Answer:
1. Amortization Expense; Patents.
2. Copyright.
Explanation:
Patent can be defined as the exclusive or sole right granted to an inventor by a sovereign authority such as a government, which enables him or her to manufacture, use, or sell an invention for a specific period of time.
Generally, patents are used on innovation for products that are manufactured through the application of various technologies.
Basically, the three (3) main ways to protect an intellectual property is to employ the use of
I. Trademarks.
II. Patents.
III. Copyright.
Copyright law can be defined as a set of formal rules granted by a government to protect an intellectual property by giving the owner an exclusive right to use while preventing any unauthorized access, use or duplication by others.
Filling the missing words or texts in the question, we have;
1. The entry to record the amortization of a patent would include a debit to amortization expense and a credit to patents. Amortization in financial accounting is used to periodically lower the book value of a loan principal or an intangible asset such as intellectual property over a set period of time.
2. Copyright: the exclusive right to publish and sell a literary, artistic, or musical composition is granted by a patent.
The stockholders’ equity section of Whisper Co. at December 31, 2018 is as follows. Common stock—$15 par value, 100,000 shares authorized, 45,000 shares issued and outstanding $ 675,000 Paid-in capital in excess of par value, common stock 70,000 Retained earnings 430,000 Total stockholders' equity $ 1,175,000 During 2019, the company has the transactions including the following.
Jan. 2 Purchased 6,000 shares of its own stock at $20 cash per share.
Jan. 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record.
Feb. 28 Paid the dividend declared on January 5.
July 6 Sold 2,250 of its treasury shares at $24 cash per share.
Aug. 22 Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Sept 5 Sold 3,750 of its treasury shares at $17 cash per share.
Oct. 28 Paid the dividend declared on September 5.
Dec. 31 Closed the $368,000 debit balance (from net loss) in the Income Summary account to Retained Earnings.
Required:
1. Prepare journal entries to record each of these transactions.
2. Prepare a statement of retained earnings for the year ended December 31, 2019.
3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019.
Answer:
Whisper Co.
1. Journal Entries to record transactions:
Jan. 2 Debit Treasury stock $90,000
Debit Paid-in Capital in Excess $30,000
Credit Cash $120,000
To record the purchase of 6,000 shares of its own stock at $20 cash per share.
Jan. 5 Debit Cash Dividend $78,000
Credit Dividend Payable $78,000
To record the declaration of a $2 per share cash dividend payable on 39,000 (45,000 - 6,000) shares
Feb. 28 Debit Dividend Payable $78,000
Credit Cash $78,000
To record the payment of the dividends.
July 6 Debit Cash $54,000
Credit Treasury stock $33,750
Credit Paid-in Capital in Excess $20,250
To record the resale of 2,250 of its treasury shares at $24 cash per share.
Aug. 22 Debit Cash Dividend $90,000
Credit Dividend Payable $90,000
To record the declaration of a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record (45,000 shares).
Sept 5 Debit Cash $63,750
Credit Treasury stock $56,250
Credit Paid-in Capital in Excess $7,500
To record the resale of 3,750 of its treasury shares at $17 cash per share.
Oct. 28 Debit Dividend Payable $90,000
Credit Cash $90,000
To record the payment of the dividends.
Dec. 31 Debit Retained earnings $368,000
Credit Income Summary $368,000
To close the net loss to the retained earnings.
2. Statement of Retained Earnings for the year ended December 31, 2019
Retained earnings, December 31, 2018 $430,000
Net loss -368,000
Dividends paid -168,000
Retained earnings, December 31, 2019 ($106,000)
3. Stockholders' Equity, December 31, 2019:
Common stock—$15 par value, 100,000 shares authorized,
45,000 shares issued and outstanding $ 675,000
Paid-in capital in excess of par value, common stock 67,750
Retained earnings ($106,000)
Total stockholders' equity $ 636,750
Explanation:
a) Data and Calculations:
Stockholders' Equity (December 31, 2018)
Common stock—$15 par value, 100,000 shares authorized,
45,000 shares issued and outstanding $ 675,000
Paid-in capital in excess of par value, common stock 70,000-30,000+20,250+7,500 = 67,750
Retained earnings 430,000
Total stockholders' equity $ 1,175,000
Transaction Analysis:
Jan. 2 Treasury stock $90,000 Paid-in Capital in Excess $30,000 Cash $120,000 purchase of 6,000 shares of its own stock at $20 cash per share.
Jan. 5 Cash Dividend $78,000 Dividend Payable $78,000
a $2 per share cash dividend payable on 39,000 (45,000 - 6,000) shares
Feb. 28 Dividend Payable $78,000 Cash $78,000
July 6 Cash $54,000 Treasury stock $33,750 Paid-in Capital in Excess $20,250 2,250 of its treasury shares at $24 cash per share.
Aug. 22 Cash Dividend $90,000 Dividend Payable $90,000
$2 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Sept 5 Cash $63,750 Treasury stock $56,250 Paid-in Capital in Excess $7,500 3,750 of its treasury shares at $17 cash per share.
Oct. 28 Dividend Payable $90,000 Cash $90,000
Dec. 31 Retained earnings $368,000 Income Summary $368,000
Dec. 31 Retained earnings $168,000 Cash Dividend $168,000
Review each of the following independent sets of conditions. For each condition, calculate the (1) sample rate of deviation, and use the AICPA sample evaluation tables to identify the (2) upper limit rate of deviation, and (3) allowance for sampling risk (n = sample size, d = deviations. ROO = risk of overreliance). (Round your answers to 1 decimal place.)
a. n = 100. d = 8. ROO = 5%.
b. n = 100. d = 4. ROO = 5%.
c. n = 100. d = 8. ROO = 10%.
