Answer:
$81, $75, and $69
a. Market value of existing shares = 215000 * $81 = $17415000
Value of New shares issued = 48000 * $81 = $3888000
$21,303,000
Price after issue of new shares = 21,303,000 / (215000 + 48000)
= 21,303,000 / 263,000
= $81
Conclusion: No changes ($0 per share
b. Market value of existing shares = 215000 * $81 = $17415000
Value of New shares issued = 48000 * $75 = $3600000
$21015000
Price after issue of new shares = 21015000 / (215000 + 48000)
= 21,015,000 / 263,000
= $79.90
Conclusion: There is a decrease in amount (81 - 79.90) = $1.10 per share
c. Market value of existing shares = 215000 * $81 = $17415000
Value of New shares issued = 48000 * $69 = $3312000
$20,727,000
Price after issue of new shares = 20,727,000 / (215000 + 48000)
= 20,727,000 / 263,000
= $78.81
Conclusion: There is a decrease in amount (81 - 78.81) = $2.19 Per share
One Step, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 27 years to maturity that is quoted at 105 percent of face value. The issue makes semiannual payments and has a coupon rate of 4 percent.
Requried:
a. What is the company's pretax cost of debt?
b. If the tax rate is 23 percent, what is the aftertax cost of debt?
Answer:
Before tax cost of debt=3.72%
After-tax cost of debt =2.87 %
Explanation:
The yield to maturity to Maturity van be worked out using the formula below:
YM =( C + F-P/n) ÷ ( 1/2× (F+P))
C- annual coupon,
F- face value ,
P- current price,
n- number of years to maturity
YM - Yield to maturity
DATA
C- 4%× 100 = 4, P- 105, F- 100
AYM = 4 + (100-105)/27 ÷ 1/2× (100+105)
=0.0372 × 100= 3.72%
Yield to maturity =3.72%
Before tax cost of debt = Yield to maturity
Before tax cost of debt=3.72%
After tax cost of debt =Before tax cost of debt × (1-T)
Before tax cost of debt = 3.72%
Tax rate = 23%
After-tax cost of debt = 3.72%× (1-0.23) =2.87 %
After-tax cost of debt =2.87 %
Break-Even Sales and Sales to Realize Income from OperationsFor the current year ended October 31, Friedman Company expects fixed costs of $14,300,000, a unit variable cost of $250, and a unit selling price of $380.a. Compute the anticipated break-even sales (units).unitsb. Compute the sales (units) required to realize income from operations of $2,405,000.units
Answer:
a. 110,000 units
b. 128,500 units
Explanation:
a. Compute the anticipated break even sales in unit
Break even point in unit = Total fixed cost / Contribution margin
Total fixed cost = $14,300,000
Contribution margin per unit = Unit selling price - Unit variable cost
= $380 - $250
= $130
Break even point in units = $14,300,000 / $130
= 110,000 units
b. Compute sales (units) required to realize income from operations of $2,405,000
Break even point + expected profits = (total fixed costs + expected profits) / Contribution margin
° total fixed cost + expected profits
= $14,300,000 + $2,405,000
= $16,705,000
°contribution margin per unit
= $380 - $250
= $130
Break even point + expected profits in unit
= $16,705,000 / $130
= 128,500 units
During December, Rainey Equipment made a $658,000 credit sale. The state sales tax rate is 6% and the local sales tax rate is 1.5%. Prepare the appropriate journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
So starting out they purchase your equipment with a promissory note. That promissory note is Debited to your accounts receivable for the amount of sales price (658,000) + both sales & local taxes. 6%+1.5%= 7.5% so... 1+ (7.5%*658,000)= $707,350
then your sales tax payable is credited like this 7.5%*658,000= $49,350
and of course credit, the sales price for $658,000
Explanation:
Accounts Receivable $707,350 Sales Revenue $658,000 Sales taxes payable $49,350Good luck!
#JmackTheInstructor
The major components of a time series are all of the following EXCEPT: trend. cycles. random variations. seasonality. inflation.
Answer: Inflation
Explanation:
Time series data are refer to those taken over a period of years with a minimum of four years being satisfactory. The data shown will have variations that fall under four major components being;
Trend - Data that moves in a predictable fashion and so can be used to predict future behavior.Cycles - The variation here follows the business cycle or its own. Random Variables - Cannot be predicted. Seasonal - These follow a chronological pattern.Only Inflation does not fall here.
