Answer:
Goodwill 35,000 debit
Investment in Gates 25,000 credit
Retained Earnings 10,000 credit
--to adjust for change of method--
Explanation:
600,000 x 15% = 90,000
purchased at 105,000
goodwill of 15,000
+ 150,000 x 15% of net income = 22,500
- 50,000 x 15% dividends = (7,500)
investment at the end of 2013:
90,000 + 22,500 - 7,500 = 105,000
Then we purchase 25%
105,000 represent 15%
thus 25% would be: 105,000 / 0.15 x 0.25 = 175,000
purchased at 200,000
goodwill of 25,000 to be recognized.
So, equity method will be:
105,000 + 175,000 = 280,000 for the proportional equity
and 15,000 + 25,000 = 35,000 goodwill
Total of 315,000
While fair value will not recognize goodwill. and also, the investment is not modified when dividends and the gain for the year are delcared.
It measure at cost unless the market value of the stock decrease so we got:
105,000 1st purchase + 200,000 2nd purchase = 305,000
To adjust we are going to decrease investment by 25,000 and increase goodwill by 35,000 the other will go into retained earnings to balance out.
To switch from the fair-value method to the equity method, an adjustment is needed for the initial investment in Gates Corporation.
Explanation:To change from the fair-value method to the equity method, an adjustment needs to be made for the initial investment in Gates Corporation. The fair-value method recognizes changes in the value of the investment each reporting period, while the equity method only recognizes the investor's share of the net income or loss of the investee. Therefore, the adjustment would involve removing any fair-value adjustments made under the fair-value method and recording the initial investment at its original cost.
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A(n) ____ strategy involves a partnership with a long-term commitment that can be used to acquire new technology and information.
Answer:
joint venture
Explanation:
Joint venture -
It is the type of business agreement , where two or more companies or business organisation , comes together to merge their resources in order to accomplish a common activity or a new project together , is referred to as a joint venture.
In this scenario , the profit or loss to the new business is equally shared between both the companies.
Hence, from the given statement of the question,
The correct term is joint venture .
A _____ is a statement of company rules, guidelines, and instructions with a purpose to inform, build image, and goodwill. A. monthly and annual report B. transmittal C. 10 K report D. policy and procedure bulletin E. quarterly report
Answer:
The correct answer is letter "D": policy and procedure bulletin.
Explanation:
The policy and procedure bulletin is the document that states all the practices and behavior the company expects from the employees after hiring them. The policy and procedure bulletin represents the rules of the firm that must be followed within the organization to ensure worker's safety and a peaceful work-frame.
A ________ is a descriptive fact about a product or service; a ________ is what the customer gains from that characteristic.
Answer:
The correct words for the blank spaces are: feature; benefit.
Explanation:
The product features are all the characteristics that represent it: design, size, and price, and availability are some of them. The product features make a good or service unique and differentiate it from competitors. The product benefit is the value customers provide to the good or service based on the need it satisfies. The more beneficial, the more frequent customers will purchase it.
Parts of Speech. Choose the correct answer. Words such as slowly, very, and tomorrow that answer the questions How? and When? are (a) adverbs, (b) adjectives, (c) nouns, (d) conjunctions:________
Answer:
(a) adverbs,
Explanation:
Words like slowly, very, quickly, fastly and tomorrow that gives the answer to the questions How? are Adverbs. An adverb is a word tells more about a verb, and most of the time answers the questions how often? how? when? what way? where?
Usually, there are five kinds of the adverb, and when the word indicates that how something is done as the question is being asked here, it is called Adverbs of Manner.
The words 'slowly', 'very', and 'tomorrow' that answer 'How?' and 'When?' are adverbs. The correct answer is a.
Explanation:Words such as slowly, very, and tomorrow that answer the questions How? and When? are (a) adverbs. Adverbs are parts of speech that describe a verb, an adjective, or another adverb. They commonly provide more details about how an action is performed, the extent or degree of an action or quality, and time-related aspects.
For example:
The man walked slowly (How did he walk?)The homework was very hard (To what extent was the homework hard?)She will leave tomorrow (When will she leave?)Adverbs often, but not exclusively, end in -ly. However, words like very do not follow this pattern and are still considered adverbs because they modify adjectives or other adverbs.
