Answer:
Speed World Cycles
a. Average Cost FIFO LIFO
Cost of goods sold $20,100 $19,900 $20,300
Ending inventory $20,100 $20,300 $19,900
b-1. FIFO will result in Speed World Cycles reporting the highest net income for the current year, because of the reduced cost of goods sold.
b-2. LIFO minimizes the income taxes owed by Speed World Cycles for the year, because it reduces the income before taxes.
b-3. Yes. However, the cost flow assumptions self-correct in later years, by which time it is not allowed to be jumping from one cost flow assumption to another.
Explanation:
a) Data and Calculations:
Purchase Date Units Purchased Unit Cost Total Cost
July 1 2 $ 4,950 $ 9,900
July 22 3 5,000 15,000
Aug. 3 3 5,100 15,300
Total 8 $ 40,200
July 28 Sold 4
September 30 4 (8 - 4)
Average cost = $40,200/8 = $5,025
a-1. Cost of goods sold = $20,100 (4 * $5,025)
Ending inventory = $20,100 (4 * $5,025)
a-2. FIFO:
Ending inventory = $20,300 (3 * $5,100 + 1 * $5,000)
Cost of goods sold = Cost of goods available minus cost of ending inventory
= $40,200 - $20,300
= $19,900
a-3 LIFO:
Cost of goods sold = $20,300 (3 * $5,100 + 1 * $5,000)
Ending inventory = Cost of goods available minus cost of goods sold
= = $40,200 - $20,300
= $19,900
V Boutique is a fashion house that designs, manufactures, and sells evening gowns. Their lowest-selling design is a vibrant green strapless gown in Dupioni silk. V Boutique is considering lowering the selling price of the gown to stimulate demand. However, before lowering the price, they must evaluate the total costs associated with the gown.
. Fabric and materials - $62/gown
. Labor to construct the gown - $40/gown
. Equipment cost for these gowns (steamer and sewing machines) $3,000
V Boutique anticipates selling 500 gowns after lowering the selling price. Assuming their projection is accurate, what is the total average cost they will incur per gown?
Answer:
V. Boutique
Assuming their projection of 500 gowns is accurate, the total average cost they will incur per gown is:
= $108.
Explanation:
a) Data and Calculations:
Unit variable costs:
Fabric and materials per gown = $62
Labor cost per gown to construct the gown = $40
Total unit variable costs per gown = $102
Unit fixed costs:
Equipment cost = $3,000/500 $6
Total average costs per gown = $108
b) The average cost per gown equals the unit costs (variable costs per unit and the fixed costs per unit). V. Boutique incurs a total equipment cost of $3,000 for the 500 gowns. This means that each gown consumes $6 ($3,000/500) in equipment costs.
Grant and Marvin organized a new business as a corporation in which they own equal interests. The new business generated a $65,000 operating loss for the year. Use Appendix A. Required: Assume the corporation expects to generate $500,000 of income next year and has a 21 percent tax rate. Calculate the net present value of the future tax savings associated with the current year operating loss, using a 4 percent discount rate. (Do not round intermediate computations. Round your final answer to the nearest whole dollar amount.)
Answer:
The net present value of the future tax savings associated with the current year operating loss is:
= $13,650.
Explanation:
a) Data and Calculations:
Operating loss for the current year = $65,000
Expected income next year = $500,000
Income tax rate = 21%
N (# of periods) 1
I/Y (Interest per year) 4
PMT (Periodic Payment) 0
FV (Future Value) 500000
Results
PV = $480,769.23
Total Interest $19,230.77
Tax = $480,769.23 * 21%
= $100,961.53
Tax = ($480,769.23 - 65,000) * 21%
= $415,769.23 * 21%
= $87,311.53
Tax savings = $13,650 ($100,961.53 - 87,311.53)
or $65,000 * 21%
= $13,650
The net present value of the future tax savings associated with the current year operating loss will be $13650.
Based on the information given, one has to calculate the tax for both periods, this will be:
First tax = $489769.23 × 21%
= $100961.53.
The second tax will be:
= ($480769.23 - $65000) × 21%
= $87311.53
Therefore, the tax savings will be:
= $100961.53 - $87311.53
= $13650
Therefore, the net present value of the future tax savings is $13650.
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You are the manager for a Pizza restaurant. Currently, your restaurant pre-makes pizzas that are ordered the most to increase the number of pizzas being made on time for your customers. Over time, many customers have complained that their pizzas were cold upon delivery and not fresh, requesting refunds or remakes of their pizza. Your location is losing money from these wasteful practices, therefore, you want to create a Kanban based on the following basic principles:
1. A later process tells an earlier process when new items are required. This means that unless a customer orders a pizza, no pizzas will be made. Pull!
2. The earlier process produces what the later process needs.
3. No Items can be made without a Kanban card (order request). This allows the process to be transparent so everyone knows what is going on.
