Charlotte owns a custom publishing business. She uses 500 square feet of her home (2,000 square feet) as an office and for storage. All her business has come from telemarketing (telephone sales), direct mailings, or referrals. In her first year of operation, she has revenues of $37,000, cost of goods sold of $25,900, and other business expenses of $8,100. The total expenses related to her home are:
Answers
Answer:
As calculated below (attachment)She must deduct the expenses related to interest and taxes first, then deduct her other business expenses, then at last the depreciation.She may carry forward the $1,105 ($145 limit- $1,250 current depreciation) which she is not ble to use in the current year to a future year when her business has sufficient income to absorb the deduction.
Explanation:
Related Questions
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:
April May June
Manufacturing costs* $157,400 $193,400 $200,500
Insurance expense** 1,180 1,180 1,180
Depreciation expense 2,140 2,140 2,140
Property tax expense*** 450 450 450
*Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.
**Insurance expense is $1,180 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
***Property tax is paid once a year in November.
The cash payments expected for Finch Company in the month of May are
a.$223,750
b.$184,400
c.$145,050
d.$39,350
Answers
Answer:
b.$184,400
Explanation:
Finch Company
April May June
Manufacturing costs* $157,400 $193,400 $200,500
Payment of April 1/4 $ 39350
Payment of May 3/4 $145050
Insurance expense,Depreciation expense , Property tax expense,None of these will be paid in the month of May .
The insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
Depreciation is not paid . It is deducted from the value of the asset.
Property tax is paid once a year in November.
Total Payments in May are $ 39350 +$145050= $184,400
Choice B is the correct answer.
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.
Answers
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
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
Answers
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
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.
Answers
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.
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.
Answers
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
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.
Answers
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
Farah is an engineer with an idea for a flexible solar energy material that would have a wide range of military and civilian applications. She estimates that she will need approximately $300,000 to develop a prototype. Friends and family could provide about $75,000. She contacts Natalie, an angel investor, for this purpose. In this case, which of the following is likely to be true?a. Farah is unlikely to expect more than just financial support from Natalie.b. Farah is likely to receive a report from Natalie that is more thorough than those by formal venture capitalists.c. Natalie is likely to be a wealthy individual with expertise in the field.d. Natalie is unlikely to be a private investor.
Answers
Answer: Natalie is likely to be a wealthy individual with expertise in the field (C)
Explanation:
Based on the information gotten from the question, Farah is an engineer who has an idea for a flexible solar energy material which would have a wide range of civilian and military applications and she needs about $300,000 but has only gotten$75,000.
Farah then gets in touch with Natalie who is an angel investor. An angel investor is a person who gives capital for a business start-up, in exchange for ownership equity or convertible debt.
As an angel investor, to analyze good prospects of the investments, they usually have some expertise in the business field where they want to invest.
Your firm is a U.K.-based importer of bicycles. You have placed an order with an italian firm for €1,000,000 worth of bicycles. Payment (in euro) is due in 12 months.
1. Use a money market hedge to redenominate this one-year receivable into a pound-denominated receivable with a one-year maturity.
Contract size Country U.S. $ Equiv. Currency per U.S. $
£ 10,000 Britain (pound) $ 1.9600 £ 0.5102 interest APR rates
12 months forward $ 2.0000 £ 0.5000
€ 10,000 Euro $ 1.5600 € 0.6410 i$ = 1 %
12 months forward $ 1.6000 € 0.6250 i€ = 2 %
SFr. 10,000 Swiss franc $ 0.9200 SFr. 1.0870 i£ = 3 %
12 months forward $ 1.0000 SFr. 1.0000 iSFr. = 4 %
The following were computed without rounding. Select the answer closest to yours.
