Answer:
Explanation:
Seasonality = average of a season in the past two years/average per season
Average per year = 3200 tires
Average per season = 3200/4 = 800
Sales in Fall = 900 and 1000. Average sold in fall = (900 + 1000)/2 = 950
Sales in winter = 1500 and 1400. Average sold in winter = (1500 + 1400)/2 = 1450
Sales in spring = 400 and 350. Average sold in spring = (400 + 350)/2 = 375
Sales in Summer = 400 and 450. Average sold in Summer = (400 + 450)/2 = 425
Seasonality of Fall = average sold in fall/average per season = 950/800 = 1.1875
Seasonality of winter = 1450/800 = 1.8125
Seasonality of spring = 375/800 = 0.46875
Seasonality of summer = 425/800 = 0.53125
Sales next year = 4000 tires
Average per season = 1000 tires
Seasonal forecast = average per season * seasonality
Forecast for each season:
Fall: 1000×1.1875 = 1187.5 tires
Winter: 1000×1.8125 = 1812.5
Spring: 1000×0.46875 = 468.75
Summer: 1000×0.53125 = 531.25
Rounding off the forecast to whole numbers Fall will be 1188, Winter 1813 Spring 469 and Summer 531
Presented here are selected transactions for the Leiss Company during April. Leiss uses the perpetual inventory system.
April
1 Sold merchandise to Mann Company for $4,000, terms 2/10, n/30. The merchandise sold had a cost of $2,500.
2 Purchased merchandise from Wild Corporation for $8,000, terms 1/10, n/30.
4 Purchased merchandise from Ryan Company for $1,000, n/30.
10 Received payment from Mann Company for purchase of April 1 less appropriate discount.
11 Paid Wild Corporation for April 2 purchase.
Journalize the april transactions for Leiss Company.
Answer and Explanation:
The journal entries are shown below:
On April 1
Account receivable Dr $4,000
To Sales revenue $4,000
(Being the sale of the merchandise is recorded)
For recording this we debited the account receivable as it increased the assets and credited the sales revenue as it also increased the sales
Cost of goods sold Dr $2,500
To Merchandise inventory $2,500
(Being the cost of goods sold is recorded)
For recording this we debited the cost of goods sold as it increased expenses and credited the inventory as it reduced the assets
On April 2
Merchandise Inventory Dr $8,000
To Account payable $8,000
(Being the purchase of merchandise is recorded)
For recording this we debited the inventory as it increased the assets and credited the account payable as it also increased the liabilities
On April 4
Merchandise Inventory Dr $1,000
To Account payable $1,000
(Being the purchase of merchandise is recorded)
For recording this we debited the inventory as it increased the assets and credited the account payable as it also increased the liabilities
On April 10
Cash $3,920
Sales discount $80 ($4,000 × 2%)
To Account receivable $4,000
(Being the cash receipts is recorded)
For recording this we debited the cash as it increased the assets and credited the account receivable as it reduced the assets plus the discount is debited to sales discount
On April 11
Account payable $8,000
To Merchandise inventory $80 ($8,000 × 1%)
To Cash $7,920
(Being the cash paid is recorded)
For recording this we debited the account payable as it reduced the liabilities and credited the cash as it reduced the assets plus the discount is credited to merchandise inventory
The transactions are journalized by debiting and crediting various accounts such as Accounts Receivable, Sales, Cost of Goods Sold, Inventory, and Accounts Payable. An example is the April 1st transaction, where $4,000 is debited to Accounts Receivable and credited to Sales, and $2,500 is debited to COGS and credited to Inventory.
Explanation:The process of recording these transactions into the official accounting records of the Leiss Company is known as journalizing. Here are the entries for April
April 1: Debit Accounts Receivable $4,000, Credit Sales $4,000. Debit Cost of Goods Sold (COGS) $2,500, Credit Inventory $2,500.April 2: Debit Inventory $8,000, Credit Accounts Payable $8,000.April 4: Debit Inventory $1,000, Credit Accounts Payable $1,000.April 10: Debit Cash $3,920 ($4,000 less 2% discount of $80), Debit Sales Discounts $80, Credit Accounts Receivable $4,000.April 11: Debit Accounts Payable $8,000, Credit Cash $8,000.Learn more about Journalizing here:https://brainly.com/question/31718461
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Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce. Refer to Scenario 13-3. Ziva's economic profit from farming equals a. −$130. b. $170. c. $130. d. −$80.
Answer:
The correct answer is:
-$80 (d.)