Answer: See explanation
Explanation:
a. n = 100. d = 8. ROO = 5%.
i. Sample rate of deviation will be:
= Number of Deviations / Sample size
= 8/100
= 8%
ii. Upper limit rate of deviation = 14%
iii. Allowance for sampling risk will be:
= Upper Limit Rate of Deviation - Sample rate of devaition
= 14% - 8%
= 6%
b. n = 100. d = 4. ROO = 5%.
i. Sample rate of deviation will be:
= Number of Deviations / Sample size
= 4/100
= 4%
ii. Upper limit rate of deviation = 9%
iii. Allowance for sampling risk will be:
= Upper Limit Rate of Deviation - Sample rate of devaition
= 9% - 4%
= 5%
c. n = 100. d = 8. ROO = 10%.
i. Sample rate of deviation will be:
= Number of Deviations / Sample size
= 8/100
= 8%
ii. Upper limit rate of deviation = 12.7%
iii. Allowance for sampling risk will be:
= Upper Limit Rate of Deviation - Sample rate of devaition
= 12.7% - 8%
= 4.7%
The comparative balance sheets and income statement for Bingky Barnes Inc. are as follows:
Current Year Prior Year
Balance sheet at December 31
Cash $37,300 $29,400
Accounts receivable 32,700 28,900
Merchandise inventory 42,000 38,300
Property and equipment 121,500 100,800
Less: Accumulated depreciation (30,700) (25,300)
$202,800 $172,100
Accounts payable $36,700 $27,900
Accrued wages expense 1,400 1,800
Note payable, long-term 44,500 50,800
Common stock and additional paid-in capital 89,600 72,900
Retained earnings 30,600 18,700
$202,800 $172,100
Income statement for current year Sales $123,000
Cost of goods sold 73,000
Other expenses 38,100
Net income $11,900
Additional Data:
a. Equipment bought for cash, $20.700.
b. Long-term notes payable was paid off for $4,800.
c. Issued new shares of stock for $16,400 cash.
d. No dividends were declared or paid.
e. Other expenses included depreciation, $5,200, wages, $20,100; taxes, $6,100; other, $6,500 f. Assume that expenses were fully paid in cash, when there are no liabilities account related to them. For example, tax expenses are paid in cash since there is no taxes payable.
Required:
Prepare the statement of cash flows for the year ended December 31, current year, using the Indirect method.
Answer:
Bingky Barnes Inc.
Statement of Cash Flows for the year ended December 31, Current Year
(using the indirect method)
Operating activities:
Net income $11,900
Add non-cash expenses:
Depreciation 5,400
Adjusted operating $17,300
Changes in working capital:
Accounts receivable -3,800
Merchandise inventory -3,700
Accounts payable +8,800
Accrued wages expense -400
Net operating cash flow $18,200
Investing activities:
Property & equipment -$20,700
Financing activities:
Note payable, long-term -6,300
Common stock and
additional paid-in capital +16,700
Net cash from financing $10,400
Net cash flows $7,900
Explanation:
a) Data and Calculations:
Comparative balance sheets and income statement
Current Year Prior Year Change
Balance sheet at December 31
Cash $37,300 $29,400 +7,900
Accounts receivable 32,700 28,900 +3,800
Merchandise inventory 42,000 38,300 +3,700
Property and equipment 121,500 100,800 +20,700
Less: Accumulated depreciation (30,700) (25,300)
Total assets $202,800 $172,100
Accounts payable $36,700 $27,900 +8,800
Accrued wages expense 1,400 1,800 -400
Note payable, long-term 44,500 50,800 -6,300
Common stock and
additional paid-in capital 89,600 72,900 +16,700
Retained earnings 30,600 18,700
Total liabilities and equity $202,800 $172,100
Income statement for current year
Sales $123,000
Cost of goods sold 73,000
Other expenses 38,100
Net income $11,900
Additional Data:
a. Equipment bought for cash, $20,700
b. Long-term notes payable was paid off for $4,800?
c. Issued new shares of stock for $16,400 cash.
d. No dividends were declared or paid.
e. Other expenses:
Depreciation, $5,400
Wages 20,100
Taxes, 6,100
Other, 6,500
f. Assume that expenses were fully paid in cash, when there are no liabilities account related to them. For example, tax expenses are paid in cash since there is no taxes payable.
Wages Payable
Beginning balance $1,800
Wages expense $20,100
Ending balance 1,400
Cash paid 19,700
You are provided with the following information for Sandhill Co., effective as of its April 30, 2022, year-end.
Accounts payable $ 848
Accounts receivable 900
Accumulated depreciation—equipment 630
Cash 1,360
Common stock 16,300
Cost of goods sold 1,000
Depreciation expense 315
Dividends 310
Equipment 2,500
Goodwill 1,900
Income tax expense 175
Income taxes payable 135
Insurance expense 360
Interest expense 460
Inventory 950
Investment in land 15,000
Land 3,200
Mortgage payable (long-term) 4,500
Notes payable (short-term) 62
Prepaid insurance 70
Retained earnings (beginning) 1,700
Salaries and wages expense 850
Salaries and wages payable 275
Sales revenue 6,200
Stock investments (short-term) 1,300
Prepare an income statement for Sandhill Co. for the year ended April 30, 2022.
