Answer:B and D i think
Explanation:
Punishments must be recorded in a contra-income account. Charges for interest ought to be posted to a payable account. An income account should receive the early payment discount (credit). As a result, choices (B) and (D) are the appropriate responses.
What is sales tax?A sales tax is a levy levied on the sale of specific products and services and paid to a governing authority. Generally, laws allow the seller to collect tax dollars from the consumer at the point of purchase.
A use tax is a tax on goods or services that is paid directly to a governing body by a customer. Food, education, and medications, for example, are frequently free from sales and use tax under state legislation.
A value-added tax (VAT) on products and services is similar to a sales tax. Key distinctions can be found in the comparison with sales tax.
Hence, options (B) and (D) are accurate.
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An owner withdrawal of $20,000 would: A. decrease owner’s equity and increase assets by $20,000. B. increase owner’s equity and decrease liabilities by $20,000. C. increase liabilities and assets by $20,000.
Answer:
C) increase liabilities and assets by $20,000.
Explanation :
Any financial transaction affects both assets and liability equally. If asset is increased , liability also is increased and vice-versa.
In the given problem , Option A and option B states that while one increases , other decreases. which is not possible .
So option C is correct.
If you are interested in pursuing a B.S.E. (Bachelor of Science in Engineering) degree, please write a 300-500 word essay describing why you are interested in studying engineering, any experiences in or exposure to engineering you have had, and how you think the programs in engineering offered at Princeton suit your particular interests.
Explanation:
When I was in school grade 9, I had my first interaction with a robot during a visit to technology expo since then I could not think of anything else but to awe for exploring the fascinating world of robots.
I didn't had much resources to buy tools and components to build robots but still my passion kept me motivated and I found my way to get hands on scrap parts available at the various spots in my locality. Slowly and gradually, I kept learning and building robots and by the time I was in my high school, I had already won 3 major school competitions and received tremendous amount of recognition. Due to my outstanding performance, I was awarded with merit scholarship for the college.
In college, I continued my handwork and kept myself busy in exploring the depth of robotics. I had the pleasure of working on a big project funded by a our college. The project was to build a search and rescue quad-copter. Honestly speaking, it was not easy! I worked day and night tirelessly, and finally after 6 months I successfully built the quad-copter.
My goal is to become an inventor in the field of robotics. Building such robots that can make a difference in our lives and help humanity to grow and thrive. I believe that engineering program at Princeton encourages such passion and vision and would be a great learning platform for me to showcase my talent and skills.
The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 13,000 16,000 15,000 14,000 In addition, 19,500 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $6,400. Each unit requires 6 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 8,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labor-hours and direct laborers are paid $14.50 per hour. Required: 1.&2. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole. 3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole. 4. Calculate the estimated direct labor cost for each quarter and for the year as a whole.
Final answer:
To calculate the estimated grams of raw material that need to be purchased, consider the desired ending inventory, beginning inventory, and production needs. Multiply the estimated grams of raw material purchased by the cost per gram to calculate the cost of raw material purchases. Calculate the expected cash disbursements for purchases of materials based on the percent paid in the quarter acquired. Multiply the number of units to be produced by the direct labor needed per unit and the direct labor wage to estimate the direct labor cost.
Explanation:
To calculate the estimated grams of raw material that need to be purchased, we need to determine the desired ending inventory for each quarter and the production needs for the following quarter. For example, the desired ending inventory for the 1st Quarter is 16,000 * 0.25 = 4,000 grams. To calculate the estimated raw material purchases for each quarter, we need to consider the desired ending inventory, beginning inventory, and production needs. For example, the estimated raw material purchases for the 1st Quarter would be (13,000 + 4,000 - 19,500) * 6 = 58,500 grams.
To calculate the cost of raw material purchases for each quarter, we need to multiply the estimated grams of raw material purchased by the cost per gram. For example, the cost of raw material purchases for the 1st Quarter would be 58,500 * $1.20 = $70,200.
To calculate the expected cash disbursements for purchases of materials, we need to consider the percent of raw material purchases paid in the quarter acquired and the following quarter. For example, if 60% of raw material purchases are paid in the quarter acquired, the expected cash disbursement for the 1st Quarter would be $70,200 * 0.6 = $42,120.
To calculate the estimated direct labor cost, we need to multiply the number of units to be produced by the direct labor needed per unit and the direct labor wage. For example, the estimated direct labor cost for the 1st Quarter would be 13,000 * 0.20 * $14.50 = $37,700.
Goods in process inventory account of a manufacturing company that uses an overhead rate based on the direct labor cost has a 4,400 debit balance after all posting is completed. the cost sheet of the one job still in process shows direct materialcost of 2,000 and direct labor cost of 800. Therefore the companys overhead application rate is?
