Answer:
DEBIT SIDE $140,100
CREDIT SIDE $140,100
Explanation:
Preparation of a trial balance.
CRANE COMPANY Trial Balance For the Month Ended December 31, 2017
DEBIT SIDE
Equipment $74,500
Accounts receivable $7,800
Cash $5,900
Supplies $4,900
Dividends $7,800
Salaries and Wages Expense $37,200
Rent Expense $2,000
TOTAL DEBIT SIDE $140,100
CREDIT SIDE
Common stock $24,500
Notes payable $19,600
Salaries and wages payable $2,900
Accounts payable $8,800
Service Revenue $84,300
TOTAL CREDIT SIDE $140,100
Therefore Prepare a trial balance CRANE COMPANY Trial Balance will have both. DEBIT and CREDIT BALANCE of $140,100
Most of the time it is quite difficult to separate the three functions of money. Money performs its three functions at all times, but sometimes we can stress one in particular. For each of the following situations, identify which function of money is emphasized: _________
a) Brooke accepts money in exchange for performing her daily tasks at her office, since she knowsshe can use that money to buy goods and services: medium of exchange
b) Tim wants to calculate the relative value of oranges and apples, and therefore checks the price per pound of each of these goods quoted in currency units: unit of account
c) Maria is currently pregnant. She expects her expenditures to increase in the future and decides to increase the balance in her savings account: store of value
Answer:
a medium of exchange
a unit of account
a store of value,
Explanation:
Functions of money
1. Medium of exchange : money can be used to exchange for goods and services. For example, money serves as a medium of exchange when you pay $20 for your favourite jeans
2. Unit of account : money can be used to value goods and services, For example, $20 is the value of your favourite jeans
3. Store of value : money can retain its value over the long term, this it can be used as a store of value
a) Calculate the PV of a perpetuity with a cash flow of $111,111 received every year. The first cash flow occurs in year 1. The interest rate is 11% simple annual rate. b) Calculate the PV of a perpetuity with a cash flow of $222,222 received every second year. The first cash flow occurs in year 2. The interest rate is 11% simple annual rate. c) Calculate the PV of a perpetuity with a cash flow of $333,333 received every third year. The first cash flow occurs in year 3. The interest rate is 11% simple annual rate.
Answer:
a) Calculate the PV of a perpetuity with a cash flow of $111,111 received every year. The first cash flow occurs in year 1. The interest rate is 11% simple annual rate.
PV of a perpetuity = annual payment / interest rate = $111,111 / 11% = $1,010,100
b) Calculate the PV of a perpetuity with a cash flow of $222,222 received every second year. The first cash flow occurs in year 2. The interest rate is 11% simple annual rate.
PV of a perpetuity = annual payment / interest rate = $222,222 / (11% x 2) = $1,010,100
c) Calculate the PV of a perpetuity with a cash flow of $333,333 received every third year. The first cash flow occurs in year 3. The interest rate is 11% simple annual rate.
PV of a perpetuity = annual payment / interest rate = $333,333 / (11% x 3) = $1,010,100
Explanation:
Since the interest rate is simple, not compounded, the three perpetuities have the same present value.
The GAP is a global clothing retailer for men, women, children, and babies. The following information is taken from The Sap's fiscal 2015 annual report. Selected Balance Sheet Data ($ millions)20152014 Inventories$1,918$1,844 Accounts Payable1,1571,128 a. The Gap purchased inventories totaling $10,438 million during fiscal 2015. Use the financial statement effects template to record cost of goods sold for The Sap's fiscal year ended 2015. (Assume accounts payable is used only for recording purchases of inventories and all inventories are purchased on credit.) b. What amount did the company pay to suppliers during the year
Answer:
The GAP
a. Cost of goods sold = $10,364
b. Cash paid to suppliers = $10,409
Explanation:
a) Data and Calculations:
Selected Balance Sheet Data
($ millions) 2015 2014
Inventories $1,918 $1,844
Accounts Payable 1,157 1,128
Purchases during 2015 = $10,438 million
b) Cost of goods sold:
Beginning inventory $1,844
Purchases 10,438
Goods available $12,282
Ending inventory (1,918)
Cost of goods sold $10,364
c) Accounts Payable:
Beginning balance $1,128
Purchases 10,438
Less ending balance 1,157
Cash paid to suppliers $10,409
What are the costs and sources of inefficiency in a barter B apply.) A. Productivity is increased by specialization. B. Each good has only one price. C. There is increased time and effort spent looking for trading partners. D. There is a lack of standardization. E. There is difficulty in accumulating wealth. OF. Transactions costs are almost always high.