If interest rates rise, which of the following U.S. Government debt instruments would show the greatest percentage drop in value?
a. treasury bills.
b. treasury notes.
c. treasury bonds.
d. savings bonds.
Answer: treasury bonds
Explanation:
The treasury bonds are typically debt securities for the government that have a long maturity period e.g ten years ane above.
If interest rates rise, the U.S. Government debt instruments that would show the greatest percentage drop in value is the treasury bonds because of its longer maturity period.
Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the East region. 3. Compute the break-even point in dollar sales for the West region. 4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. Use the same format as shown above. What is Crossfire’s net operating income (loss) in your new segmented income statement? 5. Do you think that Crossfire should allocate its common fixed expenses to the East and West regions when computing the break-even points for each region?
Complete Question:
Crossfire Company segments its business into two regions - East and West. The company prepared a contribution format segmented income statement as shown below:
Total Company East West
Sales $900,000 $600,000 $300,000
Variable Expenses 675,000 480,000 195,000
Contribution margin 225,000 120,000 105,000
Traceable Fixed Expenses 141,000 50,000 91,000
Segment Margin $84,000 $70,000 $14,000
Common Fixed Expenses 59,000
Net Operating Income $25,000
Instructions: (As given).
Answer:
Crossfire Company1. Computation of the companywide break-even point in dollar sales:
Break-even point in dollar sales
= Sales = Total costs
Sales = $816,000
Total costs = Variable costs + Traceable fixed costs
= $675,000 + $141,000
= $816,000
2. Computation of the break-even point in dollar sales for the East region:
Break-even point in dollar sales
= Sales = Total costs
= $530,000
Total costs = $530,000 ($480,000 + 50,000)
3. Computation of the break-even point in dollar sales for the West region:
Break-even point in dollar sales
= Sales = Total costs
= $286,000
Total costs = $286,000 ($195,000 + 91,000)
4. A new segmented income statement based on the break-even dollar sales that are computed in requirements 2 and 3:
Total Company East West
Sales $816,000 $530,000 $286,000
Variable Expenses 675,000 480,000 195,000
Contribution margin 141,000 50,000 105,000
Traceable Fixed Expenses 141,000 50,000 91,000
Segment Margin $0 $0 $0
Common Fixed Expenses 59,000
Net Operating Income/(loss) ($59,000)
Crossfire's net operating income (loss) in the new segmented income statement is: $59,000
5. I think that Crossfire should allocate the common fixed expenses to the East and West regions when computing the break-even points for each region.
This ensures that Crossfire does not run into net operating loss, company-wide. The segmented sales revenues for the regions can be used to allocate the common fixed expenses. Other suitable bases are traceable fixed expense, number of sales and administrative staff, or activity cost pools, using activity-based costing technique.
Explanation:
a) Break-even point in sales dollars is the sales point at which Crossfire's sales revenue will be equal to the total costs. At this point, Crossfire will not make any profit or incur any loss.
Which one of these is the best description of a comparative market analysis? It shows what similar homes in the area have recently sold for It shows the list prices of similar homes in the area It’s a guide to the minimum acceptable offer It discloses issues with the home that are known to the seller
Answer:
It shows what similar homes in the area have recently sold for.
Explanation:
Answer:
The statement "It shows the same types of homes in the area that are presently sold" is considered to be the best description for the comparative market analysis.
Explanation:
A comparative market analysis is a tool that is used by the real estate agent in order to remove the value of the particular property via evaluation of the same types of homes that could be presently sold in a similar area.
For finding the best description regarding the comparative market analysis, we need to determine the following information:
It does not show the list prices of the same types of homes in the area.It does not guide for a minimum acceptable offer.Also, it does not disclose the issues for the income that are aware to the seller.Therefore we can conclude that the first statement is correct
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Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 13.6 percent and the standard deviation of those returns in this period was 43.86 percent. a. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What about triple in value? (Do not round intermediate calculations and enter your answer as a percent rounded to 6 decimal places, e.g., .161616.)