Planter Corporation used debentures with a par value of $566,000 to acquire 100 percent of Sorden Company's net assets on January 1, 20X2. On that date, the fair value of the bonds issued by Planter was $550,000. The following balance sheet data were reported by Sorden:
Balance Sheet Item Historical Cost Fair Value
Assets
Cash & Receivables $59, 000 $53, 000
Inventoy 101, 000 203, 000
Plant & Equipment 413,000 310,000
Less: Accunulat ed Depreciation (168,000)
Goodwill 13,000
Total Assets $480, 000 $675, 000
Liabilities and Equities
Accounts Payable $47,000 $47,000
Common Stock 89,000
Additional Paid-In Capital 60, 000
Retained Eamings 284, 000
Total Liabilities& Equities $ 480,000
Required:
1. Determine the amount Planter Corporation would record as a gain on bargain purchase and prepare the journal entry Planter would record at the time of the exchange. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
$78,000
Explanation:
The journal entry is shown below:
Cash & Receivables A/c Dr $53,000
Inventory A/c Dr $203,000
Land A/c Dr $109,000
Plant & Equipment A/c Dr $310,000
Discount on Bonds payable A/c Dr $16,000 ($566,000 - $550,000)
To Account payable $47,000
To Bond payable $566,000
To gain on purchase $78,000
(Being the exchange is recorded and the balancing figure is credited to gain on purchase account)
The computation of gain on purchase account would be
= Fair value of assets - fair value of account payable - fair value of the bonds issued by Planter
= $675,000 - $47,000 - $550,000
= $78,000
Note: The land historical cost and fair value is $62,000 and $109,000 respectively
This information is not given in the question
Which of the following is not involved with the demographic component of an organization's external environment?
A) gender
B) income
C) values
D) race
Answer:
The correct answer is letter "C": values.
Explanation:
The demographic components of an organization's external environment are composed of those features of the people that do not belong to the firm. Those features can be measured and represent information from where companies can determine what their target population could be.
In that case, as values cannot be measured, they do not fall into this category. Gender, income, and race do.
There are different aspects or component of demographic environment. The option that is not involved with the demographic component of an organization's external environment is values.
Demographic analysis is simply known to be the study of a population using the factors such as age, race, and sex.
Demographic data are therefore any socioeconomic information that is often shown statistically such as employment, education, income, etc.
Some examples of demographics are age, race, ethnicity, gender, marital status, income, etc. and therefore values is not one of them.
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Which process is recommended for those products with the highest volume and the highest standardization on the product continuum?
Answer:
correct answer is Continuous flow
Explanation:
highest volume and the highest standardization is Continuous flow
because in the Continuous-flow process it involve moving of 1 work unit at a time between the every step of the process without break in the time and sequence and substances
simply continuous flow save the time, energy and the cost with high volume and the high standard
so here the correct answer is Continuous flow
Economists assume that the only reason people take the actions they do is in response to economic incentives.
A. True
B. False
Answer:
The correct answer is letter "B": False.
Explanation:
Economic incentives are the factors that drive people to react in a certain form. It allows individuals to go after their preferences. However, external factors can also push people to act in one way or another. Those factors could be inflation, low job opportunities or unplanned major events like war.
Martinez Mining Company purchased land on February 1, 2020, at a cost of $1,031,100. It estimated that a total of 54,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $99,900. It believes it will be able to sell the property afterwards for $111,000. It incurred developmental costs of $222,000 before it was able to do any mining. In 2020, resources removed totaled 27,000 tons. The company sold 19,800 tons.Compute the following information for 2020.
(a) Per unit mineral cost
$enter a dollar amount
(b)
Total material cost of December 31, 2020, inventory
$enter a dollar amount
(c)
Total material cost in cost of goods sold at December 31, 2020
$enter a dollar amount
Answer:
a. $23
b. $165,600
c. $455,400
Explanation:
The computation is shown below:
a. Per unit cost
= Cost of depreciation ÷ estimated number of tons
where,
Cost of depreciation = Purchase value of land + fair value of this restoration obligation + developmental costs incurred - residual value
= $1,031,000 + $99,900 + $222,000 - $111,000
= $1,241,900
And the estimated number of tons is 54,000 tons
So, the per unit cost would be
= $1,241,900 ÷ 54,000 tons
= $23
b. The total material cost for ending inventory would be
= (27,000 tons - 19,800 tons) × $23
= 7,200 tons × $23
= $165,600
c. The total material cost for ending cost of goods sold would be
= 19,800 tons × $23
= $455,400
You want to buy a $300,000 home. You have $30,000 as a down payment. Therefore, buying the house will require you to take out a $270,000 mortgage. If you pay $1,262.70 per month for 30 years, how much money do you pay in interest over the course of the 30-year mortgage
Answer:
The amount of money do you pay in interest over the course of the 30-year mortgage is $184,572.
Explanation:
Total interest paid = total amount paid over 30 years - loan amount
= 1262.7*30*12 - 270000
= $184,572
Therefore, The amount of money do you pay in interest over the course of the 30-year mortgage is $184,572.
