Answer:
$15,000Explanation:
Capitalized cost = Initial cost + Interest.
Initial cost = Principal - $10,000
Interest = Principal * Rate * Time/100
Given Principal = $10,000
Rate (in %) = 10%
Time (in years) = 5 years
Interest = 10,000*10*5/100
Interest = $5000
Capitalized cost = Initial cost + Interest.
Capitalized cost = $10,000+$5,000
Capitalized cost = $15,000
Hence the capitalized cost of $10,000 every 5 years forever, starting now at an interest rate of 10% per year, is closest to $15,000
The business case for why companies should act in a socially responsible manner includes: Select one: a. It generates internal benefits including employee recruiting, workforce retention, training, and improved worker productivity b. It reduces the risk of reputation-damaging incidents c. It is in the best interest of shareholders and offers potential for increased buyer patronage d. All of the above
Answer:
d. All of the above
Explanation:
All alternatives are correct due to the fact that when a company acts in a socially responsible manner, it achieves several internal and strategic benefits that help in the success of the business.
Currently, organizations are no longer just profitable entities but are also promoters of positive social transformations for the locality in which they operate and for the world.
Being socially responsible includes having benefit programs for stakeholders, which includes improving the perception with which the company is seen, generating a position that attracts shareholders, retains employees, generates greater job satisfaction, which increases productivity and retention of staff.
Generally, corporate governance programs include the review and culture of continuous improvement of organizational processes, which reduces costs, risks and waste, which contributes to the generation of competitive and profitable advantages for the organization.
Baldwin has negotiated a new labor contract for the next round that will affect the cost for their product Buzz. Labor costs will go from $2.10 to $2.60 per unit. In addition, their material costs have fallen from $6.82 to $5.82. Assume all period costs as reported on Baldwin's Income Statement remain the same. If Baldwin were to pass on half the new costs of labor and half the savings in materials to customers by adjusting the price of their product, how many units of product Buzz would need to be sold next round to break even on the product
Answer:
433 units
Explanation:
Information related to production costs are missing, so I looked for it. I found the following:
current sales price = $17
current fixed costs = $7,242
new labor costs per unit = $2.60, which results in a $0.50 increase
new direct materials cost per unit = $5.82, which results in a $1 decrease
total variable costs per unit = $8.42
Baldwin plans to pass 50% of the changes in costs to its customers:
Increase $0.25 due to higher labor costsdecrease $0.50 due to lower materials costsnet change = -$0.25new sales price = $17 - $0.25 = $16.75
contribution margin per unit = $16.75 - $8.42 = $8.33
break even point in units = total fixed costs / contribution margin per unit = $7,242 / $16.75 = 432.36 = 433 units
Disturbed Corp. needs to raise $57 million to fund a new project. The company will sell shares at a price of $23.70 in a general cash offer and the company's underwriters will charge a spread of 7.5 percent. The direct flotation costs associated with the issue are $725,000 and the indirect costs are $445,000. How many shares need to be sold?
Answer: 2653438 shares
Explanation:
From the information given in the question, the following can be deduced:
The share price will be:
= $23.70 × (1 - 7.5%)
= $23.70 × (1 - 0.075)
= $23.70 × 0.925
= $21.9225
The money that will be raised will be:
= 57,000,000 + 725,000 + 445,000
= $58,170,000
The number of shares that are needed to be sold will be:
= $58,170,000/$21.9225
= 2653438 shares
Q3) Creative Sports Design (CSD) manufactures a standard-size racket and an oversize racket. The firm’s rackets are extremely light due to the use of a magnesium-graphite alloy that was invented by the firm’s founder. Each standard-size racket uses 0.125 kilograms of the alloy and each oversize racket uses 0.4 kilograms; over the next two-week production period only 80 kilograms of the alloy are available. Each standard-size racket uses 10 minutes of manufacturing time and each oversize racket uses 12 minutes. The profit contributions are $10 for each standard-size racket and $15 for each oversize racket, and 40 hours of manufacturing time are available each week. Management specified that at least 20% of the total production must be the standard-size racket. How many rackets of each type should CSD manufacture over the next two weeks to maximize the total profit contribution? Assume that because of the unique nature of their products, CSD can sell as many rackets as they can produce.
