Answer:
2021 2020 Income Statement Information
Sales revenue $ 8,400,000 $ 7,900,000
Cost of goods sold 5,535,600 5,400,000
Net income 332,500 198,000
Balance Sheet Information
Current assets $ 1,550,000 $ 1,450,000
Long-term assets 2,150,000 1,850,000
Total assets $ 3,700,000 $ 3,300,000
Current liabilities $ 1,150,000 $ 850,000
Long-term liabilities 1,550,000 1,550,000
Common stock 750,000 750,000
Retained earnings 250,000 150,000
Total liabilities and stockholders' equity $ 3,700,000 $ 3,300,000
1.Calculate the following profitability ratios for 2021: (Round your answers to 1 decimal place.)
The four main profitability ratios are:
gross profit margin = (revenue - COGS) / revenue = ($8,400,000 - $5,535,600) / $8,400,000 = 0.341 or 34.1%net profit margin = net profit / revenue = $332,500 / $8,400,000 = 0.03958 or 3.96%return on assets = net income / average total assets = $332,500 / [($3,700,000 + $3,300,000)/2] = $332,500 / $3,500,000 = 0.095 or 9.5%return on equity = net income / shareholders equity = $332,500 / $1,000,000 = 0.3325 or 33.25%2.Determine the amount of dividends paid to shareholders in 2021.
retained earnings 2021 - retained earnings 2020 = net income - dividends
$250,000 - $150,000 = $332,500 - dividends
$100,000 + dividends = $332,500
dividends = $332,500 - $100,000 = $232,500
All of the following are correct statements about transfers between divisions located in countries with different tax rates except that
A. differences in tax rates across countries complicate the determination of the appro-priate transfer price
B. a decreasing number of transfers are between divisions located in different countries
C. companies must pay income tax in the country where income is generated
D. many companies prefer to report more income in countries with low tax rates.
All of the following are correct statements about transfers between divisions located in countries with different tax rates except that the companies must pay income tax in the country where income is generated. Thus option (C) is correct.
What is tax?Taxes are mandatory contributions levied on individuals or corporations by a government entity—whether local, regional, or national.
Tax revenues finance government activities, including public works and services such as roads and schools, or programs such as Social Security and Medicare.
In economics, taxes fall on whoever pays the burden of the tax, whether this is the entity being taxed, such as a business, or the end consumers of the business’s goods.
From an accounting perspective, there are various taxes to consider, including payroll taxes, federal and state income taxes, and sales taxes.
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On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 80,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows:Part 1. Prepare a schedule translating (current rate method) the December 31, 20X1, trial balance from Swiss francs to dollars.
On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 80,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows:
Then intended files that supposed to be here are added in the attachments below:
Part 1. Prepare a schedule translating (current rate method) the December 31, 20X1, trial balance from Swiss francs to dollars.
Answer:
Explanation:
We are tasked to Prepare a schedule translating (current rate method) the December 31, 20X1, trial balance from Swiss francs to dollars.
Schedule remeasuring Swiss francs to dollars
Trial Balance Translation Schedule
December 31, 20X1
Sfr Exchange Rate U.S dollar
Cash $7,200 0.73 $5,256
Accounts $25,000 0.73 $18,250
receivable (net)
Receivable from $6,300 0.73 $4,599
Creek
Inventory $26,000 0.73 $18,980
Plant & equipment $110,000 0.73 $80,300
Cost of good sold $71,500 0.75 $53,625
Depreciation expense $10,100 0.75 $7,575
Operating expense $35,000 0.75 $26,250
Dividends paid $16,400 0.74 $12,136
Total: $307,500 $226,971
[tex]Accumulated - \ translation \\other \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ adjustment\\Comprehensive \\ loss[/tex] (233,031 - 226,971) $6060
TOTAL DEBITS $233,031
Accumulated $10,100 0.73 $7,373
Depreciation
Account $13,600 0.73 $9,928
Payable
Bond $51,000 0.73 $37,230
Payable
Common stock $78,000 0.80 $62,400
Sales $154,800 0.75 $116,100
Total: $307,500 $233,031
No entry necessary $ -
TOTAL CREDITS $233,031
Andrews Corporation has income from operations of $253,000. In addition, it received interest income of $25,300 and received dividend income of $28,900 from another corporation. Finally, it paid $13,000 of interest income to its bondholders and paid $47,400 of dividends to its common stockholders. Using the 2013 corporate tax schedule, what is the firm’s federal income tax? Round your intermediated and final answers to the nearest cent. $
Answer:
$107,122
Explanation:
corporate tax rate during 2013 = 39.1%
Andrews Corporation net taxable income:
from operations $253,000from interests $25,300from dividends $28,900 - dividends received deductions $20,230 = $8,670Deductions on net taxable income*:
interest paid to bondholders = $13,000Net taxable income = $286,970 - $13,000 = $273,970
federal income tax = $273,970 x 39.1% = $107,122
*Dividends are paid with retained earnings which include after tax net income. They are not tax deductible.