a. €1,244,212.10
b. €1,225,490.20
c. €1,219,815.78
d. €1,250,000
Answers
Answer:
A. €1,244,212.10
Explanation:
Contract Size Country U.S. $ equiv. Currency per U.S. $
£ 10,000 Britain (pound) $ 1.9600 £ 0.5102 interest APR
12 months forward $ 2.0000 £ 0.5000 rates
€ 10,000 Euro $ 1.5600 € 0.6410 i$ = 1 %
12 months forward $ 1.6000 € 0.6250 i€ = 2 %
SFr. 10,000 Swiss franc $ 0.9200 SFr. 1.0870 i£ = 3 %
12 months forward $ 1.0000 SFr. 1.0000 iSFr. = 4 %
(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
Answers
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
The capital accounts of Heidi and Moss have balances of $90,000 and $65,000, respectively, on January 1, the beginning of the current fiscal year. On April 10, Heidi invested an additional $8,000. During the year, Heidi and Moss withdrew $40,000 and $32,000, respectively. Revenues were $540,000 and expenses were $420,000 for the year. The articles of partnership make no reference to the division of net income. Required: 1. Prepare a statement of partners' equity for the partnership of Heidi and Moss. If an amount box does not require an entry, leave it blank. Enter all amounts as positive numbers. Heidi and Moss Statement of Partners' Equity For the Year Ended December 31 Heidi Moss Total Capital, January 1 $ 90,000 $ 65,000 $ 155,000 Net income for the year 60,000 60,000 120,000 $ $ $ $ $ $ Withdrawals during the year Capital, December 31 $ 118,000 $ 93,000 $ 211,000 2. Journalize the entries to: Close the revenue and expenses account. Close the drawing accounts. If an amount box does not require an entry, leave it blank. a. Revenues 540,000 Heidi, Capital 540,000 Moss, Capital 420,000 Heidi, Capital 40,000 Moss, Capital Moss, Drawing b. Heidi, Capital 40,000 Moss, Capital 32,000 Heidi, Drawing 40,000 Moss, Drawing 32,000
Answers
Answer:
The statement and journal are attached
Explanation:
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.
Answers
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 data from the just completed year are taken from the accounting records of Mason Company: Sales $ 656,000 Direct labor cost $ 89,000 Raw material purchases $ 137,000 Selling expenses $ 106,000 Administrative expenses $ 48,000 Manufacturing overhead applied to work in process $ 206,000 Actual manufacturing overhead costs $ 226,000 Inventories Beginning Ending Raw materials $ 8,200 $ 11,000 Work in process $ 5,600 $ 20,500 Finished goods $ 80,000 $ 25,800 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. 2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. 3. Prepare an income statement.
Answers
Answer:
Cost of Goods Manufactured $ 434,300
Adjusted Cost of Goods Sold $ 488,500
Operating Income $ 13,500
Explanation:
We do the following additions and subtractions to find the cost of goods manufactured.
Mason Company:
Schedule of Cost of Goods Manufactured
Inventories Beginning Raw materials $ 8,200
Add Raw material purchases $ 137,000
Less Inventories Ending Raw materials $ 11,000
Direct Materials Used $134,200
Add Direct labor cost $ 89,000
Add Actual manufacturing overhead costs $ 226,000
Total Manufacturing Costs $449,200
Add Inventories Beginning Work in process $ 5,600
Cost of Goods Available for Manufacture 454,800
Inventories Ending Work in process $ 20,500
Cost of Goods Manufactured $ 434,300
The cost of goods manufactured is again added and subtracted with finished goods inventories to prepare the schedule of cost of goods sold.
Mason Company:
Schedule of Cost of Goods Sold
Inventories Beginning Raw materials $ 8,200
Add Raw material purchases $ 137,000
Less Inventories Ending Raw materials $ 11,000
Direct Materials Used $134,200
Add Direct labor cost $ 89,000
Add Applied manufacturing overhead costs $ 206,000
Total Manufacturing Costs $429,200
Add Inventories Beginning Work in process $ 5,600
Cost of Goods Available for Manufacture 434,800
Inventories Ending Work in process $ 20,500
Cost of Goods Manufactured $ 414,300
Add Inventories Beginning Finished goods $ 80,000
Cost of Goods Available for Sale $ 494,300
Less Inventories Ending Finished goods $ 25,800
Un adjusted Cost of Good Sold $ 468,500
Add Under-applied Manufacturing Overhead 20,000
Adjusted Cost of Goods Sold $ 488,500
If we add the applied manufacturing overhead then the cost of goods sold is adjusted by adding the amount underapplied.
Mason Company:
Income Statement
Sales $ 656,000
Less Cost of Goods Sold $ 488,500 (as calculated above)
Gross Profit $ 167,500
Less Selling expenses $ 106,000
Less Administrative expenses $ 48,000
Operating Income $ 13,500
The standards for product V28 call for 8.2 pounds of a raw material that costs $19.00 per pound. Last month, 2,100 pounds of the raw material were purchased for $39,480. The actual output of the month was 230 units of product V28. A total of 2,000 pounds of the raw material were used to produce this output.The direct materials purchases variance is computed when the materials are purchased.Required:a. What is the materials price variance for the month
Answers
Answer:
$420 favorable
Explanation:
The computation of the material price variance is shown below:
Material price variance = Actual quantity × (Actual price - standard price)
= 2,100 pounds × ($39,480 ÷ 2,100 pounds - $19)
= 2,100 pounds × ($18.8 - $19)
= 2,100 pounds × $0.20
= $420 favorable
Since the standard price is greater than the actual price so it would lead to favorable variance
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
Answers
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.
