Answer:
$100,000
Explanation:
Data provided
Perpetual cash flow = $10,000
Discount rate = 10%
According to the given situation, the computation of Present value of this inginite sequence of cash flow is shown below:-
Present value = Perpetual cash flow ÷ discount rate
= $10,000 ÷ 10%
= $10,000 ÷ 0.1
= $100,000
Therefore for computing the present value we simply applied the above formula.
Your boss has asked you to hand deliver five invitations to a special luncheon he is hosting. When you receive the
invitations, they have only first and last names but no addresses. You remember that they all live side by side in an
apartment building on Central Street. The boss left the following information with his assistant, but it is all you have. Time to
problem-solve to figure out who lives where!
This much you know for sure Carly has Greg as one next-door neighbor and the Joneses as her other next-door
neighbors. Now it's it up to you to figure out who lives in the other apartments. It may be helpful for you to draw five boxes
to use as a visual guide. Furthermore, writing names on your drawing in pencil will allow you to keep track of the neighbors
as you place them in their homes.
1 The Smiths live in the westernmost apartment, Louis lives in the easternmost
2. Leon has Mia as one next-door neighbor with TJ on the other side.
3. Both Tami and TJ live east of the Williamses.
4. TJ lives next door to the Browns
5. Tom lives west of the Garcias and east of Carly
6. Kris and Tami are next-door neighbors. The Garcias also live next to Tami but on the other side.
7. Nikki lives east of TJ.
Answer:
1)Smiths
2)Nikki
3)Williams
4)Mia
5) Leon
6)TJ
7)Browns
8)Joneses
9)Carley
10)Greg
11)Tom
12)Garcias
13)Tami
14)Kris
15)Loise
Explanation:
Knowing she has sold 5,000 pairs, assume the company wants to launch a Black Friday promotion, where she would discount her shoes by 10%. How many more shoes would she have to sell to justify this promotion
Revenue: $500,000
Shoes: $250,000
Shoe boxes: $1,000
Advertising: $500
Rent: $1,000
Depreciation: $25
Knowing she has sold 5,000 pairs, assume the company wants to launch a Black Friday promotion, where she would discount her shoes by 10%. How many more shoes would she have to sell to justify this promotion?
A. 25.13% more shoes
B. 20.08% more shoes
C. None of the above, but I could calculate this with the information I am given.
D. None of the above, I cannot calculate this with the information I am given.
Answer:
Option A. 25.13% more shoes
Explanation:
Cost Benefit analysis would be useful here to acknowledge what percentage of shoe sales is required to justify the promotion.
The Benefit drawn before 10% promotion proposal:
Revenue: $500,000
Shoes: ($250,000)
Shoe boxes: ($1,000)
Advertising: ($500)
Rent: ($1,000)
Depreciation: ($25)
Profit $247,475
The Benefit drawn before 10% promotion proposal:
Revenue: $450,000
Shoes: ($250,000)
Shoe boxes: ($1,000)
Advertising: ($500)
Rent: ($1,000)
Depreciation: ($25)
Profit $197,475
Now we can calculate how much additional sales must be required to justify the promotion.
Sales Increase Required = (Initial Profit - Before Promotion) / Profit After Promotion
Sales Increase Required = ($247,475 - $197,475) / $197,475
Sales Increase Required = 25.31% which is close to option 1, hence Option 1 is correct here.
Promotion is termed as the activity that involves the spreading or publicizing of information regarding the products and services. It is a part of marketing that involves publicity and public relations between the customers.
The correct option is A. 25.13% more shoes
Cost Benefit analysis would be useful here to acknowledge what percentage of shoe sales is required to justify the promotion.
The Benefit drew before 10% promotion proposal:
Revenue: $500,000
Shoes: ($250,000)
Shoe boxes: ($1,000)
Advertising: ($500)
Rent: ($1,000)
Depreciation: ($25)
Profit $247,475
The Benefit drew before 10% promotion proposal:
Revenue: $450,000
Shoes: ($250,000)
Shoe boxes: ($1,000)
Advertising: ($500)
Rent: ($1,000)
Depreciation: ($25)
Profit $197,475
Now we can calculate how much additional sales must be required to justify the promotion.
Sales Increase Required = [tex]\frac{\text{Initial Profit - Before Promotion}}{\text{Profit After Promotion}}[/tex]
Sales Increase Required = [tex]\frac{\$247,475-\$197,475}{\$197,475}[/tex]
Sales Increase Required = 25.31% which is close to option 1, hence Option 1 is correct here.