Hancock Medical Supply Co., earned $90,500 of revenue on account during Year 1, its first year of operation. During Year 1, Hancock collected $71,400 of cash from its receivables accounts. The company did not write-off any uncollectible accounts. It estimates that it will be unable to collect 1% of revenue on account. What is the net realizable value of receivables that will be reported on the balance sheet at December 31, Year 1
Answer:
$18,195
Explanation:
The computation of the net realizable value is shown below:
As we know that
Net Realizable Value of Receivables = Ending Accounts Receivable - Estimated Uncollectibles amount
where,
Ending balance of Accounts Receivable is
= Revenue on Account - Accounts collected
= $90,500 - $71,400
= $191,00
And,
Estimated Uncollectibles i.e Bad debt Expense is
= Revenue on Account × given percentage
= $90,500 × 1%
= $905
So, the net realizable value is
= $19,100 - $905
= $18,195
We simply applied the above formula
Markley Manufacturing calculated its predetermined overhead rate to be 120% of direct labor cost. During June, the company incurred $90,000 of factory labor costs, of which $85,000 is direct labor and $5,000 is indirect labor. Actual overhead incurred was $84,000. Compute the amount of manufacturing overhead applied during the month. Determine the amount of under- or over-applied manufacturing overhead.
Answer:
Applied Manufacturing Overheads are $102,000
Overapplied Manufacturing overheads are $18,000
Explanation:
Under or over applied manufacturing overhead can be determined by comparing the actual and applied manufacturing overheads.
Applied overheads can be calculated by multiplying pre-determined overhead rate and actual level of quantity. Predetermined overhead rate is calculated using estimated overhead and estimated activity on which overheads are applied.
In this question the predetermined overhead rate is 120% of direct labor cost.
Applied overhead = Direct labor cost x 120% = $85,000 x 120% = $102,000
Actual overheads incurred = $84,000
Overapplied Manufacturing overheads = $102,000 - $84,000 = $18,000
Stone Company changed its method of pricing inventories from FIFO to LIFO. What type of accounting change does this represent? A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be restated. A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported. A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be presented as previously reported. A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be restated.
Answer:
A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported.
Explanation:
Since the accounting method is being changed from FIFO to LIFO, any adjusting of prior year balances would be impractical. If the change is from LIFO to FIFO, then it makes more sense to adjust prior year balances. By impractical, it means that any changes would be too difficult and expensive to determine, and the value of the change is insignificant (materiality principle).
Generally US GAAP rules require that changes from FIFO to LIFO be disclosed in the footnotes only.
The capital accounts of Heidi and Moss have balances of $90,000 and $65,000, respectively, on January 1, the beginning of the current fiscal year. On April 10, Heidi invested an additional $8,000. During the year, Heidi and Moss withdrew $40,000 and $32,000, respectively. Revenues were $540,000 and expenses were $420,000 for the year. The articles of partnership make no reference to the division of net income. Required: 1. Prepare a statement of partners' equity for the partnership of Heidi and Moss. If an amount box does not require an entry, leave it blank. Enter all amounts as positive numbers. Heidi and Moss Statement of Partners' Equity For the Year Ended December 31 Heidi Moss Total Capital, January 1 $ 90,000 $ 65,000 $ 155,000 Net income for the year 60,000 60,000 120,000 $ $ $ $ $ $ Withdrawals during the year Capital, December 31 $ 118,000 $ 93,000 $ 211,000 2. Journalize the entries to: Close the revenue and expenses account. Close the drawing accounts. If an amount box does not require an entry, leave it blank. a. Revenues 540,000 Heidi, Capital 540,000 Moss, Capital 420,000 Heidi, Capital 40,000 Moss, Capital Moss, Drawing b. Heidi, Capital 40,000 Moss, Capital 32,000 Heidi, Drawing 40,000 Moss, Drawing 32,000
Answer:
The statement and journal are attached
Explanation:
On January 1, 2021, the Blackstone Corporation purchased a tract of land (site number 11) with a building for $600,000. Additionally, Blackstone paid a real estate brokerâs commission of $36,000, legal fees of $6,000, and title insurance of $18,000. The closing statement indicated that the land value was $500,000 and the building value was $100,000. Shortly after acquisition, the building was razed at a cost of $75,000.
