Answer:
Consider a Caribbean cruise route served by two cruise lines, Carnival and Royal Caribbean. Both lines must choose whether to charge a high price ($320) or a low price ($300) to vacationers. These price strategies with corresponding profits are illustrated in the payoff matrix to the right. Carnival's profits are in red and Royal Caribbean's are in blue. Suppose the cruise lines decide to collude. At which outcome are joint profits maximized?
Joint profits are maximized when Carnival picks $320 and Royal Caribbean picks $320.
Explanation:
When Carnival picks $320 and Royal Caribbean picks $320, then joint profits are maximized.
Nash equilibrium would exist only when Royal chooses $300 and the carnival chooses $300.
However, if both Carnival and Royal Caribbean charge a lower price, both of them can earn a higher profit.
Carnival and Royal Caribbean can collude to set prices and act like a monopoly, which involves reducing output and raising prices to maximize profits.
Explanation:In the scenario presented, Carnival and Royal Caribbean have the option to collude and set their prices to maximize joint profits. Collusion would involve agreeing to charge the same price to eliminate competition and act like a monopoly.
When firms collude in such a manner, they tend to reduce output and increase prices to maximize profits, just like a monopolist would. In the context of a payoff matrix, colluding to charge a higher price would typically result in higher joint profits when compared to both firms charging a low price.
For a perfectly competitive firm, the goal is to maximize profit by finding the level of output where total revenue exceeds total costs by the greatest amount, as demonstrated by the provided example of a raspberry farm with revenue and costs data.
Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $20,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $900 every six months over the subsequent eight years, and finally pays $1,300 every six months over the last six years. Bond N also has a face value of $20,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 5.4 percent compounded semiannually. What is the current price of Bond M and Bond N
The current price of Bond M can be calculated by finding the present value of each cash flow using the required return rate, and then summing them up. The current price of Bond N is equal to its face value.
Explanation:To calculate the price of Bond M, we need to calculate the present value of each cash flow and sum them up. The cash flows consist of no payments for the first six years, $900 every six months for the next eight years, and $1,300 every six months for the last six years. We discount each cash flow using the required return rate, which is 5.4% compounded semiannually.
Calculating the present value of no payments for the first six years:PV = 0 (since there are no cash flows)Calculating the present value of $900 every six months for the next eight years:Number of periods = 8 (16 semiannual periods)Required return rate = 5.4% (0.054/2)PV = $900 * ((1 - (1 + 0.054/2)^(-16)) / (0.054/2))Calculating the present value of $1,300 every six months for the last six years:Number of periods = 6 (12 semiannual periods)Required return rate = 5.4% (0.054/2)PV = $1,300 * ((1 - (1 + 0.054/2)^(-12)) / (0.054/2))Summing up all the present values:Current price of Bond M = PV(no payments) + PV($900 payments) + PV($1,300 payments)To calculate the price of Bond N, since it makes no coupon payments over the life of the bond, its price is equal to its face value. Therefore, the current price of Bond N is $20,000.
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Explain the Charachteristics and the internal controlfeatures of an imprest fund.
An imprest fund has ______ balance at all times, which equals the sum of ______ accounts receivable cash in the bank cash in the fund deposits in transit plus the ______ check stubs credit memos total of the tickets that support payments from the fund. The internal control feature of an imprest fund is that it _______ clearly debits clearly identifies decreases increases the amount of money for which the fund custodian is responsible.
Answer:
the Same; cash in the fund; total of the tickets; clearly identifies.
Explanation:
Okay, let us first fill in the gap in the question above. Please note that the capitalized words are the missing words.
"An imprest fund has THE SAME balance at all times, which equals the sum of CASH IN THE FUND accounts receivable cash in the bank cash in the fund deposits in transit plus the TOTAL OF THE TICKETS check stubs credit memos total of the tickets that support payments from the fund. The internal control feature of an imprest fund is that it CLEARLY IDENTIFIES (decreases increases) the amount of money for which the fund custodian is responsible."
IMPREST FUND can simply be defined as the money that one can keep in order to be able to pay for little-little day-by-day expenses. IMPREST fund is one of the powerful tools that is been used in accounting. IMPREST fund is generally kept with a custodian.
A Canadian project has an initial cost of Can$1.8 million and is expected to produce cash inflows of Can$710,000 a year for 3 years after which time it will be worthless. The expected inflation rate in Canada is 4 percent while it is only 3 percent in the U.S. The applicable interest rate in Canada is 8 percent. The current spot rate is C$1 = $.88. What is the net present value of this project in Canadian dollars using the foreign currency approach?
a. Can$33,974.02
b. Can$32,790.05
c. Can$29,738.86
d. Can$28,721.40
e. Can$30,751.18
Iz, Lauren, Odd, and Ralph started a T‑shirt company. They can produce any number of T‑shirts at a cost of $2 per T‑shirt, both marginal and average. They are the only producers of T‑shirts. As monopolists, they charge $20 per T‑shirt and obtain total profits of $10,000 . Now assume there are creative differences and they split the company in two. Lauren and Ralph join together and compete against Iz and Odd. If they compete on quantity, each company would produce 50 T‑shirts and charge $12 a T‑shirt. For technical reasons, assume that the quantity demanded is greater than zero for all prices greater than $0. If, however, Ralph and Lauren compete directly against Iz and Odd in prices, the market price for T‑shirts will be $ And their profits will be $ In response to the price war, Iz and Odd decide to put an iguana on the chest of their T‑shirt. They convince the world that the iguana is necessary for coolness. This type of behavior is called Bertrand competition. product differentiation. Cournot competition. Herfindahl competition. What economic reason is likely to have caused Iz and Odd put an iguana on their T‑shirts? increase profits decrease costs get better customers receive a major fashion award gain notoriety
Answer:
Market price = $2, profit = $0
Product differentiation
Increase profit
Explanation:
The market price will be $2, since the two firms will compete against each other, then the ori e falls to the marginal cost of $2
Product differentiation refers to the distinction made in a market whereby mostly similar products are produced. The variation or distinction made by different producers is usually used to influence consumer decision. The inscription of iguana made on the chest of iz and odd's t-shirt brand is to differentiate its product from that of Ralph and Lauren.
