Answer:
Following are the response to the given question:
Explanation:
Cost of Goods Sold
Absorption costing [tex]92000+440\times (520+460+180) \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ = 602400[/tex]
Variable costing [tex]78000+440\times (520+460) \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ =509200[/tex]
Q1. What is recruitment? Explain 5 commonly used recruitment sources companies’ use?
Answer:
The top five most popular recruitment sources used by employers include (indicated by percentage of employers): General online job boards and websites (89%) Employee referrals (81%) Staffing agency or third-party recruiter (58%)
Explanation:
choose me to brainlist
Of what use is the statement of cash flows?
Answer:
The purpose of the statement of cash flows is to present cash inflows and outflows for a reporting period to the reader of the report. These inflows and outflows are further classified into operating, investing, and financing activities.
Why does the Aggregate Demand Curve slope downwards?
a. GDP Effect
b. Exchange-RMC Effect
c. Turn-Rate Effect
d. Substitution Effect
e. Interest-Rate Effect
f. Marginal Effect
g. Wealth Effect
Answer:
b. Exchange - RMC Effect c. Interest-Rate effect d. Wealth effectExplanation:
When the exchange rate of the country falls, goods denominated in that currency will become cheaper and this would have the effect of making exports cheaper. Exports therefore rise with lower price levels.
A lower interest rate will mean that more companies will take loans to invest. Investment is a component of Aggregate demand so when investment increases, so does AD.
When prices are lower in the economy, the Aggregate Demand will increase because people will be able to afford more goods and services. This is the wealth effect.
Ellen Co. has offered their customers a 1% discount off the amount owed if they pay within 15 days of receiving their bill. Handler Company owed Ellen Co. $2,185 as of May 1st and paid Ellen Co. on May 7th. How much cash did Handler Company send to Ellen Co. on May 7th?
Answer:
Money send to Ellen = $2163.15
Explanation:
Discount offered by the Ellen Co. = 1%
Owed amount = $2185
Since the amount is repaid within 15 days to the offer of a 1% discount will be applicable. So the Handler will send an amount that is 1% less than the actual amount.
Money send to Ellen = 2185 - (1% x 2185)
Money send to Ellen = $2163.15
A one-year insurance policy was purchased on June 1 for $2,400. The adjusting entry on December 31 would be:____________. (If an amount box does not require an entry, leave it blank.) Dec. 31 i. Accounts Payable ii. Cash iii. Insurance Expense iv. Insurance Payable v. Prepaid Insurance
Answer:
Adjusting Journal Entry:
Debit Insurance Expense $1,400
Credit Prepaid Insurance $1,400
To record the insurance expense for the year (7 months).
Explanation:
This adjustment will cause the Prepaid Insurance account to remain $1,000. This balance represents the insurance cost for 5 months having deducted the insurance cost for 7 months from June 1 to December 31. So, in line with the accrual concept and the matching principle of generally accepted accounting principles, only $1,400 Insurance was incurred for the current year. The balance will be charged to the account when the service is consumed.
The Polaris Company uses a job-order costing system. The following transactions occurred in October:
a. Raw materials purchased on account, $210,000.
b. Raw materials used in production, $190,000 ($152,000 direct materials and $38,000 indirect materials).
c. Accrued direct labor cost of $50,000 and indirect labor cost of $21,000.
d. Depreciation recorded on factory equipment, $104,000. Other manufacturing overhead costs accrued during October, $131,000.
f. The company applies manufacturing overhead cost to production using a predetermined rate of $5 per machine-hour. A total of 76,100 machine-hours were used in October.
g. Jobs costing $514,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h. Jobs that had cost $453,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 36% above cost.
Required:
a. Prepare journal entries to record the information given above.
b. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant information above to each account. Compute the ending balance in each account, assuming that Work in Proccss has a beginning balance of $42,000.
