Answer:
Sally should charge $1,280 per month for 18 months.
Explanation:
Sally has bought the land for $8,000 and she has invested in constructing the building $12,040. She has further invested $2,000 for future roof and common area expenses amount to $1,000. The total capital she has invested is $23,040. She should charge $1,280 per month for next 18 months in order to cover the bundled capital investment.
Bob has saved $30 per week to buy a new Blu-ray player. He compares two different models: a Panaview that is priced at $130 and a Zony model that is priced at $140. Bob decides to purchase the Zony Blu-ray player for $140. Identify what role money plays in each of the following parts of the story.
a. Sean can easily determine that the Panaview model has a lower price than the Zony model.
b. Sean saved $30 per week.
c. Sean pays $140 for the Blu-ray player.
Answer and Explanation:
The categorization is as follows:
a. It is a unit of account as it determined the panaview model along with the zony model plus the comparison is also there
b. It is the store of value because the saving should be the similar value over the time
c. It is the medium of exchange as he has purchased the player where the money is exchanged with the product
In this way it should be categorized
Have you ever financed anything on a short term or long term arrangement?
Answer:
Financing is a very important part of every business. Firms often need financing to pay for their assets, equipment, and other important items. Financing can be either long-term or short-term. As is obvious, long-term financing is more expensive as compared to short-term financing.
There are different vehicles through which long-term and short-term financing is made available. This chapter deals with the major vehicles of both types of financing.
Explanation:
Long-Term Financing
Long-term financing is usually needed for acquiring new equipment, R&D, cash flow enhancement, and company expansion. Some of the major methods for long-term financing are discussed below.
Equity Financing
Equity financing includes preferred stocks and common stocks. This method is less risky in respect to cash flow commitments. However, equity financing often results in dissolution of share ownership and it also decreases earnings.
The cost associated with equity is generally higher than the cost associated with debt, which is again a deductible expense. Therefore, equity financing can also result in an enhanced hurdle rate that may cancel any reduction in the cash flow risk.
Corporate Bond
A corporate bond is a special kind of bond issued by any corporation to collect money effectively in an aim to expand its business. This tern is usually used for long-term debt instruments that generally have a maturity date after one year after their issue date at the minimum.
Short-Term Financing
Short-term financing with a time duration of up to one year is used to help corporations increase inventory orders, payrolls, and daily supplies. Short-term financing can be done using the following financial instruments −
Commercial Paper
Commercial Paper is an unsecured promissory note with a pre-noted maturity time of 1 to 364 days in the global money market. Originally, it is issued by large corporations to raise money to meet the short-term debt obligations.
It is backed by the bank that issues it or by the corporation that promises to pay the face value on maturity. Firms with excellent credit ratings can sell their commercial papers at a good price.
Asset-backed commercial paper (ABCP) is collateralized by other financial assets. ABCP is a very short-term instrument with 1 and 180 days’ maturity from issuance. ACBCP is typically issued by a bank or other financial institution.
Promissory Note
It is a negotiable instrument where the maker or issuer makes an issue-less promise in writing to pay back a pre-decided sum of money to the payee at a fixed maturity date or on demand of the payee, under specific terms.
In the process of conversion from the equity method to the fair value method, the earnings or losses that the investor previously recognized under the equity method should
Answer: remain as a part of the carrying amount of the investment
Explanation:
Equity method is simply the process whereby investments are treated in associate companies. It usually occurs when the investor entity holds about twenty to fifty percent of the voting stock of the other company.
It should be noted that in a process of conversion from the equity method to the fair value method, the earnings or losses that the investor previously recognized under the equity method should remain as a part of the carrying amount of the investment.
Budgeted Actual Overhead cost $909,000 $884,000 Machine hours 55,000 46,000 Direct labor hours 101,000 98,000 Overhead is applied on the basis of direct labor hours. (a) Compute the predetermined overhead rate. (Round answer to 2 decimal places, e.g. 12.25.)
Answer:
Missing word "(b) Determine the amount of overhead applied for the year?"
