Answer:
Direct material price variance= $400 favorable
Explanation:
Giving the following information:
Actual quantity purchased 200 units
Actual price paid $8 per unit
Standard price $10 per unit
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (10 - 8)*200
Direct material price variance= $400 favorable
Which of the following is an advantage of a CD?
usually a higher interest rate
saving for a short-term purpose
flexible withdrawals
can be cashed out every year
Answer:
An Advantage of a Certificate of Deposit (CD) is:
It usually offers a higher interest rate.
Explanation:
For instance, Jones Company can purchase a certificate of deposit (CD) from Bank A. The CD is a financial product that pays a locked and premium interest rate. In exchange for this locked and higher interest rate, Jones Ltd agrees to leave a lump-sum deposit which it cannot withdraw from until a predetermined period of time. A CD is not a saving for a short-term purpose, and does not allow for flexible withdrawals unless after the maturity date has been reached. This implies that Jones Ltd cannot cash it out unless after the maturity date.
In Macroland autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Planned aggregate expenditure equals:________a.1,000. b.1,160. c.1,280. d.1,440.
Answer:
b) $1,160
Explanation:
From the above information,
I=Investment = 50
G=Government expenditure = 150
X=Net export = 20
a=autonomous consumption = 100
b=Marginal propensity to consume = 0.75
Y=Equilibrium GDP
C = consumption ;
C = 100 + 0.75Y (Y income - 40 taxes)
Planned aggregate expenditure (PAE)
PAE = C + l +G +X
Substituting for C in the above equation,
PAE = 100 + 0.75 (Y - 40) + 50 + 150+ 20
= 100 + 0.75Y -30 + 50 + 150 + 20
= 290 + 0.75Y
Since short run exists when Y = PAE
Therefore,
Y = 290 + 0.75Y
Collect like terms
Y - 0.75Y = 290
0.25Y =290
Y = 290/0.25
Y = 1,160
McCall Corporation has a capital structure consisting of 55 percent common equity, 30 percent debt, and 15 percent preferred stock. Any debt issues would have a pre-tax cost of 9.5%. Preferred stock can be issued for a cost of 11.5%. Common equity can be issued, but flotation costs of $4.25 per share of common stock would be paid. McCall common stock is currently selling in the market at $65 per share. McCall recently paid a dividend of $4 per share and company earnings and dividends are expected to grow at an annual rate of 8% indefinitely. McCall has a marginal tax rate of 35% and the firm wants to keep its current capital structure. If the firm needs to raise additional equity, what will be the firm's cost of capital?
Answer:
WACC = 12.14%
Explanation:
Cost of debt = 9.5% x (1 - 35%) = 6.175%
Cost of preferred stock = 11.5%
Cost of equity (Re) = {D₁ / [P₀(1 - F)]} + g
Re = {($4.25 x 1.08) / [$65 x (1 - $4.25/$65)]} + 8% = ($4.59 / $60.75) + 8% = 15.56%
WACC = (15.55% x 0.55) + (6.175% x 0.30) + (11.5% x 0.15) = 8.56% + 1.85% + 1.73% = 12.14%
During the year, Next Tec Corp. had the following cash flows: receipt from customers, $15,000; receipt from the bank for long-term borrowing, $6,500; payment to suppliers, $5,900; payment of dividends; $1,700, payment to workers, $2,900; and payment for machinery, $12,500. What amount would be reported for net financing cash flows in the statement of cash flows?
