Required information [The following information applies to the questions displayed below.] Simon Company’s year-end balance sheets follow.
At December 31 2017 2016 2015
Assets Cash $ 31,800 $ 35,625 $ 37,800
Accounts receivable, net 89,500 62,500 50,200
Merchandise inventory 112,500 82,500 54,000
Prepaid expenses 10,700 9,375 5,000
Plant assets, net 278,500 255,000 230,500
Total assets $ 523,000 $ 445,000 $ 377,500
Liabilities and Equity
Accounts payable $ 129,900 $ 75,250 $ 51,250
Long-term notes payable secured by
mortgages on plant assets 98,500 101,500 83,500
Common stock, $10 par value 163,500 163,500 163,500
Retained earnings 131,100 104,750 79,250
Total liabilities and equity $ 523,000 $ 445,000 $ 377,500
The company’s income statements for the years ended December 31, 2017 and 2016, follow.
For Year Ended December 31 2017 2016
Sales $ 673,500 $ 532,000
Cost of goods sold $ 411,225 $ 345,500
Other operating expenses 209,550 134,980
Interest expense 12,100 13,300
Income taxes 9,525 8,845
Total costs and expenses 642,400 502,625
Net income $ 31,100 $ 29,375
Earnings per share $ 1.90 $ 1.80
Calculate the company’s long term risk and capital structure positions at the end of 2015 and 2014 by computing the following ratios.
(1) Debt and equity ratios.
(2) Debt to equity ratios.

Answer:

The answer is B. $62.5

Explanation:

A stop order is an order to either buy or sell a stock immediately the stock price reaches a certain price. This particular price is called stop price.

A buy stop order is an order to buy a stock immediately the its price reaches a certain stop price. When stop price is above the current market price, a buy stop order is made.

Let's now go back to the question;

Stop buy order will be placed at:

($2,500 / 200 shares) + $50

= $12.5 + $50

= $62.5

Answer:

General Journal entry for GI is given below

Explanation:

General journal entry for GI's for its dance studio and the dance instructions would be

Entry                           DEBIT        CREDIT

Cash                          $445

Renta income                                $165

Services provided                         $280

NOTE: As GI's is receiving cash for providing services and the studio, cash would be debited and Rental income and Services revenue would be credited.

Answer:

Answering true/false for the following statements:

Barnabas and Willie had a bailment for the sole benefit of Barnabas.

A. False

B. True

If Barnabas gives Victoria the necklace, the necklace is a gift causa mortis.

A. False

B. True

Barnabas would be the donee when he gives Victoria the gift.

A. False

B. True

Willie is the bailee when he receives the necklace from Barnabas.

A. False

B. True

For the gift to be valid, Barnabas only needed to delivery it to Victoria.

Identify if the remedy (relief) is equitable or legal.

direct damages

a. equitable

b. legal

rescission

a. equitable

b. legal

specific performance

equitable /legal

nominal damages

equitable /legal

compensatory damages

a. equitable

b. legal

injunction

a. equitable

b. legal

punitive damages

a. equitable

b. legal

consequential damages

a. equitable

b. legal

Dr. Neil met Mr. Hammond's grandson while they were visiting the Park. His grandson loved dinosaurs and Dr. Neil had written many books on the matter. Dr. Neill happened to have a copy of his latest book on him and thought the grandson would love it. Thus, he signed the book and gave it to him. Identify the party.

The donor in the situation would be:________.

the grandson Dr. Neil

The donee in the situation would be:_______.

the grandson Dr. Neil

Explanation:

Bailment is the transfer of the rare necklace from Barnabas to Willie so that Willie could hold it for him for a few weeks.  Willie is the bailee when he receives the necklace from Barnabas.

Gift causa mortis is a deathbed gift, which is not applicable in this case.  The gift here is given inter vivos, that is during the life of Barnabas.

A donee is Victoria who receives the necklace for her birthday.  Barnabas is the donor when he gives Victoria the gift.

Answer:

Please see explanation below.

Explanation:

a. Cycle time = Production time available per hour / Units required per hour

= 60 / 5

= 12minutes

Minimum number of workstations = Sum of the task time / Cycle time

Sum of task time

= 8 + 10 + 8 + 10 + 8 + 4

= 48

The theoretical minimum number of work stations is

= 48 / 12

= 4

b. In order to assign the tasks to the work station, events that precede the task must be considered together with the time taken to complete each task.