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At Jacobson Company, indirect labor is a variable cost that varies with direct labor-hours. Last month’s performance report showed that actual indirect labor cost totaled $5,780 for the month and that the associated spending variance was $245 Favorable. If 24,100 direct labor-hours were actually worked last month, then the flexible budget cost formula for indirect labor must be (per direct labor-hour):
Answer:
Flexible budget cost formula for indirect labor is $0.25 per DL hours
Explanation:
Flexible budget cost for indirect labor = Actual indirect labor cost + Associated spending variance
= $5,780 + $245
= $6,025
Flexible budget cost formula for indirect labor= Flexible budget cost for indirect labor / Direct labor-hours
= $6,025 / 24,100 DL hours
= $0.25 per DL hours
(Table) If Jake and Sue are the only buyers of the local pizzeria's pizza, what is the market demand for pizzas at each of the prices listed, starting at the market price of $5? QJ is the quantity demanded at each price by Jake, and QS is the quantity demanded at each price by Sue.
Answer:
This is the table that the question is referring to:
Price QJ QS
5 4 2
10 3 1
15 2 0
20 1 0
Total market demand is the sum of the individual market demands. In this market, it is the sum of the market demand of Jake and Sue.
Market demand at the price of $5 is 7 pizzas.
Market demand at the price of $10 is 4 pizzas.
Market demand at the price of $15 is 2 pizzas.
Market demand at the price of $20 is 1 pizza.
What is the beta for a company with a 12% expected return, while treasury bills are yielding 5% and the market risk premium is 7%
Answer:
The beta for the company is 1.
Explanation:
A beta is the measure of systematic risk associated to a stock or the portfolio. Systematic risk is the market risk that affects all the stocks in the market due to factors that are uncontrollable. Such a risk is what the companies compensate the investors for. Using the CAPM equation, we calculate the expected rate of return of a stock. The equation is,
r = rRF + Beta * rpM
Where,
rRF is the risk free raterpM is the risk premium on marketWe already have the values for r, rRF and rpM. Plugging them in the formula, we calculate the beta to be,
0.12 = 0.05 + Beta * 0.07
0.12 - 0.05 = Beta * 0.07
0.07/ 0.07 = Beta
Beta = 1
"One of the ten IG principles is a Continuous improvement. What is the importance of this principle to the organization program"
Answer:
the importance is to provide periodic program review and necessary adjustments against gaps and it short comings
Explanation:
Information governance is a full way of managing information in a corporation by the implementation of a series of processes, controls and roles. It can be simply said to be a process of managing information assets as this will cause a balance between security and usage.
continuous improvement is one of its 10 principles. And it simply means that programs in information governance have to go through continuous reviews and updates as doing such will help to reduce shortcomings.
Deployment Specialists pays a current (annual) dividend of $1.00 and is expected to grow at 20% for 2 years and then at 4% thereafter. If the required return for Deployment Specialists is 8.5%, what is the intrinsic value of its stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
$30.80
Explanation:
Intrinsic value
V0=D1/1+k +D2/(1+k)^2 +DH+PH/(1 +k)^H
Let plug in the formula
First step
V0=$1 × 1.2/(1+0.085) +($1 × 1.2)^2/(1+0.085)^2 +($1 × 1.2)^2*1.04/(0.085-0.04)*(1+0.085)^2
Second step
V0=1.2/1.085+1.44/1.007225+1.44*1.04/0.045*1.177225
Third step
V0=1.2/1.085+1.44/1.007225+1.4976/0.052975
Fourth step
V0=1.10599+1.42967+28.26993
V0=$30.80
Therefore the intrinsic value of its stock will be $30.80
fremont which uses the high-low method reported total cost of $10 per unit its lowest production level, 5000 units. when production tripled to its highest level, the total cost per unit dropped to $5 variable cost per unit
Answer:
$2.50
Explanation:
Calculation for the estimation of variable cost per unit
Units Total cost
High method 15,000×$5 per units =$75,000
(5,000*3)=15,000
Low method 5,000*$10 per units=$50,000
Difference 10,000 $25,000
Variable cost per unit =$25,000/10,000
Variable cost per unit=$2.50
Note: Based on the information given we were told that production tripled to its highest level which means the high method units will be 15,000 units (5,000 units*3)
Therefore Fremont would estimate its variable cost per unit as: $2.50
Net sales for the year were $1,050,000 and cost of goods sold was $735,000 for the company’s existing products. A new product is presently under development and will have an expected selling price of not more than $68 per unit in order to remain competitive with similar products in the marketplace. Required: a. Calculate gross profit and the gross profit ratio for the year.
