Answer: Inventory will fluctuate significantly during the year
Explanation:
If a make-to-stock manufacturing firm with highly seasonal demand follows a level production strategy, then the inventory will fluctuate significantly during the year.
When using a level production strategy, it should be noted that there will be an increase in the inventory during when there are low demand while there'll be a reduction in the inventory during the periods of high demand.
Lumberton Home Maintenance Company (LHMC) earned operating income of $6,000,000 on operating assets of $62,500,000 during Year 2. The Tree Cutting Division earned $1,000,000 on operating assets of $10,000,000. LHMC has offered the Tree Cutting Division $1,250,000 of additional operating assets. The manager of the Tree Cutting Division believes he could use the additional assets to generate operating income amounting to $112,500. LHMC has a desired return on investment (ROI) of 8 percent.
Required
a. Calculate the return on investment for LHMC, the Tree Cutting Division, and the additional investment opportunity.
b. Calculate the residual income for LHMC, the Tree Cutting Division, and the additional investment opportunity
Answer:
Lumberton Home Maintenance Company (LHMC)
LHMC Tree Cutting Additional
Division Investment
a. Return on Investment 9.6% 10% 9%
b. Residual income $1,000,000 $200,000 $12,500
Explanation:
a) Data and Calculations:
LHMC Tree Cutting Additional
Division Investment
Operating income $6,000,000 $1,000,000 $112,500
Operating assets $62,500,000 $10,000,000 $1,250,000
a. Return on Investment 9.6% 10% 9%
b. Residual income $1,000,000 $200,000 $12,500
Return on investment = Operating income/Operating assets * 100
Residual income = Operating income Minus (Desired ROI * Operating assets)
Desired Return on Investment (ROI) = 8%
Show the effect of each transaction on the three basic accounting elements by indicating the dollar amount of the increase or decrease under the proper element heading. Compute the resulting accounting equation.
a. Owner invested $16,500 cash in the business.
b. Paid premium for two-year insurance policy, $1,500.
c. Purchased a van valued at $35,000 with $5,000 down payment; the balance to be paid over three years.
d. Paid the rent for the month, $900.
e. Purchased $470 of supplies for cash.
f. Cash sales for the month, $8,750.
g. Billed credit customers $14,200 for monthly services.
Answer:
Assets = Liabilities + Owner’s Equity = $67,800
Explanation:
Note: See the attached excel file for the Effect of Each Transaction on the Three Basic Accounting Elements.
From attached excel file, the resulting accounting equation can be computed as follows
Assets = Total Cash + Total Insurance Prepaid + Total Van + Total Supplies + Total Accounts Receivable = $17,380 + $750 + $35,000 + $470 + $14,200 = $67,800
Liabilities = Total Accounts Payable = $30,000
Owner’s Equity = Total Capital + Total Retained earnings = $16,500 + $21,300 = $37,800
Liabilities + Owner’s Equity = $30,000 + $37,800 = $67,800
Therefore, we have:
Assets = Liabilities + Owner’s Equity = $67,800
Logan owns a horse ranch. Logan dislikes horses, but he opened the ranch because he heard it was a lucrative business and he wanted to make money. Logan’s horse ranch has lost money every year for the past 5 years (including this year), but Logan has made some changes to business operations, including hiring a consultant and increasing his prices. Logan anticipates that as a result of these changes, his horse ranch will generate a profit in the next year or two. This year, Logan hired his brother, Luke, to work at the horse ranch. Logan pays Luke $500/hr to clean the horse stalls. Logan also hired his best friend, Lucy, to do Logan’s grocery shopping and other personal errands. He pays Lucy $15/hr. Which of the following is most accurate?
a. Logan cannot deduct any of the costs associated with the horse ranch because the horse ranch would be classified as a hobby, not a business
b. Logan can deduct the full salary paid to Luke because Luke works in Logan’s horse ranch business
c. Logan can deduct the full salary paid to Lucy because the amount of the expense is reasonable
d. Logan can deduct the full salary paid to Lucy because grocery shopping is ordinary and necessary
e. None of the above are correct
Answer:
Logan Horse Ranch
The most accurate is:
e. None of the above are correct
Explanation:
Logan's payment to his brother, Luke, of $500 per hour, is not a reasonable business expense that can be deductible. Surely, $500 per hour is not a going rate for cleaning the horse stalls per hour. With Lucy doing grocery shopping for Logan, it does not resonate like an ordinary and necessary expense for the business. Therefore, options A to D are not correct. This leaves only option E as the most accurate.