The Economic reason which could have likely sparked iz and odd's decision to put Iguana on its t-shirt brand is to give consumers something a bit more different from their usual design, thereby enticing more customers and ultimately increase profit.
Final answer:
Iz and Odd likely added an iguana to their T-shirts in a strategy to increase profits through product differentiation, allowing them to charge a higher price than competitors even after splitting from a monopolistic firm and entering into competition.
Explanation:
When Iz and Odd decide to differentiate their T-shirts by adding an iguana, the primary economic reason behind such a decision is likely to increase profits. In markets where products become commoditized and competition is based on price, differentiation can create a perceived value that allows a firm to avoid price wars. As the monopolist firm originally produced T-shirts at $20 each with a profit of $10,000, the competition after the split forced the price to go down to $12 per T-shirt when they competed on quantity.
If Ralph and Lauren were to compete directly on price with Iz and Odd, the market price would go down even further, and profits would decrease for both firms due to the Bertrand competition model. However, by adding an iguana, Iz and Odd are attempting product differentiation, which can allow them to maintain a higher price point and retain or even increase profits by setting their product apart from the competition.
How has Uber become so popular among consumers so quickly? How robust is their operating model? Any weak links/vulnerability? Do you agree or disagree with Uber’s surge pricing policy? Is it unfair? Exploitive? Are there risks to Uber? Should it change? Do you agree with Uber’s aggressive business tactics? Is there a more diplomatic way? How well does Uber treat its drivers? What are their benefits vs. complaints? Why has Uber attracted so much media attention? What about its business model makes it compelling and polarizing? Why has Uber achieved such a high valuation? What are the pros and cons ?
Answer:
I think it is ok that u can just get an uber off the street without yelling taxi and having ur neighbor see u
Explanation:
Dena's Decorations is a South Carolina business that has a SUTA rate of 3.6% and an annual SUTA wage base of $14,000. The employee earnings for the past calendar year are: B. Gilfilan $22,180, P. Laubach $37,690, S. Loftin $15,320, M. Moravec $9,840. (Assume that all employees have exceeded the annual FUTA wage base of $7,000 per employee and that the FUTA rate is 0.6%.) What are the FUTA and SUTA tax liabilities for Dena's Decorations?
Answer:
FUTA = $168
SUTA = $1,866.24
Explanation:
As per the data given in the question,
FUTA
= $7,000 × 4 employees × 0.6% = $168
SUTA
Gilfin, Laubach and Loftin earning excess = $14,000
So, will take maximum $14,000 for each of them
Moravec is less than $14,000 therefore will take the actual amount
Earnings = ($14,000 × 3 × 3.6%) + ($9,840 × 3.6%)
=$1,866.24
On its December 31, 2014, balance sheet, Calgary Industries reports equipment of $370,000 and accumulated depreciation of $74,000. During 2015, the company plans to purchase additional equipment costing $80,000 and expects depreciation expense of $30,000. Additionally, it plans to dispose of equipment that originally cost $42,000 and had accumulated depreciation of $5,600. The balances for equipment and accumulated depreciation, respectively, on the December 31, 2015 budgeted balance sheet are:Group of answer choices$328,000; $74,000.$450,000; $98,400.$450,000; $104,000.$408,000; $104,000.$408,000; $98,400.
Answer:
$408,000; $98,400; $309,600
Explanation:
The solution of balances for equipment and accumulated depreciation is provided below:-
To reach at balances for equipment and accumulated depreciation we need to deduct the accumulated depreciation from cost of equipment
Particulars Cost of equipment Accumulated Net income
Depreciation
Equipment $370,000 $74,000 $296,000
($370,000 - $74,000)
Purchase of
equipment $80,000 $30,000 $50,000
($80,000 - $30,000)
Equipment
dispose off $42,000 $5,600 $36,400
($42,000 - $5,600)
Budgeted balance
of equipment $408,000 $98,400 $309,600
($408,000 - $98,400)
therefore as per the question the option is not available so, the right answer is $408,000; $98,400; $309,600.
Analyzing and Reporting Financial Statement Effects of Bond Transactions Winston Inc. reports financial statements each December 31 and issues $400,000 of 9%, 15-year bonds dated May 1, 2017, with interest payments on October 31 and April 30. Assuming the bonds are sold at par on May 1, 2017, complete the financial statement effects template to reflect the following events: (a) bond issuance, (b) the first semiannual interest payment, and (c) retirement of $150,000 of the bonds at 102 on November 1, 2017. Use negative signs with answers, when appropriate.
Answer and Explanation:
The financial statement effects template to reflect the following events is shown below:-
Balance Sheet
Transaction Cash assets + Non Cash = Liabilities+Contributed assets capital Earned Capital
a. $400,000 $400,000
b. -$18,000
-$18,000
c. -$202,000 -$202,000
Income statement
Transaction Revenue - Expense = Net income
b. $18,000 -$18,000
c. $2,000 -$2,000
Answer:
Balance Sheet:
A) 400,000 + 0 = 400,000 + 0 + 0
B) -18,000 + 0 = 0 + 0 + -18,000
C) -153,000 + 0 = -150,000 + 0 + -3,000
Income Statement
A) 0 - 0 = 0
B) 0 - 18,000 = -18,000
C) 0 - 3,000 = -3,000
Explanation:
Sara works as a lab research assistant at Marsh Labs, which conducts trials for cosmetic products such as sprays, dyes, ointments, soaps, and the like. She joined the firm right out of college and has been working there for almost two years now. Which of the following, if true, would weaken the argument that Sara is experiencing cognitive dissonance? A. She feels that this field of work does not allow her to utilize her full potential. B. She does not wear makeup as she is aware of the ingredients that go into making these products. C. She believes that research and testing are an integral part of providing consumers with safe products. D. She recently attended a presentation on the harmful effects of certain chemicals used in cosmetics. E. None of the above
Answer:
C. She believes that research and testing are an integral part of providing consumers with safe products.
Explanation: cognitive dissonance refers to the mental conflict that occurs when a person's behaviors and beliefs do not align. It may also happen when a person holds two beliefs that contradict one another. Cognitive dissonance causes feelings of unease and tension, and people attempt to relieve this discomfort in different ways.