Answer:
Overhead absorption rate
= Overhead absorbed/Actual labour cost x 100
= $4,400/$800 x 100
= 550% of direct labour cost
Explanation:
Since the overhead absorbed is $4,400, there is need to divide the overhead absorbed by actual direct labour cost multiplied by 100. This gives the overhead application rate.
Northern Magazine collects cash from subscribers in advance and then mails the magazines to subscribers over a​ one-year period.
a. Record the journal entry to record the original receipt of $150,000 cash.
b. Record the adjusting entry that southern magazine makes to record earning $ 9,000 in subscription revenue that was collected in advance.
Answer:
The Journal entries are as follows:
(a) Cash A/c Dr. $150,000
To subscriber A/c $150,000
(To record the original receipt of $150,000 cash)
(b) Subscriber A/c Dr. $9,000
To Revenue from magazine A/c $9,000
(To record the earning $ 9,000 in subscription revenue that was collected in advance)
Assume there is a decrease in the market demand for a good sold by price-taking firms that are initially producing the profit-maximizing level of output. For the individual firm, this would result in:
Answer: Fall in revenue
Explanation:
A decrease in demand means a lower level of demand compare to the previous period. A price taking firm means that the firm cannot determine the price in the market. Profit maximising level of output means the output level that gives the highest profit.
A fall in demand without an increase in price at a profit maximising level of output will lead to a fall in revenue and profit all things being equal.
Suppose net exports decreases by $100 million due to a slump in foreign economies. If the value of the multiplier is 2, what happens to the domestic aggregate demand curve?
Answer:
It shifts to the left by $200 million at each price level
Explanation:
Given that,
Multiplier = 2
Net exports decrease by $100 million
Change in aggregate demand is calculated as follows:
Multiplier = Change in Aggregate Income (ΔY) ÷ Change in Exports (ΔX)
2 = ΔY ÷ (-$100)
ΔY = -$200
Therefore, the national income will fall by -$200 and hence the aggregate demand will fall by -$200 . Hence, the aggregate demand curve will shift to the left.
Final answer:
When net exports decrease by $100 million, the aggregate demand curve shifts to the left by a magnitude of 2 times the initial change in net exports.
Explanation:
When net exports decrease by $100 million, it means that there is a slump in foreign economies, causing a decrease in demand for goods and services from the domestic economy. The value of the multiplier determines the impact of this decrease on the domestic aggregate demand curve.
If the value of the multiplier is 2, the aggregate demand curve will shift to the left by a magnitude of 2 times the initial change in net exports. In this case, the aggregate demand curve will shift to the left by $200 million.
This means that the decrease in net exports will lead to a decrease in overall domestic demand, resulting in a lower level of real GDP and potentially lower employment.
A bank has agreed to lend you $53,000 for a home loan. The loan will be fully amortized over 39 years at 13.50%, with .44 points. The loan payments will be monthly. The closing cost is estimated to be $3,894 and you plan to refinance the mortgage in 8 years. Calculate the book value at the end of the 8th year.
a. $57,222.99
b. $56,749.94
c. $56,613.10
d. $56,556.08
e. None of the answers are correct
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
All of your teammates are dedicated to the project. They put in the time and effort to complete their individual assignments and to be adequately prepared for team meetings. However, this time and effort does not seem to translate into effectively sharing information. Which of the following actions is most likely to improve your team’s information sharing?
Answer:
Structure team discussions to focus on a smaller set of key issues.
Explanation:
The best way to get outcome from the team is to set structure team discussions so they can focus on key issues and any ambiguity or issues can be resolved with an outcome as a team.
In this example of a Keynesian tax increase, the left-shift in Aggregate Demand resulting from the tax increase causes the price level to slide back to the $________ level..
In response to a Keynesian tax increase, the aggregate demand curve shifts left, indicating a contractionary fiscal policy. The outcome is a new equilibrium (E₁) where the inflationary gap is closed, and the economy comes back to the potential GDP level. Hence, the price level slides back to the $7000 level.
Explanation:In a Keynesian model, a tax increase would apply a contractionary fiscal policy that would shift the Aggregate Demand (AD) curve to the left. The original point where the aggregate expenditure (AE) line intersects the 45-degree line in the given example is at $8000, which is above the potential GDP of $7000. A tax increase, reducing consumers' or firms' disposable income, would cause a downward shift in aggregate expenditure (from AE to AE₁), aligning the economy back to the potential GDP level.
This action corresponds to Figure D9 (b) or Figure B9 (b) and is the proper Keynesian response towards an inflationary gap. The new equilibrium then rests at E₁, leading to a reduction of inflationary price pressures in the economy. Here, the economy steadies at potential GDP without fueling inflationary price hikes. As a result, the price level slides back to $7000 level, which is the level of potential GDP.