A company using IFRS to prepare its financial statements will use a hierarchy to determine what recognition, valuation, and disclosure requirements should be used.
1. IFRS, IAS, IFRS Interpretations
2. Pronouncements of other standard-setting bodies
3. The Conceptual Framework for Financial Reporting
Which of the following depicts the correct order of the hierarchy?
a. 2,3,1
b. 3,2,1
c. 1.2.3
d. 1,3,2
Answer:
The hierarchy for determining recognition, valuation, and disclosure requirements for IFRS is:
d. 1,3,2
Explanation:
1. IFRS, IAS, IFRS Interpretations are the main standards issued by the IASB, the international accounting standard-setting body. It is like the FASB that sets the US GAAP.
2. Pronouncements of other standard-setting bodies can be applied where IFRS are not definitive.
3. The Conceptual Framework for Financial Reporting help the IASB to develop and revise IFRS that are based on consistent concepts.
The supplies account had a beginning balance of $1,693. Supplies purchased during the period totaled $4,413. At the end of the period before adjustment, $445 of supplies were on hand. Prepare the adjusting entry for supplies. If an amount box does not require an entry, leave it blank.
Answer:
Debit Supplies expense $5,661
Credit Supplies account $5,661
Explanation:
At the time of purchasing supplies, the entries includes a debit to supplies accounts, and a credit to cash or accounts payable which is dependent on whether the cash purchased was done via cash or an account
For supplies used, debit supplies expense and credit supplies account. The movement in supplies account over a period is due to purchases and its expressed as;
Opening balance + Purchases - Supplies used = closing balance
$1,693 + $4,413 - Supplies used = $445
$6,106 - Supplies used = $445
Supplies used = $6,106 + $445
Supplies used = $5,661
As a manager, Alejandro views his organization primarily as people and believes strongly in treating team members well to help them succeed. Which of the following orientations best describes Alejandro's leader orientation?
a. Symbolic orientation.
b. Human Resource orientation.
c. Structural orientation
d. Political orientation.
Answer:
b. Human Resource orientation.
Explanation:
It is correct to state that the orientation that most describes Alejandro's leader orientation is human resources, as the issue provides us with the information that Alejandro has an organizational vision based mainly on people and on the good direction of employees to help them succeed.
The orientation of human resources is related to the company's philosophy that will guide the behavior of employees and the organizational culture in accordance with the organizational mission and values. When a leader has this type of orientation focused on people, he encourages this behavior and so there is the dissemination of practices that value interpersonal relationships and collaboration, which can bring several benefits to an organization, such as increasing the value of work, greater innovation and productivity.
Bob the accountant needs to record indirect labor utilized of $6,000 in a journal entry. Bob should:_____.
a. debit Manufacturing Overhead, $6,000; credit Wages Payable, $6.000.
b. debit Accounts Payable, $6,000; credit Manufacturing Overhead, $6,000.
c. debit Manufacturing Overhead, $6,000; credit Accounts Payable, $6,000.
d. debit Wages Payable, $6,000; credit Manufacturing Overhead, $6,000.
Answer:
c. debit Manufacturing Overhead, $6,000; credit Accounts Payable, $6,000
Explanation:
The journal to record indirect labor utilized of $6,000 will include a Debit to an Expense Account - Manufacturing Overhead and a Credit to Liability Account - Accounts Payable at the value of $6,000.
The following selected transactions apply to Topeca Supply for November and December Year 1. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month.
a. Cash sales for November Year 1 were $65,500 plus sales tax of 9 percent.
b. Topeca Supply paid the November sales tax to the state agency on December 10, Year 1.
c. Cash sales for December Year 1 were $79,500 plus sales tax of 9 percent.
Required:
Record the effect of the given transactions in a horizontal statements model.
Answer:
Note: See attached excel file for the record of the effect of the given transactions in a horizontal statements model.
