Answer:
(d)MWR is greater than TWR, and TWR is the more appropriate measure for Carl
Explanation
since he is investing in between the year and he is earning 18% return which is higher than the 8% return on his early initial investment so time weighted return would be lower than that of the money weighted return because he is making money on the initial investment at interest that is lower than the interest rate which has been made by him in the middle of the investment period.
money weighted return is not as appropriate as time weighted written because time weighted return always takes into account the proper withdrawals and amount invested in between.
Granite State Airlines serves the route between New York and Portsmouth, NH, with a single-flight-daily 100-seat aircraft. The one-way fare for discount tickets is $100, and the one-way fare for full-fare tickets is $150. Discount tickets can be booked up until one week in advance, and all discount passengers book before all full-fare passengers. Over a long history of observation, the airline estimates that full-fare demand is normally distributed, with a mean of 56 passengers and a standard deviation of 23, while discount-fare demand is normally distributed, with a mean of 88 passengers and a standard deviation of 44.
a) A consultant tells the airline they can maximize expected revenue by optimizing the booking limit. What is the optimal booking limit? (Hint: Use the standard normal cumulative distribution table)
b) The airline has been setting a booking limit of 44 on discount demand, to preserve 56 seats for full-fare demand. What is their expected revenue per flight under this policy? (Hint: First find the expected revenue when b= 0. Here you can assume Probability{df = k} = Ff(k+0.5) – Ff(k-0.5) and use a spreadsheet. Then using the recursive formula, find the expected revenue if b is increased by 1 until it reaches b=44 using a spreadsheet)
c) What is the expected gain from the optimal booking limit over the original booking limit?
d) A low-fare competitor enters the market and Granite State Airlines sees its discount demand drop to 44 passengers per flight, with a standard-deviation of 30. Full-fare demand is unchanged. What is the new optimal booking limit?
Answer:
Given data: One flight with total seats = 100
Full fare passengers, cost per ticket=$150, mean=56 passengers, SD=23
Discount fare passengers, cost per ticket=$100, mean=88 passengers, SD=44
(a) Here, though there is a hint to use the CDF, since the confidence interval is not given we will make some simplying assumptions that will reduce the complexity of the question, of course keeping the question statistically correct.
this question wants us to maximize total revenue per flight (one way), we can do that by taking only full fare passengers or total revenue will be 150*100=$15,000, but since historical probability shows a mean of 56 with a standard deviation of 23, we can assume in best case scenario total full fare ticket passengers will be 56+23=79, leaving 21 tickets for discount passenger, in this case the total revenues will be 79*150+21*100=$13,950
(b) Now, the new constrained policy is giving a clear cut number of seats to each category of pasengers, 44 for discount (total revenues 44*100) and 56 for full fare (total revenues 56*150) both of which are within the probabilities given earlier (full fare mean=56, discount mean=88). Total revenues in case will be 44*100+56*150=$12,800.
(c) Gain is the difference of the excess revenues in both cases of optimal total revenues and limited seats policy or answer (a) - answer (b) = $13,950- $12,800=$1,150
(d) Realistically speaking, there is no answer for this question without a clear cut confidence interval. Another simplifying assumption we can make here is taking the mean passengers as expected bookings (can be tweaked once confidence interval or degree of significance is given). so total revenues in this case will be 44*100 from discount and 56*150 from full fare passengers. That is still similar to answer (c) due to our assumption/lack of constraints, so our optimal booking will be 54 full fare tickets and 44 discount passenger tickets. You can also take worst case scenario by subtracting SD of each passenger type from the mean or go the best case scenario in which SD of full fare will be added to the mean while the pending seats (left over from 100) will be the total to discount fare for optimal revenue collection.
Given knowledge: One flight with a total capacity of 100 passengers.
Passengers paying full fare, the average ticket price of $150, mean of 56 passengers, SD of 23
Participants on a discount price, with a ticket cost of $100, a mean of 88 passengers, and a standard deviation of 44.
(a) Spite of the fact there is a hint to utilize the CDF because statistical power is not supplied, we will make some presumptions to minimize the complexity of the question whilst retaining statistical accuracy.
We can do so by hardly taking full-fare passengers, in which particular instance total revenue will be 150*100=$15,000, but since historical probability shows a mean of 56 with a standard deviation of 23.
we can assume that total full fare ticket passengers will be 56+23=79, leaving 21 tickets for discount passengers, in which case total revenues will be[tex]79\times150+21\times100=\$13,950.[/tex]
(b) This new limited program now assigns a specific number of seats to each passenger category: 44 for discount (total revenues [tex]44\times100[/tex]) and 56 for full-fare (total revenues [tex]56\times150[/tex]), both of which are within the probability (full fare mean=56, discount mean=88).
