Answer:
Dividends are fixed. ⇒ Consistent with Debt
Fixed dividends makes preferred shares consistent with debt because debt repayments are made in equal payments as well.
Usually has no specified maturity date ⇒ Consistent with Equity.
Equity has no set maturity date unlike debt and preferred stock has no maturity date either so is much like equity in this regard.
Cost of preferred stock.
Preferred stock is like a perpetuity. The cost of preferred stock is therefore:
= Constant dividend / Price of stock
= 13 / 130.45
= 9.97%
= 10%
Choose the correct objective statement for this task.
Suppose that you have been given the task of organizing a graduation open house party for your younger brother who is graduating from high school.
a. To throw a graduation party Saturday afternoon after graduation for 50 guests, that provides ample entertainment and food, and allows my younger brother time to socialize with all the guests, at a cost of $400 or less, and all guests will be pleased with the party.
b. To throw a graduation party.
c. To throw a graduation party Saturday afternoon after graduation for 50 guests, that provides ample entertainment and food, and allows my younger brother time to socialize with all the guests.
d. To throw a graduation party Saturday afternoon after graduation for 50 guests, that provides ample entertainment and food, and allows my younger brother time to socialize with all the guests, at a cost of $400 or less.
Answer:
The correct objective statement for this task is:
b. To throw a graduation party.
Explanation:
Option b is the correct answer because it is concise and straight to the point. It does not start enumerating unnecessary details about the graduation party. Like a good objective statement, option b focuses the reader's attention to the main purpose of the task at hand. This is not so with options a, c, and d, which added details that were not covered by the task description.
In September, Jeanette Company purchased materials costing $34,400 and incurred direct labor cost of $22,100. Manufacturing overhead totaled $58,000 for the month. Information on inventories was as follows: September 1 September 30 Materials $10,300 $9,800 Work in process 6,500 7,400 Finished goods 3,630 2,970 What was the cost of direct materials used in production for the month of September? a. $34,900 b. $33,900 c. $35,300 d. $33,500
Answer:
a. $34,900
Explanation:
The computation of the cost of direct material used is shown below:
= Opening balance of raw material + purchased materials - ending balance of raw material
= $10,300 + $34,400 - $9,800
= $34,900
Hence, the correct option is a.
What is the end behavior of the graph of the polynomial function f(x)
Answer:
f(x) approaches infinity as x approaches infinity
Explanation:
Given
[tex]f(x) = 3x^6 + 30x^5+ 75x^4[/tex]
Required
The end behavior of the graph
We have:
[tex]f(x) = 3x^6 + 30x^5+ 75x^4[/tex]
The above expression implies that:
[tex]f(x) = 3x^6 + 30x^5+ 75x^4[/tex]
The leading coefficient is 3 (3 is positive)
And the degree of the polynomial is 6 (6 is even)
When the leading coefficient is positive and the degree is even; the end behavior of the function is:
[tex]x \to \infty[/tex]
[tex]f(x) \to \infty[/tex]
On January 1, 2020, Cheyenne Company purchased 40% of Santos Corporation 465,000 outstanding shares of common stock at a total cost of $13 per share. On October 25, Santos declared and paid a cash dividend of $0.40 per share. On December 31, Santos reported a net income of $934,000 for the year and the market price of its common stock was $14 per share. Prepare all necessary journal entries for Mica company for 2020.
Solution :
The following journal entry will be prepared to record the transactions
Date General Journal Debt($) Credit($)
Jan 1 Investment in Cheyenne Co. 2,418,000
(465,000 x 40% x $13)
Cash 2,418,000
Oct. 25 Cash (465,000 x 40% x $0.4) 74,400
Investment in Cheyenne Co. 74,400
Dec 31 Investment in Cheyenne Co. 373,600
($934,000 x 40%)
Equity income in Cheyenne Co. 373,600
Navajo Corporation traded a used truck (cost $20,000, accumulated depreciation $18,000) for a small computer with a fair value of $3,300. Navajo also paid $500 in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.)