In the attached excel file, we have:
Assets = Liabilities + Stockholders' Equity = $152,155
Explanation:
In the attached excel file, we have:
Sales tax payable on sales for November Year 1 = $65,500 * 9% = $5,895
Sales tax payable on sales for December Year 1 = $79,500 * 9% = $7,155
Assets = $152,155
Liabilities + Stockholders' Equity = $7,155 + $145,000 = $152,155
Therefore, the accounting equation is proved as follows:
Assets = Liabilities + Stockholders' Equity = $152,155
Analysts estimate that a bond has a 40 percent probability of being priced at $950 and a 60 percent probability of being priced at $1,050 one year from today. The bond is also callable at any time at $1,010. What is the expected value of this bond in one year?
A) $1,000
B) $980
C) $1,010
D) $995
E) $986
Answer:
E) $986
Explanation:
The computation of the expected value of the bond in one year is shown below;
= (Probability × Price of bond) + (Probability × Callable price bond)
= (0.4 × $950) + (0.60 × $1,010)
= $986
Hence, the expected value of the bond in one year is $986
Therefore the correct option is E.
Politicalization of Accounting Standards
Some accountants have said that politicization in the development and acceptance of generally accepted accounting principles (i.e., rule-making) is taking place. Think about the term more broadly to mean the compromise that results when the bodies responsible for developing generally accepted accounting principles (FASB) are pressured by interest groups (SEC, American Accounting Association, businesses through their various organizations, Institute of Management Accountants, financial analysts, bankers, lawyers, and so on).
Required:
a. The Committee on Accounting Procedure of the AICPA was established in the mid to late 1930s and functioned until 1959, at which time the Accounting Principles Board came into existence. In 1973, the Financial Accounting Standards Board was formed, and the APB went out of existence. Do the reasons these groups were formed, their methods of operation while in existence, and the reasons for the demise of the first two indicate an increasing politicalization (as the term is used in the broad sense) of accounting standard setting? Explain.
b. What arguments can be raised to support the politicalization of accounting standard setting?
c. What arguments can be raised against the politicalization of accounting standard setting?
Answer: Some accountants have said that politicization in the development and acceptance of generally accepted accounting principles (i.e., rule-making) is taking place. Some use the term “politicization” in a narrow sense to mean the influence by governmental agencies, particularly the Securities and Exchange Commission, on the development of generally accepted accounting principles. Others use it more broadly to mean the compromise that results when the bodies responsible for developing generally accepted accounting principles are pressured by interest groups (SEC, American Accounting Association, businesses through their various organizations, Institute of Management Accountants, financial analysts, bankers, lawyers, and so on).
Instructions
(a) The Committee on Accounting Procedure of the AICPA was established in the mid- to late 1930s
and functioned until 1959, at which time the Accounting Principles Board came into existence. In
1973, the Financial Accounting Standards Board was formed and the APB went out of existence.
Do the reasons these groups were formed, their methods of operation while in existence, and the
reasons for the demise of the first two indicate an increasing politicization (as the term is used in
the broad sense) of accounting standard-setting? Explain your answer by indicating how the CAP,
the APB, and the FASB operated or operate. Cite specific developments that tend to support your
answer.
(b) What arguments can be raised to support the “politicization” of accounting rule-making?
(c) What arguments can be raised against the “politicization” of accounting rule-making?
Solution
a) CAP. The Committee on Accounting Procedure, CAP, which was in existence from 1939 to 1959, was a natural outgrowth of AICPA committees which were in existence during the period 1933 to 1938. The committee was formed in direct response to the criticism received by the accounting profession during the financial crisis of 1929 and the years thereafter. The authorization to issue pronouncements on matters of accounting principles and procedures was based on the belief that the AICPA had the responsibility to establish practices that would become generally accepted by the profession and by corporate management.
Explanation:
Following is selected financial information from General Mills Inc. for its fiscal year ended May 27, 2018 ($ millions). Cost of goods sold (COGS) $14,438.1 Cash from operating activities $3,977.4 Cash from investing activities (12,159.6) Noncash assets, end of year 42,315.0 Cash, end of year 558.6 Cash from financing activities* 7,668.2 Income tax expense 80.2 Total assets, beginning of year 30,537.6 Revenue 22,036.6 Total liabilities, end of year** 33,784.2 Total expenses, other than COGS 4,490.1 Stockholders' equity, end of year 9,089.4 and income tax * Cash from financing activities includes the effects of foreign exchange rate fluctuations. ** Total liabilities includes redeemable interest. a. Prepare the income statement for the year ended May 27, 2018. Note: Do not use negative signs with any of your answers. General Mills Income Statement ($ millions) For the year ended May 27, 2018 Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer b. Prepare the balance sheet as of May 27, 2018. General Mills Balance Sheet ($ millions) May 27, 2018 Answer Answer Answer Answer Answer Answer Answer
Answer:
General Mills, Inc.
