Answer:
D1 = $4.085
D2 = $4.46
D3 = $4.86
D4 = $5.01
D5 = $5.16
Explanation:
As per the data given in the question,
DO = $3.75
Dividend expected to grow = 9%
Dividend grow later = 4%
D1 = DO(1+ Dividend1) = $3.75(1+9%)
=$3.75(1.09)
=$4.085
D2 = DO(1+ Dividend1 )( 1 + Dividend2)
= $3.75(1+9%)(1+9%)
= $4.46
D3 = DO(1+Dividend1)(1+Dividend2)(1+Dividend3)
= $3.75(1+9%)(1+9%)(1+9%)
= $4.86
D4 = DO(1+Dividend1)(1+Dividend2)(1+Dividend3)(1+Dividend later)
= $3.75(1+9%)(1+9%)(1+9%)(1+3%)
= $5.01
D5 = DO(1+Dividend1)(1+Dividend2)(1+Dividend3)(1+Dividend later)(1+Dividend later)
= $3.75(1+9%)(1+9%)(1+9%)(1+3%)(1+3%)
= $5.16
Huskie Manufacturing has two major product lines, Black and Red. Income statements for the two product lines follow: Black Red Revenues $500,000 $400,000 Variable costs 300,000 150,000 Product line fixed costs 130,000 100,000 Allocated corporate fixed costs 120,000 90,000 Operating income (loss) $(50,000) $60,000 If the Black product line were dropped, all of its product line fixed costs could be avoided. Should the Black product line be dropped, and why
Answer:
Black product line should not be dropped.
If the product line is dropped, this would reduce the Huskie's entire profit by $70,000.
Explanation:
To determine the the impact of dropping the Black product line, we will consider the relevant cash flows associated with decision. These include;
$
Lost contribution from dropping the product
(500,000 -300,000) (200,000)
Savings in line fixed cost 130,000
Net contribution lost (70,000)
Going by the above analysis, it is obvious that Product line contributes $70,000 toward the recovering of the allocated corporate fixed cost of 210,000 i.e. (120,000 +90,000).
Therefore, if the product kine is dropped, this would reduce the Huskie's entire profit by $70,000.
Black product line should not be dropped.
Ayayai Corp. lends Martinez industries $48000 on August 1, 2022, accepting a 9-month, 6% interest note. If Ayayai Corp. accrued interest at its December 31, 2022 year-end, what entry must it make to record the collection of the note and interest at its maturity date
To record the collection of the note and interest at its maturity, Ayayai Corp. first must calculate and record the accrued interest at the year-end, and then upon maturity, record the collection of the total amount received and credit the Notes Receivable and Interest Revenue.
Explanation:The first step is to calculate the accrued interest on December 31, 2022. The note was issued on August 1, so the time period until December 31 is 5 months. To calculate the accrued interest, use the formula principal x interest rate x time (in years).
For our case: $48000 x 0.06 x (5/12) = $1200. So, Ayayai Corp. must record an accrual of $1,200 in interest receivable on December 31, 2022. This is done with a debit to Interest Receivable and a credit to Interest Revenue.
When the note matures 9 months from August 1, which will be in May 2023, both the principal and the full interest are due. The interest for 9 months would be $48000 * 0.06 * (9/12) = $2160. Thus, upon collection, Ayayai would debit Cash for the total amount received (principal + full interest), debit Interest Receivable for $1200, credit Notes Receivable for the principal amount, and credit Interest Revenue for the remaining $960.
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Pacific Packaging's ROE last year was only 2%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 45%, which will result in annual interest charges of $175,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $535,000 on sales of $5,000,000, and it expects to have a total assets turnover ratio of 2.1. Under these conditions, the tax rate will be 40%. If the changes are made, what will be the company's return on equity
Answer:
16.511%
Explanation:
According to the scenario, computation of the given data are as follow:-
For computing the return on equity we need to do following calculation
Net Income = (EBIT - Interest Rate) × (1 -Tax Rate)
= ($535,000 - $175,000) × (1 - 40%)
= $360,000 × 60%
= $216,000
Profit Margin = Net Income ÷ Total Sales
= $216,000 ÷ $5,000,000
= 0.0432 or 4.32%
Assets turnover ratio = 2.1
Debt to capital ratio = 45% or 0.45
Equity Multiplier = 1 ÷ (1 - 0.45) = 1.82
As we know that
Return on Equity = Equity Multiplier × Profit Margin × Assets Turnover
= 1.82 × 4.32% × 2.1
= 16.511%
According to the analysis, the company Return on equity is 16.511%
Final answer:
The new return on equity (ROE) for Pacific Packaging after the proposed changes would increase to 15.37%. This is calculated by first determining the net income after interest and taxes, then finding the shareholder's equity from the total assets and the specified debt-to-capital ratio, and finally dividing the net income by shareholder's equity.
