Final Examination Hide or show questions Calculator Problem 9-23 (b) (LO. 2) Ricardo, who is self-employed, uses his automobile 85% for business and during 2019 drove a total of 32,200 business miles. Information regarding his car expenses is listed below. Business parking $345 Auto insurance 2,800 Auto club dues (includes towing service) 275 Toll road charges (business-related) 205 Oil changes and engine tune-ups 180 Repairs 1,890 Depreciation allowable 3,600 Fines for traffic violations (incurred during business use) 95 Gasoline purchases 4,125 What is Ricardo's deduction in 2019 for the use of his car if he uses:

Answers

Answer 1

Answer:

Explanation:

a) actual cost method:-

=deductions × percentage

= 345 + 205 + 85% (2800 + 275 + 180 + 1890 +3600 +4125 )

=550 + 10939.5

=11489.5 = 11490

Note :- fines are not taken.

b) automatic mileage method:-

=total number of business miles × standard rate

=32200×0.58 +345+205

=19226


Related Questions

Which of the following is false? Economists who advocate discretionary monetary policy argue that it is more likely to achieve the desired economic results because the monetary authority has the flexibility to shape the best monetary policy to the existing circumstances. Here is an example of zero crowding out: The government spends $100 more and the private sector doesn’t spend any less. Here is an example of complete crowding out: The government spends $100 more and the private sector spends $100 less. Not all economists believe that rule-based monetary policy is preferable to discretionary monetary policy. none of the above

Answers

Answer: None of the above

Explanation:

All of the above are correct.

For option A, Economists who advocate discretionary monetary policy do indeed believe that the monetary authority using this policy is more flexible to shape the best monetary policy to the existing circumstances.

Option B is also correct because Crowding out occurs when the government increases investment by borrowing which leaves less money for the private sector to borrow so they spend less. The government spent money here yet the private sector did not spend less so it is Zero Crowing out.

Option C by option B's explanation holds true because the entire amount the Government increased by was denied the private sector.

Option D is also true as not all Economists prefer rule-based monetary policy to discretionary monetary policy.

They are all true.

Consider a market where the demand and supply for the good are described by the following equations: begin mathsize 14px style straight Q subscript straight D space equals space 225 space minus space 3 straight P end style and begin mathsize 14px style straight Q subscript straight S space equals space minus space 22.5 space plus space 1.5 straight P end style.

If the government implements a price ceiling of $45, this will result in a

A. surplus of 22.5 units.

B. a surplus of 45 units.

C. a shortage of 45 units.

D. a shortage of 22.5 units.

Answers

Answer:

The correct option is (c)a shortage of 45 units.

Explanation:

Solution

Given that:

Qd=225-3P

Qs=-22.5+1.5P

Then,

Set Qd=Qs for equilibrium

225-3P=-22.5+1.5P

4.5P=247.50

P=$55

Now

The  government forces a ceiling of $45, it is binding as it is lesser than the equilibrium price.

Thus,

Let calculate the demanded quantity and supplied quantity at a price of $45

Now,

Qd=225-3*45=90

Qs=-22.5+1.5*45=45

Shortage=Qd-Qs=90-45=45 units .

Therefore, there is a shortage of 45 units.

Scenario 28-1 Suppose that the Bureau of Labor Statistics reports that the entire adult population of Mankiwland can be categorized as follows: 25 million people employed, 3 million people unemployed, 1 million discouraged workers, and 1 million people who are either students, homemakers, retirees, or other people not seeking employment. Refer to Scenario 28-1. What is the unemployment rate?

Answers

Answer:

10.7%

Explanation:

Solution:

Recall that:

The Reports from Bureau of labor statistics is shown as follows:

Employed people = 25 million

Unemployed people = 3 million

Discouraged workers = 1 million

Workers or Homemakers or retirees, or students = 1 million

The next step from this scenario is to find out the unemployment rate

Now,

The rate of unemployed =  (unemployed x 100 ) / labor force

= 300/28

=10.7%

71. When making decisions that are ethical under either profit maximization or corporate citizenship theories, a business should include all of the following steps except a. recognize that there is an ethical issue in the decision. b. apply ethical theories to reasonable alternatives. c. publicize the options you rejected with your reasons. d. reflect on the outcome of the decision once it is made

Answers

Answer:

The Correct Option of the given scenario is "C - Publicize the options you rejected with your reasons".

Explanation:

While creating business selection it is ought to seek for the philosophies and integrities. However, don't create it public the explanations of captivating some choices as they are having dissimilarities in philosophies which might drawback your businesses.

Answer: c. publicize the options you rejected with your reasons.

Explanation:

Under the Profit Maximisation theory where ethical behaviour does not necessarily benefit the company and the corporate citizenship theory that describes just how a company contributes to society, all the above are methods applied execpt the publication of the options rejected with reasons.