Answer and Explanation:
The journal entry is given below:
Equipment/Computer $3,300
Accumulated depreciation-Truck $18,000
To Truck $20,000
To Gain on disposal of truck $800
To Cash $500
(Being the exchange is recorded)
Here the equipment and accumulated depreciation is debited as it increased the asset and credited the truck, cash and gain as it decreased the assets and increased the revenue
The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Cash and short-term investments $ 45,000 Accounts receivable (net) 25,000 Inventory 11,000 Property, plant and equipment 210,000 Total Assets $291,000 Liabilities and Stockholders' Equity Current liabilities $ 50,000 Long-term liabilities 90,000 Stockholders' equity—common 151,000 Total Liabilities and Stockholders' Equity $291,000 Income Statement Sales $ 120,000 Cost of goods sold 55,000 Gross profit 65,000 Operating expenses 30,000 Net income $ 35,000 Number of shares of common stock 6,000 Market price of common stock $20 Dividends per share .50 What is the inventory turnover for Sampson? Group of answer choices 3,2 times 5 times 10.9 times 0.20 times
Answer:
Sampson Company
The inventory turnover for Sampson is:
5 times.
Explanation:
a) Data and Calculations:
Assets
Cash and short-term investments $ 45,000
Accounts receivable (net) 25,000
Inventory 11,000
Property, plant and equipment 210,000
Total Assets $291,000
Liabilities and Stockholders' Equity
Current liabilities $ 50,000
Long-term liabilities 90,000
Stockholders' equity—common 151,000
Total Liabilities and Stockholders' Equity $291,000
Income Statement Sales $ 120,000
Cost of goods sold 55,000
Gross profit 65,000
Operating expenses 30,000
Net income $ 35,000
Number of shares of common stock 6,000
Market price of common stock $20
Dividends per share $0.50
Inventory Turnover = Cost of goods sold/Average Inventory
= $55,000/$11,000
= 5 times
Which of the following is the plan of action used by management to identify how resources will be allocated, how the company will market in its competitive environment, and how the firm will attain its goals?
A. Strategy
B. Organizational structure
C. Competitive advantage
D. Market analysis
E. Action plan
Answer:
A. Strategy
Explanation:
Strategy is basically a planning in which it tells how the things can be done. It is the planning action that applied by the management for identifying the resources that need to be distributed, how it can be in the competitive environment and how the company is able to achieve its goals and objectives
So, the option a is correct
In 2019, Teller Company sold 3,000 units at $600 each. Variable expenses were $420 per unit, and fixed expenses were $270,000. The same selling price, variable expenses, and fixed expenses are expected for 2020. What is Teller’s break-even point in units for 2020? g
Answer:
Break-even point in units= 1,500
Explanation:
Giving the following information:
Selling price= $600
Unitary variable cost= $420
Fixed cost= $270,000
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 270,000 / (600 - 420)
Break-even point in units= 1,500
McoLawn Ltd manufactures a single product, an ecologically designed electronic lawn-mower, which they sell for £40. The variable costs of the lawn-mower are as follows: Fixed costs are £140,000. McoLawn Ltd. have budgeted profits for the coming year at £120,000. How many lawn-mowers must McoLawn Ltd. sell in order to reach budgeted profit levels? Group of answer choices
Answer: 20,000 lawn mowers
Explanation:
The formula for calculating the number of lawn mowers needed to reached the budgeted profit levels is:
= (Fixed costs + Budgeted profit) / Contribution margin
Contribution margin = Selling price - Variable cost
= 40 - (14 + 8 + 5)
= 40 - 27
= $13
Number of lawn-mowers required:
= (140,000 + 120,000) / 13
= 20,000 lawn mowers
Ride N Style Inc. is a bus line with service to several major cities. It has several competitors that each offer service to one or two cities, and based on its current outlays, it cannot match or beat those competitors on price. Because of long-term contracts and an increase in the cost of gasoline, it is not possible to reduce expenditures at this time. Which of these strategies should Ride N Styles pursue instead?
a. Close the business until the cost of us decreases.
b. Pursue a diferented strategy.
c. Compete based on intergroup rivalry, not in group rivalry
d. Create a strateg group through mergers
Answer:
b. Pursue a diferented strategy.
Explanation:
A differentiation strategy permits that the product or service should be different in the market also it provides the edge over your rivalrs. Here you can select various kinds of offering that attaching with the service in which you permit to charge more from your clients
So as per the given situation, the option b is correct
Draw supply and demand graphs that estimate what will happen to demand, supply, and the equilibrium price of coffee if these events occur: Widely reported medical studies suggest that coffee drinkers are less likely to develop certain diseases.