Prepare a retained earnings statement for Sandhill Co. for the year ended April 30, 2022. (List items that increase retained earnings first.)
Answer:
SANDHILL CO.
Income Statement
For the Year Ended April 30, 2022
Revenues
Sales revenue $6,200
Expenses
Cost of Goods Sold $1,000
Depreciation expense $315
Income tax expense $175
Insurance expense $360
Interest expense $460
Salaries & Wages expenses $850
Total Expenses $3,160
Net Income $3,040
SANDHILL CO.
Retained Earnings Statement
For the Year Ended April 30, 2022
Retained Earnings, May 1, 2021 $1,700
Add: Net Income $3,040 $4,740
Less: Dividends $310
Retained Earnings, April 30, 2022 $4,430
Skyler Manufacturing recorded operating data for its shoe division for the year. Sales $4,500,000 Contribution margin 500,000 Controllable fixed costs 200,000 Average total operating assets 900,000 How much is controllable margin for the year
Answer:
Controllable margin= $300,000
Controllable margin in %= 33.3%
Explanation:
Controllable margin is sales revenue less controllable variable costs and fixed cost.
Controllable margin= Sales revenue - controllable variable cost - controllable fixed costs
Controllable margin= contribution margin - fixed costs
= 500,000 - 200,000= 300,000
Controllable margin in %= 300,000/900,000 × 100 =33.3%
Controllable margin in %= 33.3
a. Describe an important decision in your academic or personal life that you will have to make in the near future.
b. Using the five-step decision-making approach , analyze your decision and conclude with your "best" choice.
Explanation:
a. Describe an important decision in your academic or personal life that you will have to make in the near future.
An important decision for all people is to choose which professional career to follow, since there are people with different skills, which can cause some difficulty in choosing which academic course to follow.
It is essential that the student does research on the professions that are most consistent with their profile, it is important to read about the functions of each profession, take vocational tests, talk to other professionals, etc., so that their decision is more effective.
b. Using the five-step decision-making approach , analyze your decision and conclude with your "best" choice.
1- Identify your goals: In choosing a professional career, identifying your life goals is essential to set more achievable goals and stay focused.
2- Gather information: The more you research about the career options you intend to pursue, the easier it will be to understand the aspects that will lead to a successful decision. It is important to gather information from different sources, through internet searches, books, conversations with other workers, etc.
3- Check the consequences: This step is important for the individual to be able to see his decision in a broad sense, from the positive and negative aspects that every profession has, and thus analyze whether he will be able to deal with all of them in the best way.
4- Make the decision: In the penultimate stage the decision is made, so far you have already gathered essential information that will lead you to the decision. In the example of career choice, the decision is extremely important and can impact a person's entire life, so it is common for doubts and uncertainties to arise from the decision.
5- Evaluation of the decision: This is the step that will assist in the realization of a good decision, as in the correction of problems and development of skills that contribute to make your decision the best possible and in line with your objectives.
Hoda is creating a report in Access using the Report Wizard. Which option is not available for adding fields using the wizard?
Tables
Queries
Reports
All are available options.
Answer:
Report is not available
Explanation:
From the given options, only the Reports is not an available option for adding fields using the wizard.
To create a report using the wizard, you have to navigate through
Create -> Reports Group -> Report Wizard
The attached image will be displayed after clicking the report wizard.
See that the available options to select are (Tables/Queries).
Hence, (c) is true
The following items were selected from among the transactions completed by Aston Martin Inc. during the current year:
Apr. 15 Borrowed $225,000 from Audi Company, issuing a 30-day 6% not for that amount.
May 1. Purchased equipment by issuing a $320,000, 180-day not to Spyder Manufacturing Co., which disconted the not at the rate of 6%.
15. Paid Audi Company the interest due on the note of April 15 and renewed the loan by issuing a new 60-day, 8% not for $225,000. (Record both the debit and credit to the notes payable account.)
July 14. Paid Audi Company the amount due on the note of May 15.
Aug. 16. Purchased merchandise on the account for Exige Do., $90,000, terms, n/30.
Sept. 15. Issued a 45-day, 6% not for $90,000 to Exige Co., on account.
Oct. 28. Paid Spyder Manufacturing Co. the amount due on the note of May 1.
30. Paid Exige Co. the amount owed on the not of September 15.
Nov. 16. Purchased store equipment for Gallardo Co. for $20,000 each, coming due at 30-day intervals. Dec. 16. Paid the amount due Gallardo Co. on the first note in the series issued on November 16.
28. Settled a personal injoury lawsuit with a customer for $87,500, to be paid in January. Aston Martin Inc. accrued the loss in a litigation claims payable account.
Instructions
1. Journalize the transactions.
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year:
a. Product warranty cost, %$26,800.
b. Interest on the 19 remaining notes owed to Gallardo Co.
Question Completion:
November 16 - Purchased store equipment from Gallardo Co. for $450,000, paying $50,000 and issuing a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals.
Answer:
Aston Martin, Inc.
Apr. 15 Debit Cash $225,000
Credit 6% Notes payable (Audi Company) $225,000
To record the amount borrowed by issuing a 30-day 6% note.
May 1. Debit Equipment $320,000
Credit 6% Notes Payable (Spyder Manufacturing Co.) $320,000
To record the purchase of equipment by issuing a $320,000, 180-day note at the rate of 6%.
May 15. Debit Interest expense $1,125
Credit Cash $1,125
To record the payment of interest on note.