Explanation:
in order to calculate this, we have to determine the total income earned from farming, and the total income that could have been earned if Ziva had done her consultancy service, and calculate the difference. This is shown as follows:
farming business
cost of seeds = $130
income from seeds = $300
Net income from farming = 300 - 130 = $170
Home-organizing service
charge per hour = $25
time spent on field that would have been used for consultancy = 10 hours
total amount that would have been earned for consultancy = 25 × 10 = $250
Difference between income earned for farming and the income that would have been earned for home-organizing serving = 170 - 250 = -$80
Note that the negative sign is there because Ziva indulged in the activity with the lesser income so she effectively made an economic loss instead of a profit (she made a negative profit).
The master budget of Windy Co. shows that the planned activity level for next year is expected to be 50,000 machine hours. At this level of activity, the following manufacturing overhead costs are expected:
Indirect labor Machine supplies Indirect materials Depreciation on factory building Total manufacturing overhead
$720,000 180,000 210,000 150,000 $1,260,000
A flexible budget for a level of activity of 60,000 machine hours would show total manufacturing overhead costs of:_______
a. $1,482,000.b. $1,260,000.c. $1,512,000.d. $1,362,000.
Answer:
a. $1,482,000
Explanation:
The computation of the total manufacturing overhead cost is shown below;
But before that first we need to do following calculations
The Variable overhead for 50000 machine hours is
= $1,260,000 - $150,000
= $1,110,000
As depreciation is not variable cost so it would be excluded
Now for 60,000 machine hours, the variable overhead is
= ($1,110,000 ÷ 50,000) × 60,000
= $1,332,000
And, the fixed overhead is $150,000 i.e depreciation expense
So, the total manufacturing overhead cost is
= Fixed manufacturing overhead + variable manufacturing overhead
= $150,000 + $1,332,000
= $1,482,000
Redwood Corporation is considering two alternative investment proposals with the following data: Proposal X Proposal Y Investment $900,000 $488,000 Useful life 9 years 9 years Estimated annual net cash inflows for 9 years $130,000 $84,000 Residual value $42,000 $minus Depreciation method Straightminusline Straightminusline Required rate of return 15% 12% What is the accounting rate of return for Proposal Y? (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)
Answer:
6.1%
Explanation:
As per given data
Proposal X Proposal Y
Investment $900,000 $488,000
Useful life 9 years 9 years
Annual net cash inflows for 9 years $130,000 $84,000
Residual value $42,000 $0
Depreciation method Straight-line Straight-line
Required rate of return 15% 12%
Accounting rate of return is the ratio of average net income of a project and the average investment made in the project.
Accounting rate of return = Average Net income / Average Investment
As net cash inflows are given we need to deduct the depreciation from the cash flows to arrive at the net income for the period. As all cash flows are constant so, the average value will be equal to the single years value.
Average net income = Net cash inflows - Depreciation = Net cash inflows - ( Cost of Asset - Residual value ) / Useful life of asset = $84,000 - ( $488,000 - $0) / 9 = $84,000 - $54,222 = $29,778
Average Investment = $488,000
Placing Values in the formula
Accounting rate of return = $29,778 / $488,000 = 6.1%
The Accounting Rate of Return (ARR) for Proposal Y was calculated by first determining the Average Annual Accounting Profit, which is the annual net cash inflow minus the annual depreciation. With this value, the ARR formula was applied, resulting in an ARR of 6.1% for Proposal Y.
Explanation:The Accounting Rate of Return (ARR) for Proposal Y can be calculated using the following formula:
ARR = (Average Annual Accounting Profit/ Initial Investment) x 100
The Average Annual Accounting Profit is the annual net cash inflow less the annual depreciation. In this case, the initial investment is $488,000, the net cash inflow is $84,000, and depreciation is calculated as (initial investment - residual value) divided by the useful life: which is ($488,000 - 0) / 9, equaling about $54,222 (rounded to the nearest dollar).
Therefore, the Average Annual Accounting Profit is $84,000 - $54,222 equals to about $29,778 (to the nearest dollar).
Substituting these values into the formula gives: ARR = ($29,778 / $488,000) x 100 = 6.1%
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Murphy's has shares of stock outstanding with a par value of $1 per share and a market value of $24.60 per share. The balance sheet shows $32,500 in the capital in excess of par account, $12,000 in the common stock account, and $68,700 in the retained earnings account. The firm just announced a 10 percent stock dividend. What will the balance be in the retained earnings account after the dividend
Answer:
$39,180
Explanation:
The computation of the retained earning is shown below:
= Stock dividend percentage × common stock shares × market value per share × - par value per share + balance in retained earning account
= 10 % × 12,000 shares × $ 24.6 × -$1 + $ 68,700
= - $29,520 + $68,700
= $39,180
We simply applied the above formula so that the balance in the retained earning could come
Final answer:
Without knowing the exact number of shares outstanding for Murphy's, we cannot calculate the specific retained earnings balance post-dividend. A stock dividend is recorded at the par value, thus the amount deducted is the number of shares times the par value times the dividend percentage. Without the number of shares, we can only explain the method for calculation.