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The required return on the stock of Moe's Pizza is 10.6 percent and aftertax required return on the company's debt is 3.34 percent. The company's market value capital structure consists of 67 percent equity. The company is considering a new project that is less risky than current operations and it feels the risk adjustment factor is minus 1.7 percent. The tax rate is 40 percent. What is the required return for the new project?
Answer:
6.5%
Explanation:
Firstly, we need to calculate weighted average cost of capital (WACC) as below
WACC = Weight of equity x Cost of equity + Weight of debt x Cost of debt x (1 - Tax rate)
= 67% x 10.6% + (1 - 67%) x 3.34%
= 8.2%
Then, we will add the risk adjustment factor to this WACC to get the proper WACC of the new project, which is 8.2% - 1.7% = 6.5%
The required return for the new project, adjusted for risk, is calculated to be 6.52 percent.
Explanation:The required return for the new project can be calculated using the existing rates for equity and debt, adjusting for the risk factor. Since the capital structure consists of 67 percent equity, it means the remaining 33 percent must be debt.
So, the required return would be (0.67 × 10.6) + (0.33 × 3.34), which equals 8.22 percent. But the new project is considered to be less risky than the current operations, so the risk adjustment factor of -1.7 must be applied, which results in a required return of 6.52 percent.
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Jill quits her job, which paid her $40,000 per year, so that she could start her own business. In the first year, she received $100,000 in total revenue and spent $15,000 on employee wages, $10,000 on supplies, $20,000 on rent and $10,000 to the government for taxes. She also used $40,000 from her personal savings to buy equipment for her business, which was earning 5 percent interest each year. At the end of the year, the market price for the equipment was $37,000. What is Jill’s economic profit for her business this year?
Answer:
The economic profit for her business is $45.000 without considering income tax
Explanation:
Since we are only focusing in her business, the profit is exclusively related with the operations detailed in revenues (inflows) and expenses (outflows): 100.000 - 15.000 - 10.000 - 20.000- 10.000 = 45.000. This calculation does not include income tax.
An investor has an opportunity to purchase an investment that will provide $11,000 at the end of three years, and $50,000 at the end of five years. If the property is expected to be sold at the end of the sixth year for $100,000 and the investor requires a 12% rate of return, what amount should he or she pay for the investment today?a. $161,000 b. $50,663 c. $81,568 d. $86,864
Answer:
Option (d) $86,864
Explanation:
Present value = Cash flow × Discounting factor
Here,
Discounting factor = ( 1 + r )⁻ⁿ
n = the year of cash flow
r = discount rate = 12%
Year (n) Cash flow Discount factor Present Value
3 $11,000 0.71178 $7,830
5 $50,000 0.567427 $28,371
6 $1,00,000 0.506631 $50,663
Therefore,
The amount he or she should pay for the investment today
= ∑(Present value)
= $7,830 + $28,371 + $50,663
= $86,864
Hence,
Option (d) $86,864
Cheyenne Enterprises manufactures Nuts and Bolts from a joint process (cost = $90,000). Five thousand pounds of Nuts can be sold at split-off for $20 per pound; ten thousand pounds of Bolts can be sold at split-off for $15 per pound. For product costing purposes Cheyenne allocates joint costs using the relative sales value method. The amount of joint cost allocated to Nuts would be:
Answer:
$36,000
Explanation:
Joint process cost =$85000
Allocation of Joint cost using relative sales value method:-
Sales value of Nuts = 5,000 pounds × $20 per pound
= $100,000
Sales value of Bolts = 10,000 pounds × $15 per pound
= $150,000
Total sales value = $100,000 + $150,000
= $250,000
Joint cost allocate to Nuts:
= (Total Joint cost ÷ Total relative sales value) × Sales value of Nuts
= ($90,000 ÷ $250,000) × $100,000
= $36,000
The amount of joint cost allocated to Nuts in Cheyenne Enterprises using the relative sales value method is $36,000, as calculated by apportioning the joint cost based on the relative sales values of Nuts and Bolts.
Explanation:To calculate the amount of joint cost allocated to Nuts using the relative sales value method, we first need to find the total sales values of both Nuts and Bolts at the split-off point. The value of Nuts would be 5,000 pounds multiplied by $20 per pound, which equals $100,000. The value of Bolts would be 10,000 pounds multiplied by $15 per pound, which equals $150,000. The total sales value at the split-off point would then be $100,000 (for Nuts) plus $150,000 (for Bolts), or $250,000.
The proportion of the total joint cost allocated to Nuts is then the sales value of Nuts divided by the total sales value. This equals $100,000 divided by $250,000, or 0.4. So, 40% of the joint cost would be allocated to the Nuts. Therefore, the joint cost allocated to Nuts is $90,000 (total joint costs) multiplied by 0.4 which equals $36,000
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Uber and Lyft customers often complain about the practice of ""surge"" or ""prime-time"" pricing used by these companies during periods of peak demand. This is an example of a __________ pricing policy.