Eagle Corp. operates Magnetic Resonance Imaging (MRI) clinics throughout the Northeast. At the end of the current period, the company reports the following amounts: Assets = $34,000; Liabilities = $19,000; Dividends = $1,400; Revenues = $10,800; Expenses = $7,400. Required: 1. Calculate net income.
Final answer:
Eagle Corp.'s net income is calculated by subtracting the expenses from the revenues. With revenues at $10,800 and expenses at $7,400, the net income comes out to be $3,400.
Explanation:
The student is asking how to calculate the net income for Eagle Corp., a company that operates MRI clinics. To find the net income, we subtract the total expenses from the total revenues. Given the revenues of $10,800 and expenses of $7,400, the net income can be calculated as follows:
Total Revenues: $10,800
Total Expenses: $7,400
Net Income: $10,800 - $7,400 = $3,400
Therefore, Eagle Corp's net income for the current period is $3,400.
Suppose that the Bethesda Mining Company had sales of $2,166,873 and net income of $108,381 for the year ending December 31, 2019. Calculate ROE using the DuPont identity. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter the profit margin and return on equity as a percent.)
Answer: attached below
Explanation:
The return on equity is 24.01%. As the profit margin is 3.30% and assets turnover is 29.9. The equity multiplier is 2.65. The image is attached for better understanding.
What is return on equity?Return on equity is the proportion of a company's net income to its shareholders' equity. Return on equity is a metric used to assess a company's financial performance and the efficiency of its revenue generating.
The higher the ROE, the better a company is in converting equity financing into profits. ROE is used to compare the financial performance of companies in the same sector. As it specifies the profit generated by the firm.
It measures the management's ability to turn a profit with the equity at hand. A return of 15% to 20% is considered to be favourable.
Thus, The return on equity is 24.01%.
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Buzzard Bicycle specializes in custom painting and design of bicycles. December 31 is the company’s fiscal year-end. Information necessary to prepare the year-end adjusting entries appears below.
1) A three-year fire insurance policy was purchased on July 1, 2021, for $18,000. The company debited Prepaid Insurance for the entire amount.
6) Buzzard borrowed $36,000 on March 1, 2021. The principal is due to be collected in five years. Interest is receivable each March 1 at an annual rate of 10%.
Record the necessary adjusting entries on December 31, 2021. (Do not round intermediate calculations. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
If someone could explain this I'd be eternally grateful
Answer:
See explanation section
Explanation:
Adjusting Entries
Requirement 1
December 31 Insurance Expense Debit $3,000
Prepaid Insurance Credit $3,000
Note: As the company purchased a 3-year life insurance on July 1, 2021, the insurance policy will be expired on June 30, 2024. However, the insurance expense for December 31, 2021 will be for 6 months (July 1, 2021 to December 31, 2021).
Calculation:
Prepaid Insurance (3 years policy) = $18,000, so each year insurance policy will be expired = $18,000 ÷ 3 = $6,000.
Since the insurance will be expired for 6 months in 2021, the insurance expense will be = ($6,000 × 6 months) ÷ 12 months = $3,000
Requirement 6
December 31 Interest expense Debit $3,000
Interest payable Credit $3,000
Note: As the company borrowed $36,000 for five years, the interest is to be paid on March 1, 2022. Therefore the interest expense will be accrued for 10 months (March 1, 2021 to December 31, 2021).
Interest expense will be = $36,000 × 10% × (10/12) = $3,000. Whichever the maturity date to be paid the entire amount will not be affected in that case.
Final answer:
The adjusting entries for Buzzard Bicycle include recording an insurance expense of $3,000 and debiting Prepaid Insurance, along with recording an interest expense of $3,000 and crediting Interest Payable.
Explanation:
To record the necessary adjusting entries on December 31, 2021, for Buzzard Bicycle, you need to consider the two different transactions separately. Here are the adjusting entries:
Insurance: Since the fire insurance policy was purchased on July 1, 2021, for $18,000 and it covers a three-year period, this means that from July 1, 2021, to December 31, 2021, the policy has been in effect for 6 months. To calculate the insurance expense for this period: $18,000 / 36 months * 6 months = $3,000. The adjusting entry will involve debiting Insurance Expense for $3,000 and crediting Prepaid Insurance for $3,000.Interest on Borrowed Funds: For the interest on the borrowed amount of $36,000 at an annual rate of 10%, the interest for the period from March 1, 2021, to December 31, 2021, (10 months) would be: $36,000 * 10% / 12 months * 10 months = $3,000. The adjusting entry will involve debiting Interest Expense for $3,000 and crediting Interest Payable for $3,000.