In this instance, total revenues will be [tex]44\times100+56\times150=\$12,800.[/tex]
(c) Gain is the differential between the excess earnings in both the ideal overall revenue and restricted seat policies or $13,950- $12,800=$1,150.
(d) Without a well-defined standard error, there is no real answer to this question. Another assumption we might make to make things easier is to treat the average passengers as projected bookings. In this instance, total revenues will be 44*100 from discount passengers and 56*150 from full rate passengers.
Due to our assumption/lack of limitations, our ideal booking will be 54 full-price tickets and 44 discount passenger tickets, which is comparable to the solution (c).
You may alternatively go for the worst-case scenario by subtracting the SD of each passenger type from the mean, or the best-case scenario by adding the SD of the full fare to the mean and using the pending seats (leftover from 100) to discount the fare for optimal revenue collection.
To know more about the discounted price of the airline's tickets, refer to the link below:
https://brainly.com/question/14506205
Irving Corporation makes a product with the following standards for direct labor and variable overhead: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct labor 0.20 hours $ 29.00 per hour $ 5.80 Variable overhead 0.20 hours $ 6.50 per hour $ 1.30 In November the company's budgeted production was 6,800 units, but the actual production was 6,600 units. The company used 1,510 direct labor-hours to produce this output. The actual variable overhead cost was $9,211. The company applies variable overhead on the basis of direct labor-hours. The variable overhead rate variance for November is:
Answer:
Manufacturing overhead rate variance= $604 favorable
Explanation:
Giving the following information:
Variable overhead 0.20 hours $ 6.50 per hour
The company used 1,510 direct labor-hours to produce this output. The actual variable overhead cost was $9,211.
To calculate the variable overhead rate variance, we need to use the following formula:
Manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity
Actual rate= 9,211/1,510= $6.1
Manufacturing overhead rate variance= (6.5 - 6.1)*1,510
Manufacturing overhead rate variance= $604 favorable
The Converting Department of Hopkinsville Company had 1,200 units in work in process at the beginning of the period, which were 75% complete. During the period, 25,200 units were completed and transferred to the Packing Department. There were 1,360 units in process at the end of the period, which were 25% complete. Direct materials are placed into the process at the beginning of production. Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".
Answer:
Equivalent Units
Material cost = 26,560
Conversion Cost= 25,540
Explanation:
We would assume the company uses weighted average method of valuation.
Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.
Equivalent units = Degree of completion (%) × Number of units
Material cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 100%× 1,360 1360
Total equivalent units 26,560
Conversion Cost
Item Unit Equivalent unit
Completed 25,200 100% ×25200 = 25,200
Closing WIP 1,360 25%× 1,360 340
Total equivalent units 25,540
Arlington Clothing, Inc., shows the following information for its two divisions for year 1: Lake Region Coastal Region Sales revenue $ 4,200,000 $ 13,110,000 Cost of sales 2,711,300 6,555,000 Allocated corporate overhead 252,000 786,600 Other general and administration 557,900 3,759,000 Required: a. Compute divisional operating income for the two divisions. Ignore taxes.
Answer:
Lake Region Coastal region
Operating income ($) 678,800. 2,009,400.
Explanation:
Lake Region Coastal region
$'000 $'000
Sales revenue 4,200 13,110
Cost of sales (2,711) (6.555)
Gross profit 1,488.7 6,555
Allocated overhead (252) (786.6)
Other general overhead (557.9) ( 3,759)
Operating income 678.8 2,009.4
Lake Region Coastal region
Operating income 678,800. 2,009,400.
Option A has an expected value of $2,000, a minimum payoff of -$4,000, and a maximum payoff of $18,000. Option B has an expected value of $2,200, a minimum payoff of -$1,000, and a maximum payoff of $6,000. Option C has an expected value of $1,900, a minimum payoff of $100, and a maximum payoff of $2,000. In this situation, a risk-averse decision maker would pay __________ for his risk aversion, and a risk-seeking decision maker would pay __________ for his risk seeking.
Answer:
Option A is the answer
Explanation:
A risk-averse decision maker will go for the option with the least chance of loss incurred (the highest minimum payoff of $100) and settle for an expected value of 1900. He'll pay for his risk avoidance in this way (2200-1900 = 300) while a risk-seeking decision maker will go for the option with the highest payoff chances ($18,000), regardless of the possibility of failure. This would make the risk-seeking decision maker go for option A.