°Task A This task is assigned to work station 1 and no task would further be assigned to work station 1, otherwise it will exceed the cycle time.

°Task B. This next task will be assigned to work station 2, no additional task will be assigned to station 2.

Task C is assigned to workstation 3, hence can no longer accept any other assigned task.

°Task D is the next task and will be assigned to work station 4, and we cannot assign any more task to work station 4.

°Task E and F will not be assigned as there are no more available stations.

Task Time Workstation

A. 8 1

B. 10 2

C. 8 3

D. 10 4

E. 8 -

F. 4 -

Please note that due to the theoretical minimum number of work station, which is 4, it will not be possible to assign task to all the workstations hence task E and F remains unassigned.

C. Efficiency of the assembly line

Efficiency ;

= Sum of task times / Actual number of work stations × cycle time

Although the actual number of required workstation is 5 but we cannot assign task E and F due to the theoretical minimum number of workstation. Therefore, additional work station will be required and there are 5 work stations in total.

= 48 ÷ (5 × 12) × 100

= 80%

The theoretical minimum should be = 4

The efficiency of the assembly line should be 80 percent

The production time = 60

The units that are required per hour = 5

[tex]cycle time = \frac{minutes in one hour}{units needed in a day} \\\\cycle time=\frac{60}{5}[/tex]

= 12

The workstation = 8+10+8+10+8+4

= 48

[tex]The minimum number = \frac{48}{12} \\\\= 4[/tex]

The efficiency of the assembly line

[tex]\frac{48}{5*60} \\\\= 0.8\\\\0.8*100 = \\\\80percent[/tex]

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Answer:

January 1

Cash                                           $3168967 Dr

Discount on Bonds Payable    $231033

            Bonds Payable                        $3400000 Cr

Explanation:

The issuance of bond on January 1 is at a discount as the coupon rate paid by the bond is less than the market interest rate. In such case the bond is issued at a lower value than its par/face value. The discount on bonds payable is the difference between the face value and the cash received on issuance.

The entry to record the issues include a debit to cash account as cash is received, a debit to the discount on bonds payable account for the amount of discount and a credit to bonds payable account as liability is created as a result of the issuance of the bonds.

Discount = 3400000 - 3168967 = 231033

Answer:

Accelerated depreciation

Explanation:

The term that is being described in the question is known as an Accelerated depreciation. In other words, this is a depreciation method where an asset loses its book value at a much more rapid pace than more traditional methods. This method is mostly used in accounting or for income tax purposes because it allows for a greater deduction in the first couple of years of the asset's life cycle.

Answer:

The units-of-production depreciation method

Explanation:

The units-of-production depreciation method assigns an equal amount of expense to each unit produced or service rendered by the asset.

Answer: 1 dependent

Explanation:

Only Dale can be claimed as a dependent as he is a qualifying child who is under 24 and is a full time student.

Kim cannot be claimed as a dependent as Kim is above the age of 19. To be a qualifying child for dependency, Kim would have to be less than 19 or less than 24 were Kim a full time student.

Grant also does not qualify as a dependent under the Qualifying relative designation as Grant's gross income of $5,000 exceeds the limit of $4,200 that Grant would have to be making less than in 2019 to be claimed as a qualifying relative.

Answer:

Vendors & Purchases → Enter Bills → New Bill

Explanation:

To record the part cash and part credit entry in Sage 50, we will use the following series.

Vendors & Purchases → Enter Bills → New Bill

To record the purchase transaction we need to enter the transaction in the vendors and purchase option and then we need to create separate bills for our part cash payment and part credit payment separately.

Answer:

A.9.2%

B.8.16%

Explanation:

a. Calculation for the Effective annual rate on three-month T-bill

First step

T-bill =(Par value-Selling amount)/Par value

Let plug in the formula

T-bill =($100,000-$97,820)/$97,820

T-bill =$2,180/$97,820

T-bill =0.02228

Now let calculate for the Effective Annual Interest rate

Effective Annual Interest rate = (1 + 0.02228)^4– 1

Effective Annual Interest rate = (1.02228)^4-1

Effective Annual Interest rate =1.0921-1

Effective Annual Interest rate =0.0921×100

Effective Annual Interest rate=9.2%

B. Calculation for the effective annual interest rate for A 8% coupon bond .

First step

Semi-annual return=8%/2

Semi-annual return=4%

Second step is to calculate for the effective annual interest rate

Using this formula

Effective annual interest rate =(1+Semi-annual return percentage)^2-1

Let plug in the formula

Effective annual interest rate=(1+0.04)^2-1

Effective annual interest rate=(1.04)^2-1

Effective annual interest rate=1.0816-1

Effective annual interest rate=0.0816×100

Effective annual interest rate=8.16%

Therefore the Effective annual rate on three-month T-bill will be 9.2% while that of coupon bond is 8.16%

.