Income Statement for the year ended May 27, 2018
Revenue $22,036.6
Cost of goods sold (COGS) 14,438.1
Gross profit $7,598.5
Total expenses, other than COGS 4,490.1
Income before tax $3,108.4
Income tax expense 80.2
Net income $3,028.2
Explanation:
a) Relevant Data:
Revenue $22,036.6
Cost of goods sold (COGS) $14,438.1
Total expenses, other than COGS $4,490.1
Income tax expense $80.2
Case :
"Dear Mr. President—Please Cancel our Project!": The Honolulu Elevated Rail Project
This case is a great current example of a very expensive project that was kicked off because of an assumed need—to relieve congestion in downtown Honolulu through an elevated urban rail system. Critics argue that in addition to having a ballooning cost, the actual planning was poorly conceived, leaving Honolulu with an intrusive and ugly rail system through the downtown area, ruining panoramic views, and impeding traffic. Additionally, advocates underestimated the power needs for the rail system, requiring the transport authority to renegotiate electricity fees for the system. Finally, the original costs that were assumed for the project were calculated during an economic downturn and with the economy booming again, the costs of the project have gone up dramatically. All of these elements points to a state Governor who is anxious to be rid of the project and hoping that President Trump will deny additional federal funding, in which case the project will likely be cancelled.
Required:
a. Why are public works projects like the Honolulu Rail project nearly impossible to stop once they have been approved, even if later cost estimates skyrocket?
b. Project Management researchers have charged that many large infrastructure projects, like this one, suffer from "delusion" and "deception" on the parts of their advocates. Explain how "delusion" might be a cause of ballooning budgets in this project. How does "deception" affect the final project budget overruns?
Answer:
a.The project has been approved and it has been proved necessary.
b. They often choose the cheapest budget and do not forecast any problems in to make the project more viable.
Explanation:
a.There's an extensive process to approve a project like this, since it has so many filters before being approved, canceling it would be saying these filters failed. These filters exist to prove that these projects are necessary and if they're necessary they need to be done, no matter the cost.
b. THe people in charge of setting these projects going often choose the cheapest options to make the projects viable, when doing so the cost will eventually rise and, when the government has already approved it they will continue to spend money on the project.
At Bargain Electronics, it costs $29 per unit ($16 variable and $13 fixed) to make an MP3 player that normally sells for $50. A foreign wholesaler offers to buy 3,480 units at $27 each. Bargain Electronics will incur special shipping costs of $1 per unit. Assuming that Bargain Electronics has excess operating capacity.
Required:
Indicate the net income (loss) Bargain Electronics would realize by accepting the special order.
Answer:
$34,800.
Explanation:
Reject Accept
Revenues $0 (3480*27) = $93,960 $93,960
Costs $0 (3480*16) = -$55,680 -$55,680
Shipping $0 (3480*1) = -3480 -$3,480
Net income $0 34,800 $34,800
So, the net income that Bargain Electronics would realize by accepting the special order is $34,800.
Charles Chadwick opened a business called Charlie's Detective Service in January 2019. At the end of January the accounts had the following balances:
Prepare a trial balance for Charlie's Detective Service as of January 31, 2019.
Accounts Payable $4,000
Accounts Receivable $3,000
Cash $24,400
Charles Chadwick, Capital $30,000
Charles Chadwick, Drawing $3,000
Computer Equipment $8,000
Office Furniture $5,000
Office Supplies $300
Professional Fees $12,000
Rent Expense $1,500
Utilities Expense $800
Answer:
Please find the complete solution in the attached file.
Explanation:
Erica Shotwell's company pays her $18.92 per hour for regular time up to 40 hours, and time-and-a-half for overtime. Her time card for Monday through Friday last week had 8.3 8.8, 7.9, 9.4, and 10.6 hours. What was Erica's gross pay?
