Following are the accounts and balances from the adjusted trial balance of stark company
Notes payable $11,000 Accumulated depreciation building $15,000
Prepaid insurance 2,500 Accounts receivable 4,000
Interest expense 500 Utilities expense 1,300
Accounts payable 1,500 Interest payable 100
Wages payable 400 Unearned revenue 800
Cash 10,000 Supplies expense 200
Wages expense 7,500 Buildings 40,000
Insurance expense 1,800 Dividends 3,000
Common stock 10,000 Depreciation expense—Buildings 2,000
Retained earnings 14,800 Supplies 800
Services revenue 20,000
Prepare the (1) income statement and (2) statement of retained earnings for the year ended December 31 and (3) balance sheet at December 31. The Retained Earnings account balance was $35,600 on December 31 of the prior year.
Answers
Answer:
STARK COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31
PARTICULARS AMOUNT $
Service Revenue 20,000
Expenses
Supplies expense 200
Interest expense 500
Insurance expense 1,800
Utilities expense 1,300
Depreciation expense 2,000
Wages expense 7,500
Total expenses 13,300
Net profit 6,700
STARK COMPANY
STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31
Amount $
Retained earnings December 31 prior year end 14,800
Add- Net income 6,700
Less- Dividends 3,000 3,700
Retained earnings, December 31 Current year end 18,500
3. STARK COMPANY
BALANCE SHEET FOR THE YEAR ENDED DECEMBER 31
Current Assets
Cash 10,000
Accounts receivable 4,000
Office supplies 800
Prepaid insurance 2,500
Total current asset 17,300
Non Current Assets
Buildings 40,000
Less- Accumulated dep. 15,000
Total Non Current Assets 25,000
Total Assets 42,300
Liabilities
Current liabilities
Accounts payable 1,500
Interest payable 100
Notes payable 11,000
Unearned revenue 800
Wages payable 400
Total Current liabilities 13,800
Long term liabilities
Common stock 10,000
Retained earnings 18,500 28,500
Total liabilities and capital 42,300
Financial statements are statements that keep a record of the various transactions of the firm. It keeps the records of the inflow and outflow of cash in the company and also maintains the sound wealth in the firm.
The income statement, balance sheet, and calculations have been attached below.
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Related Questions
The last dividend paid by Coppard Inc. was $1.25. The dividend growth rate is expected to be constant at 27.5% for 3 years, after which dividends are expected to grow at a rate of 6% forever. If the firm's required return (rs) is 11%, what is its current stock price
Answers
Answer:
36.38
Explanation:
The Current stock price can be calculated by identifying Present value of dividends in all three years adding terminal value of dividends in year 3.
Year Dividend Growth Dividend PV factor Present Values
1 1.25 127.5% 1.59 0.900901 1.43
2 1.59 127.5% 2.03 0.811622 1.64
3 2.03 127.5% 2.59 0.731191 1.88
3 42.987(w) 0.731191 31.43
Total PV 36.38
Current Dividend = 2.59
Rate of return = 11.00%
Growth Rate = 6.00%
Terminal value = Current Dividend*(1+Growth rate)/(Rate of return-Growth Rate)
Terminal value = 2.59 x (1+0.06) / (0.11-0.06)
Terminal value =42.987
Current stock price = 1.43 +1.64+1.88+31.43
Current stock price = 36.38
A manufacturing company is thinking about building a new factory. The new factory, if built, will give a return of $200 million in 4 years, and it would cost $125 million today to build. The company will decide to build the factory if the interest rate is
Answers
Answer:
The company will decide to build the factory if the interest rate is 12.47 %.
Explanation:
The required interest rate r, can be determined as follows ;
PV = - $125 million
n = 4
Pmt = $0
P/yr = 1
FV = $200 million
r = ?
Using a Financial Calculator, the required interest rate r, is 12.4683 or 12.47 % (2 decimal places)
In what way did Henry Ford’s use of the assembly-line method of production represent an advance in technology in automobile manufacturing?
Answers
Answer: a. It allowed workers to specialize on specific tasks and become more productive.
Explanation:
The Assembly line method of production that Henry Ford initiated at his plant was a technological game changer as it enabled workers to assemble cars faster and this mass produce Ford cars at a cheaper rate for the masses.