Answer: a. 2.44%
b. 0.001070%
Explanation:
Given: The returns from an asset are normally distributed with
[tex]\mu=\text{ 13.6 percent and }\sigma=\text{43.86 percent.}[/tex]
Let x be the percentage value of return.
a. Double in value in a single year i.e. 100% return.
z-value = [tex]\dfrac{x-\mu}{\sigma}[/tex]
[tex]=\dfrac{100-13.6}{43.86}=1.97[/tex]
Required probability = Right-tailed probability for Z = 1.97
= 0.0244 [By p-value calculator]
= 2.44%
b. Triple in value in a single year i.e. 200% return.
z-value = [tex]\dfrac{x-\mu}{\sigma}[/tex]
[tex]=\dfrac{200-13.6}{43.86}=4.25[/tex]
Required probability = Right-tailed probability for Z =4.25
= 0.0000107 [By p-value calculator]
= 0.001070%
When the Federal Reserve buys long term MBS and Treasury securities from banks and announces its intention to keep buying these assets in large quantities for a long time the effect on commercial banks is to increase the value of fixed income securities that are not sold and at the same time to lower the interest spread between new loans originated and the cost of financing these loans. True False
Answer:
True
Explanation:
Since, Federal reserve purchased long term MBS in order to pay the less market interest rate and this will cause a rise in the amount of income i.e fixed securities. Also, due to less market interest rate, the financing cost is less and at the same time interest spread is narrower as it provides more liquidity
Therefore the given statement is true
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.
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.
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Calculate gross profit ratio and cost of goods sold Refer to the consolidated statements of earnings in the Campbell Soup Company annual report in the appendix.
Required:
a. Calculate the gross profit ratio for each of the past three years.
b. Assume that Campbell's net sales for the first four months of 2015 totaled 527 billion. Calculate an estimated cost of goods sold and gross profit for the four months.
Answer:
gross profit ratio = (total revenue - cost of goods sold) / total revenue
I looked for the missing information:
year total sales cost of goods sold
2012 $7,175 $4,365
2013 $8,052 $5,140
2014 $8,268 $5,370
a)
gross profit ratio:
2012 = ($7,175 - $4,365) / $7,175 = 39.16%
2013 = ($8,052 - $5,140) / $8,052 = 36.16%
2014 = ($8,268 - $5,370) / $8,268 = 35.05%
b)
since the gross profit margin ratio is decreasing every year, we can assume that it will keep decreasing in 2015. Using linear regression, the slope is -0.02055. So the estimated gross profit margin ratio for 2015 = 34.33%
estimated cogs (first four months of 2015) = $527 billion x (1 - 34.33%) = $346.08 billion
estimated gross profit (first four months of 2015) = $527 billion x 34.33% = $180.92 billion
hi , what is third-party companies??? thank
Answer:
A 'third party', is any entity that a company does business with. This may include suppliers, vendors, contract manufacturers, business partners and affiliates, brokers, distributors, resellers, and agents.
Your portfolio has a beta of 1.60. The portfolio consists of 16 percent U.S. Treasury bills, 36 percent Stock A, and 48 percent Stock B. Stock A has a risk level equivalent to that of the overall market. What is the beta of Stock B?
Answer: 2.58
Explanation:
Portfolio beta of 1.60 is weighted average of all the constituent betas.
US Treasury bills are riskless so beta is 0
Stock A has market risk so beta is 1.
1.60 = (0.16 * 0) + ( 0.36 * 1) + ( 0.48 * b)
1.60 = 0.36 + 0.48b
0.48b = 1.24
b = 2.58
Bramble Corp. receives $360,000 when it issues a $360,000, 8%, mortgage note payable to finance the construction of a building at December 31, 2020. The terms provide for annual installment payments of $60,000 on December 31. Prepare the journal entries to record the mortgage loan and the first two payments.
Answer:
The First Payment occurs on 31 December 2021 as :
Mortgage Payable $31,200 (debit)
Interest Expense $28,800 (debit)
Cash $60,000 (credit)
The Second Payment occurs on 31 December 2022 as :
Mortgage Payable $33,696 (debit)
Interest Expense $26,304 (debit)
Cash $60,000 (credit)
Explanation:
First prepare an amortization schedule using the following data concerning the mortgage note :
Hint : Determine the number of years, N of this bond.
PV = $360,000
PMT = - $60,000
P/Yr = 1
r = 8 %
FV = 0
N = ?
The length of the bond, N is 8.4969 or 9 years
The First Payment occurs on 31 December 2021 as :
Mortgage Payable $31,200 (debit)
Interest Expense $28,800 (debit)
Cash $60,000 (credit)
The Second Payment occurs on 31 December 2022 as :
Mortgage Payable $33,696 (debit)
Interest Expense $26,304 (debit)
Cash $60,000 (credit)
Since the 1980s and 1990s, segmentation in global financial markets has been reduced. As a result of this, the correlation among securities markets has increased, thereby reducing, but not eliminating, the benefits of international portfolio diversification. True or Worse
Answer: True
Explanation:
With the on-going drive towards Globalization, companies took advantage to raise more capital by listing across various stock exchanges in the world. The result of this became that the securities market became more correlated.