Answer:
Erica Shotwell's Company
Erica's gross pay for working 45 hours during the last week is:
= $898.70
Explanation:
a) Data and Calculations:
Regular pay per hour = $18.92
Overtime pay per hour = $28.38 ($18.92 * 1.5)
Week Day Hours worked
Monday 8.3
Tuesday 8.8
Wednesday 7.9
Thursday 9.4
Friday 10.6
Total hours worked 45
Regular pay = 40 * $18.92 = $756.80
Overtime pay = 5 * $28.38 = 141.90
Erica's gross pay for the week = $898.70
Có tài liệu về tài sản cố định (TSCĐ) trong tháng 5/2021 của công ty B như sau:
Ngày 1/5 6/5 12/5 15/5 20/5 31/5
Số lượng TSCĐ (cái) 600 750 800 550 700 860
Tính số lượng TSCĐ bình quân của doanh nghiệp B trong tháng 5? Trong nửa đầu tháng 5 (từ ngày 1 đến ngày 15), trong nửa cuối tháng 5 (từ ngày 16 đến ngày 31), trong 15 ngày cuối tháng 5 (từ ngày 17 đến ngày 31)? Cho nhận xét sơ bộ về thực trạng sử dụng TSCĐ của công ty, từ đó đề xuất một số biện pháp sử dụng hiệu quả TSCĐ cho công ty?
Answer
Explanation:
Có tài liệu về tài sản cố định (TSCĐ) trong tháng 5/2021 của công ty B như sau:
Ngày 1/5 6/5 12/5 15/5 20/5 31/5
Số lượng TSCĐ (cái) 600 750 800 550 700 860
Tính số lượng TSCĐ bình quân của doanh nghiệp B trong tháng 5? Trong nửa đầu tháng 5 (từ ngày 1 đến ngày 15), trong nửa cuối tháng 5 (từ ngày 16 đến ngày 31), trong 15 ngày cuối tháng 5 (từ ngày 17 đến ngày 31)? Cho nhận xét sơ bộ về thực trạng sử dụng TSCĐ của công ty, từ đó đề xuất một số biện pháp sử dụng hiệu quả TSCĐ cho công ty?
Beth owns a corporate office park in Ohio. Her ownership rights include the right to sell or give away the property without restriction, as well as the right to commit waste, if she chooses. Beth's ownership interest is:
Answer:
Fee Simple Absolute
Explanation:
The 6 types of modern freehold estates, distinguished by duration includes;
1. Fee simple absolute
2. Life estate
3. Fee tail
4. Fee simple determinable
5. Fee simple subject to a condition subsequent
6. Fee simple subject to an executory limitation
And also
The types of Fee Simple includes
A) Fee Simple Absolute
B) Defeasible Fees
Fee Simple Absolute
This is regarded as an absolute ownership. It is a never ending period of time with no hindrance or limitations on its inheritability. it also cannot be ended or shuffled on the happening of any event. It is also regarded as the right to possess now, even until the end of time.
Its characteristics includes:
1. The holder has all the rights or entitlement.
2. The duration is never ending that is, the interest is absolute because the interest will not end on the occurrence of an event or condition
3. There is no future interest that follows it
3. The owner has the right of possession, alienation, and exclusion
And others.
1000 par value 5 year bond with 8% semiannual coupons was boughtto yield 7.5% convertible semiannually. Determine the amount of premiumamortized in the six
Answer:
$2.08
Explanation:
First calculate the price of the bond
Price of the bond = [ ( 1000 x 8% x 6/12 ) x ( ( 1 - ( 1 + (7.5%x6/12) )^-(5x2) )/(7.5%x6/12) ] + { 1000 / (7.5%x6/12) ]
Price of the bond = $1,020.53
Now calculate the premium
Premium on the bond = Price of the bond - Face value of the bond = $1,020.53 - $1,000 = $20.53
Now prepare the amortization schedule to calculate the premium amortization in 6th payment.
The amortization schedule is attached with this answer please find that.
Hence, In the sixth payment the premium amortization is $2.08
Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 2,000,000 shares of no-par common stock were authorized; 750,000 shares were issued on January 1, 2019, at $35 per share. 800,000 shares of $100 par value, 7.5% cumulative, preferred stock were authorized; 540,000 shares were issued on January 1, 2019, at $105 per share. No dividends were declared or paid during 2019 or 2020. However, on December 22, 2021, the board of directors of Permabilt Corp. declared dividends of $15,000,000, payable on February 12, 2022, to holders of record as of January 8, 2022.