Answer:
$4,800
Explanation:
Next Tech corporation had the following cash flows
Receipt from customers= $15,000
Receipt from bank for long term borrowing= $6,500
Payment to suppliers= $5,900
Payment of dividend= $1,700
Payment to workers= $2,900
Payment for machinery= $12,500
Therefore, the amount that should be reported for the net financing cash flows in the statement of cash flow can be calculated as follows
= Receipt for bank long term borrowing-payment of dividend
= $6,500-$1,700
= $4,800
Hence the amount reported for net financing cash flows in the statement of cash flow is $4,800
Based on the following production and sales estimates for May, determine the number of units expected to be manufactured in May. Estimated inventory (units), May 1 30,000 Desired inventory (units), May 31 25,000 Expected sales volume (units): South region 20,000 West region 40,000 North region 20,000 Unit sales price $10 a.85,000 b.105,000 c.75,000 d.80,000
Answer:
Production= 75,000 units
Explanation:
Giving the following information:
Estimated inventory (units), May 1 30,000
Desired inventory (units), May 31 25,000
Expected sales volume (units):
South region 20,000
West region 40,000
North region 20,000
To calculate the production for May, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= (20,000 + 40,000 + 20,000) + 25,000 - 30,000
Production= 75,000 units
Managers of an American television network have been told they need to employ a localization strategy if they want to break into the European and Australian markets. What specifically should they do to implement this strategy
Answer:
they will need to follow the television viewing habits,and cultural differences in the locality.
Explanation:
This is very important so as to determine what would work best in each region. An extensive research into television habits as well as cultural norms would need to be carried out.
For example, program schedule times may need adjustments based on a different viewing time.
The _____focuses on bringing different talents and perspectives together to make the best organizational decisions and to produce innovative, competitive products and services..
Answer:
Paradigm
Explanation:
Definition: a typical example or pattern of something; a model.
The Busby Corporation had a share price at the start of the year of $26.20, paid a dividend of $0.56 at the end of the year, and had a share price of $29.00 at the end of the year. Which of the following is closest to the rate of return of investments in companies with equal risk to The Busby Corporation for this period?
A) 5%
B) 7%
C) 9%
D) 13%
Answer:
D) 13%
Explanation:
Calculation for the percentage that is closest to the rate of return of investments
First step is to find the balance amount of the share price using this formula
Share price =(End of the year Share price + End of the year dividend)-Start of the year Share price
Let plug in the formula
Share price =($29.00+$0.56)-$26.20
Share price =$29.56-$26.20
Share price =$3.36
Second step is to find the rate of return of investments
Using this formula
Rate of return of investments= Share price/Start of the year Share price
Rate of return of investments
Let plug in the formula
Rate of return of investments=$3.36/$26.20
Rate of return of investments=0.13*100
Rate of return of investments=13%
Therefore the percentage that is closest to the rate of return of investments in companies with equal risk to The Busby Corporation for this perio will be 13%
Which one of these people does not attend the closing?
a. Your real estate agent
b. Closing agent
c. Seller
d. Appraiser
Answer:
d. Appraiser
Explanation:
During a closing appointment, there are many individuals usually present, including the buyer, seller, closing agent, and the attorney. Sometimes the company representative, mortgage lender, and other real estate agents may attend in unique situations. From the list provided the one individual that never attends a closing appointment is the Appraiser. This individual's only job is to estimate the market value of the house before listing it, and once this is done has no involvement in the selling process.
Sam was out hunting in the woods one day when he stumbled upon a baby fox. Sam was able to capture the fox and brought him home. He went and bought the fox a cage, feeding dishes, a leash, and a name tag. He decided to call the fox Rocky, and made sure to include a phone number on the tag in case he was lost. He took Rocky for a walk, but Rocky did not seem to like the leash around its neck. Sam's wife Ellie did not seem to care for the fox. A week later, Rocky escaped from his cage and wandered away. That same day Harold saw the fox wandering on his property, but was unable to catch it. Eventually, Rocky returned to the woods. Who owns the fox?
a. Sam
b. No one
c. Harold
d. Sam and Ellie
e. Ellie
Answer:
No one
Explanation:
This is because no one legally owned him and the fox escaped anyways.
Farris Company is considering a cash outlay of $500,000 for the purchase of land, which it could lease for $40,000 per year. If alternative investments are available that yield a 15% return, the opportunity cost of the purchase of the land is
Answer: $75,000
Explanation:
Opportunity cost is what an individual, firm or the government has to forgo when another different choice is made.
From the question, we are informed that Farris Company is considering a cash outlay of $500,000 for the purchase of land, which it could lease for $40,000 per year and that alternative investments are available that yield a 15% return.