May 15 Debit 6% Notes payable (Audi Company) $225,000
Credit 8% Notes payable (Audi Company) $225,000
To record the exchange of notes, by issuing a new 60-day, 8% note for $225,000
July 14 Debit 8% Notes payable (Audi Company) $225,000
Credit Interest expense $3,000
Credit Cash $228,000
To record the full settlement of note with interest.
Aug. 16. Debit Inventory $90,000
Credit Accounts payable (Exige Co.) $90,000
To record the purchase of merchandise on account, terms, n/30.
Sept. 15. Debit Accounts payable (Exige Co.) $90,000
Credit 6% Note Payable (Exige Co.) $90,000
To record the settlement of account by issuing a 45-day, 6% note to Exige Co.
Oct. 28. Debit 6% Notes Payable (Spyder Manufacturing Co.) $320,000
Debit Interest expense $9,600
Credit Cash $329,600
To record the settlement of notes with interest.
30. Debit 6% Note Payable (Exige Co.) $90,000
Debit Interest Expense $675
Credit Cash $90,675
To record the settlement of notes with interest.
November 16 Debit Store equipment $450,000
Credit 9% Note payable (Gallardo Co.) $400,000
Credit Cash $50,000
To record the issuing of a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals.
Dec. 16. Debit 9% Note payable (Gallardo Co.) $20,000
Debit Interest expense $3,000
Credit Cash $23,000
To record the settlement of the first note with interest on all the notes.
Dec. 28. Debit Litigation Claims Loss $87,500
Credit Litigation Claims Payable $87,500
To record the litigation loss.
Explanation:
a) Data and Calculations:
Apr. 15 Cash $225,000 6% Notes payable (Audi Company) $225,000
, issuing a 30-day 6% note for that amount.
May 1. Equipment $320,000 6% Notes Payable (Spyder Manufacturing Co.) $320,000 by issuing a $320,000, 180-day note at the rate of 6%.
15. Interest expense $1,125 Cash $1,125
6% Notes payable (Audi Company) $225,000 8% Notes payable (Audi Company) $225,000
issuing a new 60-day, 8% not for $225,000
July 14. 8% Notes payable (Audi Company) $225,000 Interest expense $3,000 Cash $228,000
Aug. 16. Inventory $90,000 Accounts payable (Exige Co.) $90,000
, terms, n/30.
Sept. 15. Accounts payable (Exige Co.) $90,000 6% Note Payable (Exige Co.) $90,000 Issued a 45-day, 6% not for $90,000 to Exige Co., on account.
Oct. 28. 6% Notes Payable (Spyder Manufacturing Co.) $320,000 Interest expense $9,600 Cash $329,600
30. 6% Note Payable (Exige Co.) $90,000 Interest Expense $675 Cash $90,675
November 16 - Store equipment $450,000 9% Note payable (Gallardo Co.) $400,000 Cash $50,000
issuing a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals.
Dec. 16. 9% Note payable (Gallardo Co.) $20,000 Interest expense $3,000 Cash $23,000
28. Litigation Claims Loss $87,500 Litigation Claims Payable$87,500
A company has designed a new product and tested the prototype. what is the next step in product development?
A. test-market the product
B. launch the product
C. evaluate ideas
D. generate ideas
Answer:
A company has designed a new product and tested the prototype. What is the next step in product development ? Test - market the product.
Explanation:
Answer option A) Test - market the product.
Which of the following is a true statement?
(A) New products introduce risk into a portfolio as well as future potential profits.
(B) A company’s product portfolio is assured of success by adding new products.
(C) New products bring great rewards with little risk.
Answer:
I think it's C, New products bring great rewards with little risk
The correct option is (A) .As we know introducing a product is not that much fast and easy because it automatically contains greater risk in it.
What does the new product mainly contain?Introducing a new product is the most important component of a product portfolio. As it contains greater risk but it also contains greater rewards too.
How can we explain it with a help of an example?When a company launches new products it automatically contains the risk that if it would be opened in the market what would be the customer's reaction, whether a customer would like it or not. If the customer like the product risk would convert into a reward for the company and if not then it would get a loss to the company. This profit and loss to the company affect the portfolio the most.
Learn more about portfolio here: https://brainly.com/question/14213764
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Net present value LO P3
A new operating system for an existing machine is expected to cost $820,000 and have a useful life of six years. The system yields an incremental after-tax income of $240,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $100,000.
A machine costs $560,000, has a $56,000 salvage value, is expected to last eight years, and will generate an after-tax income of $150,000 per year after straight-line depreciation.
Assume the company requires a 12% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
a. A new operating system for an existing machine is expected to cost $820,000 and have a useful life of six years. The system yields an incremental after-tax income of $240,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $100,000. (Round your answers to the nearest whole dollar.)
b. A machine costs $560,000, has a $56,000 salvage value, is expected to last eight years, and will generate an after-tax income of $150,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.)
Answer:
a. initial outlay = -$820,000
net cash flows years 1 - 5 = $240,000
net cash flow year 6 = $340,000
discount rate = 12%
using a financial calculator:
NPV = $217,400.87
IRR = 20.55%
b. initial outlay = -$560,000
net cash flows years 1 - 7 = $150,000
net cash flow year 8 = $206,000
discount rate = 12%
using a financial calculator:
NPV = $207,763.43
IRR = 21.65%
The petty cash fund of Ricco's Automotive contained the following items at the end of September 2021:
Currency and coins $58
Receipts for the following expenditures:
Delivery charges $16
Printer paper 11
Paper clips and rubber bands 8 35
Lent money to an employee 25
Postage 32
Total $150
The petty cash fund was established at the beginning of September with a transfer of $150 from cash to the petty cash account.
