Answer:
"$127.11 per unit" is the correct approach.
Explanation:
The activity cost as per the questions will be:
Activity 1:
= [tex]\frac{30,000}{600}[/tex]
= [tex]50[/tex] ($)
Activity 2:
= [tex]\frac{45000}{900}[/tex]
= [tex]50[/tex] ($)
Activity 3:
= [tex]\frac{96600}{2400}[/tex]
= [tex]40.25[/tex] ($)
Now,
The overhead cost for digital cameras will be:
= [tex](50\times 100)+(50\times 600)+(40.25\times 400)[/tex]
= [tex]5000+30000+16.100[/tex]
= [tex]51100[/tex] ($)
Per unit overhead cost will be:
= [tex]\frac{51100}{10000}[/tex]
= [tex]5.11[/tex] ($)
hence,
The total cost will be:
= [tex]Direct \ costs+Indirect \ costs[/tex]
= [tex]122+5.11[/tex]
= [tex]127.11 \ per \ unit[/tex] ($)
Kawamura, a careful utility maximizer, consumes peanut butter and ice cream. Assume that both peanut butter and ice cream are normal goods and that diminishing marginal utility applies to both goods. Right after he achieves the utility-maximizing level of consumption of the two goods, the price of peanut butter falls. After he adjusts to this event, the marginal utility of peanut butter goes _____ and that of ice cream goes _____.
Answer:
The marginal utility of peanut butter goes down and that of ice cream goes up.
Explanation:
The substitution effect states that when the price of a product falls, it will lead to a rise in the quantity demanded of the product as buyers will buy more of the product that is now relatively cheaper.
And as more of a good is bought, its marginal utility falls. And as less of a product is bought, its marginal utility increases.
Based on the above explanation therefore, the marginal utility of peanut butter goes down and that of ice cream goes up after Kawamura adjusts to the event.
This is because as more of peanut butter is bought due to the fall in its price, its marginal utility falls. And as less of ice cream is bought as it is now relatively more expensive, its marginal utility increases.
Glaston Company manufactures a single product using a JIT inventory system. The production budget indicates that the number of units expected to be produced are 186,000 in October, 194,500 in November, and 191,000 in December. Glaston assigns variable overhead at a rate of $0.70 per unit of production. Fixed overhead equals $143,000 per month. Compute the total budgeted overhead for October.
Answer:
Budgeted overhead (October)= $273,200
Explanation:
Giving the following information:
Production= 186,000 in October
Predetermined variable overhead= $0.70 per unit.
Fixed overhead equals $143,000 per month.
To calculate the budgeted overhead for October, we need to use the following formula:
Budgeted overhead (October)= 0.7*186,000 + 143,000
Budgeted overhead (October)= $273,200
A manufacturer produces two types of computer software, Word processing (W) and Spreadsheet (S), which is offered to two different retail outlets (#1 and #2). The following table shows the maximum price each retail outlet is willing to pay for each individual software product.
Product W Product S
Retail #1 $170 $105
Retail #2 $95 $135
What is the optimal pricing strategy that will maximize revenue for the manufacturer, given the maximum the retail outlets are willing to pay?
a. Bundle both products (W and S) and sell them at $275.
b. Price product W at $95 and Product S at $105.
c. Price product W at $170 and Product S at $170.
d. Price product W at $170 and Product S at $135.
e. Bundle both products (W and S) and sell them at $230.
Answer:
e. Bundle both products (W and S) and sell them at $230.
Explanation:
Calculation to determine the optimal pricing strategy that will maximize revenue for the manufacturer
Using this formula
Optimal pricing=Retail #2 Product W+ Retail #2 Product S
Let plug in the formula
Optimal pricing=$95+$135
Optimal pricing=$230
Therefore based on the above calculation the OPTIMAL PRICING STRATEGY that will MAXIMIZE REVENUE for the manufacturer, given the MAXIMUM the retail outlets are willing to pay will be to BUNDLE BOTH PRODUCTS (W and S) AND SELL THEM AT $230.