Then the opportunity cost of the purchase of the land will be:
= $500,000 × 15%
= $500,000 × 0.15
= $75,000
Cost of common stock: Whitewall Tire Co. just paid a $1.60 dividend on its common shares. If Whitewall is expected to increase its annual dividend by 2 percent per year into the foreseeable future and the current price of Whitewall common shares is $11.66, what is the cost of common stock for Whitewall
Answer:
Cost of common stock for Whitewall is 16.00%
Explanation:
Ke = D1 / Price +g
D1 = Ke (Price + g)
D1 = $1.60 * (1+0.02)
D1 = $1.60 * (1.02)
D1 = $1.632
Ke = D1 / Price +g
We solve for Current dividend to derive the Cost of common stick
Ke = 1.632 / (11.66) + 2%
Ke = 1.632 / 11.66 + 0.02
Ke = 0.139966 + 0.02
Ke = 0.159966
Ke = 15.9966%
Ke = 16.00%
A company believes that its product will exhibit network effects if enough consumers begin to use it. How might this company decide to price its product? Offer the product for free early on, and increase the price later.
Answer: a. Offer the product for free early on, and increase the price later
Explanation:
When a product is said to have a network effect, what it means is that the product gets more value as more people use it. For example Whtsapp which is only such an effective means of communication because more and more people are getting it. If people did not get it, it would not be such a good medium and would be valued less.
If a company wants to price such a product, they should charge at lower rates first which would entice more people to use the product thereby giving the product more value. As the product value increases, the price can then increase to reflect this increased value.
The standard overhead applied is based on the ______ level of activity multiplied by the predetermined overhead rate.
Answer: actual level
Explanation:
It should be noted that when determining the standard overhead cost rate, overhead costs have to be grouped into the fixed cost and the variable costs.
The standard overhead applied is based on the actual level of activity multiplied by the predetermined overhead rate.
Jamal lost his job as a shipbuilder. His plant closed down "temporarily" but never reopened and will not. Jamal's skills are very specialized and no longer in demand. His unemployment is best classified as .
Answer:
Structural unemployment
Explanation:
Since Jamal's specialized skills are no longer in demand, this is a clear example of structural unemployment.
Structural unemployment is a situation that exists when the skills one can offer and the available jobs are not matched. It is caused by changes in technology thereby causing the skills that one possesses to be old fashioned. Jamal would have to learn new skills that are in demand to be employable.
Ohno Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Ohno’s monthly manufacturing cost and other expense data are as follows.
Rent on factory equipment $11,600
Insurance on factory building 2,500
Raw materials (plastics, polystyrene, etc.) 79,700
Utility costs for factory 900
Supplies for general office 300
Wages for assembly line workers 63,700
Depreciation on office equipment 800
Miscellaneous materials (glue, thread, etc.) 1,200
Factory manager’s salary 6,400
Property taxes on factory building 500
Advertising for helmets 14,500
Sales commissions 10,600
Depreciation on factory building 1,600
Required:
Prepare an answer sheet with the following column headings:
Cost Item Direct Materials Direct Labor Manufacturing Overhead Period Costs
Answer:
Cost Item Direct Direct Manufacturing Period
materials labor overhead costs
Rent on factory $11,600
equipment
Insurance on $2,500
factory building
Raw materials $79,700
Utility costs $900
for factory
Supplies for $300
general office
Wages assembly $63,700
line workers
Depreciation on $800
office equipment
Miscellaneous $1,200
materials
Factory manager’s $6,400
salary
Property taxes on $500
factory building
Advertising for $14,500
helmets
Sales commissions $10,600
Depreciation on $1,600
factory building
TOTALS $79,700 $63,700 $24,700 $26,200
The following information pertains to J Company's outstanding stock for 2021:
Common stock, $1 par
Shares outstanding, 1/1/2021 10,000
2 for 1 stock split, 4/1/2021 10,000
Shares issued, 7/1/2021 5,000
Preferred stock, $100 par, 7% cumulative
Shares outstanding, 1/1/2021 4,000
What is the number of shares J should use to calculate 2018 basic earnings per share?
a. 20,000.
b. 22,500.
c. 25,000 .
d. 27,000.