In performing accounting services for small businesses, you encounter the following situations per taining to cash sales. 1. Poole Company enters sales and sales taxes separately in its cash register. On April 10, the register totals are sales $30,000 and sales taxes $1,500. 2. Waterman Company does not segregate sales and sales taxes. Its register total for April 15 is $25,680, which includes a 7% sales tax. Prepare the entry to record the sales transactions and related taxes for each client.
Answer and Explanation:
According to the scenario, journal entries of the given data are as follow:-
1.Journal Entry of Poole Company
April 10
Cash A/c Dr. $31,500
To Sales A/c $30,000
To Sales tax payable A/c $1,500
(Being the sales and sales tax payable is recorded)
2. Since Register total for April $25,680 includes 7% sales tax.
So Sales of Waterman Company
= Registered Total Amount ÷ (1 + Sales Tax Rate)
= $25,680 ÷ (1 + 7%)
= $25,680 ÷ 1.07
= $24,000
Now
Sales tax = $24,000 × 7% = $1,680
Journal Entry of Waterman Company
On 15 April
Cash A/c Dr. $25,680
To Sales A/c $24,000
To Sales tax payable A/c $1,680
(Being the sales and sales tax payable is recorded)
Kubin Company’s relevant range of production is 11,000 to 14,000 units. When it produces and sells 12,500 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor $ 4.20 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 5.20 Fixed selling expense $ 3.70 Fixed administrative expense $ 2.70 Sales commissions $ 1.20 Variable administrative expense $ 0.70 Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 12,500 units? b. What is the total indirect ma
Answer:
a. $142,500
b. $86,250
Explanation:
a. The computation of the total direct manufacturing cost is shown below:
= (Direct material per unit + direct labor per unit) × number of units manufactured
= ($7.20 + $4.20) × 12,500 units
= $142,500
b. The computation of the total indirect manufacturing cost is shown below:
= (Variable manufacturing overhead per unit + Fixed manufacturing overhead per unit) × number of units manufactured
= ($1.70 + $5.20) × 12,500 units
= $86,250
While Mary Corens was a student at the University of Tennessee, she borrowed $9,000 in student loans at an annual interest rate of 9%. If Mary repays $1,700 per year, then how long (to the nearest year) will it take her to repay the loan? Do not round intermediate calculations. Round your answer to the nearest whole number.
Answer:
The time required to repay the loan is 8 years.
Explanation:
The loan amount that the student borrowed = $9000
Annual interest rate = 9%
Repayment amount per year or annuity amount = $1700 per year
Use the below formula to calculate the number of years to repay the loan amount.
A = annuity amount
r = interest rate
n = number of years
PVF = present value of annuity
[tex]\rm PVF = \frac{A\left [1-\left ( 1+r \right )^{-n} \right ]}{r} \\[/tex]
[tex]9000 = \frac{1700\left [1-\left ( 1+ 0.09 \right )^{-n} \right ]}{0.09} \\[/tex]
[tex]9000 = 18888.9(1-1.09^{-n}) \\[/tex]
[tex]n = 7.51 \ years \ or \ 8 \ years.[/tex]
So, the time taken to repay the loan amount is 8 years.
On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 80,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows:Part 1. Prepare a schedule translating (current rate method) the December 31, 20X1, trial balance from Swiss francs to dollars.
On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 80,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows:
Then intended files that supposed to be here are added in the attachments below:
Part 1. Prepare a schedule translating (current rate method) the December 31, 20X1, trial balance from Swiss francs to dollars.
Answer:
Explanation:
We are tasked to Prepare a schedule translating (current rate method) the December 31, 20X1, trial balance from Swiss francs to dollars.
Schedule remeasuring Swiss francs to dollars
Trial Balance Translation Schedule
December 31, 20X1
Sfr Exchange Rate U.S dollar
Cash $7,200 0.73 $5,256
Accounts $25,000 0.73 $18,250
receivable (net)
Receivable from $6,300 0.73 $4,599
Creek
Inventory $26,000 0.73 $18,980
Plant & equipment $110,000 0.73 $80,300
Cost of good sold $71,500 0.75 $53,625
Depreciation expense $10,100 0.75 $7,575
Operating expense $35,000 0.75 $26,250
Dividends paid $16,400 0.74 $12,136
Total: $307,500 $226,971
[tex]Accumulated - \ translation \\other \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ adjustment\\Comprehensive \\ loss[/tex] (233,031 - 226,971) $6060
TOTAL DEBITS $233,031
Accumulated $10,100 0.73 $7,373
Depreciation
Account $13,600 0.73 $9,928
Payable
Bond $51,000 0.73 $37,230
Payable
Common stock $78,000 0.80 $62,400
Sales $154,800 0.75 $116,100
Total: $307,500 $233,031
No entry necessary $ -
TOTAL CREDITS $233,031
Flyaway Travel Company reported net income for 2021 in the amount of $105,000. During 2021, Flyaway declared and paid $3,625 in cash dividends on its nonconvertible preferred stock. Flyaway also paid $25,000 cash dividends on its common stock. Flyaway had 55,000 common shares outstanding from January 1 until 25,000 new shares were sold for cash on April 1, 2021. What is 2021 basic earnings per share?
