The final stockholders' equity of Quick Fix-It Corporation at the end of the year is $1,860,000, calculated by adding the net common stock ($700,000), preferred stock ($1,000,000), and retained earnings ($160,000) together.
Explanation:The stockholders' equity section of the balance sheet can be calculated as follows:
Common stock: The company sold 78,000 shares at $10 par value each, which equals $780,000. However, they bought back 4,000 shares at $20 each, meaning they paid $80,000 for this. Therefore, the net common stock is $780,000 - $80,000 = $700,000.Preferred stock: The company sold 20,000 preferred shares at a par value of $50 each, which equals $1,000,000.There was also a net income of $210,000 for the year, but a payout of $50,000 in dividends. This means an addition to Retained Earnings of $160,000 ($210,000 - $50,000).Therefore, the final stockholders' equity is the sum of the net common stock, preferred stock, and the addition to retained earnings, which equals $1,860,000 ($700,000 + $1,000,000 + $160,000).
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How to calculate the firm’s free cash flow from earnings in a levered firm?
Answer and explanation:
Levered free cash flow is said to be the cash flow remaining after the company's financial goal has been reached. It implies paying all the company's obligations such as bonds or other maturity payments. The formula for calculating the levered free cash flow is the following:
Levered free cash flow = Net Income + Depreciation + Amortization - (change in net working capital + capital expenditures + mandatory debt payments)
Final answer:
To calculate a levered firm's free cash flow from earnings, determine net income, adjust for non-cash expenses, changes in working capital, capital expenditures, and interest expenses. Then, use this figure to assess financial health or make investment valuations using DCF analysis.
Explanation:
How to Calculate Free Cash Flow from Earnings in a Levered Firm
To calculate a firm's free cash flow (FCF) from earnings, especially for a levered firm (a company that has debt), follow these general steps:
Determine the firm's net income from its income statement.Add back any non-cash expenses, such as depreciation and amortization.Subtract changes in working capital, which includes changes in accounts receivable, inventory, and accounts payable. This reflects the cash used or generated by the company's operations.Subtract any capital expenditures, which are the funds used to acquire or upgrade physical assets like property, industrial buildings, or equipment.Adjust for any interest expenses and taxes because the firm is levered and thus pays interest on its debt, which affects its cash flow. Calculating the tax shield on interest can also be relevant, as interest payments are tax-deductible.After adjusting for these items, you will arrive at the firm's free cash flow. This FCF can then be used to assess the company's financial health, make investment decisions, or value the company using discounted cash flow (DCF) analysis. In DCF, future cash flows are estimated and discounted back to the present value using a discount rate, reflecting the investment's risk and the time value of money. The discounted present value gives the firm an idea about the profitability of investments.
It is important to remember that each firm may have different financial structures, so the approach could vary based on specific circumstances. Moreover, using online calculators for Net Present Value (NPV) can assist in evaluating future cash flows, which is helpful in decision-making processes.
Regarding the decision whether a firm should make an investment that provides a 6% rate of return without borrowing money, consider the company's cost of capital. If the cost of capital is lower than the return on investment, it could be advantageous for the firm to proceed with the investment.
An interior solution to a consumer's utility maximization problem implies which of the following:A. consuming optimal amounts of all goodsB. consuming a positive amount of one good and a negative amount of the other good.C. consuming less than an optimal amount of at least one good.D. consuming negative amounts of all goods.
Answer:
The correct answer is A
Explanation:
Interior solution is the solution or a choice which is to be made through an agent and that could be characterized as an optimum which is located or situated at the tangency of two curves on the graph.
The utility maximization of the consumer states or defines that the consumer decide or take decision to allocate the incomes so that the last dollar amount which is spent on each and every product bought yields the same amount of the additional marginal utility.
Therefore, the interior solution to the utility maximization of the consumer problem states that the consumer consuming the optimal amounts of all the goods.
When the cross price elasticity between good X and other related goods is positive and very low firm X can be assumed to have?
a. minimal market power
b. moderate market power
c. a significant amount of market power
d. virtually no market power.
Answer:
c. a significant amount of market power
Explanation:
Cross price elasticity measures the responsiveness of quantity demanded of a good to the changes in price of another good.