Answer: b. 22,500
Explanation:
J should use the total number of outstanding common stock at end of year to calculate 2018 basic earnings.
As a result of the Stock-split, the shares are split into 2 for 1.
There were 10,000 shares split so;
= 10,000 * 2
= 20,000
On the 1st of July, 5,000 shares were issued. This means that up till December 2021, the stock was outstanding for 6 months.
This will reflected by;
= 5,000 * 6/12
= 2,500 shares
Total shares = 20,000 + 2,500
= 22,500 shares
If the price that determined where marginal revenue equaled marginal cost were below the bottom of the average variable cost curve, then the profit-maximizing, monopolistically competitive firm would
Answer: c. shut down because it would cost more to produce and sell output than it would to shut down and lose all fixed costs.
Explanation:
The profit maximizing, monopolistically competitive firm maximises profit at the point where marginal revenue equals marginal costs.
If this point is below Average variable costs then that means that the company is not making enough to cover its variable costs. Should this be the case then the company should shutdown operations because variable costs are only there when the company is producing. If they shutdown then they will no longer incur them which would be the cheaper option.
They would take losses on the fixed costs but these have already been incurred so it would be better to lose the fixed costs than continue to make losses on variable costs.
Irene Watts and John Lyon are forming a partnership to which Watts will devote one-half time and Lyon will devote full time. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments, which they have agreed will be $42,000 for Watts and $63,000 for Lyon; (b) in proportion to the time devoted to the business; (c) a salary allowance of $6,000 per month to Lyon and the balance in accordance with the ratio of their initial capital investments; or (d) a salary allowance of $6,000 per month to Lyon, 10% interest on their initial capital investments, and the balance shared equally. The partners expect the business to perform as follows: year 1, $36,000 net loss; year 2, $90,000 net income; and year 3, $150,000 net income. Required: Complete the tables, one for each of the first three years, by showing how to allocate partnership income or loss to the partners under each of the four plans being considered. (Do not round intermediate calculations. Round final answers to the nearest whole dollar. Enter all allowances as positive values. Enter losses as negative values.)
Answer:
Irene Watts and John LyonAllocation of Partnership Income or Loss under these plans:(a) in the ratio of their initial capital investments, which they have agreed will be $42,000 for Watts and $63,000 for Lyon:
Year 1 Year 2 Year 3
Net Income / (Loss) ($36,000) $90,000 $150,000
Watts 40% (14,400) 36,000 60,000
Lyon 60% (21,600) 54,000 90,000
(b) in proportion to the time devoted to the business:
Year 1 Year 2 Year 3
Net Income / (Loss) ($36,000) $90,000 $150,000
Watts 1/3 (12,000) 30,000 50,000
Lyon 2/3 (24,000) 60,000 100,000
(c) a salary allowance of $6,000 per month to Lyon and the balance in accordance with the ratio of their initial capital investments:
Year 1 Year 2 Year 3
Net Income / (Loss) ($36,000) $90,000 $150,000
Less Salary (72,000) (72,000) (72,000)
Distributable Income/(Loss) (108,000) $18,000 $78,000
Watts 40% ($43,200) $7,200 $31,200
Lyon:
Salary 72,000 72,000 72,000
Distributable 60% (64,800) 10,800 46,800
Net share $7,200 $82,800 $118,800
(d) a salary allowance of $6,000 per month to Lyon, 10% interest on their initial capital investments, and the balance shared equally:
Year 1 Year 2 Year 3
Net Income / (Loss) ($36,000) $90,000 $150,000
Less Salary (72,000) (72,000) (72,000)
Less Interest on Capital (10,500) (10,500) (10,500)
Distributable Income/(Loss) (118,500) 7,500 67,500
Watts:
Interest on Capital 4,200 4,200 4,200
Distributable income 40% (47,400) 3,000 27,000
Share of profit or loss ($45,400) $7,200 $31,200
Lyon:
Salary 72,000 72,000 72,000
