To record issuance of Common Stock)
Date
June 30
DR Cash $ 1,050,000
CR Preferred Stock $ 875,000
CR Additional Paid In Capital in excess of Par value $175,000
(To record issuance of Preferred Stock)
"Pawprints Paint recently went public in a best efforts offering. The company offered 160,000 shares of stock for sale at an offer price of $26 per share. The administrative costs associated with the offering were $400,000 and the underwriter's spread was 8 percent. After completing their sales efforts, the underwriters determined that they sold a total of 153,700 shares. What were the net proceeds to the company
Answer:
Net proceeds $3,356,808
Explanation:
The net proceeds to the company would be the gross proceeds from the issue less the underwriting costs and the administrative cost
$
Gross proceeds (153,700 × $26) 3,996,200
Underwriting spread( 8%× 3,996,200) (319,696)
Administrative cost ( 400,000)
Net proceeds 3,356,808
Kim placed an order with her broker for 700 shares of each of three IPOs being offered this week. Each of the IPOs has an offer price of $23. The number of shares allocated to Kim along with the closing prices on the first trading day are: Stock Shares Allocated Price A 700 $ 22.15 B 360 26.43 C 240 28.87 What is Kim's total profit on these three stocks at the end of the first day of trading?
Answer:
$2,049
Explanation:
The profit or loss on a stock portfolio can be determined by by comparing the stock closing value at a specific date and the purchase price.
As per given data
Stock Shares Allocated Price
A 700 $22.15
B 360 $26.43
C 240 $28.87
Purchase price = (700 + 360 + 240 ) shares x $23 = $29,900
First day Closing Value of Portfolio
Stock Shares Allocated Price Value
A 700 $22.15 $15,505
B 360 $26.43 $9,514.8
C 240 $28.87 $6,928.8
Total $31,948.6
Profit on the first day closing = Closing price of Portfolio - Purchase price
Profit on the first day closing = $31,948.6 - $29,900 = $2,048.6
Peter's Plants, Inc., specializes in growing Pink Tuberous Begonia flowers. Peter's enters into a contract to deliver 1,000 of its genetically modified pink begonias to Lester's Flowers for $5 a plant. Relying on the contract, Lester's enters into a second contract with a large apartment complex to plant 1,000 pink begonias around its property. A large ice storm demolishes all of Peter's begonia flowers. In turn, Peter's didn't meet its supply to Lester's, and Lester's didn't plant the flowers at the apartment complex. The apartment complex sues Lester's for breach of contract, and Peter's is brought as a cross-claim defendant. What are the arguments Lester's and Peter's should make in defense of not performing under their respective contracts
Answer:
Explanation:
This incident occurred as a result of natural disaster which was beyond the control of the parties involved. Moreover , this incident would have been covered by so many news media and channels which would serve as evidences to buttress their claim.
Therefore , it is easier to make a defense in the fact that the breach occurred due to the natural disaster that was neither forseen nor could be prevented by their effort.
Lester's Flowers and Peter's Plants, Inc. can argue that they were unable to perform their contracts due to the ice storm.
Explanation:In this scenario, both Lester's Flowers and Peter's Plants, Inc. can make arguments in defense of not performing under their respective contracts due to the unforeseeable event of an ice storm. Lester's Flowers can argue that the ice storm prevented them from receiving the pink begonias from Peter's Plants, Inc. and therefore they could not fulfill their contract with the apartment complex. Peter's Plants, Inc. can argue that the ice storm destroyed their flowers and prevented them from meeting their supply obligations to Lester's Flowers.
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Rick Co. had 30 million shares of $1 par common stock outstanding at January 1, 2018. In October 2018, Rick Co.'s Board of Directors declared and distributed a 1% common stock dividend when the market value of its common stock was $54 per share. In recording this transaction, Rick would:
Answer and Explanation:
The journal entry to record the given transaction is as follows
Retained earning Dr (0.30 million × $54) $16.2 million
To Common stock (0.30 million × $1) $0.3 million
To Additional paid in capital in excess of par (0.30 million × $53) $15.9 million
(Being the stock dividend is declared)
The computation of the shares after declaring the dividend is
= 30 million × 1%
= 0.30 million
12/31/15 12/31/14 Prepaid Insurance 1,700 1200 Prepaid Rent 3500 4200 Interest Receivable 4200 6,320 Unearned Revenue 6700 8200 Interest Payable 3800 2200 Salaries Payable 11500 15600 Insurance Expense 4800 Rent Expense 9,400 Interest Revenue 22680 Sales revenue earned current period paid in prior periods 15900 Interest Expense ? Salary expense 22290 Insurance Payments 5300 Rent payments 8700 Interest Received 24800 Revenue payments received in advance ? Interest Paid 6530 Salaries Paid ?