Answer:
The 2021 basic earnings per share is $1.68
Explanation:
In order to calculate the 2021 basic earnings per share we would have to use the following formula:
Basic EPS = (Net income - Preferred Dividend) / Weighted average common shares outstanding
According to given data:
Net income=$105,000
Preferred Dividend=$3,625
The calculation of the Weighted average common shares outstanding would be as follows:
Period Months Number of shares outstanding Weighted Number
A B A*B /12
Jan 1 to Mar 31 3 55,000 13,750
April 1 to Dec. 31 9 80,000 (55,000 +25,000) 60,000
(40000+10000)
The Weighted average common shares is 60,000
Therefore, Basic EPS = (Net income - Preferred Dividend) / Weighted average common shares outstanding
Basic EPS= ($105,000 - $3,625) / 60,000
Basic EPS=$1.68
The focused differentiation strategy differs from the differentiation strategy in that Group of answer choices a. the focused differentiators have a broader competitive scope b. the value-creating activities of focused differentiators are more constrained. c. focused differentiators target a narrower customer market d. there are fewer risks with the focused differentiation strategy.
Answer:
The answer is option C) The focused differentiation strategy differs from the differentiation strategy in that focused differentiators target a narrower customer market.
Explanation:
Product differentiation is a marketing strategy that creates competitive advantage with designing a product superior to that of rivals, priced higher and sometimes created for exclusive users.
However, the focused differentiation strategy takes it a step further by targeting a small group of customers with ostensible goods.
The bourgeoisie are the main target for focused differentiators. They have the economic power to foot the bill and they enjoy the exclusivity of being the few to consume such products. A good example of such products is the Bugatti and Ferrari.
The following costs are included in a recent summary of data for a company: advertising expense, $85,000; depreciation expense - factory building, $133,000; direct labor, $250,000; direct material used, $300,000; factory utilities, $105,000; and sales salaries expense, $150,000. Determine the dollar amount of conversion costs.
Answer:
Conversion costs= $488,000
Explanation:
Giving the following information:
depreciation expense - factory building, $133,000
direct labor, $250,000
factory utilities, $105,000
The conversion costs are the sum of direct labor and manufacturing overhead.
Manufacturing overhead= 133,000 + 105,000= 238,000
Direct labor= 250,000
Conversion costs= $488,000
Pharoah Company has had 4 years of record earnings. Due to this success, the market price of its 500,000 shares of $4 par value common stock has increased from $15 per share to $55. During this period, paid-in capital remained the same at $6,000,000. Retained earnings increased from $4,500,000 to $30,000,000. CEO Don Ames is considering either (1) a 15% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on (a) retained earnings, (b) total stockholders’ equity, and (c) par value per share.
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
1) 15% Stock Dividend-
Retained Earnings = Increase Value of Retained Earnings - (Total Shares × 15% Stock Dividend × Increase Value of Per Share)
= $30,000,000 - (500,000 × 15% × $55)
= $30,000,000 - $4,125,000
= $25,875,000
2) 2-for-1 stock split-
Retained earnings = $30,000,000
The 2-for-1 stock split will not impact retained earnings.
a and b) The before, after effects of each option are shown in the attachment below
c) Par value per share
Par value per share of stock dividend = $4
Par value per share of 2-for-1 stock split = $4 ÷ 2 = $2
According to the analysis, stock dividend will not make any impact.