Answer:
The correct word for the blank space is: dynamic.
Explanation:
Dynamic pricing policies are based on certain time frames in which the demand for a service is requested. According to those time frames, the time could be cheaper or more expensive. Businesses are said to establish flexible prices under this scenario.
The strategy where Uber and Lyft adjust prices based on consumer demand is known as dynamic pricing. This is a strategy used when the demand for a product or service is greater than its supply, with the price increase intended to balance the supply and demand.
Explanation:The policy you're referring to, where Uber and Lyft increase prices during periods of peak demand, is known as dynamic pricing policy.
Dynamic pricing, also called demand pricing or time-based pricing, is a strategy where businesses set flexible prices for products or services based on current market demands.
For Uber and Lyft, this means when the demand for rides is higher than the number of available drivers, prices go up. This acts as an incentive for more drivers to work during these busy times, and balances the supply and demand of rides.
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Fred Company paid $48,000 for a two-year insurance policy, ($2,000 per month), on October 1 and recorded the $48,000 as a debit to Prepaid Insurance and a credit to Cash. What adjusting entry should Fred make on December 31, the end of the accounting period (no previous adjustment has been made)? Select one: a. Debit: Prepaid Insurance 6,000 Credit: Insurance Expense 6,000 b. Debit : Insurance Expense 6,000 Credit: Prepaid Insurance 6,000 c. Debit: Insurance Expense 24,000 Credit: Prepaid Insurance 24,000 d. Debit: Prepaid Insurance 42,000 Credit: Insurance Expense 42,000
Answer:
The adjusting entry Fred should make on December 31, the end of the accounting period:
b. Debit : Insurance Expense 6,000 Credit: Prepaid Insurance 6,000
Explanation:
On October 1, Fred Company paid $48,000 for a two-year insurance policy, ($2,000 per month)
From October 1 to December 31, Fred Company has used the insurance for 3 months.
Insurance Expense = $2,000 x 3 = $6,000
The adjusting entry Fred should make on December 31, the end of the accounting period:
Debit Insurance Expense $6,000
Credit Prepaid Insurance $6,000
The adjusting entry should Fred make on December 31, the end of the accounting period is: Debit Insurance Expense $6,000; Credit Prepaid Insurance $6,000.
Journal entryBased on the information given the appropriate journal entry to record the transaction is:
Fred company adjusting entry
Debit Insurance Expense $6,000
Credit Prepaid Insurance $6,000
( $2,000 x 3 = $6,000)
Inconclusion the adjusting entry should Fred make on December 31, the end of the accounting period is: Debit Insurance Expense $6,000; Credit Prepaid Insurance $6,000.
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USSOCOM is focused on organizing, training, equipping and providing highly capable __________ special operations forces to geographic combatant commanders.
USSOCOM organizes, trains, equips, and provides highly capable Special Operations Forces globally. These forces are tasked with combating threats posed by non-state or non-governmental organizations such as al-Qaeda and ISIS, which have terrorist cells distributed worldwide.
Explanation:The United States Special Operations Command (USSOCOM) is focused on organizing, training, equipping, and providing highly capable Special Operations Forces to geographic combatant commanders. These forces are not confined to any particular region, but they operate in various parts of the world, including the United States, Asia, and Europe. This is primarily to combat non-state or non-governmental organizations that pose a significant threat to global security and peace. Such organizations include al-Qaeda and ISIS, which consist of various terrorist cells located in many different countries across all continents. Their existence and operations have introduced a new type of enemy into the balance of power equation and have necessitated more vigilant and sophisticated approaches to enhancing global security.
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In the United States the degree of individual income mobility (that is, the degree to which people move from higher to lower or lower to higher income groupings) is___________.
a. rigid in both directions.
b. flexible in both directions.
c. flexible upward but rigid downward since high income perpetuates itself from generation to generation.
d. flexible downward but rigid upward since most low-income people never rise significantly above the poverty level.
Answer:
The correct answer is letter "B": flexible in both directions.
Explanation:
The ability that an individual, family or group of people develop to improve or worsen their economic condition is called economic mobility. It is measured in income terms and particularly, in the U.S. is flexible in both directions since, according to studies, Americans have proved to be able to get better living conditions but some of them have gone from good economic situations to poverty.
You work for an organization that is seeking growth and recently has hired new district managers to assist in this growth. In talking to other regional managers, you have heard that some district managers do not have a thorough understanding of commonly used accounting tools including an income statement and balance sheet. You have a new district manager hire, John, and see the need to do some training with him so he has a solid understanding of income statements, balance sheets, and the elements that go into them, including advertising costs, Web development costs, and store opening costs.