Answer:
The Polaris Company
a. Journal Entries
a. Debit Raw materials $210,000
Credit Accounts Payable $210,000
To record the purchase of raw materials on account.
b. Debit Work in Process $152,000
Debit Manufacturing Overhead $38,000
Credit Raw materials $190,000
To record raw materials used in production as direct and indirect.
c. Debit Work in Process $50,000
Debit Manufacturing Overhead $21,000
Credit Payroll $71,000
To record the costs of direct labor and indirect labor.
d. Debit Manufacturing Overhead $104,000
Credit Depreciation on factory equipment, $104,000
To record the depreciation expense.
Debit Manufacturing Overhead $131,000
Credit Other Expense $131,000
To record other manufacturing overhead costs.
f. Debit Work in Process $380,500
Credit Manufacturing Overhead $380,500
To record manufacturing overhead applied at the rate of $5 for 76,100 DLHs.
g. Debit Finished Goods $514,000
Credit Work in Process $514,000
To record the cost of goods manufactured.
h. Debit Cost of Goods Sold $453,000
Credit Finished Goods $453,000
To record the cost of goods sold.
Debit Accounts Receivable $616,080
Credit Sales Revenue $616,080
To record the sale of goods on account at 36% above cost.
b. T-accounts:
Manufacturing Overhead
Account Titles Debit Credit
Raw materials $38,000
Indirect labor cost 21,000
Factory depreciation 104,000
Other expenses 131,000
Work in Process $380,500
Overapplied overhead 86,500
Work in Process
Account Titles Debit Credit
Beginning inventory $42,000
Raw materials 152,000
Direct labor cost 50,000
Overhead 380,500
Finished Goods $514,000
Ending inventory $110,500
Explanation:
a) Data and Analysis:
a. Raw materials $210,000 Accounts Payable $210,000
b. Work in Process $152,000 Manufacturing Overhead $38,000 Raw materials $190,000
c. Work in Process $50,000 Manufacturing Overhead $21,000 Payroll $71,000
d. Manufacturing Overhead $104,000 Depreciation on factory equipment, $104,000 Manufacturing Overhead $131,000 Other Expense $131,000
f. Work in Process $380,500 Manufacturing Overhead $380,500
g. Finished Goods $514,000 Work in Process $514,000
h. Cost of Goods Sold $453,000 Finished Goods $453,000
Accounts Receivable $616,080 Sales Revenue $616,080
Journalize the following transactions.a. On December 1, $13,250 was received for a service contract to be performed from December 1 through April 30. b. Assuming the work is performed evenly throughout the contract period, journalize the adjusting entry required on December 31.
Answer:
hello didi the code on their own lives r
Answer:
On December 1
$18000 To unearned revenue AC
Explanation:
$18000÷5months
=$3600
The common stock of Buffalo Inc. is currently selling at $113 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $68 per share. 8.40 million shares are issued and outstanding.
Required:
Prepare the necessary journal entries assuming the following.
a. The board votes a 2-for-l stock split.
b. The board votes a 100% stock dividend. Briefly discuss the accounting and securities market differences between these two methods of increasing the number of shares outstanding.
Answer:
Buffalo Inc.
a. Journal Entry:
No journal entry required except a memorandum to record the split.
b. Journal Entry:
Debit Stock Dividend (Retained Earnings) $84 million
Credit Stock Dividend Distributable $84 million
To record the declaration of a 100% stock dividend.
When issued:
Debit Stock Dividend Distributable $84 million
Credit Common Stock $84 million
To record the issuance of stock dividends.
2. Both methods increase the outstanding number of shares by 100%. However, with a stock split of 2-for-1, there is no journal entry except a memorandum record to state the split.
Secondly, with a stock split or 2-for-1, the market price is also halved. This does not happen with a stock dividend. The market forces will determine and correct the market price to an acceptable level. A stock dividend requires some accounting entries to be made.
Explanation:
a) Data and Calculations:
Current market price of common stock per share = $113
Par value per share = $10
Book value per share = $68
Shares issued and outstanding = 8.40 million
a. The board votes a 2-for-l stock split:
Shares outstanding = 16.80 million shares
Market price = $56.50
Journal Entry:
No journal entry required except a memorandum to record the split. The value of common stock remains the same.
b. The board votes a 100% stock dividend:
Shares outstanding will increase to 16.80 million shares
Market price = $113 and level off based on demand and supply.