Workman Software has 11 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 108.3 percent of par. a. What is the current yield on the bonds
Answer:
10.16%
Explanation:
Coupon amount = 11% * 1000
Coupon amount = $110
Price of bond = 1000*108.3%
Price of bond = $1,083
Current yield = Coupon amount / Price of bond
Current yield = $110 / $1,083
Current yield = 0.1015697
Current yield = 10.16%
So, the current yield on the bonds is 10.16%.
ABC Company operates two divisions with the following operating information for the month of May:
Division 1: sales, $128,000; operating income, $39,680; operating assets, $320,000.
Division 2: sales, $84,000; operating income, $42,336; operating assets, $420,000.
ABC Company expects a minimum return of 10% should be earned from all investments.
Required:
Prepare ABC Company’s ROI analysis using the DuPont model for each division.
An investor sells 100 shares short at $43. The sale requires a margin deposit equal to 60 percent of the proceeds of the sale. The company paid a cash dividend of $1 per share. If the investor closed the position at $38, what was the percentage earned or lost on the investment
Answer:
15.5%
Explanation:
We first calculate the beginning value of the investment
= 43$x100 = 4300
We find ending value = $38x100 = 3800
We find dividend = $1x100 = $100
Profit therefore = 4300-3800-100 = 400
Investment = 60% x 4300= 2580
ROI = 400/2580 = 0.1550 = 15.5%
Therefore calculated percentage = 15.5%
Thank you!
Using information that was accurate in the year 2012, categorize each member state according to whether it was a member state using the euro, a member state not using the euro, or not a member state.
You are currently in a sorting module. Turn off browse mode or quick nav, Tab to items, Space or Enter to pick up, Tab to move, Space or Enter to drop.
European Union member state using the euro
European Union member state not using the euro
Not a member of the European Union
Answer:
European Union member state using the euro.
SlovakiaFrance ItalyAll three of the above nations are members of the EU using the Euro which enables easier transactions with the rest of the Union. France still prints and manages their old currency, the Franc for its previous colonies in West Africa.
European Union member state not using the Euro.
SwedenUnited KingdomHungaryThese three countries still use their own currency with Sweden using the Krona, the British still using the Pound and the Hungarians still using the Forint. The British were still members of the EU in 2012 but have since left the Union.
Not a member of the European Union
UkraineNorwayThese two nations are not part of the EU but have very significant ties to the European Union's markets.
Five welding jobs are waiting to be processed. Their processing times and due dates are given below. Using the critical ratio dispatching rule, in which order should the jobs be processed
Job Processing Time (days) Job due date (days)
A 4 7
B 2 4
C 8 11
D 3 5
E 5 11
Answer:
Order of processing the jobs:
Job Critical Ratio
C 1.375
D 1.667
A 1.75
B 2.0
E 2.2
Explanation:
a) Data and Calculations:
Job Processing Job due Critical
Time (days) date (days) Ratio
A 4 7 1.75 (7/4)
B 2 4 2.0 (4/2)
C 8 11 1.375 (11/8)
D 3 5 1.667 (5/3)
E 5 11 2.2 (11/5)
b) The critical ratio (CR) dispatching indicates the priority sequencing that should be adopted to process work at a work center. The first process is to create the CR priority index number, which is obtained from the formula of due days divided by the processing days. Therefore, the job with the lowest CR is scheduled first.
Monopoly in the competitive environment a. is enjoyed by few organizations as sole suppliers of a good or service. b. is typical of public utilities -- even more so now than twenty years ago. c. cannot be achieved temporarily even through the use of patents and similar legal devices. d. is the logical extension of a firm's control of its production and labor resources. e. is, all in all, the most common type of competition in the U.S. market.
Answer:
b
Explanation:
and services.
An example of a monopoly is a utility company
A natural monopoly occurs due to the high start-up costs or a large economies of scale.
Natural monopolies are usually the only company providing a service in a particular region
Because the demand curve for a monopoly is downward sloping, marginal revenue is less than price. As prices fall, more units of the product are bought.
In a monopoly When the average cost is falling, the marginal cost lies below the average cost. If the government sets price to be equal to marginal cost, which lies below the average cost, the monopoly would incur losses.