In preparing to train your new hire, you have determined that the use of examples (a picture is worth a thousand words) can be a great approach to use. So you have decided to gather some examples from the company’s summary of significant accounting policies from its latest financial statements.
You may apply this scenario to either Option 1 or Option 2, described in Requirements below.
Your Role
You are a regional manager for Urban Outfitters or your selected organization and oversee a number of districts. You have recently brought a new district manager on board and want to ensure he has the knowledge and tools needed to effectively do his job.
Requirements
Option 1:
The organization you work for is Urban Outfitters. Use the U.S. Securities and Exchange Commissionwebsite to find the Urban Outfitter’s 2016–2017 financial statement’s summary of significant accounting policies. Look at the data for 2015, 2016, and 2017 for the following examples of essential elements you need to cover with John and ensure his understanding.
Advertising. Examine the criteria used to expense and capitalize advertising costs and where these costs appear in the financial statement.
Store opening costs. Examine how store opening and organization costs were handled and where these costs appear in the financial statement.
Website development costs. Examine the approaches taken during the application and infrastructure development stage and the planning and operating stage.
Option 2:
Use a firm or scenario of your choosing.
Before choosing a company, read the assessment thoroughly to ensure:
The company fits the assessment requirements.
You have access to the financial statement’s summary of significant accounting policies and the Note disclosures from which you are drawing your materials. Include this information in the appendix for reference.
You can distribute the data without disclosing confidential company information.
Answer:
Option 1:
Option 1 is a better approach
The organization you work for is Urban Outfitters. Use the U.S. Securities and Exchange Commissionwebsite to find the Urban Outfitter’s 2016–2017 financial statement’s summary of significant accounting policies. Look at the data for 2015, 2016, and 2017 for the following examples of essential elements you need to cover with John and ensure his understanding.
Advertising. Examine the criteria used to expense and capitalize advertising costs and where these costs appear in the financial statement.
Store opening costs. Examine how store opening and organization costs were handled and where these costs appear in the financial statement.
Website development costs. Examine the approaches taken during the application and infrastructure development stage and the planning and operating stage.
Explanation:
Option 1:
The organization you work for is Urban Outfitters. Use the U.S. Securities and Exchange Commissionwebsite to find the Urban Outfitter’s 2016–2017 financial statement’s summary of significant accounting policies. Look at the data for 2015, 2016, and 2017 for the following examples of essential elements you need to cover with John and ensure his understanding.
Firstly it is better to show the previous years financial statements because company policies do not change every year. Each company follows some particular accounting policies example it may follow different accounting periods or it may choose accrual basis of accounting. Showing other companies financial statements is of not much use as they have their own accounting policies which result in different values of profit etc.
Advertising. Examine the criteria used to expense and capitalize advertising costs and where these costs appear in the financial statement.
Advertising expenses are listed under the marketing expenses in the income statement and deducted from the gross profit.
Store opening costs. Examine how store opening and organization costs were handled and where these costs appear in the financial statement.
Store opening costs like land or building are capitalized and recorded as an asset anddepreciated or amortized over time. Other costs like running expenses are recorded in the corresponding expense ledgers .
Website development costs. Examine the approaches taken during the application and infrastructure development stage and the planning and operating stage.
Website development costs are recorded under the research and development in the income statement and deducted in the period as they incur. Like the whole years website charges are $3600 . They may be deducted like $300 every month.
Even Better Products has come out with an even better product. As a result, the firm projects an ROE of 20%, and it will maintain a plowback ratio of 0.30. Its earnings this year will be $2 per share. Investors expect a 12% rate of return on the stock. a. At what price and P/E ratio would you expect the firm to sell? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Answer:
Current Price is $23.33
P/E ratio is 11.66
Explanation:
Computing the P/E ratio by dividing the current price with the projected earnings:
P/E ratio = Current Price / Projected earnings
where
Current Price is to be computed as:
Current Price = EPS × ( 1 - Plow back ratio) / Rate of return - (ROE - Plow back ratio)
= $2 × (1 - 0.30) / 0.12 - (0.20 × 0.30)
= $2 × 0.7 / 0.12 - 0.06
= $1.4 / 0.06
= $23.33
Projected earnings is $2
Putting the values above:
= $23.33 / $2
= 11.66
The modified approach to accounting for infrastructure assets may be utilized by a state or local government if:
i. The government accumulates information about all infrastructure assets within either a network or subsystem of a network.
ii. The government capitalizes infrastructure assets.
iii. The government expenses costs of maintaining the infrastructure assets.
iv. The government chooses to depreciate its infrastructure assets.