Answer:
165 oversize rackets = 32 machine hours (79.71% of total production)
42 standard size rackets = 7 machine hours (20.29% of total production)
total profit contribution = (165 x $15) + (42 x $10) = $2,895
Explanation:
materials machine hours profit
standard size 0.125 kg 1/6 $10
oversize 0.4 kg 1/5 $15
constraints 80 kilograms of materials
40 hours of manufacturing
profit per machine hour:
standard size $10 x 6 = $60 x 40 hours = $2,400 (total possible production = 240 rackets)
oversize $15 x 5 = $75 x 40 hours = $3,000 (total possible production = 200 rackets)
profit per kilogram of alloy:
standard size $10 / 0.125 = $80 x 80 kgs = $6,400 (total possible production = 480 rackets)
oversize $15 / .4 = $37.50 x 80 hours = $3,000 (total possible production = 200 rackets)
since the most important constraint is the manufacturing hours available, the company should try to produce the products that yield the highest contribution margin per machine hour. In this case, at least 20% of total production must be standard size rackets, so the remaining 80% should be oversize rackets that yield a higher profit.
165 oversize rackets = 32 machine hours (79.71% of total production)
42 standard size rackets = 7 machine hours (20.29% of total production)
total manufacturing time = 40 hours
if we produce 166 oversize rackets and 41 standard size rackets, total manufacturing time will exceed 40 hours (40.03 hours exactly).
Upon starting her new position, Brenda is given a _______ that details the tasks, duties, and responsibilities considered a part of her position.
Answer:
The answer is job description (JD).
Explanation:
The job description is the summary of tasks, duties, and responsibilities for a particular position. The job description also includes the requirements for the position holder. In some cases, it may details the reporting line, compensation and benefits regarding to the job.
Suppose annual inflation rates in the U.S. and Mexico are expected to be 6% and 80%, respectively, over the next several years. If the current spot rate for the Mexican peso is $.005, then the best estimate of the peso's spot value in 3 years is Group of answer choices $.00276 $.01190 $.00321 $.00102
Answer:
$.00102
Explanation:
The forward peso's spot value in 3 years can be computed using the below formula:
forward exchange rate=current spot rate*(1+US inflation)^3/(1+Mexican inflation)^3
current spot rate=$.005,
US inflation rate is 6%
Mexican inflation rate is 80%
forward exchange rate=$.005,*(1+6%)^3/(1+80%)^3
forward exchange rate(in 3 years)=$0.00102
Coronado Industries is planning to sell 900 boxes of ceramic tile, with production estimated at 470 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.25 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $22 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Coronado has 4700 pounds of clay mix in beginning inventory and wants to have 3900 pounds in ending inventory. What is the total amount to be budgeted in pounds for direct materials to be purchased for the month
Answer:
Total pounds= 19,880
Explanation:
Giving the following information:
Production= 470 boxes
Each box of tile requires 44 pounds of clay mix
Beginning inventory= 4,700 pounds
Desired ending inventory= 3,900 pounds
To calculate the direct material purchase, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Direct material budget (in pounds):
Production= 470*44= 20,680
Desired ending inventory= 3,900
Beginning inventory= (4,700)
Total pounds= 19,880
Suppose you invest equal amounts in a portfolio with an expected return of 16% and a standard deviation of returns of 18% and a risk-free asset with an interest rate of 4%. Calculate the expected return on the resulting portfolio. Group of answer choices
Answer: 10%
Explanation:
You invest equal amounts in a portfolio yielding 16% and a risk-free asset yielding 4%.
The expected return will be a weighted average of these two;
= (Weight of the Portfolio * Portfolio return) + (Weight of the Portfolio * risk-free rate)
= (0.5 * 16%) + (0.5 * 4%)
= 8% + 2%
= 10%
Your text outlines three basic categories of electronic commerce applications: business-to-consumer (B2C), business-to-business (B2B) and consumer-to-consumer (C2C). B2C applications:_______.
A. Involve businesses developing attractive electronic marketplaces to entice customers and sell products and services to consumers.