Colil Computer Systems, Inc., manufactures printer circuit cards. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials of $ 300 comma 000 were used in production during the month. Workminusinminusprocess records revealed that 12 comma 500 card units were started in January, 6 comma 250 card units were complete, and 4 comma 000 card units were spoiled as expected. Ending workminusinminusprocess card units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete. What is the direct material cost assigned to good units completed? A. $ 258 comma 621 B. $ 150 comma 000 C. $ 96 comma 000 D. $ 246 comma 000
Answer:
D. $246,000
Explanation:
As per the given question the solution of direct material cost assigned to good units completed is provided below:-
To reach Cost transferred out we need to follow some steps which is following below:-
Step 1. Cost per unit = cost of material used ÷ Units started
= $300,000 ÷ 12,500
= $24
Now,
Step 2. Goods units completed = Started units × Cost per unit
= 6,250 × $24
= $150,000
Step 3. Normal spoilage = Cards units × Cost per unit
= 4,000 × $24
= $96,000
and finally
Cost transferred out = Goods units completed + Normal spoilage
= $150,000 + $96,000
= $246,000
To reach allocation of Cost transferred out we simply put the values into formula.
(Ignore income taxes in this problem.) Assume you can invest money at a 14 percent rate of return. How much money must be invested now to be able to withdraw $5,000 from this investment at the end of each year for eight years, the first withdrawal occurring one year from now
Answer:
the original amount invested = $285,714.29
Explanation:
Let original amount invested be x
Amount to be withdrawn per year = $5,000
Total number of years = 8
Total amount to be withdrawn = 5,000 × 8 = $40,000
Next, we are told that 14% return on x is realized,
∴ 14% return on x = $40,000
0.14 × x = 40,000
x = 40,000 ÷ 0.14 = $285,714.29
Therefore, the original amount invested = $285,714.29
In 2017, Cullumber Corporation incurred research and development costs as follows: Materials and equipment $111000 Personnel 131000 Indirect costs 171000 $413000 These costs relate to a product that will be marketed in 2018. It is estimated that these costs will be recouped by December 31, 2020. The equipment has no alternative future use. What is the amount of research and development costs that should be expensed in 2017
Answer:
The amount of research and development costs that should be expensed in 2017 is $413,000
Explanation:
In order to calculate the amount of research and development costs that should be expensed in 2017 we would have to use the following formula:
amount of research and development costs that should be expensed in 2017= Materials and equipment costs+ Personnel costs+Indirect costs
amount of research and development costs that should be expensed in 2017= $111,000+ $131,000+$171,000
amount of research and development costs that should be expensed in 2017=$413,000
The amount of research and development costs that should be expensed in 2017 is $413,000
The amount of research and development costs that should be expensed in 2020
$ 99000 + $ 119000 + $ 159000
$377,000
Please help ASAP giving BRAINLIEST , Did I get this correct?
Answer:
No, in my opinion I would choose:
A) the properties of free-market system that determine what the outcomes will be.
Explanation:
That would be my answer because the definition of market forces is "the economic factors affecting the price of, demand for, and availability of a commodity."(off the internet) and the answer which fits that definition the most in my opinion is A.
That would be my answer at least.
Hope this helps!
On January 1, 2020, Pina Corporation sold a building that cost $263,240 and that had accumulated depreciation of $101,140 on the date of sale. Pina received as consideration a $253,240 non-interest-bearing note due on January 1, 2023. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2020, was 11%. At what amount should the gain from the sale of the building be reported?
Answer:
Gain from sale = $23,067
Explanation:
the none interest bearing note must be recorded at present value:
present value of the note = face value / (1 + r)ⁿ
face value = $253,240r = 11%n = 3PV = $253,240 / (1 + 11%)³ = $185,167
the note receivable must be recorded at $253,240, but $68,073 will be recorded as interest revenue.