This had the advantage of granting many companies enough capital that they became Multinational companies but it had the disadvantage of reducing the benefits of international portfolio diversification because the companies would be able to influence the movement of stock across the nations that they are listed in. Where before you could trade in Japan if there were losses in the NYSE, with a company being on both and suffering, both exchanges would feel it.
A firm is expected to have net earnings of $1,480,000 three years from now. There are 500,000 shares of stock outstanding. The firm's current P/E ratio is 18 and it is expected to remain at that level. What is the firm's expected stock price for year 3
Answer:
Stock price = $53.28
Explanation:
DATA
Earnings = $1,480,000
Shares outstanding = 500,000
P/E ratio = 18
Stock price = ?
he firm's expected stock price for year 3 can be calculated by using Price earning ratio formula
Formula:
P/E ratio = Stock price / EPS
Stock price = P/E ratio x EPS
Stock price = 18 x $2.96(w)
Stock price = $53.28
Workings
EPS = Earning per share
EPS = Earning /Shares
EPS = $1,480,000 /500,000
EPS = $2.96
The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects:
Year Cash Flow (I) Cash Flow (II)
0 –$87,000 –$55,000
1 36,900 11,700
2 47,000 34,500
3 27,000 28,500
Requirement 1:
(a) If the required return is 10 percent, what is the profitability index for each project? (Do not round intermediate calculations). Round your answers to 3 decimal places.
(b) If the required return is 10 percent and the company applies the profitability index decision rule, which project should the firm accept?
Requirement 2:
(a) If the required return is 10 percent, what is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places .
Answer:
PI for the first project = 1 + ($5,673.93 / 87,000) = 1.065
PI for the second project = 1 + ($5,561.23 / $55,000) = 1.101
b. the second project should be chosen because the PI is higher
NPV for 1 = $5,673.93
NPV for 2 = $5,561.23
Explanation:
profitability index = 1 + (NPV / Initial investment)
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
for the first project
Cash flow in year 0 = –$87,000
Cash flow in year 1 = 36,900
Cash flow in year 2 = 47,000
Cash flow in year 3 = 27,000
I = 10%
NPV = $5,673.93
for the second project
Cash flow in year 0 = –$55,000
Cash flow in year 1 = 11,700
Cash flow in year 2 = 34,500
Cash flow in year 3 = 28,500
I = 10%
NPV = $5,561.23
PI for the first project = 1 + ($5,673.93 / 87,000) = 1.065
PI for the second project = 1 + ($5,561.23 / $55,000) = 1.101
b. the second project should be chosen because the PI is higher
To find the NPV 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 NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
n the cash flow information for the Ping Kings project, Ping spent $300,000 for research and development of the golf clubs. Ping's tax rate is 40%. How much of this cost should be included in the initial (t = 0) cash flow for this project
Answer: C. $0
Explanation:
When including initial costs in a project's cash-flow, the relevant costs are those that henceforth will be spent on the project. Sunk costs are not to be included because they have already been incurred and cannot be recovered.
Research and Development costs have already been incurred and so are sunk costs. Hence they are not to be included in the initial cash-flow for the project.
The amount of the cost that should be included in the initial (t = 0) cash flow for Ping Kings' Project is D. $300,000.
This is a cash outlay (outflow). It bears a negative value. The initial cash flow cannot be $120,000, $180,000, or $0 because of Ping's tax rate of 40%. Under the FASB, Research and Development costs are capitalized.
Secondly, tax is not applied on capital investment but its net income.
Options for this question include:
A. $120,000
B. $180,000
C. $0
D. $300,000
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Mangum Co. is a large company that segments its business into cost and profit centers. The Cost center for the manufacture of Product M2T incurred the following costs in October:
Direct Labor: $25/unit
Direct Materials: $80/unit
Variable Overhead: $15/unit
Traceable Fixed Costs: $62,000
Common Fixed Costs: $100,000
Sales were 2,000 units in October. Each unit sells for $210. The M2T Department is being evaluated on overall profitability. In September, the department margin was $100,000. By how much did the department margin increase or decrease in October?
a. $100,000 decrease
b. $118,000 increase
c. $18,000 increase
d. $82,000 decrease
Answer: c. $18,000 increase
Explanation:
Department margin was $100,000 in September.
