Simon Company's year-end balance sheets follow.
At December 31 2015 2014 2013
Assets
Cash $25,267 $30,131 $31,387
Accounts receivable, net 75,450 50,642 41,435
Merchandise inventory 92,074 68,299 44,128
Prepaid expenses 8,301 8,066 3,418
193,532
Plant assets, net 231,487 215,775
Total assets $432,579 372,913 313,900
Liabilities and Equity
Accounts payable $106,635 $62,392 $41,849
Long-term notes payable secured by
mortgages on plant assets 79,698 84,912 71,453
Common stock, $10 par value 163,500 163,500 163,500
Retained earnings 82,746 62,109 37,098
Total liabilities and equity $432,579 $372,313 313,900
Express the balance sheets in common-size percents.

Answers

Answer 1

Answer:

Simon Company

Common-size percents Balance Sheet as of the years ended December 31 2015 2014 2013:

                                             2015     %         2014         %       2013        %

Assets

Cash                                $25,267   5.8%  $30,131      8.1%  $31,387   10%

Accounts receivable, net 75,450   17.4%  50,642    13.6%   41,435   13.2%

Merchandise inventory    92,074   21.3%  68,299   18.3%   44,128    14.1%

Prepaid expenses               8,301     1.9%     8,066    2.2%     3,418       1.1%

                                        201,092  46.5%  157,138   42.1% 120,368  38.3%

Plant assets, net             231,487  53.5%  215,775   57.9% 193,532  61.7%

Total assets                 $432,579  100%    372,913 100%   313,900    100%

Liabilities and Equity

Accounts payable       $106,635   24.7%  $62,392 16.7% $41,849    13.3%

Long-term notes payable secured by  mortgages

 on plant assets            79,698    18.4%      84,912 22.8%   71,453   22.8%

Total Liabilities           $186,333   43.1%  $147,304  39.5 $113,302   36.1%

Common stock, $10

par value                     163,500    37.8%   163,500 43.8% 163,500   52.1%

Retained earnings         82,746    19.1%      62,109  16.7%  37,098     11.8%

Total liabilities and

 equity                     $432,579    100%   $372,913 100%  313,900   100%

Explanation:

Simon Company's balance sheets in common-size percents shows the relative values of assets and liabilities and equity in numeric and percentage terms to enable comparison.  The company's balance sheet line items are expressed as  percentages of the total, usually the total assets in each period.  From the analysis, the management, investors, and other parties of Simon Company can understand the changes in the line items from year to year, thus making it possible for  Simon Company to undertake a trend analysis.


Related Questions

A customer who has routinely traded securities through your firm has placed an order to buy a security that is only listed on the Malaysian Stock Exchange. To effect the transaction, your firm must use a correspondent broker-dealer located in Malaysia that charges large special handling fees to cover Malaysian securities transfer taxes. Which statement is TRUE

Answers

Answer:

the broker-dealer must notify the customer of the additional charges prior to executing the transaction

Explanation:

In such a scenario, the statement that would be completely true is that the broker-dealer must notify the customer of the additional charges prior to executing the transaction. Since the broker is acting on behalf of the customer, then the customer needs to be notified beforehand in order for him/her to be able to analyze and decide whether or not they still want to go ahead with the transaction.

A company is considering a project with a beta of 0.5 while the company’s beta is 2.0. How should the company adjust its WACC to reflect the riskiness of the project? g

Answers

Answer: decrease

Explanation:

The weighted average cost of capital is a vital calculation that is used in finance to know whether the return on an investment will meet or exceed exceed a project or an asset.

If a company is considering a project with a beta of 0.5 while the company’s beta is 2.0, to reflect the riskiness of the project, the WACC will be reduced.