Explanation:
The student asked what will the balance be in the retained earnings account after Murphy's announces a 10 percent stock dividend. To calculate this, we need to understand that a stock dividend will not be paid in cash, but instead with additional shares of stock. Given Murphy's current market value per share of $24.60, a 10 percent stock dividend means that for every 100 shares owned, an investor receives an additional 10 shares. However, this value must be transferred from the retained earnings account into the common stock account.
To calculate the amount that will be deducted from the retained earnings, we need to know how many shares are outstanding. Since we are not provided with the number of outstanding shares, we cannot compute the exact value to be deducted. Assuming theoretically that we know the number of shares, we would multiply the number of shares by the par value of $1 per share (since stock dividends are recorded at par value) and then by 10 percent to get the value of the stock dividend. This amount would then be deducted from the retained earnings account.
Without the number of shares outstanding, we can only describe the process: The calculation would be as follows: number of shares imes par value per share imes 10%. The result is the amount to be subtracted from the retained earnings. If we had the number of outstanding shares, we could find the balance that will remain in the retained earnings account after the stock dividend distribution.
Chace is a manager at Westwick Inc., an advertising company. He regularly holds meetings with his subordinates to track their work progress and address issues that they might be facing. This way, Chace tries to ensure that issues are identified early and work is completed on time. In this case, Chace is using _____.
Answer:
concurrent control
Explanation:
Concurrent control (also known as steering or preventive control) is the process of monitoring activities in real time so as to identify and preventing problems from happening thereby producing the desired result and completion of activity in time. This involves applying regulations on the ongoing process based on standards, rules, codes, and policies so that they conform to the organization or company standards
The government of Junta took Fuel Safe Corp., a domestic energy firm, into state ownership to save the company from bankruptcy. However, the other private competitors in the energy industry were enraged by this decision. As a result, the government had to reduce the tax burden on all private energy firms so that both the state-owned enterprise and private firms could coexist. What type of economy does this portray?
Answer:
These are the options for the question:
market-based
communist
command
laissez-faire
mixed
And this is the correct answer:
mixed
Explanation:
A mixed economy is an economy that either:
Mixes state intervention with a free-market economy.Has some sectors of the economy run in market-based style, and other sectors in a planned-style.Has coexistence of public enterprises and private enterprises.In the question, we have an example of a mixed economy because in the energy sector (a crucial sector in any economy), there is one public company competing against private companies.
The economy becomes even more mixed when the government lowers the tax rates of the private companies, so that both the public firm and the private firms compete under the same conditions.
Salvatori, Inc., manufactures and sells two products: Product A4 and Product Q5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours Product A4 600 7.0 4,200 Product Q5 900 4.0 3,600 Total direct labor-hours 7,800 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product A4 Product Q5 Total Labor-related DLHs $ 163,058 4,200 3,600 7,800 Machine setups setups 10,550 800 700 1,500 Order size MHs 499,527 4,200 4,500 8,700 $ 673,135 The overhead applied to each unit of Product A4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer :
Overhead applied per unit = $557.61
Explanation :
As per the data given in the question,
Particulars A B C=A ÷B D C ×D
Activity cost Estimated Total expected Activity Product A4 Product A4
Pool OH cost Activities Rate Expected activities total OH cost
Labor related $163,058 $7,800 20.90 4,200 $87,780
Machine setup $10,550 $1,500 7.03 800 $5,624
Order size $499,527 $8,700 57.42 4,200 $241,164
Total overhead cost = $334,568
Activity rate = Estimated OH cost ÷ Total expected activity
Product A4 overhead = Product A4 expected activity ×activity rate
Overhead applied per unit = Total overhead applied ÷ Expected production of A4
= $334,568 ÷ 600 units
=$557.61
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,650,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below:
2021 2022
Costs incurred during the year $ 352,000 $ 2,025,000
Estimated costs to complete as of 12/31 1,408,000 0
Billings during the year 470,000 1,750,000
Cash collections during the year 405,000 1,815,000
Required:
1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion.
2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion.
4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time.