When cognitive dissonance is unaddressed in the workplace, it causes the following effect: Withdrawal and Disengagement: When employees are stressed out, they become inactive. A stressed employee would stop bringing up their ideas and if they remain in that job, the function in employment preservation mode.
Stuart Pointers Corporation expects to begin operations on January 1, year 1; it will operate as a specialty sales company that sells laser pointers over the Internet. Stuart expects sales in January year 1 to total $260,000 and to increase 20 percent per month in February and March. All sales are on account. Stuart expects to collect 70 percent of accounts receivable in the month of sale, 21 percent in the month following the sale, and 9 percent in the second month following the sale. Required Prepare a sales budget for the first quarter of year 1. Determine the amount of sales revenue Stuart will report on the year 1 first quarterly pro forma income statement. Prepare a cash receipts schedule for the first quarter of year 1. Determine the amount of accounts receivable as of March 31, year 1.
Answer:
Explanation:
The preparation of sales budget for the first quarter of year
Sales budget for the first quarter
Jan Feb March
Sales $260,000 $312,000 $374,400
Working Note
For Feb Sales = $260,000 × (100 + 20%)
= $260,000 × 120%
= $312,000
For March Sales = $312,000 × 120%
= $374,400
The amount of sales revenue Stuart will report on the year 1 first quarterly pro forma income statement is shown below:-
Jan Sales = $260,000
Feb Sales = $260,000 × (100 + 20%)
= $260,000 × 120%
= $312,000
March Sales = $312,000 × 120%
= $374,400
Total Sales = $260,000 + $312,000 + $374,400
= $946,400
The preparation of cash receipts schedule for the first quarter of year is shown below:-
Jan Feb March
Jan Sales collection $182,000 $54,600 $23,400
($260,000 × 70%) ($260,000 × 21%) ($260,000 × 9%)
Feb Sales collection $218,400 $65,520
($312,000 × 70%) ($312,000 × 21%)
March Sales collection $262,080
($374,400 × 70%)
Total cash collections $182,000 $273,000 $351,000
The amount of accounts receivable is given below:-
Receivables
Out of Feb Sales $28,080
($312,000 × 9%)
Out of March Sales $112,320
($374,400 × (21% + 9%))
Total receivables $140,400
An airline is considering a project of replacement and upgrading of machinery that would improve efficiency. The new machinery costs $350 today and is expected to last for 5 years with no salvage value. Straight line depreciation will be used. Project inflows connected with the new machinery will begin in one year and are expected to be $300 each year for 5 years and project outflows will also begin in one year and are expected to be $135 each year for 5 years. The corporate tax rate is 36% and the required rate of return is 8%. Calculate the project's net present value.
Answer:
$172.25
Explanation:
initial outlay for the project = -$350
cash flow years 1-5 = [($300 - $135 - $70) x (1 - 36%)] + $70 (depreciation expense) = $60.80 + $70 = $130.80
using an excel spreadsheet and the NPV function, we can calculate the project's NPV with an 8% discount rate:
=NPV(8%,130.80,130.80,130.80,130.80,130.80) - $350 = $522.25 - $350 = $172.25
we can also do it manually:
NPV = -$350 + $130.80/1.08 + $130.80/1.08² + $130.80/1.08³ + $130.80/1.08⁴ + $130.80/1.08⁵ = $172.25
The net present value of the project when the machine cost is $350 should be considered as the $172.25.
Calculation of the net present value:Since the initial outlay for the project is -$350
And, the time period is 5 years
Also, the tax rate is 36%
The required rate of return is 8%.
Now
cash flow years 1-5
= [(One year cost - outflows - $70) * (1 - tax rate) + $70
= [($300 - $135 - $70) x (1 - 36%)] + $70
= $60.80 + $70
= $130.80
Now the NPV should be
= Machine cost + cash flow / (1 + required rate of return) + cash flow / (1 + required rate of return)^2 + cash flow / (1 + required rate of return)^3 + cash flow / (1 + required rate of return)^4 + + cash flow / (1 + required rate of return)^5
= -$350 + $130.80/1.08 + $130.80/1.08² + $130.80/1.08³ + $130.80/1.08⁴ + $130.80/1.08⁵
= $172.25
hence, The net present value of the project should be considered as the $172.25.
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Oriole Company uses the percentage-of-receivables basis to record bad debt expense and concludes that 2% of accounts receivable will become uncollectible. Accounts receivable are $391,900 at the end of the year, and the allowance for doubtful accounts has a credit balance of $2,903. (a) Prepare the adjusting journal entry to record bad debt expense for the year. (b) If the allowance for doubtful accounts had a debit balance of $827 instead of a credit balance of $2,903, prepare the adjusting journal entry for bad debt expense.
Answer and Explanation:
According to the scenario, journal entry for the given data are as follows:
a). Journal entry to record bad-debt expense
Bad-debt expense A/c [($391,900 × 2÷100) - $2,903] Dr. $4,935
To Allowance for doubtful accounts A/c $4,935
(To record bad-debts expense)
b). Journal entry to record bad-debt expense
Bad-debt expense A/c [($391900×2÷100)+$827 ] Dr. $8,665
To Allowance for doubtful accounts A/c $8,665
(To record bad-debts expense)
Oriole Company uses the percentage-of-receivables basis to record bad debt expense. The adjusting journal entry to record bad debt expense can be calculated using the percentage-of-receivables basis and the account balance information provided. The adjusting journal entry changes when the allowance for doubtful accounts has a debit instead of credit balance.