Required:
Prepare the journal entry to replenish the fund at the end of September.
Answer:
Date Account titles and Explanation Debit Credit
Sep 30 Delivery expenses $16
Offices supplies $19
Postage expenses $32
Receivables from employees $25
Cash $92
(To record replenishment of petty cash fund)
Clampett, Incorporated, converted to an S corporation on January 1, 2020. At that time, Clampett, Incorporated, had cash ($54,000), inventory (FMV $74,000, basis $37,000), accounts receivable (FMV $54,000, basis $54,000), and equipment (FMV $74,000, basis $94,000). In 2021, Clampett, Incorporated, sells its entire inventory for $74,000 (basis $37,000). Assume the corporate tax rate is 21 percent. Clampett, Incorporated's taxable income in 2021 would have been $1,000,000 if it had been a C corporation. How much built-in gains tax does Clampett, Incorporated, pay in 2021
Answer:
$3,570
Explanation:
Particulars FMV Basis Differences
Inventory $74,000 $37,000 $37,000
Accounts receivable $54,000 $54,000 $0
Equipment $74,000 $94,000 -$20,000
Taxable gain $17,000
Tax rate = 21%
So, Built-in gains tax = Taxable gain × tax rate
= $17,000 × 21%
= $3,570
Market Structure and Market Power
The marginal revenue curve of a firm with market power will always lie below its demand curve because of:_____.
a. the discount effect and the substitution effect.
b. the substitution effect and the income effect.
c. the output effect and the discount effect.
d. the output effect and the substitution effect.
Answer: c. the output effect and the discount effect.
Explanation:
The output effect is how firms with market power control their production in honest to make profit.
A firm with market farm will have to reduce it's marginal revenue curve to increase sales.
The marginal revenue will therefore be below the Demand curve to show that the marginal revenue has to be reduced for a team to sell more goods.
Mackenzie Company has a price of $38 and will issue a dividend of $ 2.00 next year. It has a beta of 1.3, the risk-free rate is 5.2%, and the market risk premium is estimated to be 4.9%. a. Estimate the equity cost of capital for Mackenzie. b. Under the CGDM, at what rate do you need to expect Mackenzie's dividends to grow to get the same equity cost of capital as in part (a)?
Answer and Explanation:
a. The computation of the equity cost of capital is shown below:
As we know that
Expected rate of return = Risk free rate + Risk Premium × Beta
= 5.20% + 4.90% × 1.30
= 11.57%
b. Now the rate at which the dividend should be grow is
Value of the stock = Expected dividend ÷ (cost of equity - growth rate)
$38 = $2 ÷ (11.57% - growth rate)
so, the growth rate is 6.31%
Fultz Company has accumulated the following budget data for the year 2017. 1 Sales: 31,450 units, unit selling price $85. Cost of one unit of finished goods: direct materials 1 pound at $5 per J pound, direct labor 3 hours at $13 per hour, and manufacturing overhead $6 per direct labor hour, j Inventories (raw materials only): beginning, 10,290 pounds; ending, 15,250 pounds. Selling and administrative expenses: $170,000; interest expense: $30,000. Income taxes: 30% of income before income taxes.
Prepare a schedule showing the computation of cost of goods sold for 2017.
Answer:
See below
Explanation:
Computation of Cost of goods sold
Direct materials
Direct labor
Manufacturing overheads
Total cost
Net Zero Products, a wholesaler of sustainable raw materials, prepares the following aging of receivables analysis. Days Past Due Total 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 185,000 $ 100,000 $ 38,000 $ 17,000 $ 14,000 $ 16,000 Percent uncollectible 1 % 2 % 4 % 6 % 10 % 1. Estimate the balance of the Allowance for Doubtful Accounts using the aging of accounts receivable method. 2. Prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the Allowance for Doubtful Accounts is a $3,000 credit.
Answer:
1)
Days Past Due
Total 0 1 to 30 3 1 to 60 61 to 90 Over 90
$185,000 $100,000 $38,000 $17,000 $14,000 $16,000
1% 2% 4% 6% 10%
Bad debts $1,000 $760 $680 $840 $1,600
Total bad debt = $4,880
2)
Dr Bad debt expense 4,880
Cr Allowance for doubtful accounts 4,880
A review of the ledger of Wildhorse Co. at December 31, 2022, produces these data pertaining to the preparation of annual adjusting entries.
1. Prepaid Insurance $16,824. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2021, for $10,080. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2022, for $8,424. This policy has a term of 18 months.
2. Unearned Rent Revenue $314,240. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.
Date Term (in months) Monthly Rent Number of Leases
Nov.1 8 $5,380 5
Dec. 1 7 $8,120 4
3. Notes Payable $46,800. This balance consists of a note for 6 months at an annual interest rate of 7%, dated October 1.
4. Salaries and Wages Payable $0. There are 11 salaried employees. Salaries are paid every Friday for the current week.
5 employees receive a salary of $635 each per week, and 6 employees earn $ 765 each per week. Assume December 31 is a Wednesday. Employees do not work weekends. All employees worked the last 3 days of December.
Required:
Prepare the adjusting entries at December 31, 2017.