Answer:
I, II and III
Explanation:
Approaches to Accounting for Infrastructure by State or Local Government
Traditional Depreciation Approach
This approach depreciates infrastructure assets consistently with other assets. This approach lists infrastructure assets as part of depreciable assets
Modified Approach
This approach treats infrastructure assets under a few criteria:
Maintenance and Preservation costs are reported as expenses and depreciation expenses are not requiredInfrastructure Assets are listed as Capital Assets and non-depreciable assetsThere is an asset management network or subsystem in place that preserves the assets. This system is committed to maintaining the infrastructure at a specific condition levelCombined Approach
This system combines both the traditional depreciation methods and the modified approach for infrastructure assets. The Infrastructure system can be divided into sub-systems and the traditional depreciable approach can be used for a sub-system while the modified approach is used for an other sub-system
Modified Approach to accounting for infrastructure assets
Based on the Criteria for Modified approach system:
Option 1: Accumulation of information about all infrastructure assets within either a network or subsystem of a network will allow the use of the modified approach
Option 2: The Capitalization of infrastructure assets is also a feature of the Modified Approach
Option 3: Grouping maintenance cost of infrastructure assets as expenses also allow the use of the Modified Approach
Option 4: The Depreciation of Infrastructure assets will only allow the use of the Tradtitional Depreciation Approach
On December 31, 2015, Ed Abbey Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Ed Abbey Co. agreed to accept a $200,000 zero-interest-bearing note due December 31, 2017, as payment in full.
Hayduke is somewhat of a credit risk and typically borrows funds at a rate of 10%. Ed Abbey is much more creditworthy and has various lines of credit at 6%.1.)Prepare the journal entry to record the transaction of December 31, 2015, for the Ed Abbey Co.2.)Assuming Ed Abbey Co.’s fiscal year-end is December 31, prepare the journal entry for December 31, 2016.3.) Assuming Ed Abbey Co.’s fiscal year-end is December 31, prepare the journal entry for December 31, 2017.
Answer:ED Abbey journal $
Date
December 31, 2015
Note Receivable Dr 200,000
Consulting services Cr. 200,000
Narration.record of non interest note receivable due in 2017
December 2016.
Note receivable Dr 200,000
Consulting services Cr. 200,000
Narration. record of non interest receivable note due in 2017
December 2017
Note receivable Dr 200,000
Consulting services. Cr 200,000
Narration. record of non interest receivable note due in 2017.
Explanation:
The notes receivable was issued for service render and it's a non Interest bearing note even though it's payable in the future. This makes the figure to be constant throughout the year, though the company loan acquisition rate was given it does not affect the solution since no loan was bought in the interval.
.
To record the transaction for the zero-interest-bearing note on December 31, 2015, Ed Abbey Co. must recognize the present value of the note as a receivable and as service revenue. In subsequent years, interest revenue is accrued using the imputed interest rate of 10%.
The question is about accounting for a zero-interest-bearing note received in exchange for services provided, where the interest rate must be imputed based on the credit risk of the issuer of the note.
Journal Entry on December 31, 2015 (Service Rendered Date):
Dr. Notes Receivable (Present Value) $149,586
Cr. Service Revenue $149,586
The present value of the note is calculated using Hayduke's credit risk interest rate of 10%.
Journal Entry on December 31, 2016 (Year-End Adjustment):
Dr. Interest Receivable $14,959
Cr. Interest Revenue $14,959
This reflects the interest income earned on the note over one year. The interest is recorded even though it’s not paid, as per the accrual accounting principle.
Journal Entry on December 31, 2017 (Note Receivable Due):
Dr. Cash $200,000
Cr. Notes Receivable $149,586
Cr. Interest Receivable $14,959
Cr. Interest Revenue $35,455
The note is settled, and the total interest revenue over two years is recognized.
Julianna, the HR manager at Hudson Corp., is facing criticism from the company's high-performing employees for the lack of an effective incentive scheme that rewards them with the necessary pay. The company has avoided paying out incentives in addition to employees' monthly salary in an attempt to minimize costs. But, after the last annual meeting, it has been decided to pay employees an incentive amount based on their performance ratings and their compa-ratio. In this scenario, Julianna would be applying the system of:a. commission b. standard hour pay c. merit pay d. piecework pay
Answer:
Juliana, the HR manager at Hudson Corp. would be applying the system of c. merit pay
Explanation:
Merit pay describes payment made to an employee if it has been measured and proven that the employee performed well and successfully achieved a set target.
The question is about paying incentives to high-performing employees and so, merit pay best describes the scenario being portrayed.
An attitude of constantly seeking ways to improve company operations, including customer service, product quality, product features, the production process, and employee interactions, is called: Select one: a. Continuous improvement. b. Customer orientation. c. Just-in-time. d. Theory of constraints. e. Total quality measurement.
Answer:
a. continuous improvement
Explanation:
This is the ideal explanation of continuous improvement or (KAIZEN). The ideology of continuous improvement was brought forward by the JAPANEESE philosophy of KAIZEN, which means continuous improvement which is also a momentous aspect of total quality management (TQM). According to this philosophy businesses need not only bring strategic improvements and/or changes but must build a culture of continuous improvement of each and every aspect of a business. And such a culture must come from the top of the management.