Answer:
The answer is:
Gross profit is $315,000
Gross profit ratio is 30 percent
Explanation:
Gross profit equals net sales minus cost of sales
Net sales - $1,050,000
Cost of sales - ($735,000)
Gross profit -. $315,000
Gross profit ratio is:
(Gross profit / net sales) x 100 percent
($315,000 / $1,050,000) x 100 percent
0.3 x 100 percent
30 percent.
So we have:
Gross profit is $315,000
Gross profit ratio is 30 percent
Wing CompanyCash- $234,000 Accounts payable- $97,000Inventories- $121,000 Notes payable (due 2020)- $211,000Land- $453,000 Accounts receivable- $46,000Refer to the information provided for Wing Company. Calculate current assets.a. $498,000b. $401,000c. $854,000d. $709,000
Answer:
b. $401,000
Explanation:
Currents assets refer to assets that are possible to be employed, exhausted, consumed, or sold withing a one year during the normal business activities of a company.
Current assets therefore include cash, cash equivalent and other assets that are expected to be changed to cash within one year.
From the question, we have;
Cash- $234,000
Accounts payable- $97,000
Inventories- $121,000
Notes payable (due 2020)- $211,000
Land- $453,000
Accounts receivable- $46,000
Therefore, current assets of Wing Company can be computed as follows:
Current assets = Cash + Inventories + Accounts receivable = $234,000 + $121,000 + $46,000 = $401,000
Therefore, the correct option is b. $401,000.
During the month of March, Blossom Company’s employees earned wages of $60,000. Withholdings related to these wages were $4,590 for Social Security (FICA), $7,031 for federal income tax, $2,906 for state income tax, and $375 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $656 for state unemployment tax.
1. Prepare the necessary March 31 journal entry to record salaries and wages expense and salaries and wages payable. Assume that wages earned during March will be paid during April.
2. Prepare the entry to record the company’s payroll tax expense.
Answer:
1.
March 31,
DR Salaries and Wages Expense ....................$60,000
CR FICA taxes payable ........................................................$4,590
CR Federal income tax payable .........................................$7,031
CR State income tax payable ..............................................$2,906
CR Union dues payable .......................................................$375
CR Salaries and Wages payable ..........................................$45,098
Working
Salaries and Wages payable = 60,000 - 4,590 - 7,031 - 2,906 - 375
= $45,098
2.
DR Payroll taxes payable ...................................$5,246
FICA taxes payable .................................................................$4,590
State unemployment taxes payable ....................................$656
Working
Payroll taxes payable = 4,590 + 656
= $5,246
The involvement by a company in more than one of the activities in the entire value chain from development through production, distribution, sales, and after-sales service is called ________. opportunity cost vertical integration relevant cost avoidable cost
Answer: vertical integration
Explanation: The integrating (to include as a constituent part or functionality) of successive stages in the production and marketing process under the ownership or control of a single management organization is known as vertical integration. As such, such a firm is usually involved in various activities in the entire value chain. This helps it reduce costs, ensure tighter quality control, as well as ensuring a better flow and control of information across the value chain.
Regulations that permit a regulated firm to cover its costs and to make a normal level of profit are commonly referred to as
Answer:
cost plus regulation
Explanation:
Cost plus regulation is generally used by the government to regulate monopolies (mainly natural monopolies like utilities, and others). The price that the monopoly can charge for its goods or services is set by the government and it should generally cover all of the company's costs plus allow it to make a "normal" profit.
Endor Company begins the year with $110,000 of goods in inventory. At year-end, the amount in inventory has increased to $118,000. Cost of goods sold for the year is $1,300,000. Compute Endor’s inventory turnover and days’ sales in inventory. Assume that there are 365 days in the year
Answer:
11.40
32 days
Explanation:
Inventory turnover and days of sales of inventory are examples of activity ratios.
They are used to measure the efficiency of performing daily tasks
inventory turnover = Cost of goods sold/ average inventory
Average inventory = ($118,000 + $110,000) / 2 = $114,000
Inventory turnover = $1,300,000 / $114,000 = 11.40
days of sales of inventory = 365 / inventory turnover = 365 / 11.40 = 32 days
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
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.