All About Animals has two product​ lines: Cat food and Dog food. Contribution margin income statement data for the most recent year​ follow:
Total Cat Food Dog Food
Sales revenue $435,000 $350,000 $85,000
Variable expenses $61,000 $21,000 $40,000
Contribution margin $374,000 $329,000 $45,000
Fixed expenses $101.000 $49,000 $52,000
Operating income (loss) $273,000 $280,000 $(7,000)
Assuming the Dog food is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $26,000 per year, how will operating income be affected?
A. Increase $254,000
B. Decrease $19,000
C. Increase $527,000
D. Increase $19,000

Answers

Answer:

B. Decrease $19,000

Explanation:

The computation of the amount affect the operating income is shown below

But before that first we need to find the new operating income

Total operating income for Cat Food  $280,000

Less: Fixed costs for Dog Food           ($52000)

Add: rented per year                             $26000

New net operating income                  $254000

Now decrease in net operating income is

= operating income - new operating income

= $273,000 - $254,000

= $19,000

On February 20, services valued at $60,000 relating to the organization of a corporation were performed in exchange for 1,000 shares of its $25 par value common stock.
Make the necessary journal entry.

Answers

Answer: The solution has been attached

Explanation:

From the question, we are informed that on February 20, services valued at $60,000 relating to the organization of a corporation were performed in exchange for 1,000 shares of its $25 par value common stock.

The common stock was calculated as:

= 1000 × $25

= $25,000

The paid on capital in excess of the par common stock was calculated as:

= $60,000 - $25,000

= $35,000

The journal has been solved and attached.

Bank's Balance Sheet Assets Liabilities and Owners' Equity $1,600 $250 Securities $1,000 Capital (owners' equity) $150 Reserves$200 Deposits Loans $800 Debt Suppose the owners of the bank borrow $100 to supplement their existing reserves.
This would increase the reserves account and ______ the ______ account.
This would also bring the leverage ratio from its initial value of __________ to a new value of_______
Which of the following is true of the capital requirement?
a. The higher the percentage of assets a bank holds as loans, the higher the capital requirement.
b. A minimum leverage ratio for all banks.
c. Its intended goal is to protect the interests of those who hold equity in the bank.

Answers

Answer:

1. This would increase the reserves account and increase the debt account.

Borrowing refers to debt and so it will increase the debt account.

2. This would also bring the leverage ratio from its initial value of 13.33 to a new value of 14.

The bank leverage ratio refers to its Assets divided by Capital (Owners equity).

Before the $100 was borrowed, the leverage ratio was;

= (Reserves + loans + securities)/Capital

= ( 200 + 800 + 1,000) / 150

= 13.33

After the $100 was borrowed

= ( 200 + 800 + 1,000 + 100) /150

= 14.

3. a. The higher the percentage of assets a bank holds as loans, the higher the capital requirement.

The capital requirement is meant to protect depositors in case the loans are defaulted on as the loans are created from the funds depositors bring in. Should the loans be defaulted on, they will be paid from the capital therefore if the bank holds more loans, it will have to hold more capital to ensure it can cover those loans.

​Handbags, Inc. had 200 units of inventory on hand at the end of the year. These were recorded at a cost of $18 each using the last−​in, first−out ​(LIFO) method. The current replacement cost is $16 per unit. The selling price charged by​ Handbags, Inc. for each finished product is $27. In order to record the adjusting entry needed under the lower−of−cost−or−market ​rule, the Cost of Goods Sold will be​ ________.

Answers

Answer:

debited by $400

Explanation:

Inventory on hand at the beginning × each inventory cost

= 200 units × $18

= $3,600

Inventory on hand at the beginning × Current replacement cost

= 200 units × $16 per unit

= $3,200

Therefore;

$3,600 - $3,200 = $400 increase of cost of goods sold which is debit.

Which of the following is true regarding warranties under common law? Select one: A. Express warranties, the implied warranty of assignability, and warranties of title arise automatically under common law. B. Only the implied warranty of merchantability arises automatically under common law. C. Only warranties of title arise automatically under common law. D. For a warranty to exist, it must first be requested by the buyer. E. Only the implied warranty of assignability arises automatically under common law.