If the cross price elascitiy is postive, the goods are subsituites.
If the cross price elasticity is negative, the goods are complementary goods.
If the cross price elasticitiy is low the firm has market power. It means that it's consumers do not change the quantity demanded when the price of the good changes
If the cross price elasticitiy is high, the market has low market power.
I hope my answer helps you.
try it! 7-1 Zenefit Corporation sold laser pointers for $11 each in 2017. Its budgeted selling price was $12 per unit. Other information related to its performance is given below: Units made and sold Variable costs Fixed costs Actual 28,000 $90,000 $55,000 Budgeted 27,500 $ 3 per unit $58,000 Calculate Zenefit’s static-budget variance for (a) revenues, (b) variable costs, (c) fixed costs, and (d) operating income.
Answer:
I have provided the answer in the attachment below.
To find the static budget variance, you simply substract the actual money spent from the budgeted money.
Remember that operating income = sales revenue - operating costs (variable costs - fixed costs).
Final answer:
Zenefit Corporation's static-budget variance is calculated by comparing actual financial performance with budgeted figures, resulting in unfavorable variances for revenues, variable costs, and operating income, and a favorable variance for fixed costs.
Explanation:
The analysis of Zenefit Corporation's static-budget variances involves comparing the actual results with the budgeted expectations. The static-budget variance for each category is calculated as follows:
Revenues: Actual revenues minus budgeted revenues equals ($11 × 28,000) - ($12 × 27,500) = $308,000 - $330,000 = -$22,000 (unfavorable).Variable Costs: Actual variable costs minus budgeted variable costs equals $90,000 - ($3 × 27,500) = $90,000 - $82,500 = $7,500 (unfavorable).Fixed Costs: Actual fixed costs minus budgeted fixed costs equals $55,000 - $58,000 = -$3,000 (favorable).Operating Income: The actual operating income is actual revenues minus total actual costs (variable and fixed). The budgeted operating income is budgeted revenues minus total budgeted costs (variable and fixed). Thus, the variance for operating income is ($308,000 - $90,000 - $55,000) - ($330,000 - $82,500 - $58,000) = $163,000 - $189,500 = -$26,500 (unfavorable).Which of the following activities is part of the "planning" function of management?
a. Assigning a particular worker to do a specific task
b. Looking at market forecasts to identify future business opportunities and challenges
c. Praising a sales representative who has far exceeded her monthly sales objectives
d. Conducting a job interview with a potential new employee
Answer: Option D
Explanation: Planning involves looking forward to potential possible outcomes to be taken. It's a preliminary move. It is indeed a systemic process that decides where what and who should do a particular job. Planning refers to a comprehensive framework for potential action classes.
Planning thus took into account the institution's current & potential personnel and material capital in order to achieve successful alignment, commitment & total adjustment.
This is the basic business feature that involves the development of any or even more comprehensive strategies with the existing resources to reach an appropriate balance of requirements or expectations.
Thus, from the above we can conclude that the correct option is d.
Considering the available options, the activity that is part of the "planning" function of management is "Looking at market forecasts to identify future business opportunities and challenges."
What is Planning in Management?Planning is how the company or organization defines and determines the goals, future direction, missions, and methods including opportunities and weaknesses to achieve those targets.
Planning is part of the management functions, and it ensures that the business goals are defined and met, so there is a direction or path to follow.
Therefore, looking at market forecasts to identify future business opportunities and challenges is an example of a planning process.
Hence, in this case, it is concluded that the correct answer is option C.
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Kate has a 20-square-foot plot of land in her backyard that she uses to grow tomatoes and lettuce. Every square foot of land can produce either 5 tomatoes or 3 heads of lettuce each summer. Her neighbor, Jim, has a 30- square-foot plot of land that has a lot more shade than Kate's, which is better for lettuce but worse for tomatoes. Every square foot of Jim's land can produce either 3 tomatoes or 6 heads of lettuce.
a) How many tomatoes and heads of lettuce will Kate produce?
b) How many tomatoes and heads of lettuce will Jim produce?