Journal Entry:
Stock Dividend (Retained Earnings) $84 million
Common Stock $84 million
Bundling:__.
A. is illegal in most U.S. states.
B. increases transaction costs for consumers.
C. is when firms sell multiple separate goods together for a single price.
D. is where a firm wraps its fragile goods in special packaging and charges a higher price than if the goods are put into regular packaging.
Answer:
c
Explanation:
Bundling is when separate products of a company are combined together and sold to customers usually at a lower price
Problems and Applications Q8 Suppose subway ridership in New York City declined by 4.3 percent after a fare increase of 25 cents to $1.50. Using the midpoint method, an estimate of the price elasticity of demand for subway rides is . True or False: According to your estimate, the Transit Authority's revenue rises when the fare increases. True False
Answer:
Price elasticity of demand = Percentage in quantity demanded / Percentage change in price
We already have the percentage change in quantity demanded as -4.3%.
We need to find the percentage change in price using the midpoint method.
= (New price - Old price) ÷ ((New Price + Old price) / 2)
Old price = 1.50 - 0.25 = $1.25
Percentage change in price = (1.50 - 1.25) ÷ ((1.50 + 1.25) / 2)
= 18.18%
Price elasticity of demand = -4.3% / 18.18%
= -0.24
According to your estimate, the Transit Authority's revenue rises when the fare increases. TRUE.
The statement is true because the price elasticity of demand here is Inelastic and when this is the case, revenue rises when the price of the good or service increases.
The price elasticity of demand is inelastic when it is less than 1 which is the case here.
Explain the concept of a Pereto Chart - provide an example - explain how the concept of the Pereto Chart might be used in making decisioins about handling negative risks which could impact a project or organization.
Answer:
a. A Pareto Chart is a graph that shows the frequency of flaws and their overall impact.
b. For instance, by using Pareto Charts, you might discover that putting in 13% of the effort yields 87% of the results. Alternatively, 30% of underlying causes might be addressed to solve 70% of problems.
c. Pareto charts are important for deciding which defects or negative risks should be prioritized in order to achieve the best overall results.
Explanation:
a. Explain the concept of a Pereto Chart
A Pareto Chart is a graph that shows the frequency of flaws and their overall impact. A Pareto chart is a fundamental quality tool that can be used to identify the most common problems, complaints, or any other countable and categorizeable factor. A Pareto chart is a form of graph that includes both bars and a line graph, with bars representing individual values in descending order and a line representing the cumulative total.
b. Provide an example
The Pareto Principle explains how there is frequently a lack of symmetry between the labor you do and the outcomes you get. For instance, by using Pareto Charts, you might discover that putting in 13% of the effort yields 87% of the results. Alternatively, 30% of underlying causes might be addressed to solve 70% of problems.
b. Explain how the concept of the Pereto Chart might be used in making decisioins about handling negative risks which could impact a project or organization.
A Pareto diagram is used to distinguish between the important and inconsequential components of a problem. It frequently shows the most common sources of defects, the most common type of fault, the most common grounds for customer complaints, and so on in quality control.
Therefore, Pereto Chart might be used in making decisioins about handling negative risks which could impact a project or organization as it allows a project team or an organisation to know where to focus their improvement efforts by graphically distinguishing the parts of an issue. Pareto charts are therefore important for deciding which defects or negative risks should be prioritized in order to achieve the best overall results.
When schools and businesses allocate admissions or jobs on the basis of race, gender, disability, or other criteria unrelated to ability, they are aiming at
Answer:
equality of outcome
Explanation:
Equality of outcome may be defined as to ensuring people with disadvantaged for making any personal profit or gains. It eliminates the personal responsibility of the people.
In the context, when the schools or the businesses allocate jobs or admissions based on the people's disability, race or gender or some other criteria which is unrelated to ability, they are mostly trying o to aim at equality of outcome.