1. Predetermined overhead rate = Budgeted overhead / Budgeted direct labor hours
Predetermined overhead rate = $909,000 / 101,000
Predetermined overhead rate = $9 per DLH
2. Overhead applied = Actual hours * Overhead rate
Overhead applied = 98,000 * $9 per DLH
Overhead applied = $882,000
Burlington Construction Company is considering selling excess machinery with a book value of $281,000 (original cost of $400,100 less accumulated depreciation of $119,100) for $277,400, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $284,300 for five years, after which it is expected to have no residual value. During the period of the lease, Burlington Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,000.
Required:
Prepare a differential analysis, dated January 3, 2012, to determine whether Sure-Bilt should lease (Alternative 1) or sell (Alternative 2) the machinery.
Answer:
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Answer:
3. The special concept reminded by the phrase "Exchanging Butter Cake for Dates" is:
Trade by barter.
4. The need fulfilled by this business is people's demand for Cake.
The want fulfilled by this business is the organization's supply of dates for its production of cake.
Explanation:
A trade by barter involves the exchange of one good or service by one trading party for another good or service from the coincidental trading party without the use of money or monetary mediums. Trade by barter enables people without money to fulfill their needs. The major problem with trade by barter is that there must be coincidence of wants by the two trading partners. This is not always feasible.
An overhead variance report includes which of the followings: _________
a. Variable and fixed flexible budget costs
b. Variable and fixed actual results
c. Variable and fixed sales results
d. Variable and fixed variances
Answer: a. Variable and fixed flexible budget costs
Explanation:
An overhead variance report shows the difference between the overhead that was actually incurred to either produce or sell vs the overhead that was budgeted.
Overhead can either be fixed or variable so an overhead report will include both fixed and variable budgeted costs which will then be compared to fixed and variable actual overhead costs.
Entries for Installment Note Transactions On the first day of the fiscal year, Shiller Company borrowed $63,000 by giving a five-year, 12% installment note to Soros Bank. The note requires annual payments of $17,773, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $7,560 and principal repayment of $10,213. Journalize the entries to record the following:
a. Issued the installment note for cash on the first day of the fiscal year.
b. Paid the first annual payment on the note. For a compound transaction, if an amount box does not require an entry, leave it blank.
c. Explain how the notes payable would be reported on the balance sheet at the end of the first year.
Answer:
Shiller Company
Journal Entries:
a) Jan. 1 Debit Cash $63,000
Credit 12% Note Payable (Soros Bank) $63,000
To record the issuance of the five-year, 12% installment note.
December 31: Debit Note Payable (Soros Bank) $10,213
Debit Interest Expense $7,560
Credit Cash $17,773
To record the first repayment, including interest.
c. The notes payable would be reported as Long-term Liability at $52,787.
Explanation:
a) Data and Analysis:
Jan. 1 Cash $63,000 12% Note Payable (Soros Bank) $63,000
Issuance of a five-year, 12% installment note.
December 31: Note Payable (Soros Bank) $10,213 Interest Expense $7,560 Cash $17,773
Balance of Notes Payable on December 31:
Amount of note = $63,000
Repayment = (10,213)
Balance of note = $52,787
A company produces a single product. Variable production costs are $12.50 per unit and variable selling and administrative expenses are $3.50 per unit. Fixed manufacturing overhead totals $41,000 and fixed selling and administration expenses total $45,000. Assuming a beginning inventory of zero, production of 4,500 units and sales of 3,850 units, the dollar value of the ending inventory under variable costing would be: Multiple Choice $10,400 $5,850 $8,125 $13,975
Answer:
the third option is correct - $8,125
Explanation:
The calculation of the ending inventory under variable costing is given below:
Ending inventory value (Variable costing) os
= Variable production cost per unit × No. of units
= $12.50 × (4,500 - 3,850)
= $8,125,
Hence, the ending inventory under variable costing is $8,125
Therefore the third option is correct
The Chiemsee Knee Replacement Clinic (CKRC) is a sports clinic located at the northern edge of the German Alps. It specializes in knee replacements for skiers who come to CKRC from Germany, Austria, Switzerland, and Italy. The clinic currently has one operating room (OR). However, since the clinic has dramatically more demand than capacity, the management team contemplates investing in a second OR. A lean consulting firm, however, suggests that before going ahead with installing new capacity, the clinic should first look at how it uses its existing capacity. The data collected by the consulting firm reveal that:
The OR is available for 12 hours a day; the hospital has decided to not perform any procedures between 7pm and 7am. This time is equally divided across three surgeons.