The Assembly line worked by putting workers at various stages of the assembly line where they would focus on installing only one or a few parts into the prospective vehicle. This way they were able to focus on that specific task, become more adept at it and thus become more productive.
XYZ, Inc. has a beta of 0.8. The yield on a 3-month T-bill is 5%, and the yield on a 10-year T-bond is 7%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 20%. What is the estimated cost of common equity using the CAPM? Show your work
Answers
Answer:
the estimated cost of common equity using the CAPM is 11.40 %.
Explanation:
Cost of Equity = Return on the Risk Free Security + Beta × Return on Market Portfolio
= 7.00 % + 0.8 × 5.5%
= 11.40 %
The estimated cost of common equity using the CAPM is 11.40 %.
Calculation of the cost of common equity;Since the return on risk-free rate is 7%, beta is 0.8 and, the market risk premium is 5.5%
So here the cost of common equity should be
= Return on the Risk Free + Beta × Market risk premium
= 7.00 % + 0.8 × 5.5%
= 11.40 %
Hence, The estimated cost of common equity using the CAPM is 11.40 %.
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A PHLX Jan 80 Swiss Franc Call contract is quoted at 2 when the Swiss Franc closes at 77. The contract is:_______
Answers
Answer:
Out the money.
Explanation:
A PHLX Jan 80 Swiss Franc Call contract is quoted at 2 when the Swiss Franc closes at 77. The contract is out the money.
An out the money ultimately implies that an option only has an extrinsic value but no intrinsic value. The extrinsic value of an option refers to the difference between its intrinsic value and the market value (premium). An extrinsic value is affected by the volatility in the market and its time value. The intrinsic value of an asset refers to the calculated, true or real value of an asset and is solely affected by internal factors.
A call is out the money when the strike price is greater than or above the underlying price of an asset. This simply means that, it's market value (price) has fallen below its strike price.
In this scenario, the market price of the call is 77 while its strike price is 80; thus, the call option is out the money by 3.
Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as: Multiple Choice Financing activities. Investing activities.
Answers
Answer:
Operating activities
Explanation:
The operating activities in the cash flow statement using the direct method derive that the cash receipts and the cash payment should be recorded under this activity.
Cash payment would be recorded when the purchase of merchandise is held
And cash received would be recorded when the sale of goods and services made to customers
And, the purchase of goods, sales of goods and services show in the income statement along with the expenditure to arrive at the net income i.e. shown in the operating activities
Bailey and Sons has a levered beta of 1.10, its capital structure consists of 40% debt and 60% equity, and its tax rate is 40%. What would Bailey's beta be if it used no debt, i.e., what is its unlevered beta? a. 0.79 b. 0.67 c. 0.71 d. 0.64 e. 0.75
Answers
Answer:
Option A. 0.79
Explanation:
All we have to do is convert the levered beta into unlevered beta (100% equity financed). So we will use the following formula to find unlevered beta:
Unlevered Beta = Levered Beta / (1 + (1+T)* D/E)
Here,
Tax rate is 40%
Debt is 40%
Equity is 60%
And Levered Beta is 1.10
Now by putting values, we have:
Unlevered Beta = 1.10 / (1 + (1 - 0.4)* 40% / 60%)
Unlevered Beta = 1.10 / (1 + 0.6 * .667)
Unlevered Beta = 1.10 / (1 + 0.4)
Unlevered Beta = 1.10 / (1.4)
Unlevered Beta = 0.786 which after rounding off we have 0.79
Onslow Co. purchases a used machine for $178,000 cash on January 2 and readies it for use the next day at a $2,840 cost. On January 3, it is installed on a required operating platform costing $1,160, and it is further readied for operations. The company predicts the machine will be used for six years and have a $14,000 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations, it is disposed of.Required:Prepare journal entries to record the machine's disposal under each of the following separate assumptions: a. It is sold for $22,000 cash. b. It is sold for $88,000 cash. c. It is destroyed in a fire and the insurance company pays $32,500 cash to settle the loss claim.