This is because certain things need to remain confidential for the protection of individuals and reputations as well as to avoid scrutiny because a Company's methodology might not be the methodology that a number of people would subscribe to.

Levine Company uses the perpetual inventory system. Apr. 8 Sold merchandise for $9,300 (that had cost $6,873) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee. 12 Sold merchandise for $5,000 (that had cost $3,240) and accepted the customer's Continental Card. Continental charges a 2.5% fee. Prepare journal entries to record the above credit card transactions of Levine Company

Answers

Answer:

Dr Apr 08 Cash $8,928

Dr Credit Card Expense $372

Cr Sales $9300

Apr 08 Cost of goods sold $6,873

Merchandise inventory $6,873

Dr Apr 12 Accounts receivable- Continental $4,875

Dr Credit card expense $125

Cr Sales $5,000

Dr Apr 12 Cost of Goods Sold $3,240

Cr Merchandise Inventory $3,240

Explanation:

Levine CompanyJournal entries

Date General Journal Debit Credit

Dr Apr 08 Cash $8,928

Dr Credit Card Expense $372

(4%×9300)

Cr Sales $9300

Apr 08 Cost of goods sold $6,873

Merchandise inventory $6,873

Dr Apr 12 Accounts receivable- Continental $4,875

Dr Credit card expense $125

(2.5%×5000)

Cr Sales $5,000

Dr Apr 12 Cost of Goods Sold $3,240

Cr Merchandise Inventory $3,240

January 1, 2021, Woody Forrest Corporation granted executive stock options to purchase 41,000 of its common shares at $9 each. The market price of common stock was $24 per share on December 31, 2021, and averaged $12 per share during the year then ended. There was no change in the 164,000 shares of outstanding common stock during the year. Net income for the year was $39,000. The number of shares to be used in computing diluted earnings per share for the quarter is:

Answers

Answer:

174,250 shares

Explanation:

The computation of the number of shares to be used in computing diluted earnings per share is shown below:

Proceeds from exercise of options (a)  $369,000  (41,000 shares × $9)

Used to repurchased for common stock (b) 30,750 shares (41,000 shares × $9 ÷ $12)

Number of shares for exercised (c)                           41,000 shares

Less: repurchased shares (d)                                    -30,750 shares

Diluted common shares {e = c - d}                             10,250 shares

Add: Common shares (f)                                             164,000 shares

Total number of shares for diluted earning per share 174,250 shares

We ignored the market price of common stock as it is not relevant.

​Bob, Kara, and Mark are partners in the BKM Partnership. Bob is a​ 40% partner and has a June 30 tax yearminus−end. Kara owns a​ 40% interest in the partnership and has a September 30 tax yearminus−​end, and Mark owns the remaining​ 20% interest and has an October 31 tax yearminus−end. The partnership does not have a natural business year. What is the required tax yearminus−end for the partnership​ (if no Sec. 444 election is​ made)? A. September 30 B. October 31 C. December 31 D. June 30

Answers

Answer:

D. June 30

Explanation:

Since no Sec. 444 election is​ made, the required tax yearmius-end for the partnership​ will be the tax yearminus−end of a partner with at least 40% interest.

Since Bob is a​ 40% partner and has a June 30 tax yearminus−end, therefore, the required tax yearminus−end for the partnership is June 30.

Cawley Company makes three models of tasers. Information on the three products is given below.Tingler Shocker Stunner Sales $296,000 $504,000 $200,000 Variable expenses 145,000 190,000 135,000 Contribution margin 151,000 314,000 65,000 Fixed expenses 114,840 225,160 92,000 Net income $36,160 $88,840 $(27,000) Fixed expenses consist of $290,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $29,000 (Tingler), $79,000 (Shocker), and $34,000 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out.James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company’s net income.

(a) Compute current net income for Cawley Company. Net income $ ______
(b) Compute net income by product line and in total for Cawley Company if the company discontinues the Stunner product line. (Hint: Allocate the $290,000 common costs to the two remaining product lines based on their relative sales.)
Tingler Net Income $ _______
Shocker Net Income $ _______
Total Net Income $ _______
(c) Should Cawley eliminate the Stunner product line?
Why or why not?

Net income would _____ from $ ______to $ ________.

Answers

Answer:

Cawley Company

a) Current Net Income

                                        Tingler            Shocker      Stunner     Total

Sales                            $296,000     $504,000   $200,000  $1,000,000

Variable Costs               145,000         190,000      135,000        470,000

Contribution                   151,000         314,000        65,000        530,000

Fixed Expenses              114,840         225,160        92,000       432,000

Net Income                      36,160          88,840        (27,000)       98,000

b) Net Income by product line with Stunner discontinued:

                                                Tingler       Shocker           Total

Sales                                  $296,000       $504,000        $800,000

Variable Costs                      145,000          190,000          335,000

Contribution                          151,000          314,000           465,000

Fixed Expenses                    136,300          261,700           398,000        

Net Income                             14,700          52,300             67,000

c1) Cawley should not eliminate the Stunner product line.

c2) Net income would decrease from $98,000 to $67,000 if the Stunner product line is eliminated.