4. Defects are not passed on to the next stage.Create a Kanban board for your pizza company that delivers. You must have 4-6 columns with headings for each.
Required:
Decide what your Kanban cards will represent. Set Rules for your Kanban.
Answer:
RULES OF KANBAN BOARD
Yellow – A Slice of Pizza
• Blue – Full Pizza
• Green – Soda
• Green jumps from Queue to Pack only
• No pizza will be delivered without quality check
• Pizza will return to the backlog, if it is found with inferior quality during quality check
• A unique token number will be given for each order
• Orders with multiple pizza or a combo order will be given same unique token number
• Pizza will be prepared in the order of token number
• Token number will include initials “C” for carry out, “D” for dine in
THE ATTACHED IMAGE HAS THE REPRESENTATIONS OF KANBAN CARDS.
The independent cases are listed below includes all balance sheet accounts related to operating activities:
Case A Case B Case C
Net income $314,000 $17,000 $424,000
Depreciation expense 44,000 154,000 84,000
Accounts receivable
increase (decrease) 108,000 (204,000) (24,000)
Inventory increase
(decrease) (54,000) 39,000 54,000
Accounts payable
increase (decrease) (54,000) 124,000 74,000
Accrued liabilities
increase (decrease) 64,000 (224,000 ) (44,000)
Show the operating activities section of cash flows for each of the given cases.
Answer:
Cash Flow from Operating Activities
Case A Case B Case C
Net Income $314,000 $17,000 $424,000
Adjustments to Reconcile Net income to
Net cash provided by Operating Activities
Depreciation $44,000 $154,000 $84,000
Changes in Assets and Liabilities
Accounts Receivable -$108,000 $204,000 $24,000
Inventory $54,000 -$39,000 -$54,000
Accounts Payable -$54,000 $124,000 $74,000
Accrued Liabilities $64,000 -$224,000 -$44,000
Net cash under Operating Activities $0 $236,000 $508,000
On January 1, 2021 Rastell Co signed a long term finance lease for an office building. The terms of the lease required Rastall to pay 16,000 annually beginning December 31, 2021 and continuing each year for 16 years. On January 1, 2021 the present value of the lease payments is 151, 146 discounted at the 7% interest rate implicit in the lease In Rastall’s December 31, 2021, balance sheet, the lease payable should be:
a. $109,200
b. $112,679
c. $221,000
d. $95,679
Answer:
$145,726
Explanation:
Note: The options to this question belongs to another question entirely and that is attached as picture. So, the correct answer is not among the 4 options
Interest expense = Present value of lease payment * Interest rate
Interest expense = $151,146 * 7%
Interest expense = $10,580.22
Particulars Amount
Present value of lease payment $151,146
Add: Interest expense $10.580
Less: Annual Payments ($16,000)
Lease Payable on December 31, 2021 Balance Sheet $145,726
n 1982 the inflation rate hit 16%. Suppose that the average cost of a textbook in 1982 was $25. What was the expected cost in the year 2017 if we project this rate of inflation on the cost? (Assume continuous compounding. Round your answer to the nearest cent.) If the average cost of a textbook in 2012 was $150, what is the actual inflation rate (rounded to the nearest tenth percent)?
Answer:
Total number of years = 35
a. Expected cost in 2017 = $25 * e^(35*0.16)
Expected cost in 2017 = $25 * e^5.6
Expected cost in 2017 = $25 * 270.42
Expected cost in 2017 = $6,760.50
b. If the average cost of a textbook in 2012 was $150, then the actual inflation rate:
150 = 25 * e^(r*t)
150 = 25 * e^(r*30)
6 = e^(r*30)
Taking log base e on both side
30r = Ln6
30r = 1.7918
r = 1.7918/30
r = 0.05972667
r = 5.97%
So, actual inflation rate is 5.97%
A bank loan officer has been approached by a start-up company that needs a five-year loan to purchase the equipment for its first project. The project will have a life of five years. At the end of five years, the equipment will be worthless. The founders of the company told the loan officer that they would be willing to pay a much higher interest rate on a simple interest loan rather than contracting to an add-on interest loan.
A. The loan officer should offer the company an add-on interest loan because there is a high risk that the company will not be able to repay the principal on the loan at the end of the project's life.
B. The loan officer should offer the company a simple interest loan. The bank will make more money in the long run, because it can charge a much higher interest rate.
Answer:
A.
Explanation:
add on interest loan is more frequently in case of sub prime borrowers.