Blackstone entered into a $3,000,000 fixed-price contract with Barnett Builders, Inc., on March 1, 2021, for the construction of an office building on land site 11. The building was completed and occupied on September 30, 2022. Additional construction costs were incurred as follows:
Plans, specifications, and blueprints .....................$ 12,000
Architectsâ fees for design and supervision ............95,000
To finance the construction cost, Blackstone borrowed $3,000,000 on March 1, 2021. The loan is payable in 10 annual installments of $300,000 plus interest at the rate of 14%. Blackstoneâs average amounts of accumulated building construction expenditures were as follows:
For the period March 1 to December 31, 2021 ...........$ 900,000
For the period January 1 to September 30, 2022 .......2,300,000
Required:
1. Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site 11 as of September 30, 2022.
2. Prepare a schedule that discloses the individual costs that should be capitalized in the office building account as of September 30, 2022.
Answer:
Blackstone Corporation
1. A schedule that discloses the individual costs making up the balance in the land account in respect of land site 11 as of September 30, 2022:
Cost of Land = $600,000
Broker's Commission = $36,000
Legal Fees = $6,000
Title Insurance = $18,000
Razing of old building = $75,000
Total = $735,000
2. A schedule that discloses the individual costs that should be capitalized in the office building account as of September 30, 2022:
Payment to contractor for building = $3,000,000
Plans, specifications, and blueprints = $12,000
Architect's fees (design & supervision = $95,000
Capitalized Interest ($3m x14%/10 x 2) = $84,000
Total = $3,191,000
Explanation:
a) The cost of land to recognize includes the actual cost for the parcel of land, including the building which was razed. All other expenses incurred ordinarily and necessarily in order to put the land to its intended use are also capitalized. The costs for the broker's commission, legal fees, title insurance, and razing of old building were incurred ordinarily and necessarily for the land and are therefore capitalized in determining the value of the land.
b) The capitalized interest portion for the building is the interests paid to date. The contractor's fee, payments for plans, architect's fee, and interests are included as costs of the building.
he income statement of Sarasota Company is shown below. SARASOTA COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,890,000 Cost of goods sold Beginning inventory $1,910,000 Purchases 4,410,000 Goods available for sale 6,320,000 Ending inventory 1,620,000 Cost of goods sold 4,700,000 Gross profit 2,190,000 Operating expenses Selling expenses 460,000 Administrative expenses 700,000 1,160,000 Net income $1,030,000 Additional information: 1. Accounts receivable decreased $350,000 during the year. 2. Prepaid expenses increased $160,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $300,000 during the year. 4. Accrued expenses payable decreased $90,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method.
Answer:
Cash flow from operating activities
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees ($6,460,000)
Net Cash from Operating Activities $780,000
Explanation:
Prepare a statement of cash flows` operating activities section as follows :
Cash flow from operating activities
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees ($6,460,000)
Net Cash from Operating Activities $780,000
Cash Receipts from Customers Calculations
Sales revenue $6,890,000
Add Decrease in Accounts Receivables $350,000
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees Calculations
Cost of goods sold $4,700,000
Add
Selling expenses $460,000
Administrative expenses $700,000
Less depreciation expense of $50,000
Decrease in Accounts Payable $300,000
Decrease in Accrued Expenses $90,000
Increase in Prepaid expenses $160,000
Cash Paid to Suppliers and Employees $6,460,000
The following information relates to the pension plan for the employees of Turner Co.: 1/1/20 12/31/20 12/31/21 Projected benefit obligation 9,765,000 10,458,000 14,007,000 Fair value of plan assets 8,925,000 10,920,000 12,054,000 AOCI – net (gain) or loss -0- (1,512,000) (1,680,000) Settlement rate (for year) 11% 11% Expected rate of return (for year) 8% 7% Turner estimates that the average remaining service life is 16 years. Turner's contribution was $1,323,000 in 2021 and benefits paid to retired employees was $987,000. The amount of AOCI (net gain) amortized in 2021 is
Answer:
The amount of AOCI (net gain) amortized in 2021 is $26,250
Explanation:
In order to calculate the calculate the amount of AOCI (net gain) amortized in 2021 we would have to use the following formula:
amount of AOCI (net gain) amortized in 2021=(AOCI net gain 12/31/20-Corridor amount for 2021)/Average remaining service life
AOCI net gain 12/31/20=$1,512,000
Corridor amount for 2021=$1,092,000=10,920,000*10%
Average remaining service life=16
Therefore, AOCI (net gain) amortized in 2021=($1,512,000-$1,092,000)/16
AOCI (net gain) amortized in 2021=$26,250
Fultz Company has accumulated the following budget data for the year 2020.