Explanation:

a) The decision to be made is whether to eliminate a product line or not.  In making such decisions, the relevant costs to be considered are avoidable costs.  Allocated fixed costs are unavoidable and should not be taken into account.

b) Stunner makes a Net Income of $31,000 without the allocated common fixed expenses.  This shows that the allocated common fixed expenses is actually causing Stunner to record Net Loss.  And when Stunner is eliminated the company is not better off.

c) Allocation of Fixed Expenses based on Sales:

Tingler = 296/800 * $290,000 = $107,300 Plus direct cost of $29,000 = $136,300

Shocker = 504/800 * $290,000 = $182,700 Plus direct of of $79,000 = $261,700

g On July 1, 2019, Sheffield Corp. issued 9% bonds in the face amount of $12400000, which mature on July 1, 2025. The bonds were issued for $11859948 to yield 10%, resulting in a bond discount of $540052. Sheffield uses the effective-interest method of amortizing bond discount. Interest is payable annually on June 30. At June 30, 2021, Sheffield's unamortized bond discount should be

Answers

Answer:

$393,063

Explanation:

The bond is issued on discount when the issuance price is less than the face value of the bond. The discount is expensed over the bond period until maturity. It is added to the interest expense value to expense it.

Unamortized Discount is the discount balance which has not been expensed or discount balance for outstanding period of the bond to maturity.

Discount Balance = $540,052

Date   Interest Paid  Interest Expense  Amortization Book Value

7/1/19                                                                           11,859,948

6/30/20 1,116,000   1,185,995              69,995           11,929,943

6/30/21   1,116,000   1,192,994              76,994           12,006,937

Unamortized Discount = Total Discount - Discount amortized

Unamortized Discount = $540,052 - ($69,995 + $76,994)

Unamortized Discount = $393,063

Galla Inc. needs to determine a price for a new product. Galla desires a 25% markup on the total cost of the product. Galla expects to sell 6420 units. Additional information is as follows: Variable product cost per unit $ 23​ Variable administrative cost per unit 25​ Total fixed overhead 46,500​ Total fixed administrative 30,540​ Using the total cost method what price should Galla charge?

Answers

Answer:

The price Galla should charge is $75

Explanation:

Solution

Now

The total cost = variable product cost + variable administrative cost + fixed overhead + fixed administrative

= ($23 * 6,420) + ($25 * 6,420) + $46,500 + $30,540

= $147,660 + $160,500 + $46,500 + $30,540

= $385,200

Thus,

The total cost per unit = Total cost / units

= $385,200 / 6,420 units

= $60

Hence

The selling price should charge = Cost per unit * 1.25

= $60 * 1.25

= $75

Goshford Company produces a single product and has capacity to produce 105,000 units per month. Costs to produce its current sales of 84,000 units follow. The regular selling price of the product is $126 per unit. Management is approached by a new customer who wants to purchase 21,000 units of the product for $77.40 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company’s regular selling territory, so there will be a $7.60 per unit shipping expense in addition to the regular variable selling and administrative expenses. Per Unit Costs at 84,000 Units Direct materials $ 12.50 $ 1,050,000 Direct labor 15.00 1,260,000 Variable manufacturing overhead 14.00 1,176,000 Fixed manufacturing overhead 17.50 1,470,000 Variable selling and administrative expenses 14.00 1,176,000 Fixed selling and administrative expenses 13.00 1,092,000 Totals $ 86.00 $ 7,224,000 Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $77.40 per unit.

Answers

Answer:

Net income= $4,836,200

Explanation:

Giving the following information:

Offer:

21,000 units for $77.4

An increase in variable cost= $7.6 per unit

Direct materials $ 12.50 $ 1,050,000

Direct labor 15.00 1,260,000

Variable manufacturing overhead 14.00 1,176,000

Fixed manufacturing overhead 17.50 1,470,000

Variable selling and administrative expenses 14.00 1,176,000

Fixed selling and administrative expenses 13.00 1,092,000

Totals $ 86.00 $ 7,224,000

First, we need to calculate the effect on the income of accepting the offer:

Effect on income= 21,000*77.4 - 21,000*(12.5 + 15 + 14 + 14 + 7.6)

Effect on income= 1,625,400 - 1,325,100

Effect on income= 300,300

Net income= 84,000*140 + 300,300 - 7,224,000

Net income= $4,836,200

Assume that Parker Company will receive SF200,000 in 360 days. Assume the following interest rates: the 360-day borrowing rate in U.S. is 7% while the 360-day borrowing rate in Switzerland is 5%. The 360-day deposit rate in U.S. is 5% while the 360-day deposit rate in Switzerland is 4%. Assume the forward rate of the Swiss franc is $0.50 and the spot rate of the Swiss franc is $0.48. If Parker Company uses a money market hedge, it will receive ____ in 360 days.