Answer:
Multiple Answers
Explanation:
1. Over Time
a) Begin w/ Percentage of Revenue Method:
Actual Costs to Date / Estimated Total Costs = % Complete to Date
2021:
$352,000 / ($352,000 + $1,408,000) =
$352,000 / $1,760,000 = 20%
2022:
($352,000 + $2,025,000) / ($352,000 + $2,025,000)
$2,377,000 / $2,377,000 = 100%
b)
2021:
Construction Revenue: (20% * $2,650,000) = $530,000
Less: Construction Expenses: $352,000
Gross Profit: $178,000
c)
2022 (subtract out 2021 costs):
Construction Revenue: $2,650,000 - $530,000 = $2,120,000
Less: Construction Expenses: $2,377,000 - $352,000 = $2,025,000
Gross Profit: $273,000 - $178,000 = $95,000
2. Upon Completion:
2021:
Revenue: $0
Gross Profit: $0
2022:
Revenue: $2,650,000
Gross Profit: $273,000
3. Over Time:
Current Assets:
A/R: $470,000 - $405,000 = $65,000
Costs & Profits in Excess of Billings: $530,000 - $470,000 = $60,000
4. Upon Completion:
Current Assets:
A/R: $470,000 - $405,000 = $65,000
Current Liabilities:
Billings in Excess of Profit & Cash: $470,000 - $352,000 = $118,000
The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,800 direct labor-hours will be required in February. The variable overhead rate is $9.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $109,120 per month, which includes depreciation of $18,240. All other fixed manufacturing overhead costs represent current cash flows. The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Answer:
$171,840
Explanation:
To reach the number, we first add up variable manufacturing overhead and fixed overhead, and then, substract depreciation.
February
Budgeted direct labor hours 8,800
Variable overhead rate per direct labor hour $9.20
Variable manufacturing overhead $80,960
Fixed manufacturing overhead $109,120
Total manufacturing overhead $190,080
Less depreciation ($18,240)
Cash disbursement for manufacturing overhead $171,840
Principal, Inc. is acquiring Secondary Companies for $38,000 in cash. Principal has 4,500 shares of stock outstanding at a market price of $31 a share. Secondary has 1,600 shares of stock outstanding at a market price of $22 a share. Neither firm has any debt. The net present value of the acquisition is $2,400. What is the price per share of Principal after the acquisition
Answer:
$31.53 Price per share
Explanation:
[(4,500 ×$31) + $2,400] / 4,500
=$139,500+$2,400/4,500
=$141,900/4,500
= $31.53
Therefore the price per share of Principal after the acquisition is $31.53 Price per share
Zippy Company has a product that it currently sells in the market for $60 per unit. Zippy has developed a new feature that, if added to the existing product, will allow Zippy to receive a price of $75 per unit. The total cost of adding this new feature is $38,000 and Zippy expects to sell 2,400 units in the coming year. What is the net effect on next-year's operating income of adding the feature to the product?
Answer:
Effect on income= $2,000 increase
Explanation:
Giving the following information:
Previous selling price= $60
New selling price= $75
Increase in fixed costs= $38,000
Units sold= 2,400
We weren't provided with information regarding unitary variable costs. We need to determine the effect on income based on the selling price difference:
Effect on income= 2,400*(75-60) - 38,000
Effect on income= $2,000 increase
Question 43 Big Moose Toys is a market pioneer introducing a modern version of Bubble the Moose, a character from an animated television series originally broadcast in the '50s and '60s. The company's version of Sandy the Flying Squirrel, a character from the show targeted to baby boomers, was a strong success. Since the firm is a market pioneer, it needs to make the new launch strategy for Bubble the Moose consistent with the intended ________. A. Pricing B. Product positioning C. Brand extension D. Prototype E. Fad
Answer: B. Product positioning
Explanation:
Product Positioning refers to the position a product occupies in the minds of it's consumers especially in relation to the products of other companies.
As they are relaunching the character, whatever strategy they use needs to account for how they want the product to be valued in the mind of the consumer and then act towards it in the same way they targeted baby boomers and succeeded.
PLEASE HELP
What is the best approach to use when writing a proposal that is unsolicited?
A: direct approach
B: formal approach
C: persuasive approach
D: cautious approach
Answer:
C, persuasive approach
Explanation:
If the proposal is solicited, approach the letter of transmittal as a positive message, highlighting those aspects of that may give you a competitive advantage. - If the proposal is unsolicited, approach the letter as a persuasive message that must convince the reader that you have something worthwhile to offer.
Using the allowance method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs, $6,900. The cost of the merchandise is $2,760. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment. Required: Journalize the above transactions. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to nearest dollar amount.