Answer:
Revenue payments received in advance $ 14,400
Interest expense for the year $ 8,130
Salaries Paid for the year $ 26,390
Explanation:
Revenue payments received in advance
beginning 8,200
+ received during the period XXX
- earned during the period -15,900
ending unearned revenue 6,700
received: 6,700 + 15,900 - 8,200 = 14,400
Interest expense
Interest Payable beginning 2,200
+ interest expense XXX
- interest paid for the year - 6,530
Interest Payable ending 3,800
expense: 3,800 + 6,530 - 2,200 = 8,130
Beg Salaries Payable 15,600
+Salary expense 22,290
-salaries paid XXX
End Salaries Payable 11,500
paid salaries:
15,600 + 22,290 - 11,500 = 26,390
Page Company makes 30% of its sales for cash and 70% on account. 60% of the credit sales are collected in the month of sale, 25% in the month following sale, and 12% in the second month following sale. The remainder is uncollectible. The following information has been gathered for the current year: Month 1 2 3 4 Total sales $60,000 $70,000 $50,000 $30,000 Total cash receipts in Month 4 will be:
Final answer:
Total cash receipts in Month 4 will be $41,650.
Explanation:
To calculate the total cash receipts in Month 4, we need to determine the amount collected in the month of sale, the following month, and the second month following sale, as well as the uncollectible amount.
Month 1: Total sales = $60,000
Cash sales = 30% of total sales = 0.3 * $60,000 = $18,000
Credit sales = 70% of total sales = 0.7 * $60,000 = $42,000
Amount collected in Month 1 = 60% of credit sales = 0.6 * $42,000 = $25,200
Month 2: Total sales = $70,000
Cash sales = 30% of total sales = 0.3 * $70,000 = $21,000
Credit sales = 70% of total sales = 0.7 * $70,000 = $49,000
Amount collected in Month 2 = 25% of credit sales = 0.25 * $49,000 = $12,250
Month 3: Total sales = $50,000
Cash sales = 30% of total sales = 0.3 * $50,000 = $15,000
Credit sales = 70% of total sales = 0.7 * $50,000 = $35,000
Amount collected in Month 3 = 12% of credit sales = 0.12 * $35,000 = $4,200
Total cash receipts in Month 4 = Amount collected in Month 1 + Amount collected in Month 2 + Amount collected in Month 3
Total cash receipts in Month 4 = $25,200 + $12,250 + $4,200
= $41,650
Joseph Company is considering replacing an existing piece of machinery with newer technology. In deciding whether to replace the existing machinery, management should consider which costs as relevant? Multiple Choice Historical costs associated with the old machine. Future costs which will be classified as fixed rather than variable. Sunk costs associated with the old machine. Future costs which will be different under the two alternatives.
Answer:
Future costs which will be different under the two alternatives.
Explanation:
In simple words, while considering to replace the new machinery every entity must focus comely on two main aspects which are the historical cost or the cost at which the old machine could be sold and the future costs which will significantly affects the potential profits of the subject firm.
However, due to various different methods of depreciation and future value estimations one should consider all the methods in hand and then take the decision.
LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.3 hours of direct labor at the rate of $19.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The budgeted direct labor cost per unit of Product WZ would be: Multiple Choice $19.00 $5.60 $20.10 $43.70
Answer:
$43.70
Explanation:
Data provided
Each Unit Require = 2.3 hours
Direct Labor Rate Per Hour = $19.00
The computation of budgeted direct labor cost per unit is shown below:-
Budgeted direct labor cost per unit = Each Unit Require × Direct Labor Rate Per Hour
= 2.3 hours × $19.00 rate per hour
= $43.70
Therefore for computing the budgeted direct labor cost per unit we simply multiply the each unit require with direct labor rate per hour
Salvia Company recently purchased a truck. The price negotiated with the dealer was $40,000. Salvia also paid sales tax of $2,000 on the purchase, shipping and preparation costs of $3,000, and insurance for the first year of operation of $4,000. At what amount should the truck be recorded on the balance sheet prior to recording depreciation expense
Answer:
The amount the truck should be recorded on the balance sheet prior to recording depreciation expense is $45,000.
Explanation:
The insurance premium of $4,000 would not be added to the cost of the truck. Insurance is usually for one year, it will be treated as prepayment and amortized over one year.
Based on IAS 16 Property, Plant and Equipment, the cost of an asset includes directly attributed costs that are necessary to bring the assets to the condition intended by management. The cost components, based on the standard, are:
purchase price plus import duties and taxesany directly attributable cost to bring the sset to the location and condition to be capable of operating in the manner intended by managementthe initial estimated of the cost of dismantling and removing the item and restoring the site on which it is locatedBased on the above, the cost is $40,000 + $2,000 + $3,000 = $45,000
QS 23-11 Sell or process further LO A1 A company has already incurred $5,200 of costs in producing 6,100 units of Product XY. Product XY can be sold as is for $31 per unit. Instead, the company could incur further processing costs of $8 per unit and sell the resulting product for $35 per unit. Should the company sell Product XY as is or process it further?
Answer:
It is more profitable to sell te products as-is.
Explanation:
Giving the following information:
Sell as-is:
Selling price= $31
Continue processing:
Selling price= $35
Unitary incremental cost= $8
Units= 6,100
The firsts $5,200 is a sunk cost, this means that the cost will remain the same in both options. It is irrelevant to the decision-making process.
Sell as-is:
Effect on income= 6,100*31= $189,100
Continue processing:
Effect on income= 6,100*(35-8)= $164,700
It is more profitable to sell te products as-is.
Question 12 (3.333333333 points)
3
In one study, small businesses starting out spent what percentage of sales on
marketing?