October Margin = Sales - Variable Costs - Traceable Fixed Costs
= (2,000 *( 210 - 25 - 80 - 15) ) - 62,000
= (2,000 * 90) - 62,000
= $118,000
= October Margin - September Margin
= 118,000 - 100,000
= $18,000 increase
Income statement.
Use the data from the following financial statement in the popup window, Complete the partial income statement if the company paid interest expense of $18,100 for 2014 and had an overall tax rate of 40% for 2014. Complete the income statement below:
(Round to the nearest dollar.)
Income Statement Year Ending 2014
Sales revenue $360,000
Cost of goods sold $150,000
Fixed costs $42,900
Selling, general, and administrative expenses $27,200
Depreciation $45,900 EBIT $
Interest expense $ 18100
Taxable income $
Taxes $
Net income $
Find the accumulated depreciation for 2014 first.
The accumulated depreciation for 2014 is:_____(Round to the nearest dollar.)
Answer:
Income Statement Year Ending 2014
Sales revenue $360,000
Cost of goods sold $150,000
Gross profit $210,000
Fixed costs $42,900
Selling, general, and
administrative expenses $27,200
Depreciation $45,900
EBIT $94,000
Interest expense $18,100
Taxable income $ 75,900
Taxes $ 30,360
Net income $ 45,540
Find the accumulated depreciation for 2014 first.
The accumulated depreciation for 2014 is:_$45,900____(Round to the nearest dollar.)
Explanation:
A company's income statement is one of the three financial statements prepared by the entity at the end of its fiscal period. The statement compares the company's revenue with the expenses. After deducting the total expenses from the total revenue, the net income or loss is obtained. But before arriving at the net income or loss, there are other profit points that are usually calculated. The first is the gross profit, which is the difference between the sales revenue and the cost of goods sold. It shows the ability of the management to generate enough revenue to cover the cost of goods sold and make a profit from its trading or primary activities.
The next profit point is the Earnings before Interests and Taxes (EBIT). This is an important index for checking the financial performance of a company. The next is the Taxable Income on which the tax rate is determined and paid to government as Company Income Tax. After deducting the tax expense from the pre-tax income, the final profit point is the After-Tax Income or the Net Income. This determines the dividends policy and the share of retained earnings of the entity.
The accountant for Mandarin Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year $949,000
Net income for the year 295,000
Cash dividends declared for the year 55,000
Retained earnings balance at the end of the year 1,397,000
Cash dividends payable at the beginning of the year 12,600
Cash dividends payable at the end of the year 14,900
What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?
a. $55,000.
b. $57,300.
c. $82,500.
d. $2,300.
e. $52,700.
Answer: e. $52,700
Explanation:
Cash Dividend to be paid = Cash dividends payable at the beginning of the year + Cash dividends declared for the year - Cash dividends payable at the end of the year
= 12,600 + 55,000 - 14,900
= $52,700
A company purchased property for a building site. The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?
Answer:
The question is incomplete, below is a possible match of the complete question:
a company purchased property for a building site. the costs associated with the property were:
purchase price $175,00
real estate commisions $15,000
legal fees 800
expenses of clearing the land 2,000
expenses to remove old building 1,000
what portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?
Answer:
cost allocated to land = $193,800
cost allocated to new building = $0
Explanation:
The expenses associated with the ost of land purchase are all the necessary expenses made in the purchase of the land and in getting the land ready for use. These include legal fees, cost of clearing the land, cost of removing old structures etc. Therefore cost allocated to land is calculated as follows:
cost of land = purchase price + real estate commissions + legal fees + expenses of clearing the land + expenses to remove old building.
cost of land = 175,000 + 15,000 + 800 + 2,000 + 1,000 = $193,800
∴ cost of land = $193,800
cost of new building = $0
There is no transaction associated directly with setting up the new building, all the costs were associated with the acquisition of the land, hence the cost os the new building is $0
Merry Maidens Cleaning generally charges $280 for a detailed cleaning of a normal-size home. However, to generate additional business, Merry Maidens is offering a new-customer discount of 10%. On May 1, Ms. E. Pearson has Merry Maidens clean her house and pays cash equal to the discounted price. Required: Record the revenue earned by Merry Maidens Cleaning on May 1.
Answer:
May 1
DR Cash $252
CR Service Revenue $252
(To record payment for services rendered)
Working
Cash = Net Service revenue
Net Service revenue = $280 * ( 1 - 10%)
= 280 * 90%
= $252
Which of the following is included in the entry to record the issuance of shares of par value common stock at per share for cash?