Answer and Explanation:
As per the data given in the question,
Apr-01 Accounts receivable A/c Dr. $6,900
To Sales A/c $6,900
Apr-01 Cost of goods sold A/C Dr. $2,760
To Inventory A/c $2,760
( Being cost of goods on merchandise is recorded)
Jun-10 Allowance for doubtful debt A/c Dr. $ 4,600
Cash A/c Dr. $2,300
To Accounts receivable A/c $6,900
( Being bad debt expense is recorded)
Oct-11 Accounts receivable A/c Dr. $4,600
To Allowance for doubtful debt A/c $4,600
( Being bad debt recovered is recorded)
Oct-11 Cash Dr. $4,600
To Accounts receivable A/c $4,600
( Being cash recovered from bad debt is recorded)
On January 1, 2021, Julee Enterprises borrows $39,000 to purchase a new Toyota Highlander by agreeing to a 6%, 4-year note with the bank. Payments of $915.92 are due at the end of each month with the first installment due on January 31, 2021. Record the issuance of the note payable and the first two monthly payments. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)
Answer:
The answer
January 1.
Dr Cash $39,000
Cr Notes Payable $39,000
January 31
Dr Interest Expense $195
Dr Notes Payable $720.92
Cr Cash $915.92
February 28
Dr Interest Expense $191.40
Dr Notes Payable $724.52
Cr Cash $915.92
Explanation:
Annual Interest on the notes is $2,340(6% of $39,000)
Monthly interest will therefore be $195($2,340 ÷12 months)
Notes payable is $720.92($915.92 - $195)
For second month
$39,000 - $720.92 =$38,279.08
($38,279.08 x 0.06) ÷ 12 = $191.40
January 1.
Dr Cash $39,000
Cr Notes Payable $39,000
January 31
Dr Interest Expense $195
Dr Notes Payable $720.92
Cr Cash $915.92
February 28
Dr Interest Expense $191.40
Dr Notes Payable $724.52
Cr Cash $915.92
Sammy has worked for a company with a retirement program, and today is retiring from her job with the amount of $105 in her retirement account. She decides to withdrawal an equal amount from this account, once a year, beginning immediately, and ending 17 years from today (for a total of 18 payments). If the interest rate is 6.50%, solve for the annuity amount such that she uses up her full accumulation.
Answer:
Annuity amount is $9.45
Explanation:
The amount that Sammy can withdraw from the account each can computed using the PMT formula in excel as follows:
=pmt(rate,nper,pv,fv,type)
rate is the of return on the account which is 6.5%
nper is the number of withdrawals to be made from the account which is 18 withdrawals
pv is the amount in the account presently i.e $105
fv is the total amount of withdrawals from the account which is not known hence taken as zero
type is 1 for annuity due such as this one,0 for ordinary annuity
=pmt(6.5%,18,-105,0,1)
=$9.45
The Annuity amount is $9.45
Calculation of the annuity:Here we use the PMT formula:
=pmt(rate,nper,pv,fv,type)
here
rate = 6.5%
nper = 18 withdrawals
pv i.e $105
fv = zero
And, type is 1 for annuity due like this one,0 for ordinary annuity
So,
=pmt(6.5%,18,-105,0,1)
=$9.45
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The Porch Cushion Company manufactures foam cushions. The number of cushions to be produced in the upcoming three months follows: Each cushion requires 2 pounds of the foam used as stuffing. The company has a policy that the ending inventory of foam each month must be equal to 30% of the following month's expected production needs. How many pounds of foam does The Porch Cushion Company need to purchase in August?
Answer: 25,200 pounds
Explanation:
Your question is incomplete as it lacked the first part. I attached a completion that I found.
The company has a policy that the ending inventory of foam each month must be equal to 30% of the following month's expected production needs.
This means that in August, the Opening inventory will be 30% of what was is needed in August and the Closing Inventory will be 30% of what is needed in September.
Remember that each cushion requires 2 pounds of foam as stuffing.
Pounds required in August
= 12,000 cushions * 2
= 24,000 pounds
Opening Stock
= 30% * (12,000 * 2)
= 7,200 pounds
Closing stock
= 30% * ( 14,000 * 2)
= 8,400 pounds.
Foam needed to be purchased in August = Pounds required tonbe produced + Closing Stock - Opening Stock
= 24,000 + 8,400 - 7,200
= 25,200
25,200 pounds of foam are what The Porch Cushion Company needs to purchase in August.
You have just completed a $20,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $100,000, but if you sold it today, you would net $115,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $30,000 plus an initial investment of $5,000 in inventory. What is the initial incremental cash flow for opening the coffee shop today? Answer a negative number if the cash flow is a cost.
Answer:
$150,000
Explanation:
Data provided
Expected after tax cash flows from sale of space = $115,000
Increase in working capital = $5,000
Outfitting expenses = $30,000
The calculation of initial incremental cash flow is shown below:-
Initial incremental cash flow = Expected after tax cash flows from sale of space + Increase in working capital + Outfitting expenses
= $115,000 + $5,000 + $30,000
= $150,000
So, for calculating the initial incremental cash flow we simply applied the above formula.
