Answer:
Better Corp. (BC)
a. Accounting Equation
Assets = Liabilities + Equity
1. Cash $7,000 Common stock $7,000
2. Cash $12,000 Bank loan payable $12,000
3. Cash $47,000 Service Revenue $47,000
4. Cash ($30,000) Op. expenses ($30,000)
5. Cash ($8,000) Cash dividend ($8,000)
6. Land $20,000 Cash ($20,000)
Assets $28,000 = Liabilities $12,000 + Equity $16,000
b. December 31, Year 1 Balances:
Total assets = $28,000
Total liabilities = $12,000
Stockholders' equity = $16,000
Balance Sheet as of December 31, Year 1
Assets:
Cash $8,000
Land $20,000
Total assets $28,000
Liabilities:
Bank loan $12,000
Equity:
Common stock $7,000
R/Earnings 9,000
Total equity $16,000
Liabilities and
Equity $28,000
c. January 1, Year 2 Balances:
Total assets = $28,000
Total liabilities = $12,000
Total equity = $16,000
d. The Land will be shown on the December 31, Year balance sheet at $20,000. The reason is that this is the acquisition cost and the land is not held for trading (no information provided).
Explanation:
a) Data and Analysis based on the Accounting Equation:
1. Cash $7,000 Common stock $7,000
2. Cash $12,000 Bank loan payable $12,000
3. Cash $47,000 Service Revenue $47,000
4. Cash ($30,000) Operating expenses ($30,000)
5. Cash ($8,000) Cash dividend ($8,000)
6. Land $20,000 Cash ($20,000)
While under contract to play professional basketball for the Philadelphia 76ers, Billy Cunningham, an outstanding player, negotiated a three-year contract with the Carolina Cougars, another professional basketball team. The contract with the Cougars was to begin at the expiration of the contract with the 76ers. In addition to a signing bonus of $125,000, Cunningham was to receive under the new contract a salary of $100,000 for the first year, $110,000 for the second, and $120,000 for the third. The contract also stated that Cunningham "had special, exceptional and unique knowledge, skill and ability as a basketball player" and that Cunningham therefore agreed the Cougars could enjoin him from playing basketball for any other team for the term of the contract. In addition, the contract contained a clause prohibiting its assignment to another club without Cunningham’s consent. In 1971, the ownership of the Cougars changed, and Cunningham’s contract was assigned to Munchak Corporation, the new owners, without his consent. When Cunningham refused to play for the Cougars, Munchak Corporation sought to enjoin his playing for any other team. Cunningham asserts that his contract was not assignable. Was the contract assignable? Explain.
Answer:
Billy Cunningham and the Cougars
The contract was not assignable to another club.
But, the contract (assets and liabilities) can be inherited by a successor entity using the same club, the Cougars.
Explanation:
The contract was not assigned to another club, despite the change of ownership of the Cougars. Interestingly, the contract between Cunningham and Carolina Cougars was inheritable with the change of ownership of the Cougar Club from the formers owners, Carolina Cougars, to the new owners, Munchak Corporation. The clause prohibiting the contract's assignment to another club without Cunningham's consent was not violated.
true or false
Macroeconomics deals with the behaviour of individual economic units.
Answer:
false. it deals with ecomonics as a whole. it's in the name dude
Answer:
False
Explanation:
Macroeconomics looks at the economy as a whole. It focuses on broad issues such as growth of production, the number of unemployed people, the inflationary increase in prices, government deficits, and levels of exports and imports.
Gina is very serious about her budget. As a new manager, she wants to make sure that she is a good steward of her employees, knowing that stress can cause her division to miss their bottom line at the end of the year. When Gina is considering the physiological implications for her workforce, which of the following is she notconsidering?
A) family leave
B) burnout
C) low job satisfaction
D) emotional exhaustion
E) absenteeism
Answer:
A)family leave
Explanation:
From the question we are informed about Gina who is very serious about her budget. As a new manager, she wants to make sure that she is a good steward of her employees, knowing that stress can cause her division to miss their bottom line at the end of the year. When Gina is considering the physiological implications for her workforce, one of the factor she is not considering is family leave.
physiological implications can be regarded as activities that has effect on organs,systemic functions, emotions
and whole system of the employee.
physiology relates to normal functions as regards to living thing, These effects could influence the performance of employees in carrying out their daily task. It could be burnout, low job satisfaction as well as absenteeism and emotional exhaustion
Checking accounts at a local bank carry an average balance of $3000. The bank turns over its balance 3 times a year. On average, how many dollars flow through the bank each month?