6
5 to 10%
8 to 15%
9
15 to 19%
25 to 32%
12
Answer:
The correct answer is 25 to 32%
Answer:
15-19%
Explanation:
Textbook, Chapter 30
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 8 microns per toy at $0.32 per micron Direct labor: 1.2 hours per toy at $6.50 per hour During July, the company produced 5,100 Maze toys. The toy's production data for the month are as follows: Direct materials: 78,000 microns were purchased at a cost of $0.28 per micron. 27,000 of these microns were still in inventory at the end of the month. Direct labor: 6,620 direct labor-hours were worked at a cost of $46,340.
Compute the direct materials price and quantity variances for July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effectCompute the direct labor rate and efficiency variances for July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect
Answer:
1.-3,120 Favorable variance.
2.$704Unfavorable variance
Explanation:
Material price variance:
Actual price is $0.28
Standard price 0.32
Actual quantity 78,000
Material price variance = (Actual price - Standard price) Actual quantity=
(0.28 - 0.32)*78,000
= (-0.04) 78,000= -3,120 Favorable variance.
2. Material quantity variance:
Actual quantity of material used (78,000 - 27,000) = 51,000
Standard quantity of material for the actual level of production (5,100 toys x 8 microns per toy) =48,800 toys
Standard price per unit of material = $0.32
Material quantity variance = (Actual quantity used - Standard quantity of material for actual level of production) Standard price
= (51,000 - 48,800)* $0.32
= (2,200) $0.32 = $704Unfavorable variance
Answer:
Explanation:
Std material Qty allowed (5100*8) = 40800
Std price: 0.32
Actual qty purchased: 78000
Actual qty used: 78000-27000 =51000
Actual price = 0.28
Material price variance= Actual Qty (Std price -Actual price)
78000 (0.32- 0.28) = 3120 fav
Material Qty variance= Std price (Std qty-Actual Qty )
0.32 (40800-51000) = 3264 Unfav
Std labor hours (5100*1.2) = 6120 Hours
Std rate per hour: 6.50
Actual Labor hours: 6620 hours
Actual labor cost = 46340
labor rate variance = Actual hours *Std rate-Actual labor cost
6620 *6.50 - 46340 = 3310 Unfav
Labor efficiency variance = Std price (Std hours -Actual hours )
6.50 (6120-6620 ) = 3250 Unfav
The COB Division of Northern Corp. produces and sells a product to both external customers and other Northern divisions. Per-unit data collected from COB's operations include: Outside sales price $800 Direct materials 350 Direct labour 75 Fixed overhead 180 If COB has excess capacity available to fulfill an inter-company order, what transfer price should be set
Answer:
$425
Explanation:
Data provided as per the question
Direct material = $350
Direct labor = $75
The computation of transfer price should be set is shown below:-
Transfer price should be = Direct materials + Direct labor
= $350 + $75
= $425
Note :- The minimum transfer price shall be "Variable Rate" if there is an excess capacity to produce for internal transfer.
Prahm Corp. wants to raise $4.7 million via a rights offering. The company currently has 530,000 shares of common stock outstanding that sell for $48 per share. Its underwriter has set a subscription price of $23 per share and will charge the company a spread of 5 percent. If you currently own 6,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
If you choose not to participate in Prahm Corp.'s rights offering and sell your 6,000 rights, you can receive approximately $37,500 based on a subscription price of $23 per share and an ex-rights price of $12.50.
To calculate the value of the rights, you can follow these steps:
1. Determine the Subscription Ratio:
[tex]\[ \text{Subscription Ratio} = \frac{\text{Number of New Shares Issued}}{\text{Number of Existing Shares}} \][/tex]
In a rights offering, the subscription ratio is usually 1:1, meaning for every existing share, shareholders can buy one new share.
2. Calculate the Number of Rights You Hold:
[tex]\[ \text{Number of Rights} = \text{Number of Existing Shares You Own} \times \text{Subscription Ratio} \] \[ \text{Number of Rights} = 6,000 \times 1 \][/tex]
3. Determine the Ex-Rights Price:
[tex]\[ \text{Ex-Rights Price} = \frac{\text{Market Price - Subscription Price}}{1 + \text{Subscription Ratio}} \] \[ \text{Ex-Rights Price} = \frac{\$48 - \$23}{1 + 1} \][/tex]
4. Calculate the Value of One Right:
[tex]\[ \text{Value of One Right} = \text{Ex-Rights Price} - \text{Subscription Price} \] \[ \text{Value of One Right} = \frac{\$48 - \$23}{1 + 1} - \$23 \][/tex]
5. Calculate the Total Value of Your Rights:
[tex]\[ \text{Total Value of Rights} = \text{Number of Rights} \times \text{Value of One Right} \][/tex]
Now, you can substitute the values and calculate:
[tex]\[ \text{Ex-Rights Price} = \frac{\$48 - \$23}{1 + 1} = \frac{\$25}{2} = \$12.50 \]\[ \text{Value of One Right} = \frac{\$25}{2} - \$23 = \$6.25 \]\[ \text{Total Value of Rights} = 6,000 \times \$6.25 \]\[ \text{Total Value of Rights} = \$37,500 \][/tex]
Therefore, if you decide not to participate in the rights offering and choose to sell your rights, you can potentially receive $37,500.