Learn more about opportunity costs here:
https://brainly.com/question/481029
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Please help ASAP giving BRAINLIEST , Did I get this correct?
Answers
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!
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
Answers
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.
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.
Answers
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.
After graduating from college with a bachelor's degree in business administration,Joe sent an email,with his resume attached,to the Media Blitz Company (MBC).In his email,he was only inquiring about an entry level position at the firm.When he found out that MBC had hired two of his classmates who were not of his race,Joe filed a discrimination complaint against MBC under Title VII of the Civil Rights Act.Which of the following is true of this scenario?
A) Joe has a good case against MBC because his email was clear that he was interested in the entry level position at the firm, and they did not even consider him.
B) Joe does not have a valid case because employment laws do not permit people to apply for a job via the Internet or related electronic data technologies.
C) Joe does not have a valid case because sending an email inquiry about a job does not qualify the sender as an applicant.
D) Joe would have had a valid case against MBC had he submitted his resume via a third-party job board.
Answers
Answer:
C) Joe does not have a valid case because sending an email inquiry about a job does not qualify the sender as an applicant.
Explanation:
Joe after graduating from the college with a degree in business administration, sent an enquiry email with his resume attached to the Media Blitz Company (MBC).
Joe would most likely not prevail in his case because sending an email inquiry about a job does not qualify the sender as an applicant.
As a job seeker, you're expected to send an application for a job position advertised with your resume attached. This would serve as an evidence of interest or desire to work with the organization.
In this scenario, Joe wasn't being discriminated at by the Media Blitz Company (MBC).
Hence, Joe's case against MBC on the ground of discrimination under Title VII of the Civil Rights Act becomes an invalid one.
Which of the following organizations is likely to use the multiple-factor index method to estimate the market potential? a firm that manufactures auto parts a firm that provides facility management services to large offices a company that provides Web site development services for small businesses a company that manufactures diagnostic machines for hospitals a firm that manufactures fashionable clothes for teenagers
Answers
Answer:
The organization that is likely to use the multiple-factor index method to estimate the market potential is a firm that manufactures fashionable clothes for teenagers.
Explanation:
The organization that is likely to use the multiple-factor index method to estimate the market potential is a firm that manufactures fashionable clothes for teenagers because it is a consumer based organization.
Consumer marketers primarily use multiple-factor index method to estimate the market potential.
The information can be collated by a survey, questionnaire, a dedicated database or even through social media advertising target portal.
The rest of the options provided caters for businesses. for example, a company that provides Web site development services for small businesses. Business to Business marketers prefer to use market build up method.
What is the effect of just-in-time inventory strategies? A. They increase business efficiency by reducing inventory costs. B. They outsource manufacturing jobs to underdeveloped nations. C. They eliminate the need for tasks such as welding and assembling. D. They expand businesses with the use of worldwide telecommunication.
Answers
The answer is A
Explanation:
Management in Life Annabelle and Bettina share a dorm room. They like each other, but they disagree about how often to clean. Eventually, Annabelle says to Bettina, "I'm afraid that if we clean the room only once a month, we're going to get bugs. Bettina replies, "Maybe, but this physics course is killing me, so I don't have time to clean more often than that." Annabelle and Bettina are engaged in conflict, based on Which of the following outcomes are likely in this situation?
A) Annabelle and Bettina will learn from each other.
B) The roommates will come up with a creative solution.
C) The roommates will stop speaking to each other.
D) Annabelle and Bettina will be angry at each other.
Answers
Answer:
A). Annabelle and Bettina will learn from each other .
B). The roommates will come up with a creative solution."
Explanation:
Anabelle and Bettina are involved in a 'cognitive' conflict as it occurs when they both experience a mental as well as emotional discomfort when they are confronted with the information that challenges their existing ideas or beliefs. The most likely outcomes of this situation would be that they 'both would learn from each other' by accepting each other's point of view and adapting with the new information that would help them 'reach a creative solution' to resolve their conflict over the cleaning of their room. Therefore, options A and B are the correct answers.