Explanation:
To calculate Pacific Packaging's new return on equity (ROE) assuming the changes are made, we can use the following formula:
Net income = EBIT - Interest charges - TaxesROE = (Net income) / (Shareholder's equity)First, calculate the net income:
EBIT: $535,000Annual interest charges: $175,000Tax rate: 40%Net income = $535,000 - $175,000 - (($535,000 - $175,000) * 40%)Net income = $216,000
Next, to find the shareholder's equity, we use the total assets turnover ratio and the sales figure:
Total assets turnover ratio = Sales / Total assets2.1 = $5,000,000 / Total assetsTotal assets = $5,000,000 / 2.1Total assets = $2,380,952.38 (which equals total invested capital since there's no preferred stock)Debt-to-capital ratio = Debt / (Debt + Shareholder's equity)0.45 = Debt / ($2,380,952.38 + Debt)Debt = $975,609.756Shareholder's equity = $2,380,952.38 - DebtShareholder's equity = $1,405,342.62Finally, we calculate the new ROE:
ROE = $216,000 / $1,405,342.62ROE = 15.37%
Hence, if Pacific Packaging implements the new operating plan, its ROE would increase to 15.37%.
Jan is an average salesperson. She tends to make her sales quota four out of every five months. Last month she closed the largest sale that her company has ever made in its history. Even though there is no indication that she is now an exceptional salesperson, her supervisor ranked her as one. This is an example of how a ____ error can influence a performance appraisal.
Answer:
RECENCY
Explanation:
In simple words, Recency failure or error refers to the inaccuracy or mistake in performance assessment or work interview, induced by the dependence of the assessor or even the moderator on the actions of the worker or the candidate's most current instances. Recency discrimination arises when supervisors assess an individual on the basis of their latest results-ignoring the complete picture.
Champs Sports Bar in State College, PA has decided to perform a total cost analysis on vodka suppliers. Consumption is currently 6,000 bottles per year. Demand is predicted to stay at that level for the next few years. The current supplier, Byron's, charges $9.50 per bottle and packs 288 bottles in a crate. The cost to ship the crate is $15. Another potential source of vodka is Pancho. Pancho charges $9.00 per bottle and ships 100 bottles in a crate at $20 per crate. Assume that a partial crate may be purchased. What is the total annual cost to supply vodka from the current supplier
Answer:
Annual total cost = $55,200
Explanation:
As per the data given in the question, computation are as follows:
Consumption = 6,000 bottles
Cost per bottle = $9
Cost = $9 × 6,000 bottles
= $54,000
Number of crates = 6,000 ÷ 100
= 60 crates
Cost per crate = $20
Total crate cost = $20 × 60 crates
=$1,200
Hence, Annual total cost = $54,000 + $1,200
= $55,200
For a project, an initial cash outlay of $1.4 million is made. In year 1 the expected annual cash flow is $900,000, years 2-5 the expected annual cash flow is $1,000,000 and in year 6 the expected annual cash flow is $1.3 million. A cost of capital of 15% is used. The IRR (internal rate of return) is ________. A. 25.5% B. 12.5% C. 13.5% D. 65.8% E. 40.0%
Answer:
D. 65.8%
Explanation:
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
IRR can be calculated using a financial calculator:
Cash flow in year zero = $-1.4 million
Cash flow in year one = $900,000
Cash flow each year from year two to five =$1,000,000
Cash flow in year 6 = $1.3 million.
IRR = 65.8%
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
I hope my answer helps you
You are a financial analyst for Ford Motor Company and have been asked to determine the impact of alternative depreciation methods. For your analysis, you have been asked to compare methods based on a machine that cost $106,000. The estimated useful life is 13 years and the estimated residual value is $2,000. The machine has an estimated useful life in productive output of 200,000 units. Actual output was 20,000 in Year 1 and 16,000 in Year 2. Required: 1. For years 1 and 2 only, prepare separate depreciation schedules assuming: (Do not round intermediate calculations and round your final answers to the nearest dollar amount.) a. Straight-line method.
Answer: Please refer to Explanation
Explanation:
a) Straight-line method.
For a straight line method, the depreciation is constant for all years and so is calculated as
Depreciation per year = (106,000 - 2,000) / 13 = 8,000 per year
That means both years 1 and 2 both have $8,000 as their Depreciation amounts.
The depreciation schedule has been attached to this answer.
b) Units of Production Method
Here we use the estimated useful life in productive output to find out how to depreciate machine.
The formula is,
Depreciation per unit = (106,000 - 2,000) / 200,000 = 0.52
That 0.52 is then used to depreciate per year in the following manner,
Year 1 = 20,000 x 0.52
= $10,400
Year 2 = 16,000 x 0.52
= $8,320
I have attached the schedule as well.
c) Double Declining Balance Method
This is an accelerated depreciation method that gets it's name because it goes at twice the rate of the Straight line method.
It is calculated by the following formula,
Depreciation rate = (1/13) x 2
= 15.38%
This 15.38% is then deducted from the balance per year.
Year 1 = 106,000 * 15.38%
= $16,307.69
Year 2 = (106,000 - 16,307.69) * 15.38%
= $13,798.82
Diamond Boot Factory normally sells its specialty boots for $21 a pair. An offer to buy 95 boots for $16 per pair was made by an organization hosting a national event in Norfolk. The variable cost per boot is $8, and special stitching will add another $2 per pair to the cost. Determine the differential income or loss per pair of boots from selling to the orga
Final answer:
To determine the differential income or loss per pair of boots, subtract the sum of the variable cost and special stitching cost per pair from the special order price, resulting in a $6 differential income per pair.