Answers
Answer:
All the requirements are solved below
Explanation:
Purchase = $178,000
Ready to use cost = $2,480
Installation cost = $1,160
Salvage value = $14,000
Depreciation method = Straight line
Useful life = 6 years
Solution
Requirement A If sold for $22,000
Entry DEBIT CREDIT
Cash $22,000
Accumulated depreciation $140,000
Profit/loss on disposal $20,000
Machinery $182,000
Requirement B If sold for $88,000
Entry DEBIT CREDIT
Cash $82,000
Accumulated depreciation $140,000
Profit/loss on disposal $40,000
Machinery $182,000
Requirement C If destroyed in fire and insurance company paid $32,500
Entry DEBIT CREDIT
Cash $30,000
Accumulated depreciation $140,000
loss from fire $12,000
Machinery $182,000
Workings
Cost =$178,000 + $2,480 + $1,160
Cost = $182,000
Accumulated depreciation = ([tex]\frac{182,000-14,000}{6}x5[/tex]
Accumulated depreciation = 140,000
A firm is using experience curve pricing when it prices high worldwide in an attempt to position itself as a market leader.
A. True
B. False
Answers
the answer is this true
A firm is using experience curve pricing when it prices high worldwide in an attempt to position itself as a market leader is a false statement.
What is experience curve pricing?Pricing for Experience Curve is Depending on the company's level of expertise in creating the goods, the price is set. Every time a corporation doubles its expertise in creating a product, the cost of selling that product or service drops by 10% to 30%.
A business can use less time and resources or produce products more effectively as it gains experience. As a result, it may provide a lower price since costs are reduced.
The pricing of a product at a lower than average-cost level on the theory that costs will reduce as manufacturing expertise improves allows the product to become cheaper as it continues through the product life cycle.
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The production department is proposing the purchase of an automatic insertion machine. They have identified 3 machines and have asked the accountant to analyze them to determine the best average rate of return.
Machine A Machine B Machine C
Estimated Average Income $45,192.56 $64,695.00 $60,929.70
Average Investment $322,804.00 $215,650.00 $406,198.00
Select the correct answer.
a) Machine B or C
b) Machine A
c) Machine C
d) Machine B
Answers
Answer:
Option D is correct
Machine B is the best investment
Explanation:
The accounting rate of return is the average annual income expressed as a percentage of the average investment.
The simple rate of return can be calculated using the two formula below:
Accounting rate of return =
Annual operating income/Average investment × 100
To determine the the machine with the best return,we would compute the average annual return of all of the machines and then choose the machine with the highest return
This is done as follows:
Machine Working s Average annul rate
A 45,192.56/322,804.00 × 100 = 14.0%
B 64,695.00/215,650.00 × 100= 30.0%
C 60,929.70/406,198.00× 100 = 15.0%
Machine B is the best investment
Folsom Advertising, Inc. is considering an investment in a new information system. The new system requires an investment of $1,800,000 and either has
a. Even cash flows of $750,000 per year or
b. The following expected annual cash flows: $450,000, $225,000, $600,000, $600,000, and $150,000.
Required:
Calculate the payback period for each case
Answers
Answer:
Payback period=2 years 5 months
Payback period=3 years 8 months
Explanation:
The payback period is the estimated length of time in years it takes .
It is the number of years it takes the cash project to break-even
a) Payback period
Total cash flow for two years = 750× 2 = 1500.000
Balance of cash flow required to make up= 1800000- 1500,000 300,000
Payback period = 2 years + 300,000/750,000× 12 months= 2 years 5 months
Payback period=2 years 5 months
b) Payback period
Total cash flow for 3 years = 450,000 + $225,000 +600,000=1,275 ,000
Balance o cash required to make up 1800,000 = 1,800,000 -1275,000= 525,000
Pay back period = 3 years + 525,000/750,000× 12 months
= 3 years 8 months
Payback period=3 years 8 months
Mr. Dow bought 100 shares of stock at $17 per share. Three years later, he sold the stock for $23 per share. What is his annual rate of return
Answers
Answer:
10.60%
Explanation:
The compound annual growth rate formula stated below can be used to determine the annual rate of return on the stock investment.