the journal entry for the transaction should be:
January 1, 2020, sale of a building:
Dr Notes receivable 253,240
Dr Accumulated depreciation 101,140
Cr Building 263,240
Cr Interest revenue 68,073
Cr Gain from sale 23,067
Assume that at the end of 2019, Clampett, Inc. (an S corporation) distributes property (fair market value of $40,000, basis of $5,000) to each of its four equal shareholders (aggregate distribution of $160,000). At the time of the distribution, Clampett, Inc., has no corporate earnings and profits and J.D. has a basis of $50,000 in his Clampett, Inc., stock. What is J.D.'s stock basis after the distribution
Answer:
J.D.'s stock basis after the distribution is $85,000
Explanation:
In order to calculate the J.D.'s stock basis after the distribution we would have to use the following formula:
J.D.'s stock basis after the distribution=original basis +increase/decrease in basis from gain from property distribution
original basis=$50,000
basis from gain from property distribution=$40,000-$5,000
basis from gain from property distribution=$35,000
Therefore, J.D.'s stock basis after the distribution=$50,000+$35,000
J.D.'s stock basis after the distribution=$85,000
Suppose that you are the international treasurer of Apple with an extra U.S. $10 million to invest for 9 months. You are considering the purchase of U.S. T-bills that yield 1.50% annual rate. The spot exchange rate is $1.00 = ¥100, and the 9 month forward rate is $1.00 = ¥110. What must the interest rate in Japan be before you are willing to consider investing there for 9 months? A. 14.5515 B. <8.8975 C. >13.4983 D. 12.5050
Answer:
Japan Interest Rate = 0.15%
Explanation:
As per Interest Rate Parity Theory
Spot Rate : 1$ = 100
Forward Rate : 1 $ = 110
r = 9/12
As per interest rate parity, forward rate = Spot rate(1+Interest rate Japan)/(1+Interest rate US)
Forward rate = Spot rate *(1+ iD)/(1+iF)
110 / 100 = (1 + Japan Interest Rate * 9 /12) / 1.01125
1.1 * 1.01125 = 1 + Japan Interest Rate * 0.75
1.112375 = 1 + Japan Interest Rate * 0.75
Japan Interest Rate * 0.75 = 1.112375 - 1
Japan Interest Rate * 0.75 = 0.112375
Japan Interest Rate = 0.112375 / 0.75
Japan Interest Rate = 0.15%
On January 1, 2021, Cobbler Corporation awarded restricted stock units (RSUs) representing 29.7 million of its $1 par common shares to key officers, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. On the grant date, the shares had a market price of $5.2 per share. Required: 1. Determine the total compensation cost pertaining to the RSUs. 2. to 6. Prepare the appropriate journal entries.
Answer and Explanation:
The computation and the journal entries are shown below:
1) Total compensation cost
= Common shares × market price per share
= 29,700,000 × $5.2
= $154,440,000
2)The journal entries are shown below:
On Jan 1 2021
No journal entry is required for awarded the restricted stock units
On Dec 12 2021
Compensation expense (154,440,000 ÷ 3 years) $5,1480,000
Paid-in capital- restricted stock $51,480,000
(Being the compensation expense is recorded)
For recording this we debited the compensation expense as it increased the expenses and credited the paid in capital as it increased the equity
On Dec 31 2022
Compensation expense (154,440,000 ÷ 3 years) $5,1480,000
Paid-in capital- restricted stock $51,480,000
(Being the compensation expense is recorded)
For recording this we debited the compensation expense as it increased the expenses and credited the paid in capital as it increased the equity
On Dec 31 2023
Compensation expense (154,440,000 ÷ 3 years) $5,1480,000
Paid-in capital- restricted stock $51,480,000
(Being the compensation expense is recorded)
For recording this we debited the compensation expense as it increased the expenses and credited the paid in capital as it increased the equity
On Dec 31 2023
Paid-in capital - restricted stock $154,440,000
Common stock (29.7 million × $1) $29,700,000
Paid-in capital- excess of par $124,740,000 (Balancing figure)
(Being the lifting of restrictions and issuance of the shares is recorded)
For recording this we debited the paid in capital as it decreased the equity and credited the paid in capital and common stock as it increased the equity
he income statement of Sarasota Company is shown below. SARASOTA COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,890,000 Cost of goods sold Beginning inventory $1,910,000 Purchases 4,410,000 Goods available for sale 6,320,000 Ending inventory 1,620,000 Cost of goods sold 4,700,000 Gross profit 2,190,000 Operating expenses Selling expenses 460,000 Administrative expenses 700,000 1,160,000 Net income $1,030,000 Additional information: 1. Accounts receivable decreased $350,000 during the year. 2. Prepaid expenses increased $160,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $300,000 during the year. 4. Accrued expenses payable decreased $90,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method.