Explanation:To record the bad debt expense for the year, we need to calculate the amount of the expense first. We are told that Oriole Company uses the percentage-of-receivables basis and concludes that 2% of accounts receivable will become uncollectible. Therefore, the bad debt expense can be calculated as 2% of $391,900, which equals $7,838.
The adjusting journal entry to record the bad debt expense would be:
Bad Debt Expense: 7838Allowance for Doubtful Accounts: 7838If the allowance for doubtful accounts had a debit balance of $827 instead of a credit balance of $2,903, the adjusting journal entry for bad debt expense would be:
Bad Debt Expense: 7,011Allowance for Doubtful Accounts: 7,011Learn more about Recording bad debt expense here:https://brainly.com/question/30899643
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On December 31, 2020, Berclair Inc. had 600 million shares of common stock and 7 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $1,050 million. The income tax rate is 25%.
Also outstanding at December 31 were 30 million incentive stock options granted to key executives on September 13, 2016. The options were exercisable as of September 13, 2020, for 30 million common shares at an exercise price of $56 per share. During 2021, the market price of the common shares averaged $70 per share.
Required:
Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2021.
Answer:
The diluted EPS is $1.65
Explanation:
Solution
The Numerator (Basic EPS):
The Net income = $1,050 million
The Preferred dividends= 3mn * 9% * $ 100 = $ 27 million
because the preferred stock is cumulative, the dividend is deducted whether or not paid)
The Denominator (Basic EPS): Weighted average Number of shares
Now,
common stock outstanding (1/1 – 12/31) 600 million x (12/12) *1.05 = 630 million
The Treasury shares purchased (3/1 – 12/31) (24) million x (10/12) *1.05 =(21) million
The shares treasury sold (10/1 – 12/31) (4) million x (3/12) =1
The average weighted number of shares =610 million
so,
Basic EPS = ($1,050-27) ÷ 610 = $1.68
Stock Options
The stock choice are dilutive because exercise price is lesser than market price of $ 70 per share.
By applying the treasury stock method.
Exercise is supposed to take place at the later of the date of issue (9/13/21) or the beginning of the year (1/1/21). Assume exercise 1/1/21
The Treasury Stock Method suggests that the proceeds received upon exercise of $1,680 (30 million x $56) are used to purchase back stock at the market price average, for example $1,680 ÷ $70 = 24 million
The net goes higher in the number of shares = 6 million (30 million issued upon exercise – 24 million repurchased)
Convertible Bonds
By applying method if bonds are transformed into common stock. however,a step by step approach to calculate nature of dilution. is determined
Now,
The shares issued on conversion = 6 million
The Interest paid, net of tax = $3 [(8% x $50) x 75%]
The Interest per shares issued = 3/6 = $ 0.5 per share
The EPS without assumed conversion = ($1,050 - $27+3) ÷ (610 + 6+6) = $1.65
The convertible bonds are dilutive because $1.65 is less than $1.68
Therefore, diluted EPS = ($1,050 - $27+3) ÷ (610 + 6+6) = $1.65
When the Berclair's basic and diluted earnings per share for the year ended December 31, 2021, Then, The diluted EPS is = $1.65
Computation of Tax Rate
The Numerator (Basic EPS):
Then, The Net income is = $1,050 million
After that, The Preferred dividends is = 3mn * 9% * $ 100 = $ 27 million
because When the preferred stock is cumulative, Then, the dividend is deducted whether or not paid)
When The Denominator (Basic EPS): Weighted average Number of shares
Now, When the common stock outstanding (1/1 – 12/31) 600 million x (12/12) *1.05 is = 630 million
When The Treasury shares purchased (3/1 – 12/31) (24) million x (10/12) *1.05 is = (21) million
Although, The shares treasury sold (10/1 – 12/31) (4) million x (3/12) =1
When The average weighted number of shares is = 610 million
so,
The Basic EPS is = ($1,050-27) ÷ 610 = $1.68
Then the Stock Options are:
When The stock choice is dilutive because the exercise price is lesser than the market price of $ 70 per share.
Now, By applying the treasury stock method.
The Exercise is supposed to take place at the later date of issue (9/13/21) or the beginning of the year (1/1/21). Then, Assume exercise 1/1/21
After that, The Treasury Stock Method suggests that the proceeds received upon exercise of $1,680 (30 million x $56) are used to purchase back stock at the market price average, for example, $1,680 ÷ $70 is = 24 million
When The net goes higher the number of shares is = 6 million (30 million issued upon exercise – 24 million repurchased)
Now, Convertible Bonds
Then, By applying the method if bonds are transformed into common stock. however, When a step by step approach to calculating the nature of dilution. is determined
Now,
The shares issued on conversion is = 6 million
The Interest paid, net of tax is = $3 [(8% x $50) x 75%]
The Interest per shares issued is = 3/6 = $ 0.5 per share
The EPS without assumed conversion is = ($1,050 - $27+3) ÷ (610 + 6+6) = $1.65
After that, The convertible bonds are dilutive because $1.65 is less than $1.68
Thus, diluted EPS = ($1,050 - $27+3) ÷ (610 + 6+6) = $1.65
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A comparative balance sheet and income statement is shown for Cruz, Inc. CRUZ, INC. Comparative Balance Sheets December 31, 2017 2017 2016 Assets Cash $ 64,400 $ 16,200 Accounts receivable, net 27,800 34,400 Inventory 58,200 64,600 Prepaid expenses 3,600 2,900 Total current assets 154,000 118,100 Furniture 72,600 82,200 Accum. depreciation—Furniture (11,300 ) (6,200 ) Total assets $ 215,300 $ 194,100 Liabilities and Equity Accounts payable $ 10,100 $ 14,300 Wages payable 6,100 3,400 Income taxes payable 1,000 1,800 Total current liabilities 17,200 19,500 Notes payable (long-term) 20,700 47,800 Total liabilities 37,900 67,300 Equity Common stock, $5 par value 154,500 124,000 Retained earnings 22,900 2,800 Total liabilities and equity $ 215,300 $ 194,100 CRUZ, INC. Income Statement For Year Ended December 31, 2017 Sales $ 332,400 Cost of goods sold 213,900 Gross profit 118,500 Operating expenses Depreciation expense $ 25,600 Other expenses 60,700 86,300 Income before taxes 32,200 Income taxes expense 11,800 Net income $ 20,400 Furniture costing $56,600 is sold at its book value in 2017. Acquisitions of furniture total $47,000 cash, on which no depreciation is necessary because it is acquired at year-end. What is the cash inflow related to the sale of furniture? rev: 02_19_2019_QC_CS-159605
Answer:
Cruz Inc.