CAGR=(future value/present value)^(1/n)-1
future value is the future worth of the stock after three years i.e100*$23=$2300
Present value is the initial cost of the stock which is 100*$17=$1700
n is the number of years the stocks have been owned
CAGR=($2300/$1700)^(1/3)-1=10.60%
Sue purchased a house for $89,000, spent $56,000 upgrading it, and currently had it appraised at $212,900. The house is being rented to a family for $1,200 a month, the maintenance expenses average $200 a month, and the property taxes are $4,800 a year. If she sells the house she will incur $20,000 in expenses. She is considering converting the house into professional office space. What opportunity cost, if any, should she assign to this property if she has been renting it for the past two years?
Answers
Answer:
Opportunity cost = $192,900
Explanation:
The opportunity cost is the "cost" incurred by not enjoying the benefit associated with the best alternative choice
DATA
Current value = $212,900
Selling expense = $20,000
Opportunity cost = Current value - selling expense
Opportunity cost = $212,900 - $20,000
Opportunity cost = $192,900
Here Sue is Decide to convert the house into professional office space she would lose te opportunity cost of $192,000
A catering company prepared and served 375 meals at an anniversary celebration last week using 3 workers. The week before, 2 workers prepared and served 225 meals at a wedding reception
a1. Calculate the labor productivity for each event. (Round your answers to 1 decimal place.) Anniversary Wedding meals/worker meals/worker
a2. For which event was the labor productivity higher?
Anniversary
Wedding
Answers
Answer:
for anniversary = 125
for wedding = 112.5
anniversary
Explanation:
Labour productivity = number of meals / total number of workers
for anniversary = 375 / 3 = 125
for wedding = 225 / 2 = 112.5
labour productivity is higher for the anniversary because one unit of labour produces more meals when compared to the wedding.
A product's ________ identifies the product or brand, describes several things about the product, and promotes the brand.
Answers
Answer: label
Explanation:
Product labels are the piece of material
that are being attached to a product in order for easy identification by consumers in order to know the brand and also to know the contents.
A product's label identifies the product or brand, describes several things about the product, and promotes the brand.
A product label identifies the product or brand, describes various things about the product, and promotes the brand. Developing product labeling is therefore a strategic task that can help identify the brand and position it in the market.
An example of how labeling can provide extra benefits for companies is through environmental certifications, which can come as a seal on labels and promote the company's environmental responsibility in a widespread and fast way.
Therefore, the labeling must have the design, layout and information aligned with the company's values so that there is promotion of its products and assist in consumer choice.
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In its first year, a project is expected to generate earnings before interest and taxes of $237,884 and its depreciation expense is expected to be $87,882. If the company’s tax rate is 35%, what is the project’s expected net operating profit after taxes for the year?
Answers
Answer:
Net operating income= $242,506.6
Explanation:
Giving the following information:
Earnings before interest and taxes= $237,884
Depreciation expense= $87,882.
Tax rate= 35%
To calculate the net operating profit, we need to use the following structure:
EBIT= 237,884
Tax= (237,884*0.35)= (83,259.4)
Depreciation= 87,882
Net operating income= 242,506.6
A customer sells short 1,000 shares of ABC stock at $4 in a margin account. The customer must deposit:________.
A. $2,000
B. $2,500
C. $4,000
D. $5,000
Answers
Answer: $4000
Explanation:
A margin account is typically offered by a brokerage firms so that investors can borrow money in order to purchase securities.
A customer sells short 1,000 shares of ABC stock at $4 in a margin account. The customer must deposit:
= $4 × 1000
= $4000
On January 15, the end of the first pay period of the year, North Company’s employees earned $40,000 of sales salaries. Withholdings from the employees’ salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $3,100 of federal income taxes, $593 of medical insurance deductions, and $230 of union dues. No employee earned more than $7,000 in this first period. Prepare the journal entry to record North Company’s January 15 salaries expense and related liabilities.