Answer:
Please find the required diagram in the attached image
Explanation:
Only a change in the price of a good leads to a movement along the demand curve of that good. Also, only a change in the price of the good would lead to an increase or decrease in the quantity demanded of that good.
Other factors other than the change in the price of the good would lead to a shift of the demand curve. Some of those factors include :
1. a change in consumers' expectation
2. a change in the taste of consumers
3. a change in income
As a result of the study, there would be an increase in the demand for coffee. This would shift the demand curve to the right. As a result, there would an increase in equilibrium price and quantity
Using the starting point method, what is the price elasticity of demand from a price of $4.50 to a price of $4.00 per pack of 100 screws
Answer:
The price elasticity of demand is -9.00.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
The table below shows the weekly demand for machine screws at the local hardware store.
Price (dollars per pack of 100 screws) Quantity (packs of 100 screws)
$5.00 0
4.50 60
4.00 120
3.50 180
3.00 240
2.50 300
2.00 360
1.50 420
1.00 480
0.50 540
0.0 600
Using the starting point method, what is the price elasticity of demand from a price of $4.50 to a price of $4.00 per pack of 100 screws:
The explanation of the answer is now provided as follows:
New quantity = 120
Old quantity = 60
New price = $4.00
Old price = $4.50
Using the formula for calculating the starting point method for elasticity of demand, we have:
Price elasticity of demand = ((New quantity - Old quantity) / (New price - Old price)) * (Old price / Old quantity) = ((120 - 60) / (4.00 - 4.50)) * (4.50 / 60) = -9.00
Therefore, the price elasticity of demand is -9.00.
The price elasticity of demand is -9.00.
Given information
New quantity = 120
Old quantity = 60
New price = $4.00
Old price = $4.50
Now, we will use the formula below for calculating the starting point method for elasticity of demand.
Price elasticity of demand = ((New quantity - Old quantity) / (New price - Old price)) * (Old price / Old quantity)
Price elasticity of demand = ((120 - 60) / (4.00 - 4.50)) * (4.50 / 60)
Price elasticity of demand = -9.00
In conclusion, the price elasticity of demand is -9.00.
Read more about price elasticity of demand
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Which of the following would not occur as a result of a monopolistically competitive firm suffering a short-run economic loss?
A) The firm could exit the industry in the long run.
B) If the firm does not exit the industry in the long run its demand curve will shift to the left.
C) If the firm does not exit the industry in the long run its demand curve will shift to the right.
D) If the firm remains in the industry in the long run it will break even.
choose "A"
choose "B"
choose "C"
choose "D"
Answer:
B) If the firm does not exit the industry in the long run its demand curve will shift to the left.
Explanation:
This is because the statement "If the firm does not exit the industry in the long run its demand curve will shift to the left, " simply means that if the monopolistic competitive firm stays in a particular industry for long, the firm will experience a situation in which less of the good or service is demanded at every price.
However, this cannot be true because a monopolistic competitive firm produces unique products that tend to have its specific customers. These customers, in the long run, will demand more goods and services of the firms which will be affected positively by a lot of reasons including prices of related goods, increase in salary, better economy at large, etc.
Describe the five factors that may limit how fast a project can be completed. Give an example of each.
Answer:
Logical order, activity duration, resource availability, imposed dates, and cash flow are the five factors that may slow down the completion of a project.