Cash inflow from the sale of Furniture:
Difference in the accumulated depreciation account is transferred to Sale of Furniture:
Accumulated Depreciation- Furniture
Opening Balance - $6,200
Plus Depreciation Expense - $25,600
Less Credit Balance - $11,300
Balance transferred to sale of furniture = $20,500
Sales of Furniture Account
Debit: Furniture Account (book value) = $56,600
Credit: Accumulated Depreciation = $20,500
Credit: Cash inflow = $36,100
Explanation:
The cash inflow is the difference between the book value of the furniture sold and its attributable accumulated depreciation.
The attributable accumulated depreciation is the difference between opening accumulated depreciation and depreciation expenses less closing accumulated depreciation. This difference represents the amount of accumulated depreciation transferred out, as a result of the sale.
Final answer:
The cash inflow related to the sale of furniture by Cruz, Inc. is $56,600, which is the book value of the furniture that was sold in 2017. This is calculated using the historical cost and accumulated depreciation provided, considering that the sold furniture did not contribute to any gain or loss in the sale.
Explanation:
The question you asked pertains to the cash inflow from the sale of furniture as reported in the financial statements of Cruz, Inc. To calculate this cash inflow, we need to examine the details provided in the comparative balance sheet and the income statement, as well as the additional information given.
In the balance sheet, the accumulated depreciation on furniture increased by $5,100 from 2016 to 2017 ($11,300 - $6,200). This increase in accumulated depreciation suggests that some furniture was sold, as there is no depreciation expense necessary for new acquisitions in the current year, based on the information provided.
The income statement shows a depreciation expense of $25,600 for the year. Since we've been told that furniture with a historical cost of $56,600 was sold at its book value, we need to figure out this book value. The historical cost of the furniture is subtracted by the accumulated depreciation related to the furniture that was sold, which must be part of this year's depreciation expense, to find the book value.
The book value of the sold furniture could be calculated as follows: $56,600 (historical cost) - (total depreciation expense $25,600 - depreciation for new acquisitions $0) = $56,600 (since there is no additional depreciation for new acquisitions in this year, all depreciation expense is related to old furniture).
Since the furniture was sold at its book value and there was no loss or gain reported, it implies the cash inflow is equal to the book value of the furniture that was sold. Therefore, the cash inflow related to the sale of furniture is $56,600.
Assume that tomatoes are currently imported from abroad at a market price of $ .50 per tomato. Assume that a tariff of $ .25 is placed on imported tomatoes. Also assume that the supply and demand for tomatoes are normal supply and demand relationships. What will be the effect of the tariff on the price of tomatoes in the U.S. and to the price received by foreign exporters of tomatoes?
Answer:
Increases the price of tomatoes in the U.S.
Decrease the price received by foreign exporters of tomatoes.
Explanation:
Tariff refers to a tax or duty is charged on some imported goods. It is usually used to discourage the importation of the goods.
The effect of the tariff $0.25 will be an increase in the price of tomatoes in the U.S. However, it will lead to a decrease in the price received by foreign exporters of tomatoes.
The reason is that the supply and demand for tomatoes are normal supply and demand relationships which will make the foreign exporter to bear the higher burden of the tariff.
On January 1, 2018, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $412,184 and has an expected economic life of five years. Aqua expects the residual value at December 31, 2018, to be $50,000. Negotiations led to Maywood guaranteeing a $70,000 residual value.
Equal payments under the lease are $100,000 and are due on December 31 of each year with the first payment being made on December 31, 2018. Maywood is aware that Aqua used a 5% interest rate when calculating lease payments.
Required:
(a) Prepare the appropriate entries for Maywood on January 1, 2018 and December 31, 2018, related to the lease.
Answer:
Explanation:
The attached picture below shows the whole explanation for the problem. Its so explanatory and i hope it helps you
A company's income statement showed the following: net income, $128,000; depreciation expense, $37,000; and gain on sale of plant assets, $11,000. An examination of the company's current assets and current liabilities showed the following changes accounts receivable decreased $10,800; merchandise inventory increased $25,000; prepaid expenses increased $7,600; accounts payable increased $4,800. Calculate the net cash provided or used by operating activities.
Answer:
$137,000
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow. Depreciation and other non-cash expenses deducted in the income statements are added back while the non-cash income such gain on asset are deducted from net income.
The net cash provided or used by operating activities
= $128,000 + $37,000 - $11,000 + $10,800 - $25,000 - $7,600 + $4,800
= $137,000
Shoshone County uses the consumption method to account for supplies. At the beginning of the year the city had no supplies on hand. During the year the city purchased $450,000 of supplies for use by activities accounted for in the general fund. The city used $300,000 of those supplies during the year. At fiscal year-end, the appropriate account balances on the general fund financial statements would be a) Expenditures $450,000; Supplies inventory $150,000. b) Expenditures $450,000; Supplies inventory $0. c) Expenditures $300,000; Supplies inventory $150,000. d) Expenditures $300,000; Supplies inventory $0.