Answer:
a) Kate will produce 100 tomatoes and 0 heads of lettuce.
b) Jim will produce 0 tomatoes and 180 heads of lettuce.
Explanation:
As climatic conditions are better for tomatoes at Kate's plot of land, she should choose to grow those because of better quality. Also, production of lettuce per square-foot is lower at Kate's land compared to Jim's (3 heads vs 6 heads of lettuce). So on 20-squire-foot Kate could produce 60 heads and Jim - 120 heads of lettuce (2x more). So Kate should avoid production of lettuce due to quality and quantity.
Same explanation can be applied to Jim's production of tomatoes. If Jim produce tomatoes, he will only have quantity of 60 tomatoes at 20-square-foot plot, compare to Kate's 100 tomatoes. So he should avoid production of tomatoes.
Answer: dedserwgergeeq
Explanation:
The company budgeted for production of 6,400 units in October, but actual production was 6,500 units. The company used 610 direct labor-hours to produce this output. The actual direct labor rate was $21.80 per hour. The labor efficiency variance for October is:
Answer:
Labor efficiency variance = $218 favorable.
Explanation:
We know,
Labor efficiency variance = (Standard Hour - Actual hour) × Standard rate
Given,
Standard labor hour = (Actual labor hour ÷ actual production) × budgeted production
Standard labor hour = (610 hours ÷ 6,500 units) × 6,400 units
Standard labor hour = 600 hours
Actual hour = 610 hours
Standard rate = $21.80 per hour
Therefore, Labor efficiency variance = (610 - 600) hours × $21.80
Labor efficiency variance = $218 favorable.
JackITs has 5.0 million shares of common stock outstanding, 1.0 million shares of preferred stock outstanding, and 20.00 thousand bonds. If the common shares are selling for $28.00 per share, the preferred share are selling for $13.50 per share, and the bonds are selling for 98.00 percent of par, what would be the weight used for equity in the computation of JackIT's WACC?
Answer:
80.88; 7.80; 11.32
Explanation:
Common Stock:
Value = Number × Price
= 5,000,000 × $28
= $140,000,000
Preferred Stock:
Value = Number × Price
= 1,000,000 × $13.50
= $13,500,000
Bonds:
Value = Number × Price
= 20,000 × $980
= $19,600,000
Total value = $140,000,000+ $13,500,000 + $19,600,000
= 173,100,000
Weight of common stock = Respective Value ÷ Total Value
= $140,000,000 ÷ 173,100,000
= 80.88
Weight of preferred stock = Respective Value ÷ Total Value
= $13,500,000 ÷ 173,100,000
= 7.80
Weight of Bonds = Respective Value ÷ Total Value
= $19,600,000 ÷ 173,100,000
= 11.32
which of these is a reason why outsourcing continues to expand?
(A) more reliable transportation
(B) increased technological expertise
(C) rapid development and deployment of advancements in telecommunications and computers
(D) more expensive transportation
Answer:
The correct answer is letter "C": rapid development and deployment of advancements in automation.
Explanation:
Outsourcing is a business approach in which companies take their activities to different countries, rather than increasing their scale in the area where their headquarters are trying to reduce costs or meet regulations. This activity affects workers in the original country but is primarily a benefit to the countries in which companies start new operations.
Advances in software deployment, telecommunications and computers have improved outsourcing as it allows for the decentralization of information regardless of where organizations are involved and needs fewer qualified staff because most of the operations are conducted with the use of computers rather than employee expertise.
The increase in technological expertise and specialization is the reason why outsourcing continues to expand.
Outsourcing refers to the process where company passes its responsibility to a specialist company with the main aim of saving cost, improves service and efficiency etc
The method of Outsourcing are been considered by companies because advancement in technological in mass production and other purpose.
The technological specialization and its continued advancement is the reason why outsourcing is a viable operation and constantly expanding.
Therefore, the Option B is correct.
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You are creating a portfolio of two stocks. The first one has a standard deviation of 20% and the second one has a standard deviation of 37%. The correlation coefficient between the returns of the two is 0.1. You will invest 43% of the portfolio in the first stock and the rest in the second stock. What will be the standard deviation of this portfolio's returns? Answer in percent, rounded to two decimal places (e.g., 4.32%=4.32).