Answer:
75,000
Explanation:
I think? not shure
A company pays its employees $2,900 each Friday, which amounts to $580 per day for the five-day workweek that begins on Monday. If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at the end of the accounting period is:
Answer:
$2,320
Explanation:
Calculation to determine what amount of salaries earned but unpaid at the end of the accounting period is:
Ending salaries earned but unpaid=$2,900-$580
Ending salaries earned but unpaid=$2,320
($2,900-580)
Therefore the amount of salaries earned but unpaid at the end of the accounting period is: $2,320
As of December 31, 2019, Nilsen Industries had $2,000 of raw materials inventory. At the beginning of 2019, there was $1,600 of materials on hand. During the year, the company purchased $354,000 of materials; however it paid for only $314,000. How much inventory was requisitioned for use on jobs during 2019? a. $354,400b. $344,400c. $343,600d. $353,600
Answer:
d. $353,600
Explanation:
The computation of the inventory requisitioned for use on jobs during 2019 is shown below;
= OPening inventory + purchase made - ending inventory
= $1,600 + $354,000 - $2,000
= $353,600
Hence, the inventory requisitioned for use on jobs during 2019 is $353,600
Therefore the option d is correct
Angelina's made two announcements concerning its common stock today. First, the company announced that its next annual dividend has been set at $2.16 a share. Secondly, the company announced that all future dividends will increase by 4% annually. What is the maximum amount you should pay to purchase a share of Angelina's stock if your goal is to earn a 10% rate of return?
A. $21.60
B. $22.46
C. $27.44
D. $34.62
E. $36.00
The following events apply to Guiltf Seafood for the 2018 fiscal year 1.
a. The company started when it acquired $17,000 cash by issuing common stock.
b. Purchased a new cooktop that cost $16,900 cash. Earned $22,500 in cash revenue.
c. Paid $10,300 cash for salaries expense.
d. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2,200. Use straight-line depreciation. The adjustment was made as of December 31, Year 1.
Required:
Record the above transactions in a horizontal statements model.
Answer:
Gulf Seafood
Horizontal Statements Model:
Balance Sheet Income Statement Cash Flows
Assets = Liabilities + Equity Revenue - Expenses = Income
a. $17,000 0 + $17,000 FA
b. $16,900 ($16,900) IA
$22,500 $22,500 $22,500 OA
c. ($10,300) ($10,300) ($10,300) OA
d. ($3,675) ($3,675) ($3,675) None
$25,525 = 0 + $25,525 $22,500 - $13,675 = $8,825
Explanation:
a) Data and Analysis:
a. Cash $17,000 Common stock $17,000
b. Equipment $16,900 Cash ($16,900)
Cash $22,500 Revenue $22,500
c. Cash ($10,300) Salaries Expense ($10,300)
d. Accumulated Depreciation ($3,675) Depreciation Expense ($3,675)
Assume that Jones Company made a payment on a mortgage. It included $100 of principal and $150 of interest. What would the journal entry be to record the payment?
Answer:
the journal entry be to record the payment
Debit : Interest expense $150
Debit : Mortgage Payable $100
Credit : Cash $250
Explanation:
When a payment for mortgage is made, we recognize the interest expense that accrues and also derecognize the part of capital repayment made for the mortgage. That means Mortgage Payable decreases, Interest expense increases and Cash account decreases with the to total of interest and principle.
Assume the risk-free rate is 4%. You are a financial advisor, and must choose one of the funds below to recommend to each of your clients. Whichever fund you recommend, your clients will then combine it with risk-free borrowing and lending depending on their desired level of risk.
Expected Return Volatility
Fund A 10% 10%
Fund B 15% 22%
Fund C 6% 2%
Required:
a. Which fund would you recommend to a client seeking the highest possible expected return with a maximum volatility of 22%?
b. Which fund would you recommend to a client seeking the highest possible expected return with a maximum volatility of 22%?
c. Which fund would your recommend without knowing your clients risk preference?
Answer:
Following are the solution to the given point.