Explanation:
The question involves calculating the differential income or loss when selling boots at a reduced price for a special bulk order. To determine the income or loss per pair, we need to compare the revenue from the special order with the total variable costs, including the additional special stitching cost.
We are given the following information:
Normal selling price: $21 per pairSpecial order price: $16 per pairVariable cost per boot: $8Additional cost for special stitching: $2 per pairTo calculate the differential income or loss:
Calculate the total cost per pair, which is the sum of the variable cost and special stitching ($8 + $2 = $10).Subtract the total cost per pair from the special order price ($16 - $10 = $6 differential income per pair).The differential income per pair is $6, indicating a profit when accepting the special order.Sandhill Company is preparing its manufacturing overhead budget for 2020. Relevant data consist of the following. Units to be produced (by quarters): 10,700, 13,000, 14,900, 16,600. Direct labor: Time is 1.7 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.80; indirect labor $1.20; and maintenance $0.60. Fixed overhead costs per quarter: supervisory salaries $36,850; depreciation $17,010; and maintenance $13,350. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal places, e.g. 1.25. List variable expenses before fixed expense.) SANDHILL COMPANY Manufacturing Overhead Budget Quarter 1 2 3 4 Year $ $ $ $ $ $ $ $ $ $ Direct labor hours Manufacturing overhead rate per direct labor hour $
Answer :
Total manufacturing overhead = $512,824
Direct labor hours = 93,840
Manufacturing overhead rate per direct labor hour = $5.46
Explanation :
As per the data given in the question,
Sandhill company
Manufacturing Overhead Budget
Particulars Quarter
1 2 3 4 Year
Units produced 10,700 13,000 14,900 16,600 55,200
Variable cost:
Indirect material at $0.80 $14,552 $17,680 $20,264 $22,576 $75,072
indirect labor at $1.20 $21,828 $26,520 $30,396 $33,864 $112,608
Maintenance cost at $0.60 $10,914 $13,260 $15,198 $16,932 $56,304
Total variable cost $47294 $57,460 $65,858 $73,372 $243,984
Fixed cost:
Supervisors salary $36,850 $36,850 $36,850 $36,850 $147,400
Depreciation $17,010 $17,010 $17,010 $17,010 $68,040
Maintenance $13,350 $13,350 $13,350 $13,350 $53,400
Total fixed cost $67,210 $67,210 $67,210 $67,210 $268,840
Total manu. overhead $114,504 $124,670 $133,068 $140,582 $512,824
Direct labor hours 18,190 22,100 25,330 28,220 93,840
Manufacturing overhead rate per direct labor hour $5.46
Iverson Company purchased a delivery truck for $45,000 on January 1, 2018. The truck was assigned an estimated useful life of 100,000 miles and has a residual value of $10,000. The truck was driven 18,000 miles in 2018 and 22,000 miles in 2019. Compute depreciation expense using the units-of-activity method for the years 2018 and 2019. Depreciation expense for 2018$ Depreciation expense for 2019
Answer:
Depreciation expense for 2018 is $6,300.
Depreciation expense for 2019 is $7,700.
Explanation:
The unit-of-production method also known as units-of-activity method is used when the asset value closely relates to the units of output it is able to produce. It is expressed with the formula below:
(Original Cost - Salvage value) / Estimated production capacity x Units/year
At Year 2018, depreciation expense (DE) is: ($45,000 - $10,000) / 100,000 miles x 18,000 miles = $6,300/year
At Year 2019, depreciation expense (DE) is: ($45,000 - $10,000) / 100,000 miles x 22,000 miles = $7,700/year
Accumulated depreciation for 2 years is $6,300 + $7,700 = $14,000.
Note that this depreciation method results in higher depreciation charge when the asset is heavily used, at this time, it was in Year 2019.
The NBV under this method is: $45,000 - $14,000 = $31,000.
Exercise 09-8 Departmental income statement and contribution to overhead LO P3 Jansen Company reports the following for its ski department for the year 2019. All of its costs are direct, except as noted. Sales $ 605,000 Cost of goods sold 425,000 Salaries 112,000 ($15,000 is indirect) Utilities 14,000 ($3,000 is indirect) Depreciation 42,000 ($10,000 is indirect) Office expenses 20,000 (all indirect) 1. Prepare a departmental income statement for 2019. 2. & 3. Prepare a departmental contribution to overhead report for 2019. Based on these two performance reports, should Jansen eliminate the ski department?