B. Involve both electronic business marketplaces and direct market links between businesses .
C. Involve consumers buying and selling with each other in an auction process at an auction website, as well as personal advertising of products or services to buy or sell at electronic newspaper sites or personal websites.
D. None of the choices are correct.
Answer:
A. Involve businesses developing attractive electronic marketplaces to entice customers and sell products and services to consumers.
Explanation:
The Business to Consumer (B2C) sales strategy corresponds to a type of sale aimed at the final consumer. This sale takes place at retail, and occurs according to the consumer purchase decision process, which identifies their needs, judges the options according to their preferences and desires and finally chooses the option that best suits their search for a particular product or service.
Therefore, in the B2C strategy, retail companies have as main objective to create in the consumer the desire for a purchase, so the most appropriate option for this issue is that developing attractive electronic markets will help the company to attract customers and sell products and services to consumers.
Analyze the following scenarios to determine who can appropriately access health information.
1. Mrs. John Smith is requesting the emergency room records from last week of her daughter, Katy. Mrs. Smith is the noncustodial parent of Katy, who lives with her dad. Should you release the records to her? Why or why not?
2. Mr. Fred Mitchell is requesting the birth record for Amy, his birth daughter. Mr. and Mrs. Mitchell gave Amy up for adoption four years ago. Should you release the records to him? Why or why not?
3. Mrs. Lynn Olsen is requesting the lab results of her husband, Tim. She has a note. signed by him, giving his permission for her to have the records. Should you release the records to her? Why or Why not?
4. An investigator from the Health and Human Services department is conducting an audit of patient records and has provided a list of records that they want to review. Should you release the information to the investigator? Why or why not?
5. Dr. Rex Harrisson is requesting the medical records of Martha Flynn. He states he is a family friend and has been asked by Mrs. Flynn's son to review her last inpatient admission for appropriateness of care. Should you release the records to Dr. Harrison? Why or why not?
Answer:
4. because they are government officials
4. You should release the information to the investigator from the Health and Human Services department because they are government officials.
What is Human Services department ?A Department of Human Services (DHS) or Ministry of Human Services (MHS) is a national or subnational umbrella agency in charge of delivering public assistance programmes to the people they serve. Social security, social affairs, human resources, and welfare are some of the various aspects or alternate names.
Human Service with Multiple Purposes Organizations encourage volunteerism and offer a variety of direct services in the communities they serve, across the country, and around the world. Among these organisations are YMCAs, YWCAs, and the Red Cross, among others.
Answer to questions :
1. Mrs. Smith cannot get the records because non-custodials parent have no right to get any medicalrecord. She can only visit.
2. The Original Birth certificate will be Sealed and no longer available once the child is been adopted
3. No, even though her husband has signed a note, the lab results should not be released.
4. You should release the information to the investigator.
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A study of over 12,000 employees found that ________ had engaged in such workplace misbehaviors as goldbricking, sick time abuses, and/or fraud at least once.
Answer:
90%
Explanation:
According to the study of over 12,000 employees, it is found that 90% has engaged in the workplace with respect to the misbehaviors in terms of goldbricking, sick time abuses, or fraud at lease one time
here goldbricking means working less as your capability as they are more focused to do a personal task
So the correct answer is 90%
Use the following selected financial information for Wilcox Corporation to answer questions 11-20. Wilcox Corporation Income Statement For the Year Ended December 31, 20XX Net sales $2,870 Cost of goods sold 1,985 Gross profit $ 885 Operating expenses 620 Operating profit $ 265 Interest expense 40 Earnings before taxes $ 225 Income tax expense 80 Net profit $ 145 Wilcox Corporation Balance Sheet December 31, 20XX Assets Liabilities and stockholders' equity Current assets Current liabilities Cash $ 25 Accounts payable $ 85 Short-term investments 15 Accrued liabilities 45 Accounts receivable 70 Total current liabilities 130 Inventory 150 Long-term debt 240 Total current assets 260 Total liabilities 370 Long-term assets Stockholders' equity Net PPE 390 Common stock and PIC 80 Goodwill 210 Retained earnings 410 Total stockholders' equity 490 Total assets $860 Total liabilities and equity $860 WilcoxCorporation Statement of Cash Flow Information For the Year Ended December 31, 20XX Cash from operating activities $150 Investing activities: Capital expenditures $ 60 Acquisitions $ 10 Financing activities: Proceeds from long-term borrowing $ 50 Payments on long-term borrowing $ 25 Payments of cash dividends $ 20 Cash paid for interest $ 10 Cash paid for income taxes $ 75 Wilcox’s average collection period is:
Answer:
Wilcox’s average collection period is 9 days.