Answer:
23.56
Explanation:
Standard deviation of the first stock (σ1) = 20%
Standard deviation of the second stock (σ2) = 37%
The correlation coefficient between the returns (ρ) = 0.1.
Proportion invested in the first stock (W1) = 43%
Proportion invested in the second stock (W2) = 57%
The standard deviation of a two-stock portfolio's returns is given by
[tex]\sigma_{portfolio} = \sqrt{w_1^2\sigma_1^2+w_2^2\sigma_2^2+2w_1w_2\rho\sigma_1\sigma_2} \\\sigma_{portfolio} = \sqrt{0.43^2*0.2^2+0.57^2*0.37^2+2*0.43*0.57*0.1*0.2*0.37}\\\sigma_{portfolio} =0.2356=23.56\%[/tex]
The standard deviation of this portfolio's returns IS 23.56%
A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a corporation is organized for the purpose of making a profit. corporation is subject to more federal and state government regulations. corporation is an accounting economic entity. corporation's temporary accounts are closed at the end of the accounting period.
Answer:
Option B - A corporation is subject to more federal and state government regulations
Explanation:
Option A is incorrect because not only corporation is organized to make profits but also sole proprietorship business or partnership businesses want to make profits. Perhaps, all types of businesses want to make a profit.
Option C is also wrong because all types of entities are accounting economic entities as they have profits and losses.
Option D is incorrect as in each types of organizations, temporary accounts should be closed.
Option B is correct because corporation needs more regulations while sole proprietorship businesses are easy to form. Although partnership businesses are slightly hard to establish, those businesses do not require complicated federal and state authorization.
A corporation is distinct from a sole proprietorship or a partnership due to its legal setup, financial structure, stricter government regulations it has to follow, and the procedure of closing temporary accounts at the end of each accounting period.
Explanation:The primary distinction between a corporation, a sole proprietorship, or a partnership lies in their legal and financial structures. A corporation is a separate legal entity from its owners and is subject to more federal and state government regulations. It allows for liability protection for its owners, meaning the owners' personal assets are not at risk if the corporation fails or incurs debts. This is not the case with a sole proprietorship or a partnership.
In the case of a corporation, the business's temporary accounts are closed at the end of each accounting period to summarize a period's revenues, expenses, gains, and losses. This is not typically a characteristic found with a sole proprietorship or a partnership. Therefore, their operations are considerably different from each other.
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SilverFinn makes high-end jewelry for women. This jewelry is manufactured and patented in Italy. Manufacturers in Argentina create counterfeit SilverFinn jewelry and sell it in local markets at nearly similar prices to the original SilverFinn jewelry sold in other countries. This lack of intellectual property protection is like to result ina. reduction in export opportunities from Argentina to other countries.b. reduction in the export opportunities for SilverFinn jewelry in Argentina.c. expansion of the world market for SilverFinn products.d. reduction in import of all Argentinian goods.e. increase in the prices of jewelry produced by SilverFinn.
Answer:
b. reduction in the export opportunities for SilverFinn jewelry in Argentina
Explanation:
As there is a secondary market which erodes the trademark value of SilverFinn with counterfeit products; SilverFinn will find harder to export into Argentina as local market would prefer the local option as it is cheaper and will import other jewelry which do not have an alternative counterfeit market.
Suppose that a small county is considering adding a guard rail to a dangerous curve by a river. The guard rail will cost $70,000. The average damage done to vehicles that slide off the road at the curve is $10,000. It is expected that the guard rail will prevent 5 vehicles from sliding off the road during its usable life. What should the county do?