Answer and Explanation:
The Preparation of departmental contribution to overhead report is shown below:-
Departmental income statement for 2019
Sales $605,000
Less: Cost of goods sold ($425,000)
Less: Salaries ($112,000)
Less: Utilities ($14,000 )
Less: Depreciation ($42,000 )
Less: Office Expense ($20,000)
Net income (loss) ($8,000)
The Preparation of departmental contribution to overhead report is shown below:-
Sales $605,000
Less: Direct Expenses:
Cost of goods sold ($425,000)
Salaries ($97,000)
($112,000 - $15000)
Utilities ($11,000)
($14,000 - $3000)
Depreciation ($32,000)
($42,000 - $10,000)
Contribution to overhead $40,000
The Ski department of Jansen Company is profitable with a net income of $40,000 and contributes $48,000 to overhead costs. Therefore, it may not be beneficial for Jansen to consider eliminating it.
To prepare the departmental income statement for 2019, and the departmental contribution to overhead report for 2019 for Jansen's Ski department, we first need to separate the direct and indirect costs.
Here's the departmental income statement for 2019:
Sales: $605,000Cost of Goods Sold: $425,000Gross Profit: $180,000 (Sales - COGS)Direct Salaries: $97,000 ($112,000 - $15,000)Direct Utilities: $11,000 ($14,000 - $3,000)Direct Depreciation: $32,000 ($42,000 - $10,000)Net Income: $40,000 (Gross Profit - Direct Costs)And here's the departmental contribution to overhead report for 2019:
Indirect Salaries: $15,000Indirect Utilities: $3,000Indirect Depreciation: $10,000Office Expenses: $20,000Total Contribution to Overhead: $48,000Given the net income of $40,000 and the contribution to overhead of $48,000, it may not be beneficial for Jansen to consider eliminating the ski department.
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Balance sheet and income statement data indicate the following: Bonds payable, 6% (issued 2000, due 2020) $1,200,000 Preferred 8% stock, $100 par (no change during the year) 200,000 Common stock, $50 par (no change during the year) 1,000,000 Income before income tax for year 340,000 Income tax for year 80,000 Common dividends paid 60,000 Preferred dividends paid 16,000.Based on the data presented above, what is the number of times bond interest charges were earned (round to two decimal places)?A) 5.72B) 6.83C) 4.72D) 4.83
Answer:
The correct option is A,5.72 times
Explanation:
The number of times that interest charges gives a sense of how financial stable is in its ability to pay interest on bonds as at when due.It is key consideration for prospective bondholders when assessing whether to buy bonds in a particular company
Number of times interest charges earned=net income before interest/interest
net income before interest charges=net income+interest charges
net income is $340,000
interest charges=$1,200,000*6%=$72,000
net income before interest charges=$340,000+$72,000=$412,000
number of times interest was earned=$412,000/$72,000=5.72
The risk-free rate of return is 2% and the expected return on the market portfolio is 8%. Oklahoma Oilco has a beta of 2.0 and a standard deviation of returns of 26%. Oilco's marginal tax rate is 35%. Analysts expect Oilco's net income to grow by 12% per year for the next 5 years. Using the capital asset pricing model, what is Oklahoma Oilco's cost of common stock
Answer:
The multiple choices are as follows:
18.6%
14.0%
22.8%
25.0%
The second option is the correct answer,14%
Explanation:
The capital asset pricing asset model formula for computing a firm's cost of equity according to Miller and Modgiliani is given below:
Ke=Rf+Beta*(Mr-Rf)
Rf is the risk free of 2% which is the return expected from zero risk investment such as government treasury bills.
Beta is how risky an investment in a company is compared to similar businesses operating in similar business sector of the company given as 2.0
Mr is the expected return on market portfolio which 8%
Ke=2%+2*(8%-2%)
Ke=2%+2*(6%)
Ke=2%+12%=14%
Matthew company manufactures phones in a two-department process that involve assembly and finishing. the assembly department reported the follow data for the past month:
direct materials added $336,000
direct labor 460,320
factory overhead 204,000
total costs to account for $1,000,320
units started 80,000
units completed and transferred 67,200
units not complete 12,800
units in beginning inventory 0
The partially complete units at the end of the month were 100 percent complete with respect to materials and 75 percent complete with respect to conversion costs. The unit cost of conversion costs is _______. show your work
a) $3.00
b) $6.00
c) $8.65
d) $9.00
Answer:
c) $8.65
Explanation:
Step 1 Calculate the Total Cost of Conversion
Total Cost of Conversion = Conversion Cost in Beginning Inventory + Added during the period
= 0 + 460,320 + 204,000
= $664,320
Step 2 Calculate the Total Equivalent unit for Conversion Cost
Total Equivalent unit for Conversion Cost
Units completed and transferred (67,200×100%) = 67,200
Units not complete( 12,800×75%) = 9,600
Total = 76,800
Step 3 Calculate unit cost of conversion
unit cost of conversion = Total Cost of Conversion / Total Equivalent unit
= $664,320 / 76,800
= $8.65
Therefore, The unit cost of conversion costs is $8.65
You own a stock portfolio invested 30 percent in Stock Q, 30 percent in Stock R, 30 percent in Stock S, and 10 percent in Stock T. The betas for these four stocks are .82, 1.20, 1.21, and 1.38, respectively. What is the portfolio beta?