Answer:
Cash flow from operating activities
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees ($6,460,000)
Net Cash from Operating Activities $780,000
Explanation:
Prepare a statement of cash flows` operating activities section as follows :
Cash flow from operating activities
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees ($6,460,000)
Net Cash from Operating Activities $780,000
Cash Receipts from Customers Calculations
Sales revenue $6,890,000
Add Decrease in Accounts Receivables $350,000
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees Calculations
Cost of goods sold $4,700,000
Add
Selling expenses $460,000
Administrative expenses $700,000
Less depreciation expense of $50,000
Decrease in Accounts Payable $300,000
Decrease in Accrued Expenses $90,000
Increase in Prepaid expenses $160,000
Cash Paid to Suppliers and Employees $6,460,000
Dextra Computing sells merchandise for $15,000 cash on September 30 (cost of merchandise is $12,000). The sales tax law requires Dextra to collect 5% sales tax on every dollar of merchandise sold. Record the entry for the $15,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 5% tax on this sale to the state government on October 15. View transaction list Journal entry worksheet Record the cost of September 30th sales. Note: Enter debits before credits Date General Journal Debit Credit Sep 30 Record entry Clear entry View general journal
Answer and Explanation:
The journal entries are shown below:
1. On Sep 30
Cash $15750
To Sales $15,000
To Sales taxes payable ($15000 ×5%) $750
(Being the cash receipts is recorded)
For recording this we debited the cash as it increased the assets and credited the sales and sales tax payable as it increased the revenue and liabilities
2 On Sep 30
Cost of goods sold $12,000
To Merchandise inventory $12,000
(Being the cost of goods sold is recorded)
For recording this we debited the cost of goods sold as it increased the expenses and credited the merchandise inventory as it reduced the assets
3 On Oct 15
Sales taxes payable $750
To Cash $750
(Being cash paid is recorded)
For recording this we debited the sales tax payable as it reduced the liabilities and credited the cash as it decreased the assets
It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______, and discontinuation of shirt production is considered their __________. opportunity cost; production cost production cost; resource cost production cost; opportunity cost resource cost; production cost
Answer:
production cost; opportunity cost
Explanation:
The $15 is the production cost and the shirt is the opportunity cost
What is opportunity cost?Simply put, opportunity cost is the alternative forgone, it is the benefit forfeited for another.
In this case, the shirt was forfeited for the production of jeans, despite the possibility of still making a profit in shirt production.
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Now suppose country A imposes a tax on A's production of to curb emissions. Country B, however, is not taxed. A's cost function is now , while B's cost function is . World demand is . The amount of greenhouse gas emissions per unit is still , such that total world emissions are given by . What are total world emissions after country A enacts a carbon tax?
Answer:
286.5
Explanation:
P=99-qa-qb
MRa=99-2qb-qb
MCa=48
99-2qa-qb=48
Qa=25.5-0.5qb{ best response function of firm A)
MRb=99-qa-2qb
MCb=4
99-qa-2qb=4
Qb=47.5-0.5qa{ best response function of form b}
Qb=47.5-0.5(25.5-0.5qb)
Qb=34.75/0.75=46.33
Qa=25.5-0.5*46.33=2.33
Total world output=46.33+2.33=48.66
Total world emission=0.5*48.66=24.33
p=1146-qa-qb-qc
MRa=1146-2qa-qb-qc
MCa=0
1146-2qa-qb-qc=0
Qa=573-0.5(qb+qc) best response function of firm a)
By symmetry,
Qb=573-0.5(qa+qc)
Qc=573-0.5(qa+qb)
Qb+qc=1146-qa-0.5(qb+qc)
Qb+qc=764-qa/1.5
Qa=573-0.5(764-qa/1.5)=191+qa/3
Qa=191*3/2=286.5
Qa=Qb=Qc=286.5
Total output=3*286.5=859.5( cournot equilibrium market output)
Cartel output=573
Lower QUANTITY in cartel equilibrium compare to cournot equilibrium
=859.5-573
=286.5
Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $400,000 and has $175,000 of accumulated depreciation to date, with a new machine that has a purchase price of $550,000. The old machine could be sold for $250,000. The annual variable production costs associated with the old machine are estimated to be $72,500 per year for eight years. The annual variable production costs for the new machine are estimated to be $24,000 per year for eight years. a.1 Prepare a differential analysis dated May 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.
Answer:
Decision : It would be better to Replace Old Machine
Explanation:
Check the file attached for proper arrangement and explanation of the solution. Thank you.
Matt and Joel are equal partners in the MJ Partnership. For the current year ended December 31, the partnership has book income of $80,000, which includes the following deductions: (1) guaranteed payments (salaries) to partners: Matt, $35,000; and Joel, $25,000; and (2) charitable contributions, $6,000. The book income amount does not include any sales of capital assets or Sec. 1231 assets or any taxminusexempt income. Based on the above information, what amount should be reported as ordinary income on the partnership return?
Answer:
$86,000
Explanation:
A partnership is a pass through entity that is not taxed directly, but instead its partners are taxed. Even the partners' salaries are recorded as drawings, not salary expense.