Answer:
C)There is increased time and effort spent looking for trading partners.
D)There is a lack of standardization.
E)There is difficulty in accumulating wealth.
Explanation:
barter in a trade can be regarded as a system of exchange that involves exchange of goods and services for another without using money as a medium of exchange. Barter is been considered as 'inefficient' as a result of the needs for 'double coincidence of wants'. For instance in a situation whereby someone is buying particular amount of another's goods, but the payment he/she has is for just one indivisible unit of another good, and the worth is higher than what he/she want to obtain, in this case there won't be barter transaction.
It should be noted that the costs and sources of inefficiency in a barter are;
✓There is increased time and effort spent looking for trading partners.
✓There is a lack of standardization.
✓There is difficulty in accumulating
An investor is in the 33 percent tax bracket and pays long-term capital gains taxes of 15 percent. What are the taxes owed (or saved in the case of losses) in the current tax year for each of the following situations?
a) Net short-term capital gains of $3,000; net long-term capital gains of $4,000
b) Net short-term capital gains of $3,000; net long-term capital losses of $4,000
c) Net short-term capital losses of $3,000; net long-term capital gains of $4,000
d) Net short-term capital gains of $3,000; net long-term capital losses of $2,000
e) Net short-term capital losses of $4,000; net long-term capital gains of $3,000
f) Net short-term capital losses of $1,000; net long-term capital losses of $1,500
g) Net short-term capital losses of $3,000; net long-term capital losses of $2,000
Answer:
The taxes owed (or saved in the case of losses) in the current tax year for each of the following situations) are:
Taxes owed Taxes saved
a. $1,590 $0
b. $0 $1,000
c. $150 $0
d. $0 $1,000
e. $0 $1,000
f. $0 $2,500
g. $0 $5,000
Explanation:
a) Data:
Investor's tax bracket = 33% (same as the short-term capital gains taxes)
Long-term capital gains taxes = 15%
b) Events and Calculations:
a) Net short-term capital gains of $3,000; net long-term capital gains of $4,000
Short-term tax = $990 ($3,000*33%)
Long-term tax = $600 ($4,000*15%)
Total taxes = $1,590
b) Net short-term capital gains of $3,000; net long-term capital losses of $4,000
Long-term capital losses = $4,000
Short-term capital gains = (3,000)
Savings = $1,000
c) Net short-term capital losses of $3,000; net long-term capital gains of $4,000
Long-term capital gains = $4,000
Short-term capital losses (3,000)
Long-term capital gains taxes = $150 ($1,000 * 15%)
d) Net short-term capital gains of $3,000; net long-term capital losses of $2,000
Short-term capital gains = $3,000
Long-term capital losses (2,000)
Savings = $1,000
e) Net short-term capital losses of $4,000; net long-term capital gains of $3,000
Short-term capital losses = $4,000
Long-term capital gains (3,000)
Savings $1,000
f) Net short-term capital losses of $1,000; net long-term capital losses of $1,500
Short-term capital losses = $1,000
Long-term capital losses 1,500
Savings = $2,500
g) Net short-term capital losses of $3,000; net long-term capital losses of $2,000
Short-term capital losses = $3,000
Long-term capital losses 2,000
Savings = $5,000
An analysis of the company's insurance policies provided the following facts.