PrimeTime Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded management's most optimistic projections. Sales are made on account and collected as follows: 49% in the month after the sale is made and 44% in the second month after sale. Merchandise purchases and operating expenses are paid as follows:
In the month during which the merchandise is purchased or the cost is incurred 75 %
In the subsequent month 25 %
PrimeTime Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows:
September October November December
Sales $ 41,800 $ 53,700 $ 68,100 $ 58,900
Cost of goods sold:
Beginning inventory $ 5,530 $ 14,600 $ 20,310 $ 22,050
Purchases 37,800 43,700 49,000 32,600
Cost of goods available for sale $ 43,330 $ 58,300 $ 69,310 $ 54,650
Less: Ending inventory (14,600 ) (20,310 ) (22,050 ) (20,360 )
Cost of goods sold $ 28,730 $ 37,990 $ 47,260 $ 34,290
Gross profit $ 13,070 $ 15,710 $ 20,840 $ 24,610
Operating expenses 10,400 13,100 14,300 16,000
Operating income $ 2,670 $ 2,610 $ 6,540 $ 8,610
Cash on hand August 31 is estimated to be $40,240. Collections of August 31 accounts receivable were estimated to be $19,820 in September and $15,330 in October. Payments of August 31 accounts payable and accrued expenses in September were estimated to be $23,840.
Question Completion:
Prepare the cash budget for the months of October and November.
Answer:
PrimeTime Sportswear
Cash Budget:
October November
Beginning cash balance $40,420 $34,007
Cash collections 35,812 44,705
Total cash in hand $76,232 $78,712
Total payments $42,225 $47,675
Cash balance $34,007 $31,037
Explanation:
a) Data and Calculations:
Income Statement Budgets
September October November December
Sales $ 41,800 $ 53,700 $ 68,100 $ 58,900
Cost of goods sold:
Beginning inventory $ 5,530 $ 14,600 $ 20,310 $ 22,050
Purchases 37,800 43,700 49,000 32,600
Cost of goods available $ 43,330 $ 58,300 $ 69,310 $ 54,650
Less: Ending inventory (14,600 ) (20,310 ) (22,050 ) (20,360 )
Cost of goods sold $ 28,730 $ 37,990 $ 47,260 $ 34,290
Gross profit $ 13,070 $ 15,710 $ 20,840 $ 24,610
Operating expenses 10,400 13,100 14,300 16,000
Operating income $ 2,670 $ 2,610 $ 6,540 $ 8,610
Cash on hand August 31 = $40,420
Collections of August accounts receivable:
September $19,820
October $15,330
Payments of August 31 accounts payable:
September $23,840
Sales collections:
49% in month after sale
44% second month after
7% uncollectible
Purchases and operating expenses payments:
75% in the month
25% following month
September October November December
Sales $ 41,800 $ 53,700 $ 68,100 $ 58,900
Cash collections:
49% in month after sale 19,820 20,482 26,313 33,369
44% second month after 15,330 18,392 23,628
Total cash collections $35,812 $44,705 $56,997
Purchases 37,800 43,700 49,000 32,600
Operating expenses 10,400 13,100 14,300 16,000
Total purchase & operating $48,200 $56,800 $63,300 $48,600
Payments:
75% in the month 36,150 42,600 47,475 36,450
25% following month 23,840 12,050 14,200 15,825
Total payments $52,190 $42,225 $47,675 $36,700
A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,000 units): Direct materials $180,000 Direct labor 240,000 Variable factory overhead 280,000 Operating expenses: Variable operating expenses $130,000 Fixed operating expenses 50,000 180,000 If 1,600 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is a.$66,400 b.$64,000 c.$78,400 d.$56,000
Answer:
d.$56,000
Explanation:
The computation of the amount of inventory that would be reported on the variable costing balance sheet is shown below:
But before that following calculations need to be done
The total production cost
= Direct material + direct labor + variable factory overhead
= $180,000 + $240,000 + $280,000
= $700,000
Now the production cost per unit is
= $700,000 ÷ 20,000 units
= $35 per unit
Now the amount of inventory is
= 1,600 units × $35 per unit
= $56,000
Which of the following is a true statement?
(A) New products introduce risk into a portfolio as well as future potential profits.
(B) A company’s product portfolio is assured of success by adding new products.
(C) New products bring great rewards with little risk.
Answer:
I think it's C, New products bring great rewards with little risk
The correct option is (A) .As we know introducing a product is not that much fast and easy because it automatically contains greater risk in it.
What does the new product mainly contain?Introducing a new product is the most important component of a product portfolio. As it contains greater risk but it also contains greater rewards too.
How can we explain it with a help of an example?When a company launches new products it automatically contains the risk that if it would be opened in the market what would be the customer's reaction, whether a customer would like it or not. If the customer like the product risk would convert into a reward for the company and if not then it would get a loss to the company. This profit and loss to the company affect the portfolio the most.
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Whistle Works sells each whistle for $12. It takes 3 ounces of metal to produce each whistle at a cost of $0.50 per ounce. They prefer to have 10% of materials required for the following month's production in ending inventory as well. How many ounces of direct materials does Whistle Works need to purchase in October to meet production needs
The question is incomplete. The complete Question is as follows,
Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget:
Units to be produced
October 4,500
November 4,750
December 5,200
Whistle Works sells each whistle for $12. It takes 3 ounces of metal to produce each whistle at a cost of $0.50 per ounce. They prefer to have 10% of materials required for the following month's production in ending inventory as well. How many ounces of direct materials does Whistle Works need to purchase in October to meet production needs?