Answer:

So, the bonds will issue at par which means that they will issue at their face value of $58000

Explanation:

If the coupon rate paid by the bond and the market interest rates are same, the bonds are always issued at par. We can check this through the following.

To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,

Coupon Payment (C) = 0.05 * 1/2 * 58000 = $1450

Total periods (n)= 15 * 2 = 30

r or YTM = 5% * 1/2 = 2.5% or 0.025

The formula to calculate the price of the bonds today is attached.

Bond Price = 1450 * [( 1 - (1+0.025)^-30) / 0.025]  +  58000 / (1+0.025)^30

Bond Price = $58000

Answer:Ending Inventory at Cost= $981,248.40

Explanation:

                                     Cost                      Retail

Beginning inventory  $393,500         $594,000

purchases                      $3,408,000      $5,193,600                

freight in                        $159,500,

net markups                                                     $414,000

Total                          $3,961,000                     $6,201,600

Sales                                                 $4,666,000

Ending Inventory at Retail:=(Beginning inventory + purchases +net markups - Sales during the current year

594,000 + $5,193,600   +  $414,000- $4,666,000,  = $1,535,600

Cost to Retail Ratio:( Beginning inventory + purchases+freight in)/ (Beginning inventory + purchases +net markups )

=($393,500 + $3,408,000 +$159,500,) ÷ (594,000 + $5,193,600   +  $414,000) =$3,961,000/$6, 201, 600= 0.638= 0.639

Ending Inventory at Cost:   Ending Inventory at Retail x Cost to Retail Ratio

$1,535,600 x 0.639 = $981,248.40

Answer:

long 1 ABC Jan 75 Call

Explanation:

This type of customer (or investor) is bearish about the market, i.e. he/she believes that the stock prices will drop. The investor will try to create a net credit position (the credit spread = $75 - $65). The maximum possible profit is created when the stock price falls below $65, and the maximum possible loss would occur if the price went above $75. This investor is a net seller, since it is a short call spread.

Answer:

the weighted average cost of capital is 6.31 %

Explanation:

Weighted Average Cost of Capital (WACC) is the return required by the providers of long term permanent source of capital to the firm.

WACC = Ke × (E/V) + Kp × (P/V) + Kd × (D/V)

Ke = Cost of equity

    = $1.20 / $37.00 + 0.04

    = 0.0724 or 7.24 %

E/V = Weight of Equity

      = (200,000 × $37) ÷ (200,000 × $37 + 4,500 × $1,000 × 99%)

      = $7,400,000 ÷ ($7,400,000 + $4,455,000)

      = 62.42 %

Kd = Cost of Debt

    = Interest × (1 - tax rate)

    = 6.70 % × (1 - 0.34)

    = 4.42 %

D/V = Weight of Debt

      = (4,500 × $1,000 × 99%) ÷ (200,000 × $37 + 4,500 × $1,000 × 99%)

      = $4,455,000 ÷ ($7,400,000 + $4,455,000)

      = 37.28 %

Therefore,

WACC = 7.24 % × 62.42 % +  4.42 % × 37.28 %

           = 6.31 %

Answer:

Dr Finished Goods Inventory 12,600

Cr Work in Process - Assembly 12,600

Explanation:

Based on the information given we were told that the company transferred items that cost the amount of $12,600 from the Assembly Department because the items were finished and ready to be sold which means that the journal entries will be recorded as:

Dr Finished Goods Inventory 12,600

Cr Work in Process - Assembly 12,600

Answer:

Credit to Cash for $4,995 is correct

Explanation:

here is a complete question

has a gross salary for May of $7,000. The entire amount is under the OASDI limit of $118,500 and thus subject to FICA. He is also subject to federal income tax at a rate of 21%. Which of the following is a part of the journal entry to record the disbursement of his net pay? (Assume a FICA-OASDI Tax of 6.2 % and FICA-Medicare Tax of 1.45%. Round the final answer to the nearest dollar.) A. debit to Cash for $4,995 B. debit to FICA Tax Payable of $4,995 O C. debit to Employee Income Tax Payable of $4,995 D. credit to Cash for $4,995

The computation of the amount that becomes the part for accrual the employer payroll taxes is shown below:

Gross Pay                   $7,000  

Less: Deductions    

Federal Income tax       $1,470            ($7000 × 21%)

FICA-OASDI tax             $434              ($7000 × 6.2%)

FICA-Medicare tax         $102              ($7,000 × 1.45%)

Total Deductions          2006  

Net pay                         $4,995  

Answer:

d. Our workforce may be waiting on delayed arrivals of inputs needed to do the work.