You would like to have enough money saved after your retirement such that you and your heirs can receive $100,000 per year in perpetuity. How much would you need to have saved at the time of your retirement in order to achieve this goal? (Assume that the perpetuity payments start one year after the date of your retirement. The annual interest rate is 12.5 percent.)
Answer:
$900,000
Explanation:
Given that,
Perpetuity payment = $100,000
Annual interest rate = 12.5 percent
Total value of investment should be:
= Perpetuity payment ÷ Annual interest rate
= $100,000 ÷ 0.125
= $800,000 (should be as balance on the date of retirement)
The first payment of $100,000 should be on the date of retirement
Therefore,
Total investment on the date of retirement should be:
= $800,000 + $100,000
= $900,000
To receive $100,000 annually in perpetuity with an interest rate of 12.5%, you would need to have saved $800,000 at the time of your retirement. This is calculated by dividing the desired annual payment by the interest rate.
Explanation:The subject of this question relates to finance, particularly the concept of perpetuity. Perpetuity is an infinite series of payments or cash flows that occur at regular intervals. In this case, the student wants to find out how much they need to save by retirement to receive $100,000 every year indefinitely, with an annual interest rate of 12.5%.
To calculate this, we can use the formula of Perpetuity Value = Payment / Interest rate. Here the payment is $100,000 and the interest rate is 12.5% or 0.125. Let's plug these into the formula:
Perpetuity Value = 100,000 / 0.125 = $800,000.
So you would need to have saved $800,000 by retirement to achieve your goal of getting $100,000 per year in perpetuity.
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Economists speaking like scientists make a. positive statements. b. prescriptive statements. c. claims about how the world should be. d. More than one of the above is correct.
Answer:
a. positive statements.
Explanation:
Positive statements is a statement from the field of positive economics that deals with measurement and explanation of economic phenomena, it deals with or studies 'what is' or how the various economics problems of what to produce, how to produce, when to produce and for whom to produce are actually solved. it uses relevant fact for its analysis.
Economists, like scientists, primarily make positive statements, based on observable and measurable facts. They also make normative statements that describe how they believe the world should be, based on values and opinions.
Explanation:When economists speak like scientists, they make positive statements that describe the world as it is, based on observable and measurable facts that can be tested. This approach is rooted in the economic way of thinking which is meant to understand human behavior and how people, firms, and governments act. On the other hand, prescriptive statements or normative statements are those that describe how the world should be, based on subjective opinions and values, and these can't be tested for validity.
Therefore, in answer to your question, more than one option is correct. Economists speaking like scientists make both a. positive statements and b. prescriptive statements. However, they predominantly make positive statements, and their analysis is mostly based on these.
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In Statistical Process Control (SPC), if a sample of items is taken and the mean of the sample is outside the control limits, the process is:
a. out of control and the cause should be established
b. producing high quality products
c. in control and capable of producing within the established control limits
d. in control, there is no need for concern within the established control limits with only natural causes of variation
The process will be out of control and the cause must be established
Explanation:
The statistical method in which the employers handle to control the quality and to control the process of a specific process and they help to function efficiently
This will ensure that the products operates efficiently and if the products produce more specifications and the tools that are included will include the run charts the control charts and the main focus will be on the continuous improvement and in the design of the experiments
The accountant for Sysco Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year Net income for the year Cash dividends declared for the year $ 819,000 230,e00 42,000 1,007,000 10,00e Retained earnings balance at the end of the year Cash dividends payable at the beginning of the year Cash dividends payable at the end of the year 11,000
What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows? Multiple Choice
$42,000.
$42.000
$43,000
$63.000.
$1,000
$41000
Answer:
The correct answer is $ 41,000.
Explanation:
This problem requires us to calculate the amount of cash dividend that will be reported in the financing section of the statement of cash flows. In statement of cash flow the dividend paid in cash during the period is reported. Dividend declaration in not relevant as far as statement of cash flow is concerned.
Cash dividend to reported is calculated as follow.
Dividend payable opening balance = 10,000
Divdend declared = 42,000
Dividend payable closing balance = (11,000)
Dividend paid = 41,000
The amount of cash dividends paid that should be reported in the financing section of the statement of cash flows for Sysco Company is $41,000. This is calculated by adding the dividends declared to the dividends payable at the beginning of the year and subtracting the dividends payable at the end of the year.
Explanation:To calculate the cash dividends paid that should be reported in the financing section of the statement of cash flows, we consider the dividends declared and the balance of dividends payable at both the beginning and end of the year. In this scenario, Sysco Company declared $42,000 in dividends. Dividends payable were $10,000 at the beginning of the year and $11,000 at the end. So, Cash dividends paid = Declared dividends + Dividends payable at the beginning - Dividends payable at the end. Therefore, Cash dividends paid = $42,000 + $10,000 - $11,000 = $41,000.