A) 4,500 ounces
B) 13,575 ounces
C) 13,425 ounces
D) 4,525 ounces
Answer:
Purchases = 13575 ounces
Option B is the correct answer
Explanation:
To calculate the purchases of material for October, we first need to calculate the inventory needed to produce the desired number of units in October along with the desired ending inventory and adjust it for the available opening inventory at start of October.
Material available at Start - October = 10% * 4500 units * 3 ounces per unit Material available at Start - October = 1350 ounces
Material required at end - October = 10% * 4750 units * 3 ounces per unit
Material required at end - October = 1425 ounces
Material required to produce required units in October = 4500 * 3 = 13500
Production = Opening Inventory + Purchases - Closing Inventory
13500 = 1350 + Purchases - 1425
13500 + 1425 - 1350 = Purchases
Purchases = 13575 ounces
On July 31, 2017, Crane Company had a cash balance per books of $6,355.00. The statement from Dakota State Bank on that date showed a balance of $7,905.80. A comparison of the bank statement with the Cash account revealed the following facts.
1. The bank service charge for July was $19.00.
2. The bank collected $1,630.00 for Crane Company through electronic funds transfer.
3. The July 31 receipts of $1,309.30 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31.
4. Company check No. 2480 issued to L. Taylor, a creditor, for $394.00 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $349.00.
5. Checks outstanding on July 31 totaled $1,979.10.
6. On July 31, the bank statement showed an NSF charge of $685.00 for a check received by the company from W. Krueger, a customer, on account.
Question Completion:
Prepare a bank reconciliation statement as of July 31, 2017.
Answer:
Crane CompanyBank Reconciliation Statement as of July 31, 2017
Balance as per bank statement $7,905.80
Add Uncredited deposits 1,309.30
Less Checks outstanding 1,979.10
Balance as per adjusted cash book $7,236.00
Explanation:
a) Data and Analysis:
July 31, 2017:
Cash balance per books of $6,355.00
Bank statement balance = $7,905.80
Reconciling items:
1. Bank service charge$19.00
2. Direct EFT receipt $1,630.00
3. Uncredited deposits $1,309.30
4. Understated check No. 2480 $45
5. Checks outstanding $1,979.10
6. NSF charge of $685.00 (W. Krueger)
Cash Book Adjustment as of July 31, 2017
Balance as per cash book $6,355.00
add: Direct EFT receipt 1,630.00
less: Bank service charge 19.00
Understated check No. 2480 45.00
NSF charge 685.00
Adjusted Cash Book balance $7,236.00
On January 8, 2012, Speedway Delivery Service purchased a truck at a cost of $65,000. Before placing the truck in service, Speedway spent $4,000 painting it, $2,500 replacing tires, and $8,000 overhauling the engine. The truck should remain in service for five years and have a residual value of $6,000. The truck’s annual mileage is expected to be 22,000 miles in each of the first four years and 12,000 miles in the fifth year—100,000 miles in total. In deciding which depreciation method to use, David Greer, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance).
Requirements
1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value.
2. Speedway prepares financial statements using the depreciation method that reports the highest net income in the early years of asset use. For income tax purposes, the company uses the depreciation method that minimizes income taxes in the early years. Consider the first year that Speedway uses the truck. Identify the depreciation methods that meet the general manager’s objectives, assuming the income tax authorities permit the use of any of the methods.
Answer:
Speedway Delivery Service
1. Depreciation Schedules:
Depreciation Schedule (Straight-line Method)
Date Cost Value Depreciation Accumulated Net Book
Expense Depreciation Value
December 31, 2012 $79,500 $14,700 $14,700 $64,800
December 31, 2013 $79,500 $14,700 $29,400 $50,100
December 31, 2014 $79,500 $14,700 $44,100 $35,400
December 31, 2015 $79,500 $14,700 $58,800 $20,700
December 31, 2016 $79,500 $14,700 $73,500 $6,000
Depreciation Schedule (Units-of-production Method)
Date Cost Value Depreciation Accumulated Net Book
Expense Depreciation Value
December 31, 2012 $79,500 $16,170 $16,170 $63,330
December 31, 2013 $79,500 $16,170 $32,340 $47,160
December 31, 2014 $79,500 $16,170 $48,510 $30,990
December 31, 2015 $79,500 $16,170 $64,680 $14,820
December 31, 2016 $79,500 $8,820 $73,500 $6,000
Depreciation Schedule (Double-declining-balance Method)
Date Cost Value Depreciation Accumulated Net Book
Expense Depreciation Value
December 31, 2012 $79,500 $31,800 $31,800 $47,700
December 31, 2013 $79,500 $19,080 $50,880 $28,620
December 31, 2014 $79,500 $11,448 $62,328 $17,172
December 31, 2015 $79,500 $6,869 $69,197 $10,303
December 31, 2016 $79,500 $4,303 $73,500 $6,000
2. The straight-line method reports the highest net income in the early years while the double-declining-balance method minimizes the income taxes in the early years.
