Answer:
a) as there is no taxes, under MM proposition the value of the firm remains the same at 472.2 millions
b) as there is income taxes, the value of the firm increases if levered As the interest expense provides a tax shield:
18,500,000 x 21% = 3,885,000
47,200,000 + 3,885,000 = 51,085,000
Explanation:
The reasoning behind is that while dividends (reutrn on equity) are not considered expenses interest (debt "return") do. Thus, financing with debt generates a positive tax shield as we decrease our fiscal obligations
If Bird Enterprises sells $18.5 million in debt and uses it to repurchase equity, its value remains $47.2 million when ignoring taxes. However, with a 21% tax rate, the value increases to $51.085 million due to tax savings from the debt's interest.
Explanation:a. Ignoring taxes, if Bird Enterprises sells $18.5 million in debt and uses the proceeds to repurchase equity, the total value of the company will remain unchanged at $47.2 million. The reason is that the company is simply replacing one form of financing (equity) with another (debt).
b. With a tax rate of 21 percent, the value of the company increases if it sells $18.5 million in debt. The interest on the debt is tax-deductible, which brings tax savings. So, the increase in value can be calculated as the debt multiplied by the tax rate. That is $18.5 million * 0.21 = $3.885 million. Therefore, the new total value of Bird Enterprises would be the original value of $47.2 million plus tax savings of $3.885 million or $51.085 million.
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Prior to 1914, Argentina experienced around fifty years of economic growth. During that time, Argentina was ruled by a small amount of elite that was invested in agricultural exports. Thus, the economy grew by exporting beef and grain during a worldwide economic boom surrounding these commodities. The broadening of the political landscape following WWI and subsequent repeated military coups changed the leaders, but made the economic landscape increasingly unstable.
This period of growth is a classic example of economic growth under what system?
a. Rule by Law
b. Extractive institutions
c. The vicious circle
d. Inclusive Institutions
Answer: Option (B)
Explanation:
The period of growth exhibited by Argentina is referred to as the classic example of their growth under Extractive institutions. Extractive institutions referred to as the means under which a small organization or group of individuals tend do exploit the population of a nation. Under this case the small group of elites that were ruling Argentina and thus further investing in export of agricultural products,thus effecting Argentina and its population.
Herc Co.'s inventory on December 31, 2005 was $1,500,000, based on a physical count priced at cost, and before any necessary adjustment for the following: • Merchandise costing $90,000, shipped FOB shipping point from a vendor on December 30, 2005, was received and recorded on January 5, 2006. • Goods in the shipping area were excluded from inventory although shipment was not made until January 4, 2006. The goods, billed to the customer FOB shipping point on December 30, 2005, had a cost of $120,000. What amount should Herc report as inventory in its December 31, 2005, balance sheet?
Answer:
1,710,000
with 1.5 + .9 +.12
Explanation:
I can't entirely give an explanation for this, but I had this exact question on a recent test and am sure that this is the answer. Maybe someone else could provide with an explanation but I hope this helps you!
Some jobs in the economy are no longer needed after an advancement in technology. A person who loses his or her job this way would be considered _________.
Group of answer choices:
1. cyclically unemployed.
2. a discouraged worker.
3. frictionally unemployed.
4. overemployed.
5. structurally unemployed.
Answer and Explanation:
5. structurally unemployed.
Jimmer’s nominal income will go up by 10 percent next year. Inflation is expected to be – 2 percent next year. By approximately how much will Jimmer’s real income change next year?
Answer:
Nominal interest rate (n) = 10% = 0.10
Inflation rate (i) = -2% = -0.02
Real interest rate (r) = ?
Application of Fisher's Equation
(I + n) = (1 + r)(1 + i)
(1 + 0.10) = (1 + r)(1 + -0.02)
1.10 = (1 + r)(0.98)
1.10 = 1 + r
0.98
1.1224 = 1 + r
1.1224 - 1 = r
r = 0.1224 = 12.24%
Jimmer's real income will change by 12.24% next year.
Explanation:
In the determination of the rate of change in real income, there is need to apply Fisher's equation. The nominal rate and inflation rate have been given, thus, we will make the real rate the subject of the formula.
Tyrone, a project manager at a computer firm, needs to monitor the schedule of a critical project. What should Tyrone do first?
A. Develop a schedule baseline
B. Calculate all schedule variances
C. Identify major scope creep
D. Analyze the completion status of activities
Answer:
The correct answer is letter "C": Identify major scope creep.
Explanation:
Scope creep in project management refers to those uncontrolled changes in the scope of a plan. This can be caused when the scope of the project is not defined or controlled correctly. It may cause schedule variances so it is important to deal with it during the first steps of monitoring a critical project.