Answers

Answer:

Company will receive = $96,000

Explanation:

As per the data given in the question,

Corresponding SF liability equals to pay SF200,000 including interest

= 200,000÷1.05 = SF190476.19

Now Convert the SF into $US at the current spot rate = $0.48×190476.19

= $91428.57

Now deposit the $ US at 5% and withdraw after 360 days =

= $91428.57 + $91428.57×5%

= $95999.99

This way the liability of SF 190476.19 + 190476.19×5% interest will be paid off when Parker company receives $200,000, Parker company will receive = $96,000 in 360 days.

Carlinville Car Parts, Inc. has been provided by its lenders and owners with $46,000,000 to purchase assets. The most recent income statement showed Earnings Before Interest and Taxes (EBIT, or Operating Income) of $10,500,000, and net income of $3,950,000. Income tax was paid at a 25% average annual rate. What was Return on Invested Capital (ROIC) for the year?

Answers

Answer:

17%

Explanation:

The formula to calculate ROIC is:

ROIC= Net operating profit after tax/ Total invested capital

ROIC= EBIT*(1-Tax rate)/Total invested capital

ROIC= 10,500,000*(1-0.25)/46,000,000

ROIC= 7,875,000/46,000,000

ROIC= 0.17 → 17%

According to this, the answer is that the Return on Invested Capital (ROIC) for the year is 17%.

Crane Corporation had the following 2020 income statement. Sales revenue $197,000 Cost of goods sold 124,000 Gross profit 73,000 Operating expenses (includes depreciation of $19,000) 48,000 Net income $25,000 The following accounts increased during 2020: Accounts Receivable $10,000, Inventory $10,000, and Accounts Payable $11,000. Prepare the cash flows from operating activities section of Crane’s 2020 statement of cash flows using the direct method.

Answers

Answer:

$35,000

Explanation:

Crane Corporation

CASH FLOW STATEMENT

FOR THE YEAR ENDING 2020

Cash Flows from Operating Activities:

Net Income                                                                                    $25,000

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation on Fixed Assets                                                       $19,000

(Increase) Decrease in Current Assets:

Accounts Receivable                                                                     ($10,000)

Inventory                                                                                         ($10,000)

Increase (Decrease) in Current Liabilities:

Accounts Payable                                                                            $11,000

Net Cash Provided by operating activities                                  $35,000

Cash Flow from Investing Activities:                                                     -

Cash Flow from Financing Activities:                                                     -

Net Increase (Decrease) in Cash                                                    $35,000

Managers must chart a company's strategic course by Multiple Choice ensuring excess production capacity and/or inventory. building a bigger dealer network. ensuring that marketing and promotion programs are state-of-the-art. developing a thorough understanding of the company's external and internal environments. competing fiercely for a share in the market.

Answers

Answer:

The correct answer is the fourth option: developing a thorough understanding of the company's external and internal environments.  

Explanation:

To begin with, in order to understand that a company's strategy must be guided by thorough understanding of its external and internal environments it is necessary to understand that the system proposed is formed by several factors that influence it and therefore that a manager must study carefully those factors and that system in order to guide the company to a successful work and accomplish the goals by using a strategy that compresses all the information about those factors.

Market researchers have determined nine categories of lifestyles for computer users. One of the categories is described as "Mouse Potatoes," who like the Internet for entertainment and can't wait to buy the latest in "techno-entertainment." In terms of the diffusion process, how would "Mouse Potatoes" be classified?

Answers

Answer: Innovators.

Explanation:

The Diffusion Process defines how new products are able to spread across a market.

It does this by using the Adoption Process to determine the various groups in the market and how fast the product gets to those groups. There are 5 groups in total.

- Innovators

- Early Adopters

- Early Majority

- Late Majority

- Laggards.

In the above scenario, the Mouse Potatoes would be the Innovators. These are the first buyers of a product and as such their opinions are very important as they then tell others how useful the product is. Mouse Potatoes regularly browse the net looking for the latest in "techno-entertainment", so they can buy or use it first thus making them Innovators.

g The December 31, 2021, adjusted trial balance for the Blueboy Cheese Corporation is presented below. Account Title Debits Credits Cash 41,500 Accounts receivable 305,000 Prepaid rent 10,500 Inventory 45,000 Office equipment 550,000 Accumulated depreciation 230,000 Accounts payable 62,000 Notes payable (due in six months) 45,000 Salaries payable 7,000 Interest payable 1,500 Common stock 400,000 Retained earnings 125,000 Sales revenue 700,000 Cost of goods sold 420,000 Salaries expense 105,000 Rent expense 31,500 Depreciation expense 55,000 Interest expense 3,000 Advertising expense 4,000 Totals 1,570,500 1,570,500 Required: 1-a. Prepare an income statement for the year ended December 31, 2021. 1-b. Prepare a classified balance sheet as of December 31, 2021. 2. Prepare the necessary closing entries at December 31, 2021.