Explanation:
a) Data and Calculations:
January 8, 2012:
Purchase of a delivery truck = $65,000
Cost of painting the truck = 4,000
Cost of replacing the tires = 2,500
Cost of overhauling the engine 8,000
Total costs = $79,500
Residual value = 6,000
Depreciable amount = $73,500
Estimated useful life = 5 years
Straight-line depreciation Method:
Annual depreciation expense = $14,700 ($73,500/5)
Units-of-production Method:
Depreciation rate per mile = $0.735 ($73,500/100,000)
For 22,000 miles, depreciation expense = $16,170 ($0.735 * 22,000)
For 12 ,000 miles, depreciation expense = $8,820 ($0.735 * 12,000)
Double-declining-balance method:
Depreciation rate = 100/5 * 2 = 40%
First year's depreciation expense = $31,800 ($79,500 * 40%)
Declined balance = $47,700 ($79,500 - $31,800)
Second year's depreciation expense = $19,080 ($47,700 * 40%)
Declined balance = $28,620 ($47,700 - $19,080)
Third year's depreciation expense = $11,448 ($28,620 * 40%)
Declined balance = $17,172 ($28,620 - $11,448)
Fourth year's depreciation expense = $6,869 ($17,172 * 40%)
Declined balance = $10,303 ($17,172 - $6,869)
Fifth year's depreciation expense = $4,303 ($10,303 - $6,000)
Which type of interview presents the interviewee with a project which the interviewee must create and carry out a plan for?
Select the best answer choice:
A.
Behavioral interview
B.
Informational interview
C.
Case interview
D.
Panel interview
Answer:C
Explanation:
A behavioral interview is obviously based on behavior.
A informational interview is where you have to know more.
A case interview is where you basically work as an employee to see how you can manage or do the job.
A panel interview is where there’s many interviewers and one candidate
Mackenzie Company has a price of $38 and will issue a dividend of $ 2.00 next year. It has a beta of 1.3, the risk-free rate is 5.2%, and the market risk premium is estimated to be 4.9%. a. Estimate the equity cost of capital for Mackenzie. b. Under the CGDM, at what rate do you need to expect Mackenzie's dividends to grow to get the same equity cost of capital as in part (a)?
Answer and Explanation:
a. The computation of the equity cost of capital is shown below:
As we know that
Expected rate of return = Risk free rate + Risk Premium × Beta
= 5.20% + 4.90% × 1.30
= 11.57%
b. Now the rate at which the dividend should be grow is
Value of the stock = Expected dividend ÷ (cost of equity - growth rate)
$38 = $2 ÷ (11.57% - growth rate)
so, the growth rate is 6.31%
A continuous (rolling) budget A. presents the plan for a range of activity so that the plan can be adjusted for changes in activity levels. B. presents a statement of expectations for a period of time but does not present a firm commitment. C. presents the plan for only one level of activity and does not adjust to changes in the level of activity. D.drops the current month or quarter and adds a future month or quarter as the current month or quarter is completed. E. classifies budget requests by activity and estimates the benefits arising from each activity. A continuous budget has a constant time horizon and always looks ahead the same number of periods.
Answer:
D.drops the current month or quarter and adds a future month or quarter as the current month or quarter is completed.
Explanation:
A continuous (rolling) budget is one that varies over time. It attach another month to the end of the budget as one month expires. for example, If initial budget covers the months of January to December 2018, then you may add January 2019 after January 2018 has ended.
Hence, option D is the correct answer.
Which of the following is NOT one of the steps taken in the financial planning process? a. Develop a set of forecasted financial statements under alternative versions of the operating plan in order to analyze the effects of different operating procedures on projected profits and financial ratios. b. Consult with key competitors about the optimal set of prices to charge, i.e., the prices that will maximize profits for our firm and its competitors. c. Forecast the funds that will be generated internally. If internal funds are insufficient to cover the required new investment, then identify sources from which the required external capital can be raised. d. Determine the amount of capital that will be needed to support the plan. e. Monitor operations after implementing the plan to spot any deviations and then take corrective actions.
Answer:
B)Consult with key competitors about the optimal set of prices to charge, i.e., the prices that will maximize profits for our firm and its competitors.
Explanation:
The financial planning process can be regarded as series of steps which states best way of using money and investments as well as other assets so that financial goals can be potentially achieved. Most of the financial plans has its focus savings of goals as well as payoff goals even estate planning goals so that roadmap to financial freedom can be set.
The steps that can be taken in the financial planning process are;
✓ Forecast the funds that will be generated internally. If internal funds are insufficient to cover the required new investment, then identify sources from which the required external capital can be raised.