Policy Date of Purchase Months of Coverage Cost
A April 1, 2017 24 $10,824
B April 1, 2018 36 9,576
C August 1, 2019 12 8,424
The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost. (Year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.)
Required:
So what would my adjusting journal entry be?
Answer:
Adjusting Journal in the year of payment:
December, 2017: Policy A
Debit Insurance Expense $4,059
Credit Prepaid Insurance $4,059
To record the insurance expense for the year (9 months).
December, 2018: Policy A and B
Policy A:
Debit Insurance Expense $5,412
Credit Prepaid Insurance $5,412
To record insurance expense for the year, 12 months.
Policy B:
Debit Insurance Expense $2,394
Credit Prepaid Insurance $2,394
To record insurance expense for the year, 9 months.
December, 2019:
Policy A:
Debit Insurance Expense $1,353
Credit Prepaid Insurance $1,353
To record insurance expense for the year, 3 months.
Policy B:
Debit Insurance Expense $3,192
Credit Prepaid Insurance $3,192
To record insurance expense for the year, 12 months.
Policy C:
Debit Insurance Expense $3,510
Credit Prepaid Insurance $3,510
To record insurance expense for the year, 5 months.
Explanation:
a) Data and Calculations:
Policy Date of Purchase Months of Cost Monthly
Coverage Cost
A April 1, 2017 24 $10,824 $451 ($10,824/24)
B April 1, 2018 36 9,576 $266 ($9,576/36)
C August 1, 2019 12 8,424 $702 ($8,424/12)
b) The insurance expenses recorded under the three policies have been determined using the monthly rates. In each year, the months covered are taken into consideration when computing the insurance expense for the year. In this way, only the expenses incurred for the period are accounted for, in accordance with the accrual concept of accounting.
Describe the role of communication in effective leadership. Discuss your own administration style and how it may influence your successful completion of your program of study. Use headings to support the organization of your content. (1,000 words, two scholarly sources, APA format) Discuss in your owns words
Answer:
Knowledge and ideas of leader are shared with the team through effective communication.
Explanation:
A good leader possesses many qualities among which effective communication is an essential quality which a leader must have. Leader should be able to express his ideas and inspire others through his leadership skills. Leader should communicate with its team in a routine language and should not use jargons. The team should be involved in decision making and ideas should be gathered through brainstorming.
In its income statement for the year ended December 31, 2017, Darren Company reported the
following condensed data.
Salaries and wages expense $465,000 Loss on disposal of plant assets $83,500
Cost of goods sold 987,000 Sales revenue 2,210,000
Interest expense 71,000 Income tax expense 25,000
Interest revenue 65,000 Sales discounts 160,000
Depreciation expense 310,000 Utilities expense 110,000
Instructions
(a) Prepare a multi-step income statement.
(b) Calculate the profit margin and gross profit rate.
(c ) In 2016, Darren had a profit margin of 5%. Is the decline in 2017 a cause for concern?
(Ignore income tax effects.)
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a) DARREN COMPANY
Income Statement
For the Year Ended December 31, 2017
Sales
Sales revenue $2,210,000
Less: Sales discounts $160,000
Net Sales $2,050,000
Cost of goods sold $987,000
Gross profit $1,063,000
Operating expenses
Salaries and wages expense $465,000
Depreciation expense $310,000
Utilities expense $110,000
Total operating expenses $885,000
Income from operations $178,000
Other revenues and gains
Interest revenue $65,000
Other expenses and losses
Loss on disposal of plant assets 83,500
Interest expense 71,000 154,500
Income before income taxes 88,500
Income tax expense 25,000 28%
Net income $63,500
(b) Profit margin
Net income $63,500
Net Sales 2,050,000
3.10%
Gross profit rate
Gross profit $1,063,000
Net sales $2,050,000
51.9%
After you have completed E5-8 , consider the following additional question.
1. Assume that cost of goods changed to $1,015,000 and that the income tax rate is 28%.
What impact does this change have on the multi-step income statement and the
profitability ratios?