Answers

Answer:

Check the explanation

Explanation:

The right choice is Income summary account, since that is not in the account, closing entries can be in the following ways,

Alternative 1, one combined entry with balancing figure as retained earnings,

Date General Journal      Debit         Credit

Dec 31 Sales revenue   $7,60,000  

Cost of goods sold                                     $4,56,000

Salaries expense                                          $1,14,000

Rent expense                                                 $40,500

Depreciation expense                                   $62,000

Interest expense                                             $4,400

Advertising expense                                      $5,400

Retained Earnings                                          $77,700

Alternative 2, Transfer of Revenue and expenses separately to Retained Earnings

Date General Journal           Debit                   Credit

Dec 31 Sales revenue        $7,60,000  

Retained Earnings                                                $7,60,000

Dec 31 Retained Earnings    $6,82,300  

Cost of goods sold                                               $4,56,000

Salaries expense                                                    $1,14,000

Rent expense                                                          $40,500

Depreciation expense                                            $62,000

Interest expense                                                    $4,400

Advertising expense                                             $5,400

i. Discuss the rationale of organizing an industrial strike in resolving employee dispute with the
state, focusing on the detrimental effects strikes has on various stakeholders in an economy.

Answers

Answer: The answer is provided below

Explanation:

Strike action, is a work stoppage, that is caused by mass refusal of employees to work and it usually takes place in response to the employee grievances.

Some of the reasons for strike include:

• Low wages: Employees engage in strik as a way to show their grievances to their employers that they're not well paid and want a pay rise.

• Poor communication with the organisation: Another reason for strikes is the lack of trust between employers and the trade unions. In cases whereby workers believe their employers aren't transparent with them, strike can take place.

• Employee debt: When employees are owed certain amount of money and the employer is not doing anything reasonable about paying, the workers may strike.

• Working conditions: Workers can engage in strike in order to seek for improvement in their working conditions. This may be probably because they need better equipments, medical facilities etc.

The detrimental effects that strikes has on various stakeholders in an economy are:

Effects on employers: Strike affects business and it is vital for employers to know their rights and keep up to date with the current labour laws and legislation. Strike leads to loss of revenue for the owner and if the strike continues.for a long time, it can badly affect the business.

Effects on employees: Striking employees who belong to a union are under the obligation to strike when the union wants. They can be at risk of losing their wages and benefits such as sick and holiday pay, medical aid insurance if the strike drags continues for an extended period of time.

Effect on the economy: The impact of strike will be felt by the economy in the immediate and long term future. Strike can harm a country’s investment and reputation internationally. The GDP growth will also be affected and consequences of higher wages in some sectors would lead to higher inflation.

The stock of Cooper Corporation is​ 70% owned by Carole and​ 30% owned by​ Carole's brother, Chris. During​ 2017, Chris transferred property​ (basis of​ $100,000 and FMV of​ $120,000) as a contribution to the capital of Cooper. During February​ 2018, Cooper adopted a plan of liquidation and subsequently made a pro rata distribution of the property back to Carole and Chris. At the time of the​ liquidation, the property had an FMV of​ $80,000. What amount of loss can be recognized by Cooper on the distribution of​ property?

Answers

Answer:

$0

Explanation:

Since 100% of Cooper Corporation's stock were owned by Carole and Chris (who are siblings), then no one can recognize any loss or gain from the contribution of property (nor the distribution of property). Under section 351, no gain or loss can be recognized for the contribution of property in exchange for stocks in a controlled corporation.

Since the contribution was made through a carryover basis transaction less than 5 years before the liquidation, the distribution is carried out in the same way.

Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit: Manufacturing: Direct materials $6Direct labor $9Variable manufacturing overhead $3Variable selling and administrative $4Fixed costs per year: Fixed manufacturing overhead$300,000Fixed selling and administrative$190,000 During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the company’s product is $50 per unit. Required:1. Assume that the company uses absorption costing:a. Compute the unit product cost.b. Prepare an income statement for the year.2. Assume that the company uses variable costing:a. Compute the unit product cost.b. Prepare an income statement for the year.

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Variable costs per unit:

Direct materials $6

Direct labor $9

Variable manufacturing overhead $3

Variable selling and administrative $4

Fixed costs per year:

Fixed manufacturing overhead$300,000

Fixed selling and administrative $190,000

During the year, the company produced 25,000 units and sold 20,000 units.

The selling price of the company’s product is $50 per unit.

The difference between the absorption costing and variable costing methods is that the first one includes the fixed manufacturing overhead to the product cost.