Interest on Capital 6,300 6,300 6,300
Income/Loss 60% (71,100) 4,500 40,500
Net share $7,200 $82,800 $118,800
Explanation:
a) Data and Calculations:
Net Income of Loss:
Year 1 = $36,000 loss
Year 2 = $90,000
Year 3 = $150,000
Sharing plans:
a) Capital:
Watts $42,000 = $42,000/$105,000 = 40%
Lyon $63,000 = $63,000/$105,000 = 60%
b) Time devotion:
Watts 1 = 1/3 or 33%
Lyon 2 = 2/3 or 67%
c) a salary allowance of $6,000 per month to Lyon and the balance in accordance with the ratio of their initial capital investments:
Distributable Income / Loss:
Year 1 = ($36,000) - $72,000 = ($108,000)
Year 2 = $90,000 - $72,000 = $18,000
Year 3 = $150,000 - $72,000 = $78,000
Media Bias Inc. issued bonds 10 years ago at $1,000 per bond. These bonds had a 35-year life when issued and the annual interest payment was then 13 percent. This return was in line with the required returns by bondholders at that point in time as described below: Real rate of return 5 % Inflation premium 4 Risk premium 4 Total return 13 % Assume that 10 years later, due to good publicity, the risk premium is now 3 percent and is appropriately reflected in the required return (or yield to maturity) of the bonds. The bonds have 25 years remaining until maturity.
Answer:
remaining time to maturity 25 years, annual coupon
face value $1,000
when the bonds were issued, the market interest rate was 13%, which was identical to the coupon rate, therefore, the bonds were sold at par
now, 10 years later, the market interest rate is 12% (1% less), so the current market price is:
PV of face value = $1,000 / (1 + 12%)²⁵ = $58.82
PV of coupon payments = $130 x 7.8431 (PV annuity factor, 25 periods, 12%) = $1,019.63
bond's current market price = $58.82 + $1,019.63 = $1,078.45
Busch Company has these obligations at December 31. For each obligation, indicate whether it should be classified as a current liability, noncurrent liability, or both.
(a) A note payable for $100,000 due in 2 years.
Current liabilityNoncurrent liabilityBoth
(b) A 10-year mortgage payable of $200,000 payable in ten $20,000 annual payments.
BothCurrent liabilityNoncurrent liability
(c) Interest payable of $15,000 on the mortgage.
Noncurrent liabilityBothCurrent liability
(d) Accounts payable of $60,000.
Current liabilityNoncurrent liabilityBoth
Answer:
(a) A note payable for $100,000 due in 2 years. - Noncurrent liability
Non-current liabilities are obligations of payments by the company that extend for over a year. This note payable is due in 2 years and so is a Non-current liability.
(b) A 10-year mortgage payable of $200,000 payable in ten $20,000 annual payments. - Noncurrent liability
This obligation also extends for over a year thereby satisfying the definition of a Non-current liability
(c) Interest payable of $15,000 on the mortgage. - Current liability
Current Liabilities being the opposite of Non-current liabilities are obligations that are due within a year. The $15,000 interest payment is the amount due for the year and so is a Current Liability.
(d) Accounts payable of $60,000. - Current liability
Accounts Payable are payable within the year and as such are current liabilities.
Other things held constant, if a bond indenture contains a call provision, the yield to maturity that would exist without such a call provision will generally be____ the YTM with a call provision.
Answer:
Other things held constant, if a bond indenture contains a call provision, the yield to maturity that would exist without such a call provision will generally be lower than the YTM with a call provision.
Explanation:
That is the correct answer to the question asked about bond indenture.
he sales of the Garland Corporation are projected to grow exponentially for the years between 2010 and 2015 from $110 million to $160 million. (a) Find a model giving the sales of Garland Corporation in year t between 2010 (t
Answer:
between 2010 and 2015 he only grown $50.
Explanation:
That why he come from $110 to $160. In the middle of the years he only grown $50.
I hope it help you understand.