Answer:
1. Debit Insurance expense for $8,976; and Credit Prepaid insurance for $8,976.
2. Debit Unearned revenue for $86,280; and Credit Rent revenue for $86,280.
3. Debit Interest expense for $819; and Credit Interest payable for $819.
4. Debit Salaries expense for $4,659; Credit for Salaries payable for $4,659.
Explanation:
Note: The correct date in the requirement is 2022 not 2017 as mistakenly stated.
The adjusting journal entries will look as follows:
Date Accounts Title & Explanation Debit ($) Credit ($)
Dec. 31 Insurance expense (w.1) 8,976
Prepaid insurance 8,976
(To record insurance expenses)
Dec. 31 Unearned revenue 86,280
Rent revenue (w.2) 86,280
(To record rent revenue.)
Dec. 31 Interest expense (w.3) 819
Interest payable 819
(To record interest on note payable.)
Dec. 31 Salaries expense (w.4) 4,659
Salaries payable 4,659
(To record salaries accrued.)
Workings:
w.1. Prepaid Insurance $16,824. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2021, for $10,080. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2022, for $8,424. This policy has a term of 18 months.
Expired insurance Policy B4564 adjustment = $10,080 / 3 = $3,360
Expired insurance Policy A2958 adjustment = ($8,424 /18 months) * 12 months = $5,616
Total insurance expense = Expired insurance Policy B4564 adjustment + Expired insurance Policy A2958 adjustment = $3,360 + $5,616 = $8,976
w.2. Unearned Rent Revenue $314,240. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.
Earned revenue = Monthly rent * Accrued month * Number of lease
Therefore, we have:
Total earned revenue = ($5,380 * 2 * 5) + ($8,120 * 1 * 4) = $86,280
w.3. Notes Payable $46,800. This balance consists of a note for 6 months at an annual interest rate of 7%, dated October 1.
Interest expense on note payable = Principal * Rate * Time = $46,800 * 7% * (3 / 12) = $819
w.4. Salaries and Wages Payable $0. There are 11 salaried employees. Salaries are paid every Friday for the current week. 5 employees receive a salary of $635 each per week, and 6 employees earn $ 765 each per week. Assume December 31 is a Wednesday. Employees do not work weekends. All employees worked the last 3 days of December.
Total salaries accrued = (5 employees * $635 each per week * 3/5 days) + (6 employees * $765 each per week * 3/5 days) = $4,659
Suppose Nike, Inc. reported the following plant assets and intangible assets for the year ended May 31, 2022 (in millions): other plant assets $935.0, land $220.0, patents and trademarks (at cost) $510.0, machinery and equipment $2,160.0, buildings $980.0, goodwill (at cost) $210.0, accumulated amortization $50.0, and accumulated depreciation $2,200. Prepare a partial balance sheet for Nike for these items.
Answer:
NIKE, INC.
Partial Balance Sheet as of May 31, 2022
(in millions)
Property, Plant and Equipment
Land $220.0
Buildings $980.0
Machinery and Equipment $2160.0
Other Plant Assets $935.0
Less: Accumulated Depreciation $2200.0 $1875.0
Total Property, Plant and Equipment $2095.0
Intangible Assets:
Goodwill $210.0
Patents and Trademarks $510.0
Less: Accumulated Amortization $50.0 $460.0
Total Intangible Assets $670.0
At the beginning of 2021, Terra Lumber Company purchased a timber tract from Boise Cantor for $3,510,000. After the timber is cleared, the land will have a residual value of $720,000. Roads to enable logging operations were constructed and completed on March 30, 2021. The cost of the roads, which have no residual value and no alternative use after the tract is cleared, was $279,000. During 2021, Terra logged 620,000 of the estimated 6.2 million board feet of timber.Required:Calculate the 2021 depletion of the timber tract and depreciation of the logging roads assuming the units-of-production method is used for both assets. (Do not round intermediate calculations. Enter values in whole dollars.)
Answer:
A. $279,000
B. $27,900
Explanation:
A. Calculation for 2021 depletion of the timber tract
2021 Depletion=[($3,510,000 - $720,000) / 6.2 million] *$620,000
2021 Depletion=0.45x 620,000
2021 Depletion= $279,000
Therefore 2021 depletion of the timber tract is $279,000
B. Calculation to determine the depreciation of the logging roads
Depreciation=($279,000 / 6.2 million)*$620,000 Depreciation= 0.073*$620,000
Depreciation= $27,900
Therefore the depreciation of the logging roads is $27,900
Nick has a job. The first place he should look for health care coverage is because the costs will probably be the for the generous terms and coverage. Sam does not have a job. He is a member of the alumni association of his alma mater. Sam will probably find better coverage for a lower cost through plans offered by because plans spread the costs and risks among more people than plans do. To begin their research, Nick and Sam should look at in order to .
n 1982 the inflation rate hit 16%. Suppose that the average cost of a textbook in 1982 was $25. What was the expected cost in the year 2017 if we project this rate of inflation on the cost? (Assume continuous compounding. Round your answer to the nearest cent.) If the average cost of a textbook in 2012 was $150, what is the actual inflation rate (rounded to the nearest tenth percent)?