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In the obsolescing bargain situation, bargaining power of the host country government will be stronger when the MNC has made larger investments in that country.
True or False?
Answer:
True
Explanation:
The obsolescing bargain is a model of interaction between a multinational enterprise and a host country government, which initially reach a bargain that favors the MNE but where, over time as the MNE's fixed assets in the country increase, the bargaining power shifts to the government
There are four basic principles of finance. Which principle correctly describes the following statement: "A dollar today is worth more than a dollar received in the future. Conversely, a dollar received in the future is worth less than a dollar received today"?
Answer:
Time value of money
Explanation:
The ability of money kept in a savings deposit to earn interest over time and the increase in the total interest in line with the length of time, brought us to a conclusion that an amount of money to be received now, that is in the present, is worth more than the same amount if received in the future.
The increase in the value of money as a result of interest earned on it, increases the value of money, this concept is what is referred to time value of money.
Students in the United States consistently score ________ on international assessments of mathematics and science than do students in other industrialized and even some nonindustrialized nations.
Answer: The correct answer is "lower".
Explanation: Students in the United States consistently score lower on international assessments of mathematics and science than do students in other industrialized and even some nonindustrialized nations.
Aberzombie purchases denim jeans from manufacturer oversees. The current purchase price is $9.2 per unit. Efforts to improve quality has prompted sourcing to consider making the jeans in-house. Annual sales should increase from 150,000 to 600,000 units. Fixed costs would increase by about $1,125,000 per year for the new equipment and tooling needed. The cost of raw materials and variable overhead would be about $2 per unit, and labor costs would be $3 per unit produced.What is the break-even quantity? _________ units (Enter your response rounded to the nearest whole number.)
Answer:
234,375 units
Explanation:
The computation of the break-even quantity is shown below:
= (Fixed cost) ÷ (Contribution margin per unit)
where,
Contribution margin per unit = Selling price per unit - variable cost per unit
= $9.2 per unit - $2 per unit - $3 per unit
= $4.8
So, the break even quantity would be
= $1,125,000 ÷ $4.8
= 234,375 units
We assume the current purchase price would be equal to selling price per unit
The appropriate discount rate for the following cash flows is 9 percent compounded quarterly. Year Cash Flow 1 $ 815 2 990 3 0 4 1,520 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
To calculate the present value of cash flows, discount each cash flow back to the present using the appropriate discount rate of 9 percent compounded quarterly.
The present value of the cash flows can be calculated by discounting each cash flow back to the present using the appropriate discount rate of 9 percent compounded quarterly.
Using the formula for present value:
PV = CF1/(1+r)^1 + CF2/(1+r)^2 + CF4/(1+r)^4
Where PV is the present value, CF is the cash flow in each period, r is the discount rate, and the numbers refer to the respective years. Plugging in the values, we get:
PV = $815/(1+0.09/4)^1 + $990/(1+0.09/4)^2 + $1520/(1+0.09/4)^4
Solving this equation gives the present value of the cash flows.
The present value of the cash flows is approximately [tex]\$3,211.93[/tex].
To find the present value (PV) of the cash flows, we'll use the formula for the present value of a series of future cash flows:
[tex]\[ PV = \dfrac{CF_1}{(1 + r)^1} + \dfrac{CF_2}{(1 + r)^2} + \dfrac{CF_3}{(1 + r)^3} + \dfrac{CF_4}{(1 + r)^4} \][/tex]
Where:
[tex]\( CF_1 = \$815 \)[/tex]
[tex]\( CF_2 = \$990 \)[/tex]
[tex]\( CF_3 = \$0 \)[/tex]
[tex]\( CF_4 = \$1,520 \)[/tex]
[tex]\frac{0.09}{4} = 0.0225[/tex] (quarterly rate)
Substituting the values:
[tex]\[ PV = \dfrac{815}{(1 + 0.0225)^1} + \dfrac{990}{(1 + 0.0225)^2} + \dfrac{0}{(1 + 0.0225)^3} + \dfrac{1,520}{(1 + 0.0225)^4} \][/tex]
[tex]\[ PV= \dfrac{815}{1.0225} + \dfrac{990}{(1.0225)^2} + \dfrac{0}{(1.0225)^3} + \dfrac{1,520}{(1.0225)^4} \][/tex]
[tex]\[ PV = 796.12 + 963.91 + 0 + 1,451.90 \][/tex]
[tex]\[ PV = 3,211.93 \][/tex]
Richard runs a supermarket chain. All his stores have been experiencing declining sales for the past one year. Richard blames this depletion in sales on the increasing competition in the market. Which of the following theories best explains Richard's behavior in this scenario?
a. Attribution theory
b. Two-factor theory
c. Equity theory
d. Expectancy theory
Answer:
Letter a is correct. Attribution theory.