Explanation:
The order in which activities should be completed is known as logical order. You wouldn't put down new carpet before removing the old one. As a result, the logical order is for the predecessor activity to come first, followed by the successor activity.The total number of work periods required to complete a scheduled activity (excluding holidays and other nonwork periods) is known as activity duration. By identifying the right people for the job and discussing the time frame of each activity with them, you can figure out how long each activity should take.The availability of resources, such as workers, to complete a project is referred to as resource availability. Obtaining commitments for equipment and workers in a project prevents days of no work from occurring. It is necessary to stick to a strict schedule.Imposed dates are deadlines for completing specific parts of a project. Perhaps your permit is only valid for 30 days. If this is the case, you must complete your project within the specified time frame. This date was not chosen; it was imposed by the permit.The term "cash flow" refers to the money that comes in from the financial backer as well as the money that goes out to the employees and subcontractors. If there is a cash flow problem on either end of the transaction, it can affect the entire project. Workers will not continue to work if they are not paid on time, and a project may be abandoned.Source:
Describe the five factors that may limit how fast a project can be completed. Give an example of each (Course Hero).The five factors that may limit how fast a project can be completed are:
Logical orderAvailability of resourcesCash flow rateActivity durationImposed dateExplanation:
The order of arrangement in which activities should be completed is known as logical order. If the logical order isn't right, this may limit how fast the project can be completed.The total number of work hours required to complete a scheduled activity is known as activity duration. Upon identifying the right people for the job and discussing the time frame of each activity with them, you can figure out how long each activity should take.The availability of resources, such as skilled and unskilled labour, to complete a project is referred to as resource availability.Imposed dates are deadlines for completing specific parts of a project. At times, the permit is only valid for 20 days.Cash flow otherwise known as working capital refers to the money that comes in from the source of finances as well as the money that goes out to the employees and subcontractors. If there is a cash flow problem on either end of the transaction, the entire project may be affected.Read more on project limiting factors:
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Price elasticity for a good depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has the most elastic demand? Fish food Monthly cell phone bill Thumbtacks
Answer:
Monthly Cell Phone Bill
Explanation:
Other things being equal, the higher the price of a good relative to a consumer's income, the greater the price elasticity of demand. Hence, the price elasticity of demand for low-priced items, such as thumbtacks and fish food, tends to be lower than the price elasticity of demand for relatively expensive items, such as monthly cell phone bill, that represent a more significant fraction of a consumer's annual income.
Be sure to consider not just the price, however, but also the overall portion of a consumer's annual income spent on an item. For example, one latte costs only $3.00, but for daily coffee drinkers the annual expense could be around $1,000. The elasticity of demand for lattes is therefore likely to be higher than that for other low-priced items (such as thumbtacks) that may need to be purchased only a few times annually.
Explain the difference between the concepts of Business Management and Technology Management. Provide examples.
Answer:
Explanation:
There is a difference between business management and technology management.
Business management refers to managing the organization's business perspective so that the direct business objectives of the organization is served.
Business management involves managing the domain, employees, looking after the business processes of an organization, etc. whereas
While technology management is used to make the business process simple and convenient through various aspects like managing the technical aspect of each and every business process and that is possible by having details about the technical aspects that are involved in all the business process of the organization.
For an organization to be successful it should possess all the required management techniques that include the business and technical aspects both.
Today the way of doing business has changed a lot and hence the organizations need to be quite diligent and effective in order to sustain and remain competitive in the industry.
(Deferred Tax Asset with and without valuation Account) Jennifer Capriati Corp. has a deferred tax asset account with a balance of $150,000 at the end of 2016 due to a single cumulative temporary difference of$375,000. At the end of 2017, this same temporary difference has increased to a cumulative amount of $450,000. Taxable income for 2017 is$820,000. The tax rate is 40% for all years. No valuation account related to the deferred tax asset is in existence at the end of 2016. Instructions (a) Record income tax expense, deferred income taxes, and income taxes payable for 2017, assuming that it is more likely than not that the deferred tax asset will be realized. (b) Assuming that it is more likely than not that$30,000 of the deferred tax asset will not be realized, prepare the journal entry at the end of 2017 to record the valuation account.
Answer:
a. Income Tax Expense (Dr.) $298,000
Deferred Tax (Dr.) $30,000
Income Tax Payable (Cr.) $328,000
Explanation:
b. Income Tax expense (Dr.) $30,000
Allowance to reduce deferred tax value to NRV (Cr.) $30,000
Income tax payable is calculated based on tax rate of 40%.
$820,000 * 40% = $382,000
How many shares are held as treasury stock by Coca-Cola at December 31, 2015, and by PepsiCo at December 26, 2015
Answer:
December 31 ,2015 Coca cola and December 26, 2015
1-a. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $8,400, the monthly sales volume increases by 100 units, and the total monthly sales increase by $9,500? 1-b. Should the advertising budget be increased?