Answers

Answer: E. Only the implied warranty of assignability arises automatically under common law

Explanation:

Implied warranty is a term that is used in common law to refer to assurance that are given to a a product that the said product is fit and in good condition for the purpose it'll be used for.

Of all the options that are given, the one that is true regarding warranties under common law is that only the implied warranty of assignability arises automatically under common law.

Joe must pay liabilities of 1,000 due 6 months from now and another 1,000 due one year from now. There are two available investments: \,1. Bond I: a 6-month bond with face amount of 1,000, a 8% nominal annual coupon rate convertible semiannually, and a 6% nominal annual yield rate convertible semiannually; and \,2. Bond II: a one year bond with face amount of 1,000, a 5% nominal annual coupon rate convertible semiannually, and a 7% nominal annual yield rate convertible semiannually Calculate the amount of each bond Joe should purchase in order to exactly match the liabilities.

Answers

Answer:

future liabilities:

$1,000 in 6 months

$1,000 in 1 year

Present value of bond I (due in 6 months):

PV = $1,000 / (1 + 3%) = $970.87

Present value of bond II (due in 1 year):

PV = $1,000 / (1 + 3.5%)² = $933.51

The price of the bonds is determined by the annual yield rate (YTM), not the coupon rate. Joe will pay $970.87 for bond I and $933.51 for bond II.

While making organizational decisions, managers should take into consideration the needs and interests of the employees, suppliers, and customers, who are the organization's _____.

Answers

Answer:

Stakeholders.

Explanation:

Stakeholders are the group of people who may be interested in the processes of a particular company. They are formed by the group of employees, suppliers and customers, who are the stakeholders in the organization.

Therefore, it is necessary that strategic actions and business processes are aimed at satisfying the interests and needs of stakeholders, who are the company's public, that is, the reason for the existence of a company.

It is important for the company to identify who its stakeholders are and how they directly impact the business, so that it can shape a strategy that is aligned with its interests and what they expect from the company.

Satisfying stakeholders and adopting corporate governance, contributes to the company having a strong market position and achieving several competitive and strategic advantages in the market, increasing its results and profitability.

Desktop Computer Company would like to calculate their cash conversion cycle. What factors are included in computing this metric?

Answers

Answer:

The answer is:

1. Days inventory outstanding i.e the number of days it takes to sell its inventories

2. Days sales outstanding i.e the number of days it takes to collect it receivables

3. Days payables outstanding i.e the number of days it takes to pay its payables.

Explanation:

Cash conversion cycle is the time(number of days) it takes a business to convert its money tied in inventory to cash through sales from customers.

In computing cash conversion cycle, the following are included:

1. Days inventory outstanding i.e the number of days it takes to sell its inventories

2. Days sales outstanding i.e the number of days it takes to collect it receivables

3. Days payables outstanding i.e the number of days it takes to pay its payables.

The formula for cash conversion cycle is Days inventory outstanding + Days sales outstanding - Days payables outstanding

An all-equity firm is considering the following projects:
Project Beta IRR
W .85 8.9%
X .92 10.8
Y 1.09 12.8
Z 1.35 13.3
The T-bill rate is 4 percent, and the expected return on the market is 11 percent.
a. Which projects have a higher expected return than the firm's 11 percent cost of capital?
b. Which projects should be accepted?
c. Which projects would be incorrectly accepted or rejected if the firm's overall cost of capital were used as a hurdle rate?