Answer:
do not Install guard rail because the guard rail cost exceed the expected benefits
Explanation:
given data
guard rail cost = $70,000
average damage = $10,000
guard rail prevent = 5 vehicles
to find out
What should the county do
solution
we know here guard rail cost is $70,000
but expected benefits = $10,000 × 5
expected benefits = $50,000
so we can say that do not Install guard rail because the guard rail cost exceed the expected benefits
Gundy Company expects to produce 1,252,800 units of Product XX in 2017. Monthly production is expected to range from 72,200 to 110,400 units. Budgeted variable manufacturing costs per unit are: direct materials $3, direct labor $6, and overhead $11. Budgeted fixed manufacturing costs per unit for depreciation are $5 and for supervision are $1.In March 2017, the company incurs the following costs in producing 91,300 units: direct materials $303,900, direct labor $541,800, and variable overhead $1,010,300. Actual fixed costs were equal to budgeted fixed costs.Prepare a flexible budget report for March. (List variable costs before fixed costs.)
Answer:
See below.
Explanation:
Flexible budget is when per unit budgeted costs are reconciled with actual production volume.
Flexed Budget Costs
Direct Materials (91,300 * 3) $273,900
Direct Labor (91,300 * 6) $547,800
Overheads (91,300 * 11) $1,004,300
Manufacturing (91,300 * 5) $456,500
Supervision (91,300 * 1) $91,300
Total flexed Costs Budgeted $2,373,800
Hope that helps.
Ben bought a local artist's painting for $2,100. Several years later. Ben sold it for $2,700. The year Ben sold the painting. He was in the 15% tax bracket. Ben's gain on the picture will be taxed at:
A-15%
B-25%
C_28%
D-33%
Now suppose that the government immediately pursues an accommodative policy by increasing government purchases in response to the short-run economic impact of the higher oil prices. In the long run, when the government pursues accommodative policy, the output in the economy will be $ billion and the price level will be
In response to an inflationary gap, the government can pursue an accommodative policy, which might include increasing government purchases, increasing taxes, or reducing expenditure. This would help shift the aggregate expenditure line, leading to a new equilibrium. In the long run, such actions can help the economy reach potential GDP without inflationary pressures.
Explanation:The question is about the effects of an accommodative policy in response to sharply increasing oil prices. Most likely, the economy is currently below its potential GDP, creating a gap caused by inflation.
In the long run, if the government increases purchases as part of an accommodative policy to address this inflationary gap, the economy's output may rise towards potential GDP, mitigating inflationary pressure. This can be achieved by shifting the aggregate expenditure line to a lower point (for example from AE to AE₁ in the provided figures), resulting in a new equilibrium point.
Such an accommodative policy approach is inspired by Keynesian economics. If the government either increases taxes on consumers or firms, or reduces government expenditure, this will also lead to a downward shift in aggregate spending, allowing the economy to operate at potential GDP without inflationary pressures.
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Applying the time-period concept
Consider the following situations:
a. Business receives $2,000 on January 1 for 10-month service contract for the period January 1 through October 31.
b. Total salary for all employees is $3,000 per month. Employees are paid on the 1st and 15th of the month.
c. Work performed but not yet billed to customers for the month is $900.
d. The company pays interest on its $10,000, 6% note payable of $50 on the first day of each month.
Requirement
1. Assume the company records adjusting entries monthly. Calculate the amount of each adjustment
Answer:
a) $200
b) $3,000
c) $900
d) $50
Explanation:
The amount of each adjustment will be as follows
a) Business receives $2,000 on January 1 for 10-month service contract for the period January 1 through October 31.
Thus,
Monthly amount
= Total amount ÷ Duration from January 1 through October 31.
= $2,000 ÷ 10
= $200
b) Total salary for all employees is $3,000 per month. Employees are paid on the 1st and 15th of the month.
since the salary is paid per month it will be remain $3,000 after adjusting
c) The bill for the customer for the month is $900
d) The interest payable will remain same as $50 is paid each month
Final answer:
The monthly adjustments for each situation are: (a) $200 in revenue for the service contract, (b) no adjustment if salary payments align with the statement period, (c) $900 in revenue for unbilled services, and (d) no adjustment if interest payments align with the statement period.