Altuve Co. was incorporated on January 1, 2013, at which time 250,000 shares of $10 par value common stock were authorized, and 110,000 of these shares were issued for $17 per share. Net income for the year ended December 31, 2013, was $1,257,300. Altuve Co.’s board of directors declared dividends of $3 per share of common stock on December 31, 2013, payable on February 7, 2014.Use the horizontal model to show the effects of the following:a. The issuance of common stock on January 1, 2013b. The declaration of dividends on December 31, 2013.c. The payment of dividends on February 7, 2014.
Answer:
Altuve Co.
Horizontal Model and Transaction Effects:
Balance Sheet
a. The issuance of common stock on January 1, 2013
Assets = Liabilities + Equity
Cash $1,870,000 = Common Stock $1,100,000
Additional Paid-in 770,000
b. The declaration of dividends on December 31, 2013.
Assets = Liabilities + Equity
Assets = Liabilities $330,000 + Equity ($330,000)
c. The payment of dividends on February 7, 2014.
Assets ($330,000) = Liabilities ($330,000) + Equity
Explanation:
a) Data and Analysis:
a. The issuance of common stock on January 1, 2013
Jan. 1, 2013: Cash $1,870,000 Common Stock $1,100,000 Additional Paid-in Capital $770,000
b. The declaration of dividends on December 31, 2013.
Dec. 31, 2013: Cash Dividend $330,000 Dividends Payable $330,000
c. The payment of dividends on February 7, 2014.
Feb. 7, 2014: Dividends Payable $330,000 Cash $330,000
$1,000 par value zero-coupon bonds (ignore liquidity premiums) Bond Years to Maturity Yield to Maturity A 1 6.00% B 2 7.50% C 3 7.99% D 4 8.49% E 5 10.70% One year from now bond C should sell for ________ (to the nearest dollar).
Answer:
$842
Explanation:
The computation of the One year from now bond C should sell is shown below;
But before that we have to determined the expected yield to maturity for bond C in one year :
So,
1.0799^3 = 1.06 x (1 + r)^2
1.188 = (1 + r)^2
√1.188 = √(1 + r)^2
1.08999 = 1 + r
r = 0.08999
= 9%
Now
the yield to maturity = (future value ÷ present value)^0.5 - 1
0.09 + 1 = ($1,000 ÷ value in 1 year)^0.5
1.09 = ($1,000 ÷ value in 1 year)^0.5
1.09^2 = $1,000 ÷ value in 1 year
So,
value in 1 year is
= $1,000 ÷ 1.09^2
= $1,000 ÷ 1.1881
= $841.68
≈ $842
a. Develop a probability distribution for x
b. Compute the expected value of x
c. Compute the variance and standard deviation for x
d. Comment on what your results imply about wind conditions during boating accidents
a. Answer:The corresponding probabilities are obtained by converting the percentages into probabilities. That is, by dividing each value with 100.
F/N (where F =percentage of accidents and N =100)
Explanation:
X 0 1 2 3 4
f(X) 0.096 0.57 0.238 0.077 0.019
b. The formula for the expected value of a discrete random variable is E(x)= µ=∑xf(x)
X F(X) X.f(X)
0 0.096 0
1 0.57 0.57
2 0.238 0.476
3 0.077 0.231
4 0.019 0.076
Total 1 1.353
Hence, the value for expected value of X is 1.353
The formula for the variance of the discrete random variables is Var(x)= σ² =∑(x-µ)²f(x)
X F(X) (x-µ) (x-µ)² (x-µ)².f(x)
0 0.096 -1.353 1.8306 0.1757
1 0.57 -0.353 0.1246 0.0710
2 0.238 0.647 0.4186 0.0996
3 0.077 1.647 2.7126 0.2089
4 0.019 2.647 7.0066 0.1331
Total 1 3.235 12.0930 0.6884
Hence, the variance of the random variable x is 0.6884
The formula for the standard deviation of the discrete random variables is
σ=√(∑[(x-µ)².f(x)] )
Thus, the standard deviation is σ= √0.6884
=0.8297
Hence, the standard deviation of the random variable x is 0.8297
The following information was available for the year ended December 31, 2016
Sales $260,000
Net income 38,340
Average total assets 560,000
Average total stockholders' equity 315,000
Dividends per share 1.23
Earnings per share 3.00
Market price per share at year-end 24.60
Required:
a. Calculate margin, turnover, and ROl for the year ended December 31, 2016.
b. Calculate ROE for the year ended December 31, 2016.