A way to identify those elements in the product/service chain that uniquely add value is referred to as
A. the resources view.
B. value-chain analysis.
C. the five forces model.
D. supply chain management.
Answer:
B. value-chain analysis.
Explanation:
According to the given situation, the most appropriate option is B. value chain analysis as the value chain analysis represent the activities that adds the value to the business organization. This concept is developed by Michael Porter in his book "Competitive advantage".
The value chain analysis comprises of the two activities
1. Primary activities: It includes activities like - inbound and outbound logistics, marketing sales and services, etc
2. Support activities: It includes those activities which helps in procurement, managing human resource, etc.
The resource view measures the efficiency and effectiveness of the available resources that helps the organization to assess competitive advantage
The five forces model shows the weakness and strengthens of the business organization
And, the supply chain management deals with transforming the raw material into the finished products
inkal Co. was formed on January 1, 2017 as a wholly owned subsidiary of a US corporation. Sinkal's functional currency was the stickle (§). The following transactions and events occurred during 2017: Jan 1 Sinkal issued common stock for §1,000,000 June 30 Sinkal paid dividends of §20,000 Dec. 31 Sinkal reported net income of §80,000 for the year Exchange rates for 2017 were: Jan 1 §1 = $.48 June 30 §1 = $.46 Dec. 31 §1 = $.42 Average §1 = $.44
What was the amount of the translation adjustment for 2017?
Answer:
It would decrease the net assets by $60,800
Explanation:
The computation of the translation adjustment for 2017 is shown below:
For common stock
= Issued amount × (revised exchange rate - exchange rate)
= $1,000,000 × (0.42 - 0.48)
= -$60,000
For dividend
= Dividend paid × (revised exchange rate - exchange rate)
= $20,000 × (0.42 - 0.46)
= -$800
For net income
= Net income × (revised exchange rate - exchange rate)
= $80,000 × (0.42 - 0.42)
= $0
So, it would decrease the net assets by $60,800 ($60,000 + $800)
Which of the following bankruptcy verdicts for consumers permit removal of some debts?
a. Chapter 7
b. Chapter 11
c. Chapter 13
d. All of the above
e. None of the above
Answer:
c. Chapter 13
Explanation:
Chapter 13 bankruptcy allows an individual to pay loans in monthly installments for 3 or 5 years. It uses all the disposable income and after 3 or 5 years, all remaining debt is removed. Hence it allows for removal of some debts.
Omicron Technologies has $50 million in excess cash and no debt. The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends. Omicron's unlevered cost of capital is 8% and there are 10 million shares outstanding. Omicron's board is meeting to decide whether to pay out its $50 million in excess cash as a special dividend or to use it to repurchase shares of the firm's stock. Assume that Omicron uses the entire $50 million in excess cash to pay a special dividend. The amount of the regular yearly dividends in the future is closest to ________.
Answer:
$4 per share
Explanation:
The formula to compute the regular yearly dividends in the future is shown below:
= Free cash flow ÷ outstanding shares
= $40 million ÷ 10 million shares
= $4 per share
It shows a relationship between the free cash flow and the outstanding shares
All other information which is given is not relevant. Hence, ignored it
Stafford Co. Issued $200,000 face value, 6%, 10-year bonds on January 1, 2017 for $172,740. The market rate of interest was 8%. Interest is payable semi-annually on June 30 and December 31. Staffer uses the effective interest method to amortize bond premium or discount. (a) Determine the amount of interest expense to be recorded with the first cash interest payment. $Answer (b) Determine the carrying value of the bonds on December 31, 2017, after the interest payment has been made. $Answer (c) How much interest expense would be recorded on the 2017 Income Statement? $Answer (d) If the bonds are selling at 103 on December 31, 2018, have market interest rates increased or decreased since the bonds were issued? Answer
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.
Rhonda is single and receives the following income during the year: $30,000 taxable pension, $6,000 in social security payments, and $1,000 of interest on State of Iowa bonds. What is Rhonda's adjusted gross income based on the above information?a. $36,000b. $34,500c. $33,000d. $30,000e. None of the above
Answer:
Rhonda's adjusted gross income = $33,000
so correct option is c. $33,000
Explanation:
given data
taxable pension = $30,000
social security payments = $6,000
interest on State of Iowa bonds = $1,000
to find out
Rhonda's adjusted gross income
solution
we get here Rhonda's adjusted gross income that is express as
adjusted gross income = Taxable pension + Social security ....................1
here we know If income is between $25,000 and $34,000 than there is up to 50 % of your benefits may be subject to tax
so here Social security = 50% × $6,000 = $3000
so total adjusted gross income will be
Rhonda's adjusted gross income = $30,000 + $3,000
Rhonda's adjusted gross income = $33,000
so correct option is c. $33,000
During a Sprint, the features are broken down into smaller elements and put on theSprint Backlog. Which one of the following statements best describes these smallerelements?
a. Activities estimated in duration scrum
b. Tasks estimated in hours (effort)
c. Tasks estimated in duration
d. Activities estimated in hours (effort)
Answer:
The correct answer is letter "B": Tasks estimated in hours (effort).