Answers
Answer:
Dr Salaries expense 40,000
Cr FICA - Social security taxes payable 2,480
Cr FICA - medicare taxes payable 580
Cr Employee medical insurance deduction 593
Cr Union dues 230
Cr Salaries payable 33,017
Cr Federal income taxes payable 3,100
Explanation:
Preparation of the journal entry to record North Company’s January 15 salaries expense and related liabilities
Jan 15
Dr Salaries expense 40,000
Cr FICA - Social security taxes payable 2,480 (6.2%*40,000)
Cr FICA - medicare taxes payable 580
(1.45%*40,000)
Cr Employee medical insurance deduction 593
Cr Union dues 230
Cr Salaries payable 33,017
Cr Federal income taxes payable 3,100
Salaries payable is calculated as:
Salaries expense 40,000
Less: FICA - Social security taxes payable (2,480)
FICA - medicare taxes payable (580)
Employee medical insurance deduction (593)
Union dues (230)
Federal income taxes payable (3,100)
=$33,017
Here, we are to prepare the journal entry to record North Company’s January 15 salaries expense and related liabilities.
Salaries payable = Salaries expense - FICA - Social security taxes payable - FICA - medicare taxes payable - Employee medical insurance deduction - Union dues - Federal income taxes payable
Salaries payable = $40,000 - $2,480 - $580 - $593 - $230 - $3,100
Salaries payable = $33,017
Date Account titles and Explanation Debit Credit
Jan 15 Salaries expense $40,000
FICA - Social security taxes payable $2,480
(6.2%*40,000)
FICA - medicare taxes payable $580
(1.45%*40,000)
Employee medical insurance deduction $593
Union dues $230
Salaries payable $33,017
Federal income taxes payable $3,100
(To record salaries expense and related liabilities)
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Explain how growth in the demand for Australia's natural resources would affect the demand for Australian dollars in the foreign exchange market. Explain how the supply of Australian dollars would change.
Answers
Answer:
The question here is that of the balance of trade and the principles of demand and supply.
According to the Economics principles of demand and supply, when demand is high, prices follow in the same direction and the currency appreciates in value.
So, on one hand, when the demand for Australia's natural resources increases, because the legal tender recognised within Australia's borders is its own currency, trading partners are forced to convert from their currency into the Australian dollars thus creating an increased demand for the currency.
On the other hand, if the value of a countrys imports is more than the value of its export transactions, the opposite would happen, that is, its currency depreciates or loses value.
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True or false: At 2019 year-end, a government has $25,000 of outstanding encumbrances. The 2019 Budgetary Comparison Scheduled will include the $25,000 whether or not the encumbrances lapse at year-end.
Answers
Answer:
True.
Explanation:
The 2019 Budgetary Comparison Schedule will include the $25,000 whether or not the encumbrances lapse at the year-end, either as outstanding encumbrances or settled encumbrances. These $25,000 encumbrances are budget reservations of appropriations so that they can be used to settle specified expenditures in the future. The purpose of making these reservations is to signal that the expenditures have been earmarked so that their cash allocations are not used for other purposes.
Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: Name of Company Revenues Cost of Purchased Inputs Citrus Growers Inc. $0.75 0 Florida Jam Company $2.00 $0.75 The Corner Store $2.50 $2.00 What is the value added of Florida Jam Company
Answers
Answer:
$1.75
Explanation:
Value added is calculated by subtracting the difference of revenue and the cost of inputs.
value added of Florida Jam Company = $2.50 - $0.75 = $1.75
Given the following data for Vinyard Corporation:
D=1000
V=4000
E=3000
V=4000
Calculate the proportions of debt (D/V) and equity (E/V) for the firm that you would use for
estimating the weighted average cost of capital (WACC):
A. 40% debt and 60% equity
B. 50% debt and 50% equity
C. 25% debt and 75% equity
D. none of the given values
Answers
Answer:
C
Explanation:
D / V = 1000 / 4000
Dividing 1000 by 4000 gives 0.25 = 25%
E / V = 3000 / 4000
Dividing 3000 by 4000 gives 0.75 = 75%
Who Done It Mystery Theater sells tickets for dinner and a show for each. The cost of providing dinner is per ticket and the fixed cost of operating the theater is per month. The company can accommodate patrons each month. What is the contribution margin per patron?
Answers
Answer: $19
Explanation:
The Contribution Margin is defined as the Sales the Variable costs.