The initial incremental cash flow for opening the coffee shop today would be $60,000, calculated by subtracting the total costs ($55,000) from the potential revenue from selling the property ($115,000).
Explanation:The initial incremental cash flow for opening the coffee shop today can be calculated by adding up the explicit costs and the potential revenue from selling the property. The explicit costs, in this case, include the cost of the feasibility study ($20,000), the capital expenditure to outfit the retail space ($30,000), and the initial inventory investment ($5,000). These add up to a total cost of $55,000. As for potential revenue, if the property were sold today, it would net $115,000. Therefore, the initial incremental cash flow would be the potential revenue ($115,000) minus the total costs ($55,000), which equals <$strong>60,000.
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Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $13,000 for 200 shares of Malti Company’s common stock. She received a $420 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $16,000. Kathy would like to earn a return of at least 14% on all of her investments. She is not sure whether the Malti Company stock provide a 14% return and would like some help with the necessary computations.
Answer:
(A) The net present value is -$1,225. (B) Kathy Myers did not earn 14% return on investment.
Explanation:
Solution
(A) Calculate the net present value as shown below:
Now 1 2 3
Purchase of stock = ($13,000)
Annual Cash Divided $420 $420 $420
the Sale of Stock $16,000
Total cash Flow ($13,000) $420 $420 $420
Discount Factor at 14% 1.000 0.877 0.769 0.675
The present value ($13,000) $368 $323 $11,083
Net present value
($368 +$323 + $11,083- 13,000 = ($1,225)
The net present value is -$1,225.
(b) The NPV is negative. It shows that the rate of return on income is lower than the minimum required rate of return. so, KM did not earn 14% return.
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Answer: A
Explanation:
Answer:
D. There is a greater risk that a longer-term loan will not be repaid.
Explanation:
People are forgetful, so they may forget. Another reason is that the person may pass away, and if there is no close relatives, then the bank will have to take the loss. Also, having a longer term may also result in people fleeing the country before they repay, which may also lead to a loss for the bank.
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Delaware Corp. prepared a master budget that included $16,360 for direct materials, $28,100 for direct labor, $14,315 for variable overhead, and $38,900 for fixed overhead. Delaware Corp. planned to sell 4,090 units during the period, but actually sold 4,300 units. What would Delaware’s variable overhead cost be if it used a flexible budget for the period based on actual sales? (Do not round your intermediate calculations.)
Answer:
$15,050
Explanation:
The computation of the variable overhead cost in case of flexible budget is shown below:
= Actual sales units × Variable overhead at budgeted sales ÷ Budgeted sales units
= 4,300 units × $14,315 ÷ 4,090 units
= $15,050
We simply applied the above formula so that the variable overhead cost could come for flexible budget
Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months: January February March Material purchases $12,040 14,150 10,970 Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $6,500. The expected January 30 Accounts Payable balance is: Group of answer choices $6,500. $7,075. $12,040. $6,020 $9,270.
Answer:
c) 6020
Explanation:
January purchase is 12040
50 % of this purchase will be due on January 30 as remaining 50 % will be paid in January itself
so amount due will be = 12040 x 50 %
= 6020
Indicate which financial statements must be included in the comprehensive annual financial report (CAFR) in each set of fund statements or government-wide statements.
Financial statement Governmental funds Proprietary funds Fiduciary funds Government-wide
1. Balance sheet
2. Statement of activities
3. Statement of cash flows
4. Statement of changes in fiduciary net position
5. Statement of fiduciary net position
6. Statement of net position
7. Statement of revenues, expenditures, and changes in fund balances
8. Statement of revenues, expenses, and changes in fund net position
Answer:
Explanation:
1. Management Discussion and Analysis (MD&A)
2. Basic Financial Statements
3. Note to Financial Statements
4. Required Supplementary Information (RSI)
5. Combining Statements for Non-major Fund & Non-major Components
6. Individual Fund statements and Schedules for Primary Government Funds
You manage a pension fund that promises to pay out $10 million to its contributors in five years. You buy $7472582 worth of par-value bonds that make annual coupon payments of 6% and mature in five years. Right after you make the purchase, the interest rate on same-risk bonds decreases to 4.5%. If the rate does not change again and you reinvest the coupon payments that you receive in same-risk bonds, how much will you fall short of the money that you promised
Answer :
Shortfall of money = $74,598
Explanation :
As per the data given in the question,
Par value of bond = $7,472,582
To determine the future value of annual coupon payments received, we will use FV of annuity's formula
FV of Annuity = P [(1 + r)^n- 1 ÷ r]
where,
P = Periodic payment
r = interest rate
n = Time period
here P = 6% of $7,472,582 = $448,354.92
r = 4.50%
n = 5 years
FV of Annuity = $448,354.92 × [(1 + 4.50%)^5 - 1) ÷ 4.50%]
=$2,452,820
Shortfall at the end of 5 years is
= $10,000,000 - $7,472,582 - $2,452,820
= $74,598
Pirate Seafood Company purchases lobsters and processes them into tails and flakes. It sells the lobster tails for $20.30 per pound and the flakes for $15.30 per pound. On average, 100 pounds of lobster are processed into 58 pounds of tails and 26 pounds of flakes, with 16 pounds of waste. Assume that the company purchased 3,200 pounds of lobster for $4 per pound and processed the lobsters with an additional labor cost of $7,400. No materials or labor costs are assigned to the waste. If 1,722 pounds of tails and 752 pounds of flakes are sold, calculate the allocated cost of the sold items and the allocated cost of the ending inventory. The company allocates joint costs on a value basis. (Round your answers to nearest whole number. Round cost per pound answers to 2 decimal places.)