Answer:
1.11
Explanation:
The computation of portfolio beta is shown below:-
Portfolio Beta = (Percentage of stock Q × beta of Q) + (Percentage of stock R × Beta of R) + (Percentage of stock S × Beta of S) + (Percentage of stock T × Beta of T)
= (30% × 0.82) + (30% × 1.20) + (30% × 1.21) + (10% × 1.38)
= (0.30 × 0.82) + (0.30 × 1.20) + (0.30 × 1.21) + (0.10 × 1.38)
= 0.246 + 0.36 + 0.363 + 0.138
= 1.11
So, for computing the portfolio beta we simply applied the above formula.
Your local grocery store offers a coupon that reduces the price of milk during the coming week. The regular retail price of milk in the store is $3.00 per gallon, and the coupon price is $2.00 per gallon for the next week. If the store maximizes profits and the price elasticity of demand for milk is -2 for coupon users, what is the price elasticity of demand for non-users?
Final answer:
Without additional data on the change in quantity demanded by non-coupon users, the price elasticity of demand for milk among non-users cannot be determined. Price elasticity for coupon users is -2, indicating high responsiveness to price changes.
Explanation:
The student's question pertains to the concept of price elasticity of demand, which measures how much the quantity demanded of a good responds to a change in the price of that good. The provided coupon causes a decrease in the price of milk from $3.00 to $2.00 per gallon for coupon users, and given the price elasticity of demand is -2 for them, it implies that the quantity demanded by these users is highly responsive to price changes.
Understanding that, for the non-coupon users, the price elasticity of demand would depend on how their quantity demanded changes with price. However, the exact value cannot be determined from the given information without additional data regarding the change in quantity demanded by non-users when the price remains at $3.00. Typically, demand elasticity varies according to factors such as the availability of substitutes, the proportion of income spent on the good, and the period considered. Detailed data is necessary to accurately calculate the price elasticity for non-users.
Chester's Elite product Cid has an awareness of 72%. Chester's Cid product manager for the Elite segment is determined to have more awareness for Cid than Andrews' Elite product Agape. She knows that the first $1M in promotion generates 22% new awareness, the second million adds 23% more and the third million adds another 5%. She also knows one-third of Cid's existing awareness is lost every year. Assuming that Agape's awareness stays the same next year (77%), out of the promotion budgets below, what is the minimum Chester's Elite product manager should spend in promotion to earn more awareness than Andrews' Agape product?
Final answer:
To surpass the competitor's product awareness of 77%, Chester's Elite product manager should spend a minimum of $2 million on promotions, achieving 93% awareness compared to the competitor's 77%.
Explanation:
The question is asking to calculate the minimum amount of promotion budget required to increase product awareness above that of a competitor's product. To solve this, we first calculate the loss of awareness due to the one-third attrition rate, and then incrementally add the incremental awareness percentages based on the promotion budget.
Chester's Cid starts with 72% awareness, and it loses one-third of it every year. To calculate the lost awareness:
Lost awareness = 72% / 3 = 24%Remaining awareness = 72% - 24% = 48%Now we add the new awareness based on promotion spending:
First $1M adds 22%: Total awareness = 48% + 22% = 70%Second $1M adds 23%: Total awareness = 70% + 23% = 93%Third $1M adds 5%: Total awareness = 93% + 5% = 98%Since Agape's awareness is 77%, the product manager needs to achieve more than this percentage. Spending the first million will lead to a total of 70% awareness, which is not enough. Spending the second million will bring total awareness to 93%, which is higher than 77%. Therefore, the minimum promotion budget to achieve a higher awareness level than Agape is $2 million.
Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors. Standard costs follow:
Standard Quantity Standard (Rate) Standard Unit Cost
Silver 0.60 oz. $ 24.00 per oz. $ 14.40
Crystals 4.00 $ 0.45 per crystal 1.80
Direct labor 1.50 hrs. $ 14.00 per hr. 21.00
During the month of January, Crystal Charm made 1,500 charms. The company used 350 ounces of silver (total cost of $7,350) and 3.050 crystals (total cost of $701.50) and paid for 2,400 actual direct labor hours (cost of $34,800.00).Required:1. Calculate Crystal Charm's direct materials price and quantity variances for silver and crystals for the month of January. Indicate whether each variance is favorable or unfavorable.2. Calculate Crystal Charm's direct labor rate and efficiency variances for the month of January. Indicate whether each is favorable or unfavorable.