Answers

Answer:

Projects Y and Z

b. Projects W and Z

c. Projects W and Y

Explanation:

CAPM equation : Expected return = Risk free rate + Beta x (Expected market return - Risk free rate)

W = 4% + [0.85 x (11% - 4%)] = 9.95%

X = 4% + (0.92 x 7%) = 10.44%

Y = 4% + (1.09 x 7%) = 11.63%

Z = 4% + (1.35 x 7%) = 13.45%

Projects Y and Z have an expected return greater than 11%

b. Projects W and Z should be accepted because its expected return is higher than the IRR

c. Project W would be incorrectly rejected because the expected rate of return is less than the overall cost of capital (i.e. 9.95 is less than 11). But its expected rate of return is greater than the IRR

Y would be incorrectly accepted because its expected rate of return is greater  than the overall cost of capital but its expected rate of return is less than the IRR

Amos Manufacturing has two major departments. Management wants to compare their relative performance. Information related to the two departments is as follows:Division 1:Sales: $200,000Expenses: $150,000Asset investment: $950,000Division 2:Sales: $45,000Expenses: $35,000Asset investment: $200,000Based on ROI, which division is more profitable?a. Division 1b. Both divisions have the same ROI ratioc. Division 2

Answers

Answer:

Division A is doing better and his more profitable because it has a higher ROI than Division B

Explanation:

Return on Investment is the proportion of operating assets that an investment center earned as as net operating income.

ROI is measure of the returned earned by a division relative to the amount invested in the assets used to generate the return.

It is calculated as follows

ROI = operating income/operating assets

Division A

Net operating income = Sales - expenses

Net operating income = 200,000 - 150,000 = 50,000

Operating assets = 950,000

ROI = 50,000/950,000× 100 = 5.26 %

Division B

Net operating income = 45,000 - 35,000 = 10,000

Operating assets = 200,000

ROI = 10,000/ 200,000 × 100 = 5 %

Division A is doing better and his more profitable because it has a higher ROI than Division B

Abica Roast Coffee Company produces Columbian coffee in batches of 6,000 pounds. The

standard quantity of materials required in the process is 6,000 pounds, which cost $5.00per pound. Columbian coffee can be sold without further processing for $8.40 per pound.

Columbian coffee can also be processed further to yield Decaf Columbian, which can

be sold for $10.00 per pound. The processing into Decaf Columbian requires additional

processing costs of $9,450 per batch. The additional processing will also cause a 5% loss

of product due to evaporation.



Columbian coffee can be sold without further processing for $8.40 per pound.

Columbian coffee can also be processed further to yield Decaf Columbian, which can

be sold for $10.00 per pound. The processing into Decaf Columbian requires additional

processing costs of $9,450 per batch. The additional processing will also cause a 5% loss

of product due to evaporation.

a. Prepare a differential analysis dated August 28, 2012, on whether to sell regular

Columbian (Alternative 1) or process further into Decaf Columbian (Alternative 2).

b. Should Abica Roast sell Columbian coffee or process further and sell Decaf

Columbian?

c. Determine the price of Decaf Columbian that would cause neither an advantage or

disadvantage for processing further and selling Decaf Columbian.

Answers

Answer:

A)

                                       no further          further                 differential

                                       processing        processing          amount

price per pound             $8.40                 $10.00                $1.60

materials                         $5                      $5.25                 ($0.25)

processing costs            $0                      = $9,450 /          ($1.66)

                                                                  5,700 = $1.66

operating profit per        $3.40                 $3.09                 ($0.31)

pound

                                     

B)

The company should sell coffee without any further processing, just sell it as normal Colombian coffee.

C)

In order to eliminate the financial disadvantage of processing further the decaf coffee, the the price should be $10 + $0.31 = $10.31 per pound.

A company sold equipment that originally cost $290,000 for $145,000 cash. The accumulated depreciation on the equipment was $145,000. The company should recognize a:

Answers

Answer:

$0 gain/loss

Explanation:

A company sold an equipment that originally cost $290,000 for $145,000

The accumulated depreciation on the equipment was $145,000

The first step is to calculate the book value of the equipment

Book value of the equipment= Cost of equipment-accumulated depreciation

= $290,000-$145,000

= $145,000

Therefore, the gain/loss on the equipment can be calculated as follows

= Selling price-book value

= $145,000-$145,000

= 0

Hence there is no recognized gain or loss on the equipment

Answer:

Company would recognize a no loss or gain on the disposal i.e Nil

Explanation:

The gain or loss on disposal is the difference between the carrying value of an assets at the point of disposal and the the disposal value.