Explanation:
The average collection period can be described as how long it takes a company to get paid by the amount of money its clients are owing it in terms of accounts receivable (AR).
Average collection period can be calculated using the following formula:
ACP = (Accounts receivable / Net sales) * 365 days .............. (1)
Where, for this question;
ACP = Average collection period = ?
Accounts receivable = $70
Net sales = $2,870
Substituting the values into equation (1), we have:
ACP = ($70 / $2,870) * 365 days
ACP = 0.024390243902439 * 365 days
ACP = 8.90 days, or approximately 9 days
Therefore, Wilcox’s average collection period is 9 days.
The Silverside Company is considering investing in two alternative projects: Project 1 Project 2 Investment $400,000 $280,000 Useful life (years) 5 5 Estimated annual net cash inflows for useful life $90,000 $65,000 Residual value $25,000 $12,000 Depreciation method Straight−line Straight−line Required rate of return 10% 6% What is the payback period for Project 1?
Answer:
The Silverside Company
Project 1's Payback Period
= Initial Investment/Annual cash flows
= $400,000 / $90,000
= 4.44 years.
Explanation:
Project 1:
Initial Investment = $400,000
Useful life = 5 years
Annual cash inflows for useful life = $90,000
The Silverside Company's payback period calculates the time or number of years that it would take the company to recover from its initial investment in Project 1. This is the simple payback period calculation. There is also the discounted payback period calculation. This method discounts the annual cash inflows to their present values before the calculation is carried out. This second method gives a present value perspective on the issue.
Stellar Corporation has a cumulative temporary difference related to depreciation of $542,000 at December 31, 2017. This difference will reverse as follows: 2018, $37,000; 2019, $225,000; and 2020, $280,000. Enacted tax rates are 35% for 2018 and 2019, and 40% for 2020. Compute the amount Stellar should report as a deferred tax liability at December 31, 2017. Deferred tax liability at December 31, 2017
Answer:
$203,700
Explanation:
2018 2019 2020
Temporary difference $37,000 $225,000 $280,000
Tax rate 35% 35% 40%
Deferred tax liability $12,950 $78,750 $112,000
Deferred tax liability to be reported at December 31, 2017 = $12,950 + $78,750 + $112,000 = $203,700
For Gundy Company, units to be produced are 5,230 in quarter 1 and 6,100 in quarter 2. It takes 2.0 hours to make a finished unit, and the expected hourly wage rate is $15 per hour.
Required:
Prepare a direct labor budget by quarters for the 6 months ending June 30, 2017.
Answer:
Direct labor budget by quarters for the 6 months ending June 30, 2017
Quarter 1 Quarter 2
Expected Production (units) 5,230 6,100
Hours required per unit 2.0 2.0
Total Expected Hours 10,460 12,200
Cost per Hour $15 $15
Total Cost $156,900 $183,000
Explanation:
Total Expected Cost = Total Expected Hours × Total Cost per Hour
During July, Laesch Company, which uses a perpetual inventory system, sold 1,430 units from its LIFO-based inventory, which had originally cost $19 per unit. The replacement cost is expected to be $28 per unit.
Required: Respond to the following two independent scenarios as requested
Case 1: In July, the company is planning to reduce its inventory and expects to replace only 980 of these units by December 31, the end of its fiscal year
Prepare the entry in July to record the sale of the 1,390 units (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Laesch Company
Journal entries:
Sale of 1,430 units
Debit Cash or Accounts Receivable $40,040
Credit Sales Revenue $40,040
To record the sale of 1,430 units of inventory at $28.
Debit Cost of goods sold $27,170
Credit Inventory $27,170
To record the cost of the goods sold at $19.
Sale of 1,390 units
Debit Cash or Accounts Receivable $38,920
Credit Sales Revenue $38,920
To record the sale of 1,390 units of inventory at $28.