The standard procedure time for the knee surgery done at the clinic is 1h.
The cleaning and housekeeping that needs to happen after each procedure takes 20 minutes. Almost all of this time could be saved if the cleaning crew were notified earlier on.
10 minutes are spent on patient preparation / anesthesia work before each procedure. (Note: this is not part of the 60-minute procedure time). Proposals have been evaluated to move these 10 minutes to outside the OR, and there exists no medical reason that would prohibit doing this.)
A surgeon only starts a case if all of the work associated with the case (preparation, procedure, and cleaning) can be completed in the 4h allotted to each surgeon. Surgeons never start BEFORE their allotted time.
Though the clinic aims to operate 7 days a week, holidays, vacation, and construction time lead to an average of one day a week that the OR cannot be used at all.
What is the OEE of the operating room? Assume a 12h window in which the OR could be used.
The OEE of the Operating Room is 34.8%.
Operating Room Overall Equipment EffectivenessTo calculate the OEE (Overall Equipment Effectiveness) of the OR, you need to consider three factors: availability, performance, and quality.
Availability: The OR is available for 12 hours a day, but there is a 1 hour window between 7pm and 7am when it is not used. Additionally, there is an average of one day a week when the OR cannot be used at all. Therefore, the availability is:(12 hours - 1 hour) / 12 hours * 7 days/week - 1 day/week = 0.92 or 92%
Performance: The standard procedure time for the knee surgery is 1 hour, and 10 minutes are spent on patient preparation and anesthesia work. The cleaning and housekeeping takes 20 minutes, and a surgeon only starts a case if all of the work can be completed in the 4 hours allotted to each surgeon. Therefore, the performance is:1 hour + 10 minutes + 20 minutes = 1 hour and 30 minutes / 4 hours = 0.375 or 37.5%
Quality: Quality is not mentioned in the data provided, so it is assumed to be 100%.To calculate OEE, you need to multiply availability, performance, and quality:
OEE = availability * performance * quality = 0.92 * 0.375 * 1 = 0.348 or 34.8%
So, the OEE of the OR is 34.8%.
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Sandoval needs to determine its year-end inventory. The warehouse contains 33,000 units, of which 4,300 were damaged by flood and are not sellable. Another 3,300 units were purchased from Markor Company, FOB shipping point, and are currently in transit. The company also consigns goods and has 5,300 units at a consignee's location. How many units should Sandoval include in its year-end inventory
Answer:
37,300
Explanation:
Calculation to determine How many units should Sandoval include in its year-end inventory
Using this formula
Year-end inventory units=(Warehouse units- Damaged units)+ Units purchased+ Units at consignee's location
Let plug in the formula
Year-end inventory units=(33,000 - 4,300) +3,300+5,300
Year-end inventory units=28,700+3,300+5,300
Year-end inventory units=37,300
Therefore How many units should Sandoval include in its year-end inventory is 37,300
Journal Entry
On November 1, the company rented space to another tenant. A check in the amount of $9,000, representing three months' rent in advance, was received from the tenant on that date. The payment was recorded with a credit to the Unearned Rent account. Complete the necessary adjusting entry for December 31 by selecting the account names and dollar amounts from the drop-down menus.
Date Account Title Debit Credit
Dec. 31 selectAccounts ReceivableAccumulated DepreciationCashDepreciation ExpenseEquipmentEquipment ExpenseRent RevenueSalaries ExpenseSalaries PayableService RevenueSuppliesSupplies ExpensesUnearned Rent Revenue select300060009000 select300060009000
selectAccounts ReceivableAccumulated DepreciationCashDepreciation ExpenseEquipmentEquipment ExpenseRent RevenueSalaries ExpenseSalaries PayableService RevenueSuppliesSupplies ExpensesUnearned Rent Revenue select300060009000 select300060009000
Answer:
Explanation:
unearned rent 6000 (debit)
Rent revenue. 6000 (credit)
to record 2 months of realized rent revenue
Brown Co. issued $100 million of its 10% bonds on April 1, 2016, at 99 plus accrued interest. The bonds are dated January 1, 2016, and mature on December 31, 2035. Interest is payable semiannually on June 30 and December 31. What amount did Brown receive from the bond issuance?