Explanation:

There are two possible sources for 25% of the jobs not being delivered on time:

If we followed Juran's Law, we can simply assume that the problem here has to do with our productive system (like 85% of production errors). Two clear problems are obvious:

Obviously we cannot answer these questions just be reading two paragraphs, but that is what should be answered in order to solve the issues.

Answer: Limited liability of stockholders

Explanation:

Limited liability in a corporate fo.of business means that the shareholders will be legally responsible for debts of a company based on the on their share's nominal value.

This is an advantage of the corporate form of​ business along with the easy generation of huge equity.

Answer:

the numbers are missing, so I looked for a similar question:

Cash Flow                       A                B

Cost                        $10,000         $105,000

Cash flow year 1     $3,571            $21,000

Cash flow year 2     $3,571            $10,500

Cash flow year 3     $3,571            $42,000

Cash flow year 4     $3,571            $31,500

Cash flow year 5     $3,571            $5,250

Cash flow year 6     $3,571            $0

With a discount rate of 5​%, 10% & 15%

Discounted cash flows for project A:

                                                      5%                10%               15%

Cost                        $10,000        

Cash flow year 1     $3,571            $3,401        $3,246          $3,105

Cash flow year 2     $3,571           $3,239       $2,951           $2,700

Cash flow year 3     $3,571           $3,085       $2,683          $2,348

Cash flow year 4     $3,571           $2,938       $2,439          $2,042

Cash flow year 5     $3,571           $2,798       $2,217            $1,775

Cash flow year 6     $3,571           $2,665       $2,016           $1,544

discounted payback period:

5% = 3.09 years

10% = 3.46 years

15% = 3.9 years

The higher the discount rate, the longer the discounted payback period.

Discounted cash flows for project B:

                                                      5%                10%               15%

Cost                        $105,000        

Cash flow year 1     $21,000        $20,000     $19,091          $18,261

Cash flow year 2     $10,500       $9,524       $8,678           $7,940

Cash flow year 3     $42,000      $36,281      $31,555          $27,616

Cash flow year 4     $31,500        $25,915     $21,515           $18,010

Cash flow year 5     $5,250         $4,114         $3,260           $2,610

discounted payback period:

5% = more than 5 years, the project's NPV is negative -$9,166.37

10% = more than 5 years, the project's NPV is negative -$20,901.42

15% = more than 5 years, the project's NPV is negative -$30,563.54  

Answer:

a. No - Because Richardson will be worse off than what he was before.

b. Yes - Because Richardson will be better off than what he was before.

Explanation:

a. Analysis of Operating Income is Richardson drop Product B

Sales Revenue                  $70,000

Less Variable Costs        ($63,500)

Contribution                        $6,500

Fixed Costs                      ($30,000)

Total Operating Income  ($23,500)

Dropping Product B will result in Total Operating Loss of $23,500. This means Richardson will be worse off than what he was before. He should not drop the product in this case.

b. Analysis of Operating Income is Richardson drop Product B

Sales Revenue                  $70,000

Less Variable Costs        ($63,500)

Contribution                        $6,500

Fixed Costs                      ($15,000)

Total Operating Income   ($8,500)

Dropping Product B will result in Total Operating Loss of $8,500. This means Richardson will be better off than what he was before. He should  drop the product in this case.

Answer:

The total rate of return on the stock is 14%.

Explanation:

The sources of income from a stock are dividends and increase in its value. Therefore, the total rate of return on stock is calculated by dividing the addition of appreciation in the of the stock and dividends paid by the original stock price.

Therefore, the total rate of return on the stock can be calculated using the following formula:

Total rate of return = [(P1 - Po) + D] / Po .......................... (1)

Where;

P1 = Ending stock price = $44

Po = Initial stock price = $40

D = Dividend paid = $2

Substituting the values into equation (1), we have:

Total rate of return = [(44 - 40) + 2] / 44

Total rate of return = [4 + 2] / 44

Total rate of return = 6 / 44

Total rate of return = 0.14, or 14%

Answer:

B) needs no consideration.