Debit Cost of goods sold $26,410
Credit Inventory $26,410
To record the cost of the goods sold at $19.
Explanation:
Laesch Company can use Journal entries to record its business transactions as they occur on a daily basis. Journal entries show the accounts involved in any transaction and the one to be debited or credited. From the journal, postings are made to the general ledger into individual accounts.
You purchased 500 shares of Barden Enterprises stock for $55.43 per share at the beginning of the year. The stock is currently priced at $57.48 per share. What is your dividend yield if you received total dividends of $835 over the year?
Answer:
Dividend yield is 2.91 %.
Explanation:
Dividend yield = Annual Dividend per Share / Stock Price per Share × 100
where,
Annual Dividend per Share = Total Dividends ÷ Total Number of Shares
= $835 ÷ 500
= $1.67
then,
Dividend yield = $1.67 / $57.48 × 100
= 2.905 or 2.91 %
Following are several figures reported for Allister and Barone as of December 31, 2018:
Allister Barone
Inventory $530,000 $330,000
Sales 1,060,000 860,000
Investment income not given
Cost of goods sold 530,000 430,000
Operating expenses 245,000 315,000
Allister acquired 70 percent of Barone in January 2017. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $70,000 that was unrecorded on its accounting records and had a 4-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2018, Barone sells inventory costing $126,000 to Allister for $172,000. Of this amount, 20 percent remains unsold in Allister's warehouse at year-end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2018:
Amounts
Inventory
Sales
Cost of goods sold
Operating expenses
Net income attributable to noncontrolling interest
Answer and Explanation:
The computation of inventory, sales, cost of goods sold, Operating expenses and Net income attributable to non-controlling interest is shown below:-
But before that we need to determine the following calculations
Unrealized profit on inventory = ($172,000 - $126,000) × 10%
= $4,600
Customer list amortization = $70,000 ÷ 4
= $17,500
Inventory = $530,000 + $330,000 - $4,600
= $855,400
Sales = $1,060,000 + $860,000 - $172,000
= $1,748,000
Cost of goods sold = $530,000 + $430,000 + $4,600 - $172,000
= $792,600
Operating expenses = $245,000 + $315,000 + $17,500
= $577,500
Net income attributable to non-controlling interest = 10% × ($860,000 - $430,000 - $315,000 - $4,600 - $17,500)
= 10% × $92,900
= $9,290
Presented below is selected information for three regional divisions of Medina Company. Divisions North West South Contribution margin $300,300 $499,000 $399,200 Controllable margin $139,700 $360,600 $209,900 Average operating assets $997,857 $1,567,826 $1,499,286 Minimum rate of return 13 % 14 % 9 % Compute the return on investment for each division. (Round ROI to 0 decimal places, e.g. 15.) North Division % West Division % South Division % Compute the residual income for each division. (Round final answers to 0 decimal places, e.g. 1,255.) North Division $ West Division $ South Division $ Assume that each division has an investment opportunity that would provide a rate of return of 16%. (1) If ROI is used to measure performance, which division or divisions will probably make the additional investment? (2) If residual income is used to measure performance, which division or divisions will probably make the additional investment?
Answer:
North West South
Contribution margin $300,300 $499,000 $399,200
Controllable margin $139,700 $360,600 $209,900
Average operating assets $997,857 $1,567,826 $1,499,286
Minimum rate of return 13% 14% 9%
return on investment (ROI) = controllable margin / average operating assets
North's ROI = $139,700 / $997,857 = 14%
West's ROI = $360,600 / $1,567,826 = 23%
South's ROI = $209,900 / $1,499,286 = 14%
residual income = controllable margin - (average operating assets x minimum rate of return)
North's RI = $139,700 - ($997,857 x 13%) = $9,978.59
West's RI = $360,600 - ($1,567,826 x 14%) = $141,104.36
South's RI = $209,900 - ($1,499,286 x 9%) = $74,964.26
(1) If ROI is used to measure performance, which division or divisions will probably make the additional investment?
North and South divisions should probably make the additional investments since their current ROI is less than 16%
(2) If residual income is used to measure performance, which division or divisions will probably make the additional investment?