Explanation:
Calculate each fund's Sharpe ratio. It Fund is the best danger reward with the highest Sharpe ratio.
[tex]\text{Sharpe Ratio} = \frac{\text{(Fund return - \text{risk free return)}}}{Volatility}\\\\\to Fund A= \frac{(10\%-4\%)}{10\%} = 0.6\\\\\to Fund B= \frac{(15\%-4\%)}{22\%} = 0.5\\\\\to Fund C = \frac{(6\%-4\%)}{2\%}=1.0\\\\[/tex]
Fund C consequently offers the best risk-benefit. and without understanding client risk preference, we will advise Fund C for any clients. If a client wants to have a 22 percent minimum volatility, we'll nevertheless propose that Fund C instead of Fund B is available, because an investor can take risk-free rates to the degree that the total portfolio volatility stands at 22 percent and deposit it in Fund C.
Crane Company receives a $74,000, 5-year note bearing interest of 5% (paid annually) from a customer at a time when the discount rate is 6%.
Required:
What is the present value of the note received by Crane?
Answer: $70,882.98
Explanation:
Present value of note = Present value of interest payments + Present value of face value
Present value of interest payment:
First calculate the interest:
= 5% * 74,000
= $3,700
This amount is constant so is an annuity
Present value = 3,700 * Present value interest factor of annuity, 5 years, 6%
= 3,700 * 4.2124
= $15,585.88
Present value of face value :
= 74,000 / (1 + 6%)⁵
= $55,297.10
Present value of note:
= 15,585.88 + 55,297.10
= $70,882.98
Bengal Co. provides the following sales forecast for the next three months: JulyAugustSeptember Sales units 8,500 9,200 5,950 The company wants to end each month with ending finished goods inventory equal to 20% of the next month's sales. Finished goods inventory on June 30 is 1,700 units. The budgeted production units for August are:
Answer:
Production= 8,550
Explanation:
Giving the following information:
Sales units 8,500 9,200 5,950
Desired ending inventory= 20% of the next month's sales.
To calculate the production for August, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 9,200 + (5,950*0.2) - (9,200*0.2)
Production= 9,200 + 1,190 - 1,840
Production= 8,550
Suppose that the total value of dividends to be paid by companies in the Narnian stock market index is $100 billion. Investors expect dividends to grow over the long term by 5% annually, and they require a 10% return. Now a collapse in the economy leads investors to revise their growth estimate down to 4%. By how much should market values change
Answer:
The correct answer is "16.67%".
Explanation:
Given:
Dividend,
= $100 billion
Rate of return,
= 10%
= 0.10
Growth rate,
= 5%
= 0.05
Now,
Market value will be:
= [tex]\frac{Dividend}{Rate \ of\ return-Growth \ rate}[/tex]
= [tex]\frac{100}{0.10-0.05}[/tex]
= [tex]\frac{100}{0.05}[/tex]
= [tex]2000 \ Billion[/tex] ($)
After collapse,
The market value will be:
= [tex]\frac{100}{(.10-.04)}[/tex]
= [tex]\frac{100}{.06}[/tex]
= [tex]1666.67[/tex] ($)
Change in market value will be:
= [tex]2000-1666.67[/tex]
= [tex]333.33 \ Billion[/tex] ($)
hence,
The percentage change in market value will be:
= [tex]\frac{333.33}{2000}[/tex]
= [tex]16.67[/tex]%
Auto Industries Company reported the following on its income statement:
Income before income taxes $420,000
Income tax expense (120,000)
Net income $300,000
If the income statement also shows interest expense equal to $80,000, what is the company's times interest earned ratio?
a. 5 times.
b. 6.25 times.
c. 5.25 times.
d. 8 times.
Answer:
Option c. 5.25 times is the correct answer.
Explanation:
Below is the calculation:
Income before income tax = $420000
Income tax expenses = 120000 dollars
Net income = $300000
Interest expense = $80000
Interest earned ratio = Earning Before Interest and Taxes / Interest Expenses
Interest earned ratio = 420000 / 80000
Interest earned ratio = 5.25 times
Option c. 5.25 times is the correct answer.
Prosecutors representing the Securities and Exchange Commission recentlyannounced criminal charges against 13 individuals for engaging in insidertrading. According to the SECs director of enforcement, a trading ring acting on inside information compromises the marketsintegrity and investorstrust. . . . Explain why.