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Kansas Enterprises purchased equipment for $73,500 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $6,450 at the end of five years. Using the double-declining balance method, depreciation expense for 2022 would be
Answer:
The answer is $17,640
Explanation:
Equipment was bought on Jan. 1, 2022 for $73,500. This is the historical cost of the asset.
Residual value is $6,450. This is the amount the equipment is being expected to sell for at the end of its useful life.
Useful life is 5 years.
To know the percentage to be used for the depreciation, we have:
100percent / 5 years
= 20 percent
Double-declining is 40 percent(20 percent x 2)
Depreciation for 2021 is
$73,500 x 40 percent
= $29,400.
Carrying amount at the end of 2021 which will also be for the beginning of 2022 is $44,100 ($73,500 - $29,400)
Depreciation for 2022:
$44,100 x 40 percent
$17,640.
Therefore, the depreciation for 2022 is $17,640.
You manufacture wine goblets. In mid- June you receive an order for 10,000 goblets from Japan. Payment of ¥400,000 is due in mid- December. You expect the yen to rise from its present rate of $1=¥107 to $1 to ¥120 by December 2020. You can borrow yen at 6% a year. What should you do?
Answer:
I will borrow yen at 6% a year.
Explanation:
a) Data and Calculations:
Payment for 10,000 = ¥400,000
Spot rate = $1 = ¥107
Forward rate = $1 to ¥120
Borrow ¥400,000, the interest cost = ¥24,000 = $224.30/2 (¥24,000/107) = $112.15 for six months
Value of ¥400,000 borrowed in dollars = $3,738.32 (¥400,000/107)
Loan Repayment of ¥400,000 in dollars = $3,333,33 (¥400,000/120)
Gain from forward contract = $404.99
Interest cost for borrowing = 112.15
Overall debt hedging gain = $292.84
By borrowing yen at 6% per annum, you will make an overall gain of $292.84. This is not comparable to the foreign exchange loss of $404.99 that you will incur without borrowing yen. Taking advantage of the the debt hedging, the supplier is able to save foreign exchange loss.
All of the following are disadvantages of using the average rate of return except a.The average rate of return method does not consider the expected timing of the expected cash flows. b.The average rate of return method does not use present values. c.The average rate of return method does not use the expected cash flows from the proposal. d.All of these choices are disadvantages.
Answer:
D
Explanation:
average rate of return = average net income / average book value
an advantage of average rate of return is that it is easy to calculate.
its disadvantages include :
a.The average rate of return method does not consider the expected timing of the expected cash flows like the NPV and IRR method.
b.The average rate of return method does not use present values.
c.The average rate of return method does not use the expected cash flows from the proposal. it makes use of accounting values instead.
dazzle, inc. produces beads for jewelry making use the journal entry to record production activities for direct labor usage is
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
A publisher is deciding whether or not to invest in a new printer. The printer would cost $900, and would increase the cash flows in year 1 by $500 and in year 3 by $800. Cash flows do not change in year 2.If the interest rate is 12% Is the investment in the new printer feasible?
Answer:
Yes, since NPV>0
Explanation:
The computation of the net present value is shown below:
= Present value of cash inflows - initial investment
where,
Present value of cash inflows is
= $500 ÷ (1 + 0.12)^1 + $800 ÷ (1 + 0.12)^3
= $446.43 + $569.42
= $1,015.85
And the intial investment is $900
So, the net present value is
= $1,015.85 - $900
= $115.85
Since the net present value comes in positive so the investment in new printer is feasible
Assuming a 360 -day year the maturity value of a 15000, 9%,60-day note receivable dated February 10th is:
Answer:
the maturity value of the note receivable is $15,225, and includes both principal plus interest revenue.
Explanation:
when the note is collected on April 11, the journal entry should be:
April 11, collection of notes receivable
Dr Cash 15,225
Cr Notes receivable 15,000
Cr Interest revenue 225
interest revenue = $15,000 x 9% x 2/12 = $225
Finding operating and free cash flows Consider the following balance sheets and selected data from the income statement of Keith Corporation.