Answer:
a. Income before advertising budget increase:
= Contribution margin - Fixed costs
= (38 * 3,600) - 79,000
= $57,800
Income after advertising budget increases:
= Sales - Variable expenses - Fixed expenses
Sales = (3,600 + 100 units) * 95 per unit
= $351,500
Variable expenses = 60% * 351,500
= $210,900
Fixed expenses = 79,000 + 8,400 advertising
= $87,400
Income = 351,500 - 210,900 - 87,400
= $53,200
b. Income decreased with the increase in advertising so Advertising budget should not be increased.
suppose the transfers of pillars to the lantern would reduce sales to outside customers by 15000. whats the lowest transfer price that would
Answer:
$1.20
Explanation:
Variable cost per pillar is $0.80, there is demand of pillar for 15000 by an outside customer. The selling cost is around $0.40. The total variable cost is $1.20, this is minimum transfer price that can be set by the supplier.
Catrina Santana contributed a patent, accounts receivable, and $23,000 cash to a partnership. The patent had a book value of $8,000. However, the technology covered by the patent appeared to have significant market potential. Thus, the patent was appraised at $85,000. The accounts receivable control account was $38,000, with an allowance for doubtful accounts of $2,000. The partnership also assumed a $10,000 account payable owed to a Santana supplier. On December 31, provide the journal entry for Santana's contribution to the partnership.
Answer:
Date Account Title Debit Credit
12/31 Cash $23,000
Patent $85,000
Accounts Receivable $38,000
Accounts Payable $10,000
Allowance for doubtful debt $2,000
Capital $134,000
An example of fast tracking a project schedule would be to overlap the design and production phases for a design-to-production project, where the conventional approach would be to move on to construction only after completing the design phase.
a. True
b. False
Answer:
a. True
Explanation:
Project management can be defined as the process of designing, planning, developing, leading and execution of a project plan or activities using a set of skills, tools, knowledge, techniques and experience to achieve the set goals and objectives of creating a unique product or service.
Generally, projects are considered to be temporary because they usually have a start-time and an end-time to complete, execute or implement the project plan.
Furthermore, the main purpose of project management is working toward a common goal.
This ultimately implies that, project managers should ensure adequate attention and time is taken to identify, analyze and manage capital, raw materials, people, system of tasks and other resources, so as to effectively and efficiently achieve a common goal with all project stakeholders.
The fundamentals of Project Management includes;
1. Project initiation
2. Project planning
3. Project execution
4. Monitoring and controlling of the project.
5. Adapting and closure of project.
In the execution of a project, delaying a task normally affects the start or finishing time of the other tasks (successors) in a project.
The amount of time that is permitted for an activity to be delayed without delaying the early start date of any immediately following (succeeding) activities refers to the free slack or having an adverse effect on entire project.
A project schedule can be defined as a plan that comprises of the deliverables, activities and milestones with respect to a project, especially by including the intended start and finish dates.
The time for the implementation or execution of a project can be fast-tracked by a project manager.
For example, you can fast-track a design-to-production project by overlapping the design and production phases; especially by moving on to construction only after completing the design phase.
Exercise 4-11 Computing net sales for multiple-step income statement LO P4 A company reports the following sales-related information. Sales, gross $ 245,000 Sales returns and allowances $ 20,000 Sales discounts 4,900 Sales salaries expense 10,900 Prepare the net sales portion only of this company’s multiple-step income statement.
Answer:
Net sales revenue= 220,100
Explanation:
Giving the following information:
Sales, gross $ 245,000
Sales returns and allowances $ 20,000
Sales discounts 4,900
Sales salaries expense 10,900
Sales salaries expense is not a part of the net sales in a multiple-step income statement. The net sales are as follow:
Sales= 245,000
Sales returns and allowances= (20,000)
Sales discounts= (4,900)
Net sales revenue= 220,100
The applicable tax rate is 25%. There are no other temporary or permanent differences. Franklin's taxable income ($ in millions) is:
Answer: $160
Explanation:
Taxable income = Pretax income + (Non deductible expenses) - Deductible expenses
= Pretax income + Overweight fees + Depreciation expense - Depreciation in the tax return
= 195 + 5 + 70 - 110
= $160
A firm is paying an annual dividend of $10.00 for its preferred stock which is selling for $66.00. There is a selling cost of $3.00. What is the after-tax cost of preferred stock if the firm's tax rate is 31%
Answer:
15.87%
Explanation:
Calculation to determine the after-tax cost of preferred stock
Using this formula
Kp=Dividend/Price − floatation costs per share
Let plug in the formula
Kp=$10.00/$66-$3.00
Kp=$10.00/$63
Kp= 0.1587*100
Kp=15.87%
Therefore the after-tax cost of preferred stock is 15.87%
What is the effective annual cost of skipping the discount and paying at the end of the net period for the following credit terms: 6/10, net 70
Answer:
APR = 38.829%
APY = 45.70%
Explanation:
Missing word "Calculate the APR and the APY."