Answer and Explanation:
Insider trading compromises the integrity of the market because insider investors have non-public information about the stocks of the company that could very much impact the value of the stock of the company. In other words, an insider knows what the public doesn't know about a company and it allows him an unfair advantage to trade the stocks of the company using this information and make large unusual profit. This could lead to market collapse as investors are no longer encouraged to invest seeing that they can't trust that the market is transparent and trustworthy(they don't have all the important information that would affect the company)
Which mineral resource is used in chemical industry?
Answer:
Carbon feedstocks – oil, gas, coal, renewables, and CO2 – are the base of organic chemistry that creates about 90% of the value of the chemical industry. Some inorganic feedstocks are regarded as critical: Noble metals, some rare earth elements, indium, lithium, phosphate, etc.
As Laura checks items off her meeting agenda and various individuals provide input and insight, she beams at her team. She is so proud of the work they do at her clinic every day. They have always been a very high performing team, and for that, she has always been thankful.
Select the statement that is true about high performing teams.
a) High performing teams are able to come up with more rapid solutions and have increased productivity.
b) High performing teams never face obstacles.
c) High performing teams should only have about 4-6 members.
d) High performing teams are most effective when all members share the same skills and experience.
Answer: a) High performing teams are able to come up with more rapid solutions and have increased productivity.
Explanation:
A high performing team is as the term implies, one that is productive. To be productive one has to be able to come up with solutions to problems as fast as possible and implement those solutions so as to continue or even increase production.
A high performing team is one that would do the above. Laura's team provides inputs and insights which means they come up with solutions and they also show up to work every day to be productive. They are indeed a high performing team.
During 2004, Thor Lab supplied hospitals with a comprehensive diagnostic kit for $120. At a volume of 80,000 kits, Thor had fixed costs of $1,000,000 and a profit before income taxes of $200,000. Due to an adverse legal decision, Thor’s 2005 liability insurance increased by $1,200,000 over 2004. Assuming the volume and other costs are unchanged, what should the 2005 price be if Thor is to make the same $200,000 profit before income taxes?
a. $120.00
b. $135.00
c. $150.00
d. $240.00
Answer:
d. $240.00
Explanation:
Calculation to determine what should the 2005 price be if Thor is to make the same $200,000 profit before income taxes?
2004 CM% = 12.5% ($15/$120)
2005 CM = $2,400,000 ($1,000,000 + $200,000)
2005 CM per unit = $2,400,000/80,000 units
2005 CM per unit= $30 CM per unit;
2005 selling price per unit = $30/.125
2005 selling price per unit= $240
Therefore what should the 2005 price be if Thor is to make the same $200,000 profit before income taxes is $240
The purpose of GAAP's flexibility in its reporting standards allows companies to: Select one: a. Smooth reported revenues and earnings over several reporting periods. b. Change accounting estimates to meet target sales or earnings. c. Change accounting principles to improve reported earnings. d. Adopt specific accounting and reporting procedures to represent the firm's activities more accurately.
Answer:
D. Adopt specific accounting and reporting procedures to represent the firm's activities more accurately.
Explanation:
GAAP in accounting means Generally accepted accounting principle. It is a uniform collection of accounting rules and standards for reporting financial accounting for organizations
The main reason or purpose of GAAP is to ensure that there is transparency and consistency in the reporting of financial details from one organization to another. The aim is to also help firms record their financial activities accurately by adopting specific accounting and reporting procedures as stipulated by GAAP.
Cullumber Corporation has announced that its net income for the year ended June 30, 2017, was $1,353,412. The company had EBITDA of $4,948,000, and its depreciation and amortization expense was equal to $1,128,000. The company's average tax rate is 34 percent. What was its interest expense
Answer:
See below
Explanation:
Net income = $1,353,412
Tax rate is 34% hence the company's EBT amount is calculated as
EBT = $1,353,412 / 0.66 = $2,050,624.24
Add back Depreciation and amortization to the EBT
= $2,050,624.24 + $1,128,000
= $3,178,624.24
The difference between the above and EBITDA amount will be the interest expense for the year
= $4,948,000 - $3,178,624.24
= $1,769,375.76
Therefore, the interest expense is $1,769,375.76
A company uses return on investment (ROI) to measure the performance of its business units. The company manufactures and distributes consumer goods. Last year, management identified a possible shortage of raw materials. To mitigate this risk, a large amount of raw material was bought in advance and stored in the manufacturing plant inventory. As a result of this decision, ROI will A. Have an unpredictable change. B. Decrease. C. Increase. D. Not change.