In 20X4, Bosh Corporation had income of $60,000 using absorption costing. Beginning and ending inventories were 13,000 and 8,000 units, respectively. The fixed manufacturing overhead cost was $4.00 per unit. What was the net income using direct/variable costing
Answer:
Net income under variable costing $80,000
Explanation:
The computation of the net income using direct/variable costing is shown below:
Net income under absorption costing $60,000
Add fixed cost under applied $20,000
Net income under variable costing $80,000
Working
Beginning inventory 13000
Less ending inventory -8000
Decrease in inventory 5000
Now under applied inventory $20,000
Gilmore, Inc., had equity of $135,000 at the beginning of the year. At the end of the year, the company had total assets of $290,000. During the year, the company sold no new equity. Net income for the year was $29,000 and dividends were $3,400. a. What is the sustainable growth rate for the company
Answer:
A. 18.96%
B. 18.96%
C. 15.94%
Explanation:
A. Calculation to determine the sustainable growth rate for the company
First step is to calculate the Ending equity
Ending equity = 135,000 + 29,000 -3,400
Ending equity=$160,600.
Second step is to calculate the return on equity
Return on equity =29,000/160,600
Return on equity=0.18057285
Third step is to calculate the retention ratio
Retention ratio =(Net income- dividends) / Net income
Retention ratio= (29,000-3400) / 29,000
Retention ratio=25,600 /29,000
Retention ratio=0.88275862.
Now let calculate the Sustainable growth rate using this formula
Sustainable growth rate = (Return on equity *Retention ratio) / [1-(Return on equity*retention ratio)]
Let plug in the formula
Sustainable growth rate=(0.18057285*0.88275862)/ [1-(0.18057285*0.88275862)]
Sustainable growth rate=0.15940224/ [1-0.15940224]
Sustainable growth rate=0.1896*100
Sustainable growth rate=18.96%.
b. Calculation to determine the sustainable growth rate if you use the formula ROE band beginning of period equity
First step is to calculate the return on equity using beginning of the period equity
Return on equity using beginning of the period equity=$29,000 /135,000
Return on equity using beginning of the period equity=0.21481481.
Now let calculate the sustainable growth rate if you use the formula ROE band beginning of period equity
roe * b = 0.21481481*0.88275862
ROE band=0.1896*100
ROE band=18.96%.
c.return on equity using ending of period equity = 29,000/160,600
=>0.18057285
roe*b=>0.18057285*0.88275862
=>0.1594
=>15.94%.
IPS Corp. will upgrade its package-labeling machinery. It costs $850,000 to buy the machinery and have it installed. Operation and maintenance costs, which are $11,000 per year for the first 3 years, increase by $1000 per year for the machine's 10-year life. The machinery has a salvage value of 12% of its initial cost. Interest is 25%. What is the future worth of cost of the machinery
Answer:
The future worth of cost of the machinery is –$8,227,391.25.
Explanation:
The value of an amount of money at a particular interest rate at some point in the future is referred to as future worth.
Note: See the attached excel file for the calculation of the future worth of cost of the machinery.
In the attached excel file, the discounting factor for each year is calculated as follows:
Discounting Factor = (100% + Interest)^Remaining years ………………. (1)
Where:
Interest = 25%
Remaining years = 10 – Number of current year
In the attached excel file, we have:
Total future worth = (8,227,391.25) = –$8,227,391.25
Therefore, the future worth of cost of the machinery is –$8,227,391.25.
s). Marty has been offered an injury settlement of $15 comma 000 payable in 5 years. He wants to know what the present value of the injury settlement is if his opportunity cost is 3.5 %. (The opportunity cost is the interest rate in this problem.) What if the opportunity cost is 7.5 %? What if it is 11.5 %?
Answer and Explanation:
The computation of the present value in each situation is as follows:
As we know that
Present value = Future value ÷ (1 + rate of interest)^time period
When the rate is 3.5%, the present value is
= $15,000 ÷ (1 + 3.5%)^5
= $12,630
When the rate is 7.5%, the present value is
= $15,000 ÷ (1 + 7.5%)^5
= $10,448.38
And, When the rate is 11.5%, the present value is
= $15,000 ÷ (1 + 11.5%)^5
= $8,703.96
The price of crude oil rose to over $100 per barrel in early 2013. What would we expect to see happen to the supply of plastic, which is produced using crude oil
Answer: The supply of plastic will decrease.