Cosmo contributed land with a fair market value of $332,500 and a tax basis of $138,000 to the Y Mountain partnership in exchange for a 40 percent profits and capital interest in the partnership. The land is secured by $163,000 of nonrecourse debt. Other than this nonrecourse debt, Y Mountain partnership does not have any debt
a. How much gain will Cosmo recognize from the contribution? (Leave no answer blank. Enter zero if applicable.)
b. What is Cosmo’s tax basis in his partnership interest?
Answer:
a. Zero gain
b. Cosmo’s tax basis in his partnership interest is $55,200
Explanation:
a. According to the given data there is a Zero gain, therefore Cosmo will recognize $ 0 gain from the contribution.
b. In order to calculate Cosmo’s tax basis in his partnership interest we would have to make the following calculation:
Cosmo’s tax basis in his partnership interest= tax basis to the Y Mountain partership×percentage of profits and capital interest in the partnership
Cosmo’s tax basis in his partnership interest=$138,000×40%
Cosmo’s tax basis in his partnership interest=$55,200
Cosmo’s tax basis in his partnership interest is $55,200
Final answer:
Cosmo will recognize $0 in gain from the contribution of land to the Y Mountain partnership. His initial tax basis in the partnership interest will also be $0 after accounting for relief of the nonrecourse debt.
Explanation:
Calculation of Gain Recognition and Tax Basis:
Cosmo contributed land to the Y Mountain partnership which triggers certain tax considerations. Firstly, the gain recognition:
Cosmo would not recognize any gain on the contribution of property to a partnership in exchange for an interest in the partnership under Section 721 of the Internal Revenue Code, assuming the contribution did not result in a change of 80% or more of the ownership of the partnership.Thus, the gain Cosmo recognizes is:
Recognized Gain: $0Next, for the tax basis in the partnership interest:
The basis of his land contributed is $138,000.However, since the land is subject to a $163,000 nonrecourse debt which the partnership assumes, Cosmo must reduce his basis by the amount of the debt relieved.Therefore, Cosmo's initial basis would be decreased by the nonrecourse debt.Adjusted Tax Basis = $138,000 - $163,000 = -$25,000. However, since basis cannot be negative, Cosmo's basis would be $0. It's important to note that future income allocations or additional contributions could increase this basis.In conclusion, Cosmo's initial tax basis in the partnership is $0.
Suppose seafood price and quantity data for the years 2000 and 2009 follow. Use 2000 as the base period. Seafood 2000 Qty. (lb) 2000 Price ($/lb) 2009 Price ($/lb) Halibut 75,190 2.01 2.33 Lobster 83,080 3.62 3.09 Tuna 50,779 1.87 1.97 (a) Compute a price relative for each type of seafood. (Round your answers to one decimal place.) Seafood Price Relative Halibut Lobster Tuna (b) Compute a weighted aggregate price index for the seafood catch. (Round your answer to one decimal place.)
Answer:
a) Price Relative for Halibut is 115.9 (1 d.p)
Price Relative for Lobster is 85.4 (1 d.p)
Price Relative for Tuna is 105.4 (1 d.p)
b) The Weighted Aggregate Price Index for the seafood catch is 98.4.
Explanation:
a) The Price Relative for a good refers to it's current price divided by it's base price times 100. It therefore measures a change in price across different periods.
Writing the formula as stated is,
Price Relative = Current Price / Base Price * 100
Price Relative for Halibut = 2.33/2.01 * 100
= 115.9 (1 d.p)
Price Relative for Lobster = 3.09/3.62 * 100
= 85.4 (1 d.p)
Price Relative for Tuna = 1.97/1.87 * 100
= 105.35
= 105.4 (1 d.p)
b) The Weighted Aggregate Price Index enables us to see how prices in a particular basket has changed over a period of time. It is calculated as follows,
Weighted Price Index = (Sum of Weighted Current Price ) / ( Sum of weighted Base Price) * 100
Sum of Weighted Current Price = (75,190 * 2.33) + (83,080 * 3.09) + ( 50,779 * 1.97)
= 538,124.53
Sum of Weighted Base Price = (75,190 * 2.01) + (83,080 * 3.62) + ( 50,779 * 1.87)
= 546,838.23
Weighted Price Index = (538,124.53 / 546,838.23) *100
= 98.4
The Weighted Aggregate Price Index for the seafood catch is 98.4.
Poodle Corporation was organized on January 3, 2021. The firm was authorized to issue 83,000 shares of $5 par common stock. During 2021, Poodle had the following transactions relating to shareholders' equity: Issued 26,000 shares of common stock at $6.40 per share. Issued 23,000 shares of common stock at $9.30 per share. Reported net income of $110,000. Paid dividends of $50,000. What is total paid-in capital at the end of 2021
Answer:
$380,300
Explanation:
Paid-in-capital is the amount of cash received from the investors of the company for issuance of stocks. Paid-in-capital is recorded for both common and preferred stock separately. The value st par is recorded separately from the value excess of par of each stock type.