Answer: B. Decrease
Explanation:
Return on investment refers to the ratio between the net income and investment. It should be noted that a high return on investment implies that the investment's gains compare favourably to the cost.
In this scenario, since a large amount of raw material was bought in advance and stored in the manufacturing plant inventory, this will lead to an increase in the cost of production which therefore will reduce the return in investment.
Therefore, the correct option is B.
Which statement is true?
A bank interest lower than inflation means more purchasing power.
Nominal rates are an accurate figure of purchasing power.
Real interest measures the power of the saved money
Real interest is the rate quoted in loan and deposit agreements.
Answer:
Nominal rates are an accurate figure of purchasing power.
The statement nominal rates are an accurate figure of purchasing power can be marked as true. Thus, the correct option is B). Nominal rates are an accurate figure of purchasing power.
What is nominal interest rate?Nominal interest rate refers to the interest rate before taking inflation into account. It is also refer to the interest rate on a loan that is charged without taking into account any fees or compounding of interest.
The nominal rate of interest is often used in banks to describe the interest on different loans and in the investment field as well. The higher the nominal rate, the more interest will be earned on savings.
Basically, the nominal interest rate is approximately equal to the real interest rate plus the inflation rate that can be depicts as (i = R + h).
Learn more about nominal interest rate here:-
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Future pension liabilities are estimated based on all of the following except a.expected employee compensation levels. b.federal withholding income tax. c.employee life expectancy. d.employee turnover.
Answer:
The answer is B.
Explanation:
The correct option is B. - federal withholding income tax.
Pension liability is the amount of money that a company or government at any level(federal or state) has to account for in order to make future pension payments. It is a future payment that a company or government is obligated to pay its retired employees.
They take into considerations:
1. Their employees turnover
2. Their employees life expectancy
3. Their employees compensation level.
Federal tax level is not the issue because the payment is futuristic and federal tax can change.
Phương pháp kế toán chi tiết vật tư
ĐÁP ÁN:
Phương pháp thẻ song song:
Phương pháp thẻ song song mặc dầu đơn giản, dễ làm nhưng việc ghi chép còn nhiều trùng lắp. Vì thế, chỉ thích hợp với doanh nghiệp có qui mô nhỏ, số lượng nghiệp vụ ít, trình độ nhân viên kế toán chưa cao.
Phương pháp sổ đối chiếu luân chuyển:
Theo phương pháp sổ đối chiếu luân chuyển, công việc cụ thể tại kho giống như phương pháp thẻ song song ở trên. Tại phòng kế toán, kế toán sử dụng sổ đối chiếu luân chuyển để hạch toán số lượng và số tiền của từng thứ (danh điểm) vật liệu, công cụ, dụng cụ nhỏ theo từng kho. Phương pháp này mặc dầu đã có cải tiến nhưng việc ghi chép vẫn còn trùng lắp.
Phương pháp sổ số dư:
Theo phương pháp sổ số dư, công việc cụ thể tại kho giống như các phương pháp trên. Định kỳ, sau khi ghi thẻ kho, thủ kho phải tập hợp toàn bộ chứng từ nhập kho, xuất kho phát sinh theo từng vật liệu, dụng cụ, sản phẩm quy định. Sau đó, lập phiếu giao nhận chứng từ và nộp cho kế toán kèm theo các chứng từ nhập, xuất kho vật liệu, dụng cụ, sản phẩm. Ngoài ra, thủ kho còn phải ghi số lượng vật liệu, dụng cụ, sản phẩm tồn kho cuối tháng theo từng danh điểm vào sổ số dư.
A popular hotel has continued to lose business in its room service food sales over the last five years. Using the Six Sigma DMAIC process explain what you would do in each step of the process to improve the sales - provide relevant, practical details. What statistics would you apply and why?
The correct answer to this open question is the following.
Using the Six Sigma DMAIC process, I will explain what I would do in each step of the process to improve the sales.