1) Absorption costing:

Unitary fixed overhead= 300,000/25,000= $12 per unit

Unitary product cost= 6 + 9 + 3 + 12= $30

Income statement:

Sales= 20,000*50= 1,000,000

COGS= (20,000*30)= (600,000)

Gross profit= 400,000

Total selling and administrative= (190,000 + 20,000*4)= (270,000)

Net income= 130,000

2) Variable costing method:

Unitary variable cost= 6 + 9 + 3= $18

Income statement:

Sales= 1,000,000

Variable cost= (20,000*22)= (440,000)

Contribution margin= 560,000

Fixed manufacturing overhead= (300,000)

Fixed selling and administrative= (190,000)

net income= 70,000

If the marginal propensity to consume decreases, then the marginal propensity to save will decrease by the same percentage. the spending multiplier will decrease. the money multiplier will decrease. the rate of savings will decrease. the spending multiplier will increase.

Answers

Answer:

1.If the marginal propensity to consume decreases, then

a)the marginal propensity to save will decrease by the same percentage.

b)the spending multiplier will decrease.

c)the money multiplier will decrease.

d)the rate of savings will decrease.

e)the spending multiplier will increase.

2.Which of the following might cause stagflation in an open-market economy operating at equilibrium in the intermediate range of the aggregate supply curve?

a)Over the course of time, companies begin to provide educational opportunities for their employees.

b)The price of oil decreases as new reserves are found in the Alaskan wilderness.

c)The government sets a price ceiling for gasoline below market equilibrium.

d)An earthquake causes a serious rupture in the Alaskan oil pipeline that will take 6 months to repair.

e)Consumers fear a recession so they cut back on spending causing massive layoffs in major cities across the United States.

3.According to Classical economists,

a)the economy is stable in the long run causing unemployment to increase during time of recession.

b)the economy is stable in the long run and macroeconomic equilibrium can occur at less than full employment.

c)the economy is stable in the long run and self correcting to full employment.

d)the economy is unstable in the long run causing unemployment to increase during time of recession.

e)the economy is unstable in the long run and self correcting to full employment.

4.Which of the following will cause a decrease in SRAS?

a)An increase in labor productivity

b)An decrease in employee wages

c)An increase in government regulations on businesses

d)An increase in consumer spending

e)A decrease in investment spending

5.When inflation has reached a peak, economists would say that the economy has reached the

a)trough of the business cycle.

b)expansion of the business cycle.

c)peak of the business cycle.

d)contraction of the business cycle.

e)bottom of the business cycle.

6.In the circular flow diagram, tourists spend money in

a)the product market that provides goods and services to firms.

b)the product market that provides profit for firms.

c)the product market that provides revenue for firms.

d)the factor market that provides profit for firms.

e)financial markets that provides profit for firms.

7.Which of the following statements about the official rate of unemployment in the United States is most accurate?

a)The official unemployment rate includes only structurally and frictionally unemployed persons.

b)The official unemployment rate is greater than the natural rate of unemployment.

c)The official unemployment rate does not include discouraged workers.

d)The official unemployment rate includes all unemployed persons except teenagers who would be counted as seasonally unemployed.

e)The official unemployment rate includes all people in the labor force who do not have jobs.

8.If the Federal Reserve purchases securities, then

a)consumer spending will increase and AD will shift right.

b)consumer spending will decrease and AD will shift left.

c)government spending will increase and AD will shift right.

d)investment spending will increase and AD will shift right.

e)investment spending will decrease and AD will shift left.

9.If, while maintaining a balanced budget, Congress decreases spending and taxes by $100 each, then

a)aggregate demand will shift right.

b)aggregate demand will shift left.

c)aggregate demand will remain the same.

d)aggregate supply will shift right.

e)aggregate supply will shift left

10)If Congress wanted to lower inflation and unemployment at the same time, it would most likely

a)increase the international value of the dollar.

b)increase spending on public works projects across the United States.

c)decrease personal income taxes.

d)pay subsidies to businesses that increase economic investment and provide increased training and education to their workers.

e)decrease welfare payments to the working poor.

Explanation:

Assume the​ following: ​WIP, beginning 2 comma 500 units​ (100% complete as to direct​ materials, 50​% complete as to conversion​ costs) Started 10 comma 500 units during the period Total spoilage is 700 with normal spoilage is calculated to be 550 units Completed and transferred out during the period 6 comma 000 units ​WIP, ending 6 comma 300 units​ (100% complete as to direct​ materials, 60​% complete as to conversion​ costs) Spoiled units 700 and inspection happens when the process is 20​% complete All materials are added at the start of the process Under the weighted average​ method, would would be the equivalent units of work done for the​ period? A. 9 comma 920 B. 10 comma 190 C. 6 comma 000 D. 6 comma 300

Answers

Answer:

B. 10 comma 190

Or none of the given

Explanation:

Particulars         Units       % of Completion         Equivalent Units

                                   Materials Conversion     Materials    Conversion

Transferred       6000         100       100              6000        6000

+Ending WIP       6300         100        60               6300        3780

+Normal Spoilage 550         100        60               550           330

+Abnormal

Spoilage              150          100        60            150               90      

Total                                                                    13000          10200

As we see the total  weighted Equivalent units  for materials are 13000

and for conversion are 10200 . So the correct choice would be 10190 that is choice B which the nearest answer of the choices given to the answer calculated .