Explanation:
Sprint Planning meeting is the first Scrum event where tasks are planned for the ongoing Sprint. In this Sprint, the Scrum master, product owner, and the development team participate to share ideas. The tasks are broken down into small duties that the development team members can select. Those tasks are estimated in hours, being the total amount of hours the total work.
Final answer:
The smaller elements on the Sprint Backlog during a Sprint in Scrum methodology are tasks estimated in hours (effort), which are essential for realistic sprint planning and effective time management. The correct answer is: b. Tasks estimated in hours (effort).
Explanation:
During a Sprint, the smaller elements that features are broken down into are described as tasks estimated in hours (effort). In the context of Scrum, once functions are selected and refined for a Sprint, they are detailed and explained for implementation. The work time for these tasks is estimated, informing how many functions can be included in the sprint which typically lasts two to four weeks. This estimation process is crucial for successful sprint planning and requires the creation of a sprint log. As part of the sprint planning, the sprint backlog contains all the tasks to be implemented in the next stage, with the necessary technical descriptions to guide developers and team members.
The focus during sprint planning is on breaking down the work into manageable tasks and creating realistic time estimates based on effort in hours. This is essential to accommodate the selected functions within the sprint timeframe. This estimation enables effective time management and ensures that the team remains focused on delivering value while staying within the planned duration of the Sprint.
Colortrigon Company makes a variety of paper products. One product is 30 lb copier paper, packaged 3,000 sheets to a box. One box normally sells for $20. A large bank offered to purchase 6,000 boxes at $15 per box. Costs per box are as follows: Direct materials $6 Direct labor 2 Variable overhead 2 Fixed overhead 3 No variable marketing costs would be incurred on the order. The company is operating significantly below the maximum productive capacity. No fixed costs are avoidable. Should Colortrigon accept the order?
a.Yes, income will increase by $19,000.
b.No, income will decrease by $43,000.
c.No, income will decrease by $86,000.
d.Yes, income will increase by $30,000.
e.It doesn't matter; there will be no impact on income.
Answer:
d.Yes, income will increase by $30,000
Explanation:
The net profit from this order = Revenue – all expense related = number of unit sold x (price per unit – cost per unit) =
6,000 boxes x (price $15 – Direct materials $6 - Direct labor $2 - Variable overhead $2 - Fixed overhead $3 but avoidable) = 6000 x (15-6-2-2-0) = $30,000
Final answer:
Colortrigon Company should accept the offer as it will increase income by $30,000. The fixed costs are unavoidable, and operating below capacity, the additional order will cover variable costs with additional revenue to contribute to fixed costs.
Explanation:
The Colortrigon Company is operating below capacity and has an offer to sell 6,000 boxes of copier paper at a reduced price of $15 per box. To determine if they should accept the offer, we need to calculate the incremental income from accepting the offer versus the costs involved. The costs per box are as follows: direct materials $6, direct labor $2, and variable overhead $2, totaling to $10 in variable costs per box. The fixed overhead is $3 per box, but since it is unavoidable and the company is operating below capacity, it won't change with the order. Therefore, for the 6,000 boxes, the incremental revenue is $90,000 ($15 per box), and the incremental variable costs are $60,000 ($10 per box). The increase in income is the incremental revenue minus the incremental variable costs, which is $30,000. So, accepting the offer would increase Colortrigon's income by $30,000.
he Alford Group had 220,000 shares of common stock outstanding at January 1, 2018. The following activities affected common shares during the year. There are no potential common shares outstanding. 2018 Feb. 28 Purchased 24,000 shares of treasury stock. Oct. 31 Sold the treasury shares purchased on February 28. Nov. 30 Issued 96,000 new shares. Dec. 31 Net income for 2018 is $1,590,000. 2019 Jan. 15 Declared and issued a 2-for-1 stock split. Dec. 31 Net income for 2019 is $1,590,000.