DMAIC stands for Define, Measure, Analyze, Improve, and control.
What I would do first is, of course, define the nature of the problem. To define exactly what is the root of the drop in sales in the hotel. That would allow me to establish proper goals and define a strategy to implement. If a need to do surveys to customers or unsatisfied clients, I would do that. Listening to customer feedback would provide the necessary information.
Then, I have to measure the performance of my employees. Monitoring and evaluate the productivity of the people who work in the organization.
I have to analyze if the productivity ratio of each employee to know if they are performing to the maximum of their capabilities.
In this case, I could use a Pareto chart or the 80-20 rule, to assess productivity in the company.
I have to pay attention to the causes of poor performance and poor quality service. There is an interesting analysis called Root Cause Analysis (RCA) that can be useful in this case.
Once identified and eliminated the root or causes of the problems, then it comes de Improve the process to enhance the performance in every area of the organization. I would have to get people on the same page and focus on one problem at a time to doing things right.
Another model that could be useful in this scenario would be Design of Experiments, commonly known as DOE, which helps resolve complex issues
Finally, the control of everything implementation and solution to confirm it has been established the right way with the desired results. This could be part of the continuing Quality Control process- The poke yoke system would be a good option to be contemplated.
Darkover Inc., as part of its strategic planning process, is considering making some policy changes. What effect (i.e. Increase, Decrease, No Effect) would each the following changes have on Darkover's Net Cash Flow from Operating Activities? Assume that in each case, the change only affects the account or accounts mentioned (i.e. all other accounts are not changed by the action).
Question Completion:
_____(a) Increase investment in new plant and equipment.
_____(b)Change the collections policy to insure that receivables are collected sooner.
_____(c)Change inventory policy to increase the amount of raw materials kept on hand (work in process and finished goods inventory will remain unchanged).
_____(d)Sell long term bonds and use the proceeds to reduce notes payable
._____(e) Begin paying all employees every week instead of every two week, effectively decreasing accruals.
_____(f)Change accounts payable policy to pay bills in 20 days instead of 10 days.
Answer:
Darkover Inc.
Effects of Changes on Darkover's Net Cash Flow from Operating Activities:
_No Effect____(a) Increase investment in new plant and equipment.
Increase_____(b) Change the collections policy to insure that receivables are collected sooner.
Decrease_____(c) Change inventory policy to increase the amount of raw materials kept on hand (work in process and finished goods inventory will remain unchanged).
Decrease_____(d) Sell long term bonds and use the proceeds to reduce notes payable
Decrease_____(e) Begin paying all employees every week instead of every two week, effectively decreasing accruals.
Increase_____(f) Change accounts payable policy to pay bills in 20 days instead of 10 days.
Explanation:
Darkover's net cash flow from operating activities is the result of accumulating the cash inflows and outflows from its operating activities. Operating activities are the normal activities that Darkover carries out from which it earns its revenues and incurs related expenses. They are the day-to-day activities through which the mission of the entity is carried out.
In order to update a production process, a company can spend money now or four years from now. If the amount now would be $20,000, what equivalent amount could the company spend four years from now at a compound interest rate of 15% per year?(All the alternatives presented below were calculated using compound interest factor tables including all decimal places
Answer: $34,980.13
Explanation:
The amount that the company will spend 4 years from now is simply the future value of the amount that it can spend today.
The amount to be spent today is $20,000 so the amount to be spent 4 years from now is the future value of $20,000:
= Amount * (1 + rate) ^ number of years
= 20,000 * ( 1 + 15%)⁴
= $34,980.13
Given the following production plan, use a chase production strategy to compute the monthly production, ending inventory/(backlog), net requirements and required workforce levels. A worker can produce 75 units per month. Assume that the beginning inventory in January is 750 units, and the firm desires to have 750 units of inventory at the end of June.
Month Jan Feb Mar Apr May Jun
Demand 2100 3000 5100 6000 4800 2400
Required:
a. What are the net requirements for January?
b. What month has the highest number of workers required?
c. What is the production level for June?
d. How many people will be employed for the month of January?
Answer:
Computation of the monthly production, ending inventory/(backlog), net requirements and required workforce levels:
a. The net requirements for January = 2,025 units and 27 workers.
b. The month with the highest number of workers required is April.
c. The production level for June is 2,475 units
d. 27 workers will be employed for the month of January.