Through continuous improvement a business can make significant cost reductions. For example through training the workforce, the efficiency and quality of work can be improved, similarly, through continuous value engineering (identification of valuing adding features and/or activities and eliminating non-value adding features and activities) one can achieve significant cost advantages in the long-run.
PA4-3 (Algo) Selecting Cost Drivers, Assigning Costs Using Activity Rates [LO 4-1, 4-3, 4-4, 4-6 ] Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work Direct materials cost per unit $ 39 $ 63 Direct labor cost per unit 23 33 Sales price per unit 354 570 Expected production per month 730 units 470 units Harbour has monthly overhead of $184,260, which is divided into the following cost pools: Setup costs $ 72,540 Quality control 58,520 Maintenance 53,200 Total $ 184,260 The company has also compiled the following information about the chosen cost drivers: Home Work Total Number of setups 37 56 93 Number of inspections 300 365 665 Number of machine hours 1,600 1,200 2,800 Required: 1. Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.)
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Basic production information follows:
Harbour has a monthly overhead of $184,260
The number of machine-hours:
Home: 1,600
Work: 1,200
Total: 2,800
To calculate the allocated overhead, first, we need to calculate the overhead rate:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 184,260/ 2,800= $65.81 per machine hour
Now we can allocate the overhead using the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Work:
Allocated MOH= 65.81*1,600= $105,296
Home:
Allocated MOH= 65.81*1,200= $78,972
Final answer:
Using a traditional costing system with machine hours as the cost driver, the Home model is assigned $105,280 in overhead and the Work model is assigned $78,960 in overhead.
Explanation:
Determining Overhead Assigned Using Traditional Costing
To calculate the overhead assigned to each product line using a traditional costing system with machine hours as the cost driver, we follow these steps:
Calculate the overhead rate by dividing the total overhead by the total number of machine hours.Assign overhead to each product by multiplying the overhead rate by the number of machine hours for each product.Using the given data:
Total overhead = $184,260
Total machine hours (Home + Work) = 2,800 hours
Overhead rate = Total overhead / Total machine hours = $184,260 / 2,800 hours = $65.80 per machine hour
Now, assign the overhead to each product line:
Therefore, the Home model is assigned $105,280 in overhead, and the Work model is assigned $78,960 in overhead.
On December 31, 2019, Wintergreen, Inc., issued $150,000 of 7 percent, 10-year bonds at a price of 93.25. Wintergreen received $139,875 when it issued the bonds (or $150,000 × .9325). After recording the related entry, Bonds Payable had a balance of $150,000 and Discounts on Bonds Payable had a balance of $10,125. Wintergreen uses the straight-line bond amortization method. The first semiannual interest payment was made on June 30, 2020. Complete the necessary journal entry for June 30, 2020 by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns. Score answer Visit question mapQuestion 2 linked to 3 of 9 Total2 3 of 9 Prev
Answer:
June 30, 2020 Bond Interest expense Debit $5,756.25
Discount on Bonds payable Credit $506.25
Cash Credit $5,250
Explanation:
We have to calculate the interest expense. The bond interest expense = Cash payment + bond amortization discount
Given,
Bond price = $150,000
Interest = 7%
Number of period, n = 10 years × 2 (As it is a semiannual bond) = 20
Cash payment for semiannual interest = $150,000 × 0.07 × (1÷2)
Cash payment for semiannual interest = $5,250 (Credit)
Amortized bond discount (discount on bonds payable) = $10,125 ÷ 20 (as it is a semiannual payment and $10,125 is for 10 years)
Discount on bonds payable = $506.25 (Credit)
Therefore, bond interest expense = $5,250 + $506.25 = $5,756.25 (Debit)
The interest expenses are the expense acquired by an entity for obtained funds. The interest expenses can be calculated by:
[tex]\text{Bond interest expense} & = \text{Cash payment + Bond amortization discount}[/tex]
The debit amount is $ 5756.25
It can be calculated by:
Price of the bond = $150,000
Interest Rate = 7%
Period Time (n) = [tex]10 \; \text{years} \times 2 \; (\text{Semiannual bond}) & = 20[/tex]
Cash amount for half-yearly interest = [tex]\$150,000 \times 0.07 \times\dfrac{1}{2}[/tex]
Cash amount for half-yearly interest (Credit) = $5,250
Amortized bond reduction (discount on payable bonds):
= [tex]\dfrac{\$\; 10,125}{20}[/tex]
Discount on payable bonds (Credit) = $506.25
See the attached image below for the entry sheet.