a) $87.8 million
b) $99.0 million
c) $100.0 million
d) $101.5 million
Answer:
d) $101.5 million
Explanation:
The computation of the amount received from the bond issuance is given below:
Interest Rate: 10%
Time period: 3 months (from 01.01.2016 to 31.03.2016)
Par Value=$100 million
Accrued Interest be 2.53 million
So,
Amount receive from Bond Issuance is
= 99 + 2.53
= $101.5 million
Summarise the five (5) types of directors in incorporated companies.
DonCo. Inc. sold merchandise on January 14, and accepted a 90 day, 5% promissory note in the amount of $5,000. On January 14, the entry to record this transaction would include a debit to:
a. Cash in the amount of $5,000
b. Notes Receivable in the amount of $5,000
c. Accounts Receivable in the amount of $5,000
d. Sales in the amount of $5,000
QS 8-4 Units-of-production depreciation LO P1 On January 1, the Matthews Band pays $65,800 for sound equipment. The band estimates it will use this equipment for four years and perform 200 concerts. It estimates that after four years it can sell the equipment for $2,000. During the first year, the band performs 45 concerts. Compute the first-year depreciation using the units-of-production method.
Answer:
$14,355
Explanation:
Activity method based on output = (output produced that year / total output of the machine) x (Cost of asset - Salvage value)
(45/200) x ($65,800 - $2000) =
0.225 x 63800
$14355
Describe how you will operate your business
The accounting records of Jamaican Importers, Inc., at January 1, 2021, included the following: Assets: Investment in IBM common shares $ 1,345,000 Less: Fair value adjustment (145,000) $ 1,200,000 No changes occurred during 2021 in the investment portfolio.
Prepare appropriate adjusting entry(s) at December 31, 2021, assuming the fair value of the IBM common shares was:_____.
1, $ 1,175,000
2, $ 1,275,000
3, $ 1,375,00
Answer: See explanation
Explanation:
The appropriate adjusting entry(s) at December 31, 2021, given the fair value of the IBM common shares are represented below:
1. 31, December 2021
Dr Unrealized holding gain or loss - NI $25,000
Cr To Fair value adjustment $25,000
(To record adjustment to fair value)
2. 31, December 2021
Dr Fair value adjustment $75,000
Cr To Unrealized holding gain or loss - NI $75,000
(To record adjustment to fair value)
3. 31, December 2021
Dr Fair value adjustment $175,000
Cr To Unrealized holding gain or loss - NI $175,000
(To record adjustment to fair value)
True or false: Interest expense and income tax expense are considered general and administrative expenses and, therefore, are included on the general and administrative expense budget. True false question. True False
Answer: True
Explanation:
Interest expense and income tax expenses generally are stand-alone expenses but they fall under general and administrative expenses required to run the business.
Interest expense is charged on debt that was taken to run the company so will be an admin expense and tax is part of the expenses that a company has to take care of in order to run the company so it is an admin expense as well.
ctivity-Based Costing (ABC) is useful in: Select one: A. Breakdown COGS into DL, DM, and FOH B. Breaking down FOH more accurately into cost drivers C. Breaking down FOH into one overhead rate D. Breaking down DL and DM by product
Answer:
B. Breaking down FOH more accurately into cost drivers
Explanation:
In the case of activity based costing, the activity of the fixed cost should be breakdown based on the number of activity pools while the fixed cost should be breakdown as per the cost drivers. Also, there is more than one overhead rate existed. In addition to this, it is the method for distribution of the overhead with those firms who is able to used it
Therefore the option b is correct
Welcome Inn Hotels is considering the construction of a new hotel for $90 million. The expected life of the hotel is 30 years, with no residual value. The hotel is expected to earn revenues of $26 million per year. Total expenses, including depreciation, are expected to be $15 million per year. Welcome Inn management has set a minimum acceptable rate of return of 14%.
a. Determine the equal annual net cash flows from operating the hotel.
b. Calculate the net present value of the new hotel. Use 7.003 for the present value of an annuity of $1 at 14% for 30 periods.
c. Does your analysis support construction of the new hotel?