Answer:
a) Expenditures $450,000; Supplies inventory $150,000
Explanation:
At fiscal year-end, the appropriate account balances on the general fund financial statements would be:
Supplies for use by activities accounted for in the general fund $450,000
Less supplies used during the year $300,000
Balance =$150,000
Hence;
Expenditures $450,000; Supplies inventory $150,000
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $46.Required:A) Build a spreadsheet model in Excel to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,500 copies?For subtractive or negative numbers use a minus sign.B) Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to test the sensitivity of profit to demand. Breakeven occurs where profit goes from a negative to a positive value, that is, breakeven is where total revenue = total cost yielding a profit of zero. In which interval of demand does breakeven occur?(i) Breakeven appears in the interval of 3,600 to 3,800 copies.(ii) Breakeven appears in the interval of 4,000 to 4,200 copies.(iii) Breakeven appears in the interval of 4,200 to 4,400 copies.(iv) Breakeven appears in the interval of 4,400 to 4,600 copies.
Answer:
(a). Loss = $20,000
(b). Breakeven appears in the interval of 4,000 to 4,200 copies.
Explanation:
According to the scenario, computation of the given data are as follow:-
a). Sales = sale units × selling price per unit
= 3,500 × $46 = $161,000
variable cost = sale units × variable cost per unit
= 3,500 × $6 = $21,000
contribution = sales - variable cost
= $161,000 - $21,000 = $140,000
Net income = contribution - fixed cost
= $140,000 - $160,000 = -$20,000 (Loss)
(b). The attachment is attached below:
According to the analysis, (ii) breakeven appears in the interval of 4,000 to 4,200 copies.
To calculate the profit/loss for a given demand, use the formula: Profit = Revenue - Cost. The break-even point occurs where profit goes from negative to positive.
Explanation:To calculate the profit/loss for a given demand, you can use the formula: Profit = Revenue - Cost. The revenue can be calculated by multiplying the demand (3,500 copies) by the selling price ($46). The cost can be calculated by adding the fixed costs ($160,000) to the variable costs (demand * $6). In this case, the profit can be calculated as: $46 * 3,500 - ($160,000 + (3,500 * $6)).
To test the sensitivity of profit to demand, you can use a data table in Excel. Vary the demand from 1,000 to 6,000 in increments of 200 and calculate the profit for each demand level. The break-even point occurs where the profit goes from negative to positive. Based on the data table, the break-even point appears to be in the interval of 4,000 to 4,200 copies.
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Pancor Corporation paid cash of $167,000 to acquire Sink Company’s net assets on February 1, 20X3. The balance sheet data for the two companies and fair value information for Sink immediately before the business combination were: Pancor Corporation Sink Company Balance Sheet Item Book Value Book Value Fair Value Assets Cash $ 257,000 $ 16,000 $ 16,000 Accounts Receivable 149,000 34,000 34,000 Inventory 175,000 44,000 48,000 Patents 86,000 44,000 57,000 Buildings & Equipment 388,000 327,000 144,000 Less: Accumulated Depreciation (182,000 ) (192,000 ) Total Assets $ 873,000 $ 273,000 $ 299,000 Liabilities & Equities Accounts Payable $ 79,000 $ 63,000 $ 63,000 Notes Payable 139,000 127,000 127,000 Common Stock: $8 par value 181,000 $6 par value 12,000 Additional Paid-In Capital 141,000 7,000 Retained Earnings 333,000 64,000 Total Liabilities & Equities $ 873,000 $ 273,000 Required: a. Prepare the journal entry recorded by Pancor Corporation when it acquired Sink’s net assets.
Answer and Explanation:
As per the data given in the question,
Journal entry for Pancor Corporation -
Cash A/c Dr. $16,000
Account receivable A/c Dr. $34,000
Inventory A/c Dr. $48,000
Patents A/c Dr. $57,000
Building A/c Dr. $144,000
Goodwill A/c Dr. $299,000
To Account Payable $63,000
To Notes payable $127,000
To Purchase consideration A/c $167,000
(Being the acquired net assets is recorded)
We debited the all assets and credited the liabilities as it increased the assets and liabilities and the remaining balance is debited to goodwill
The journal entry recorded by Pancor Corporation when it acquired Sink's net assets involves debiting and crediting various accounts to reflect the fair value of assets, liabilities, and equity of Sink Company.
Explanation:The journal entry recorded by Pancor Corporation when it acquired Sink's net assets is as follows:
Debit: Sink Company's Assets (Fair Value)https://brainly.com/question/33762471
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What term refers to searching for potential buyers?
Answer is prospecting
Answer:
^
Explanation:
Quarter Real GDP (billions of dollars) Long-Run Trend of Real GDP (billions of dollars) 1 4,000 4,000 2 4,160 4,120 3 4,326 4,244 4 4,413 4,371 5 4,501 4,502 6 4,591 4,637 7 4,499 4,776 8 4,409 4,919 9 4,673 5,067 10 4,954 5,219 11 5,252 5,376 12 5,376 5,537 Between quarter 10 and quarter 11, real gross domestic product (GDP) grew by what percentage?
Answer:
6%
Explanation:
As per given data
Quarter Real GDP ($billions) Long-Run Trend of Real GDP ($billions)
1 4,000 4,000
2 4,160 4,120
3 4,326 4,244
4 4,413 4,371
5 4,501 4,502
6 4,591 4,637
7 4,499 4,776
8 4,409 4,919
9 4,673 5,067
10 4,954 5,219
11 5,252 5,376
12 5,376 5,537
Growth of GDP = (DGP of Current/recent period - GDP of Prior period) / DGP of Prior period
In this question prior period is quarter 10 and current /recent period is quarter 11.
So, formula will be
Growth of GDP = (DGP of quarter 11 - GDP of quarter 10) / GDP of quarter 10
As we need to calculate the real GDP growth the formula will be as follow
Growth of real GDP = (Real DGP of quarter 11 - Real GDP of quarter 10) / Real GDP of quarter 10
Growth of real GDP = ($5,252 billion - $4,954 billion) / $4,954 billion
Growth of real GDP = $298 billion / $4,954 billion
Growth of real GDP = 6.02% = 6%
Final answer:
Between quarter 10 and quarter 11, the real GDP grew by approximately 6.01%, calculated by taking the difference in GDP for the two quarters, dividing by the GDP in quarter 10, and then multiplying by 100.