✓Develop a set of forecasted financial statements under alternative versions of the operating plan in order to analyze the effects of different operating procedures on projected profits and financial ratios
✓Determine the amount of capital that will be needed to support the plan. e. Monitor operations
Which of the following is the second step in the hiring process?
Select the best answer choice.
A.
the submission of the application or resume
B.
the interview
C.
sending a thank-you note
D.
getting hired for the position
Answer:
B) The interview
Explanation:
The second step in the hiring process is to plan your employee recruitment. Recruitment planning meetings or emails identify the job description or specification for the position so you know the skills and experience you seek.
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The following items were selected from among the transactions completed by Aston Martin Inc. during the current year:
Apr. 15 Borrowed $225,000 from Audi Company, issuing a 30-day 6% not for that amount.
May 1. Purchased equipment by issuing a $320,000, 180-day not to Spyder Manufacturing Co., which disconted the not at the rate of 6%.
15. Paid Audi Company the interest due on the note of April 15 and renewed the loan by issuing a new 60-day, 8% not for $225,000. (Record both the debit and credit to the notes payable account.)
July 14. Paid Audi Company the amount due on the note of May 15.
Aug. 16. Purchased merchandise on the account for Exige Do., $90,000, terms, n/30.
Sept. 15. Issued a 45-day, 6% not for $90,000 to Exige Co., on account.
Oct. 28. Paid Spyder Manufacturing Co. the amount due on the note of May 1.
30. Paid Exige Co. the amount owed on the not of September 15.
Nov. 16. Purchased store equipment for Gallardo Co. for $20,000 each, coming due at 30-day intervals. Dec. 16. Paid the amount due Gallardo Co. on the first note in the series issued on November 16.
28. Settled a personal injoury lawsuit with a customer for $87,500, to be paid in January. Aston Martin Inc. accrued the loss in a litigation claims payable account.
Instructions
1. Journalize the transactions.
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year:
a. Product warranty cost, %$26,800.
b. Interest on the 19 remaining notes owed to Gallardo Co.
Question Completion:
November 16 - Purchased store equipment from Gallardo Co. for $450,000, paying $50,000 and issuing a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals.
Answer:
Aston Martin, Inc.
Apr. 15 Debit Cash $225,000
Credit 6% Notes payable (Audi Company) $225,000
To record the amount borrowed by issuing a 30-day 6% note.
May 1. Debit Equipment $320,000
Credit 6% Notes Payable (Spyder Manufacturing Co.) $320,000
To record the purchase of equipment by issuing a $320,000, 180-day note at the rate of 6%.
May 15. Debit Interest expense $1,125
Credit Cash $1,125
To record the payment of interest on note.
May 15 Debit 6% Notes payable (Audi Company) $225,000
Credit 8% Notes payable (Audi Company) $225,000
To record the exchange of notes, by issuing a new 60-day, 8% note for $225,000
July 14 Debit 8% Notes payable (Audi Company) $225,000
Credit Interest expense $3,000
Credit Cash $228,000
To record the full settlement of note with interest.
Aug. 16. Debit Inventory $90,000
Credit Accounts payable (Exige Co.) $90,000
To record the purchase of merchandise on account, terms, n/30.
Sept. 15. Debit Accounts payable (Exige Co.) $90,000
Credit 6% Note Payable (Exige Co.) $90,000
To record the settlement of account by issuing a 45-day, 6% note to Exige Co.
Oct. 28. Debit 6% Notes Payable (Spyder Manufacturing Co.) $320,000
Debit Interest expense $9,600
Credit Cash $329,600
To record the settlement of notes with interest.
30. Debit 6% Note Payable (Exige Co.) $90,000
Debit Interest Expense $675
Credit Cash $90,675
To record the settlement of notes with interest.
November 16 Debit Store equipment $450,000
Credit 9% Note payable (Gallardo Co.) $400,000
Credit Cash $50,000
To record the issuing of a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals.
Dec. 16. Debit 9% Note payable (Gallardo Co.) $20,000
Debit Interest expense $3,000
Credit Cash $23,000
To record the settlement of the first note with interest on all the notes.
Dec. 28. Debit Litigation Claims Loss $87,500
Credit Litigation Claims Payable $87,500
To record the litigation loss.
Explanation:
a) Data and Calculations:
Apr. 15 Cash $225,000 6% Notes payable (Audi Company) $225,000
, issuing a 30-day 6% note for that amount.
May 1. Equipment $320,000 6% Notes Payable (Spyder Manufacturing Co.) $320,000 by issuing a $320,000, 180-day note at the rate of 6%.
15. Interest expense $1,125 Cash $1,125
6% Notes payable (Audi Company) $225,000 8% Notes payable (Audi Company) $225,000
issuing a new 60-day, 8% not for $225,000
July 14. 8% Notes payable (Audi Company) $225,000 Interest expense $3,000 Cash $228,000
Aug. 16. Inventory $90,000 Accounts payable (Exige Co.) $90,000
, terms, n/30.