Answer:
Pirate Seafood Company
1) Calculation of the Allocated Cost of Sold Items:
a) Production Units:
Lobster tails = 3,200/100 * 58 = 1,856 units
Lobster flakes = 3,200/100 * 26 = 832 units
Total units = 2,688 units, costing $12,800
b) Material costs:
Lobster tails = 1,856/2,688 * $12,800 = $8,838
Lobster flakes = 832/2,688 * $12,800 = $3,962
c) Labor costs:
Lobster tails = 1,856/2,688 * $7,400 = $5,110
Lobster flakes = 832/2,688 * $7,400 = $2,290
d) Total Production costs (Materials & Labor):
i) Lobster tails = $8,838 + $5,110 = $13,948
per unit cost = $13,948/1,856 = $7.52
ii) Lobster flakes = $3,962 + $2,290 = $$6,252
per unit cost = $6,252/832 = $7.51
e) Cost of Sales:
Lobster tails = $7.52 x 1,722 = $12,949.44
Lobster flakes = $7.51 x 752 = $5,647.52
2) Calculation of the Allocated Cost of Ending Inventory:
a) Ending Inventory units:
Lobster tails = Production unit Minus Sales unit = 1,856 - 1,722 = 134
Lobster flakes = Production unit Minus Sales unit = 832 - 752 = 80
b) Ending Inventory costs:
Lobster tails = 134 x $7.52 = $ 1,007.68
Lobster flakes = 80 x $7.51 = $600.80
Explanation:
To calculate the costs of sales and the costs of ending inventory, the first step is to calculate the units produced. The material and labour costs are then apportioned based on the units produced since no costs are allocated to the waste.
Then, the unit costs of tails and flakes are calculated. These form the bases for computing the cost of items sold and the ending inventory.
A company purchased land for $92,000 cash. Commissions of $13,000, property taxes of $13,500, and title insurance of $4,200 were also incurred. The $13,500 in property taxes includes $7,400 in back taxes paid by the company on behalf of the seller and $6,100 due for the current year after the purchase date. For what amount should the company record the land? a. $112,400. b. $116,600. c. $122,700. d. $92,000.
Answer:
The answer is option (b) $116,600.00
Explanation:
Solution
The Cash price =$92,000.00
Commission on purchase of land $ = 13,000.00
Property taxes =$7,400.00
Title insurance is=$ 4,200.00
Total cost of land to be recorded is =$116,600.00
The property taxes paid for back date will be added to the land cost but not $6100 which is related to present year.
The property taxes $6100 will be filled to income statement in present year.
Title insurance and commission will be included to cost of land.
Final answer:
The company should record the land at $116,600, which includes the purchase price, commissions, title insurance, and back taxes paid.
Explanation:
When recording the purchase of land on the company's books, all expenditures that are necessary to get the land ready for use should be included in the land's cost. The correct value of the land should include the cash paid for the land itself, commissions, property taxes (which are part of the land acquisition costs), and title insurance. Current property taxes should not be included as they are an expense related to the period after purchase.
The initial purchase price of the land is $92,000. Commissions were $13,000, and title insurance was $4,200. Of the property taxes paid, only the back taxes of $7,400 are considered part of the acquisition cost because they relate to the period before the acquisition. Therefore, the company should record the land at $92,000 + $13,000 + $4,200 + $7,400 = $116,600.
The ultimate retail strategy is to offer consumers multiple brand–based "touchpoints" that leverage the strengths of each channel. Using a scenario of various touchpoints, describe what might happen after a company with an omni-channel strategy has sparked a customer’s interest using mobile advertising. The scenario should end with a customer service rep in a call center.
Answer:
Here, to explain this, a company with a truly integrated or omni channel strategy might spark a customer's interest using mobile advertising or direct mail catalogs. The customer then visits a brick and mortar store to examine the product firsthand and speak to a salesperson.