Answer:
silver
direct materials price variance = $1,050 favorable
direct materials quantity variance = $13,200 favorable
Crystals
direct materials price variance = $671 favorable
direct materials quantity variance =$1,327.50 favorable
direct labor
direct materials rate variance = $1,200 unfavorable
direct materials efficiency variance =$2,100 favorable
Explanation:
silver
direct materials price variance = (Aq×Ap)-(Aq×Sp)
= (350×$21,00)-(350×$24.00)
= $1,050 favorable
direct materials quantity variance = (Aq×Sp)-(Sq×Sp)
= (350×$24.00) -(1,500×0,60×$24.00)
= $13,200 favorable
Crystals
direct materials price variance = (Aq×Ap)-(Aq×Sp)
= (3,050×$0,23)-(3,050×$0.45)
= $671 favorable
direct materials quantity variance = (Aq×Sp)-(Sq×Sp)
= (3,050×$0.45) -(1,500×4.00×$0.45)
= $1,327.50 favorable
direct labor
direct materials rate variance = (Aq×Ap)-(Aq×Sp)
= (2,400×$14,50)-(2,400×$14.00)
= $1,200 unfavorable
direct materials efficiency variance = (Aq×Sp)-(Sq×Sp)
= (2,400×$14.00) -(1,500×1.50×$14.00)
= $2,100 favorable
hare Issuances for Cash Chase, Inc., issued 10,000 shares of $20 par value preferred stock at $50 per share and 8,000 shares of no-par value common stock at $20 per share. The common stock has no stated value. All issuances were for cash. a. Prepare the journal entries to record the share issuances. b. Prepare the journal entry for the issuance of the common stock assuming that it had a stated value of $10 per share. c. Prepare the journal entry for the issuance of the common stock assuming that it had a par value of $2 per share.
Answer:
a. Prepare the journal entries to record the share issuances.
Dr Cash 500,000 Cr Preferred stocks 200,000 Cr Additional paid in capital - preferred stocks 300,000Dr Cash 160,000 Cr Common stocks 160,000b. Prepare the journal entry for the issuance of the common stock assuming that it had a stated value of $10 per share.
Dr Cash 160,000 Cr Common stocks 80,000 Cr Additional paid in capital - common stocks 80,000c. Prepare the journal entry for the issuance of the common stock assuming that it had a par value of $2 per share.
Dr Cash 160,000 Cr Common stocks 16,000 Cr Additional paid in capital - common stocks 144,000Answer:
. Prepare the journal entries to record the share issuances.
Dr Cash 500,000
Cr Preferred stocks 200,000
Cr Additional paid in capital - preferred stocks 300,000
Dr Cash 160,000
Cr Common stocks 160,000
b. Prepare the journal entry for the issuance of the common stock assuming that it had a stated value of $10 per share.
Dr Cash 160,000
Cr Common stocks 80,000
Cr Additional paid in capital - common stocks 80,000
c. Prepare the journal entry for the issuance of the common stock assuming that it had a par value of $2 per share.
Dr Cash 160,000
Cr Common stocks 16,000
Cr Additional paid in capital - common stocks 144,000
Explanation:
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Fallsview Glatt Kosher Caterers ran a business that provided travel packages, including food, entertainment, and lectures on religious subjects, to customers during the Passover holiday at a New York resort. Willie Rosenfeld verbally agreed to pay Fallsview $24,050 for the Passover package for himself and his family. Rosenfeld did not appear at the resort and never paid the money owed. Fallsview sued Rosenfeld for breach of contract. Rosenfeld claimed that the contract was unenforceable because it was not in writing and violated the UCC’s Statute of Frauds. Is the contract valid? Explain.
Answer: The Contract is valid.
Explanation:
Under the UCC’s Statute of Frauds, transactions above $500 for goods cannot be made orally alone and have to be written in writing as well. This is the law that Rosenfield relied on.
However, Fallsview can argue that the Passover Retreat is not a Good, but rather a Service in which case it does not fall under the Statute.
The main bone of contention thereby becomes, if indeed it is a service or a good.
If it is a Hybrid of both, then the Court needs to decide if the services outweigh the goods involved.
From the text we see that the following were included in the package, food, entertainment, and lectures on religious subjects.
Food is the only good there and is outweighed by Entertainment and lectures on religious subjects.
As such, the contract is valid as it is for more service than good.
The contract between Rosenfeld and Fallsview may be valid despite not being in writing. This depends on whether the service package provided by Fallsview is interpreted as a 'sale of goods' under the UCC's Statute of Frauds, which typically requires a written contract. Proof of the agreement by other means could also make the contract enforceable.
Explanation:The contract's validity in this case depends on whether it falls under the Statute of Frauds, which is a part of the Uniform Commercial Code (UCC). The Statute of Frauds requires that certain contracts must be in writing to be enforceable, most commonly those concerning real estate transactions, contracts that cannot be performed within one year, and contracts for the sale of goods over $500. However, there are exceptions such as if the parties have begun performance of the contract, or if there is a specially manufactured good.
In this case, Fallsview Glatt Kosher Caterers were providing a service package, and it can be argued that this does not strictly fall under the sale of goods. Therefore, it might not necessarily need to be in writing according to the UCC. Furthermore, if there is any proof of the verbal agreement such as witnesses, emails, or quotes, this could also make the contract enforceable. So, whether the contract is valid or not ultimately depends on the specific details of the case and how the courts interpret the UCC's Statute of Frauds in relation to this situation.
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Pacific Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships. Required: 1. The likelihood of a payment occurring is probable, and the estimated amount is $1.22 million. 2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $1.02 to $1.22 million. 3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.22 million. 4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.22 million. Record the necessary entry for the scenarios given above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.)