Issue of stock
first issuance
Common stock = 26,000 shares x $5 = $130,000
Add-in capital excess of par- Common shares = 26,000 shares x ( $6.4 - $5 )
Add-in capital excess of par- Common shares = $36,400
second issuance
Common stock = 23,000 shares x $5 = $115,000
Add-in capital excess of par- Common shares = 23,000 shares x ( $9.3 - $5 )
Add-in capital excess of par- Common shares = $98,900
Total Paid-in-capital = ($130,000 + $36,400) + ($115,000 + $98,900)
Total Paid-in-capital = $166,400 + $213,900 = $380,300
To find the total paid-in capital for Poodle Corporation at the end of 2021, add the amounts received from the issuance of common stock. The total paid-in capital at the end of 2021 is $380,300.
Total Paid-In Capital Calculation:
Calculate the total paid-in capital by adding the amounts received from the issuance of common stock. $6.40 per share * 26,000 shares + $9.30 per share * 23,000 shares = Total Paid-In Capital.
Calculate the total paid-in capital: $166,400 + $213,900 = Total Paid-In Capital.
Total Paid-In Capital at the end of 2021 is $380,300.
Our Lady of Sorrows Church, a not-for-profit entity, operates a school in connection with the Church. This year members of the Church decided to construct a new wing on the school with six classrooms. The Church hired an architect and a construction supervisor. The bulk of the labor for construction was donated by Church members who were willing workers but not necessarily skilled carpenters. Materials for the construction cost $600,000 and the paid labor was $200,000. The fair value of the completed building is $2 million. When the building is completed what should be the balance in the asset account "Building" and the account "Contribution Revenue"? A. Building $800,000; Contribution Revenue $0. B. Building $800,000; Contribution Revenue $1,200,000. C. Building $2 million; Contribution Revenue $1,200,000. D. Building $2 million; Contribution Revenue $0.
Answer:
C) Building $2 million; Contribution Revenue $1,200,000.
Explanation:
Volunteer work must be recorded in the In-Kind Contributions account, which is used to record contributions received as volunteer work:
E.g.
Dr Wages and salaries - masonry 1,200,000
Cr In-kind contributions 1,200,000 (or contribution revenue)
Volunteer work does not accumulate revenue, since it must be expensed immediately against the appropriate account. The finished building must be recorded at fair value.
Keating Co. is considering disposing of equipment with a cost of $72,000 and accumulated depreciation of $50,400. Keating Co. can sell the equipment through a broker for $26,000 less 10% commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $48,000. Keating will incur repair, insurance, and property tax expenses estimated at $8,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is
a. $24,900
b. $19,920
c. $16,600
d. $11,620
Answer:
Option (c) : $16,600
Explanation:
As per the data given in the question,
For computing the net differential income we need to do following calculations which are shown below:
Sales consideration = $26,000
Commission = $26,000×10%
= $2,600
Net income = $26,000 - $2,600
= $23,400
Lease amount = $48,000
Repair, insurance, and property tax expenses = $8,000
Net income = $48,000 - $8,000
= $40,000
Income if offer of lease accepted = $40,000
Income if equipment is sold through a broker = $23,400
Net differential income from the lease alternative =$40,000 - $23,400
= $16,600
Hence, option (c) : $16,600 is correct answer.
Which one of the following statements is correct? Question 19 options: A longer payback period is preferred over a shorter payback period. The payback rule states that you should accept a project if the payback period is less than one year. The payback period ignores the time value of money. The payback rule is biased in favor of long-term projects. The payback period considers the timing and amount of all of a project's cash flows.
Answer:
The payback period ignores the time value of money.
Explanation:
This could primarily be classified to be amongst the major disadvantages of the payback period that it ignores the time value of money which is a very important business concept. In the other hand, the payback period disregards the time value of money. It is determined by counting the number of years it takes to recover the funds invested. Some analysts favor the payback method for its simplicity. Others like to use it as an additional point of reference in a capital budgeting decision framework.
The payback period does not account for what happens after payback, ignoring the overall profitability of an investment.
The correct statement here is that the payback period ignores the time value of money.
Contrary to what is obtainable in other ways of capital budgeting, the payback period is known to not have the need for the time value of money.
The time value of money can be described as the idea that the money that is at hand today has more value than the same amount of money in the future.
This is due to the potential that the money has today in terms of earnings.
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Sheldon, Inc. declared a stock dividend of 50,000 shares on a date when the company's common stock was selling for $ 18 per share. Prior to this date, Sheldon had 500,000 outstanding shares of $ 1 par value common stock. As a result of this stock dividend, Sheldon's common stock will ________, the additional paidminusin capital will ________, and the retained earnings will ________.
Answer:
As a result of this stock dividend, Sheldon's common stock will increase by $900,000, the additional paid in capital will not change, and the retained earnings will decrease by $900,000
Explanation:
Stock dividend is paying dividends by issuing additional stocks to shareholders.
In this case,50,000 shares were issued instead of paying cash dividends.
The stock dividend is financed from retained earnings and the amount involved is $900,000(50000*$18).
However,common stock would witness an increase of $900,000 by a way of credit and retained earnings would reduce by the same amount with no impact in the paid in capital in excess of par since the par value of the stock was not provided,hence it is no par value stock.