The Contribution Margin per patron is therefore;
= Ticket Price - Variable Cost which is the cost of dinner
= 40 - 21
= $19
Michael and Kathy have one dependent, Dustin, who is in his third year of college. Michael is taking classes in the evening toward an MBA. What credits can Michael and Kathy claim related to tuition they pay for these programs. I. American Opportunity Tax Credit II. Lifetime Learning Credit
Answers
Answer: I and II
I. American Opportunity Tax Credit
II. Lifetime Learning Credit
Explanation:
From the question, we are informed that Michael and Kathy have one dependent, Dustin, who is in his third year of college and that Michael is taking classes in the evening toward an MBA.
The credits that Michael and Kathy can claim related to tuition they pay for these programs are American Opportunity Tax Credit and the Lifetime Learning Credit.
Tennessee Corporation is analyzing a capital expenditure that will involve a cash outlay of $109,332. Estimated cash flows are expected to be $36,000 annually for 4 years. The present value factors for an annuity of $1 for 4 years at interest of 10%, 12%, 14%, and 15% are 3.170, 3.037, 2.914, and 2.855, respectively. The internal rate of return for this investment is a.9% b.3% c.10% d.12%
Answers
Answer:
D
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-109,332
Cash flow each year from year 1 to 4 = $36,000
IRR = 12%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. All of the company's transactions with customers, employees, and suppliers are conducted in cash; there is no credit.
The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $76,500 of manufacturing overhead for an estimated activity level of $45,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:
Raw materials $10,200
Work in process $4,200
Finished goods $8,200
During the year, the following transactions were completed:
a. Raw materials purchased for cash, $170,000.
b. Raw materials requisitioned for use in production, $141,000 (materials costing $121,000 were charged directly to jobs; the remaining materials were indirect).
c. Costs for employee services were incurred as follows: |Direct labor|$156,000
Indirect labor $185,900
Sales commissions $22,000
Administrative salaries $50,000
d. Rent for the year was $18,800 ($13,600 of this amount related to factory operations, and the remainder related to selling and administrative activities).
e.Utility costs incurred in the factory, $16,000.
f.Advertising costs incurred, $13,000.
g. Depreciation recorded on equipment, $21,000. ($15,000 of this amount was on equipment used in factory operations; the remaining $6,000 was on equipment used in selling and administrative activities.)
h. Manufacturing overhead cost was applied to jobs, $?
i.Goods that had cost $226,000 to manufacture according to their job cost sheets were completed.
j. Sales for the year totaled $514,000. The total cost to manufacture these goods according to their job cost sheets was $220,000.
Required:
(Round your intermediate calculations to 2 decimal places)
1. Prepare journal entries to record the transactions for the year.
2. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.
3. Prepare an income statement for the year.
Answers
Answer:
1)
a. Raw materials purchased for cash, $170,000.
Dr Materials inventory 170,000
Cr Cash 170,000
b. Raw materials requisitioned for use in production, $141,000 (materials costing $121,000 were charged directly to jobs; the remaining materials were indirect).
Dr Work in process: direct materials 121,000
Dr Manufacturing overhead 20,000
Cr Materials inventory 141,000
c. Costs for employee services were incurred as follows:
Dr Work in process: direct labor 156,000
Dr Manufacturing overhead 185,900
Dr Sales salaries expense 22,000
Dr Administrative salaries expense 50,000
Cr Cash 413,900
d. Rent for the year was $18,800 ($13,600 of this amount related to factory operations, and the remainder related to selling)
Dr Manufacturing overhead 13,600
Dr Rent expense 5,200
Cr Cash 18,800
e.Utility costs incurred in the factory, $16,000.
Dr Manufacturing overhead 16,000
Cr Cash 16,000
f. Advertising costs incurred, $13,000.
Dr Advertising expenses 13,000
Cr Cash 13,000
g. Depreciation recorded on equipment, $21,000. ($15,000 of this amount was on equipment used in factory operations; the remaining $6,000 was on equipment used in selling and administrative activities.)
Dr Manufacturing overhead 15,000
Dr Depreciation expense 6,000
Cr Accumulated depreciation: manufacturing equipment 15,000
Cr Accumulated depreciation: office equipment 6,000
h. Manufacturing overhead cost was applied to jobs, $?
Dr Work in process 265,200
Cr Manufacturing overhead 265,200 (170% of direct labor)
i. Goods that had cost $226,000 to manufacture according to their job cost sheets were completed.