Discount % = 6%
Total period = 70
Discount period = 10
i. APR = (Discount% / [100% - Discount%]) * (365 / [Total period - Discount period])
APR = [6% / 100%-6%] * [365 / 70 - 10]
APR = 6%/94% * 365/60
APR = 0.06382979 * 6.083333
APR = 0.38829787
APR = 38.83%
ii. APY = (1 + [Discount% / {100% - Discount%}])^(365/[Total period - Discount period]) - 1
APY = [1 + [6%/ / 100%-6%]^(365/70-10) - 1
APY = {1 + 0.06382979]^6.083333 - 1
APY = 1.06382979^6.083333 - 1
APY = 1.45704250704 - 1
APY = 0.45704250704
APY = 45.70%
On March 31, 2019, Brodie Corporation acquired bonds with a par value of $400,000 for $425,800. The bonds are due December 31, 2024, carry a 12% annual interest rate, pay interest on June 30 and December 31, and are being held to maturity. The accrued interest is included in the acquisition price of the bonds. Brodie uses straight-line amortization.Required: 1. Prepare journal entries for Brodie to record the purchase of the bonds and the first two interest receipts.
2. Next Level If Brodie failed to separately record the interest at acquisition, explain the errors that would occur in the company’s financial statements (no calculations are required).
Answer:
1. March 31, 2019
Dr Investment in held-to-maturity debt securities
$413800
Dr Interest income $12,000
Cr Cash $425800
2. June 30, 2019
Dr Cash $12,000
Cr Investment in held-to-maturity debt securities
$300
Cr Interest income $11700
3. December 31, 2019
Dr Cash $24000
Cr Investment in held-to-maturity debt securities
$600
Cr Interest income $23400
2. Assets overstated
Profit overstated
Explanation:
1. Preparation of the journal entries for Brodie to record the purchase of the bonds and the first two interest receipts.
1. March 31, 2019
Dr Investment in held-to-maturity debt securities
$413800
Dr Interest income $12,000
(400000*12%*3/12)
Cr Cash $425800
(To record the purchase of held-to-maturity securities)
2. June 30, 2019
Dr Cash $12,000
(400000*12%*3/12)
Cr Investment in held-to-maturity debt securities
$300
[($12,000/10)*3/12]
Cr Interest income $11700
($12,000-$300)
(To record the interest and amortization)
3. December 31, 2019
Dr Cash $24000
(400000*12%*6/12)
Cr Investment in held-to-maturity debt securities
$600
[($12,000/10)*6/12]
Cr Interest income $23400
($24,000-$600)
(To record the interest and amortization)
2. Based on the information given assuming Brodie failed to SEPARATELY RECORD THE INTEREST AT ACQUISITION, the errors that would occur in the company’s financial statements would be OVERSTATED ASSETS in the balance sheet and the PROFIT would as well be OVERSTATED.
The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 200th gallon of gasoline entails the following:
• a private cost of $3.03;
• a social cost of $3.23;
• a value to consumers of $3.39.
Refer to Scenario 10-1. Suppose the equilibrium quantity of gasoline is 220 gallons; that is, Q MARKET = 220. Then the equilibrium price of a gallon could be:________
a. $3.08.
b.$2.77.
c. $2.45.
d. $3.69.
Answer:
a. $3.08
Explanation:
Calculation to determine what the equilibrium price of a gallon could be:
Based on the information given the Private cost is $3.03 while the Social cost is $3.23 which indicates that Social cost lies ABOVE the private cost and since The MARKET EQUILIBRIUM tend to occurs when Private value=Private cost which means that the EQUILIBRIUM PRICE lies between $3.03 and $3.23, Therefore the EQUILIBRIUM PRICE of a gallon would be $3.08 because it lies between $3.03 and $3.23.
Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:
Crazy Mountain Outfitters Co.
Unadjusted Trial Balance
April 30, 2018
Debit
Balances Credit
Balances
Cash 11,400
Accounts Receivable 72,600
Supplies 7,200
Equipment 112,000
Accounts Payable 12,200
Unearned Fees 19,200
Common Stock 20,000
Retained Earnings 117,800
Dividends 10,000
Fees Earned 305,800
Wages Expense 157,800
Rent Expense 55,000
Utilities Expense 42,000
Miscellaneous Expense 7,000
475,000 475,000
For preparing the adjusting entries, the following data were assembled:
Required:
Supplies on hand on April 30 were $1,380.
Fees earned but unbilled on April 30 were $3,900.
Depreciation of equipment was estimated to be $3,000 for the year.
Unpaid wages accrued on April 30 were $2,475.
The balance in unearned fees represented the April 1 receipt in advance for services to be provided. Only $14,140 of the services was provided between April 1 and April 30.
2. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. before the adjusting entries.
Revenues $
Expenses
Net income $
3. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. after the adjusting entries.
Revenues $
Expenses
Net income $
4. Determine the effect of the adjusting entries on Retained Earnings.
Retained Earnings increases by $.
Answer:
1. Dr Supplies expense $5,820
Cr Supplies $5,820
Dr Accounts receivable $3,900
Cr Earned fees $3,900
Dr Depreciation expense $3,000
Cr Accumulated depreciation $3,000
Dr Wages expense $2,475
Cr Wages payable $2,475
Dr Unearned fees $14,140
Cr Fees earned $14,140
2. Revenues $305,800
Expenses $261,800
Net income $44,000
3. Revenue $323,840
Expense $261,800
Net income $50,745
4. $6,745 Increase
Explanation:
1. Preparation of the journal entries necessary on April 30. 2019
Dr Supplies expense $5,820
Cr Supplies $5,820
($7,200-$1,380)
(To record supplies used)
Dr Accounts receivable $3,900
Cr Earned fees $3,900
(To record accrued fees Earned)
Dr Depreciation expense $3,000
Cr Accumulated depreciation $3,000
(To record equipment Depreciation)
Dr Wages expense $2,475
Cr Wages payable $2,475
(To record accrued wages)
Dr Unearned fees $14,140
Cr Fees earned $14,140
(To record fees earned)
2. Calculation to Determine the revenues, expenses, and net income of Crazy Mountain Outfitters before the adjusting entries.
REVENUE
Fees earned $305,800
EXPENSE:
Wages Expense $157,800
Rent Expense $55,000
Utilities Expense $42,000
Miscellaneous Expense $7,000
Expense $261,800
NET INCOME $44,000
($305,800-$261,800)
Therefore the revenues, expenses, and net income of Crazy Mountain Outfitters before the adjusting entries will be:
Revenues $305,800
Expenses $261,800
Net income $44,000
3. Calculation to Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. after the adjusting entries.
REVENUE
Fees Earned $305,800
Fees earned but unbilled $3,900
Unearned fees $14,140
Revenue $323,840
EXPENSE
Wages Expense $157,800
Rent Expense $55,000
Utilities Expense $42,000
Miscellaneous Expense $7,000
Supplies expense $5,820
Depreciation of equipment $3,000
Unpaid wages accrued $2,475
Expense $273,095
NET INCOME $50,745
($323,840-$273,095)
Therefore the revenues, expenses, and net income of Crazy Mountain Outfitters Co. after the adjusting entries will be:
Revenue $323,840
Expense $261,800
Net income $50,,745
4. Calculation to Determine the effect of the adjusting entries on Retained Earnings.
Effect of the adjusting entries=$50,745-$44,000
Effect of the adjusting entries=$6,745
Therefore the effect of the adjusting entries on Retained Earnings is Retained Earnings increases by $6,745
A shortcoming of real gross domestic product (GDP) is it does not include the underground economy. includes nonmarket goods. does not measure changes in employment. does not include the value obtained through purchases of stocks and bonds. does not account for changes in the prices of goods and services.
Answer:
it does not include the underground economy.
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