Answer:
Consider the following calculation
Explanation:
1. Determine the 2018 EPS.
EPS = Net Income / Weighted Average number of shares
Numerator
Net Income = $15,90
Denominator
Weighted Average number of shares = 2,20 – (24x10/12) + (24x2/12) + (96x1/12)
= 2,52 Shares
EPS 2018 = $15,90 / 2,52 Shares
= $6.31 per share
2. Determine the 2019 EPS.
Numerator
Net Income = $15,90
Denominator
Weighted Average number of shares
=[ 2,20 – 24 + 24 + 96 ] x 2 Stock Split
= 6,32 Shares
EPS 2019 = $15,90 / 6,32 Shares
= $2.52 per share
3. At what amount will the 2018 EPS be presented in the 2019 comparative financial statements?
Numerator
Net Income = $15,90
Denominator
Weighted Average number of shares
= 2,520 x 2 Stock split
= 5,04 Shares
EPS = $15,90 / 5,04
= $3.15 per share
Global Technology’s capital structure is as follows: Debt 35 % Preferred stock 15 Common equity 50 The aftertax cost of debt is 9.00 percent; the cost of preferred stock is 13.00 percent; and the cost of common equity (in the form of retained earnings) is 16.00 percent. Calculate the Global Technology’s weighted cost of each source of capital and the weighted average cost of capital. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)
Answer:
weighted average cost of capital = 13.10%
Explanation:
given data
Debt = 35%
Preferred stock = 15
Common equity = 50
cost of debt = 9 percent
cost of preferred stock = 13 percent
cost of common equity = 16 percent
to find out
Weighted Average cost of capital
solution
we get here weighted cost of each source of capital that is
Weighted Cost of Debt = 0.35 * 9% = 3.15 % ....................1
Weighted Cost of Preferred Stock = 0.15 * 13% = 1.95% .........2
Weighted Cost of Common Stock = 0.50 * 16% = 8 % ..............3
so
so weighted average cost of capital will be
weighted average cost of capital = 3.15 % + 1.95% + 8 %
weighted average cost of capital = 13.10%
Suppose you recently paid $1000 for a new 30-year bond issued by the telecommunications company, Verizon. The interest ("coupon") rate is 6 percent, and for the sake of simplicity, let’s assume that the $60 is paid once a year at the end of the year. Given the 6 percent interest rate, the present value of the bond's face value of $1000 paid thirty years from now is approximately $175. What is the present value of the stream of thirty, annual $60 payments? You can calculate the answer or use a shortcut.
$1,000
$825
$700
$350
$140
Answer:
$825
Explanation:
The computation of the present value of the stream of thirty is shown below:
= Face value of the bond - Present value of maturity value after 30 years
= $1,000 - $175
= $825
Simply we deduct the present value of maturity value after 30 years from the face value of the bond so that the correct amount can come
All other information which is given is not relevant. Hence, ignored it
Developing a "marketing plan" involves nothing more than assembling the Four Ps of the marketing mix better than one’s competitors.
a. is limited to just providing information about the marketing mix decisions and not the reasons behind these decisions.
b. is easy—and profits are virtually guaranteed.
c. provides a blueprint for how a firm will implement its marketing strategy.
d. includes no time-related details because the plan is frequently changing.
Answer: The correct answer is "c. provides a blueprint for how a firm will implement its marketing strategy.".
Explanation: The development of a marketing plan provides a plan of how a company will implement its marketing strategy to perform it in the most efficient way possible in order to obtain the greatest amount of profit.
Sensitivity analysis is conducted by_________________.
A. holding all variables at their base level and changing the required rate of return assigned to a project.
B. changing the value of two variables to determine their interdependency.
C. changing the value of a single variable and computing the resulting change in the current value of a project.
D. assigning either the best or the worst possible value to every variable and comparing the results to those achieved by the base case.
E. managers after a project has been implemented to determine how each variable relates to the level of output realized.
Answer:
The correct answer is letter "C": changing the value of a single variable and computing the resulting change in the current value of a project.
Explanation:
Sensitivity Analysis is used in financial modeling to determine how one variable (the target variable) may be affected by changes in another variable (the input variable). It is used to find out what variables affect a publicly-traded company's stock price. Input variables include the company's earnings, number of shares outstanding, debt to equity ratio, and the number of competitors in the industry.
Tamarisk, Inc. has 1,000,000 authorized shares of $24 par value common stock. As of June 30, 2020, there were 800,000 shares issued and outstanding. On June 30, 2020, the board of directors declared a $0.50 per share cash dividend to be paid on August 1, 2020. Prepare the necessary journal entries to be recorded on (a) the date of declaration, (b) the date of record, and (c) the date of payment.