Answer:
a. Annual Net cash flows:
= Revenue - Expenses + Depreciation
= 26,000,000 - 15,000,000 + (90,000,000 / 30 years)
= 11,000,000 + 3,000,000
= $14,000,000
b. Net present value:
= Present value of cashflows - Investment cost
= (Annual cashflow * present value of an annuity, 14%, 30 periods) - Investment cost
= (14,000,000 * 7.003) - 90,000,000
= $8,042,000
c. Company should construct the hotel as it would bring a positive Net Present Value
Note: In "b" the cashflow was treated as an annuity because it is constant.
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $220,000 and sell its old low-pressure glueball, which is fully depreciated, for $40,000. The new equipment has a 10-year useful life and will save $48,000 a year in expenses. The opportunity cost of capital is 10%, and the firm’s tax rate is 21%. What is the equivalent annual saving from the purchase if Gluon can depreciate 100% of the investment immediately. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
EQUIVALENT ANNUAL SAVING:
"the equivalent annual saving from the purchase if Gluon can depreciate 100% of the investment immediately is $13,245.99".
Since they are purchasing the new machine by first disposing off the old machine.
Hence,
First step is to Determine the Net initial investment
Net initial investment = $220,000 - $40,000
Net initial investment= $180,000
Second step is to determine the Total savings
Depreciation = $220,000/10
Depreciation = $22,000
Savings before tax = $48,000 - $22,000
Savings before tax= $26,000
Tax at 21% = (21%*$26,000)
Tax at 21% =$5,460
Savings after tax $20,540
($26,000-$5,460)
Add back depreciation $22,000
Cash flow after tax $42,540
($20,540+$22,000)
Third step is to determine PV of CFAT and NPV
PV of CFAT = $42,540 x (10%, PVFA10Y)
PV of CFAT = $42,540 x 6.1446
PV of CFAT = $261,391
NPV = $261,391 - $180,000 = $81,391
Now let determine the EQUIVALENT ANNUAL SAVING(EAS)
Equivalent annual saving(EAS) = NPV/(10%, PVFA10Y)
Equivalent annual saving(EAS)= $81,391/6.1446
Equivalent annual saving(EAS)= $13,245.99
Therefore the EQUIVALENT ANNUAL SAVING from the purchase if Gluon can depreciate 100% of the investment immediately is $13,245.99
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Dextra Computing sells merchandise for $16,000 cash on September 30 (cost of merchandise is $11,200). Dextra collects 9% sales tax. Record the entry for the $16,000 sale and its sales tax. Also record the entry that shows Dextra sending the sales tax on this sale to the government on October 15.
Answer:
See journal entries under the explanation below:
Explanation:
The journal entries will look as follows:
Dextra Computing
Journal Entries
Date Particulars Debit ($) Credit ($)
Sep 30 Cash 17.440
Sales 16,000
Sales Taxes Payable ($16,000 * 9%) 1,440
(To record the cash sale and 9% sales tax)
Cost of Goods Sold 11,200
Merchandise Inventory 11,200
(To record the cost of sales.)
Oct 15 Sales Taxes Payable ($16,000 * 9%) 1,440
Cash 1,440
(To record sending sales tax to the government.)
On January 1, Baker Co. purchased equipment for $100,000. It has an estimated useful life of five years and its residual value is $10,000. The company has a calendar year-end. Using the straight-line method, depreciation expense for the first year of its life equals:
Answer:
Explanation:
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You made an investment of $15,000 into an account that paid you an annual interest rate of 3.8 percent for the first 8 years and 8.2 percent for the next 10 years. What was your annual rate of return over the entire 18 years
Answer: 6.22%
Explanation:
To find the annual rate of return, find the geometric mean of the returns:
= ¹⁸√ (1 + 3.8%)⁸ * (1 + 8.2%)¹⁰ - 1
= ¹⁸√ 2.9638173484126186153 - 1
= 1.0622187633434 - 1
= 6.22%
On July 1, Sterns Co. acquired patent rights for $36,000. The patent has a useful life of 6 years and a legal life of 15 years.