Explanation:
Applying the time-period concept in accounting involves recognizing revenue and expenses in the period they are incurred, regardless of when the cash transactions occur. Let's calculate the monthly adjustment amounts for each situation:
a. For the 10-month service contract received in advance, the revenue is earned evenly over the contract period (January 1 through October 31). Therefore, the monthly adjusted revenue is $2,000 / 10 months = $200 per month.b. Salary expenses accrue daily, but since employees are paid twice a month, no adjustment is necessary if financial statements are prepared after the payments on the 1st and 15th. If statements are prepared at a different time, adjustment for accrued salaries would be necessary for the days since the last payment.c. Work performed but not yet billed is $900. This amount should be recorded as revenue in the current period since the service has been provided, even though the cash hasn't been received yet.d. The interest on the note payable amounts to $10,000 * 6% annually. Monthly interest is ($10,000 * 0.06) / 12 = $50. This interest expense is already paid on the first day of each month, so no adjustment is required unless statements are prepared on a different date.Wildhorse Beverage Company reported the following items in the most recent year. Net income $43,400 Dividends paid 5,210 Increase in accounts receivable 11,440 Increase in accounts payable 8,490 Purchase of equipment (capital expenditure) 8,720 Depreciation expense 5,490 Issue of notes payable 24,020 Compute net cash provided by operating activities, the net change in cash during the year.
Answer:
Net cash provided by operating activities is $45,940
Net change in cash during the year is $56,030
Explanation:
Net cash provided by operating activities = Net income $43,400 + Depreciation expense 5,490 - Increase in accounts receivable 11,440 + Increase in accounts payable 8,490 = $45,940
Net change in cash during the year = Net cash provided by operating activities $45,940 - Dividends paid 5,210 - Purchase of equipment (capital expenditure) 8,720 + Issue of notes payable 24,020 = $56,030
Novak Co. uses the net method to account for cash discounts. On June 1, 2020, it made sales of $52,500 with terms 3/15, n/45. On June 12, 2020, Novak received full payment for the June 1 sale. Prepare the required journal entries for Novak Co. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer:
Explanation:
The journal entries are shown below:
On 1 June 2020
Accounts receivable A/c Dr $50,925
To Sales revenue $50,925
(Being goods are sold on credit)
On July 12 2020
Cash A/c Dr $50,925
To Accounts receivable A/c $50,925
(Being cash received is recorded)
The computation is shown below:
= Sales amount - discount
= $52,500 - $1,575
= $50,925
And, The discount = Sales amount × discount rate
= $52,500 × 3%
= $1,575
You are using earned value analysis to track your project's progress. In your project, earned value is higher than planned value and actual value. That means the project is _____ schedule and _____ budget.Select an answer:A. behind; underB. ahead of; underC. ahead of: overD. behind; over
Answer:
Ahead of schedule and under the budget.
Explanation:
Earned value analysis (EVA) or Earned value management (EVM) is the technique used to track project status and evaluate the project´s progress report. These analysis been on camparing the earned value with actual cost and planned value.
Planned value is the value which is approved for the project to be completed in a given period of time. Earned value is compared with planned value to check schedule variance of project.
Actual value or cost is the cost that is spent on project while working on it till date. Earned value is compared with Actual value to check cost variance of project.
Earned value is the value of work done on project till date. It show the value of project in term of schedule and cost.
______________ did pioneering work on National Income Accounting at the NBER This was very important along with Wesley Mitchell's study of the Business Cycle and Milton Friedman's research on the demand for money..
A. Adam Smith
B. Joseph Schumpeter
C. Torstein Veblen
D. Simon Kuznets
Answer:
D. Simon Kuznets
Explanation:
Simon (Smith) Kuznets was born April 30, 1901 in Pinsk, Russian Empire (now Belarus), he was a Russian American economist and statistician and a 1971 Nobel Prize winner in Economics. In his work, he stressed the importance of making multiple observations, the limitation of simple models based on a single phase of historical experience, and the complexity of underlying economic data. According to Kuznets, in order for economic data to provide a healthy model, they should include information on the population structure, the nature of labor, the state structure, trade and markets. suggested. It also examines the cyclical changes in growth rates today called Kuznets cycles and their links to key factors such as population.