Answer:
Explanation:
The journal entries are shown below:
a. Retained earning A/c Dr $400,000
To Dividend payable A/c $400,000
(Being cash dividend declared)
b. No journal entry is required
c. Dividend payable A/c Dr $400,000
To Cash A/c
(Being the payment is made for cash)
The computation of the dividend is shown below:
= 800,000 shares × $0.50 per share
= $400,000
The table below shows some hypothetical data on the costs associated with the use of a liter of gasoline in a European country.
1. In Euros, what is the private cost for an individual of a liter of gasoline in Europe?
Cost (Euros)
Cost of imported oil 0.5
Cost of refining oil to gasoline 1
Cost of distributing and selling gasoline 0.75
Government taxes 2.5
Cost of pollution from one liter of gasoline 2
Answer:
The private cost for an individual of a liter of gasoline in Europe is 4.75
Explanation:
Private cost is a supplier's or producer's cost of providing goods and services without any external cost.
Private cost = 0.50 + 1 + 0.75 + 2.50
= 4.75
Therefore, The private cost for an individual of a liter of gasoline in Europe is 4.75
Suppose a firm has an annual budget of $150,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented property, and $35,000 in interest costs on capital. The owner-manager does not choose to pay himself, but he could receive income of $90,000 by working elsewhere. The firm earns revenues of $320,000 per year. What are the annual accounting costs for the firm described above?
Answer:
The annual explicit costs for the firm is $310,000.
Explanation:
Explicit cost refers to the cost of the resources purchased by firm from outsiders.
Calculate the annual explicit cost -
Annual explicit cost = Wages and salaries + Materials + New equipment + rented property + interest cost on capital
Annual explicit cost = $150,000 + $75,000 + $30,000 + $20,000 + $35,000
Annual explicit cost = $310,000
Thus,
The annual explicit costs for the firm is $310,000.
Using the following data, Garcon Company Pepper Company Beginning finished goods inventory $ 12,000 $ 16,450 Beginning work in process inventory 14,500 19,950 Beginning raw materials inventory 7,250 9,000 Rental cost on factory equipment 27,000 22,750 Direct labor 19,000 35,000 Ending finished goods inventory 17,650 13,300 Ending work in process inventory 22,000 16,000 Ending raw materials inventory 5,300 7,200 Factory utilities 9,000 12,000 Factory supplies used 8,200 3,200 General and administrative expenses 21,000 43,000 Indirect labor 1,250 7,660 Repairs—Factory equipment 4,780 1,500 Raw materials purchases 33,000 52,000 Selling expenses 50,000 46,000 Sales 195,030 290,010 Cash 20,000 15,700 Factory equipment, net 212,500 115,825 Accounts receivable, net 13,200 19,450 References Section BreakExercise 18-8 Cost of goods manufactured and cost of goods sold computation LO P1, P2 1.value: 1.50 pointsPart 1 1. Complete the table to find the cost of goods manufactured for both Garcon Company and Pepper Company. HintsReferenceseBook & Resources Hint #1 Check my workPrevious attempt 2.value: 2.00 pointsRequired information You did not receive full credit for this question in a previous attempt Exercise 18-8 Part 2 2. Complete the table to calculate the cost of goods sold for both Garcon Company and Pepper Company.
Answer:
Garcon company : cost of production $96,680 cost of good sold $91,030 Gross profit $104,000 Net profit $33,000
Pepper company : cost of production $139,860 cost of good sold $143,010 Gross profit $147,000 Net profit $58,000Explanation:
Garcon. Company
T Account Format
Manufacturing, Trading, Profit and Loss Account
Dr. Cr
$ $
Raw materials. Cost of production transferred
Beginning inventory 7,250. to trading account
Add: purchase 33,000. 96,680
----------
Total materials available 40,250
Less:Ending inventory 5,300
----------
Cost of raw materials consumed 34,950
Add: Direct Labour 19,000
-----------
Prime Cost. 53,950
Factory overhead
Rental cost 27,000
Factory utilities 9,000
Factory supplies used 8,200
Indirect labour 1,250
Repair of factory equipment 4,780
-----------
50,230
Add:Beginning WIP. 14,500
----------
64,730
Less: Ending WIP 22,000
---------
42,730
--------------- ------------------------
Cost of production. 96,680. 96,680
----------------- ---------------------------
Finished good
Beginning inventory 12,000. Sales 195,030
Add: Cost of production 96,680
----------
Goods available for sale 108,680
Less: ending finished good inventory 17,650
-----------
Cost of good sold. 91,030
Gross Profit c/d. 104,000
------------- -----------------
195,030. 195,030
------------------ ----------------------
Expenses
General & Administrative expenses 21,000. Gross Profit b/d 104,000