Gains/(Loss)= Disposal value - carrying value

The carrying value is the difference between the historical cost and the accumulated depreciation till date.

Carrying value = Historical cost - Accumulated depreciation till date

Carrying value = 290,000 - 145,000 = 145 ,000

Gains/Loss= 145,000 - 145,000 = 0.

Company would recognize a no loss or gain on the disposal i.e Nil

Crane Sales Company uses the retail inventory method to value its merchandise inventory. The following information is available for the current year:
Cost Retail
Beginning inventory $ 30,000 $ 45,000
Purchases 190,000 260,000
Freight-in 2,500 —
Net markups — 8,500
Net markdowns — 10,000
Employee discounts — 1,000
Sales revenue — 205,000
If the ending inventory is to be valued at the lower-of-cost-or-market, what is the cost-to-retail ratio?
a) $220,000 ÷ $315,000
b) $222,500 ÷ $305,000
c) $222,500 ÷ $313,500
d) $222,500 ÷ $303,500

Answers

Answer:

C. $222,500 ÷ $313,500

Explanation:

Calculation for cost to retail ratio

COST

Beginning inventory $30,000

Add; Purchases $190,000

Add: Freight in $2,500

Cost $222,500

RETAIL

Beginning inventory $45,000

Add: Purchases $260,000

Add: Net mark ups $8,500

Retail $313,500

Therefore, the cost to retail ratio will be

$222,500 $313,500

Gross Corporation adopted the dollar-value LIFO method of inventory valuation on Dec 31, 2016. Its inventory at that date was $1,100,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows:
Date Inventory at Current Prices Current Price Index
December 31, 2017 $1,284,000 107
December 31, 2018 $1,450,000 125
Deceber 31, 2019 $1,625,500 130
1. What is the cost of ending inventory December 31, 2017 under Dollar-value LIFO method?
2. What is the cost of ending inventory December 31, 2018 under Dollar-value LIFO method?
3. What is the cost of ending inventory December 31, 2019 under Dollar-value LIFO method?

Answers

Answer:

1. $1,207,000

2. $1,164,200

3. $1,281,701

Explanation:

To calculate ending inventory under the dollar value LIFO method, the steps below shall be followed.

Step 1

Y = Current price at year end / Price index at that time

Step 2

Ending inventory = Opening inventory value + ( Y - Opening inventory value ) × Index value.

Gross corporation

Ending inventory

2016 1,100,000

1. Cost of ending inventory at 31, December 2017, under dollar value LIFO

= 1,284,000 / 1.07

= $1,200,000

Ending inventory

= $1,100,000 + ( $1,100,000 - $100,000 ) × 1.07

= $1,207,000

2. Cost of ending inventory at 31, December 2018, under dollar value LIFO

= $1,450,000/1.25

= $1,160,000

Ending inventory

= $1,100,000 + ( $1,160,000 - $1,100,000) × 1.07

= $1,164,200

3. Cost of ending inventory at 31, December 2019, under dollar value LIFO

= $1,625,500/1.30

= $1,250,385

Ending inventory

= $1,164,200 + $90,385 × 1.30

= $1,281,701

Consider the following information and then calculate the required rate of return for the Global Investment Fund, which holds 4 stocks. The market’s required rate of return is 13.25%, the risk-free rate is 7.00%, and the Fund’s assets are as follows:(hint: market beta =1.0) Stock Investment Beta A $ 200,000 1.50 B 300,000 −0.50 C 500,000 1.25 D $1,000,000 0.75

Answers

Answer:

11.77%

Explanation:

total investment = $200,000 + $300,000 + $500,000 + $1,000,000 = $2,000,000

stock    weight                                         beta             total

A          $200,000 / $2,000,000             1.5               0.15

B          $300,000 / $2,000,000             -0.5            -0.075

C          $500,000 / $2,000,000             1.25            0.3125

D          $1,000,000 / $2,000,000           0.75           0.375

Portfolio                                                                       0.7625

required rate of return = Rf + beta(Rm - Rf) = 7% + 0.7625(13.25% - 7%) = 11.7656% = 11.77%

A person who enters into a contract when he or she is intoxicated can void the contract if the terms are obviously favorable to the other party.
a. true
b. false

Answers

Answer:

False.