Under weighted method the Transferred out units are added to the ending work in process and the normal and abnormal spoilage is also added to find the equivalent units of production.

The other answer would be none of the given choices if exact figures are to be matched.

c. Assume that neither country experiences population growth or technological progress and that 6 percent of capital depreciates each year. Assume further that country A saves 15 percent of output each year and country B saves 23 percent of output each year. Using your answer from part b and the steady-state condition that investment equals depreciation, find the steady-state level of capital per worker (k∗) , income per worker (y∗) , and consumption per worker (c∗) for each country.

Answers

Answer:

Check Explanation.

Explanation:

Note that the production function of bother country = Y=F(K,L) = K L c : k^1/2 L^1/2.

Thus Y/L = b; b = k^1/2 L^1/2/ L.

b = k^1/2.

From the question we are given that L = 6% = 0.06.

Country A saves 15% = 15/100 = 0.15 and country B saves 23% = 23/100 = 0.23.

For country A,

(a). the steady state;

∆k = 0 = y - dk.

0 = 0.15 × k^1/2 - 0.06k.

K^1/2 = 2.5, k* = 6.25

(b). y = K^1/2 = (6.25)^1/2.

y* = 2.5

(c). C = 2.5 - (0.15 × 2.5) = 2.5 - 0.375.

C* = 2.125.

Then, for COUNTRY B.

(a). ∆k = 0 = y - dk.

0 = 0.25 × k^1/2 - 0.06k.

K^1/2 = 4.167, k* = 17.36

(b). y = K^1/2 = (17.36)^1/2.

y* = 4.167.

(c). C = 4.167 - (0.25 × 4.167) = 2.5 - 0.375.

C* = 3.127.

C* = 2.125.

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 6.90 pounds $ 2.60 per pound $ 17.94 Direct labor 0.30 hours $ 7.00 per hour $ 2.10 During the most recent month, the following activity was recorded: 19,250.00 pounds of material were purchased at a cost of $2.40 per pound. All of the material purchased was used to produce 2,500 units of Zoom. 450 hours of direct labor time were recorded at a total labor cost of $4,500. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month.

Answers

Answer:

1. Material Variances

Material Price Variance = $3,850 F

Material Quantity Variance = $5,200 U

2. Labor Variances

Labor Rate Variance = $1,350 U

Labor Efficiency Variance = $2,100 F

Explanation:

Calculation is as follows:

1. Material Variances

Material Price Variance = (Standard Price - Actual Price) x Actual units

Material Price Variance = ($2.60 - $2.4) x 19,250 pounds

Material Price Variance = $3,850 (favorable)

As the actual rate is less than standard rate the variance is favorable.

Standard Quantity = 2,500 x 6.9 = 17,250 pounds

Material Quantity Variance = (Standard Quantity - Actual Quantity) x Standard Rate

Material Quantity Variance = (17,250 - 19,250) x $2.60

Material Quantity Variance = $5,200 (Unfavorable)

As the actual raw material quantity used is higher than standard raw material quantity the variance is unfavorable.

2. Labor Variances

Actual Labor Rate = 4,500/450 = $10/hour

Labor Rate Variance = (Standard Rate - Actual Rate) x Actual Hours

Labor Rate Variance = ($7 - $10) x 450

Labor Rate Variance = $1,350 (Unfavorable)

As actual rate is higher than standard rate thus the variance is unfavorable.

Standard Hours = 2,500 x 0.3 = 750

Labor Efficiency Variance = (Standard Hours - Actual Hours) x Standard Rate

Labor Efficiency Variance = (750 - 450) x $7

Labor Efficiency Variance = $2,100 (Favorable)

As the Standard Hours is more than Actual Hours the variance is favorable.

Answer:

Check the explanation

Explanation:

Kindly check the attached image below to see the step by step explanation to the question above.

The CFO’s objective is to make certain that the capital consumed in farming is renewed and that the farm remains efficient, utilizing the best technology and equipment appropriate for its competitive situation. How would you expect the CFO to calculate depreciation expense?

Answers

Explanation:

Since the CFO wants the company to be competitive in the Industry he has to upgrade the machines and equipment in time when a new technology hits the market. which makes the company to increase the depreciation expense and write of the asset as early as possible.

The members of the farm is sharing the profits and assumes no other way of remuneration or incentive, Hence there will not be any opposition in charging higher depreciation.

So it is suitable for the company to claim depreciation on Straight Line method or Double Decline method which will amortize the capital expense early.