Explanation:
Supply simply means the amount of goods and services that a seller is willing to sell at a particular price and a given time period.
It should be noted that one determinant of supply is cost of raw material. Since there's an increase in the price of crude oil which is used in making plastic, there'll be a reduction in the number of plastic that can be produced, therefore, the supply of plastic will reduce.
Suppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 400 million pounds per year. Suppose that WebMD claims that a protein found in turkey will increase your expected lifespan by 2 years. WebMD's claim will cause consumers to demand _____________turkey at every price.
Answer:
The "WebMD's claim will cause consumers to demand ______more_______turkey at every price."
Explanation:
Consumers will tend to demand more turkey in order to increase their expected lifespan by 2 years by consuming more of the protein found in turkey as claimed by WebMD. This implies that there will a new equilibrium as the old equilibrium shifts outward to match the increased demand by consumers of turkey. This claim may trigger demand and supply to exceed the annual 400 million pounds equilibrium at $5 per pound.
The price of a basket of goods is $2000 in the U.S. If purchasing power parity holds, and the dollar buys two units of some country’s currency, then how many units of foreign currency does the same basket of goods cost in that country?
Answer:
4000
Explanation:
Calculation to determine how many units of foreign currency does the same basket of goods cost in that country
Based on the information given we were told that the PRICE OF A BASKET OF GOODS is the amount of $2000 in which the dollar buys TWO UNITS of some country’s currency, now let determine HOW MANY UNITS of foreign currency does the same basket of goods cost in that country
Using this formula
Units of foreign currency=Basket of goods price*Some country’s currency units
Let plug in the formula
Units of foreign currency=$2,000* 2 units
Units of foreign currency=4,000 units
Therefore the number of units of foreign currency that the same basket of goods cost in that country is 4,000
The price of a basket of goods is $2000 in the U.S. If purchasing power parity holds, and the dollar buys two units of some country’s currency, then how many units of foreign currency does
Hyundai's Assurance program empathized with American consumers during uncertain financial times, helping to create a psychological and emotional:_______
a. brand association.
b. differentiation strategy.
c. consumer response.
d. marketing campaign.
Accompanying a bank statement for Marsh Land Properties is a credit memo for payment on a $15,000 1-year note receivable and $900 of interest collected by the bank. Marsh Land Properties has been notified by the bank at the time of collection, but had made no entries.
Required:
Journalize the entry that should be made by Marsh Land to bring the accounting records up to date.
Answer:
Dr Cash $15,900
Cr Notes Receivable $15,000
Cr Interest Revenue $900
Explanation:
Preparation of the journal entry that should be made by Marsh Land to bring the accounting records up to date.
Dr Cash $15,900
($15,000+$900)
Cr Notes Receivable $15,000
Cr Interest Revenue $900
Everything else equal, if the United States runs a large foreign trade deficit, the financing of the deficit will: a. increase government subsidies. b. increase interest rates. c. decrease sales of Treasury securities. d. increase the money supply. e. decrease tax revenue.
Answer: decrease tax revenue
Explanation:
A trade deficit occurs when the import of a country's is more than the export of the country for a given period of time period. The main cause is when there's an imbalance between the savings of a country and the investment rates.
In this case, financing the deficit will lead to the reduction in the tax revenue. When part of the tax revenue gotten from economic agents are used in the finance of the deficit, there'll be a reduction in the tax revenue.
ABC Company's production budget for March is 32,000 units. Budgeted fixed overhead is $64,000. ABC's standard fixed overhead application rate is $2 per machine hour and each unit is allowed a standard of 1 hour of machine time. Actual fixed overhead for March is $67,000 Actual production in March is 36,000 units. To calculate its standard fixed overhead application rate, ABC divided its budgeted (units/overhead) by its budgeted (units/overhead)
Answer:
Overheads by its budgeted units.