Explanation:

A contract can be defined as an agreement between two or more parties (group of people) which gives rise to a mutual legal obligation or enforceable by law.

A person who enters into a contract when he or she is intoxicated cannot void the contract even if the terms are obviously favorable to the other party.

By law, an individual can void a contract entered into while under the influence of alcohol or intoxicated, only if he or she doesn't understand or comprehend the legal consequences binding on the parties involved in the contract.

Hence, a contract is legally binding and enforceable even if one of the parties was intoxicated at the time of its formation.

Tyler Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $127.20 per unit. Sales volume (units) 5,000 6,000 Cost of Sales $419,000 $502,800 Selling and Administrative costs $186,000 $202,200 The best estimate of the total contribution margin when 5,300 units are sold is: Group of answer choices $230,020 $51,410 $146,810 $32,330

Answers

Answer:

The correct answer is A.

Explanation:

Giving the following information:

The company sells the product for $127.20 per unit.

Sales volume (units) 5,000 6,000

Cost of Sales $419,000 $502,800

First, we need to determine the unitary variable cost:

unitary variable cost= 419,000/5,000= $83.8

unitary variable cost= 502,800/6,000= $83.8

Now, the unitary contribution margin:

Unitary contribution margin= 127.2 - 83.8= $43.4

Finally, the total contribution margin:

total contribution margin= 5,300*43.4= $230,020

The best estimate of the total contribution margin when 5,300 units are sold is option A $230,020.

Total Contribution Margin

To Calculate the Contribution Margin, we need to find the value of the unitary variable cost, and their margin. We are provided with these information:

Selling price $127.20 per unit.

Sales volume  5,000, & 6,000

Cost of Sales $419,000 & $502,800

To find the value of Total Contribution margin:

Step 1: Unitary Variable Cost= 419,000/5,000= $83.8

Step 2: Unitary Variable Cost= 502,800/6,000=  $83.8

Step 3: Unitary Contribution Margin= 127.2 - 83.8= $43.4

Step 4: Total contribution margin when 5300 units are sold= 5,300×43.4= $230,020.

Hence, option A is correct.

Learn More about Contribution Margin here:

https://brainly.com/question/24309427

Which of the following stocks is less risky? Stock Average Return Standard Deviation Coefficient of Variation X 10% 40% 4 Y 20% 40% 2

Answers

Answer:

Stock X has a CV of 4 while Stock Y has a CV of 2. As stock Y has a lower CV than Stock X, it is less riskier.

Explanation:

The coefficient of variation is a statistical model which is also used to determine the volatility per unit of a factor. In terms of a stock, the coefficient of variation calculates the volatility of its return. It is calculated by dividing the stock's standard deviation, which is a measure of risk, by the stock's mean return or expected return.

CV = SD / r

Where,

CV is coefficient of variationSD is standard deviationr is expected return

The CV of a stock tells us the risk per unit of return. The higher the CV, the riskier the stock and vice versa.

Stock X has a CV of 4 while Stock Y has  a CV of 2. As stock Y has a lower CV than Stock X, it is less riskier.

Fertile Acres Inc., Growers Farm Co-op, and Harvest Orchards agree to exchange information, conduct an advertising campaign, and set certain regulatory standards to govern their operations. This association is

Answers

Answer: a.  subject to analysis under the rule of reason.

Explanation:

The Rule of Reason is used to interpret whether he Sherman Act which is an anti-trust law has been breached. This Rule was established so as not to unfairly close down all monopolies and Monopolies are not illegal, price fixing is.