Sharon Foods Company reported the following transactions for September 2017. a) The business received a $21,000 cash contribution from the owner. It was credited to Sharon, Capital. b) The business purchased office equipment for $9,000 for which $4,000 cash was paid and the balance was put on a note payable. c) Paid insurance expense of $1,500 cash. d) Paid the September utility bill for $800 cash. e) Paid $1,600 cash for September rent. f) The business had sales of $12,000 in September. Of these sales, 40% were cash sales, and the balance was credit sales. g) The business paid $8,000 cash for office furniture. What are the total liabilities at the end of September, 2017
Answer:
The total liabilities at end of September is $5,000
Explanation:
The $21,000 received from business owner is capital which would have been credited to capital and debited to cash.
The purchase of office equipment meant that cash decreased by $4000,a credit of $4,000 and a credit of $5,000 to notes payable while the $9000 is debited to equipment account.
The insurance expense,utility bill,rent as well as the purchase of office furniture were all cash settled and had no liability impact,hence the only liability outstanding at month end is the notes payable on office equipment of $5,000
Ana was complaining about her workload before the staff meeting began. Later, when the manager announced that twelve parking spaces would be lost as a result of construction across the street, she raised her hand and said, "Then where, exactly, do you expect us to park?" The manager tried to provide some recommendations, but Ana continued to complain until the manager gave up and announced that the meeting was over.
The complete question is:
Ana was complaining about her workload before the staff meeting began. Later, when the manager announced that twelve parking spaces would be lost as a result of construction across the street, she raised her hand and said, "Then where, exactly, do you expect us to park?" The manager tried to provide some recommendations, but Ana continued to complain until the manager gave up and announced that the meeting was over.
What should Ana do to make the next meeting more effective and productive?
Answer:
Bring a positive attitude
Explanation:
In this scenario Ana was already frustrated by the excess workload she has before attending the meeting. So when the manager raised the issue of construction affecting parking spaces she expressed a negative reaction, and kept complaining until the manager gave up and announced that the meeting was over.
For the next meeting to be more productive Ana should bring a positive mindset, and consider recommendations provided by the manager.
This will result in her working collaboratively with the manager to find solutions to the parking space problem.
Quantum Company uses the highminuslow method to estimate the cost function. The information for 2017 is provided below: Machineminushours Labor Costs Highest observation of cost driver 1 comma 000 $ 32 comma 000 Lowest observation of cost driver 200 $ 16 comma 000 What is the estimated cost function for the above data? A. y = 32 comma 000 + 32X B. y = 12 comma 000 + 20X C. y = 20 comma 000 + 80X D. y = 16 comma 000 + 40X
Answer:
The correct option is B,y = 12 comma 000 + 20X
Explanation:
Total =fixed cost+(variable cost*X)
where X is quantity of items produced
Variable cost=Highest observation cost-lowest observation/highest machine hours-lowest machine hours
variable cost=$32,000-$16,000/(1000-200)=$20
Substituting the variable cost in highest activity figures,we would arrive at fixed cost
$32000=fixed cost+($20*1000)
$32000=fixed cost+$20,000
fixed cost=$32,000-$20,000=$12,000
The correct option is B,y=12,000+20X
The y stands for total cost
Segment Revenue Horizontal Analysis Starbucks Corporation reported the following geographical segment revenues for a recent and a prior fiscal year: Recent Year (in millions, rounded) Prior Year (in millions, rounded) Americas $13,293 $11,980 EMEA* 1,217 1,295 China/Asia Pacific 2,396 1,130 Channel Development** 1,731 1,546 Other 526 497 Total $19,163 $16,448 *Europe, Middle East, and Africa **Sells packaged coffee and teas globally a. Prepare a horizontal analysis of the segment data using the prior year as the base year. Round all percents to one decimal place. Enter all amounts in millions. If required, use minus sign to indicate the decreasing values.
Answer and Explanation:
The Preparation of horizontal analysis of the segment data is shown below:-
Starbucks Corporation
Horizontal analysis segment revenue statements
For years ended prior and recent
Recent Prior year/ Increase or Percentage
year Base year Reduced difference
a b c = a - b d = (c÷b) × 100
Revenue
Americas $13,293 $11,980 $1,313 11.00
Europe, Middle East,
and Africa $1,217 $1,295 -$78 -6.00
China/Asia
pacific $2,396 $1,130 $1,266 112.00
Channel
development $1,731 $1,546 $185 12.00
Other $526 $497 $29 5.80
Total $19,163 $16,448 $2,715 16.50
It can be made relevant in horizontal analysis if specific time figures are available for analysis.
Therefore to reach the Percentage difference we simply first made the difference of recent year and prior year/base year after that we divide the increase or reduced by prior year/base year and convert into percentage by multiply of 100.
Final answer:
A horizontal analysis of Starbucks' segment revenue involves calculating the change in revenue between two fiscal years and expressing this as a percentage of the prior year. The analysis shows growth in the Americas, China/Asia Pacific, Channel Development, and Other segments, and a decrease in the EMEA segment.