Answer:
Total number of years = 35
a. Expected cost in 2017 = $25 * e^(35*0.16)
Expected cost in 2017 = $25 * e^5.6
Expected cost in 2017 = $25 * 270.42
Expected cost in 2017 = $6,760.50
b. If the average cost of a textbook in 2012 was $150, then the actual inflation rate:
150 = 25 * e^(r*t)
150 = 25 * e^(r*30)
6 = e^(r*30)
Taking log base e on both side
30r = Ln6
30r = 1.7918
r = 1.7918/30
r = 0.05972667
r = 5.97%
So, actual inflation rate is 5.97%
Modigliani and Miller's world of no taxes. Roxy Broadcasting, Inc. is currently a low-levered firm with a debt-to-equity ratio of /. The company wants to increase its leverage to / for debt to equity. If the current return on assets is % and the cost of debt is %, what are the current and the new costs of equity if Roxy operates in a world of no taxes? What is the current cost of equity if Roxy operates in a world of no taxes?
Answer and Explanation:
The computation is shown below:
For Current
Total assets = Debt + Equity
= 2 + 7 9
Now
Debt ratio = Debt ÷ Total assets = 2 ÷ 9
Equity ratio = Equity ÷ Total assets = 7 ÷ 9
Return on assets = Cost of debt × Debt ratio + Cost of equity × Equity ratio
11% = 9% × 2 ÷ 9 + Cost of equity × 7 ÷ 9
Cost of equity × 7 ÷ 9 = 11% - (9% × 2 ÷ 9)
Cost of equity = ( 11% - (9% × 2 ÷ 9) ) × 9 ÷ 7
= 12%
For New
Total assets = Debt + Equity = 7 + 2 = 9
Debt ratio = Debt ÷ Total assets = 7 ÷ 9
Equity ratio = Equity ÷ Total assets = 2 ÷9
Return on assets = Cost of debt × Debt ratio + Cost of equity × Equity ratio
11% = 9% × 7 ÷ 9 + Cost of equity × 2 ÷ 9
Cost of equity × 2 ÷ 9 = 11% - (9% × 7 ÷ 9)
Cost of equity = ( 11% - (9% × 7 ÷ 9) ) × 9 ÷ 2
= 18%
On January 8, 2012, Speedway Delivery Service purchased a truck at a cost of $65,000. Before placing the truck in service, Speedway spent $4,000 painting it, $2,500 replacing tires, and $8,000 overhauling the engine. The truck should remain in service for five years and have a residual value of $6,000. The truck’s annual mileage is expected to be 22,000 miles in each of the first four years and 12,000 miles in the fifth year—100,000 miles in total. In deciding which depreciation method to use, David Greer, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance).
Requirements
1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value.
2. Speedway prepares financial statements using the depreciation method that reports the highest net income in the early years of asset use. For income tax purposes, the company uses the depreciation method that minimizes income taxes in the early years. Consider the first year that Speedway uses the truck. Identify the depreciation methods that meet the general manager’s objectives, assuming the income tax authorities permit the use of any of the methods.
Answer:
Speedway Delivery Service
1. Depreciation Schedules:
Depreciation Schedule (Straight-line Method)
Date Cost Value Depreciation Accumulated Net Book
Expense Depreciation Value
December 31, 2012 $79,500 $14,700 $14,700 $64,800
December 31, 2013 $79,500 $14,700 $29,400 $50,100
December 31, 2014 $79,500 $14,700 $44,100 $35,400
December 31, 2015 $79,500 $14,700 $58,800 $20,700
December 31, 2016 $79,500 $14,700 $73,500 $6,000
Depreciation Schedule (Units-of-production Method)
Date Cost Value Depreciation Accumulated Net Book
Expense Depreciation Value
December 31, 2012 $79,500 $16,170 $16,170 $63,330
December 31, 2013 $79,500 $16,170 $32,340 $47,160
December 31, 2014 $79,500 $16,170 $48,510 $30,990
December 31, 2015 $79,500 $16,170 $64,680 $14,820
December 31, 2016 $79,500 $8,820 $73,500 $6,000
Depreciation Schedule (Double-declining-balance Method)
Date Cost Value Depreciation Accumulated Net Book
Expense Depreciation Value
December 31, 2012 $79,500 $31,800 $31,800 $47,700
December 31, 2013 $79,500 $19,080 $50,880 $28,620
December 31, 2014 $79,500 $11,448 $62,328 $17,172
December 31, 2015 $79,500 $6,869 $69,197 $10,303
December 31, 2016 $79,500 $4,303 $73,500 $6,000
2. The straight-line method reports the highest net income in the early years while the double-declining-balance method minimizes the income taxes in the early years.
Explanation:
a) Data and Calculations:
January 8, 2012:
Purchase of a delivery truck = $65,000
Cost of painting the truck = 4,000
Cost of replacing the tires = 2,500
Cost of overhauling the engine 8,000
Total costs = $79,500
Residual value = 6,000
Depreciable amount = $73,500
Estimated useful life = 5 years
Straight-line depreciation Method:
Annual depreciation expense = $14,700 ($73,500/5)
Units-of-production Method:
Depreciation rate per mile = $0.735 ($73,500/100,000)
For 22,000 miles, depreciation expense = $16,170 ($0.735 * 22,000)
For 12 ,000 miles, depreciation expense = $8,820 ($0.735 * 12,000)
Double-declining-balance method:
Depreciation rate = 100/5 * 2 = 40%
First year's depreciation expense = $31,800 ($79,500 * 40%)
Declined balance = $47,700 ($79,500 - $31,800)
Second year's depreciation expense = $19,080 ($47,700 * 40%)
Declined balance = $28,620 ($47,700 - $19,080)
Third year's depreciation expense = $11,448 ($28,620 * 40%)
Declined balance = $17,172 ($28,620 - $11,448)
Fourth year's depreciation expense = $6,869 ($17,172 * 40%)
Declined balance = $10,303 ($17,172 - $6,869)
Fifth year's depreciation expense = $4,303 ($10,303 - $6,000)
Sicilian Defence, a division of Queen's Gambit Corp., has a net operating income of $60,000 and average operating assets of $300,000. The minimum required rate of return for the company is 15%. If the manager of the Sicilian Defence division is evaluated based on residual income, will she want to make an investment of $100,000 that would generate additional net operating income of $18,000 per year?