Explanation:
To calculate the percentage growth of real gross domestic product (GDP) between quarter 10 and quarter 11, we can use the formula for percentage change:
Percentage Change = ((New Value - Old Value) / Old Value) × 100
For quarter 10, the Real GDP was $4,954 billion, and for quarter 11, it was $5,252 billion. Applying the formula, we get:
Percentage Change = (($5,252 - $4,954) / $4,954) × 100
Percentage Change = ($298 / $4,954) × 100
Percentage Change ≈ 6.01%
Therefore, the Real GDP grew by approximately 6.01% from quarter 10 to quarter 11.
On October 1, 2019, Fashion Jewelers accepted a 4minusmonth, 14% note for $ 8 comma 000 in settlement of an overdue account receivable. The accounting period ends on December 31. Calculate the accrued interest on the note at December 31, 2019. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
Answer:
$280.00
Explanation:
Data provided
Overdue accounts receivable = $8,000
Note percentage = 14%
The computation of accrued interest on the note is shown below:-
Accrued interest = Overdue accounts receivables × Note percentage × Remaining month (From Oct to Dec)
= $8,000 × 14% × 3 ÷ 12
= $8,000 × 14% × 0.25
= $280.00
therefore for computing the accrued interest we simply applied the above formula.
The condensed product-line income statement for Dish N' Dat Company for the month of March is as follows:
Dish N' Dat Company
Product-Line Income Statement
For the Month Ended March 31
Bowls Plates Cups
Sales $71,000 $105,700 $31,300
Cost of goods sold 32,600 42,300 16,800
Gross profit $38,400 $63,400 $14,500
Selling and administrative expenses 27,400 42,800 16,700
Income from operations $11,000 $20,600 $(2,200)
Fixed costs are 15% of the cost of goods sold and 40% of the selling and administrative expenses.
Dish N' Dat assumes that fixed costs would not be materially affected if the Cups line were discontinued.
Required:
a. Prepare a differential analysis dated March 31, 2014, to determine if Cups should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter zero 0.
Answer:
It will generate a financial disadvantage for 44,065 dollar to discontinued the cup division. This division generates a positive contribution which, if discontinued will not help to absorp the common fixed cost fo the firm and move the burden entirely to Bowls Plates division making the profit to decrease.
Explanation:
[tex]\left[\begin{array}{cccc}&$Continued&$Discontinued&$Differential\\$sales&105700&0&(105700)\\$variable cost&-61635&0&61635\\$contribution&44065&0&(44065)\\$fixed cost&-23465&-23465&0\\$Result&20600&-23465&(44065)\\\end{array}\right][/tex]
Fixed cost:
42,300 x 15% + 42,800 x 40% = 23,465
Variable cost:
42,300 x (1 - 15%) + 42,800 x (1 - 40%) = 61,635
The differencial will be discontinued less continued column
If the result is positive there is a cost saving if discontinued
if negative there is a loss in contribution if discontinued
Sheffield Suppliers reported cost of goods sold for 2017 of $690,000 and retained earnings of $1,250,000 at December 31, 2017. Sheffield later discovered that its ending inventories at December 31, 2016 and 2017, were overstated by $48,000 and $64,800, respectively. Determine the corrected amounts for 2017 cost of goods sold and December 31, 2017, retained earnings. COGS Retained Earnings Corrected amounts $enter a dollar amount $enter a dollar amount
Answer:
Adjusted COGS = $706,800
Adjusted retained earnings = $1,185,200
Explanation:
Opening stock + purchases - Closing stock = Adjustment needed to COGS
- 48,000 + 0 - (-64,800) = Adjustment needed to COGS
-48,000 + 64,800 = Adjustment needed to COGS
Adjustment needed to COGS = $16,800
Adjusted COGS = $690,000 + $16,800 = $706,800
Adjusted retained earnings = $1,250,000 - 64,800 = $1,185,200
Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2021, Lacy received the following information: Projected Benefit Obligation ($ in millions) Balance, January 1 $ 1,120 Service cost 90 Prior service cost 42 Interest cost(5.0%) 56 Benefits paid (80 ) Balance, December 31 $ 1,228 Plan Assets ($ in millions) Balance, January 1 $ 530 Actual return on plan assets 56 Contributions 2021 90 Benefits paid (80 ) Balance, December 31 $ 596 The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2021. At the end of 2021, Lacy amended the pension formula creating a prior service cost of $42 million. Determine Lacy's pension expense for 2021.
Answer:
$93 Million
Explanation:
The computation of Lacy's pension expense is shown below:-
Service cost $90 Million
Interest cost $56 Million
Expected return on the plan assets $53 Million
$56 Million - (56 Million - 53 Million)
Amortization of prior service cost $0*
Amortization of net gain or net loss-AOCI $0
Pension Expense $93 Million
Therefore, the change was at the end of the year, so there will be no changes in amortization of prior service cost in 2021.
The total pension expense for Lacy Construction in 2021 is $132 million, which is calculated by adding the service cost ($90 million), Interest cost ($56 million), and prior service cost ($42 million), and subtracting the actual return on plan assets ($56 million).
Explanation:The pension expense for Lacy Construction in 2021 can be calculated by adding the service cost, interest cost, and the prior service cost because of the amendment of the pension formula, less the actual return on the plan assets. Therefore, Lacy's pension expense can be calculated as follows: Service cost ($90 million) plus Interest cost ($56 million) plus Prior service cost ($42 million) minus Actual return on plan assets ($56 million). Therefore, the total pension expense for Lacy Construction in 2021 is $132 million. For Lacy Construction, an increment in pension liabilities due to the Prior service cost was a significant aspect of their pension expense, and managing the Actual return on plan assets will also play a critical role in controlling these costs in the future.
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Bearcat Construction begins operations in March and has the following transactions:
March 1 Issue common stock for $11,500.