Last year Kruse Corp had $380,000 of assets (which is equal to its total invested capital), $403,000 of sales, $28,250 of net income, and a debt-to-total-capital ratio of 39%. The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets and total invested capital to $252,500. The firm finances using only debt and common equity. Sales, costs, and net income would not be affected, and the firm would maintain the same capital structure (but with less total debt). By how much would the reduction in assets improve the ROE (percentage point change)
Answers
Answer:
=6.154%
Explanation:
Original New
Assets $380,000 $252,500
Sales $403,000 $403,000
Net income $28,250 $28,250
Debt ratio 39.00% 39.00%
Debt = Assets × debt % = $148,200 $98,475
Equity = Assets − Debt = $231,800 $154,025
ROE = NI/Equity = 12.187% 18.341%
Increase in ROE = 18.341%-12.187%
= 6.154%
Therefore, the reduction in assets improve the ROE (percentage point change) is 6.154%
i. Lawyers are changing their pay structures. It used to be that they would bill hourly (top dollar for top lawyers, less experienced helpers had cheaper rates). Now they’re beginning to price like consultants—per project. Thus they must begin assessing the value-added to the client firm of the legal expertise and assistance. What advice would you give a law firm to proceed fairly and profitably?
Answers
Answer:
Prominent conjoint analysis is said to be the only thing that I would recommend to the law firming order in order to ensure that the order has proceed fairly and as well as profitably .
Due to the fact that this method of payment is said to offers different prices for different projects to both the top lawyers and the less experienced help.
Explanation:
The mode of payment that lawyers have made had turned to be the best and most interesting mode of payment structures, because before reading the above article I was not actually aware of the payment strategy to be in paying most individuals due to the fact that the most prominent conjoint analysis is said to be the only thing that I would recommend to the law firming order in order to ensure that the order has proceed fairly and as well as profitably .
Due to the fact that this method of payment is said to offers different prices for different projects to both the top lawyers and the less experienced help.
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.
Answers
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.
Present Value of Bonds Payable; Premium Moss Co. issued $100,000 of four-year, 12% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Note: Round final answer to the nearest dollar. $ Feedback Remember, the selling price of a bond is the sum of the present values of: the face amount of the bonds due at the maturity date and the periodic interest to be paid on the bonds. The market rate of interest is used to compute the present value of both the face amount and the periodic interest.
Answers
Answer:
The present of value of the bonds payable is $ 109,893.83
Explanation:
The present value of the bonds payable is the present of semiannual coupon payments as well as the repayment of face value in year 4.
coupon payments =$100,000*12%*6/12=$6,000
Face value receivable in year 4 is $100,000
Find attached spreadsheet detailing the computation of present value
"Vaughn Corporation is considering the issue of commercial paper and would like to know the yield it should offer on its commercial paper. The corporation believes that a 0.2 percent credit risk premium, a 0.1 percent liquidity premium, and a 0.3 percent tax adjustment are necessary to sell its commercial paper to investors. Furthermore, annualized T-bill rates are 7 percent. Based on this information, Vaughn should offer ____ percent on its commercial paper."
Answers
Answer:
7.6 percent
Explanation:
Vaughn should offer 7.6 percent on its commercial paper.
This is calculated by adding the 0.2 credit risk premium to 0.1 percent liquidity premium + 0.3 percent tax adjustment + 7 percent annualized t bills rate.
= 0.1 + 0.2 + 0.3 + 7
= 7.6
Based on this Vaughn would offer 7.6 percent on its commercial paper.
A company is selling bonds with a face value of $1,000 to raise money for a plant expansion. The bonds pay a coupon rate of 4% per year on a semiannual basis and mature in 5 years. Net of all fees, the company receives $760 from the sale of each bond. What is the company's cost of capital on an annual basis
Answers
Answer:
10.26%
Explanation:
According to the scenario, computation of the given data are as follow:-
Net sales = $760
Face value of bonds = $1,000
Coupon rate = 4% = $1,000 × 4 ÷ 100
= 40
N = Number of Years = 5 annually = semiannually = 5 × 2
= 10 years
We assume, interest rate = 10% = 0.10
P = Coupon Rate ÷ 2 × (PVIFA,Interest Rate ÷ 2%,No. of Years) + Future Value(PVIF,Interest Rate ÷ 2%, No. of Years)
=$40 ÷ 2 × [1 - 1 ÷ (1 + Interest Rate)N] ÷ Interest Rate + Future Value[1 ÷ (1 + Interest Rate) × N]
=$40 ÷ 2 × [1-1 ÷ (1 + 0.10 ÷ 2)^10] ÷ 0.05 + $1,000 × [1 ÷ (1 + 0.10 ÷ 2)^10]
=$20 × [1 - 1 ÷ (1.05)^10] ÷ 0.05 + $1,000 × [1 ÷ (1.05)^10]
=$20 × [1 -1 ÷ 1.6288946] ÷ 0.05 + $1,000 × [1 ÷ 1.6288946]
= 420 × 7.72173 + $1,000 × 0.613913
= $154.4346 + $613.913
= $768.3476
= $768.35
But the given value is 760, so we assume interest rate = 11%
=$40 ÷ 2 × [1-1 ÷ (1 + Interest Rate)^N] ÷ Interest Rate + Future Value[1 ÷ (1 + Interest Rate)^N]
= $40 ÷ 2 × [1 - 1 ÷(1 + 0.11 ÷ 2)^10] ÷ 0.055 + $1,000 × [1 ÷ (1 + 0.11 ÷ 2)^10]
= $20 × [1 - 1 ÷ (1.055)^10] ÷ 0.055 + $1,000 × [1 ÷ (1.055)^10]
= $20 × [1 - 1 ÷ 1.70814446] ÷ 0.055 + $1000 × [1 ÷ 1.70814446]
= $20 × 7.5376255 + $1,000 × 0.5854306
= $150.75 + $585.43
= $736.18
At the Interest rate of 10% the price is more than $760 and at the Interest rate of 1% the price is less than $760. So the required rate lies in between 10% to 11%.