Keith Corporation Balance Sheets December 31
Assets 2015 2014
Cash $ 1,500 $ 1,000
Marketable securities 1,800 1,200
Accounts receivable 2,000 1,800
Inventories 2,900 2,800
Total current assets $ 8,200 $ 6,800
Gross fixed assets $ 29,500 $ 28,100
Less: Accumulated depreciation 14,700 13,100
Net fixed assets $ 14,800 $ 15,000
Total assets $ 23,000 $ 21,800
Liabilities and stockholders' equity
Accounts payable $ 1,600 $ 1,500
Notes payable 2,800 2,200
Accruals 200 300
Total current liabilities $ 4,600 $ 4,000
Long-term debt 5,000 5,000
Total liabilities $ 9,600 $ 9,000
Common stock $ 10,000 $ 10,000
Retained earnings 3,400 2,800
Total stockholders' equity $ 13,400 $ 12,800
Total liabilities and stockholders' equity $ 23,000 $ 21,800
Keith Corporation Income Statement Data (2015)
Depreciation expense $1,600
Earnings before interest and taxes (EBIT) 2,700
Interest expense 367
Net profits after taxes 1,400
Tax rate | 40%
Required
a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2015
b. Calculate the firm?s operating cash flow (OCF) for the year ended December 31, 2015
c. Calculate the firm?s free cash flow (FCF) for the year ended December 31, 2015
d. Interpret, compare, and contrast your cash flow estimates in parts b and c.
Answer:
a. NOPAT = EBIT * (1-t)
NOPAT = $2,700 * (1-0.40)
NOPAT = $1,620
b. OCF = NOPAT + Depreciation
OCF = $1,620 + $1,600
OCF = $3,220
c. FCF = Net fixed asset investment - Net current asset investment
FCF = $3,320 - $1,400 - $1,400
FCF = $420
Note:
Net fixed asset investment = Change in net fixed assets + depreciation
= ($14,800- $ 15,000) + $1,600
= $1,400
Net current asset investment = Change in current assets - Change in accounts payable and accurals
= ($8,200 - $6,800) - {($1,600 + $200) - ($1,500 - $300)}
= $1,400
d. FCF is meaningful as it shows that OCF is able to cover Operating expenses as well as Investment in Fixed and Current Assets
Costs which can be eliminated in whole or in part if a particular business segment is discontinued are called:
Answer:
Avoidable costs
Explanation:
An avoidable cost is defined as one that an entity will not incur if a particular activity is not undertaken.
In business operations avoidable costs are usually variable costs. These are costs that vary or change in the cost of production. For example wages, cost of raw materials, and labour. These can be avoided depending on business needs.
Costs that are not avoidable are fixed cost. For example rent, insurance, and utilities.
These costs are paid wether production occurs or not.
Ideally, in effective marketing planning, goals should be _____ in terms of what is to be accomplished and when.
Answer:
The answer is quantified and measurable.
Explanation:
Goals need to be quantified and measurable in effective marketing planning. To determine what needs to be accomplished and when, we must put figures to it. This makes performance measurement easier where variances at the end can be analysed.
For example, one of the marketing goals for bank A might be to onboard 100 new customers every month for a year after the launching of its new mobile app.
This example is quantified and can be measured every month.
Charger Company's most recent balance sheet reports total assets of $28,413,000, total liabilities of $16,113,000 and total equity of $12,300,000. The debt to equity ratio for the period is (rounded to two decimals):
Answer:
Debt to equity ratio is 1.31
Explanation:
Given the above inflation, the formula for debt to equity ratio is
= Total debt / Total equity
= $16,113,000 / $12,300,000
= 1.31
Therefore, debt to equity ratio is 1.31
The firm receives an average of $20,000 in checks per day. The weighted average delay in clearing the checks received is 3 days. Meanwhile, the firm writes an average of $17,000 in checks to pay its suppliers per day. The usual clearing time for the checks the firm wrote is 2 days. The current interest rate is 0.015 percent per day. What is the most the firm should be willing to pay today (in a lump sum today) to eliminate its float entirely? A) 3000 B) 26000 C) 34000 D) 37000 E) 60000
Answer:
$26000
Explanation:
from the question;
check per day; 20000
delay: 3 days
checks to pay suppliers; 17000
clearing time 2 days
we first calculate collection flaot:
collection flaot = average amount of check x outstanding days
= 20000 x 3
= 60000
now we have to calculate disbursements float:
average amount of check x days to clear
= 17000 x 2
= 34000
with these two values we can get the net float
= collection flaot - disbursements float
= 60000 - 34000
= $26000
The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company.