Answer:
Part a
Darren Company
Multi-step income statement
Sales
Sales revenue $2,210,000
Less: Sales discounts ($160,000)
Net Sales $2,050,000
Cost of goods sold ($987,000)
Gross profit $1,063,000
Operating expenses
Salaries and wages expense $465,000
Depreciation expense $310,000
Utilities expense $110,000
Total operating expenses ($885,000)
Income from operations $178,000
Other revenues and gains
Interest revenue ($65,000)
Other expenses and losses
Loss on disposal of plant assets $83,500
Interest expense $71,000 ($89,500)
Income before income taxes $88,500
Income tax expense 25,000 28% ($25,000)
Net income $63,500
Part b
Darren Company
Profit margin = 3.10 % and gross profit rate = 51.85 %
Part c
Change in profit margin : The Profit Margin has fallen from 5% to 3.10 % in 2017 by 2.10% . The cause of this decline is a concern and must be investigated. The Profit margin rate measure the success with respect of earnings on sales thus more investigations must be done on what caused the earnings to decline in 2017.
Part 1
Cost of Goods Sold has increased by $28,000 ($1,015,000 -$987,000). Income tax rate has not changed.
a. Impact of the change on multi-step income statement
The items of Gross Profit and Income from Operations will decline by $28,000.
b. Impact of the change on profitability ratios
The Profit ratios will decline. Profit margin will be 1.73 %. Gross Profit margin will be 50.49 %
Explanation:
Multiple Step Income Statement shows separately the Operating Income and the Net Income. Operating Income being Income derived from Primary Activities of the Company whilst the Net Income includes the Secondary Activities of the Company such as Income taxes or Sale of assets.
Other Workings :
Profit margin = Net Income / Net Sales x 100
= $63,500 / $2,050,000 x 100
= 3.10 %
Gross Profit rate = Gross Profit / Net Sales x 100
= $1,063,000 / $2,050,000 x 100
=51.85 %
The Total Revenue and Net Earnings are shown individually on the Several Stage Financial Statements. Operating income comes from the company's main activities, whereas net earnings come from the industry's support functions, such as taxable income and divestments.
The income statement has been attached below.
Part. B.
Darren Company
Profit margin = 3.10 % and gross profit rate = 51.85 %
Part. C.
Profitability has dropped by 2.10 percent from 5 percent to 3.10 percent in the year 2017. The basis for this drop is a point of anxiety that needs to be questioned.
Because the gross margin rate evaluates achievement in terms of income on selling, more analysis into what prompted the profitability to drop in 2017 is required.
Part 1
Cost of Goods Sold has boost up by $28,000 ($1,015,000 -$987,000).
The income tax rate has not changed.
a. Impact of the change on the multi-step income statement
The items of Gross Profit and Income from Operations will reduce by $28,000.
b. Impact of the change on profitability ratios
The Profit ratios will decline.
The profit margin will be 1.73 %.
The Gross Profit margin will be 50.49 %
Working Notes:
Profit margin = [tex]\frac{ \text{Net Income}}{ \text{Net Sales}} \times 100[/tex]
= [tex]\frac{ \$63,500}{ \$2,050,000}\times 100[/tex]
= 3.10 %
Gross Profit rate = [tex]\frac{\text{Gross Profit}}{\text{Net Sales}} \times 100[/tex]
= [tex]\frac{ \$1,063,000 }{ \$2,050,000}\times 100[/tex]
=51.85 %
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are capital markets also organisational markets?
Answer:A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold.[6] Capital markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments.[a] Financial regulators like Securities and Exchange Board of India (SEBI), Bank of England (BoE) and the U.S. Securities and Exchange Commission (SEC) oversee capital markets to protect investors against fraud, among other duties.