Sept. 15. Accounts payable (Exige Co.) $90,000 6% Note Payable (Exige Co.) $90,000 Issued a 45-day, 6% not for $90,000 to Exige Co., on account.
Oct. 28. 6% Notes Payable (Spyder Manufacturing Co.) $320,000 Interest expense $9,600 Cash $329,600
30. 6% Note Payable (Exige Co.) $90,000 Interest Expense $675 Cash $90,675
November 16 - Store equipment $450,000 9% Note payable (Gallardo Co.) $400,000 Cash $50,000
issuing a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals.
Dec. 16. 9% Note payable (Gallardo Co.) $20,000 Interest expense $3,000 Cash $23,000
28. Litigation Claims Loss $87,500 Litigation Claims Payable$87,500
Roland, Inc. provides residential painting services for three home building companies, Alpha, Beta, and Gamma, and it uses a job costing system for determining the costs for completing each job. The job cost system does not capture any cost incurred by Roland for return touchups and refinishes after the homeowner occupies the home. Roland paints each house on a square footage contract price, which includes painting as well as all refinishes and touchups required after the homes are occupied. Each year, Roland generates about one-third of its total revenues and gross profits from each of the three builders. Roland has observed that the builders, however, require substantially different levels of support following the completion of jobs. The following data have been gathered:Major refinishes Hours on job $70
Touchups Number of visits $180
Communication Number of calls $20
Builder Major Refinishes Touchups Communication
Alpha 80 150 360
Beta 35 110 205
Gamma 42 115 190
(a) Assuming that each of the three customers produces gross profits of $100,000, calculate the profitability from each builder after taking into account the support activity required for each builder.
Alpha
Beta
Gamma
Answer: See attachment
Explanation:
Based on the information provided, the question has been solved and attached.
Profitability for Alpha:
Revenue = $100,000
Cost = $39800
Profit = $60200
Profitability for Beta:
Revenue = $100,000
Cost = $26350
Profit = $73650
Profitability for Gamma:
Revenue = $100,000
Cost = $27440
Profit = $72560
Sicilian Defence, a division of Queen's Gambit Corp., has a net operating income of $60,000 and average operating assets of $300,000. The minimum required rate of return for the company is 15%. If the manager of the Sicilian Defence division is evaluated based on residual income, will she want to make an investment of $100,000 that would generate additional net operating income of $18,000 per year?
Answer:
Queen's Gambit Corp.
Sicilian Defence Division
If the manager of the Sicilian Defence division is evaluated based on residual income, will she want to make an investment of $100,000 that would generate additional net operating income of $18,000 per year?
Yes.
The additional investment yields comparable positive Residual Income.
Explanation:
a) Data and Calculations:
Net operating income of Sicilian Defence Division = $60,000
Average operating assets = $300,000
Required rate of return for the company = 15%
Residual income (RI)= Operating Income - (Operating Assets x Required Rate of Return)
= $60,000 - ($300,000 * 15%)
= $60,000 - $45,000
= $15,000
Investment cost = $100,000
Additional net operating income = $18,000
Residual Income = $18,000 - ($100,000 * 15%)
= $18,000 - $15,000
= $3,000
Total residual income = $78,000 - ($400,000 * 15%)
= $78,000 - $60,000
= $18,000
Jameson Corporation was organized on May 1. The following events occurred during the first month.
A. Received $67,000 cash from the five investors who organized Jameson Corporation. Each investor received 110 shares of $10 par value common stock.
B. Ordered store fixtures costing $10,000.
C. Borrowed $16,000 cash and signed a note due in two years.
D. Purchased $18,000 of equipment, paying $1,400 in cash and signing a six-month note for the balance.
E. Lent $1,700 to an employee who signed a note to repay the loan in three months.
F. Received and paid for the store fixtures ordered in (b).
Required:
Prepare journal entries for each transaction.
Answer:
Transaction A
Debit : Cash $67,000
Credit : Common Stock $67,000
Transaction B
Debit : Store fixtures $10,000
Credit : Accounts payable $10,000
Transaction C
Debit : Cash $16,000
Credit : Note Payable $16,000
Transaction D
Debit : Equipment $18,000
Credit : Cash $1,400
Credit : Note Payable $16,600
Transaction E
Debit : Note Receivable $1,700
Credit : Cash $1,700
Transaction F
Debit : Accounts Payable $10,000
Credit : Cash $10,000
Explanation:
When there is no immediate payment of cash recognize a liability accounts payable otherwise recognize cash.
Simon's most recent income statement is given below. Sales (8,000 units) $160,000 Less variable expenses (68,000) Contribution margin 92,000 Less fixed expenses (50,000) Net income $42,000 Required: a. Contribution margin per unit is b. If sales are doubled total variable costs will equal c. If sales are doubled total fixed costs will equal d. If 20 more units are sold, profits will increase by e. Compute how many units must be sold to break even. f. Compute how many units must be sold to achieve operating income of $60,000. g. Compute the revenue needed to achieve an after tax income of $30,000 given a tax rate of 30%.