Explanation:
Attribution theory is defined as a theory of social psychology that explains the way in which people attribute causes of behavior to themselves, other individuals and events to external factors.
In this theory, cognitive perception is affected by the collection of information to arrive at causal explanations for events, which impacts their social and professional conduct, which can generate negative behaviors such as errors of judgment and prejudice.
Bill Lister contracted with Plimsoll Corporation to complete the roofing on a housing complex. A signed contract established a flat amount for the services rendered by Bill Lister. Bill is a licensed roofer and does his business under the business name, Lister Roofing. He hires his own roofers who are treated as employees for federal employment tax purposes. If there is a problem with the roofing work, Lister Roofing is responsible for paying for any repairs. Bill Lister, doing business as Lister Roofing, is a(n)
Multiple Choice
a. agent.
b. independent contractor.
c. bailor.
d. lessee.
Answer:
The correct answer is letter "B": independent contractor.
Explanation:
An independent contractor is typically a third party hired to perform a specific job on behalf of other companies without the need of sharing employees. The independent contractor acts as another company with its own payroll and has all the benefits and liabilities according to the type of organization it selects for business.
The following is the post-closing trial balance for the Whitlow Manufacturing Corporation as of December 31, 2015.
Account Title Debits Credits
Cash 4,100
Accounts receivable 1,100
Inventory 4,100
Equipment 10,100
Accumulated depreciation—equipment 2,600
Accounts payable 2,100
Common stock 9,000
Retained earnings 5,700
Sales revenue 0
Cost of goods sold 0
Salaries and wages expense 0
Rent expense 0
Advertising expense 0
Totals 19,400 19,400
The following transactions occurred during January 2016:
Jan. 1
Sold merchandise for cash, $2,600. The cost of the merchandise was $1,100. The company uses the perpetual inventory system.
2 Purchased equipment on account for $4,600 from the Strong Company.
4
Received a $200 bill from the local newspaper for an advertisement that appeared in the paper on January 2.
8 Sold merchandise on account for $4,100. The cost of the merchandise was $1,900.
10 Purchased merchandise on account for $9,050.
13 Purchased equipment for cash, $900.
16 Paid the entire amount due to the Strong Company.
18 Received $4,000 from customers on account.
20 Paid $900 to the owner of the building for January’s rent.
30 Paid employees $2,100 for salaries and wages for the month of January.
31
Paid a cash dividend of $900 to shareholders.
Required:
1, Prepare general journal entries to record each transaction.
2, Post the transactions into the appropriate T-accounts.
3,Prepare an unadjusted trial balance as of January 31, 2016.
The journal entries to record each transaction is given below.
Anything that involves a shift in the financial situation of more than one entity, whether they be people or businesses.
A transaction is described as the exchange of goods and services, the transfer of money, or the agreement to trade goods and services in the future, depending on the transaction definition.
Any exchange involving another person can be referred to as a transaction, including significant business deals involving the purchase or sale of items. There are exchanges of money, concepts, and even e-mail. An agreement or completion are both described by the Latin word transaction.
Sold merchandise for cash, [tex]$4,300[/tex]. The cost of the merchandise was [tex]$2,800[/tex]. The company uses the perpetual inventory system.
Debit Cash Account Asset [tex]$ 4,300[/tex]
Credit Sales Income Account [tex]$ 4,300[/tex]
Debit Cost of goods sold [tex]$ 2,800[/tex]
Credit Inventory Account [tex]$ 2,800[/tex]
Purchased equipment on account [tex]$6,300[/tex] of the Strong Company.
Debit Equipment Asset [tex]$ 6,300[/tex]
Credit Payable [tex]$ 6,300[/tex]
4 Received a $100 bill from the local newspaper for an advertisement that appeared in the paper on January 2.
Debit Advertisement expense [tex]$ 100[/tex]
Credit Payable [tex]$ 100[/tex]
Sold merchandise on account for $5,800. The cost of the merchandise was $3,600.
Debit Account Receivable [tex]$ 5,800[/tex]
Credit Sales Income [tex]$ 5,800[/tex]
Debit Cost of Goods Sold [tex]$ 3,600[/tex]
Credit Inventory [tex]$ 3,600[/tex]
Purchased merchandise on account for [tex]$9,900.[/tex]
Debit Inventory [tex]$ 9,900[/tex]
Credit Payable [tex]$ 9,900[/tex]
Purchased equipment for cash,[tex]$700.[/tex]
Debit Equipment Asset [tex]$700.[/tex]
Credit Cash [tex]$ 700[/tex]
Paid the entire amount due to the Strong Company.