Dr Finished goods inventory 226,000
Cr Work in process 226,000
j. Sales for the year totaled $514,000. The total cost to manufacture these goods according to their job cost sheets was $220,000.
Dr Cash 514,000
Cr Sales revenue 514,000
Dr Cost of goods sold 220,000
Cr Finished goods inventory 220,000
2)
Dr Manufacturing overhead ($265,200 - $250,500) 14,700
Cr Cost of goods sold 14,700
3) Gold Nest Company
Income Statement
Sales revenue $514,000
- Cost of goods sold -$205,300
Gross profit $308,700
Operating expenses:
Sales salaries expense -$22,000Administrative salaries expense -$50,000Rent expense -$5,200Advertising expenses -$13,000Depreciation expense -$6,000 -$96,200Operating profit $212,500
1. The preparation of journal entries to record the transactions for Gold Nest Company of Guandong, China, is as as follows:
a. Debit Raw materials $170,000
Credit Cash $170,000
b. Debit Work in Process $121,000
Debit Manufacturing Overhead $20,000
Credit Raw materials $141,000
c. Debit Work in Process $156,000
Debit Manufacturing Overhead $185,900
Credit Payroll Expenses $341,900
Debit Selling and Administrative Expenses $22,000
Credit Sales commissions $22,000
Debit Selling and Administrative Expenses $50,000
Credit Administrative salaries $50,000
d. Debit Manufacturing Overhead $13,600
Debit Selling and Administrative Expenses $5,200
Credit Rent Expenses $18,800
e. Debit Manufacturing Overhead $16,000
Credit Utilities Expense $16,000
f. Debit Selling and Administrative Expenses $13,000
Advertising costs $13,000
g. Debit Manufacturing Overhead $15,000
Debit Selling and Administrative Expenses $6,000
Credit Depreciation Expenses $21,000
h. Debit Work in Process $265,200
Credit Manufacturing Overhead (Applied) $265,200 ($1.70 x $156,000)
i. Debit Finished Goods Inventory $226,000
Credit Work in Process $226,000
j. Debit Cash $514,000
Credit Sales Revenue $514,000
j. Debit Cost of goods sold $220,000
Credit Finished Goods Inventory $220,000
2. The journal entry to close the balance in the Manufacturing Overhead account to the Cost of goods sold is as follows:
Debit Manufacturing Overhead $14,700
Credit Cost of goods sold $14,700
3. Gold Nest Company
Income Statementfor the year ended December 31
Sales Revenue $514,000
Cost of goods sold 205,300
Gross profit $308,700
Selling and Administrative Expenses:
Sales commission $22,000
Administrative salaries 50,000
Rent Expenses 5,200
Advertising Expenses 13,000
Depreciation Expenses 6,000
Total selling/admin. $96,200
Net income $212,500
Data Calculations:Estimated manufacturing overhead = $76,500
Estimated direct labor dollars = $45,000
Predetermined overhead rate = $1.70 ($76,500/$45,000)
Beginning inventory balances:Raw materials = $10,200
Work in process = $4,200
Finished goods = $8,200
Data Analysis:a. Raw materials $170,000 Cash $170,000
b. Work in Process $121,000 Manufacturing Overhead $20,000 Raw materials $141,000
c. Work in Process $156,000 Manufacturing Overhead $185,900 Payroll Expenses $341,900
Selling and Administrative Expenses $22,000 Sales commissions $22,000
Selling and Administrative Expenses $50,000 Administrative salaries $50,000
d. Manufacturing Overhead $13,600 Selling and Administrative Expenses $5,200 Rent Expenses $18,800
e. Manufacturing Overhead $16,000 Utilities Expense $16,000
f. Selling and Administrative Expenses $13,000 Advertising costs $13,000
g. Manufacturing Overhead $15,000 Selling and Administrative Expenses $6,000 Depreciation Expenses $21,000
h. Work in Process $265,200 Manufacturing Overhead (Applied) $265,200 ($1.70 x $156,000)
i. Finished Goods Inventory $226,000 Work in Process $226,000
j. Cash $514,000 Sales Revenue $514,000
j. Cost of goods sold $220,000 Finished Goods Inventory $220,000
2. Manufacturing Overhead $14,700 Cost of goods sold $14,700
Manufacturing Overheadb. Raw materials $20,000
c. Payroll Expenses $185,900
d. Rent Expenses $13,600
e. Utilities Expense $16,000
g. Depreciation Expenses $15,000
h. Work in Process $265,200
Cost of goods sold (Over-applied
overhead) $14,700
Cost of goods soldFinished goods $220,000
Over-applied manufacturing overhead (14,700)
Adjusted cost of goods sold $205,300
What is a job-order costing system?A job-order costing system is a costing system that tracks the costs and revenues according to jobs, with jobs allocated job numbers. It is unlike process costing, which tracks jobs for each process in order to determine the unit costs instead of per job.