The National Bureau of Economic Research, founded in 1920, is a private, non-profit, non-partisan research organization designed to foster a deeper understanding of how the economy works. NBER seeks to conduct and disseminate objective economic research among government officials, business professionals, and the academic community. Over the years, the NBER research program has embraced a wide range of issues that our society faces. Early research focused on the overall economy, examining in detail the business cycle and long-term economic growth. Simon Kuznets’s pioneering work on national income accounting, Wesley Mitchell’s influential business cycle study, and Milton Friedman’s study of money demand and the determinants of consumer spending were among the first studies conducted by NBER.
In 1931, at the direction of Mitchell, Kuznets claimed responsibility for NBER's work on U.S. national income accounts. In 1934, the United States national income was estimated for the period 1929–1932; in addition, it was extended until 1919–1938, and then until 1869. Although Kuznets was not the first economist to try this, his work was so comprehensive and thorough that it set the standard in this area.
Kuznets managed to solve many problems, starting from a lack of information sources and bias estimates, and ending with the development of a theoretical concept of national income. Kuznets achieved high precision calculations. His work allowed us to analyze the structure of national income and identify for a detailed study a number of specific problems of the national economy. Improved methods for calculating national income and related indicators have become classics and formed the basis of the modern system of national accounts. After analyzing the distribution of income between different social groups, Kuznets hypothesized that in countries in the early stages of economic development, income inequality primarily increases, but as the national economy grows, it tends to decrease. This was Kuznets curve of “An empirical concept".
A newsvendor orders the quantity that maximizes expected profit for two products, X and Y. The critical ratio for both products is .8. The demand forecast for both products is 9000 units and both are normally distributed. Product X has more uncertain demand in the sense that it has the larger standard deviation. Of which of the two products does the newsvendor order more? ______________
A. Product X because it has less certain demand.
B. Product Y because it has more certain demand.
C. The order quantities are the same because they have the same critical ratio.
D. More information is needed to determine which has the higher order quantity.
Answer:
Correct answer is (A)
Explanation:
Product X because it has less certain demand.
Product X has a higher standard deviation of demand, its optimal order quantity is greater given the same mean and critical ratio.
A price ceiling above $25 per box will not prevent the market from reaching equilibrium.
A. True
B. False
How does a project charter support the project manager in getting things for the project from other people?
Answer: A project charter contains:
Project manager assigned, his responsibility and authorization level. Project Objectives Project justification. Project general description. High level requirements High level risks. Summary of the most important milestones in the schedule. Budget Summary List of Stakeholders or stakeholders of the Project. Requirements for project approval. Name and level of authorization of the Sponsor or the person authorizing the Project Charter.The important thing with the generation of this document is that there is a formal record of the initiation, limits and completion of the project being of great importance for its success.
In this way, with all this information established with security, it allows the manager to obtain funds from third parties for the realization of the project.
Answer:
by communicating the project manager's authority for the project
Carlos Naturals manufactures bulk quantities of cleaning fluids. The company currently sells 700 containers a month at a sales price of $24 per unit. The addition of a new disinfectant will result in a sales price of $26 per unit for the improved product. It would cost a total of $4,000 per month to make the alteration. Operating income would ________.
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The company currently sells 700 containers a month at a sales price of $24 per unit. The addition of a new disinfectant will result in a sales price of $26 per unit for the improved product. It would cost a total of $4,000 per month to alter.
First, we need to calculate the current sales level:
Sales= 700*24= $16,800
Now, we can calculate the new income:
Sales= 700*26 - 4,000= $14,200
It is more convenient to not apply the disinfectant.
Tripp Corporation is planning to borrow $800,000 from its bank to pay one of its suppliers. The bank requires a compensating balance of 10%. Since Tripp currently holds no funds at the lending bank, it has borrowed enough to cover for the compensating balance as well. The amount that Tripp will pay its supplier is:
Answer:
$720,000
Explanation:
Data provided in the question:
Amount Tripp Corporation is planning to borrow = $800,000
Compensating balance required by the bank = 10%
Now,
Since out of the borrowed amount 10% is Compensating balance required by the bank
Therefore only 90% of the balance is available for the Tripp corporation to pay one of its suppliers
Thus,
Amount Tripp will pay its supplier will be
= 90% of the Amount Tripp Corporation is planning to borrow
= 0.90 × $800,000
= $720,000
During 2017 sales on account were $866000 and collections on account were $522000. Also during 2017 the company wrote off $42500 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $329000. The change in the cash realizable value from the balance at 12/31/16 to 12/31/17 was a
Answer:
There is a change of $27,500 (decrease)
Explanation:
Cash realizable value is the amount of money that the company expects to receive from their accounts receivable after deducting all uncollectible accounts.