A model that gives the sales of Garland Corporation in year t between 2010 and 2015 is [tex]S = S_{o}e^{0.075t}[/tex]
What is the model that represents the expoential growth of sales?The equation that can be used to represent exponential functions is:
[tex]S = S_{o}e^{rt}[/tex]
Where:
s = future sales value [tex]S_{o}[/tex] = present sales value r = rate of growth t = number of years,r = (In 160 / 110) /5
r = 0.075
To learn more about exponential functions, please check: https://brainly.com/question/26331578
The advantages of using typedef do not include:a. Making programs more portable by allowing data types to be easily changed to meet system specifications.b. Making type names shorter.c. Making programs more readable.d. Increasing the efficiency of accessing struct member variables.
Answer:
d. Increasing the efficiency of accessing struct member variables.
Explanation:
In the programming language C and C++ there is a keyword i.e typedef that function is to provide a new name. It is to be used to develop an extra name for the other data type but it does not develop a new data type
Here the advantage of using typedef is as follows
1. It allows the data types for meeting the specifications of the system
2. The name would become shorter
3. Readable program
but it does not increase the efficiency
Hence, the last option is correct
Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $166,400 to $201,500. Variable costs and their percentage relationship to sales are sales commissions 7%, advertising 6%, travel 4%, and delivery 1%. Fixed selling expenses will consist of sales salaries $34,900, depreciation on delivery equipment $6,600, and insurance on delivery equipment $1,700. Prepare a monthly selling expense flexible budget for each $11,700 increment of sales within the relevant range for the year ending December 31, 2020.
Answer:
there is not enough room here, so I prepared an excel spreadsheet
In early January, Burger Mania acquired 100% of the common stock of the Crispy Taco restaurant chain. The purchase price allocation included the following items: $5 million, patent; $3 million, trademark considered to have an indefinite useful life; and $5 million, goodwill. Burger Mania's policy is to amortize intangible assets with finite useful lives using the straight-line method, no residual value, and a five-year service life. What is the total amount of amortization expense that would appear in Burger Mania's income statement for the first year ended December 31 related to these items
Answer:
$1,000,000 per year
Explanation:
We can infer from the above information that the intangible assets with indefinite period are checked annually, for impairment hence patent is a limited life intangible.
Therefore;
The amount of amortization of patent at the end of first year
= Patent value ÷ Useful life
= $5 million ÷ 5 years
= $1,000,000 per year
Therefore, the company should amortize $1,000,000 per year.
The manager of a crew that installs wood floors has tracked the crew's output over the past several weeks. Each worker works 40 hours per week and earns $17 per hour. The wholesale cost of lumber to the company is $5 per square foot and the company charges its customers $15 per square foot of flooring installed.
Week Crew Size Lumber Used (sq. ft.) Flooring Installed (sq. ft.)
1 4 480 420
2 3 351 325
3 2 250 238
a. Calculate labor productivity for each of the weeks.
b. Suppose that in addition to labor cost and wholesale lumber cost, the firm's overhead is 120% of its labor cost. Calculate multifactor productivity for each of the weeks shown.
Answer:
Week Crew Size Lumber Used Flooring Installed
(sq. ft.) (sq. ft.)
1 4 480 420
2 3 351 325
3 2 250 238
a)
labor productivity = total output / number of employees
week 1 ⇒ 420 / 4 = 105 sq. ft. of floors installed per worker
week 2 ⇒ 325 / 3 = 108.33 sq. ft. of floors installed per worker
week 3 ⇒ 238 / 2 = 119 sq. ft. of floors installed per worker
b)
multi-factor productivity = total output in $ / (labor + materials + overhead)
week 1 ⇒ (420 x $15) / [(4 x 40 x $17) + (480 x $5) + (4 x 40 x $17 x 1.2) = $6,300 / ($2,720 + $2,400 + $3,264) = 0.75
week 2 ⇒ (325 x $15) / [(3 x 40 x $17) + (351 x $5) + (3 x 40 x $17 x 1.2) = $4,875 / ($2,040 + $1,755 + $2,448) = 0.78
week 3 ⇒ (238 x $15) / [(2 x 40 x $17) + (250 x $5) + (2 x 40 x $17 x 1.2) = $3,570 / ($1,360 + $1,250 + $1,632) = 0.84
Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. The partners have decided to liquidate their partnership. On the day of liquidation their balance sheet appears as follows.