1. Sales: 31,410 units, unit selling price $85.
2. Cost of one unit of finished goods: direct materials 1 pound at $6 per pound, direct labor 3 hours at $12 per hour, and manufacturing overhead $7 per direct labor hour.
3. Inventories (raw materials only): beginning, 10,120 pounds; ending, 15,480 pounds.
4. Selling and administrative expenses: $170,000; interest expense: $30,000.
5. Income taxes: 30% of income before income taxes.
Prepare a schedule showing the computation of cost of goods sold for 2020.
Answer:
COST OF Goods SOLD $ 1,1539,110
Explanation:
Fultz Company
Schedule of Cost of Goods Sold for 2020
As there are no beginning and ending finished goods inventories the total units produced are sold. (Finished Goods required 31410 Units)
Inventories raw materials : beginning, 10,120 pounds
Add Direct Materials Purchases 36770 pounds
Less Inventories ending raw materials , 15,480 pounds
Direct Materials Used 31410 pounds
Materials 1 pound at $6 per pound= $ 6* 31410 Units= $ 188460
Direct labor 3 hours at $12 per hour= $ 36* 31410 Units= $ 1130780
Manufacturing Overhead $7 per direct labor hour= $ 7* 31410 Units=
$ 219870
Total Manufacturing Costs $ 1,1539,110
There are no beginning and ending work in process inventories so the total manufacturing cost gives us the COST OF Goods SOLD.
Matrix Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 23 $ 22 Accounts receivable 39 40 Inventory 43 44 Property, plant, and equipment 587 500 Less accumulated depreciation 359 347 Total assets $ 333 $ 259 Liabilities and stockholders' equity: Accounts payable $ 30 $ 26 Accrued liabilities 15 18 Income taxes payable 39 40 Bonds payable 109 120 Common stock 51 50 Retained earnings 89 5 Total liabilities and stockholders' equity $ 333 $ 259 Income Statement Sales $ 972 Cost of goods sold 620 Gross margin 352 Selling and administrative expense 200 Net operating income 152 Gain on sale of equipment 14 Income before taxes 166 Income taxes 50 Net income $ 116 The company sold equipment for $20 that was originally purchased for $7 and that had accumulated depreciation of $1. It paid a cash dividend during the year and did not issue any bonds payable or repurchase any of its own common stock. Required: Determine the net cash provided by (used in) operating activities for the year using the indirect method.
Answer:
Check the explanation
Explanation:
Cash flow from operating activities:
Net income $116
Adjustment to reconcile net income to cash basis:
Depreciation expense ($359+1-347) $13
Gain on sale of equipment (14)
Decrease in account receivable (40-39) $1
Decrease in inventory (44-43) $1
Increase in account payable (30-26) $4
Decrease in accrued liabilities (18-15) (3)
Decrease in income tax payable (40-39) (1)
Net cash flow from operating activities $117
One of the key functions of human resource management is
Answer: recruiting.
Explanation:
Recruiting is one of the most important aspects of human resource management. Hence, Option B is correct.
What is the meaning of Recruiting?Finding, vetting, recruiting, and eventually onboarding qualified job prospects is the process of recruitment. The process of finding, vetting, shortlisting, and employing potential resources to fill open jobs in a company is known as recruitment.
It serves as a fundamental part of human resource management. The act of selecting the best candidate for a position at the ideal time is known as recruitment.
Simply announcing that you are hiring is all that hiring entails. The deliberate technique of locating and attracting the best individuals for the position is known as recruiting.
Therefore, Option B is correct.
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The complete question has been attached in text form:
One of the key functions of human resource management is:
a. departmentalizing.
b. recruiting.
c. budgeting.
d. auditing.