If companies therefore come together as Fertile Acres Inc., Growers Farm Co-op, and Harvest Orchards have done, the Government under the Rule of Reason will check to see if the actions of these firms was done in order for them to go against free trade practices. If it was not then the agreement might be allowed to stand.

What is the annual real estate tax on a property valued at $135,000 and assessed for tax purposes at $47,250, with an equalization factor of 125%, when the tax rate is 25 mills

Answers

Answer:

$1,477

Explanation:

The annual real estate tax = assessed tax × equalization factor × tax rate

= $47,250 × 125% × 25 mills

= $47,250 × 125% × 2.5%(25 mills)

= $47,250 × 1.25 × 0.025

= $1,477

dazzle, inc. produces beads for jewelry making use the journal entry to record production activities for direct labor usage is

Answers

Answer:

Debit Work in Process Inventory $180,000; credit Factory Wages Payable $180,000.

Explanation:

The journal entry to record the direct labor usage is shown belwo:

Work in process inventory Dr

          To factory wages payable

(Being the direct labor usage is recorded)

For recording this we debited the work in process as it increased the assets and credited the factory wages payable as it also increased the liabilities

Moreover, when the wages is applied in the production level so the respective account is debited and credited

I enjoy working with this team because we all trust each other and respect what each person brings to the team. Which characteristic of team excellence am I displaying

Answers

Answer: Collaborative climate

Explanation:

When an individual enjoys working with this team because they all trust each other and respect what each person brings to the team, the characteristic of team excellence displayed is referred to as collaborative climate.

Collaborative teams come together and work together in order to achieve the aims and objectives of the organization. A collaborative team bonds and trust each other.

The following data relate to the direct materials cost for the production of 50,000 automobile tires: Actual: 725,000 lbs. at $3.00 per lb. Standard: 730,000 lbs. at $2.95 per lb. a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Answers

Answer and Explanation:

a. The computation of the material price variance is shown below:

= Actual Quantity × (Standard Price - Actual Price)

= 725,000 × ($2.95- $3)

= 725,000 × $0.5

= $36,250 unfavorable

b. The computation of the material quantity variance is shown below:

= Standard Price × (Standard Quantity - Actual Quantity)

= $2.95 × (730,000 - 725,000)

= $2.95 × 5,000

= $14,750 favorable

And, the total direct material cost variance is

= Material price variance + material cost variance

= $36,250 unfavorable + 14,750 favorable

= $21,500 unfavorable

What is the required monthly payment on a $350,000 mortgage? Assume a standard mortgage (360 months) with monthly payments. Use a nominal rate of 6.90%.

Answers

Answer:

EMI = $2,305

Explanation:

We can calculate Monthly payment on a $350,000 mortgage by using following formula of equated monthly installments. You just need to collect the data to input in the formula for further calculation.

Data

Principal amount = $350,000

Rate = 6.90% = 6.90%/12months = 0.00575

number pf periods = 360 months

Formula

EMI = [[tex]\frac{[P x R x (1+R)^{n} }{(1+R)^{n-1} }[/tex]]

P = Principal amount

R = Rate

n = number pf periods

Solution

EMI =[tex]\frac{[350,000 x0.00575 x ((1+0.00575)^{360-1}) ]}{1+0.00575)^{360-1}}[/tex]

EMI = $2,305

g A decrease in the basis will __________ a long hedge and __________ a short hedger. Group of answer choices hurt; hurt hurt; benefit benefit; have no effect upon benefit; benefit benefit; hurt

Answers

Answer:

1. hurt

2. benefit

Explanation:

Given that a contract and an asset are to be converted in cash early, this implies that, basis risk exists and futures price and spot price should not move in lockstep before delivery date. However, a reduction in the basis will then hurt the long hedger and benefit the short hedger.

Hence, considering the nature of the hypothetical situation, a decrease in the basis will HURT a long hedge and BENEFIT a short hedge.