Answer:
A. Margin 14.75%
Turnover 0.46 times
ROI 6.85%
B. ROE 12.17%
Explanation:
A. Calculation to determine the margin, turnover, and ROl for the year ended December 31, 2016.
Calculation for MARGIN
Using this formula
Margin=Net income/Sales
Let plug in the formula
Margin=$38,340/$260,000
Margin=0.1475*100
Margin=14.75%
Calculation for TURNOVER
Using this formula
Turnover=Sales /Average total assets
Let plug in the formula
Turnover=$260,000/$560,000
Turnover=0.46 times
Calculation for ROI
Using this formula
ROI=Net income/Average total assets
Let plug in the formula
ROI=$38,340/$560,000
ROI=0.0685*100
ROI=6.85%
Therefore the margin is 14.75%, turnover is 0.46 times and ROl is 6.85% for the year ended December 31, 2016.
B. Calculation to determine the ROE for the year ended December 31, 2016.
Using this formula
ROE=Net income /Average total stockholders' equity
Let plug in the formula
ROE=$38,340/$315,000
ROE=0.1217*100
ROE=12.17%
Therefore the ROE for the year ended December 31, 2016 is 12.17%
Suppose that the price of a good decreased. The substitution effect shows the change in consumption for all goods in reaction to a change in _____________ relative prices income preferences holding _____________ purchasing power utility constant.
Answer:
The correct answer is "relative prices; utility". A further explanation is provided below.
Explanation:
The conditions of a connection or bond between variables customer demand or perhaps the proportion of such a given cost of production to the normal distribution of so many other products available throughout the marketplace.Individual's pleasure is usually measured by the consumption of that same goods and services.Thus the above is the correct answer.
Iron Man Foundry produces multiple products, one of which is casting a hose nozzle. The daily demand for these nozzles is 1,000 units per day. If Iron Man currently operates one shift of eight hours what would be the Takt time
Answer: 0.48 minutes
Explanation:
Takt time = Net time available / Daily demand
Net time available is number of minutes in a shift so:
= 8 hours * 60 minutes
= 480 minutes
Daily demand = 1,000 units
Takt time = 480 / 1,000
= 0.48 minutes
Lottery. Your dreams of becoming rich have just come true. You have won the State of Tranquility's Lottery. The State offers you two payment plans for the $6 comma 000 comma 000 advertised jackpot. You can take annual payments of $150 comma 000 at the end of the year for the next 40 years or $1 comma 466 comma 858 today. a. If your investment rate over the next 40 years is 11%, which payoff will you choose? b. If your investment rate over the next 40 years is 9%, which payoff will you choose? c. At what investment rate will the annuity stream of $150 comma 000 be the same as the lump-sum payment of $1 comma 466 comma 858?
Answer:
A=1466858
B=$150000
C=10%
Explanation:
A)
Present value of $150000 at 11% for 40 years;
Using excel PV function: PV(11%,40,-150000) = $1342657.623
Therefore, 1466858 should be selected.
B)
Present value of $150000 at 9% for 40 years
= PV(9%,40,-150000) = $1613604.03
Therefore payment of $150000 should be selected
C)
Using excel rate function: RATE(40,-150000,1466858)
= 10%
The theory which states that problems arise in corporations because top management no longer is willing to bear the brunt of their decisions unless they own a substantial amount of stock in the corporation is called
Answer:
Agency theory.
Explanation:
A corporation can be defined as a corporate organization that has facilities and owns or controls assets used for the production of goods and services in at least one country other than its headquarter (home office) located in its home country.
This ultimately implies that, a corporation is a corporate organization that owns or controls its business in two or more countries.
Typically, it is considered to be one of the most complicated and expensive type of organization. Generally, a corporation is considered to be perpetual in nature and it is a body that comprises of a group of people such as directors, shareholders etc., who act as a single entity.
One of the advantage of a corporation is that, owners have limited liability for debt to the extent to which they have invested and as such are not personally liable for some of debt owed by corporation.
The theory which states that problems arise in corporations because top management no longer is willing to bear the brunt of their decisions unless they own a substantial amount of stock in the corporation is called agency theory.
On January 1, 2019, Wasson Company purchased a delivery vehicle costing $36,500. The vehicle has an estimated 6-year life and a $3,500 residual value. What is the vehicle's book value as of December 31, 2020, assuming Wasson uses the straight-line depreciation method
Answer:
Book value= $25,500
Explanation:
Giving the following information:
Purchase price= $36,500
Residual value= $3,500
Useful life= 6 years
First, we need to calculate the annual depreciation:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (36,500 - 3,500) / 6
Annual depreciation= $5,500
Now, the accumulated depreciation and book value:
Accumulated depreciation= 5,500*2= $11,000
Book value= 36,500 - 11,000
Book value= $25,500
A market Group of answer choices always requires face-to-face contact between buyer and seller. reflects upsloping demand and downsloping supply curves. is an institution that brings together buyers and sellers. entails the exchange of goods, but not services.
Answer:
Option C "is an........sellers" is the right answer.
Explanation:
The market is considered as a location wherever vendors as well as purchasers gather together or enable their exchange of goods and commodities of products or even just providers.It could be like a department shop wherever individuals keep in touch throughout real life or virtually like such an internet market, where other businesses and consumers weren’t directly connected.The provided situation isn't linked to other alternatives. Thus the above response is the right one.
When Penguin Catering Services first opened, the owner decided to target only events at resorts in its geographic region. Penguin Catering was using a(n) __________ targeting strategy.
a. concentrated
b. micromarketing
c. benefit-driven
d. differentiated
e. undifferentiated
Answer: Penguin Catering was using a Concentrated targeting strategy.
An organization that adopts a concentration strategy chooses to focus its marketing efforts on only one very defined and specific market segment. Accordingly, only one marketing mix is developed. For example, the manufacturer of Rolex watches has chosen to concentrate on the luxury segment of the watch market.
Penguin Catering Services was using a concentrated targeting strategy.
What is a targeting strategy?A strategy, which is made with consideration of the target or the goals that are needed to be achieved with regard to a particular topic, is known as a targeting strategy.
Concentrated targeting strategy is said to be implied by a firm when there is a focus only over a particular area in the strategy being made.
Hence, option A holds true regarding the targeting strategy.
Learn more about targeting strategy here:
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Gravity, Inc., needs to raise $53 million to fund its expansion plans. The company will sell shares at a price of $29.00 in a general cash offer and the company's underwriters will charge a spread of 7.5 percent. How many shares need to be sold?a- 1,975,769b- 1,827,586c- 1,457,212d- 2,195,299e- 1,700,080
Answer:
a. 1,975,769
Explanation:
Underwriter's commission per share = 7.5% * $29
Underwriter's commission per share = $2.175
Amount received by company per share = Price per share in general cash offer - Underwriter's commission per share
Amount received by company per share = $29 - $2.175
Amount received by company per share = $26.825
Amount that company wants to raise = Number of shares sold * Amount received by company per share
53,000,000 = Number of shares sold * $26.825
Number of shares sold = 53,000,000 / $26.825
Number of shares sold = 1975768.87
No of shares to be sold = 1,975,768
Jim Arnold began a business called Arnold’s Shoe Repair.
Create T accounts for Cash; Supplies; Jim Arnold, Capital; and Utilities Expense. Identify the following transactions by letter and place them on the proper side of the T accounts:
a. Invested cash in the business, $5,000.
b. Purchased supplies for cash, $800.
c. Paid utility bill, $1,500.
Answer:
Arnold's Shoe Repair
T- Accounts:
Cash
Account Titles Debit Credit
a. Jim Arnold, Capital $5,000
b. Supplies $800
c. Utilities Expense $1,500
Supplies
Account Titles Debit Credit
b. Cash $800
Jim Arnold, Capital
Account Titles Debit Credit
a. Cash $5,000
Utilities
Account Titles Debit Credit
c. Cash $1,500
Explanation:
a) Data and Analysis:
a. Cash $5,000 Jim Arnold, Capital $5,000
b. Supplies $800 Cash $800
c. Utilities Expense $1,500 Cash $1,500
why is keystone so bad
Answer:
Keystone XL would be bad for wildlife, especially endangered species. Also without Keystone XL, the same amount of bitumen will be produced and the U.S. will still get all of it through the other pipeline projects. Keystone is not needed!
Explanation:
Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $840,000 of 25-year, 8% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions for the current year.
May 1 Issued the bonds for cash at their face amount.
Nov. 1 Paid the interest on the bonds.
Answer:
May 1
Dr Cash $840,000
Cr Bonds payable $840,000
Nov 1
Dr Interest expense $33,600
Cr Cash $33,600
Explanation:
Preparation of the journal entry to record May 1 Issued bonds for cash at their face amount
May 1
Dr Cash $840,000
Cr Bonds payable $840,000
Preparation of the journal entry to record Nov. 1 interest on the bonds.
Nov 1
Dr Interest expense $33,600
Cr Cash $33,600
(840,000*8%*6/12)
In its 2001 annual report, investors of Adelphia Communications were startled to find a footnote to its financial statements that reported the company had guaranteed as much as $2.7 billion in loans to a private entity owned by CEO John Rigas and his family. As a result of the footnote, Adelphia lost more than 50 percent of its market value in little more than a week.
Required:
Explain why you think the market value of Adelphia fell so dramatically with the footnote disclosure that the company had guaranteed loans to an entity owned by the company's CEO and his family
Answer:
Explanation:
The transaction of $2.7 billion as a loan lender to a private corporation controlled by the CEO John Rigas plus his family suggests a significant likelihood of asset theft and fraudulent activity. The misappropriation of assets is a sign of a company's financial instability. It implies that people in charge of administration are not using the firm's profits to maximize shareholders' wealth, but rather are advancing the interests of only one shareholder.
As soon as the news reaches the investors, a reasonable investor would sell his stock holdings and divest from the firm. As a result of the bulk of investors' divestment, stock prices have dropped by more than 50% in a week in Adelphia Communications.
Swifty Corporation has beginning work in process inventory of $128000 and total manufacturing costs of $277000. If cost of goods manufactured is $280000, what is the cost of the ending work in process inventory?
a. $125000
b. $131000.
c. $140000.
d. $110000.
Answer:
a. $125000
Explanation:
Calculation to determine the cost of the ending work in process inventory
Beginning work in process inventory $128000
Add total manufacturing costs $277000
Less cost of goods manufactured $280000
Ending work in process inventory $125000
($128000+$277000-$280000)
Therefore the cost of the ending work in process inventory is $125000
This year, Sigma Inc. generated $639,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months:
Initial Basis Acc. Depr Sale Price
Marketable securities $144,000 0 $64,000
Production equipment 93,000 $76,000 30,000
Business realty:
Land 165,000 0 180,000
Building 200,000 58,300 210,000
Required:
a. Compute Sigma’s taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured.
b. Recompute taxable income assuming that Sigma sold the securities for $150,000 rather than $64,000.
Answer:
Sigma Inc.
a. Sigma's Taxable Income:
Business income = $639,000
Capital gains = 16,300
Total taxable income $655,300
b. Sigma's Taxable Income:
Business income = $639,000
Capital gains = 102,300
Total taxable income $741,300
Explanation:
a) Data and Calculations:
Business income = $639,000
Capital gains:
Initial Basis Acc. Depr Sale Price Gain/(Loss)
Marketable securities $144,000 0 $64,000 ($80,000)
Production equipment 93,000 $76,000 30,000 13,000
Business realty:
Land 165,000 0 180,000 15,000
Building 200,000 58,300 210,000 68,300
Net capital gains $16,300
Capital gains recomputed:
Initial Basis Acc. Depr Sale Price Gain/(Loss)
Marketable securities $144,000 0 $150,000 $6,000
Production equipment 93,000 $76,000 30,000 13,000
Business realty:
Land 165,000 0 180,000 15,000
Building 200,000 58,300 210,000 68,300
Net capital gains $102,300