A) Cash is debited for $294,000.
B) Common Stock is debited for $98,000.
C) Common Stock is credited for $294,000.
D) Paid-In Capital in Excess of Par-Common is debited for $196,000.
Answer:
A) Cash is debited for $294,000. and,
C) Common Stock is credited for $294,000.
Explanation:
When Shares are Issued for Cash, recognize the Assets of Cash (Debit) and also recognize an equity element - Common Stock (Credit).
Haruto Kawa, a Japanese citizen who works for Shin-Ro Corp. in Japan, has been asked to head the company's sales office in the United States. Upon taking the assignment, Haruto will be a(n) _____ manager.
Answer:
The correct answer will be "Expatriate".
Explanation:
An expatriate seems to be a migrant worker through his or her occupation, a specialist, or maybe even a skilled worker. Expatriate managers could've been characterized because of those who aren’t residents including its country during which individuals work, and were employed because of everyone's specialized operational skills but rather because of about there willingness to employ organization knowledge.If a firm has a service that is valuable, rare, and costly-to-imitate, but a substitute exists for the service, the firm will
Answer: the firm will have a temporary competitive advantage
Explanation: The firm in question would have a temporary competitive advantage. Competitive advantage describes something that places a company or business or a person above the competition such as value, rarity, difficult/costly-to-imitate amongst others. However, where a substitute is already in existence for such service, then the firm would have a temporary competitive advantage.
Research an organization that makes people their primary focus and another organization that makes productivity and efficiency their primary focus. Compare, contrast, and discuss the control techniques and measurements for each organization.
Answer:
Ritz Carlton hotel focuses on people.
Sony Focuses on their products.
Explanation:
Ritz Carlton has created its leading brand by providing great ambiance to the visitors and its guest. One can dream of staying at such luxury hotel. They are famous for their hospitality of their guests. The hotel management believes on total quality management. It has set highest standard for themselves and strive to meet them by providing better and better service to its guests. The success of Ritz Carlton is mainly because they keep the comfort of their guests as their highest priority.
Sony has always been striving to serve its customer better. Millennial are the top brands that are considered in market. They are the organizations which capture major market share and are massive market segment. Sony has offered wide range of products to its customers. Their main focus is on their product features and its qualities.
The bookkeeper prepared a check for $48 but accidently recorded it as $95. When preparing the bank reconciliation, this should be corrected by:
Answer:
Adding $47 to the book balance.
Explanation:
The above is an example of transposition error, which is caused by substituting two or more sequential digits ; mistake would be corrected by adding $47 ($95 -$48) to the book balance.
Kathy fields wants to buy a condominium selling for $95,000. The bank is requiring 20% down and is charging 9.5% interest for a 25 year loan. determine the amount required down payment and the amount of the monthly payment for the principal and interest.
Answer:
The down payment is 19000 and monthly payment is 664.009
Explanation:
The purchase price of condominium = $95000
Down payment = 20%
Interest charged = 9.5 %
Time period = 25 years
Down payment amount = 95000 × 20% = 19000
Remaining loan amount = $76000
Below is the calculation of monthly payment:
[tex]\text{Present vlaue of annuity} =\frac{A(1-(1+r)^{-n})}{r} \\A = monthy \ installment \\76000 = \frac{A(1-(1+ 0.095/12)^{-25\times 12})}{ 0.095/12} \\A(0.906112) = 601.667 \\A = 664.009[/tex]
eally Great Corporation manufactures industrial−sized landscaping trailers and uses budgeted machine−hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: Budgeted output units 51,000 units Budgeted machine−hours 10,200 hours Budgeted variable manufacturing overhead costs for 51,000 units $387,600 Actual output units produced 35,750 units Actual machine−hours used 14,300 hours Actual variable manufacturing overhead costs $328,900 What is the budgeted variable overhead cost rate per output unit?
Answer:
$7.60 per unit of output
Explanation:
Budgeted output units 51,000 units
Budgeted machine−hours 10,200 hours
Budgeted variable manufacturing overhead costs for 51,000 units $387,600
budgeted variable overhead cost per unit of output = $387,600 / 51,000 units = $7.60 per unit of output
In this case, the applied variable overhead rate = 35,750 units x $7.60 = $271,700, which would have been under-applied since the actual variable overhead costs were much higher, $328,900.