Explanation:

In this scenario, Wally's promise to pay the debt even though recovery is barred needs no consideration. This is mainly due to the fact that the Corporation failed to sue within the statute of limitation that was set. Meaning they can no longer sue Wally in order to recover the loan that was given to him. If they were to try and sue Wally now the lawsuit would just be dismissed with no consideration given.

Answer:

Project A should be accepted because the NPV is higher. this means that project A is more profitable than project B

Explanation:

Net present value van be used to determine which project should be accepted.

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 project A :

Cash flow in year 0 = $-60,000

Cash flow in year 1 = $30,000

Cash flow in year 2 = $37,000

Cash flow in year 3 = $20,000

I = 10%

NPV = $12,877.54

For project B :

Cash flow in year 0 = $-60,000

Cash flow in year 1 = $0

Cash flow in year 2 = $80,000

Cash flow in year 3 = $0

I = 11%

NPV = $4,929.79

Project A should be accepted because the NPV is higher. this means that project A is more profitable than project B

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  

Answer:

$52.91

Explanation:

With regards to the above, we will apply the dividend discount model to come up with the price for share.

Under the dividend discount model, the price for share represents the present value of all its future dividend discounted at the required rate of return.

Since the share has 12 annual equal dividend payments of 8.15 each year, while the required rate is 11%, we can apply the below annuity to arrive at the share price.

(8.15/0.11) × [ 1- 1.11^(-12) ] = $52.91

Therefore, the current share price is $52.91

Answer:

12.95%

Explanation:

The risk free rate of return is 3.2%

The market risk premium is 4.6%

The beta is 2.12

Therefore, the expected rate of return on a stock can be calculated as follows

= 3.2% + (2.12×4.6%)

= 3.2% + 9.752

= 12.95%

Hence the expected rate of return on a stock is 12.95%

Answer: $2,000

Explanation:

Regulation T which governs such actions in the investment market would only require that the customer deposit 50% of the total amount to be called which would be;

= 50% * (100 * 17)

= $850

However, as this is a new margin account, there is a set minimum that must be reached to enable it to be open. That minimum is $2,000.

Answer: the market supply to shift inward, driving the equilibrium price higher.

Explanation:

An increase in input prices will result into a rise in the production costs. This will result in a leftward shift of the supply curve.

Therefore, the market supply will shift inward, driving the equilibrium price higher. This simply means that there will be lesser supply of the product and hence, increase in price.

Answer:

19%

Explanation:

The market risk premium is 9%

The risk free rate of return is 3.7%

General motors have a beta of 1.7

Therefore, using the capital asset pticing model the expected return can be calculated as follows

= 3.7% + 1.7×9%

= 3.7% + 15.3%

= 19%

Hence the expected return is 19%

Answer:

Cash flow from from financing activities = $(4,000)

Explanation:

The cash flow from financing activities includes that entails any or a combination of the following; issuance and redemption of stocks , issuance and redemption of debts and payment of interest and/or dividend, and receipt of dividend and or interest.

Kindly note that the purchase of short term investment is not a financing activity but rather an investing activity

Cash flow                              $

Short term borrowing          20,000

Cash dividend paid              (16,000)

Interest paid                          (8,000)

Total Cash flow                      (4000)

Cash flow from from financing activities = $(4,000)

Answer:

10.8%

Explanation:

Required rate of return = Risk free rate + Beta x ( Expected rate - Risk free rate )

14.2% = 5.4% + 1.63 x ( market rate - 5.4% )

14.2% - 5.4% = 1.63 x ( market rate - 5.4% )

8.8% / 1.63 = market rate - 5.4%

5.4% = market rate - 5.4%

Market rate = 5.4% + 5.4%

Market rate = 10.8%

Market rate = 10.8%

Answer:

The required rate of return on stock is 14.6% and option b is the correct answer.

Explanation:

The required rate of return is the minimum return that investors demand/expect on a stock based on the systematic risk of the stock as given by the beta. The expected or required rate of return on a stock can be calculated using the CAPM equation.

The equation is,

r = rRF + Beta * (rM - rRF)

Where,

r = 0.05 + 1.2 * (0.13 - 0.05)

r = 0.146 or 14.6%