Explanation:
The student is performing a horizontal analysis of segment revenue data for Starbucks Corporation. The goal is to examine the changes in revenue over two fiscal years, using the prior year as a base year. To do so, one will calculate the difference in revenue for each segment between the recent year and the prior year, and then translate this difference into a percentage of the prior year's figures. Here's a breakdown of the horizontal analysis:
Americas
Recent Year: $13,293 millionPrior Year: $11,980 millionChange: $13,293m - $11,980m = $1,313mPercentage Change: ($1,313m / $11,980m) x 100 = 10.96%EMEA (Europe, Middle East, and Africa)
Recent Year: $1,217 millionPrior Year: $1,295 millionChange: $1,217m - $1,295m = -$78mPercentage Change: (-$78m / $1,295m) x 100 = -6.02%China/Asia Pacific
Recent Year: $2,396 millionPrior Year: $1,130 millionChange: $2,396m - $1,130m = $1,266mPercentage Change: ($1,266m / $1,130m) x 100 = 112.04%Channel Development
Recent Year: $1,731 millionPrior Year: $1,546 millionChange: $1,731m - $1,546m = $185mPercentage Change: ($185m / $1,546m) x 100 = 11.97%Other
Recent Year: $526 millionPrior Year: $497 millionChange: $526m - $497m = $29mPercentage Change: ($29m / $497m) x 100 = 5.84%These calculations reveal the growth or decline for each segment over the period being studied.
Mr. Bass transferred a building that had an adjusted basis to him of $300,000 and a fair market value of $500,000, to Corporation C solely in exchange for 100% of C’s only class of stock. The building was subject to a mortgage of $100,000, which C assumed for bona fide business purposes. The fair market value of the stock on the date of transfer was $550,000. What is the amount of gain to be recognized by Mr. Bass?
Answer:
$0
Explanation:
This transaction classifies as a § 351 exchange since Mr. Bass is exchanging his asset for 100% of Corporation C's stock.
§ 351 establishes that no gain or loss must be recognized when property is transferred in exchange for stock in a corporation. In order for this exchange to classify as § 351, the new stockholder must assume immediate control of the corporation as established by § 368 (c). This means that at least 80% of the stocks must be exchanged.
1. Soul Socket Inc. manufactures socket wrenches.
-For next month, the vice president of production plans on producing 4,450 wrenches per day.
-The company can produce as many as 5,000 wrenches per day, but is more likely to produce 4,500 per day.
-The demand for wrenches for the next three years is expected to average 4,250 wrenches per day.
-Fixed manufacturing costs per month total $374,000.
-The company works 22 days a month.
-Fixed manufacturing overhead is charged on a per-wrench basis.
Required: Answer a. – d. below
a. What is the theoretical fixed manufacturing overhead rate per wrench for the next month?
b. What is the practical fixed manufacturing overhead rate per wrench for the next month?
c. What is the normal fixed manufacturing overhead rate per wrench for the next month?
d. What is the master-budget fixed manufacturing overhead rate per wrench for the next month?
Answer:
a. $3.40 per wrench
b. $3.78 per wrench
c. $4 per wrench
d. $3.82 per wrench
Explanation:
a) Theoretical Fixed Manufacturing Overhead.
This is the cost associated with what the company can produce.
They can produce as much as 5,000 wrenches per day for 22 days on a budget of $374,000.
Theoretical Manufacturing Overhead is therefore,
= 374,000 / ( 5,000 * 22)
= $3.40 per wrench.
b. The Practical Fixed Overhead would be the costs to be incurred with the more likely level of production.
Company will more likely produce 4,500 wrenches a day.
Following from a,
= 374,000 / (4,500 * 22)
= 3.7778
= $3.78 per wrench.
c. The normal overhead is the cost associated when the company produces according to demand.
The demand is expected to be 4,250 wrenches for the next 3 years.
Therefore,
= 374,000 ( 4,250 * 22)
= $4 per wrench.
d. The master budget overhead rate is cost associated with the level the company Plans to produce.
Soul Socket plans to produce 4,450 wrenches a day.
Therefore,
= 374,000 (4,450 * 22)
= $3.82 per wrench.
Joslyn Company manufactures metal brackets. The estimated number of metal bracket sales for the first three months of the current year is: Month Unit Sales January 1,250 February 1,400 March 1,200 Finished goods inventory at the end of last December was 300 units. Desired ending finished goods inventory is equal to 20 percent of the next month's sales. Joslyn Company expects to sell the brackets for $20 each. How many brackets should Joslyn produce in February?
Answer:
Production= 1,240 units
Explanation:
Giving the following information:
Sales:
February= 1,250
March= 1,200
Desired ending finished goods inventory is equal to 20 percent of the next month's sales.
To determine the production required for February, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 1,250 + (1,200*0.2) - (1,250*0.2)
Production= 1,240 units
What is ecotourism? Write a short essay that includes the following information:
1. your own definition
2. definitions provided by other people and/or organizations; select the one you consider most accurate and complete
3. the main guidelines or requirements for ecotravelers
4. a statement indicating whether you think ecotourism is a good way to protect the environment; why or why not?
Explanation:
1. For me, ecotourism seeks to protect the natural resources that we have in the present so that future generations have the opportunity to take advantage of them, while promoting social, cultural and economic growth of the local population. According to other definitions, ecotourism is an environmentally responsible tourist modality. Its purpose is to visit and enjoy relatively unalterable natural areas as well as any cultural manifestation of the present or past, with the active participation of local populations. Ecotourism includes educational and interpretive content and tries to reduce negative impacts on the natural and socio-cultural environment as much as possible.