Answer:
1.31-Dec
Dr Loss 1.22 million
Cr Contingent Liability 1.22 million
2.31-Dec
Dr Loss 1.02 million
Cr Contingent Liability 1.02 million
3. Disclosure Required
4. No Disclosure
Explanation:
Pacific Cruise Lines Journal entry
1.31-Dec
Dr Loss 1.22 million
Cr Contingent Liability 1.22 million
2.31-Dec
Dr Loss 1.02 million
Cr Contingent Liability 1.02 million
3. Disclosure Required
4. No Disclosure
Waterway Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. (a) On July 1, (1) Waterway purchased $33,000 of inventory, terms 1/10, n/30, FOB shipping point. (2) Waterway paid freight costs of $1,105. (b) On July 3, Waterway returned damaged goods and received credit of $3,300. (c) On July 10, Waterway paid for the goods.
Answer:
The journal records to record the transactions are:
July 1, purchased merchandise on account, terms 1/10, n/30
Dr Merchandise inventory 34,105
Cr Accounts payable 33,000
Cr Cash 1,105 (freight costs paid in cash)
July 3, damaged goods are returned
Dr Accounts payable 3,300
Cr Merchandise inventory 3,300
July 10, invoice is paid within discount period
Dr Accounts payable 29,700
Cr Cash 29,403
Cr Purchase discounts 297
The 1% discount is applied only to the merchandise invoice and it must be recorded as a contra expense account (purchase discounts) with a credit balance because it reduces COGS.
Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory. What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?
A) 38,280
B) 37,680
C) 38,880
D) 40,200
Answer:
Total= 38,880 pounds
Explanation:
Giving the following information:
Production= 870 units
Required quantity= 44 pounds of clay
Beginning inventory= 3,900 pounds
Desired ending inventory= 4,500 pounds.
To calculate the direct material quantity required, we need to use the following structure:
Budgeted direct material (in pounds):
Production= 870*44= 38,280
Desired ending inventory= 4,500
Beginning inventory= (3,900)
Total= 38,880 pounds
Final answer:
The total amount to be budgeted for direct materials to be purchased for the month by Teller Co. is 38,880 pounds of clay mix, determined by calculating production needs, adjusting for desired ending inventory, and considering the current inventory levels. Option C is correct.
Explanation:
To calculate the total amount to be budgeted for the direct materials to be purchased for the month by Teller Co., we first need to determine the total amount of clay mix needed for production. The company is planning to sell 900 boxes of ceramic tile and estimates production at 870 boxes in May. Each box requires 44 pounds of clay mix.
The total clay mix required for production is 870 boxes × 44 pounds/box, which equals 38,280 pounds. Teller Co. wants to have an ending inventory of 4,500 pounds of clay mix and has an existing beginning inventory of 3,900 pounds. To calculate the total clay mix to be purchased, we add the desired ending inventory to the amount required for production and subtract the beginning inventory: 38,280 pounds (for production) + 4,500 pounds (desired ending inventory) - 3,900 pounds (beginning inventory) equals 38,880 pounds to be purchased.
On July 1, 20Y1, Danzer Industries Inc. issued $50,000,000 of 10-year, 8% bonds at a market (effective) interest rate of 10%, receiving cash of $43,768,920. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.*
2. Journalize the entries to record the following:*
a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar.)
b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar.)
3. Determine the total interest expense for 20Y1.
4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?
5. Compute the price of $43,768,920 received for the bonds by using the present value tables. (Round to the nearest dollar.)
*Refer to the Chart of Accounts for exact wording of account titles.
The journal entries have been provided for the issuance of bonds, and the semiannual interest payments. The total expense for 20Y1 is $2,188,448. Indeed, the bond proceeds will always be less than the face amount when the contract rate is less than the market rate.
Explanation:Firstly, the journal entry to record the cash proceeds from the issuance of the bonds on July 1, 20Y1 would be:https://brainly.com/question/33477032
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The questions involve the issuance of bonds and calculation of interest and amortization. It first requires recording the transaction and then calculating and recording the interest payments and bond discount amortizations. It finally requires calculating the interest expense and confirms that bond proceeds will be less if contract rate is less than market rate.
Explanation:The subject of this question is the understanding of bond issuance and bond interest payments, which falls under Business, specifically Financial Accounting. Here are the answers to these segments of your question:
On July 1, 20Y1, the journal entry will be:
Debit: Cash $43,768,920
Credit: Bonds payable $50,000,000
Credit: Discount on Bonds payable $6,231,080.
a. The first semiannual interest payment is calculated by multiplying the face value of the bonds ($50,000,000) by the contract interest rate (8%) and dividing by 2 (as interest is paid semiannually). This gives us $2,000,000.
The amortization of the bond discount using the straight-line method is calculated by dividing the total discount ($6,231,080) by the no. of periods (20), which gives us $311,554 (rounded to the nearest dollar).
The journal entry on December 31, 20Y1 would be:
Debit: Interest expense $2,311,554
Credit: Cash $2,000,000
Credit: Discount on bonds payable $311,554.
b. The journal entry on June 30, 20Y2 would be identical to the one on Dec 31, 20Y1.
Total interest expense for 20Y1 is $2,311,554.