Selling expenses. 50,000
Net profit. 33,000
------------------ ----------------
104,000 104,000
------------------- -----------------
Pepper company
T Account Format
Manufacturing , Trading, Profit and Loss Account
Dr. Cr
$ $
Raw materials. Cost of production
Beginning inventory 9,000. Transferred to trading Account
Add: purchase. 52,000. 139,860
----------
Total materials available. 61,000
Less: Ending inventory. 7,200
-----------
Cost of raw materials consumed 53,800
Add: Direct Labour. 35,000
-----------
Prime Cost. 88,800
Factory overhead
Rental cost 22,750
Factory utilities 12,000
Factory supplied used 3,200
Indirect labour 7,660
Repair of Factory equipment 1,500
-----------
47,110
Add: Beginning WIP. 19,950
-----------
67,060
Less: Ending WIP. 16,000
-----------
51,060
------------- --------------
Cost of production. 139,860. 139,860
-------------- -----------------
Finished good
Beginninginventory 16,450. Sales 290,010
Add: Cost of production 139,860
--------------
Cost of good available for sale 156,310
Less:Ending inventory 13,300
-------------
Cost of good sold. 143,010
Gross Profit c /d. 147,000
------------ ----------------
290,010. 290,010
-------------- ------------------
Expenses
General &Administrative expenses 43,000. Gross Profit b /d 147,000
Add: Selling expenses. 46,000
----------------
89,000
Net profit 58,000
-------------- -----------------
147,000. 147,000
-------------- -------------------
Accounts Receivable As of December 31, 2016, Nala Incorporated reported accounts receivable for $275,000 less allowance for doubtful accounts of $27,000 on their balance sheet. During 2017, Nala Incorporated had the following transactions related to their receivables balance: 1. Sales on account $180,000 2. Collections of accounts receivable 125,000 3. Sales returns 20,000 4. Write-offs of accounts receivable deemed uncollectible 35,000 5. Recovery of bad debts previously written off 2,500 a) Prepare the journal entries for each of these five transactions b) Prepare the journal entry to record bad debt expense for 2017, assuming that the aging of accounts receivable indicates that estimated bad debts are 10% of accounts receivable.
Answer:
A.
1. Dr Accounts receivable $180,000
Cr Sales $180,000
2. Dr Cash $125,000
Cr Accounts receivable $125,000
3. Dr Sales returns and allowances $20,000
Cr Accounts receivable $20,000
4. Dr Allowance for doubtful accounts $35,000
Cr Accounts receivable $35,000
5. Dr Accounts receivable $2,500
Cr Allowance for doubtful accounts $2,500
Dr Cash $2,500
Cr Accounts receivable $2,500
B. Dr Bad debt expense $27,500
Cr Allowance for doubtful accounts $27,500
Explanation:
A1. To record the sale on account we will debit accounts receivable as our collectible to customer and credit sales in the amount of $180,000
A2. To record the collection, we will recognize the receipt of cash so we have to debit cash and credit accounts receivable to deduct the collectible balance in the amount of $125,000
A3. When the company receives returns from the customers, it will be charged to sales returns and allowances account so we have to debit it and credit accounts receivables in the amount of $20,000 to deduct collectibles to suppliers. Said, sales returns and allowances account is a contra account of sales. Thus, any amount recorded under it will be charged against (deduction) our sales.
A4. During the write off, we will debit allowance for doubtful accounts and credit accounts receivables to reduce its amount from the worthless receivables that is deemed to be uncollectible.
A5. Collection of previously written off receivables will resort to 2 entries. First, reversal of the original entry we made during the write off. So we debit Accounts receivable and credit allowance for doubtful accounts in the amount of $2,500. Next is to record the cash we received from the customer. So debit cash and credit accounts receivable in the same amount of $2,500.
B. To record the bad debt expense, we need to compute first the ending balance of the accounts receivable.
Beg $275,000 plus sales on account of $180,000 less collection $125,000, sales return of $20,000 and write off $35,000 = $275,000.
Bad debts is 10% of the Accounts receivable, so $275,000 x 10% = $27,500
Entry:
Dr bad debt expense $27,500
Cr allowance for doubtful accounts $27,500
Hsu Corporation had a beginning balance of $6,000 in its Land account. During the year Hsu Corporation sold some of its land, reducing the balance in the Land account at the end of the year to $1,500. Hsu also recognized a $700 gain on the sale of land on its current year income statement. What is the effect of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year?