Required:
a. Use the horizontal model for the issuance of common stock and preferred stock on January 1, 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)
b. Use the horizontal model for the declaration of dividends on December 22, 2021. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)
c. Use the horizontal model for the payment of dividends on February 12, 2022. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)
Answer:
Permabilt Corp.
Financial Statement Effects:
Balance Sheet Statement of
Assets = Liabilities + Equity Cash Flows
a. January 1, 2019:
Cash $26,250,000
Common stock $26,250,000 FA cash inflow
b. December 22, 2021:
Dividends -$15,000,000
Dividends Payable $15,000,000
c. February 12, 2022:
Dividends Payable -$15,000,000
Cash -$15,000,000 FA cash outflow
Total $11,250,000 = 0 + $11,250,000
Explanation:
a) Data and Analysis:
January 1, 2019
Cash $26,250,000 Common stock $26,250,000
Cash $56,700,000 7.5% Cumulative Preferred Stock $54,000,000 Additional Paid-in Capital - Preferred $2,700,000
December 22, 2021:
Preferred Stock Dividends $4,050,000 ($54,000,000 * 7.5%)
Common Stock Dividends $10,950,000 ($15,000,000 - $4,050,000)
Dividends Payable $15,000,000
February 12, 2022:
Dividends Payable $15,000,000
Cash $15,000,000
BBB Leasing purchased a machine for $280,000 and leased it to Jack Tupp Auto Repair on January 1, 2021. Lease description: Quarterly rental payments $16,427 at beginning of each period Lease term 5 years (20 quarters) No residual value; no BPO Economic life of machine 5 years Implicit interest rate 7% Fair value of asset $280,000 What is the balance in the lease payable account after the April 1, 2021, lease payment
Answer: $251758.53
Explanation:
Based on the information given in the question,
Total lease liability = $280,000
Then, the balance in the lease payable account when the first lease payment takes place on January 1, 2021 will be:
= $280,000 - $16,427
= $263573
The, the interest that is included in the lease payment that's made on April 1, 2021 Will be:
= $263573 x 7% x 1/4
= $4612.53
Then, the principal amount that's included in the lease payment made on April 1, 2021 will be:
= $16,427 - $4612.53
= $11814.47
Therefore, the balance in the lease payable account after the April 1, 2021, lease payment will be:
= $263573 - $11814.47
= $251758.53
illings and collections between an Enterprise Fund and the General Fund A city uses an Enterprise Fund to provide electricity to its citizens and to its General Fund. A total of $50,000 was billed to the General Fund and collected 30 days later. Prepare the journal entries necessary to record these transactions, and label the fund(s) used. Note: Under the Fund column, select the appropriate fund in which the transaction is recorded (GF: General Fund or ISF: Internal Service Fund).
Answer:
Enterprise Fund due from General Fund (Dr.) $50,000
Revenue from service (Cr.) $50,000
Explanation:
The enterprise fund is used to provide electricity to the citizens. The revenue will be recorded as service charges for providing the electricity. Enterprise fund will be due from General fund which is billed for $50,000.
Boston Consulting Group (BCG) is a management consulting, technology services and outsourcing organization. Which of the following actions should managers take when there is evidence that a fixed-rate contract is over budget and will generate a loss for the firm?
a. Use the percentage of completion method and pro rate the loss over the entire term of the engagement
b. Restate the financial statements and recognize the loss in the earliest period of the engagement
c. Use the percentage of completion method to recognize the loss over the remaining term of the engagement.
d. Recognize the loss in the current period rather than over the remaining term of the engagement
e. None of the above
Answer: D. Recognize the loss in the current period rather than over the remaining term of the engagement
Explanation:
A fixed rate contract is the contract whereby the payment amount isn't dependent on the resources or the time that were used.
Since there's evidence that a fixed-rate contract is over budget and will generate a loss for the firm, the manager should recognize the loss in the current period rather than over the remaining term of the engagement.
Therefore, the correct option is D.
Julio is in the 32% tax bracket. He acquired 9,000 shares of stock in Gray Corporation seven years ago at a cost of $20 per share. In the current year, Julio received a payment of $135,000 from Gray Corporation in exchange for 4,500 of his shares in Gray. Gray has E & P of $1,000,000. What income tax liabil-ity would Julio incur on the $150,000 payment in each of the following situations? Assume that Julio has no capital losses.
a. The stock redemption qualifies for sale or exchange treatment.
b. The stock redemption does not qualify for sale or exchange treatment.
c. How would your answer to parts (a) and (b) of Problem 49 differ if Julio were a corporate shareholder rather than an individual shareholder and the stock ownership in Gray Corporation represented a 25% interest?