Hardware is adding a new product line that will require an investment of $ 1 comma 476 comma 000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $ 300 comma 000 the first year, $ 290 comma 000 the second year, and $ 240 comma 000 each year thereafter for eight years. Assume the project has no residual value. Compute the ARR for the investment. Round to two places
Answer:
42,51%
Explanation:
Accounting Rate of Return (ARR) = Average Profits / Average Investment
Calculation of Average Profits
Average Profit = Sum of Profits / Number of Years
= (300,000+290,000+240,000×8)/10
= $2,510,000 / 8
= $313,750
Calculation of Average Investment
Average Investment = Initial Investment + Scrape Value / 2
= $1,476,000/2
= $738,000
Accounting Rate of Return (ARR) = $313,750/$738,000×100
= 42,51%
Now suppose country A imposes a tax on A's production of to curb emissions. Country B, however, is not taxed. A's cost function is now , while B's cost function is . World demand is . The amount of greenhouse gas emissions per unit is still , such that total world emissions are given by . What are total world emissions after country A enacts a carbon tax?
Answer:
286.5
Explanation:
P=99-qa-qb
MRa=99-2qb-qb
MCa=48
99-2qa-qb=48
Qa=25.5-0.5qb{ best response function of firm A)
MRb=99-qa-2qb
MCb=4
99-qa-2qb=4
Qb=47.5-0.5qa{ best response function of form b}
Qb=47.5-0.5(25.5-0.5qb)
Qb=34.75/0.75=46.33
Qa=25.5-0.5*46.33=2.33
Total world output=46.33+2.33=48.66
Total world emission=0.5*48.66=24.33
p=1146-qa-qb-qc
MRa=1146-2qa-qb-qc
MCa=0
1146-2qa-qb-qc=0
Qa=573-0.5(qb+qc) best response function of firm a)
By symmetry,
Qb=573-0.5(qa+qc)
Qc=573-0.5(qa+qb)
Qb+qc=1146-qa-0.5(qb+qc)
Qb+qc=764-qa/1.5
Qa=573-0.5(764-qa/1.5)=191+qa/3
Qa=191*3/2=286.5
Qa=Qb=Qc=286.5
Total output=3*286.5=859.5( cournot equilibrium market output)
Cartel output=573
Lower QUANTITY in cartel equilibrium compare to cournot equilibrium
=859.5-573
=286.5
Management in Life Annabelle and Bettina share a dorm room. They like each other, but they disagree about how often to clean. Eventually, Annabelle says to Bettina, "I'm afraid that if we clean the room only once a month, we're going to get bugs. Bettina replies, "Maybe, but this physics course is killing me, so I don't have time to clean more often than that." Annabelle and Bettina are engaged in conflict, based on Which of the following outcomes are likely in this situation?
A) Annabelle and Bettina will learn from each other.
B) The roommates will come up with a creative solution.
C) The roommates will stop speaking to each other.
D) Annabelle and Bettina will be angry at each other.
Answer:
A). Annabelle and Bettina will learn from each other .
B). The roommates will come up with a creative solution."
Explanation:
Anabelle and Bettina are involved in a 'cognitive' conflict as it occurs when they both experience a mental as well as emotional discomfort when they are confronted with the information that challenges their existing ideas or beliefs. The most likely outcomes of this situation would be that they 'both would learn from each other' by accepting each other's point of view and adapting with the new information that would help them 'reach a creative solution' to resolve their conflict over the cleaning of their room. Therefore, options A and B are the correct answers.
Haylock Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 7,800 direct labor-hours will be required in August. The variable overhead rate is $1.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $100,560 per month, which includes depreciation of $8,790. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Answer:
Total cash= $101,130
Explanation:
Giving the following information:
Estimated direct labor hours= 7,800
The variable overhead rate is $1.20 per direct labor-hour.
The company's budgeted fixed manufacturing overhead is $100,560 per month, which includes depreciation of $8,790.
We need to deduct the depreciation expense because it is not a cash disbursement.
Cash disbursement:
Variable overhead= 7,800*1.2= $9,360
Fixed overhead= (100,560 - 8,790)= $91,770
Total cash= $101,130
A Company manufactures coffee tables. The Company has a policy of adding a 20% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month: Output units 30,000 tables Machine-hours 6000 hours Direct manufacturing labor-hours 10,000 hours Direct materials per unit $50 Direct manufacturing labor per hour $12.00 Variable manufacturing overhead costs $322,500 Fixed manufacturing overhead costs $1,200,000 Product and process design costs $600,000 Marketing and distribution costs $1,290,000 For long-run pricing of the coffee tables, what price will most likely be used by the Company
Answer:
$201.30
Explanation:
Direct materials = $50
Total Direct manufacturing labor = $12.00 * 10,000 = $120,000
Variable manufacturing overhead costs = $322,500
Fixed manufacturing overhead costs = $1,200,000
Product and process design costs = $600,000
Marketing and distribution costs = $1,290,000
Total cost apart from direct material = $120,000 + $322,500 + $1,200,000 + $600,000 + $1,290,000 = $3,532,500
Cost per unit apart from direct material = $3,532,500 / 30,000 = $117.75
Total cost per unit = $117.75 + $50 = $167.75
Mark up per unit = $167.75 * 20% = $33.55
Price per unit = $167.75 + $33.55 = $201.30
Answer: $201.30
Explanation:
To solve this all the expenses incurred per unit need to be included in the unit.