Caribou Gold Mining Corporation is expected to pay a dividend of $6 in the upcoming year. Dividends are expected to decline at the rate of 3% per year. The risk-free rate of return is 5%, and the expected return on the market portfolio is 13%. The stock of Caribou Gold Mining Corporation has a beta of .5. Using the constant-growth DDM, the value of the stock is _________. A. $150 B. $50 C. $100 D. $200

Answers

The question is incomplete. Here is the complete question.

Caribou Gold Mining Corporation is expected to pay a dividend of $6 in the upcoming year. Dividends are expected to decline at the rate of 3% per year. The risk-free rate of return is 5%, and the expected return on the market portfolio is 13%. The stock of Caribou Gold Mining Corporation has a beta of .5. Using the constant-growth DDM, the intrinsic value of the stock is _________. A. $150 B. $50 C. $100 D. $200

Answer:

$50

Explanation:

Caribou Gold mining corporation is expected to make a dividend payment of $6 next year

Dividend are expected to decline at a rate of 3%

= 3/100

= 0.03

The risk free rate of return is 5%

= 5/100

= 0.05

The expected return on the market portfolio is 13%

= 13/100

= 0.13

The beta is 0.5

The first step is to calculate the expected rate of return

= 0.05+0.5(0.13-0.05)

= 0.05+0.5(0.08)

= 0.05+0.04

= 0.09

Therefore, the intrinsic value of the stock using the constant growth DDM model can be calculated as follows

Vo= 6/(0.09+0.03)

Vo= 6/0.12

Vo= $50

Hence the intrinsic value of the stock is $50

The credit terms 2/10, n/30 are interpreted as: Multiple Choice 2% cash discount if the amount is paid within 10 days, or the balance due in 30 days. 30% discount if paid within 2 days. 2% discount if paid within 30 days. 30% discount if paid within 10 days. 10% cash discount if the amount is paid within 2 days, or the balance due in 30 days.

Answers

Answer:

The credit terms 2/10, n/30 are interpreted as:

2% cash discount if the amount is paid within 10 days, or the balance due in 30 days.

Explanation:

I will explain using an example:

On January 2, the company sells $1,000 worth of goods with credit terms 2/10, n/30.

January 2

Dr Accounts receivable 1,000

    Cr Sales revenue

If the client pays within the discount period:

January 11

Dr Cash 980

Dr Sales discounts 20

    Cr Accounts receivable 1,000

If the client pays after the discount period but before 30 days:

January 31

Dr Cash 1,000

    Cr Accounts receivable 1,000

The credit terms 2/10, and n/30 are interpreted as a 2% cash discount if the amount is paid within 10 days, or the balance is due in 30 days. Thus, option A is the correct option.

Trade credits like 2/10 net 30 are frequently provided by suppliers to purchasers. It stands for an agreement that if payment is made within 10 days, the buyer would get a 2% reduction on the net invoice amount. Otherwise, you have 30 days to pay the entire invoice amount.

It's a common way to express an early payment discount. In accounting, the discount amount and the window of availability are typically represented using a formula like 2/10, n/30. This implies that if the invoice is paid in full within ten days, a 2% reduction is applied; otherwise, the full amount is owed.

Learn more about trade credit here:

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Morganton Company makes one product and it provided the following information to help prepare the master budget:The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,500, 16,000, 18,000, and 19,000 units What is the accounts receivable balance at the end of July?

Answers

Answer:

$672,000

Explanation:

The computation of the account receivable balance at the end of July month is shown below:

Particular          June              July          August            September

Unit sales         8,500           16,000      18,000             19,000

Unit selling

price                 $70               $70           $70                 $70

Sales               $595,000     $1,120,000 $1,260,000  $1,330,000

Credit sales collection

40% in this

month sale      $238,000      $448,000  $504,000    $532,000

60% in the

following month                     $357,000   $672,000   $756,000

Total collection  $238,000    $805,000  $1,176,000   $1,288,000

For the account receivable at the end of July we considered the 60% oustanding amount i.e $672,000

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