The partnership's total ordinary income = book income + any donations or contributions to charities = $80,000 + $6,000 = $86,000
Hancock Medical Supply Co., earned $90,500 of revenue on account during Year 1, its first year of operation. During Year 1, Hancock collected $71,400 of cash from its receivables accounts. The company did not write-off any uncollectible accounts. It estimates that it will be unable to collect 1% of revenue on account. What is the net realizable value of receivables that will be reported on the balance sheet at December 31, Year 1
Answer:
$18,195
Explanation:
The computation of the net realizable value is shown below:
As we know that
Net Realizable Value of Receivables = Ending Accounts Receivable - Estimated Uncollectibles amount
where,
Ending balance of Accounts Receivable is
= Revenue on Account - Accounts collected
= $90,500 - $71,400
= $191,00
And,
Estimated Uncollectibles i.e Bad debt Expense is
= Revenue on Account × given percentage
= $90,500 × 1%
= $905
So, the net realizable value is
= $19,100 - $905
= $18,195
We simply applied the above formula
Built-Tight is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for product costs for the quarter follow: JulyAugustSeptemberBudgeted sales$64,000 $80,000 $48,000 Budgeted cash payments for Direct materials 16,160 13,440 13,760 Direct labor 4,040 3,360 3,440 Factory overhead 20,200 16,800 17,200 Sales are 20% cash and 80% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $15,000 in cash; $45,000 in accounts receivable; and a $5,000 balance in loans payable. A minimum cash balance of $15,000 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($4,000 per month), and rent ($6,500 per month).rev: 03_17_2020_QC_CS-2046792. Prepare a cash budget for each of the months of July, August, and September.
The Preparation of cash budget for each of the months of July, August, and September is shown below:
Preparation of the cash budget:Cash budget
For the month of July, August and September
July August September
Beginning cash balance $15,000 $15,000 $25,505
Cash receipts from
customer (Working note) $57,800 $67,200 $73,600
Total cash available $72,800 $82,200 $99,105
Less:
Cash disbursements
Direct Materials $16,160 $13,440 $13,760
Sales commission $6,400 $8,000 $4,800
(10% of sales)
Office salaries $4,000 $4,000 $4,000
Rent $6,500 $6,500 $6,500
Direct Labor $4,040 $3,360 $3,440
Overhead Cost $20,200 $16,800 $17,200
Interest on bank loan
For July (5,000 × 1%) $50
For August $46
($5,000 - $4,550) × 1%))
For September $0
Preliminary Cash
balance $15,450 $30,055 $49,405
Repayment of loan to
Bank $450 $4,550
($5,000 - $450)
Ending cash balance $15,000 $25,505 $49,405
Working Note
The ending balance of the particular month should be treated as a opening balance of next month
August ending balance will be forwarded in Sept as a opening balance.
Working Note
July August September
Sales $64,000 $80,000 $48,000
Less:
Ending accounts
receivable
(80% of sales) $51,200 $64,000 $38,400
Cash sales $12,800 $16,000 $9,600
Last month cash
collection $45,000 $51,200 $64,000
Cash receipts from
customer $57,800 $67,200 $73,600
Therefore we added the cash receipts as it increase the cash balance and deduct all cash payment as it decrease the cash balance
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The I-75 Carpet Discount Store has an annual demand of 10,000 yards of super shag carpet. The annual carrying cost for a yard of carpet is $0.75 and the ordering cost is $150. The carpet manufacturer normally charges the store $8 per yard for the carpet.; however, the manufacturer has offered a discount price of $6.50 per yard if the store will order 5,000 yards. How much should the store order, and what will be the total inventory cost for that order quantity?
Answer:
5 units and $2,175
Explanation:
a. The computation of the economic order quantity is shown below:
= [tex]\sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}[/tex]
=[tex]\sqrt{\frac{2\times \text{10,000}\times \text{\$150}}{\text{\$0.75}}[/tex]
= 2,000 units
The total cost of ordering cost and carrying cost equals to
= Annual ordering cost + Annual carrying cost
= Purchase cost + Annual demand ÷ Economic order quantity × ordering cost per order + Economic order quantity ÷ 2 × carrying cost per unit
= 10,000 × $8 + 10,000 ÷ 2,000 × $150 + 2,000 ÷ 2 × $0.75
= 80,000 + $750 + $750
= $81,500
Now in case of ordering 5,000 yields at discount price of $6.50 the total cost is
= Purchase cost + Annual demand ÷ Economic order quantity × ordering cost per order + Economic order quantity ÷ 2 × carrying cost per unit
= 10,000 × $6.50 + 10,000 ÷ 5,000 × $150 + 5,000 ÷ 2 × $0.75
= $65,000 + 300 + $1,875
= $67,175
Therefore there will be 5 units should store at a time and cost of inventory is 300 + $1,875 = $2,175