Answer:
a. $11.50
b. $136,000
c. $50,000
d. $230
Explanation:
Contribution = sales - variable costs
Fixed costs do not vary with level of sales or production.
Communication starts with
sender
is answer..
........
You wish to take an Excel course. You may enroll at one within your school or you may take a community class at the local library. You've gathered the following information to aid in your decision-making process.
Costs/Benefits College Course Community Course
Cost $2,600 $1,390
Distance to course 0.40 miles (walking distance) 16 miles (driving distance)
Timing of course Weekday Weekend
Number of meetings 16 8
Qualitative considerations Convenience, quality of instruction Flexibility, brief duration
If you enroll in the community class, you will be unable to work at your regular job on weekends for the eight weekend days when the class meets. If you typically earn $260 per weekend shift, which option would you choose (considering enrollment cost and opportunity cost)?
a) Neither alternative
b) College course
c) Community course
d) Both alternatives
Answer:
The chosen option (considering enrollment costs and opportunity cost) is:
b) College course.
Explanation:
a) Data and Calculations:
Costs/Benefits
College Course Community Course
Cost $2,600 $1,390
Opportunity costs -2,080 2,080
Net costs $520 $3,470
Distance to course 0.40 miles 16 miles
(walking distance) (driving distance)
Timing of course Weekday Weekend
Number of meetings 16 8
b) With the College course option, you will earn $2,080 ($260 * 8) weekdays to offset part of the enrollment cost. With the Community course option, $2,080 will be lost in opportunity cost, thereby increasing the total costs incurred. These costs are apart from the driving costs associated with traveling 16 miles to the Community Course at the local library.
Exercise
1. State and explain 5 characteristics of the
youth
Choose the correct statements.
a. A random variable is a quantitative or qualitative outcome which results from a chance experiment.
b. A random variable is a quantitative or qualitative outcome which results from a chance experiment.
c. A probability distribution includes the likelihood of each possible outcome or random variable.
d. A probability distribution includes the likelihood of each possible outcome or random variable.
e. A probability distribution is the outcome of an experiment. A probability distribution is the outcome of an experiment.
f. A random variable represents the likelihood of an outcome.
Answer:
The answer is below
Explanation:
Considering the available options, the correct statements are:
1. A random variable is a quantitative or qualitative outcome that results from a chance experiment.
2. A probability distribution includes the likelihood of each possible outcome or random variable.
Answer:
Josiah’s results are more likely to be close to the predicted results because he had a smaller number of possible outcomes.
The Smith family wants to relocate to a neighborhood with better schools before their three-year-old goes to kindergarten. They talked with Byron about properties he has for sale in neighborhoods they would like to live in. They also mentioned to Byron that they both work and may need someone to help with in-home care for their child. Byron gave them Taylor’s name to call about childcare. The Smiths also said they were having a hard time getting loan approval, so Byron suggested that they call Travis. Which best describes the jobs performed by Byron, Taylor, and Travis?
a) Byron is a Customer Service Representative, Taylor is a Child Care Worker, and Travis is a Loan Counselor.
b) Byron is a Real Estate Manager, Taylor is a Nanny, and Travis is a Loan Counselor.
c) Byron is a Real Estate Manager, Taylor is a Preschool Teacher, and Travis is a Customer Service Representative.
d) Byron is a Home Counselor, Taylor is a Nanny, and Travis is a Property Manager.
Answer:
the correct answer is B)
Explanation:
Given that they spoke to Byron about properties that he wants to sell, that means he is a Real Estate Manager. Taylor came up because they needed in-home care. That makes Taylor a Nanny because Nannies are professionals who take care of babies in their own homes.
Loan counselors have no other major business besides advising people on issues relating to taking up a loan. Therefore that makes Travis a loan Counselor.
Cheers
_____ Web sites are dedicated to employment opportunities with a given city, state, or country.
Education
Industry
Government
Corporate
Answer:
the answer is government
The Kelsh Company has two divisions--North and South. The divisions have the following revenues and expenses:
North South
Sales $900,000 $800,000
Variable expenses 450,000 300,000
Traceable fixed expenses 260,000 210,000
Allocated common corporate expenses 240,000 190,000
Net operating income (loss) ($50,000) $100,000
Management at Kelsh is pondering the elimination of the North Division. If the North Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected.
Given this data, the elimination of the North Division would result in an overall company operating income of:
a. 50,000
b. 150,000
c. (140,000)
d. 100,000
Answer:
c. (140,000)
Explanation:
Effect on net income of dropping the North Division:
Sales $(900,000)
Variable expenses $450,000
Contribution margin $(450,000)
Traceable fixed expenses $260,000
Effect on net income ($190,000)
Since the North Division currently have Net operating income (loss) of ($50,000), so therefore, after dropping the North Division, the overall company net operating loss will be $140,000 ($50,000 - $190,000).