Explanation:
Given that
Budgeted fixed overhead = $64,000
Budgeted output = 32,000 units
We know that
Standard fixed overhead application rate is
= Budgeted fixed overhead ÷ Budgeted output
= $64,000 ÷ 32,000
= $2 per unit
So, Overheads by its budgeted units.
The net income reported on the income statement of Cutler Co. was $2,460,000. There were 50,000 shares of $18 par common stock and 20,000 shares of $5 preferred stock outstanding throughout the current year. The income statement included a gain on discontinued operations of $300,000 after applicable income tax.
a. Determine the per-share figure for common stock for income before discontinued operations. Round your answer to the nearest cent.
$ per share
b. Determine the per-share figure for common stock for net income. Round your answer to the nearest cent.
$ per share
Answer and Explanation:
The computation is shown below:
a. The earning per share is
= (PAT - income tax discontinued operations - Preference dividend) ÷ number of common stock
= ($2,460,000 - $300,000 - (20,000 × $5)) ÷ (50,000 shares)
= $41.2 per share
b. The earning per share is
= (PAT - Preference dividend) ÷ number of common stock
= ($2,460,000 - (20,000 × $5)) ÷ (50,000 shares)
= $47.2 per share
Periodic inventory by three methods The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are shown below:
Number
Date Transaction of Units Per Unit Total
Jan. 1 Inventory 7,500 $75.00 10
Purchase 85.00 22,500 11,250
28 Sale $562,500 1,912,500 1,687,500
562,500 150.00 30 Sale 3,750 150.00
Feb. 5 Sale 1,500 150.00 225,000
10 Purchase 54,000 87.50 4,725,000
16 Sale 27,000 160.00 4,320,000
28 Sale 25,500 160.00 4,080,000
Mar. 5 Purchase 45,000 89.50 4,027,500
14 Sale 30,000 160.00 4,800,000
25 Purchase 7,500 90.00 675,000
30 Sale 26,250 160.00 4,200,000
1. Determine the inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system.
4. Compare the gross profit and the March 31 inventories, using the following column headings.
Answer:
1. We have:
Inventory on March 31 = $1,010,625
Cost of merchandise sold for the three-month period = $10,891,875
2. We have:
Inventory on March 31 = $881,250
Cost of merchandise sold for the three-month period = $11,021,250
3. We have:
Inventory on March 31 = $980,975.27
Cost of merchandise sold for the three-month period = $10,921,524.73
4. We have:
Details FIFO LIFO Weighted Average
$ $ $
Sales 19,875,000 19,875,000 19,875,000
Cost of Goods sold (10,891,875) (11,021,250) (10,921,525)
Gross Profit 8,983,125 8,853,750 8,953,475
Inventory, March 31 1,010,625 881,250 980,975
Explanation:
1. Determine the inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
Note: See part 1 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
From the part 1 of the attached excel file, we have:
Inventory on March 31 = $1,010,625
Cost of merchandise sold for the three-month period = $10,891,875
2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
Note: See part 2 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
From the part 2 of the attached excel file, we have:
Inventory on March 31 = $881,250
Cost of merchandise sold for the three-month period = $11,021,250
3. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system.
Note: See part 3 of the attached excel file for the determined inventory on March 31 and the cost of merchandise sold for the three-month period, using the weighted average cost method and the periodic inventory system.
From the part 3 of the attached excel file, we have:
Inventory on March 31 = $980,975.27
Cost of merchandise sold for the three-month period = $10,921,524.73
4. Compare the gross profit and the March 31 inventories, using the following column headings.
Details FIFO LIFO Weighted Average
$ $ $
Sales 19,875,000 19,875,000 19,875,000
Cost of Goods sold (10,891,875) (11,021,250) (10,921,525)
Gross Profit 8,983,125 8,853,750 8,953,475
Inventory, March 31 1,010,625 881,250 980,975
Twenty graduate students in business were asked how many credit hours they were taking in the current quarter. Their responses are shown as follows:
Student Number Credit Hours Student Number Credit Hours Student Number Credit Hours
1 2 8 8 15 10
2 7 9 12 16 6
3 9 10 11 17 9
4 9 11 6 18 6
5 8 12 5 19 9
6 11 13 9 20 10
7 6 14 13
Required:
a. Determine the mean, median, and mode for this sample of data. Write a sentence explaining what each means.
b. It has been suggested that graduate students in business take fewer credits per quarter than the typical graduate student at this university. The mean for all graduate students is 9.1 credit hours per quarter, and the data are normally distributed. Set up the appropriate null and alternative hypotheses, and determine whether the null hypothesis can be rejected at a 95 percent confidence level.