Answer:
example below
Explanation:
Hayden Company is considering the acquisition of a machine that costs $406,000. The machine is expected to have a useful life of six years, a negligible residual value, an annual net cash flow of $96,000, and annual operating income of $81,600. What is the estimated cash payback period for the machine (round to one decimal points)? a.6.2 years b.5.0 years c.4.2 years d.1.2 years
Answer:
c.4.2 years
Explanation:
The computation of the estimated cash payback period is given below:
As we know that
the estimated cash payback period is
= initial investment ÷ net cash flow per period
= $406,000 ÷ $96,000
= 4.2 years
Hence, the estimated cash payback period is 4.2 year
Therefore the option c is correct
Human capital refers to: a. the value that the firm's workforce contributes to each product produced or service rendered. b. the net present value of the future competencies of the workforce. c. the amount of money purchasers of the firm would pay for the continuing employment of the present workforce. d. knowledge and skills of a firm's entire workforce.
Answer:
D
Explanation:
Human capital is an example of an intangible asset. It is the economic value attached to labours' skills and expertise.
Types of Human Capital include :
(1) Knowledge Capital
(2) Social Capital
(3) Emotional Capital.
Qualities of human capital includes
• Education.
• on-the-job training.
• Hard work
• experience
• Mental and emotional well-being.
• People management.
• Communication skills.
Suppose that a bank has $80 in checkable deposits, reserves of $15 , and a reserve requirement of 10%. Also assume that the the bank suffers a $6 deposit outflow. If the bank chooses to borrow from the Fed to meet its reserve requirement, then the bank would need to borrow $nothing . (Round your response to the nearest two decimal place.)
Answer: See explanation
Explanation:
Based on the information given in the question, the amount of borrowing that's required will be:
= [ rr * ( D - O)] - (R-O)
where,
rr = reserve requirement = 10% = 0.1
D = checkable deposits = $80
R = reserves = $15
O = deposits outflow = $6
= [ 0.10 × ($80 - $6)] - ($15 - $6)
= [ 0.10 × $74 ] - $9
= $7.4 - $9
= -$1.60
why is eskom a monopoly?
Answer:
I don't know We will know that soon
Answer:
Eskom is South Africa's monopoly power supplier. As the result of the lack of productive and allocational inefficiency, Eskom is considered an undesirable monopoly market structure.
Explanation:
Productive efficiency takes place at a point in which the marginal cost is equal to the average cost and where the allotment efficiency is equal to the marginal cost.
The monopoly of Eskom also generates extravagant costs that reduce the output by higher prices.
Big Corporation receives management consulting services from its 95 percent owned subsidiary, Small Inc. For the year 20X8, Small billed Big $140,000. Small's labor cost and other associated costs for the employees providing services to Big totaled $121,000 in 20X8. Big reported $2,567,000 of income from its own separate operations for 20X8, and Small reported net income of $695,000.
Based on the preceding information, what amount of consolidated net income should be reported in 20X8?
a. $3,262,000
b. $4,050,000
c. $3,254,100
d. $3,122,000
Answer: a. $3,262,000
Explanation:
Consolidated income is simply the income that both companies got from their separate operations for the year because Small Inc is a subsidiary of Big Corporation so both incomes have to be added to find the total company income:
= 2,567,000 + 695,000
= $3,262,000
8. It is 1985 and suppose the 90 day forward quotes on the DM and the French franc are $.4002 10 and $.1180 90, respectively
Answer:
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Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $15 per share 10 years from today and will increase the dividend by 5 percent per year thereafter.
If the required return on this stock is 15 percent, what is the current share price?
Answer:
$51.25
Explanation:
P9 = Next dividend / Required rate r - Growth rate g
P9 = $15 / 14% - 5%
P9 = $15 / 9%
P9 = $166.67
Po = P9 / (1 - Required rate of return)^9
Po = $166.67 / (1 + 0.14)^9
Po = $166.67 / 3.2519
Po = $51.25
So, the current stock price is $51.25.