Direct Materials $50
Direct Manufacturing Labour Hours per unit
= (10,000/30,000 units) * 12 (direct Manufacturing Labour per hour)
= $4
Variable Manufacturing Overhead Cost
= 322,500/30,000
= $10.75
Fixed manufacturing overhead costs
= 1,200,000/30,000
= $40
Product and process design costs
= 600,000/30,000
= $20
Marketing and distribution costs
= 1,290,000/30,000
= $43
Adding everything up,
= 50 + 4 + 10.75 + 40 + 20 + 43
= $167.75
Company adds 20% to costs so,
= 167.75 * ( 1 + 20%)
= $201.30
Company will most likely sell at $201.30
A bidding firm, A, is worth $27,000 as a stand-alone entity. A target firm, B, is worth $12,000 as a stand-alone entity, but $18,000 if it is acquired and integrated with Firm A. Several other firms are interested in acquiring Firm B, and Firm B is also worth $18,000 if it is acquired by these other firms. If A acquired B, would this acquisition create value? If yes, how much? How much of this value would the equity holders of A receive? How much would the equity holders of B receive?
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
Firm A’s worth as a stand-alone entity = $27,000
Firm B’s worth as a stand-alone entity = $12,000
But if Firm A acquired Firm B it’s increase worth of Firm B at $18000.
Firm A is acquired Firm B, this acquisition create value of
= $18,000 - $12000
= $6000.
With this acquisition equity holders of Firms received $18,000 which is $6,000 more than Firm B stand alone.
The student-run newspaper asks students to visit a web page and respond to questions regarding a proposed tuition increase. Only responses to the questions are recorded. Summary statistics based on the survey responses are used in an article published the following week, and no one outside of the newspaper has access to the individual responses. The newspaper's survey is considered to be A) confidential. B) anonymous. C) both anonymous and confidential. D) neither anonymous nor confidential.
Answer:
C) both anonymous and confidential
Explanation:
As the student-run, the new paper and ask other students to visit a link firm the new paper and respond to those questions and the responses for only those questions were recorded. This indicates that the newspaper survey is anonymous and confidential as the ant student can fill the survey and the information that is confidential as none outside the newspaper has access to those responses.Your bagel shop uses both capital and labor in the production of bagels. In this production process capital and labor are substitutes. If you install a new oven and the marginal product of capital increases, you will:
a. reduce the number of workers you employ
b. increase the number of workers you employ
c. reduce the amount of capital you are using not make any changes since you are already maximizing profit
Answer:
The answer is option A) reduce the number of workers you employ
Explanation:
Installing a new oven is capital intensive. So, for a business person to incur an additional capital cost to aid the efficiency of production, something has to give.
In this case, where capital and labor are substitutes, installing a new oven will drastically reduce the workload thereby necessitating a reduction in the number of workers.
By implication, the cost of paying wages which is a recurrent expenditure will reduce. In the long run and if the oven is maintained, it will e a very cost effective option.
Installing a new oven also suggests a marginal increment in capital.
Matt and Joel are equal partners in the MJ Partnership. For the current year ended December 31, the partnership has book income of $80,000, which includes the following deductions: (1) guaranteed payments (salaries) to partners: Matt, $35,000; and Joel, $25,000; and (2) charitable contributions, $6,000. The book income amount does not include any sales of capital assets or Sec. 1231 assets or any taxminusexempt income. Based on the above information, what amount should be reported as ordinary income on the partnership return?
Answer:
$86,000
Explanation:
A partnership is a pass through entity that is not taxed directly, but instead its partners are taxed. Even the partners' salaries are recorded as drawings, not salary expense.