March 5 Obtain $7,100 loan from the bank by signing a note.
March 10 Purchase construction equipment for $15,500 cash.
March 15 Purchase advertising for the current month for $1,100 cash.
March 22 Provide construction services for $16,100 on account.
March 27 Receive $11,100 cash on account from March 22 services.
March 28 Pay salaries for the current month of $4,100.
Required:
Record each transaction. The company uses the following accounts: Cash, Accounts Receivable, Equipment, Notes Payable, Common Stock, Service Revenue, Advertising Expense, and Salaries Expense. (If no entry is required for a transaction/event, enter "No Journal Entry Required" in the first account field.)
Answer:
March 1 Issue common stock for $11,500.
Debt Cash account $11,500
Credit Common stock $11,500
Being entries to record the receipt of cash from the issuance of stock
March 5 Obtain $7,100 loan from the bank by signing a note.
Debit Cash account $7,100
Credit Note payable $7,100
Being entries to record loan from bank
March 10 Purchase construction equipment for $15,500 cash.
Debit Fixed assets $15,500
Credit Cash account $15,500
Being entries to record the purchase of equipment
March 15 Purchase advertising for the current month for $1,100 cash.
Debit Advertising expense $1,100
Credit Cash account $1,100
Being entries to record advertising expense for the month
March 22 Provide construction services for $16,100 on account.
Debit Accounts receivable $16,100
Credit Service Revenue $16,100
Being entries to record the revenue from construction services
March 27 Receive $11,100 cash on account from March 22 services.
Debit Cash accounts $11,100
Credit Accounts receivable $11,100
Being entries to record cash collected
March 28 Pay salaries for the current month of $4,100.
Debit Salaries expense $4,100
Credit Cash account $4,100
Being entries to record salaries expense paid.
Explanation:
Assets are debited when there there is an increase. The same also applies to expense. Increase in liabilities, common stock and income are accounted for by posting a credit entry to the account affected.
When assets decrease, credit entries are posted to it. The same also applies to expense. while debits to liabilities, equity and income is for a decrease in the account.
Final answer:
Bearcat Construction's transactions are recorded using double-entry bookkeeping. Transactions affect various accounts named, such as Cash, Equipment, and Accounts Receivable. The transactions demonstrate the accrual basis of accounting, where transactions are recorded when they occur, not necessarily when cash is exchanged.
Explanation:
To record the transactions for Bearcat Construction's operations in March, the double-entry bookkeeping system is used, where each transaction affects at least two accounts. Here's a breakdown of each transaction and how it affects the company's accounts:
Issue common stock for $11,500: Debit Cash, Credit Common Stock.Obtain a $7,100 loan from the bank by signing a note: Debit Cash, Credit Notes Payable.Purchase construction equipment for $15,500 cash: Debit Equipment, Credit Cash.Purchase advertising for the current month for $1,100 cash: Debit Advertising Expense, Credit Cash.Provide construction services for $16,100 on account: Debit Accounts Receivable, Credit Service Revenue.Receive $11,100 cash on account from March 22 services: Debit Cash, Credit Accounts Receivable.Pay salaries for the current month of $4,100: Debit Salaries Expense, Credit Cash.In the referenced information, purchasing equipment on credit is illustrative of the accrual basis of accounting where Treehouse would Debit Equipment and Credit Accounts Payable upon receiving the equipment. The accrual basis records transactions when they occur, not when cash changes hands. This ensures that the financial statements provide a complete and accurate picture of the company's financial position.
Laramie Corporation has acquired a property that included both land and a building for $ 500 comma 000. The corporation hired an appraiser who has determined that the market value of the land is $ 310 comma 000 and that of the building is $ 400 comma 000. At what amount should the corporation record the cost of the building? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
Answer:
$281,700
Explanation:
The computation of cost of the building is shown below:-
Market value of total assets = Market value of land + Market value of building
= $310,000 + $400,000
= $710,000
Share of buildings in total market value = Market value of building ÷ Market value of total assets
= $400,000 ÷ $710,000
= 56.33%
So, Cost of building to be recorded = Combined cost of land and building × Share of buildings in total market value
= $500,000 × 56.34%
= $281,700
Cersei Inc. sold $2,700 in gift cards during a special promotion on October 18, 2019, and sold $4,050 in gift cards on November 18, 2019. Of the cards sold in October, $270 were redeemed in October, $675 in November, and $810 in December. Of the gift cards sold in November, $405 were redeemed in November and $945 were redeemed in December. All gift cards expire two months after purchase and the comapny recognizes revenue related to gift card breakage at that time. At 12/31/2019, Cersei's deferred revenue account would report a balance of:
Answer:
$2,700
Explanation:
Computation of the given data are as follows:
October sales = $2,700
November sales = $4,050
As the expiry of cards is of 2 months.
Then, of the sale of November,
Redemption in November = $405
Redemption in December = $945
So, Deferred revenue = November sales - November sales - Redemption in December
= $4,050 - $405 -$945
= $2,700
When preparing the statement of cash flows using the indirect method, which statement is INCORRECT? A. Losses on the sale of longminusterm assets are subtracted from net income. B. Increases in current liabilities are added to net income. C. Depreciation expense is added to net income. D. Gains on the sale of longminusterm assets are subtracted from net income.
Answer:
The correct answer is Option A.
Explanation:
A. Losses on the sale of longminusterm assets are subtracted from net income - This is incorrect because on losses on sale of an asset are usually added to the net income to avoid double-counting of income. Under the investing section of the cash flows, the proceed received on disposal is recorded there as inflow, if the losses realized on the disposal are subtracted, there would be a double-counting because the losses had already reduced the net income before.
B. Increases in current liabilities are added to net income - This is an inflow of cash, so it is usually added back.
C. Depreciation expense is added to net income - The explanation under Option A above applies but only that depreciation is a non-cash item, which already reduced the net income and it has to be added back to reinstate the net income.
D. Gains on the sale of longminusterm assets are subtracted from net income - Explanation under Option A applies.