All the divisions since their minimum required rate of return is less than 16%.
The ROI of North, West and South are 14%, 23% and 14% respectively. North and south divisions need to make more investment as their ROI is less than 16%. All the division need to make investments.
What is ROI?Return on Investment is the performance measure to evaluate the earnings or profit earned from an investment.It is the ration between the net profit/loss to the initial investment made.
North West South
Given:
Contribution margin= $300,300 $499,000 $399,200
Controllable margin= $139,700 $360,600 $209,900
Average operating assets= $997,857 $1,567,826 $1,499,286
Minimum rate of return= 13% 14% 9%
Return on Investment= (controllable margin/ average operating assets) X 100
North= ($139,700 / $997,857) X 100= 14%West = ($360,600 / $1,567,826) X 100= 23% South= ($209,900 / $1,499,286) X 100 = 14%Residual Income= controllable margin - (average operating assets x minimum rate of return)
North = $139,700 - ($997,857 x 13%) = $9,978.59West = $360,600 - ($1,567,826 x 14%) = $141,104.36South= $209,900 - ($1,499,286 x 9%) = $74,964.26North and South divisions are required to make the additional investments since their current ROI is less than 16%If residual income is used to measure performance, all the divisions requires additional investment, as their minimum required rate of return is less than 16%.
Therefore, the above calulations aptly describes the statements.
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Conner Manufacturing has two major divisions. Management wants to compare their relative performance. Information related to the two divisions is as follows:
Division 1:
Sales: $200,000
Expenses: $150,000
Asset investment: $950,000
Division 2:
Sales: $45,000
Expenses: $35,000
Asset investment: $200,000
Based on ROI, which division is more profitable?
a. Division 1
b. Both divisions have the same ROI ratio
c. Division 2
Answer:
The correct answer is:
Division 1 (a.)
Explanation:
Return on investment (ROI) is a financial ratio used to calculate the benefit earned on an investment cost.
Mathematically, it is represented as:
[tex]ROI = \frac{Net\ Income}{original\ cost\ of\ investment} \times 100[/tex]
where:
Net income = Sales - expenses
Original cost of investment = asset invested
Now let us calculate the ROI for each division:
Division 1 :
Net income = Sales - Expenses = 200,000 - 150,000 = $50,000
Asset investment = $950,000
[tex]ROI = \frac{50,000}{950,000} \times 100\ \\\\ROI = 5.26\%[/tex]
Division 2:
Net income = 45,000 - 35,000 = $10,000
Asset investment = $200,000
[tex]ROI = \frac{10,000}{200,000} \times 100\\\\= ROI = 0.05\ \times\ 100\ = 5\%[/tex]
Therefore, based on the ROI for both divisions, Division 1 has a greater ROI (5.26%) than Division 2 (5%) hence, Division 1 is more profitable.
Product V72 sells for $20 per unit as is, but if enhanced it can be sold for $25 per unit. The enhancement process will cost $52,000 for 12,000 units. If the 12,000 units of Product V72 are sold as is without further processing, the company:
Answer:
It will incur an Opportunity cost of $8,000.
Explanation:
It will incur the opportunity cost of $8000 because the additional unit produces by the company then the additional revenue that is generated will be equal to the amount (25 - 20) x 12,000 = 60,000. Since the additional cost, that incurs for the production of 12000 units is 52000. Therefore the profit earned is $8000.
So if the company does not produce it then it will lose the profit of $8000.
Discount-Mart issues $18 million in bonds on January 1, 2021. The bonds have a eight-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value 01/01/2021 $ 16,180,939 06/30/2021 $ 900,000 $ 970,856 $ 70,856 16,251,795 12/31/2021 900,000 975,108 75,108 16,326,903 06/30/2022 900,000 979,614 79,614 16,406,517 12/31/2022 900,000 984,391 84,391 16,490,908 What is the carrying value of the bonds as of December 31, 2022
Answer:
Discount-Mart
The carrying value of the bonds as of December 31, 2022 is:
$16,490,908
Explanation:
a) Data and Calculations:
Bonds issued = $18 million
Date of issue = Jan. 1, 2021
Bond term = 8 years
Interest payable on June 30 and December 31 each year.