Answer:
Queen's Gambit Corp.
Sicilian Defence Division
If the manager of the Sicilian Defence division is evaluated based on residual income, will she want to make an investment of $100,000 that would generate additional net operating income of $18,000 per year?
Yes.
The additional investment yields comparable positive Residual Income.
Explanation:
a) Data and Calculations:
Net operating income of Sicilian Defence Division = $60,000
Average operating assets = $300,000
Required rate of return for the company = 15%
Residual income (RI)= Operating Income - (Operating Assets x Required Rate of Return)
= $60,000 - ($300,000 * 15%)
= $60,000 - $45,000
= $15,000
Investment cost = $100,000
Additional net operating income = $18,000
Residual Income = $18,000 - ($100,000 * 15%)
= $18,000 - $15,000
= $3,000
Total residual income = $78,000 - ($400,000 * 15%)
= $78,000 - $60,000
= $18,000
Orange Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment $ 520,000 Annual net cash flows $ 78,000 Life of the equipment 10 years Salvage value $ 0 Discount rate 6 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be: Multiple Choice 1.0 years 0.2 years 4.7 years 6.7 years
Answer:
6.7 years
Explanation:
According to the scenario, computation of the given data are as follows,
Investment = $520,000
Net cash flow = $78,000
Life of equipment = 10 years
So, we can calculate the payback period for investment by using following formula,
Payback period for investment = Initial Investment ÷ Net cash flow
= $520,000 ÷ $78,000
= 6.67 years or 6.7 years
You do not start saving money until age 46. On your 46th birthday you dutifully invest $10,000 each year until you finish your deposits when you reach the age of 65 (you make the last deposit on your 65th birthday). The annual interest rate is 8% that you earn on your deposits. Your brother starts saving $10,000 a year on his 36th birthday but stops making deposits after 10 years. He then withdraws the compounded sum when he reaches age 65. How much more money will your brother have than you at age 65?
Answer:
$217,600
Explanation:
The computation of the more money is shown below:
As we know that
The Future value of the annuity is
= P × { (1+r)^n - 1} ÷ r
= $10,000 × (1+.08)^20 - 1) ÷ 0.08
= $457,619.64
For 36 years to 46 years,
FV = $10,000 × (1+.08)^10 - 1) ÷ 0.08
= $144,865.62
Now
FV = PV(1+r)^n
= $144,865.62× (1+.08)^20
= $675,212.47
Now the more amount would be
= $675,212.47 - $457,619.64
= $217592.83
= $217,600
Is gender pay gap logical ? If so, kindly explain.
Thanks.
Answer:
yes (logically but in my opinion no)
Explanation:
The reason why is because some jobs required you to lift heavy stuff and some women can't lift very heavy things.
Calculate amortization expense
In early January, Burger Mania acquired 100% of the common stock of the Crispy Taco restaurant chain. The purchase price allocation included the following items: $4 million, patent; $5 million, trademark considered to have an indefinite useful life; and $6 million, goodwill. Burger Mania's policy is to amortize intangible assets with finite useful lives using the straight-line method, no residual value, and a five-year service life.
What is the total amount of amortization expense that would appear in Burger Mania's income statement for the first year ended December 31 related to these items? (Enter your answers in dollars, not in millions.
Answer: $800,000
Explanation:
The total amount of amortization expense that would appear in Burger Mania's income statement for the first year ended December 31 related to these items will be:
Ammortization value = Patent value / Useful life
= $4,000,000 / 5
= $800,000
Therefore, the ammortization value is $800,000 per year.
Which of the following is NOT one of the steps taken in the financial planning process? a. Develop a set of forecasted financial statements under alternative versions of the operating plan in order to analyze the effects of different operating procedures on projected profits and financial ratios. b. Consult with key competitors about the optimal set of prices to charge, i.e., the prices that will maximize profits for our firm and its competitors. c. Forecast the funds that will be generated internally. If internal funds are insufficient to cover the required new investment, then identify sources from which the required external capital can be raised. d. Determine the amount of capital that will be needed to support the plan. e. Monitor operations after implementing the plan to spot any deviations and then take corrective actions.
Answer:
B)Consult with key competitors about the optimal set of prices to charge, i.e., the prices that will maximize profits for our firm and its competitors.
Explanation:
The financial planning process can be regarded as series of steps which states best way of using money and investments as well as other assets so that financial goals can be potentially achieved. Most of the financial plans has its focus savings of goals as well as payoff goals even estate planning goals so that roadmap to financial freedom can be set.
The steps that can be taken in the financial planning process are;
✓ Forecast the funds that will be generated internally. If internal funds are insufficient to cover the required new investment, then identify sources from which the required external capital can be raised.
✓Develop a set of forecasted financial statements under alternative versions of the operating plan in order to analyze the effects of different operating procedures on projected profits and financial ratios
✓Determine the amount of capital that will be needed to support the plan. e. Monitor operations