1.NELSON COMPANY Debit Credit
2. Cash $1,000
3. Merchandise Inventory 12,500
4. Store supplies. 5,800
5. Prepaid Insurance. 2,400
6. Store equipment. 42,900
7. Accumulated depreciation - Store equipment $15,250
8. Accounts payable 10,000
9.J. Nelson, Capital 32,000
10.J. Nelson, Withdrawal 2,200
11. Sales. 111,950
12. Sales discounts 2,000
13. Sales returns and allowances 2,200
14. Cost of goods sold 38,400
15. Depreciation expense- Store equipmen 0
16. Salaries expense 35,000
17. Insurance expense 0
18. Rent expense 15,000
19. Store supplies expense 0
20. Advertising expense 9,800
21. Totals $169,200 169,200
Nelson company uses a perpetual inventory system. It categorizes the following accounts as selling expenses:
Required:
1. Prepare adjusting journal entries to reflect each of the following:
a. Store supplies still available at fiscal year-end amount to $1,750.
b. Expired insurance, an administrative expense, for the fiscal year is $1,400.
c. Depreciation expense on store equipment, a selling expense is $1,525 for the fiscal year.
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.
2. Prepare a multiple-step income statement for fiscal year 2015.
3. Comple the statement of retained earnings and the balance sheet.
4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2015. (Round ratios to two decimals.)
Answer:
1)
a. Store supplies still available at fiscal year-end amount to $1,750.
Dr Supplies expense 4,050
Cr Supplies 4,050
b. Expired insurance, an administrative expense, for the fiscal year is $1,400.
Dr Insurance expense 1,400
Cr Prepaid insurance 1,400
c. Depreciation expense on store equipment, a selling expense is $1,525 for the fiscal year.
Dr Depreciation expense on store equipment 1,525
Cr Accumulated depreciation: store equipment 1,525
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.
Dr Cost of goods sold 1,600
Cr merchandise inventory 1,600
2) Income statement
Sales $111,950
Sales discounts $2,000 Sales returns and allowances $2,200Net sales $107,750
- Cost of goods sold $40,000
Gross profit $67,750
Operating expenses:Depreciation expense $1,525Salaries expense $35,000 Insurance expense $1,400 Rent expense $15,000 Store supplies expense $4,050 Advertising expense $9,800 $66,775Operating income $975
3) Statement of owner's equity (the company doesn't have retained earnings)
J. Nelson, Capital, at January 1, 202x $32,000
Net income 202x $975
Subtotal $32,975
- Withdrawals $2,200
J. Nelson, Capital, at December 31, 202x $30,775
Balance sheet
Assets:
Cash $1,000
Merchandise Inventory $10,900
Store supplies $1,750
Prepaid Insurance $1,000
Store equipment, net $26,125
Total assets $40,775
Liabilities + owner's equity:
Accounts payable $10,000
J. Nelson, Capital $30,775
Total liabilities + owner's equity $40,775
4) current ratio = $14,650 / $10,000 = 1.465
acid test ratio = $3,750 / $10,000 = 0.375
gross margin ratio = $67,750 / $107,750 = 0.629
Cameroon Corp. manufactures and sells electric staplers for $15.30 each. If 10,000 units were sold in December, and management forecasts 3.3% growth in sales each month, the number of electric stapler sales budgeted for March should be:
Answer:
Electric stapler sales budgeted for March should be: 11,023 units.
Explanation:
Apply the growth of 3.30% to each month starting December as follows :
December Sales = 10,000 units
January Sales = 10,000 × (1.033)^1 = 10,330 units
February Sales = 10,000 × (1.033)^2 = 10,671 units
March Sales = 10,000 × (1.033)^3 = 11,023 units
In which of the following scenarios would enforcement of specific performance be appropriate? Multiple Choice Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day. You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons. You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute. You order a current-model, name-brand television from a department store, and a few days later the store breaches by not ordering it from the manufacturer.
Answer:
Correct Answer:
2. You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons.
3. You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute.
1. Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day.
Explanation:
In enforcement of specific performance is applied in situations where there there is an established contract that has was not honored. This bridge of contract would then trigger performance enforcement.
JG Asset Services is recommending that you invest $1,275 in a 5-year certificate of deposit (CD) that pays 3.5% interest, compounded annually. How much will you have when the CD matures
Answer:
The amount that will be received when CD matures is $1514.30
Explanation:
To calculate the amount that will be received at the maturity of the CD, we simply need to calculate the future value of the invested amount using annual compounding. The formula for the future value that we will use is,
Future value = Present value * (1+r)^t
Where,
r is the rate of interestt is the time in yearsFuture value = 1275 * (1+0.035)^5
Future value = $1514.30