In-store purchases might be made using one of the mobile payment methods discussed later in this chapter. If the store does not have the particular size or color of the product desired, the customer might order it by accessing the store's e-commerce site with his or her smartphone by scanning a QR code placed strategically on an in-store display.
The product would then be delivered through the mail. Product returns could be handled through the mail or returned to the store, depending on what is most convenient for the customer. Customer service reps in a call center would have a record of the customer's purchase regardless of which channel the transaction had been completed through.
The manager of Synergy Company's Stock Division projects the following for next year: Sales $195,000 Operating income 70,000 Average Operating assets 385,000 The manager can invest in an additional project that would require $50,000 investment in additional assets and would generate $9,000 of additional income. The company's minimum rate of return is 15%. What is the residual income for the Stock Division without the additional investment?
Answer: $12,250
Explanation:
Given Data;
Sales = $195,000
Operating income = $70,000
Average Operating assets = 385,000 Additional investment = $50,000
minimum rate of return is = 15%.
Residual income = operating income - (minimum required return x operating assets).
= $70,000 - ( 0.15 * 385,000)
= $12,250
Residual income without the Added investments is $12,250
Matching Exercise: Match the type of bond to its definition. a)The Catastrophe Bond: b)A Warrant Bond: c)An Income bond: d)A Convertible bond: e)A Put bond:
Answer:
Match the type of bond to its definition.
a)The Catastrophe Bond:
This bond is security emitted by a company to raise funds in the form of debt because it suffered a natural disaster and needs liquidity.
b)A Warrant Bond:
This type of bond is emitted by a company to favor the holder for the right to buy a stock at a price that will be decided by the company at the moment of the warrant bond expedition. This price is not linked to the market stock price at the moment of execution.
c)An Income bond:
This security is a bond that compromises the company to pay the established amount if the company makes enough earnings to issue the fraction established of the debt,
d)A Convertible bond:
This type of security provides a stable payment for the holder as payment for the lending of a certain amount of money. However, it has a special right to be converted in stock if the holder wants it.
e)A Put bond:
This type of security compromises the issuer to buy a certain stock from the holder at a certain price with a certain duration.
Explanation:
The reasons to back this answer are:
a)The Catastrophe Bond:
This bond is security emitted by a company to raise funds in the form of debt because it suffered a natural disaster and needs liquidity. This is a very effective bond to issue debt in any unexpected event.
b)A Warrant Bond:
This type of bond is emitted by a company to favor the holder for the right to buy a stock at a price that will be decided by the company at the moment of the warrant bond expedition. This price is not linked to the market stock price at the moment of execution. This is a very good bond to reward management for good results.
c)An Income bond:
This security is a bond that compromises the company to pay the established amount if the company makes enough earnings to issue the fraction established of the debt, This is a very good bond to not compromise to use a payment of a debt, and keeping it outside a bad scenario for the company.
d)A Convertible bond:
This type of security provides a stable payment for the holder as payment for the lending of a certain amount of money. However, it has a special right to be converted into stock if the holder wants it. This bond is very good to increase the stocks in the market and reduce the sare price to pump it.
e)A Put bond:
This type of security compromises the issuer to buy a certain stock from the holder at a certain price with a certain duration. This type of bond is very good to sell short the position of a company with bad performance.
Final answer:
A Catastrophe Bond is a high-yield instrument for catastrophe risks; a Warrant Bond includes stock purchase rights; an Income Bond pays interest based on profitability; a Convertible Bond can be exchanged for stock; and a Put Bond may be sold back to the issuer before maturity.
Explanation:
To match the type of bond to its definition:
a) The Catastrophe Bond: A high-yield debt instrument designed to raise money in case of a catastrophe such as an earthquake or a hurricane. The issuer is generally an insurance company looking to pass on potential risks to investors. Bonds are forfeited to pay for the losses if a catastrophe occurs.b) A Warrant Bond: This bond includes warrants which give the holder the right to purchase the company's stock at a specific price within a certain timeframe.c) An Income bond: Unlike regular bonds, income bonds pay interest only if the issuing company is profitable, thus the payments can be suspended without leading to default.d) A Convertible bond: A type of bond that can be converted into a predetermined number of the company's equity stock at certain times during its life, usually at the discretion of the bondholder.e) A Put bond: A bond that allows the holder to force the issuer to repurchase the security at specified dates before maturity.The terms risk, investment considerations, corporate bond, municipal bond, savings bond, Treasury note, Treasury bond, Treasury bill, Individual Retirement Account (IRA), capital market, money market, primary market, and secondary market are essential to understanding the various types of bonds and their respective markets.