KENDRA, COGLEY, AND MEI
Balance Sheet
May 31
Assets Liabilities and Equity
Cash $ 103,900 Accounts payable $ 258,000
Inventory 537,600 Kendra, Capital 76,700
Cogley, Capital 172,575
Mei, Capital 134,225
Total assets $641,500 Total liabilities and equity $641,500
Required:
For each of the following scenarios, complete the schedule allocating the gain or loss on the sale of inventory. Prepare journal entries to record the below transactions. (Do not round intermediate calculations. Amounts to be deducted or Losses should be entered with a minus sign. Round your final answers to the nearest whole dollar.)
(1) Inventory is sold for $608,400.
(2) Inventory is sold for $469,200.
(3) Inventory is sold for $358,800 and any partners with capital deficits pay in the amount of their deficits.
(4) Inventory is sold for $298,800 and the partners have no assets other than those invested in the partnership.
Complete this question by entering your answers in the tabs below.
Required:
Inventory
Complete the schedule allocating the gain or loss on the sale of inventory is $608,400.
1. Record the sale of inventory.
2. Allocate the gain(loss) on the sale of inventory to the partners.
3. Record the payment of the liabilities.
4. Record the disbursement of the remaining cash to the partners.
Answer
1)a
Dr Cash 608,400
Cr Inventory 537,600
Cr Gain on Sale of Inventory 70,800
b.
Dr Gain on Sale of Inventory 70,800
Cr Kendra' Capital 35,400
Cr Cogley's Capital 23,600
Cr Mei' Capital 11,800
c.
Dr Accounts Payable 258,000
Cr Cash 258,000
d.
Dr Kendra' Capital 112,100
Dr Cogley's Capital 196,175
Dr Mei, Capital 146,025
Cr Cash 454,300
2a.
Dr Cash 469,200
Dr Loss on Sale of Inventory 68,400
Cr Inventory 537,600
b.
Dr Kendra' Capital 34,200
Dr Cogley's Capital 22,800
Dr Mei' Capital 11,400
Cr Loss on sale of Inventory 68,400
c.
Dr Accounts Payable 258,000
Cr Cash 258,000
d.
Dr Kendra' Capital 42,500
Dr Cogley's Capital 149,775
Dr Mei' Capital 122,825
Cr Cash 315,100
3a.
Dr Cash 358,800
Dr Loss on Sale of Inventory 178,800
Cr Inventory 537,600
b.
Dr Kendra' Capital 89,400
Dr Cogley's Capital 59,600
Dr Mei' Capital 29,800
Cr Loss on sale of Inventory 178,800
c.
Dr Cash 12,700
Cr Kendra' Capital 12,700
d.
Dr Accounts Payable 258,000
Cr Cash 258,000
e.
Dr Cogley's Capital 17,100
Dr Mei' Capital 104,425
Cr Cash 121,525
4a.
Dr Cash 298,800
Dr Loss on Sale of Inventory 238,800
Cr Inventory 537,600
b.
Dr Kendra' Capital 119,400
Dr Cogley's Capital 79,600
Dr Mei' Capital 39,800
Cr Loss on sale of Inventory 238,800
c.
Dr Cogley's Capital 28,466
Dr Mei' Capital 14,234
Cr Kendra' Capital 42,700
d.
Dr Accounts Payable 258,000
Cr Cash 258,000
e.
Dr Cogley's Capital 64,509
Dr Mei' Capital 80,191
Cr Cash 144,700
Explanation:
Preparation of the Prepare journal entries to record the sales of inventory
1)a
Dr Cash 608,400
Cr Inventory 537,600
Cr Gain on Sale of Inventory 70,800
(608,000-536,600)
b
Dr Gain on Sale of Inventory 70,800
(608,000-536,600)
Cr Kendra' Capital 35,400
(3/6×70,800)
Cr Cogley's Capital 23,600
(2/6×70,800)
Cr Mei' Capital 11,800
(1/6×70,800)
c.