-The Ministry of Tourism in Mexico defines Ecotourism in the following way: "they are the trips that have the purpose of carrying out recreational activities of appreciation and knowledge of nature through contact with it." From another perspective, it is a tourist product aimed at those tourists who enjoy natural history, and who want to actively support and participate in the conservation of the environment.
-The environmentalist architect and international consultant of Mexican origin, Héctor Ceballos Lascuráin, popularized in 1993 when he was included in the book “Ecotourism. The Potential and the Pitfalls ”:
"Ecotourism is an environmentally responsible tourist modality, consisting of traveling to or visiting natural areas relatively undisturbed in order to enjoy, appreciate and study the natural attractions (landscape, wild flora and fauna) of said areas, as well as any cultural manifestation ( of the present and the past) that can be found there, through a process that promotes conservation, has a low negative environmental and cultural impact and fosters an active and socioeconomically beneficial involvement of local populations. ”
Ecotourism aims to achieve the preservation and maintenance of natural ecosystems; tourism plays its role as a supplier of oil economic that directly benefits local residents. Community will provide their knowledge and services to tourists and they will benefit economically.
- Ecotourism provides jobs and income to the local population.
-Provide environmental education to tourists.
-Create funds for purchase and supplies for improvement and protection of natural areas. This is beneficial to attract future tourism.
- Motivates the preservation of the environment and the creation of new or larger national parks, biosphere reserve, preservation of forests, recreation areas, beaches and natural attractions.
Third world countries are important recipients of ecotourism. In Brazil nature trips have become one of the new and more great markets of economic income of the country. In south-central Africa, the Rwanda's ecotourism is the third largest source of resources economic.
Final answer:
Ecotourism is conscious travel that conserves environments and benefits locals. It's important for economic development and environmental protection, but it requires strict adherence to sustainability to avoid greenwashing. Ecotourism can be a powerful conservation tool if managed responsibly.
Explanation:
Ecotourism refers to a form of tourism that is directed towards exotic natural environments, intended to support conservation efforts and observe wildlife. My own definition of ecotourism is the practice of visiting natural areas with the intention to learn, appreciate, and participate in conservation while striving to have minimal impact on the ecosystem. This form of tourism generates revenue for conservation, educates the traveler, and directly benefits the economic development of local communities. The International Ecotourism Society provides a more formal definition, describing ecotourism as 'responsible travel to natural areas that conserves the environment, sustains the well-being of the local people, and involves interpretation and education'. Jonathan Tourtellot's concept of geotourism complements this by emphasizing the 'stewardship of place'.
The main guidelines for ecotravelers include respecting local cultures and natural habitats, participating in conservation efforts, minimizing environmental impact, and supporting local economies. It is crucial that ecotourism maintains ethical standards and is accessible, not just to wealthy tourists but also to local residents.
In my opinion, ecotourism is an effective tool for environmental protection as it provides economic incentives to preserve natural areas, engages local communities and travelers in conservation, and fosters greater environmental awareness. However, without rigorous standards, there is a risk of greenwashing, where claims of sustainability are made without substantive actions to back them up. Therefore, the success of ecotourism as a conservation strategy depends on robust management and genuine commitment to sustainability principles.
Lois Bragg owns a small restaurant in Boston. Ms. Bragg provided her accountant with the following summary information regarding expectations for the month of June. The balance in accounts receivable as of May 31 is $56,000. Budgeted cash and credit sales for June are $145,000 and $591,000, respectively. Credit sales are made through Visa and MasterCard and are collected rapidly. Sixty five percent of credit sales is collected in the month of sale, and the remainder is collected in the following month. Ms. Bragg's suppliers do not extend credit. Consequently, she pays suppliers on the last day of the month. Cash payments for June are expected to be $710,000. Ms. Bragg has a line of credit that enables the restaurant to borrow funds on demand; however, they must be borrowed on the last day of the month. Interest is paid in cash also on the last day of the month. Ms. Bragg desires to maintain a $38,000 cash balance before the interest payment. Her annual interest rate is 10 percent. Required Compute the amount of funds Ms. Bragg needs to borrow for June. Determine the amount of interest expense the restaurant will report on the June pro forma income statement. What amount will the restaurant report as interest expense on the July pro forma income statement
Answer:
Compute the amount of funds Ms. Bragg needs to borrow for June.
$162,850Determine the amount of interest expense the restaurant will report on the June pro forma income statement.
$0, money is borrowed on June 30th there is no interest expense during JuneWhat amount will the restaurant report as interest expense on the July pro forma income statement
$1,357Explanation:
accounts receivable May 31 is $56,000.
budgeted cash sales for June $145,000
credit sales for June $591,000
65% of credit sales are collected in current month, 35% collected next month
suppliers are paid on the last day of the month
budgeted cash payments for June 30th = $710,000
cash balance $38,000
how much money does Ms. Bragg need to borrow on June 30?
total cash collections in June = $56,000 (from previous month) + $145,000 (cash sales) + $384,150 (65% of $591,000) = $585,150
payments - cash collected = $710,000 - $585,150 = $124,850
money borrowed on June 30 = $124,850 + $38,000 (desired cash balance) = $162,850
interest expense during July = $162,850 x 10% x 1/12 = $1,357