Therefore, bond interest expense will be:
[tex]= \$5,250 + \$506.25 = \$5,756.25 \;\text{(Debit)}[/tex]
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In preparing consolidated working papers, beginning retained earnings of the parent company will be adjusted in years subsequent to acquisition with an elimination entry whenever:
a. a noncontrolling interest exists.
b. it does not reflect the equity method.
c. the cost method has been used only.
d. the complete equity method is in use.
Answer:
b. it does not reflect the equity method.
Explanation:
If the beginning retained earnings do not match with the equity method we must adjusted. If we do not; then after including the other transactions which are based on equity method will lead to a mistaken ending retained earnings and thus; the consolidated balance sheet will not match Assets with liabilities plus stockolders equity.
10 points eBookPrintReferences Check my work Check My Work button is now disabledItem 9Item 9 10 points A perfectly competitive firm that makes car batteries has a fixed cost of $10,000 per month. The market price at which it can sell its output is $100 per battery. The firm’s minimum AVC is $105 per battery. The firm is currently producing 500 batteries a month (the output level at which MR = MC). This firm is making a _____________ and should _______________ production.
Answer:
loss, shut down
Explanation:
This firm is making a loss and should shut down production.
A company had the following assets and liabilities at the beginning and end of the current year:
Assets Liabilities
Beginning of year $ 231,000 $ 96,500
End of the year 262,000 78,400
Common stock in the amount of $ 23,500 was issued and dividends of $ 6,700 were paid during the year. What is the amount of net income for the year?
a) $18,900
b) $65,900
c) $49,100
d) $32,300
Answer:
$32,300
Explanation:
Begining equity = Begining asset - Begining liabilities
= $231,000 - $96,500 = $134,500
Ending equity = Ending asset - Ending liabilities
= $262,000 - $78,400 = $183,600
We will find the net income for the year using the below formula:
Ending equity = Begining equity + Stock issuance + Net income - Dividend paid, or:
$183,600 = $134,500 + 23,500 + Net income - $6,700.
Solve the above equation we get Net income = $32,300
Final answer:
The net income for the year is calculated by taking the change in equity from the increased assets and decreased liabilities and adjusting for the equity transactions of common stock issued and dividends paid. The correct net income for the year is $32,300.
Explanation:
To calculate the net income for the year, we need to look at the changes in assets, liabilities, and the equity transactions of common stock issuance and dividends paid. We use the accounting equation Assets = Liabilities + Shareholders' Equity to understand these changes.
The assets increased from $231,000 at the beginning of the year to $262,000 at the end of the year, resulting in an increase of $31,000. The liabilities decreased from $96,500 to $78,400, which is a decrease of $18,100.
We can now calculate the change in Shareholders' Equity by adding the increase in assets and the decrease in liabilities: $31,000 + $18,100 = $49,100. This is the change in equity, assuming no dividends were paid or common stock was issued.
Since the company issued $23,500 worth of common stock, this would increase Shareholders' Equity, and paying $6,700 in dividends would decrease it. So, the net effect on equity due to these transactions is $23,500 - $6,700 = $16,800.
To find the net income, we subtract the net effect of equity transactions from the change in Shareholders' Equity: $49,100 - $16,800 = $32,300.
The amount of net income for the year is therefore $32,300, which corresponds to option (d).
You decide to open a retirement account at your local bank that pays 8%/year/month (8% per year compounded monthly). For the next 20 years you will deposit $400 per month into the account, with all deposits and withdrawls occurring at the end of the month. On the day of the last deposit, you will retire. Your expenses during the first year of retirement will be covered by your company's retirement plan. As such, your first withdrawal from your retirement account will occur on the day exactly 12 months after the last deposit.
a) What monthly withdrawal can you make if you want the account to last 15 years?
b) What monthly withdrawal can you make if you want the account to last forever (with infinite withdrawals)?
Answer:
Explanation:
a.)
First, find the Future value of the annuity deposits. Using a financial calculator, input the following;
Number of months; N = 20*12 = 240
Monthly rate; I/Y = 8%/12 = 0.667%
PV =0
Recurring payment; PMT = -400
then compute future value; CPT FV = 235,725.317
Next find FV of at the end of first 12 months after retirement;
235,725.317(1 + 0.00667)^12 = 255,300.546
Next, use $255,300.546 as the PV of withdrawal annuity of 15 years to find annual PMT;
PV = -255,300.546
N = 15*12 = 180
I/Y = 0.667%
FV = 0
then CPT PMT = $2,440.38
b.)
Infinite withdrawals means that they are perpetual hence referred to as Perpetuity.
Since we have the amount you will have saved by the end of 20 years (240 months) as $255,300.546, use that as the Present value (PV) of your perpetuity.
PV = PMT / rate
PMT is the recurring withdrawal
$255,300.546 = PMT / 0.667%
PMT = 0.667% * $255,300.546
PMT = $1,702.85.
Therefore, you will make a monthly withdrawal of $1,702.85.