Dr Accounts Payable 258,000
Cr Cash 258,000
d.
Dr Kendra' Capital 112,100
(76,700+35,400)
Dr Cogley's Capital 196,175
(172,575+23,600)
Dr Mei, Capital 146,025
(134,225+11,800)
Cr Cash 454,300
(112,100+196,175+146,025)
2)Preparation of the Journal entries to Allocate the gain(loss) on the sale of inventory to the partners.
a.
Dr Cash 469,200
Dr Loss on Sale of Inventory 68,400
(469,200-537,600)
Cr Inventory 537,600
b.
Dr Kendra' Capital 34,200
(3/6×68,400)
Dr Cogley's Capital 22,800
(2/6×68,400)
Dr Mei' Capital 11,400
(1/6×68,400)
Cr Loss on sale of Inventory 68,400
c.
Dr Accounts Payable 258,000
Cr Cash 258,000
d.
Dr Kendra' Capital 42,500
(76,700-34,200)
Dr Cogley's Capital 149,775
(172,575-22,800)
Dr Mei' Capital 122,825
(134,225-11,400)
Cr Cash 315100
(42,400+149,775+122,825)
3)Preparation of the Journal entries to Record the payment of the liabilities
a.
Dr Cash 358,800
Dr Loss on Sale of Inventory 178,800
(358,800-537,500)
Cr Inventory 537,600
b.
Dr Kendra' Capital 89,400
(3/6×178,800)
Dr Cogley's Capital 59,600
(2/6×178,800)
Dr Mei' Capital 29,800
(1/6×178,800)
Cr Loss on sale of Inventory 178,800
(89,400+59,600+29,800)
c.
Dr Cash 12,700
Cr Kendra' Capital 12,700
(76,700 - 89,400)
d.
Dr Accounts Payable 258,000
Cr Cash 258,000
e.
Dr Cogley's Capital 17,100
(76,700-59,600)
Dr Mei' Capital 104,425
(134,225-29,800)
Cr Cash 121,525
(17,100+104,425)
4) Preparation of the Journal entries to Record the disbursement of the remaining cash to the partners
a.
Dr Cash 298,800
Dr Loss on Sale of Inventory 238,800
(298,800-537,600)
Cr Inventory 537,600
b.
Dr Kendra' Capital 119,400
(3/6×238,800)
Dr Cogley's Capital 79,600
(2/6×238,800)
Dr Mei' Capital 39,800
(1/6×238,800)
Cr Loss on sale of Inventory 238,800
(119,400+79,600+39,800)
c.
Dr Cogley's Capital 28,466
(2/3×42,700)
Dr Mei' Capital 14,234
(1/3×42,700)
Cr Kendra' Capital 42,700
(76,700 - 119,400)
d.
Dr Accounts Payable 258,000
Cr Cash 258,000
e.
Dr Cogley's Capital 64,509
(172,575 - 79,600 - 28,466)
Dr Mei' Capital 80,191
(134,225 - 39,800 - 14,234)
Cr Cash 144,700
(80,191+64,509)
Suppose an item sells for $125 in the United States and for 62,500 pesos in Chile. According to the law of one price, the nominal exchange rate (pesos/dollar) should be ________.
Answer:
$1 = 500 Pesos
1 Pesos = $0.002
Explanation:
$125 = 62,500 Pesos
$1 = 62,500 / 125
$1 = 500 Pesos
$1 = 500 Pesos
1 Pesos = $1 / 500
1 Pesos = $0.002
Knowledge Check 02 On February 28, the Jewelry store remits $975 of sales tax collected from its customers to the government. Prepare the February 28 journal entry for the Jewelry store by selecting the account names and dollar amounts from the drop-down menus.
Answer:
Please refer to the below
Explanation:
Journal entry as seen below
Feb 28 Sales tax payable Dr $975
Cash Cr $975
Since Jewelry store collected the sales tax from its customers, sales tax account will be debited because it reduces the balance in the account while cash account will be credited because the balance therein increases due to the sales tax collected.