Answer:
Since the calculated value of t= -1.016 does not fall in the critical region t ≥ 1.729 we conclude that the mean for all graduate students is 8.5 and fail to reject the null hypothesis.
Explanation:
Student Credit Student Credit Student Credit
Number Hours Number Hours Number Hours
1 2 8 8 15 10
2 7 9 12 16 6
3 9 10 11 17 9
4 9 11 6 18 6
5 8 12 5 19 9
6 11 13 9 20 10
7 6 14 13
The mean is the value which gives the average value of all the data.It is obtained by adding the value and dividing it by the number of values.
x`= ∑x/n
x`=2 +8 +10+ 7+ 12 + 6+ 9 +11+ 9 +9 +6 + 6 +8 + 5+ 9 +11+ 9+ 10+ 6 + 13/20
x`= 8.3
Median is the middle value which divides the data into two equal halves.
2 5,6,6,6,6, 7,8 ,8, 9,9, 9,9 ,9 ,10, 10,11,11, 12 , 13
For even number
Median = n/2=10 th.
Here the 10th value is 9 when the data is arranged in ascending order.
Mode=9
Mode gives the repeated value .
Let the hypotheses be
H0 : u = 8.5 vs Ha: u ≥ 8.5
The mean for all graduate students is 8.5
against the claim that
The mean for all graduate students is greater than 8.5
The sample mean x`= 8.5 and standard deviation s= 2.64
Putting in the test statistic
t= x`- u / s/ √n
t= 8.5-9.1/2.64/√20
t= -0.6/2.64/4.472
t= -1.016
The critical region for alpha = 0.05 for one tailed test with n-1= 2-0-1= 19 degrees of freedom is t ≥ 1.729
Since the calculated value of t= -1.016 does not fall in the critical region t ≥ 1.729 we conclude that the mean for all graduate students is 8.5 and fail to reject the null hypothesis.
Which economic concept helps explain the changing demand for jewelry?
A. fungibility
b. non-excludability
c. substitution
d. elasticity
Answer:
A.fungibility is a economic concept which helps explain the changing demand for jewelry.
As
Fungibility is the ability of a good or asset to be interchanged with other individual goods or assets .
Midyear on July 31st, the Digby Corporation's balance sheet reported: Total Liabilities of $102.335 million Cash of $8.040 million Total Assets of $165.097 million Retained Earnings of $35.132 million. What was the Digby Corporation's common stock
Answer:
$27.63 million
Explanation:
Total equity = Common stock + Retained earnings
Common stock = Total equity - Retained earnings
Common stock = (Total assets - Total liabilities) - Retained earnings
Common stock = ($165.097 million - $102.335 million) - $35.132 million
Common stock = $62.762 million - $35.132 million
Common stock = $27.63 million
Agreements between an exporter and an agent and agreements between an exporter and a distributor are called distribution contracts.
a. True
b. False
Answer: True
Explanation:
The statement that the agreements between an exporter and an agent and the agreements between an exporter and a distributor are called the distribution contracts is true.
It should be noted that the distribution comtract is the contract that takes place between the supplying company and the other company which sells the products. The contract gives the distributor the right to sell and market the product of the supplier.
Mendez Company is considering a capital project that costs $16,000. The project will deliver the following cash flows: Year 1 Year 2 Year 3 Year 4 Year 5 $8,000 $6,000 $5,000 $6,000 $5,000 Using the incremental approach, the payback period for the investment is:
Answer:
2.4 years
Explanation:
Years Cash Cumulative Cashflow
1 8000 8000
2 6000 14000
3 5000 19000
4 4000 25000
5 5000 30000
30000
Payback period = 2 years + (16,000 - 14,000) / 5,000
Payback period = 2 years + 0.4 years
Payback period = 2.4 years
For each transaction:
a. analyze the transaction using the accounting equation
b. record the transaction in journal entry form
c. post the entry using T-accounts to represent ledger accounts.
1. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $7,000 in cash along with equipment having a $3,000 value in exchange for common stock.
2. On May 21, Elegant Lawns purchases office supplies on credit for $500.
3. On May 25, Elegant Lawns receives $4,000 cash for performing landscaping services.
4. On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.
Answer:
Elegant Lawns
a. Analysis of transactions using the accounting equation:
1. May 15, Assets Cash $7,000 Equipment $3,000 Equity: Common stock $10,000
2. May 21, Assets: Office supplies $500 Liabilities: Accounts Payable $500
3. May 25, Assets: Cash $4,000 Equity: Service Revenue $4,000
4. May 30, Assets: Cash $1,000 Equity: Service Revenue $1,000
b. Journal Entries:
Date Account Titles Debit Credit
1. May 15, Assets: Cash $7,000
Assets: Equipment $3,000
Equity: Common stock $10,000
2.
May 21, Assets: Office supplies $500
Liabilities: Accounts Payable $500
3. May 25, Assets: Cash $4,000
Equity: Service Revenue $4,000
4. May 30, Assets: Cash $1,000
Equity: Service Revenue $1,000
c. T-accounts:
Cash
Date Account Titles Debit Credit
1. May 15 Common stock $7,000
3. May 25, Service revenue 4,000
4. May 30, Service revenue 1,000
Equipment
Date Account Titles Debit Credit
1. May 15 Common stock $3,000
Office Supplies
Date Account Titles Debit Credit
2. May 21, Accounts Payable $500
Common Stock
Date Account Titles Debit Credit
1. May 15 Cash $7,000
1. May 15 Equipment 3,000
Accounts Payable
Date Account Titles Debit Credit
2. May 21, Office supplies $500
Service Revenue
Date Account Titles Debit Credit
3. May 25, Cash $4,000
4. May 30, Cash 1,000
Explanation:
a) Data and Analysis with Accounting Equation:
1. May 15, Assets Cash $7,000 Equipment $3,000 Equity: Common stock $10,000
2. May 21, Assets: Office supplies $500 Liabilities: Accounts Payable $500
3. May 25, Assets: Cash $4,000 Equity: Service Revenue $4,000
4. May 30, Assets: Cash $1,000 Equity: Service Revenue $1,000
A state is conducting an examination of mortgage loan originator Basil Thyme. During the examination, the agency is authorized to do all of the following, except:a. Administer oaths or affirmationsb. Control access to Basil’s officec. Subpoena witnessesd. Require production of relevant documents
Answer: B. Control access to Basil’s office.
Explanation:
During the conduct of the examination of mortgage loan originator Basil Thyme, the agency is authorized to administer oaths or affirmations, subpoena witnesses and require production of relevant documents.
The agency cannot control the access to Basil's office. It can only control access to any records or documents of an individual whim is under investigation.
Your broker suggests that the stock of DUH is a good purchase at $25. You do an analysis of the firm, determining that the recent $1.40 dividend and earnings should continue to grow indefinitely at 5 percent annually. The firm's beta coefficient is 1.3, and the yield on Treasury bills is 1.4 percent. If you expect the market to earn a return of 8 percent, what is your valuation of DUH
Answer:
The correct answer is "$28.03".
Explanation:
The given values are:
Good purchase,
= $25
Dividend,
= $1.40
Annually earning,
= 5%
Beta coefficient,
= 1.3
Treasury bills,
= 1.4%
Now,
= [tex]1.4+1.34\times 8-1.4[/tex]
= [tex]1.34\times 8[/tex]
= [tex]10.244[/tex] (%)
hence,
The fair value will be:
= [tex]1.4\times \frac{1.05}{.10244}-.05[/tex]
= [tex]28.03[/tex]
Absolutely, the proposal including its brokerage must be adopted because as fair market value was almost $25.