On December 31, 2019, Irey Co. has $3,000,000 of short-term notes payable due on February 14, 2020. On February 8, 2020, Irey borrowed $1,200,000 (long-term loan) from County Bank and used $1,000,000 additional cash to liquidate $2,200,000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2019 balance sheet which is issued on March 5, 2020 is

Answers

Answer:

$1,800,000

Explanation:

Given short term notes payable = $3,000,000

Total amount used to liquidate short term notes = $2,200,000

Balance = $3,000,000 - $2,200,000 = $800,000

The additional $1,200,000 which is borrowed from Country Bank will not increase the short term notes payable because it's a long term credit

The additional $1,000,000 cash used will now be added to the balance amount

Amount to be reported as current liabilities = $1,000,000 + $800,000

= $1,800,000

Therefore the amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2019 balance sheet which is issued on March 5, 2020 is $1,800,000

Farrugia Corporation produces two intermediate products, A and B, from a common input. Intermediate product A can be further processed into Product X. Intermediate product B can be further processed into Product Y. The common input is purchased in batches that cost $89 each and the cost of processing a batch to produce intermediate products A and B is $36. Intermediate product A can be sold as is for $53 or processed further for $33 to make Product X that is sold for $79. Intermediate product B can be sold as is for $113 or processed further for $66 to make Product Y that is sold for $158.
Required:
A. Assuming that no other costs are involved in processing potatoes or in selling products, how much money does the company make from processing one batch of the common input into the end products X and Y?
B. Should each of the intermediate products, A and B, be sold as is or processed further into an end product?

Answers

Answer:

Explanation:

                                  Product A              Product B     Total

Incremental rev.           79                       158                  237

Incremental cost           33                        66                   99

Contribution                  46                        92                  138

common cost                                                                    (89)

Cost of Processing                                                           (36)

Net income                                                                        13

B

Financial advantage - Incremental revenue- Incremental cost -Initial revenue

Product A

79-33-53 = - 7

Product B

158-66-113 = -21.

The two products are better sold at it is without further processing.

As no other cost is involved in the processing or selling and the initial selling price is greater than the incremental contribution , it is advisable that they are sold as they are

Pronghorn Appliances provides a 3-year warranty with one of its products which was first sold in 2017. Pronghorn sold $1,840,000 of products subject to the warranty. Pronghorn expects $202,000 of warranty costs over the next 3 years. In 2017, Pronghorn spent $106,000 servicing warranty claims. Prepare Pronghorn’s journal entries to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs; Pronghorn now expects future warranty costs of $115,000

Answers

Answer:

See the explanation below.

Explanation:

Balance in the warranty liability account after claim = $202,000 - $106,000 = $96,000

Amount needed to reduce expected warranty to $115,000 = $155,00 - $96,000 = $19,000

The journal entries will be as follows:

Details                                           Dr ($)                         Cr ($)      .

Cash                                         1,840,000

Sales revenue                                                           1,840,000

To record the sales of products                                                     .

Warranty expenses                  202,000

Estimated warranty liability                                       202,000

To record the expected warranty expenses                                  .

Warranty liability account          106,000

Inventory                                                                     106,000

To record the warranty claim                                                           .

Warranty expenses                     19,000

Estimated warranty liability                                         19,000

To record the reduction of expected warranty expenses to $115,000.

You can repair your furnace for $500 and it will last 5 more years, but your heating bills will cost you about $1500 per year. Alternatively, a new furnace can be installed for $3000 that will reduce your annual heating bill to $1200. Suppose you sell the house in 5 years and receive an additional $1000 in the sales price of your home (salvage value) because of having a fairly new furnace. Should you replace it? Use a 5-year analysis period and a MARR of 5%

Answers

Answer:

By present value old furnace should not be replaced, since  the new furnace costs more.

Explanation:

Solution

For the old furnace

Present value = - 500 - 1500 = (1 +i)^n-1/i (1+i)n

= - 500-1500 * 1.05^⁵/0.05 * 1.05^⁵

= -$6994.215

Now,

For the new furnace

The present value = - 3000 - 1200 *  1.05^⁵ - 1/0.05 * 1.05^⁵ + 1000/ (1.05)⁵

= -$7411.845

Therefore, As the new furnace costs more by present value old furnace should not be replaced

Crowl Corporation is investigating automating a process by purchasing a machine for $793,800 that would have a 9-year useful life and no salvage value. By automating the process, the company would save $133,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,200. The annual depreciation on the new machine would be $88,200. The simple rate of return on the investment is closest to
a. 5.80%
b. 11.12%
c. 16.72%
d. 5.12%

Answers

Answer:

Simple rate of return is 5.8%

Therefore option (a) is correct option.

Explanation:

It is given that purchase cost = $793800

Company saving per year = $133000

Yielding = $21200

Annual depreciation = $88200

Annual profit = $133000 - $88200 = $44800

Net investment is equal to = $793800 - $21200 = $772600

Simple rate of return [tex]=\frac{44800}{772600}=0.0579[/tex]

= 5.8%

Therefore simple rate of return is 5.8 %

So option (a) is correct.

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