Explanation:
a) Data and Calculations:
Production per worker per month = 75 units
Beginning inventory in January = 750 units
Desired ending inventory in June = 750 units
Production Schedule, using the chase production strategy:
Month Jan Feb Mar Apr May Jun
Beginning inventory 75 0 0 0 0 0
Monthly production 2,025 3,000 5,100 6,000 4,800 2,475
Net requirements 2,100 3,000 5,100 6,000 4,800 2,400
Ending inventory/(backlog) 0 0 0 0 0 75
Required workforce levels 27 40 68 80 64 33
Materials Variances Assume that Pearle Vision uses standard costs to control the materials in its made-to-order sunglasses. The standards call for 2 ounces of material for each pair of lenses. The standard cost per ounce of material is $16.25. During July, the Santa Clara location produced 5,200 pairs of sunglasses and used 9,800 ounces of materials. The cost of the materials during July was $17.00 per ounce, and there were no beginning or ending inventories. Required a. Determine the flexible budget materials cost for the completion of the 5,200 pairs of glasses.
Answer:
Direct material flexible budget= $159,250
Explanation:
Giving the following information:
The standard cost per ounce of material is $16.25.
Actual quantity= 9,800 ounces
The flexible budget employs the standard cost for the actual quantity:
Direct material flexible budget= 16.25*9,800
Direct material flexible budget= $159,250
Assume that you are a loan officer of a bank. A local church is seeking a $4 million, 20-year loan to construct a new classroom building. Church officers submit a comprehensive financial report that was audited by a reputable CPA firm. In summary form (the actual statement showed details), the church’s statement of revenues and expenditures indicated the following (in millions):
Revenues from dues and contributions .... $1.8
Revenues from other sources ....... 0.2
Total revenues ............. $2.0
Less: total expenditures .......... 2.0
Excess of revenues over expenditures .... $0.0
The church's balance sheet reported assets, mainly cash and investments (at market value), of $0.2 million. In addition, a note to the financial statements indicated that equipment is approximately $3 million. The church has no outstanding debt.
a. Is there any information in the financial statements that would make you reluctant to approve the loan? If so, indicate and explain.
b. Is there any other financial information of the type likely to be reported in a conventional annual report that you would like to review prior to making a loan decision? If so, indicate and explain.
c. Is there any other information, of any type, that you would like to review prior to making a loan decision? If so, indicate and explain.
d. Comment on the inherent limitations of the financial statements of this church, or any comparable not-for-profit organization, as a basis for making loan decisions.
Answer:
Explanation:
a.
There is little information on how funds are used or how much money is spent to manage the church. The financial statements have been prepared incorrectly.
Interpretation:
While drafting the financial accounts, the church committed many errors. The church's revenue is equivalent to its daily operations operating expenditures. They have approximately $3 million in funding assets that they do not owe any money on.
It may be deduced that the church is attempting to preserve asymmetric information, and therefore it will be better to justify its sources of income and use of money in order to determine whether they can or they cannot pay the debt.
b.
The revenue from various channels must be detailed in the yearly report so that the loan officer may make an informed judgment.
Interpretation:
Since payments and contributions account for 90% of revenue and revenue from other sources accounts for 10%, it's surprising how the church earns money in other ways as stated on the income statement. As a result, it's important to understand what other potential revenue streams the church has before approving the loan.
c.
The officer in charge of the loan should check the church's book records to make sure and guarantee that there are no outstanding loans. This situation necessitates a thorough examination and assessment.
Interpretation:
The church has $3 million worth of equipment. The church's expenses, on the other hand, are equivalent to the church's income. As a result, it's unclear how the church acquired the equipment without taking out a loan. As a result, the church must be urged to produce a full breakdown of its expenses, which may be thoroughly and fully studied to see whether there are any financing charges that the church is attempting to hide in its yearly reports.
d.
There is no direct or primary source of income for the church. It solely makes money from charity donations.
Interpretation:
The church's only sources of income are fundraisers and charitable donations. It also doesn't possess any significant revenue streams. Because the church is attempting to conceal numerous possible pieces of information, this may be a case of micro-management by the proprietors, and so these issues should be considered by the officer in charge of the loan before accepting the loan.