The partnership's total ordinary income = book income + any donations or contributions to charities = $80,000 + $6,000 = $86,000
(Ignore income taxes in this problem.) Assume you can invest money at a 14 percent rate of return. How much money must be invested now to be able to withdraw $5,000 from this investment at the end of each year for eight years, the first withdrawal occurring one year from now
Answer:
the original amount invested = $285,714.29
Explanation:
Let original amount invested be x
Amount to be withdrawn per year = $5,000
Total number of years = 8
Total amount to be withdrawn = 5,000 × 8 = $40,000
Next, we are told that 14% return on x is realized,
∴ 14% return on x = $40,000
0.14 × x = 40,000
x = 40,000 ÷ 0.14 = $285,714.29
Therefore, the original amount invested = $285,714.29
elb Company currently manufactures 50,000 units per year of a key component for its manufacturing process. Variable costs are $2.95 per unit, fixed costs related to making this component are $67,000 per year, and allocated fixed costs are $61,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 50,000 units and buying 50,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier
Answer: Please refer to Explanation
Explanation:
Incremental Cost of Making Product
Variable costs are $2.95 per unit and 50,000 units are to be made. Total Variable Cost is therefore,
= 2.95 * 50,000
= $147,500
Fixed costs associated with the production are$ 67,000 so added tl the variable costs is,
= 147,500 + 67,000
= $214,500
$214,500 is the cost making the product.
Cost of Buying Product
Component can be bought for $3.90 per unit. 50,000 units to be bought gives,
= 50,000 * 3.9
= $195,000
Cost of buying is $195,000
Decision
Company should buy the component as it spends less in buying it than I making it.
Note - Allocated fixed costs were not included in calculation because they will be there regardless of the decision. Hence the term, incremental costs.
Answer:
elb Company
a) Incremental Cost of making 50,000 units:
Variable costs = $2.95 x 50,000 = $147,500
Avoidable fixed costs = $67,000
Total = $214,500
b) Incremental Cost of buying 50,000
Buy-in costs =- $3.90 x 50,000 = $195,000
c) The company should buy this component from the outside supplier.
Explanation:
In make or buy decisions, only variable and avoidable costs are taken into consideration. Unavoidable fixed costs are sunk costs which must be incurred irrespective of the choice made.
Therefore, the unavoidable allocated fixed costs of $61,500 should not be taken into consideration. Afterall, no matter the decision, it would still be incurred and allocated.
Which of the following statements generates the greatest amount of disagreement among economists? a. Increases in the money supply shift aggregate demand to the right. b. In the long run, increases in the money supply increase prices, but not output. c. Recessions are associated with decreases in consumption, investment, and employment. d. Government should use fiscal policy to try to stabilize the economy.
Answer:
d. Government should use fiscal policy to try to stabilize the economy.
Explanation:
Suggesting that the government should use fiscal policy to try to stabilize the economy generates the greatest amount of disagreement among economists because the process of implementing fiscal policy usually experiences lag as it is being slowed down by the political system (bureaucracy) of checks and balances.
Fiscal policy is the use of government expenditures, revenues and tax policies to influence macroeconomic conditions such as employment, inflation and Aggregate Demand (ADl in a specific country.
The benefits of fiscal policy is that investments, savings and growth is usually influenced in the long-run while it basically influences aggregate demand for goods and services in the short-run.
Oklahoma enacts a law requiring all businesses in the state to donate 10 percent of their profits to Protestant churches that provide services to indigent persons. Price-Lo Mart files a law suit to block the enforcement of the law. The court will probably decide that this law violates: a. the Free Exercise clause. b. the Supremacy clause. c. the Equal Protection clause. d. the Establishment clause.
Answer: d. the Establishment clause.
Explanation:
The Establishment Clause was put in place as a limitation by the United States Congress to prevent excesses or stop it from passing legislation forcing an establishment, religion, which broadly made it illegal for the government to promote theocracy or promote a specific religion with taxes. As this is the case with the state asking business to donate 10% of their profit to Protestant.
Answer:
The establishment clause.
Explanation:
Establishment clause, also called establishment-of-religion clause, clause in the First Amendment to the U.S. Constitution forbidding Congress from establishing a state religion. It prevents the passage of any law that gives preference to or forces belief in any one religion. It is paired with a clause that prohibits limiting the free expression of religion.
As the citizenry became more diverse, however, challenges arose to existing laws and practices, and eventually, the Supreme Court was called upon to determine the meaning of the establishment clause.
Though not explicitly stated in the First Amendment, the clause is often interpreted to mean that the Constitution requires the separation of church and state.
The Converting Department of Hopkinsville Company had 1,200 units in work in process at the beginning of the period, which were 75% complete. During the period, 25,200 units were completed and transferred to the Packing Department. There were 1,360 units in process at the end of the period, which were 25% complete. Direct materials are placed into the process at the beginning of production. Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".