Debit Payable [tex]$ 6,300[/tex]
Credit Cash [tex]$ 6,300[/tex]
Received [tex]$5,600[/tex] from customers on account.
Debit Cash [tex]$5,600[/tex]
Credit Receivable [tex]$ 5,600[/tex]
Paid [tex]$700[/tex] to the owner of the building for January’s rent.
Debit Rent expense of [tex]$ 700[/tex]
Credit Cash [tex]$ 700[/tex]
Paid employees [tex]$3,800[/tex] for salaries and wages for January.
Debit Salary expense of [tex]$ 3,800[/tex]
Credit Cash ` [tex]$ 3,800[/tex]
Paid a cash dividend [tex]$ 3,800[/tex] to shareholders.
Debit Dividend payable/Retain Earning [tex]$ 1000[/tex]
Credit Cash [tex]$ 1000[/tex]
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Simon Company had the following summarized operations for the month of May: Revenues earned: for cash, $32,000; and on account, $18,000; and Expenses incurred: for cash, $5,000; and on account, $10,000. In addition, the company purchased Equipment for $8,000 on account and Supplies for $5,000 for cash. The net income for the month of May is $35,000. $27,000. $45,000. $14,000.
Answer:
$35,000
Explanation:
Given that,
Revenues earned:
cash = $32,000
on account = $18,000
Expenses incurred:
cash = $5,000
on account = $10,000
Net Income:
= Income - Expenses
= (Cash revenue + account revenue) - (cash expenses + Expenses on account)
= ($32,000 + $18,000) - ($5,000 + $10,000)
= $35,000
Therefore, the net income for the month of May is $35,000.
The net income for the month of May is $35,000.
Based on the information given, the revenue will be:
= $32000 + $18000
= $50000
The expenses will be:
= $5000 + $10000
= $15000
The net income will be:
= Revenue - Expenses
= $50000 - $15000
= $35000
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GHI Co. is planning to pay a dividend of $3.20 in the next year and expects to grow the dividend at a constant rate of 4% per year, indefinitely. If the required rate of return buy shareholders is 12%, then the price the price of this stock should be:
Answer:
The price of this stock = $41.6
Explanation:
Explanation:
The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.
So if an asset (e.g a stock) promises some cash flows in the future, those cash flows need to be brought to their present values and then be added to arrive at the value of the asset.
This model is based on the concept of the time of money. The idea that $1 today is not the same as $1 tommorow. The $1 of today is worth more than that of tomorrow; and because of the opportunity to earn interest. So to determine the worth of a future cash flow, we compute its worth today- its present value.
The Present Value of a future cash flow is the amount that needs to be invested today at a particular rate of return to equal the same cash flow in the future. Present value means the value in year 0 or now
The process of calculating the present value of a future sum is called discounting. So to calculate the stock price in this question, we shall discount the future dividends using the required rate of return and then add them together.
Applying this model, the price of the stock
P =D (1+g)/(r-g)
D in year 0 (i.e now), r = required rate of return, g- growth rate
D- 3.20, r- 0.12, g -0.04
P = (3.20 × (1+0.04))/(0.12-0.04)
P = $41.6
The price of the stock = $41.6
Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation.
Which of the following scenarios is either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply.
a. The loss of enjoyment people incur when scenic land is converted to commercial use
b. The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government
c. Expenditures on federal highways
d. The variety of goods available to consumers
Answer:
A. The loss of Enjoyment People incur when scenic land is converted for commercial use
B. The value of baby sitting services when the baby sitter is paid cash and the transaction isn't reported to the government
D. The variety of goods available to the consumers
Explanation:
The Gross Domestic Product (GDP) represents the total market value monetarily of all finished products or all services that are produced in a country, within its borders and it is measured for a period of time.
The GDP broadly measures this market value and since it represents a broad measurement, there are apparently transactions and productions or even services that won't be adequately measured or accounted for
1. The loss of enjoyment people incur when scenic land is converted to commercial use is a cost that cannot be monetarily valued hence it won't be accounted for
2. The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government- This will not be measured accurately because not all persons who hire baby sitters will report the transaction
3. The variety of goods available to consumers are numerous and the government will not be able to account for every single one
Final answer:
GDP does not include non-market transactions like the loss of enjoyment from converting scenic land to commercial use or underground economic activities like unreported cash payments for babysitting. However, it does include government expenditures such as spending on federal highways and the total market value of goods but not their variety.