Learn more about accounting costs under job-order costing system at https://brainly.com/question/24516871
The Discount on Bonds Payable account is: Multiple Choice A contra equity. A contra expense. A liability. A contra liability. An expense.
Answers
Answer:
Is a contra account to bonds payable
Explanation:
One of the primary reasons for the failure of quality circles is because management refuses to listen to the quality improvement ideas of subordinates.
A. True
B. False
Answers
The failure of quality circles is not because management refuses to listen to the quality improvement ideas of subordinates.
What do you mean by quality circles?Quality circles refer to a method that helps in encouraging group involvement.
The major reason for the failure of quality circles is because of the rejection of the concept by top management, labor turnover, lack of cooperation from middle and first-line managers, etc.
Therefore, the above statement is false.
Learn more about Quality circles here:
https://brainly.com/question/24092637
Edna is a leading brain surgeon in the United States. She enters into a contract to perform a complicated brain surgery on Ben. However, since Edna is very busy, she wants to assign this contract to a less experienced surgeon, Charles. This would be Charles's first operation of this type. Ben can object to this assignment and prevent it because the contract between Ben and Edna is a(n):
Answers
Complete Question:
Edna is a leading brain surgeon in the United States. She enters into a contract to perform a complicated brain surgery on Ben. However, since Edna is very busy, she wants to assign this contract to a less experienced surgeon, Charles. This would be Charles's first operation of this type. Ben can object to this assignment and prevent it because the contract between Ben and Edna is a(n):
Group of answer choices.
A. contract for services to be performed in the future.
B. contract involving personal skill.
C. services contract.
D. employment contract.
Answer:
B. contract involving personal skill.
Explanation:
In this scenario, Edna a leading brain surgeon in the United States enters into a contract to perform a complicated brain surgery on Ben. However, Edna is very busy and wants to assign this contract to a less experienced surgeon, Charles which would be his first operation of this type. Hence, Ben can object to this assignment (brain surgery) and prevent it because the contract between Ben and Edna is a contract involving personal skill.
Apparently, it can be deduced that Edna has competent and professional skills which is the reason why she's the leading brain surgeon in USA. Ben having this information at his disposal chose to go into the contract with Edna, who is an experienced brain surgeon. Therefore, the contract between the two (2) parties is solely based on Edna's personal skill.
Your estimate of the market risk premium is %. The risk-free rate of return is %, and General Motors has a beta of . According to the Capital Asset Pricing Model (CAPM), what is its expected return?
Answers
Answer:
The correct option is option A) 16.4%.
Explanation:
Note: This question is not complete as all the important data are omitted from it. The complete question is therefore provided before answering the question as follows:
Your estimate of the market risk premium is 9%. The risk-free rate of return is 3.8% and General Motors has a beta of 1.4. According to the Capital Asset Pricing Model (CAPM), what is its expected return?
Options:
A) 16.4%
B) 17.2%
C) 14.8%
D) 15.6%
The question is now answered as followed:
Capital asset pricing model (CAPM) can be described as a model that is employed to compute a theoretical required rate of an asset in order decide whether or not to add assets a portfolio of investment that is well-diversified.
According to the Capital Asset Pricing Model (CAPM), the expected return can be calculated using the following formula:
Expected return = Risk-free rate + (Beta * Market ris premium) .......... (1)
Where;
Risk-free rate of return = 3.8%
Market risk premium = 9%
Beta = 1.4
Substitute the values into equation (1), we have:
Expected return = 3.8% + (1.4 * 9%) = 16.40%
Therefore, the correct option is option A) 16.4%.