Yes, the bonds proceeds will always be less than the face value if the contract rate is less than the market rate.
The price received ($43,768,920) is already the present value of the bonds calculated using market interest rate.
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AFN equation Broussard Skateboard's sales are expected to increase by 15% from $7.6 million in 2016 to $8.74 million in 2017. Its assets totaled $2 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 55%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Round your answer to the nearest dollar. Do not round intermediate calculations. $
Answer:
$7,680
Explanation:
Assets totaled ($2 million ×15%) $300,000
Less spontaneous liabilities affected by sales
($450,000 accounts payable+$450,000 accruals) ( $900,000×15%) ($135,000)
Less Sales increased
($8,740,000×0.04×0.45) $157,320
Addition funds needed $7,680
Or
AFN =
($2,000,000×15%-$900,000×15%×$8,740,000×0.04×0.45)
=$7,680
Therefore the forecast Broussard's additional funds needed for the coming year will be $7,680
Coastal Shores Inc. (CSI) was destroyed by Hurricane Fred on August 5, 2021. At January 1, CSI reported an inventory of $171,000. Sales from January 1, 2021, to August 5, 2021, totaled $481,000 and purchases totaled $196,000 during that time. CSI consistently marks up its products 65% over cost to arrive at a selling price. The estimated inventory loss due to Hurricane Fred would be: Multiple Choice $141,575. $75,485. $79,485.
Answer:
$75,485
Explanation:
The computation of the estimated inventory loss is shown below:
Goods lost = Cost of Goods available for sale - Cost of Goods Sold
where,
Cost of Goods available for sale = Inventory + Purchases
= $171,000 + 196,000
= $367,000
And,
Cost of Goods Sold is
= $481,000 ÷ 165%
= $291,515
So, the estimated inventory loss is
= $367,000 - $291,515
= $75,485
A covered call position is A. the simultaneous purchase of the call and the underlying asset. B. the purchase of a share of stock with a simultaneous sale of a put on that stock. C. the short sale of a share of stock with a simultaneous sale of a call on that stock. D. the purchase of a share of stock with a simultaneous sale of a call on that stock. E. the simultaneous purchase of a call and sale of a put on the same stock.
Answer:
D. the purchase of a share of stock with a simultaneous sale of a call on that stock.
Explanation:
A covered call position is the purchase of a share of stock with a simultaneous sale of a call on that stock. A covered call position is created in the financial market when investors buy stock and sell call options on a share for share basis. It is the same as a short put, stock plus a short call.
Under covered call, investors having a long-position in an asset has the inherent obligation of writing call options on that same asset because they feel that underlying stock price won't rise anytime soon but wish to increase income getting call option premiums.
Your company has money to invest in an employee benefit plan and you have been chosen to be the plan's trustee. As an employee you want to maximize the interest earned on this investment and have found an account that pays 10% compounded continuously. Your company is providing you with $ 1,500 per month to put into your account for 10 years. What will be the balance in this account at the end of the 10-year period
Answer:
The balance in this account at the end of the 10-year period is 310000
Explanation:
Solution
Given that:
Now, Recall that,
Time period is = 10 yrs = 12*10 = 120 months
Interest = 10%
= 10%/12 = 0.8333% per month continuously compounded .
Thus,
The rate effective per month = e^r - 1 = e^0.0083333 - 1 = 0.00836815
so,
The month per = 1500
The value of future deposit = 1500 * (F/A,0.836815%,120)
= 1500 * [((1 + 0.00836815)^120 - 1)/ 0.00836815]
= 1500 * [((1.00836815)^120 - 1)/ 0.00836815]
= 1500 * 205.3359
= 308003.89
which is also = 310000 (nearest value)
Most economists believe that real economic variables and nominal economic variables behave independently of each other in the long run.
For example, an increase in the money supply, a _____(real/nominal) variable, will cause the price level, a _____(real/nominal) variable, to increase but will have no long-run effect on the quantity of goods and services the economy can produce, a _____(real/nominal) variable. The distinction between real variables and nominal variables is known as the _____________(price neutrality/monetary neutrality/the quantity theory).
Answer:
Nominal;nominal;real;the quantity theory.
Explanation:
Most economists believe that real economic variables and nominal economic variables behave independently of each other in the long run.
For example, an increase in the money supply, a nominal variable, will cause the price level, a nominal variable, to increase but will have no long-run effect on the quantity of goods and services the economy can produce, a real variable. The distinction between real variables and nominal variables is known as the quantity theory.
Suppose you know a company's stock currently sells for $90 per share and the required return on the stock is 14 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?
Answer:
$5.89
Explanation:
The computation of current dividend per share is shown below:-
(Dividend in One Year) ÷ Current Price
= 14% ÷ 2
= 7%
Dividend = Dividend yield × Stock currently sold per share
= 0.07 × $90
= 6.3
Current dividend per share = Dividend ÷ (1 + Dividend yield)
= 6.3 ÷ (1 + 0.07)
= 6.3 ÷ 1.07
= $5.89
Therefore for computing the current dividend per share we simply applied the above formula.