Explanation:
Gross Domestic Product (GDP) is the primary indicator used to gauge the health of a country's economy. However, it has certain limitations and does not capture all economic transactions. The following scenarios are those that GDP, either via the income or the expenditure methods, does not account for accurately:
The loss of enjoyment people incur when scenic land is converted to commercial use, which is not a market transaction and thus not included in GDP.The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government, represents underground economic activity, which is not included in GDP because it's often unreported.Expenditures on federal highways are accounted for in GDP as government spending.The variety of goods available to consumers does not directly impact GDP as it measures the total market value, not the diversity of products.Mary's Mugs produces and sells various types of ceramic mugs. The business began operations on January 1, year 1, and its costs incurred during the year include these:
Direct materials cost $ 3,400 Direct manufacturing labor costs 25,280 Indirect manufacturing costs 1,140 Administration and marketing 2,350 Fixed costs: Administration and marketing costs 11,800 Indirect manufacturing costs 4,180
On December 31, year 1, direct materials inventory consisted of 3,400 pounds of material. Production in that year was 17,000 mugs. All prices and unit variable costs remained constant during the year. Sales revenues for year 1 was $52,500. Finished goods inventory was $6,000 on December 31, year 1. Each finished mug requires 0.4 pounds of material. (Do not round intermediate calculations.)
Required:
a. Compute the direct materials inventory cost, December 31, year 1.
b. Compute the finished goods ending inventory in units on December 31, year 1. (Do not round intermediate calculations.)
c. Compute the selling price per unit. (Round your answer to 2 decimal places.)
d. Compute the operating profit (loss) for year 1.
Answer:
Explanation:
a.
Direct Material cost per unit = Cost of Direct materials/ units produced = $3400/17000 mugs = $0.20 per mug
Direct material used per mug = 0.40 pounds
Direct material cost per pound = $0.20 / 0.40 = $0.50 per round
Direct material inventory = 3400 * $0.50 = $1700
b. Compute the finished goods ending inventory in units on December 31, year 1.
Finished Goods inventory (in units) = Finished goods inventory / manufacturing cost per unit
Manufacturing cost per unit = (Direct material + Direct Labour + Indirect manufacturing cost)/Units Produced
= ($3400+$25280+$1140+$4180)/17000 = $2 per unit
Finished Goods inventory (in unit) :
Year 1 = $6,000/$2 = 3000 units
c. Compute the selling price per unit.
Selling price per unit = Revenues / units sold
Units sold = Units produced - units in the ending finished goods inventory = 17000-3000 = 14000
Selling price per unit = $52,500/14000 = $3.75
d.Compute the operating profit (loss) for year 1
Operating income for the year :
Revenues $52,500
Cost of goods sold (14000*$2) (28000 )
-----------------------------------------------------------------
Gross Margin $24,500
Less marketing and administrative cost:
Variable cost ($2,350)
Fixed cost ($11,800)
-----------------------------------------
($14,150)
Operating Profit $10,350
To compute the direct materials inventory cost, multiply the units produced by the material required per unit and subtract the ending inventory. Divide the finished goods inventory value by the unit variable cost to determine the number of units. Divide the total sales revenue by the number of units sold to find the selling price per unit. Subtract the total costs incurred from the total sales revenue to calculate the operating profit (or loss) for the year.
Explanation:a. To compute the direct materials inventory cost on December 31, year 1, we need to calculate the value of the direct materials used in production and subtract any ending inventory. The direct materials used can be calculated by multiplying the units produced by the material required per unit. We then multiply this by the cost per pound to get the total cost of direct materials used. Subtracting the ending inventory from this total gives us the direct materials inventory cost.
b. To compute the finished goods ending inventory in units on December 31, year 1, we need to use the information given about production and the unit variable costs. By dividing the finished goods inventory value by the unit variable cost, we can determine the number of units in the inventory.
c. To compute the selling price per unit, we divide the total sales revenue by the number of units sold.
d. To compute the operating profit (loss) for year 1, we subtract the total costs incurred (direct materials, direct manufacturing labor, indirect manufacturing costs, and administration and marketing costs) from the total sales revenue. This gives us the operating profit (or loss) for the year.
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Describe several ways that communication technology can assist individuals and organizations.
Answer:
Describe several ways that communication technology can assist individuals and organizations?
Communication Technology has greatly helped individuals to build confidence or increase it, also it helps to grow or develop a good interpersonal relationship, it also helps individual to be expressive either by writing or speaking, it helps enhances smooth running of organization in terms of team work, synergy, among others
Explanation: