Begin by reviewing the labels for the change in​ stockholders' equity and then enter the amounts for each situation.
Three situations about Timmy Company's issuance of stock and declaration and payment of dividends during the year ended January 31, 2017. follow.
Requirements.
Begin by reviewing the labels for the change in stockholders' equity and then enter the amounts for each situation.
Situation A Situation B Situation C
Total stockholders' equity, January 31, 2016
Add: Issuance of stock
Net income
Less: Dividends declared
Net loss
Total stockholders' equity, January 31, 2017
For each situation, use the accounting equation and the statement of retained earnings to compute the amount of Timmy's net income or net loss during the year ended January 31 2017.
1. Timmy issued $13 million of stock and declared no dividends.
2. Timmy issued no stock but declared dividends of $17 million.
3. Timmy issued $20 million of stock and declared dividends of $27 million.

Answers

Answer 1

Answer:

Note: The missing part of the question is

"                          2017'million    2016'million

Total asset             77                  50

Total liability           18                  13"

Solution:

Stockholders Equity at year end

                         2017     2016

Assets      77        50    

Less: liabilities   -18       -13

Equity at end     59       37

Note: Situation 1, 2 and 3 is the same as question 1, 2 and 3

                                          Situation 1   Situation 2  Situation 3

                                             $'million     $'million      $'million

Total stockholders Equity            37            37              37

Jan 31 ,2016

Add: Issuance of stock                13              0               20

Less: dividend declared               0             -17              -27

Net income                                    9             39               29

Total stockholders Equity             59           59              59

January 31,2017


Related Questions

During 2021, Deluxe Leather Goods issued 797,000 coupons which entitles the customer to a $4.50 cash refund when the coupon is submitted at the time of any future purchase. Deluxe estimates that 75% of the coupons will be redeemed. 420,000 coupons had been processed during 2021. Deluxe recognizes coupon expense in the period coupons are issued. At December 31, 2021, Deluxe should report a liability for unredeemed coupons of:

Answers

Answer:

Deluxe should report a liability for un-redeemed coupons of 799,875

Explanation:

Estimated coupons to be redeemed     597,750

(797,000 * 75%)

Less: Coupons redeemed                     420,000

Coupons un-redeemed                          177,750

X Cost per Coupon                                   4.50    

Liability for un-redeemed Coupons  799,875  

iv. What is the essential tool (and subtypes) for seeing the big picture and revealing large information about the data series

Answers

Answer:

Ms Excel

Explanation:

This software is popular among businesses today, which they use in performing data analysis. Often called a spreadsheet application, Ms (Microsoft) Excel allows businesses to see the bigger picture and revealing large information about the data series.

For example, by using Ms Excel, a business can look up the percentage differences in its revenue turnover for a period time (quarterly, monthly or yearly), by simply imputing their data series.

King Company issued bonds with a face amount of $1,600,000 in 2015. As of January 1, 2020, the balance in Discount on Bonds Payable is $4,800. At that time, King redeemed the bonds at 102.Required:Assuming that no interest is payable, make the entry to record the redemption.

Answers

Answer:

January 1, 2020

Bonds Payable                                          1600000 Dr

Loss on Redemption of bonds                 36800 Cr

     Discount on Bonds Payable                        4800 Cr

     Cash                                                              1632000 Cr

Explanation:

The redemption of bonds before the maturity usually requires a payment for redemption which is a certain percentage of its face value. It is usually higher than the face value. The above bonds are redeemed at 102 which means at 102% of the face value of the bonds. Thus, the cash paid to redeem the bonds is,

Cash = 1600000 * 102%  =  1632000

The bonds have a carrying value, which is the face value less discount or add premium, of,

Carrying value = 1600000 - 4800  =  $1595200

If they are redeemed for an amount in excess of the carrying value, they are redeemed at a loss.

The loss on redemption is,

Loss = 1595200 - 1632000 = $36800

Luther Corporation
Consolidated Income Statement
Year ended December 31​ (in $millions)
2006 2005
Total sales 610.1 578.8
Cost of sales ​ (500.2) ​(355.3)
Gross profit 109.9 223.5
​Selling, general, and
administrative expenses ​ (40.5) ​(38.7​)
Research and development ​(24.6) (21.8​)
Depreciation and amortization ​(3.6) (3.9​)
Operating income 41.2 159.1
Other income −− −−
Earnings before interest and taxes​ (EBIT) 41.2 159.1
Interest income​ (expense) ​(25.1) ​(15.3​)
Pretax income 16.1 143.8
Taxes ​(5.5) (50.33​)
Net income 10.6 93.47
Price per share $16 $15
Sharing outstanding​ (millions) 10.2 8.0
Stock options outstanding​ (millions) 0.3 0.2
​Stockholders' Equity 126.6 63.6
Total Liabilities and​ Stockholders' Equity 533.1 386.7
Refer to the income statement above. ​ Luther's operating margin for the year ending December​ 31, 2005 is closest​ to:_________.
A. 13.7413.74​%
B. 21.9921.99​%
C. 27.4927.49​%
D. 32.9932.99​%

Answers

Answer:

27.48%

Explanation:

Calculation for Luther's operating margin for the year ending December​ 31, 2005

Using this formula

Operating margin = Operating income / Sales

Let plug in the formula

Operating margin= 159.1/578.8

Operating margin=0.2748*100

Operating margin=27.48%

Therefore Luther's operating margin for the year ending December​ 31, 2005 is 27.48%

A monopolist that practices perfect price discrimination has the same deadweight loss triangle as the single-price monopolist.
a) true
b) false

Answers

Answer:

The correct answer is the option B: False.

Explanation:

To begin with, the price discrimination strategy refers to a technique used by the companies in order to charge different prices to the different consumers regarding the fact of how much would they be able to pay for the product. When it comes to monopolies, a perfect price discrimination strategy would try as best as possible to capture the majority of the zone known as the "consumer surplus". And that is why that a company with a perfect price discrimination would face a small deadweight loss area due to the fact that with that strategy of price the monopolist will absorve as much as possible of that area becuase the triangle is half consumer surplus and half producer surplus.

Suppose that on August 14, 2019, an antique woven rug handmade in Canada is priced at CAD 1,100. The approximate U.S. dollar price of the rug would be

Answers

Answer:

USD 825.95

Explanation:

Step one:

To tackle this problem we need data from historical chart.

From historical chart, on August 14, 2019, 1 USD  is equivalent to CAD 1.3318

Step two:

From the historical data we need to perform conversion on the data to get the USD equivalent of the CAD given in the problem

Hence

if 1 USD = CAD 1.3318  then

x USD   =  CAD 1,100

by cross multiplying we have

x USD=  1,100/ 1.3318

x USD= 825.95

Hence as at  August 14, 2019  CAD 1,100 is USD 825.95

Deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well, is referred to as

Answers

Answer:

loss leader pricing strategy

Explanation:

The type of strategy that is being described is known as a loss leader pricing strategy. This is a pricing strategy in which a product is sold at a price below its market cost in order to be able to stimulate other sales of more profitable goods or services. In such a scenario, the "leader" product is any popular item that the company is selling, and this item is the one that receives the price cut in order to attract customers that were already interested in it to the other products.

A 25-year old single client has just started his own small business and is not covered by a retirement plan. He has $5,000 to invest and currently has a low level of income. He wishes to start saving for retirement. The BEST recommendation is a:

Answers

Answer:

Roth IRA

Explanation:

Based on this scenario, it can be said that the best recommendation would be a Roth IRA. This is an individual retirement account that non-deductible tax-free growth for retirement at age 59 1/2. As of 2018, the yearly limit for a Roth IRA account is $5,500 meaning that the client in this scenario would not have any problem investing the entire $5000 as soon as they open the account. And since he is in a low tax bracket he should not have any problem opening an Account.

On January 1, 2017, Shay issues $390,000 of 8%, 20-year bonds at a price of 97.00. Six years later, on January 1, 2023, Shay retires 20% of these bonds by buying them on the open market at 104.50. All interest is accounted for and paid through December 31, 2022, the day before the purchase. The straight-line method is used to amortize any bond discount.Required:Prepare the journal entry to record the bond retirement at January 1, 2023.

Answers

Answer:

Journal entry to record the bond retirement at Jan 1, 2023

Bond payable Dr $78,000

Loss on redemption Dr $5,265

Discount on bonds payable Cr $1,755

Cash. Cr 81,510

Explanation:

Bonds issued at 97%

$390,000 × 97%

= $378,300

Discount difference between cash proceeds and face value

= $390,000 -$378,300

= $11,700

If bonds are discounted using straight line,

$11,700 ÷ 20 year

= $585

At 2022, there is 5 amortization

= $585 × 5

= $2,925

Discount value

= $11,700 - $2,925

= $8,775

Carrying value

= $390,000 - $8,775

= $381,225

Therefore, $390,000 bonds payable × 20% × 104.5%

= $81,510

Carrying book value of 20%

$381,225 × 20%

= $76,245

Loss on redemption

= $81,510 - $76,245

= $5,265

Therefore,

20% of the face value

= $390,000 × 20%

= $78,000

20% of the discount

= $8,775 × 20%

= $1,755

Loss on redemption = $5,265

Cash disbursement = $81,510

A corporation uses the indirect method for preparing the statement of cash flows. A fixed asset has been sold for $24,241 representing a gain of $3,478. The value in the operating activities section regarding this event would be

Answers

Answer:

($3,478)

Explanation:

The above means that the amount of gain on sale of fixed asset should be deducted from net income so as to get the cash flow from the operating activities because it is an increase in net income for the period under review.

It is to be noted that where non cash expense such as depreciation is given, such will be added back while non cash revenue is deducted to arrive at the net cash flow from operating activities.

"The flexible budget formula is fixed costs $50,000 plus variable costs of $4 per direct labor hour. What is the total budgeted cost at (a) 9,000 hours and (b) 12,345 hours

Answers

Answer:

$86,000 and $99,380

Explanation:

The flexible budget formular is fixed at $50,000 plus variable costs

The direct labor hour is $4 per hour

The total budgeted cost at 9,000 hours can be calculated as follows

= $50,000 + ($4×9,000 hours)

= $50,000 + $36,000

= $86,000

The total budgeted cost at 12,345 hours can be calculated as follows

= $50,000 + ( $4×12,345 hours)

= $50,000 + $49,380

= $99,380

Hence the total budgeted cost at 9,000 hours and 12,345 hours is $86,000 and $99,380 respectively

What is the annual real estate tax on a property valued at $135,000 and assessed for tax purposes at $47,250, with an equalization factor of 125%, when the tax rate is 25 mills

Answers

Answer:

$1,477

Explanation:

The annual real estate tax = assessed tax × equalization factor × tax rate

= $47,250 × 125% × 25 mills

= $47,250 × 125% × 2.5%(25 mills)

= $47,250 × 1.25 × 0.025

= $1,477

Wayne, Inc., wishes to expand its facilities. The company currently has 5 million shares outstanding and no debt. The stock sells for $40 per share, but the book value per share is $10. Net income is currently $4 million. The new facility will cost $50 million, and it will increase net income by $820,000. Assume a constant price-earnings ratio.
a-1. Calculate the new book value per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
a-2. Calculate the new EPS. (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
a-3. Calculate the new stock price. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
a-4. Calculate the new market-to-book ratio. (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
b. What would the new net income for the company have to be for the stock price to remain unchanged? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar amount, e.g., 1,234,567.)

Answers

Answer:

a-1. Calculate the new book value per share.

current book value = stocks outstanding x book value = 5,000,000 x $10 = $50,000,000

new book value = $50,000,000 + $50,000,000 = $100,000,000

new stocks issued = $50,000,000 / $40 = 1,250,000

total stocks outstanding = 5,000,000 + 1,250,000 = 6,250,000

new book value per stock = $100,000,000 / 6,250,000 = $16

a-2. Calculate the new EPS.

old EPS = $4,000,000 / 5,000,000 = $0.80 per stock

new EPS = $4,850,000 / 6,250,000 = $0.776 per stock

a-3. Calculate the new stock price.

price to earnings ratio = $40 / $0.80 = 50

new stock price:

50 = new stock price / $0.776

new stock price = 50 x $0.776 = $38.80

a-4. Calculate the new market-to-book ratio.

market to book ratio = market capitalization / book value = $242,500,000 / $100,000,000 = 2.425

b. What would the new net income for the company have to be for the stock price to remain unchanged?

0.8 = net income / 6,250,000

net income = 6,250,000 x 0.8 = $5,000,000

If sales are $803,000, variable costs are 66% of sales, and operating income is $262,000, what is the contribution margin ratio

Answers

Answer:

34%

Explanation:

The formula to calculate the contribution margin ratio is:

Contribution margin ratio= (Sales – variable expenses)/sales

Sales=$803,000

Variable expenses=$803,000*66%=$529,980

Now, you can replace the values:

Contribution margin ratio=($803,000-$529,980)/$803,000

Contribution margin ratio=0.34

According to this, the answer is that the contribution margin ratio is 34%.

Which of the following enables employees to deliver valuable results more quickly, improve their productivity, and get products and new ideas to market faster?a. Adhering to time-tested methods and conceptsb. Preventing the dissemination of explicit knowledgec. Avoiding collaboration among contractors, suppliers, and other business partnersd. Sharing experience and expertise of employees across an organization

Answers

Answer:

d. Sharing experience and expertise of employees across an organization

Explanation:

It is important for an organization to allow its employees to share and build experience and expertise. Workers reap the moment more quickly when there is no office and what it does and when new employees or employees moving to new positions are able to share ideas and experiences. It allows employees to deliver more valuable results faster, improve productivity and deliver market products and new ideas faster.

Bonita Industries is planning to sell 1000 boxes of ceramic tile, with production estimated at 470 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.50 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $11 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Bonita has 3900 pounds of clay mix in beginning inventory and wants to have 3700 pounds in ending inventory. What is the total amount to be budgeted for direct labor for the month

Answers

Answer: $2,585‬

Explanation:

Total budgeted amount for direct labor;

Production is estimated at 470 boxes.

Each box requires 0.5 hours of direct labor

Employees are paid $11 per hour.

= 470 * 0.5 * 11

= $2,585‬

A producer can produce a product at a variable cost per unit of $7. The producer can sell the product for $10 each. If the fixed cost is $60,000.

Required:
a. How many units must the producer sell to break-even?
b. What is revenue at 35,000 units?
c. What is total cost at 35,000 units?
d. How many units must the producer sell in order to earn a profit of $60,000?

Answers

Answer:

a.

Break even in units = 20000 units

b.

Revenue at 35000 units = $350000

c.

Total cost (35000 units) = $305000

d.

Units required for target profit = 40000 units

Explanation:

a.

The break even in units is the number of units that must be sold in order to earn enough total revenue as to cover total costs. The break even in units can be calculated as follows,

Break even in units = Fixed cost / Contribution margin per unit

Where,

Contribution margin per unit = Selling price per unit - Variable cost per unit

Contribution margin per unit = 10 - 7 =$3

Break even in units = 60000 / 3

Break even in units = 20000 units

b.

Revenue = Price * Quantity

Revenue at 35000 units = 10 * 35000

Revenue at 35000 units = $350000

c.

Total cost = Variable cost + Fixed cost

Total cost (35000 units) = 7 * 35000 + 60000

Total cost (35000 units) = $305000

d.

To calculate the units required to earn a target profit, we simply add the target profit amount to the fixed costs in the break even in units equation.

Thus, the number of units required to earn a target profit of $60000 is,

Units required for target profit = (60000 + 60000) / 3

Units required for target profit = 40000 units

A product with an MSRP of CNY 15.00 has a promotion allowance of 15%. How much will the distributor receive in promotion allowance for each unit

Answers

Answer: CNY 2.25

Explanation:

Promotional Allowances are discounts in price that the producers/ supplies of a product will offer to trade partners like distributors to get them to promote their products so that they sell faster.

The promotion allowance here is 15% of the Manufacturer's Suggested Retail Price of CNY 15.00 which is;

= 15% * 15

= CNY 2.25

light sweet petroleum, inc., is trying to evaluate a generation project with cash flows:________.
year Cash Flow
0 -38,600,000
1 62,600,000
2 - 11,600,000
a-1 What is the NPV for the project if the company requires a return of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV _______
a-2 Should the company accept this project?
A. Yes
B. Nο
b. This project has two IRR's, namely _______ percent and ______ percent, in order from smallest to largest. (Note: If you can only compute one IRR value, you should input that amount into both answer boxes in order to obtain some credit.) (A negative answer should be indicated by a minus sign.

Answers

Answer:

a-1. NPV for the project is $8,381,576.17

a-2. A. Yes. Accept the Project.

b.  40.84 % and  40.84 %

Explanation:

The Net Present Value can be determined using a Financial Calculator as follows :

-38,600,000    CFj

62,600,000    CFj

- 11,600,000     CFj

11 %                   I/YR      

Shift NPV        $8,381,576.17        

A Company should accept projects that have a positive Net Present Value.Therefore, Accept this project.

Calculation of the Internal Rate of Return using a Financial Calculator :

-38,600,000    CFj

62,600,000    CFj

- 11,600,000     CFj

Shift IRR           40.84 %

Rally Quadcopters plans to sell a standard quadcopter (toy drone) for $45 and a deluxe quadcopter for $65. Rally purchases the standard quadcopter for $35 and the deluxe quadcopter for $45. Management expects to sell two deluxe quadcopters for every three standard quadcopters. The company's monthly fixed expenses are $14,700. How many of each type of quadcopter must Rally sell monthly to breakeven?
To earn $10,500?
First identify the formula to compute the sales in units at various levels of operating income using the contribution margin approach.

Answers

Answer:

Rally must sell 1,080 units of Standard and 720 units of Deluxe

Explanation:

                                                  Standard       Deluxe        Total

Sales price per unit                      $45                $65

Less: Variable cost                      ($35)              ($45)

Contribution Margin per  unit       $10                $20

Sales Mix units  (A)                        $3                  $2                $5

Contribution margin                      $30                $40             $70

Weighted average Contribution                                              $14    

per unit C= B/A

Appointment of fixed cost between standard and deluxe

Total Fixed cost = 14,700

Break even point = Fixed cost / Weighted average Contribution  per unit

= 14,700 / 14

= 1,050

Apportionment of Break even point sales between Standard and deluxe in sales mix ratio (3:2)

Standard = 1,050 * 3/5 = 630

Deluxe = 1,050 * 2/3 = 420

Unit to be sold to get desired profit = Fixed cost + Desired profit / Weighted average Contribution per unit

= (14,700 + 10,500) / 14

= 1,800

Apportionment of Units to be sold to get desired profit between Standard and Deluxe in sales mix ratio (3:2)

Standard = 1,800 * 3/5 = 1,080

Deluxe = 1,800 * 2/5 = 720

To reach target operating income, Rally must sell 1,080 units of Standard and 720 units of Deluxe

A group of elderly men, whose government disability benefits are the sole source of income, is approached to consider an experimental research study for their current colon cancer. The study involves more than minimal risk, but offers substantial financial incentives that are equal to two months of disability benefits. The IRB will be most concerned about the possibility of:

Answers

Answer:

Undue influence on the subjects

Explanation:

An institutional Review Board (IRB) can be said to be a type of committee that uses research ethics by reviewing the   procedures (methods) to be used (proposed) for research a studies  to ensure that they are ethical.

According to federal regulations of expedited review of a new, proposed study can only  be used by the IRB if only the study involves no more than minimal risk and meets one of the allowable categories of expedited review specified in federal regulations. Usually, being involved in the research  studies is voluntary, but if you choose to take part, you waive the right to legal redress for any research-related injuries. IRB will be most concerned about the possibility of Undue influence on the subjects is critical to the research studies.

Mogul Company ships merchandise to Ski Outfit in a consignment arrangement. The arrangement specifies that Ski Outfit will attempt to sell the merchandise, and in return, Mogul will pay to Ski Outfit a commission of 25% of the selling price on any merchandise sold. During the year, Mogul ships inventory with a cost of $81,000 to Ski Outfit and pays shipping costs of $8,700. By the end of the year, $61,000 of the merchandise has been sold to customers for a total of $86,000. Mogul allocates $6,500 of the shipping costs to inventory sold and the other $2,200 to inventory not sold. Mogul also paid advertising costs during the year of $10,500. What amount of inventory will Mogul report at year end

Answers

Answer:

$22,200

Explanation:

With regards to the above information Mogul company,

Cost of goods

= $81,000 + $8,700

= $89,700

= $61,000 + $6,500

= $67,500

Inventory = Cost of goods - Cost of goods sold

= $89,700 - $67,500

= $22,200

It therefore means that the amount of inventory Magu company will report at the year end is $22,200

air pollution causes capital to wear out more rapidly, doubling the rate of depreciation. How would this affect economic growth?

Answers

Answer:

The economic growth will be lower.

Explanation:

The rise in pollution and the doubling of the rate of depreciation will affect economic growth adversely. However, rapid wear and tear of capital will cost the person and it will reduce the purchasing power. Thus, lower purchasing power will result in lower economic growth. Moreover, pollution creates three main problems that are reduced labor productivity, rise in health problems, and loss of crop yield. So the reduction in all these factors will also slow down economic growth.

Burpee Company sells seeds to garden stores. Sales are expected to be $2,038,635 in January, $2,581,891 in February and $2,913,307 in March. Burpee sets their prices so that they earn an average 32% gross profit on sales revenue. What is budgeted cost of goods sold for the first quarter (January, February and March)?

Answers

Answer:

Total COGS= $5,123,006.44

Explanation:

Giving the following information:

Sales:

January= $2,038,635

February= $2,581,891

March= $2,913,307

Burpee sets their prices so that they earn an average 32% gross profit on sales revenue.

We need to calculate the cost of goods sold:

January= 2,038,635*0.68= 1,386,271.8

February= 2,581,891*0.68= 1,755,685.88

March= 2,913,307*0.68= 1,981,048.76

Total COGS= $5,123,006.44

1) Compute cash flows from financing activities using the above company information.
Addtional Short-Term Borrowings $20,000
Purchase of short term investments $5000
Cash Dividends Paid 16000
Interest Paid 8000
2) Compute cash flows from investing activities using the above company information.
Sale of short term investments $6000
Cash Collections from Customers $16,000
Purchase of used equipment $5000
Depreciation Expense $2000

Answers

Answer:

$4,000$1,000

Explanation:

1. Financing Cashflows relate to cash spent or received for the capital used in the company. These include Equity, Long term borrowings and dividends. Interest payments go to the Operating Cashflow and investments go to the Investing cashflow.

Financing Cashflow is;

= Inflow - Outflow

= +20,000 - 16,000

= +$4,000

2. Investing Cashflows related to cash spent or received from fixed assets as well as the securities of other companies. Cash collections does not fall here but rather under Operating cashflows along with depreciation.

Investing Cashflow is;

= Inflow - Outflow

= +6,000 - 5,000

= $1,000

Bramble Corp. receives $360,000 when it issues a $360,000, 8%, mortgage note payable to finance the construction of a building at December 31, 2020. The terms provide for annual installment payments of $60,000 on December 31. Prepare the journal entries to record the mortgage loan and the first two payments.

Answers

Answer:

The First Payment occurs on 31 December 2021 as :

Mortgage Payable $31,200 (debit)

Interest Expense $28,800 (debit)

Cash $60,000 (credit)

The Second Payment occurs on 31 December 2022 as :

Mortgage Payable $33,696 (debit)

Interest Expense $26,304 (debit)

Cash $60,000 (credit)

Explanation:

First prepare an amortization schedule using the following data concerning the mortgage note :

Hint : Determine the number of years, N of this bond.

PV = $360,000

PMT = - $60,000

P/Yr = 1

r = 8 %

FV = 0

N = ?

The length of the bond, N is 8.4969 or 9 years

The First Payment occurs on 31 December 2021 as :

Mortgage Payable $31,200 (debit)

Interest Expense $28,800 (debit)

Cash $60,000 (credit)

The Second Payment occurs on 31 December 2022 as :

Mortgage Payable $33,696 (debit)

Interest Expense $26,304 (debit)

Cash $60,000 (credit)

A company's Office Supplies account shows a beginning balance of $720 and an ending balance of $640. If office supplies expense for the year is $3,700, what amount of office supplies was purchased during the period

Answers

Answer:

Purchases= $3,620

Explanation:

Giving the following information:

Beginning inventory= $720

Ending inventory= $640

Purchase= ?

Used in the period= $3,700

To calculate the purchases, we need to use the following formula:

Purchases= used in the period + desired ending inventory - beginning inventory

Purchases= 3,700 + 640 - 720

Purchases= $3,620

Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows:
A. Estimated sales for July by sales territory:
Maine:
Backyard Chef 310 units at $700 per unit
Master Chef 150 units at $1,200 per unit
Vermont:
Backyard Chef 240 units at $750 per unit
Master Chef 110 units at $1,300 per unit
New Hampshire:
Backyard Chef 360 units at $750 per unit
Master Chef 180 units at $1,400 per unit
B. Estimated inventories at July 1:
Direct materials:
Grates 290 units
Stainless steel 1,500 lbs.
Burner subassemblies 170 units
Shelves 340 units
Finished products:
Backyard Chef 30 units
Master Chef 32 units
C. Desired inventories at July 31:
Direct materials:
Grates 340 units
Stainless steel 1,800 lbs.
Burner subassemblies 155 units
Shelves 315 units
Finished products:
Backyard Chef 40 units
Master Chef 22 units
D. Direct materials used in production:
In manufacture of Backyard Chef:
Grates 3 units per unit of product
Stainless steel 24 lbs. per unit of product
Burner subassemblies 2 units per unit of product
Shelves 4 units per unit of product
In manufacture of Master Chef:
Grates 6 units per unit of product
Stainless steel 42 lbs. per unit of product
Burner subassemblies 4 units per unit of product
Shelves 5 units per unit of product
E. Anticipated purchase price for direct materials:
Grates $15 per unit
Stainless steel $6 per lb.
Burner subassemblies $110 per unit
Shelves $10 per unit
F. Direct labor requirements:
Backyard Chef:
Stamping Department 0.50 hr. at $17 per hr.
Forming Department 0.60 hr. at $15 per hr.
Assembly Department 1.00 hr. at $14 per hr.
Master Chef:
Stamping Department 0.60 hr. at $17 per hr.
Forming Department 0.80 hr. at $15 per hr.
Assembly Department 1.50 hrs. at $14 per hr.
Required:
1. Prepare a sales budget for July. Gourmet Grill Company Sales Budget For the Month Ending July 31 Product and Area Unit Sales Volume Unit Selling Price Total Sales Backyard Chef: Maine 310 700 217,000 Vermont 240 750 180,000 New Hampshire 360 750 270,000 Total 910 667,000 Master Chef: Maine 150 1,200 180,000 Vermont 110 1,300 143,000 New Hampshire 180 1,400 252,000 Total 440 575,000 Total revenue from sales 1,242,000
2. Prepare a production budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Gourmet Grill Company Production Budget For the Month Ending July 31 Units Backyard Chef Master Chef Expected units to be sold 910 440 Desired inventory, July 31 40 22 Total units available 950 462 Estimated inventory, July 1 -30 -32 Total units to be produced 920 430
3. Prepare a direct materials purchases budget for July.
Gourmet Grill Company
Direct Labor Cost Budget
For the Month Ending July 31
Stamping Department
Forming Department
Assembly Department
Total Hours required for production:
Backyard Chef
Master Chef
Total Hourly rate
Total direct labor cost

Answers

Answer:

Gourmet Grill Company

1. Sales Budget For the Month Ending July 31

Product             Area Unit               Sales       Unit Selling                 Total

                                                      Volume         Price           Sales

Backyard Chef: Maine                     310              $700      $217,000

                         Vermont                240                750        180,000

                         New Hampshire   360                750        270,000

                         Total                            910                                     667,000

Master Chef:    Maine                    150              1,200         180,000

                         Vermont                110              1,300         143,000

                         New Hampshire   180              1,400       252,000

                         Total                           440                                    575,000

Total revenue from sales                                                         $1,242,000

2. Gourmet Grill Company Production Budget For the Month Ending July 31 Units

Units                                Backyard Chef           Master Chef       Total

Expected units to be sold        910                          440               1,350

Desired inventory, July 31         40                            22                   62

Total units available                950                          462                1,412

Estimated inventory, July 1      -30                           -32                   62

Total units to be produced    920                          430               1,350

3. Gourmet Grill Company

Direct Labor Cost Budget

For the Month Ending July 31

                                                  Stamping        Forming       Assembly

                                Units        Department   Department  Department

Backyard Chef        920            460 hrs           552 hrs         920 hrs            Master Chef            430            258 hrs           344 hrs          645 hrs

Total Hours required

 for production:                          718 hrs           896 hrs      1,565 hrs

Total Hourly rate                        $17                  $15                $14                    

Total direct labor cost           $12,206         $13,440          $21,910

Explanation:

1) Data:

A. Estimated sales for July by sales territory:

Maine:

Backyard Chef 310 units at $700 per unit

Master Chef 150 units at $1,200 per unit

Vermont:

Backyard Chef 240 units at $750 per unit

Master Chef 110 units at $1,300 per unit

New Hampshire:

Backyard Chef 360 units at $750 per unit

Master Chef 180 units at $1,400 per unit

B. Estimated inventories at July 1:

Direct materials:

Grates 290 units

Stainless steel 1,500 lbs.

Burner subassemblies 170 units

Shelves 340 units

Finished products:

Backyard Chef 30 units

Master Chef 32 units

C. Desired inventories at July 31:

Direct materials:

Grates 340 units

Stainless steel 1,800 lbs.

Burner subassemblies 155 units

Shelves 315 units

Finished products:

Backyard Chef 40 units

Master Chef 22 units

D. Direct materials used in production:

In manufacture of Backyard Chef:

Grates 3 units per unit of product

Stainless steel 24 lbs. per unit of product

Burner subassemblies 2 units per unit of product

Shelves 4 units per unit of product

In manufacture of Master Chef:

Grates 6 units per unit of product

Stainless steel 42 lbs. per unit of product

Burner subassemblies 4 units per unit of product

Shelves 5 units per unit of product

E. Anticipated purchase price for direct materials:

Grates $15 per unit

Stainless steel $6 per lb.

Burner subassemblies $110 per unit

Shelves $10 per unit

F. Direct labor requirements:

Backyard Chef:

Stamping Department 0.50 hr. at $17 per hr.

Forming Department 0.60 hr. at $15 per hr.

Assembly Department 1.00 hr. at $14 per hr.

Master Chef:

Stamping Department 0.60 hr. at $17 per hr.

Forming Department 0.80 hr. at $15 per hr.

Assembly Department 1.50 hrs. at $14 per hr.

b) Calculations:

                                                  Stamping        Forming       Assembly

                                Units        Department   Department  Department

Backyard Chef           1                  0.50 hr             0.60 hr       1.00 hr

Total hours required  920            460 hrs            552 hrs      920 hrs                               

Master Chef                1                0.60 hr             0.80 hr         1.50 hrs

Total hours required  430            258 hrs            344 hrs        645 hrs

Total Hours required

 for production:                             718 hrs            896 hrs     1,565 hrs

c) Gourmet Grill Company's Sales, Production, and Direct Labor Budgets for July detail the sales units under different product categories and areas.  They will guide the management of Gourmet Grill company to make relevant decisions with regard to inventories, production, and sales volume that must be achieved in order to realize the budgets and attin company's objectives.  They are very essential in planning, decision making, and control.  Based on these budgets, performances will be reviewed, analyzed, and accordingly rewarded.

Suppose Happy Dog Soap Company is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $3,225,000. The project is expected to generate the following net cash flows:


Year Cash Flow
Year 1 $275,000
Year 2 $475,000
Year 3 $400,000
Year 4 $500,000

Happy Dog Soap Company's weighted average cost of capital is 8%, and project Beta has the same risk as the firm's average project. Based on the cash flows, what is project Beta's NPV?

a. -$5,056,663
b. -$1,831,663
c -$2,106,412
d. -$2,197,996

Answers

Answer:

-$1,878,086.608

Explanation:

The computation of the net present value is shown below;

             (in dollars)                                         (in dollars)

Year Cash flows Discount factor Present value  

0             -3225000              1                             -3225000  (A)

1              275000           0.9259259259           254629.630

2             475000           0.8573388203           407235.940

3             400000           0.793832241               317532.896

4             500000           0.7350298528          367514.926

Total                                                                   1346913.392  (B)

Net present value                                           -$1,878,086.608 (A - B)

This is the answer but the same is not provided in the given options

When modeling the right to develop an oil property as a real option, and in the presence of fixed costs, using oil price volatility in the option-pricing model will

Answers

Answer:

overestimate because the value of the option depends on the volatility of revenue

Explanation:

The greater the market volatility, the greater the range that would be needed to determine the option premium. This would end up causing an overestimation of the premium value.

Therefore making use of oil price volatility in the option-pricing model will overestimate as value of option is dependent on how volatile the revenue is.

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