Required:
Journalize the adjusting entry on December 31 to recognize the amortization. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
Dr Amortization Expense $3,000
Cr Patents $3,000
Explanation:
Preparation of the journal adjusting entry on December 31 to recognize the amortization.
Dec. 31
Dr Amortization Expense $3,000
Cr Patents $3,000
(To record Amortization)
Amortization=(Patent rights/Useful life)*6/12
Amortization=($36,000/6)*6/12
Amortization=$3,000
(July 1 to Dec 31 =6months)
Janice has been invited to appear on a home improvement show for the remodel of her summerhouse in Maine. Janice asks Mary to wallpaper her house in anticipation of the home improvement, and requests expensive custom wallpaper and a very intricate design application, for which the wallpaper would cost $5000, plus labor. Mary, excited for a very large job for her solo business, orders the intricate wallpaper and blocks off her calendar for the amount of time it will take to complete the job. After the paper has been ordered, Mary asks some friends to be available to complete the job in time for the show. Janice is informed that she will not be on the show and notifies Mary that she will not need the wallpaper.
a. Does Mary have a case for re-imbursement?
b. Under what legal theory might she prevail and what are her damages, if any?
c. What ethical theories might be applicable?
Answer:
sorry I don't know.
Explanation:
Yes, Mary has a legal cause of reimbursement Under the legal theory of ethical violation.
What is ethical violation?A documented company's code of ethics, mission, vision, values, and culture are violated when something is spoken, published, or done that does so. Additionally, we are aware that moral transgressions laugh in the face of accepted social norms.
Most business professionals' ethical conduct is governed by codes of conduct. Business infractions including discrimination, safety issues, or poor working conditions are most frequently observed.
Additionally, fraud, theft, and conflicts of interest. Many of these cross the line into illegal territory that is dealt with outside the corporation and are not merely morally bad.
Customers may be charged for services they did not receive when there is improper or fraudulent billing. This occurs most frequently in professions where the person who pays the bill is different from the person who received the services.
Due to the frequency of this particular ethical breach, many insurance companies have started providing consumers with a list of services that may fall under this category, enticing them to report any irregularities.
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The rate of earnings is 6% and the cash to be received in 4 years is $20,000. The present value amount, using the following partial table of present
value of $1 at compound interest is
Year
6%
10%
12%
1
0.943
0.909
0.893
2
0.890
0.826
0.797
3
0.840
0.751
0.712
4
0.792
0.683
0.636
a. $12.720
Ob. $16,800
Oc. 513,660
Od. $15.840
Answer:
$15,840
Explanation:
Present value = Future value / (1 + r)^n
Rate, r = 6% = 0.06
Future value = $20,000
Number of years, n = 4
Present value = $20000 / (1 + 0.06)^4
Present value = $20000 / 1.06^4
Present value = $20,000 / 1.26247696
Present value = $15841.873
Using the partial table of present values :
Present value = Future value * PV(6%, 4)
PV at 6%, 4 years = 0.792
Present value = $20,000 * 0.792 = $15,840
Slavery, as a business practice protected by state laws, provided unfair advantage against those employers not using slaves, and thus the economic incentives supported and sustained slavery within its sealed environment.
A. True
B. False
Department M had 2,000 units 56% completed in process at the beginning of June, 13,500 units completed during June, and 1,000 units 28% completed at the end of June. What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories? a.14,780 units b.13,780 units c.12,660 units d.11,500 units
Answer:
c.12,660 units
Explanation:
Calculation to determine What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories
Using this formula
EUP (FIFO) = Completed Units + Ending units - Beginning units
Let plug in the formula
EUP (FIFO)=13,500 +( 1,000 x 28%)- (2,000 x 56%)
EUP (FIFO)= 13,500+280-$1120
EUP (FIFO)=12,660 units
Therefore the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories is 12,660 units