Answer:
the gain on disposal of $700 is deducted from the net profit in the segment of cash flows from operating activities.the cash received of $5,200 is recognized as a cash inflow in the segment of the cash flows from Investing activitiesExplanation:
Cost of land held at the start of the year = $6,000
Closing balance = $1,500
Cost of land sold = $6,000 - $1,500
= $4,500
Gain on sale = $700
Therefore, amount received on disposal = $4,500 + $700
= $5,200
The effect on of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year is in two parts;
the gain on disposal of $700 is deducted from the net profit in the segment of cash flows from operating activities.the cash received of $5,200 is recognized as a cash inflow in the segment of the cash flows from Investing activitiesExplanation:
Hsu Corporation had a beginning balance of $6,000 in its Land account. During the year Hsu Corporation sold some of its land, reducing the balance in the Land account at the end of the year to $1,500. Hsu also recognized a $700 gain on the sale of land on its current year income statement. What is the effect of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year?Hsu Corporation had a beginning balance of $6,000 in its Land account. During the year Hsu Corporation sold some of its land, reducing the balance in the Land account at the end of the year to $1,500. Hsu also recognized a $700 gain on the sale of land on its current year income statement. What is the effect of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year?Hsu Corporation had a beginning balance of $6,000 in its Land account. During the year Hsu Corporation sold some of its land, reducing the balance in the Land account at the end of the year to $1,500. Hsu also recognized a $700 gain on the sale of land on its current year income statement. What is the effect of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year?Hsu Corporation had a beginning balance of $6,000 in its Land account. During the year Hsu Corporation sold some of its land, reducing the balance in the Land account at the end of the year to $1,500. Hsu also recognized a $700 gain on the sale of land on its current year income statement. What is the effect of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year?Hsu Corporation had a beginning balance of $6,000 in its Land account. During the year Hsu Corporation sold some of its land, reducing the balance in the Land account at the end of the year to $1,500. Hsu also recognized a $700 gain on the sale of land on its current year income statement. What is the effect of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year?Hsu Corporation had a beginning balance of $6,000 in its Land account. During the year Hsu Corporation sold some of its land, reducing the balance in the Land account at the end of the year to $1,500. Hsu also recognized a $700 gain on the sale of land on its current year income statement. What is the effect of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year?Hsu Corporation had a beginning balance of $6,000 in its Land account. During the year Hsu Corporation sold some of its land, reducing the balance in the Land account at the end of the year to $1,500. Hsu also recognized a $700 gain on the sale of land on its current year income statement. What is the effect of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year?Hsu Corporation had a beginning balance of $6,000 in its Land account. During the year Hsu Corporation sold some of its land, reducing the balance in the Land account at the end of the year to $1,500. Hsu also recognized a $700 gain on the sale of land on its current year income statement. What is the effect of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year?Hsu Corporation had a beginning balance of $6,000 in its Land account. During the year Hsu Corporation sold some of its land, reducing the balance in the Land account at the end of the year to $1,500. Hsu also recognized a $700 gain on the sale of land on its current year income statement. What is the effect of this sale on the company's statement of cash flows assuming that Hsu Corporation made no land purchases during the year?
You have a $109 comma 000 portfolio comprising 10 stocks. You trade each stock five times this year and each time you trade, you pay about $30 in commissions and spread. You have no special knowledge, so you earn only the average market return of 11% on your investments. How much lower will your total return be because of your trades?
Answer:
Return will be 1.3 % lower
Explanation:
We have given that you have a $109000 portfolio which contain 10 stocks
So number of stocks = 10
Number of times traded each stock = 5
Commission and spread pay = $30
So total expenditure = number of stocks × number of times × commission and spread per trade = 10×5×30 = $1500
So in percentage [tex]=\frac{1500}{109000}=0.013=1.3[/tex] %
So return will be 1.3 % lower
an employee of a company is being paid to assist in the sale of stock options to the company's employees and will recieve a bonus based on sales results. this company employee
Answer:
An employee of a company who is being paid to assist in the sale of stock options to the company's employees and receives a bonus based on sales results is referred to as an Agent. This is in accordance with Uniform Securities Act.
Explanation:
The Uniform Securities Act refers to an employee of a company who is paid to assist in the sale of stock option to the company's employees and receives a bonus based on sales results as an agent. Such an employee is required to register with the state.
Final answer:
An employee receiving a bonus based on the sales of stock options is involved in a company's compensation and incentive strategy. This includes the potential for employees to purchase stock at a predetermined price to align their interests with the company's success. Changes in accounting rules and market conditions have influenced the use and effectiveness of stock options as incentives.