b) Partial bond amortization schedule for the bonds:
Date Cash Paid Interest Expense Increase in Carrying Value
Carrying Value
01/01/2021 $ 16,180,939
06/30/2021 $ 900,000 $ 970,856 $ 70,856 16,251,795
12/31/2021 900,000 975,108 75,108 16,326,903
06/30/2022 900,000 979,614 79,614 16,406,517
12/31/2022 900,000 984,391 84,391 16,490,908
b) The carrying value of the bond is the net amount between the par value of $18 million and the unamortized premium or discount. It is this value that is reported on the balance sheet.
a project that will last for 8 years is expected to have equal annual cash flows of $97,900. If the required return is 7.6 percent, what maximum initial cash flows of $97,900
Question:
MC algo 5-28 Calculating NPV A project that will last for 8 years is expected to have equal annual cash flows of $97,900. If the required return is 7.6 percent, what maximum initial investment would make the project acceptable?
Multiple Choice $516,751.56 $571,237.51 $1,026,395.85 $482,301.46 $550,008.71
Answer:
PV of cash inflow = $571,237.5
Explanation:
The maximum initial investment amount to be paid is the present value of the series of the annual cash inflow discounted at the opportunity cost rate of 7.6% per annum.
In other words,the maximum to be paid for the investment should be equal to the value today of the series of eight equal annual cash flow of $97,900 discounted at 7.6%
This is given in the relationship below:
PV of cash inflow = A ×( 1- (1+r)^(-n))/r )
A- equal annual cash - 97,900. r-rate of return - 7.6%, n-number of years- 8
PV = 97,900 × ( 1 - (1+0.076)^(-8)/0.76)= 571,237.5
PV of cash inflow = $571,237.5
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $420,000; Allowance for Doubtful Accounts has a debit balance of $4,000; and sales for the year total $1,890,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $16,400. a. Determine the amount of the adjusting entry for uncollectible accounts. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ 420,000 Allowance for Doubtful Accounts $ 16,400 Bad Debt Expense $ c. Determine the net realizable value of accounts receivable. $
Answer and Explanation:
The computation is shown below:
a. Amount of adjusting entry for uncollectible accounts
= Estimated balance of Allowance for Doubtful Accounts + debit balance
= $16,400 + $4,000
= $20,400
b. Adjusted balances
For account receivable
= account receivable
= $420,000
For allowance for doubtful debts
= Estimated amount
= $16,400
For bad debts
= AMount of adjusting entry
= $20,400
c. Net realizable value
= Account receivable balance - estimated balance of Allowance for Doubtful Accounts
= $420,000 - $16,400
= $403,600
A company's gross profit (or gross margin) was $129,650 and its net sales were $502,900. Its gross margin ratio is
Answer:
25.8%
Explanation:
A company gross profit is $129,650
The net sales is $502,900
Therefore, the gross margin ratio can be calculated as follows
Gross margin ratio= gross margin /net sales
= $129,650/$502,900
= 0.258×100
= 25.8%
Hence the gross margin ratio is 25.8%
Luther Corporation Consolidated Balance Sheet December 31, 2006 and 2005 (in $ millions) .
2006 2005
Assets
Liabilities and Stockholders' Equity
2006 2005
Current Assets
Current Liabilities
Cash 56.1 58.5
Accounts payable 88.1 73.5
Accounts receivable 54.5 39.6
Notes payable / short-
term debt 10.9 9.6
Inventories 44.8 42.9
Current maturities of long-
term debt 40.7 36.9
Other current assets 5.0 3.0
Other current liabilities 6.0 12.0
Total current assets 160.4 144.0
Total current liabilities 145.7 132.0
Long-Term Assets
Long-Term Liabilities
Land 66.8 62.1
Long-term debt 227 168.9
Buildings 108.5 91.5
Capital lease obligations
Equipment 117.1 99.6
Less accumulated
depreciation (54.4) (52.5)
Deferred taxes 22.8 22.2
Net property, plant, and
equipment 238 200.7
Other long-term liabilities --- ---
Goodwill 60.0 --
Total long-term liabilities 249.8 191.1
Other long-term assets 63.0 42.0
Total liabilities 395.5 323.1
Total long-term assets 361 242.7
Stockholders' Equity 125.9 63.6
Total Assets 521.4 386.7
Total liabilities and
Stockholders' Equity 521.4 386.7
Refer to the balance sheet above. If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then what is Luther's enterprise value?
A. -$540.0 million.
B. $771.4 million.
C. $385.7 million.
D. $521.4 million.
Answer:
C. $385.7m
Explanation:
Enterprise value = Market value of equity + Market value of all types of debt - Cash in the balance sheet
Market value of equity = Current share price × number of shares outstanding
= $16 × 10.2 million shares
= $163,200,000
Market value of all types of shares = Market value of long term debt + Market value of current portion of long term debt + notes payable / short term debt
We assume that market value of debts = Book value of debts
Therefore,
Market value of debt = $227m + $40.7m + $10.9m
= $278.6 m
Cash in the balance sheet = $56.10 m
Therefore;
Enterprise value = $163.20m + $278.60 - $56.1
=$385.7 m
Samantha and Darren are 50% owners in Black Hat Corp., a calendar year S corporation. On June 29, Samantha sold her shares to Endora. The financial results of Black Hat using normal accounting rules are as follows: Income through June 30 = $34,000; income from July 1 - Dec 31 = $76,000 for total income for the year of $110,000. All the shareholders would like to limit the tax liability from the S corporation income. Considering these facts, would Endora prefer the daily method or the normal accounting method to allocate income? What method would Samantha prefer?
Answer:
Endora would prefer DAILY METHOD while Samantha would prefer NORMAL ACCOUNTING METHOD
Explanation:
Based on the information given above Endora would most likely prefer the DAILY METHOD reason been that she would most likely allocate her income over the whole year while Samantha would prefer NORMAL ACCOUNTING METHOD reason been that the normal accounting method will often tend to recognizes a higher share of the income mostly in the second half of the year.
Therefore Endora would prefer DAILY METHOD while Samantha would prefer NORMAL ACCOUNTING METHOD.
What is International trade also list the importance of International trade.
Answer:
International trade is buying and selling goods and services across international boundaries. International trade plays a very good role in economic activities and performance of countries around the world. International trade benefit countries in many ways: 1- increasing in production and consumption as a result of specialization, 2- greater choices for consumers due to the competition between traders to get the best choice for consumers. 3- lower prices 4- trade is great source for the flow of service and technology. International trade is the engine of growth.
A company developed the following per unit materials standards for its product: 3 pounds of direct materials at $5 per pound. If 10000 units of product were produced last month and 31250 pounds of direct materials were used, the direct materials quantity variance was
Answer:
Direct material quantity variance= $6,250 unfavorable
Explanation:
Giving the following information:
Standard:
3 pounds of direct materials at $5 per pound.
10,000 units of product were produced last month and 31,250 pounds of direct materials were used.
To calculate the direct material quantity variance, we need to use the following formula:
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (3*10,000 - 31,250)*5
Direct material quantity variance= $6,250 unfavorable
Eiffel Corporation is a 100-percent owned French subsidiary of Tower Corporation, a U.S. corporation. During the current year, Eiffel paid a dividend of €500,000 to Tower. Assume an exchange rate of €1 = $1.50. Withholding taxes of €2,500 were imposed on the dividend. The dividend is paid out of earnings and profits that have not been subject to the deemed dividend rules under subpart F or GILTI. Compute the tax consequences to Tower as a result of this dividend.
Answer:
Eiffel Corporation
Computation of the tax consequences to Tower:
Withholding tax = €2,500 x $1.50 = $3,750.00
Domestic Corporation tax = 156,712.50
Total tax consequence = $160,462.50
Explanation:
a) Data and Computations:
Dividend = €500,000
Withholding tax = €2,500
Net after w/tax = €497,500
Exchange rate = €1 = $1.50
Therefore, net dividend after withholding tax = €497,500 x $1.50
= $746,250
Corporation tax rate = 21% of $746,250
= $156,712.50
Tower will suffer a withholding tax burden of $3,750 when translated into dollars and a corporation tax on income totalling $156,712.50 based on the TCJA tax rate of 21% instead of the former 35%.