First, we must compute the change in gross accounts receivable from the transactions happened during the year.
Sales on account less collections less write-offs = change in Gross accounts receivable.
$866,000 - ($522,000 + $42,500) = $301,500 (increase in gross accounts receivable)
Finally, we can now compute the change in cash realization value by deducting uncollectible accounts to gross accounts receivable.
$301,500 - $329,000 = ($27,500)
Applying the direct write-off method to account for uncollectibles Shawna Valley is an attorney in Los Angeles. Valley uses the direct write-off method to account for uncollectible receivables. At April 30, 2018, Valley’s accounts receivable totaled $19,000. During May, she earned revenue of $22,000 on account and collected $15,000 on account. She also wrote off uncollectible receivables of $1,100 on May 31, 2018.
Answer:
The question is:
a. Journalize Valley's written off of the uncollectible receivables
b. What is the Account Receivables of Valley at May 31st 2018.
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The answer is:
a.
31 May 2018
Dr Bad Debt expenses 1,100
Cr Account Receivables 1,100
( to written off of the uncollectible receivables)
b.
The balance of Account Receivables as at 31 May 2018: $24,900
Explanation:
a. Because direct written-off method is applied, the uncollectible amount is only recorded when it incurred rather than when it is foreseen. Bad debt expenses is debited and an offsetting credit is recorded straight into Account Receivables account ( instead of Provision for Uncollectible account).
b. The balance at end of May is calculated as:
Ending balance of April + Credit sales in May - Collection of credit sales in May - Uncollectibale amount recorded in May = 19,000 + 22,000 - 15,000 - 1,100 = $24,900.
The direct write-off method charges uncollectible accounts receivable directly to the expense account when deemed uncollectible. For Shawna Valley, a bad debt expense of $1,100 was recorded and her accounts receivable decreased by this same amount at the end of May 2018.
Explanation:The direct write-off method is an accounting practice used by businesses to deal directly with uncollectible accounts receivables. When a company determines that a specific account is uncollectible, the amount is charged directly to the expense account as a bad debt expense, which in turn reduces net income. The direct write-off method does not conform to the matching principle of accounting as expenses are not matched with the revenue generated in the same period.
In Shawna Valley's case, at the start of May 2018, her accounts receivable was $19,000. During May, she earned $22,000 in revenue on account and collected $15,000 in cash from accounts receivable. At the end of May, Valley wrote off $1,100 as uncollectible. The journal entry to reflect the write-off would be to debit Bad Debt Expense for $1,100 and credit Accounts Receivable for $1,100, thus directly reducing the accounts receivable balance.
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Debt service funds may be sued to account for all of the following except:
A) Repayment of debt principal
B) Lease payments under capital leases
C) Amortization of premiums on bonds payable
D) The proceeds of refunding bond issues
Answer: C) Amortization of premiums on bonds payable
Explanation:
A debt service fund is a cash reserve that is used to pay for interest and principal payments on some types of debt. Debt service funds may be sued to account for repayment of debts, the proceeds of refunding bond issues and also lease payment under capital leases but may not account for amortization of premiums on bond payable.
Estimating the Implied End-of-Year Share Price Assume that a company’s beginning-of-period price is $14 per common share, its dividends are $1 per share, and its expected cost of equity capital is 10%. What is the expected end-of-period price per common share? Round answer to two decimal places. $Answer
Answer:
expected end-of-period price per share is $14.40
Explanation:
Beginning of period price = $14
Dividend per share = $1
Cost of Equity Capital = 10%
Cost of Equity Capital:
= (End of period price + Dividend per share - Beginning of period price) ÷ Beginning of period price
10% = (End of period price + $1 - $14) ÷ $14
$1.40 = End of period price - $13
End of period price = $14.40
So, expected end-of-period price per share is $14.40