So required rate
Yield To Maturity = Lower Interest Rate + (Difference Between Interest Rate) × Higher Price - Received Price ÷ Higher Price - Lower Price
= 1 0+( 11 - 10) × $768.35 - $760 ÷ $768.35 - $736.18
= 10 + 1 × $8.35 ÷ $32.17
= 10 + 0.26
= 10.26%
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:
Answers
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
Problem 7-18 Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, LO7-2]Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials$20Direct labor$12Variable manufacturing overhead$7Variable selling and administrative$3Fixed costs per year: Fixed manufacturing overhead$110,000Fixed selling and administrative expenses$50,000 During its first year of operations, Haas produced 40,000 units and sold 40,000 units. During its second year of operations, it produced 55,000 units and sold 30,000 units. In its third year, Haas produced 20,000 units and sold 45,000 units. The selling price of the company’s product is $46 per unit. Required:1. Compute the company’s break-even point in unit sales.2. Assume the company uses variable costing:a. Compute the unit product cost for Year 1, Year 2, and Year 3.b. Prepare an income statement for Year 1, Year 2, and Year 3.3. Assume the company uses absorption costing:a. Compute the unit product cost for Year 1, Year 2, and Year 3.b. Prepare an income statement for Year 1, Year 2, and Year 3.
Answers
Answer and Explanation:
As per the data given in the question,
a)
For computation of contribution margin per unit first we need to find out the contribution margin per unit and fixed expenses which is shown below:-
Contribution margin per unit = Selling price per unit - Variable cost per unit
= $46 - ($20 + $12 + $7 + $3)
= $46 - $42
= $4
Fixed expenses = Fixed manufacturing overhead + Fixed selling and administrative expenses
= $110,000 + $50,000
= $160,000
Break-even units = Fixed expenses ÷ Contribution margin per unit
= $160,000 ÷ 4
= 40,000 units
2. a The Computation of unit product cost is shown below:-
Particulars Year 1 Year 2 Year 3
Unit product cost :
Direct material $20 $20 $20
Direct labor $12 $12 $12
Variable manufacturing
overhead $7 $7 $7
Unit product cost $39 $39 $39
b. The preparation of Income statement is shown below:-
Income statement
Haas Company
Particulars Per unit Year 1 Year 2 Year 3
Sales unit 40,000 30,000 45,000
Sales $46 $1,840,000 $1,380,000 $2,070,000
Less:
Variable cost :
Variable manufacturing
cost $39 $1,560,000 $1,170,000 $1,755,000
Variable selling and
administrative cost $3 $120,000 $90,000 $135,000
Total variable cost $42 $1,680,000 $1,260,000 $1,890,000
Contribution margin $4 $160,000 $120,000 $180,000
Fixed expenses :
Fixed Manufacturing
overhead $110,000 $110,000 $110,000
Fixed selling and
administrative expense $50,000 $50,000 $50,000
Net Operating Income $0 -$40,000 $20,000
3. a. The computation of unit product cost for Year 1, Year 2, and Year 3 is shown below:-
Particulars Year 1 Year 2 Year 3
Produced units 40,000 55,000 20,000
Unit Product Cost:
Direct material $20 $20 $20
Direct labor $12 $12 $12
Variable manufacturing
overhead $7 $7 $7
Fixed manufacturing
overhead $2.75 $2 $5.5
($110,000 ÷ Number of unit produced)
Total cost of produced unit $41.75 $41 $44.5
3. b The Preparation of income statement for Year 1, Year 2, and Year 3 is attached in the spreadsheet.
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".
Answers
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