Explanation:
An employee of a company who is paid to assist in the sale of stock options to the company's employees and is set to receive a bonus based on sales results is part of a compensation strategy used to align the interests of employees with those of the company. Stock options grant employees the right to buy company stock at a predetermined price, rewarding them for company performance and providing an incentive to work towards increasing the company's profits. However, as employees may sell their acquired stock rather than hold onto it, this strategy can occasionally be less effective at aligning long-term interests. Some companies, recognizing these challenges, have adapted their compensation strategies to include different forms of incentives, such as actual stock grants or cash bonuses.
For example, if a company commits to sell stock to an employee 2 years in the future at $30 per share, and the stock price rises to $60, the employee would profit by exercising their options at $30 and then selling them on the market. It's important to note that since stock option use has declined due to changes in accounting rules, and because they can be less appealing when the market is down, some companies have moved towards alternative incentives or a combination of options and grants.
Moreover, sales commissions involving the rewarding of employees based on sales volume or profits generated need to be managed carefully to ensure they are consistent with company objectives and do not result in unintended consequences such as over-discounting or neglecting certain customers.
Use the information below to answer question Balance Sheet 2014 2015 2014 2015 Current assets 200 250 Current liabilities 300 250 Net fixed assets 2,775 3,535 Long-term debt 1,250 2,135 2015 Income Statement Sales 5,436 Costs 2,245 Depreciation 448 Interest expense 123 1. What is the operating cash flow (OCF) for 2015? Assume the tax rate is 35 percent. A. 5,436 B. 2,274 C. 3,191 D. 2,743 E. 6,007
Answer:
B. 2,274
Explanation:
The operating cash flow is shown below:
= EBIT + Depreciation - Income tax expense
where,
EBIT = Sales - cost of good sold - depreciation expense
= $5,436 - $2,245 - $448
= $2,743
Income tax expense would be
= (Sales - cost of good sold - depreciation expense - interest expense) × tax rate
= ($5,436 - $2,245 - $448 - $123) × 35%
= $917
And all other items would remain same
Now put these values to the above formula
So, the value would equal to
= $2,743 + $448 - $917
= $2,274
Answer:
the correct answer is "b"
Explanation:
Variable Costing Marley Company has the following information for March: Sales $912,000 Variable cost of goods sold 474,000 Fixed manufacturing costs 82,000 Variable selling and administrative expenses 238,100 Fixed selling and administrative expenses 54,700 Determine the following for Marley Company for the month of March: a. Manufacturing margin $ b. Contribution margin $ c. Income from operations $
Answer:
(a) $438,000
(b) $199,900
(c) $63,200
Explanation:
(a) Manufacturing margin:
= Net sales - Variable cost of goods sold
= $912,000 - $474,000
= $438,000
(b) Contribution margin:
= Manufacturing margin - Variable selling and administrative expenses
= $438,000 - $238,100
= $199,900
(c) Income from operations:
= Contribution margin - Fixed selling and administrative expenses - Fixed manufacturing costs
= $199,900 - $54,700 - $82,000
= $63,200
Expected sales for next year for the Beresford Company is 150,000 units. Curt Planters, manager of the Beresford Division, is under pressure to improve the performance of the Division. As he plans for next year, he has to decide whether to produce 150,000 units or 170,000 units. The Beresford Company will have higher net income if Curt Planters decides to produce
Answer:
The correct answer is A.
Explanation:
Giving the following information:
The expected sales for next year for the Beresford Company is 150,000 units. Curt Planters, manager of the Beresford Division, is under pressure to improve the performance of the Division. As he plans for next year, he has to decide whether to produce 150,000 units or 170,000 units.
In order to improve its performance based on more production, the company must use an absorption cost method. Absorption cost includes the fixed manufacture cost in the unit product cost. Therefore, by producing more units, the fixed costs spread on more units, decreasing the cost of units sold and increasing gross profit. The fixed costs of the period remain on inventory.
He should produce 180,000 units under absorption cost method.
When Wilson, a manufacturer of tennis racquets, sent a team of researchers, designers, and tennis pros out to visitwith 40 women tennis players of various abilities in locations from California to Florida to find out what womenplayers want in a racquet, what kind of research were they conducting?
a. Heuristic
b. Primary
c. Cohesive
d. Randome.
e. Secondary
Answer:
Primary research
Explanation:
It is a type of research, that requires acquiring new and original data from primary sources. This is known as Primary Data. As the term ‘primary’ implies it means first and when it is linked with research, it means an in-depth investigation of facts by the researcher himself and they have a one to one communication with the people, who know about the subject.
Answer:
The correct option is B: Primary research.
Explanation:
Primary research involves gathering primary data. Primary data are those information gathered for the first time for the purpose of solving a specific problem. Thus Wison and the researchers are conducting a primary research, since it involved going to get first-hand information from the women players themselves.