Answer:
Equivalent Units
Material cost = 26,560
Conversion Cost= 25,540
Explanation:
We would assume the company uses weighted average method of valuation.
Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.
Equivalent units = Degree of completion (%) × Number of units
Material cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 100%× 1,360 1360
Total equivalent units 26,560
Conversion Cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 25%× 1,360 340
Total equivalent units 25,540
Suppose that the standard deviation of monthly changes in the price of commodity A is $2. The standard deviation of monthly changes in a futures price for a contract on commodity B (which is similar to commodity A) is $3. The correlation between the futures price and the commodity price is 0.9. What hedge ratio should be used when hedging a one month exposure to the price of commodity A
Answer:
0.6
Explanation:
Correlation r = 0.9,
Standard deviation of monthly change in price of commodity A, σA = 2,
Standard deviation of monthly change in price of commodity B, σB = 3
The hedge ratio will be calculated using the formula
Hedge ratio=r×σA÷σB
Hedge ratio=0.9×2÷3
Hedge ratio = 0.6
Therefore, the hedge ratio used when hedging a one month exposure to the price of commodity A is 0.6.
If a firm has retained earnings of $2.7 million, a common shares account of $4.7 million, and additional paid-in capital of $9.4 million, how would these accounts change in response to a 10 percent stock dividend? Assume market value of equity is equal to book value of equity.
Answer:
Change in retained earnings = $1.02 million (Decrease)
Change in common shares account = $5.17 million (Increase)
Change in additional paid-in capital = $10.61 million (Increase)
Explanation:
Given:
Retained earnings = $2.7 million
Common shares account = $4.7 million
Additional paid-in capital = $9.4 million
Stock dividend = 10%
Find:
Changes in account.
Computation:
1. Change in retained earnings
Change in retained earnings = Retained earnings - (Retained earnings - Common shares account - Additional paid-in capital)Stock dividend
Change in retained earnings = $2.7 million - ($2.7 million - $4.7 million - $9.4 million)10%
Change in retained earnings = $2.7 million - 1.68 million
Change in retained earnings = $1.02 million (Decrease)
2. Change in common shares account
Change in common shares account = Common shares account (1+Stock dividend)
Change in common shares account = $4.7 million (1+10%)
Change in common shares account = $5.17 million (Increase)
3. Change in additional paid-in capital
Change in additional paid-in capital = Additional paid-in capital + (Additional paid-in capital + Retained earnings)Stock dividend
Change in additional paid-in capital = $9.4 million + ($9.4 million + $2.7 million)10%
Change in additional paid-in capital = $9.4 million + 1.21 million
Change in additional paid-in capital = $10.61 million (Increase)
The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year. Manufacturing Overhead (a) 486,144 (b) 405,120 Bal. 81,024 Work in Process Bal. 10,880 (c) 754,000 298,500 90,500 (b) 405,120 Bal. 51,000 Finished Goods Bal. 39,000 (d) 662,000 (c) 754,000 Bal. 131,000 Cost of Goods Sold (d) 662,000 The overhead that had been applied to production during the year is distributed among Work in Process, Finished Goods, and Cost of Goods Sold as of the end of the year as follows: Work in Process, ending $ 24,480 Finished Goods, ending 62,880 Cost of Goods Sold 317,760 Overhead applied $ 405,120 For example, of the $51,000 ending balance in work in process, $24,480 was overhead that had been applied during the year. Required: 1. Identify reasons for entries (a) through (d). 2. Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary journal entry. 3. Assume that the underapplied or overapplied overhead is closed proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the necessary journal entry.
Answer and Explanation:
As per the data given in the question,
1.
a) Cost of goods manufactured.
b) Cost of goods sold.
c) Overhead cost applied to work in process
d) Actual manufacturing overhead cost.
2. Journal Entry
Manufacturing overhead A/c Dr. 81,024
To cost of goods sold A/c. 81,024
3.
Work in process ending $24,480 =6.04%
Finished goods ending $62,880 =15.52%
Cost of goods sold $317,760 =78.44%
Total cost $405.120 =100%
To calculate overhead allocation :
Work in process ending = ($81,024× 6.04%) =$4,894
Finished goods ending = ($81,024 × 15.52%) =$12,575
Cost of goods sold = ($81,024 × 78.44%) = $63,355
Total cost = $81,024
Journal Entry
Manufacturing overhead A/c Dr. 81,024
To work in process A/c. $4,893
To finished goods A/c. $12,575
To cost of goods sold A/c. $63,555