Modern capital markets are almost invariably hosted on computer-based electronic trading platforms; most can be accessed only by entities within the financial sector or the treasury departments of governments and corporations, but some can be accessed directly by the public. As an example, in the United States, any American citizen with an internet connection can create an account with TreasuryDirect and use it to buy bonds in the primary market, though sales to individuals form only a tiny fraction of the total volume of bonds sold. Various private companies provide browser-based platforms that allow individuals to buy shares and sometimes even bonds in the secondary markets. There are many thousands of such systems, most serving only small parts of the overall capital markets. Entities hosting the systems include stock exchanges, investment banks, and government departments. Physically, the systems are hosted all over the world, though they tend to be concentrated in financial centres like London, New York, and Hong Kong.
Explanation:
Concerned by recent negative trends in economic indicators such as the consumer price index, gross domestic product, and inflation, the marketing manager of Kevin's Kayaks recommends that the company reduce its advertising spending. His recommendation is based on ________ data.
Answer:
Macroeconomics.
Explanation:
Economics can be classified into two (2) main categories, namely;
1. Microeconomics can be defined as the study of the effect of price and quantity levels through interactions between individual buyers and sellers in various markets. Simply stated, it focuses on analyzing or evaluating the decisions of consumers (buyers) and those of firms (sellers) such as methods of production, pricing; and the manner in which government policies affect those decisions.
2. Macroeconomics can be defined as the study of behaviors, performance and factors that affect the entire economy. Therefore, it focuses on aggregate phenomena such as price level, economic growth, Gross Domestic Product (GDP), inflation, unemployment and national income levels with respect to the central bank, demand or supply shocks, government policies, aggregate spending and savings.
In this scenario, concerned by recent negative trends in economic indicators such as the consumer price index, gross domestic product, and inflation, the marketing manager of Kevin's Kayaks recommends that the company reduce its advertising spending. Thus, his recommendation is based on macroeconomics data.
This ultimately implies that, macroeconomic is a form of externality that typically affects the levels of inflation, unemployment, consumer price index, or growth in the economy as a whole (GDP).
Billed Mercy Co. $2,400 for services performed.
how to journalize this?
When a business transaction requires a journal entry, we must follow these rules:
The entry must have at least 2 accounts with 1 DEBIT amount and at least 1 CREDIT amount.
The DEBITS are listed first and then the CREDITS.
The DEBIT amounts will always equal the CREDIT amounts.
For another example, let’s look at the transaction analysis we did in the previous chapter for Metro Courier (click Transaction analysis):
1. The owner invested $30,000 cash in the corporation. We analyzed this transaction by increasing both cash (an asset) and common stock (an equity) for $30,000. We learned you increase an asset with a DEBIT and increase an equity with a CREDIT. The journal entry would look like this:
2. Purchased $5,500 of equipment with cash. We analyzed this transaction as increasing the asset Equipment and decreasing the asset Cash. To increase an asset, we debit and to decrease an asset, use credit. This journal entry would be:
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Answer:
All the journal entries illustrated so far have involved one debit and one credit; these journal entries are called simple journal entries. Many business transactions, however, affect more than two accounts. The journal entry for these transactions involves more than one debit and/or credit. Such journal entries are called compound journal entries.
Explanation:
1. The owner invested $30,000 cash in the corporation. We analyzed this transaction by increasing both cash (an asset) and common stock (an equity) for $30,000. We learned you increase an asset with a DEBIT and increase an equity with a CREDIT
2. Purchased $5,500 of equipment with cash. We analyzed this transaction as increasing the asset Equipment and decreasing the asset Cash. To increase an asset, we debit and to decrease an asset, use credit.
3. Purchased a new truck for $8,500 cash. We analyzed this transaction as increasing the asset Truck and decreasing the asset Cash. To increase an asset, we debit and to decrease an asset, use credit.
4. Purchased $500 in supplies on account. We analyzed this transaction as increasing the asset Supplies and the liability Accounts Payable. To increase an asset, we debit and to increase a liability, use credit.
5. Paid $300 for supplies previously purchased. Since we previously purchased the supplies and are not buying any new ones, we analyzed this to decrease the liability accounts payable and the asset cash. To decrease a liability, use debit and to decrease and asset, use debit.
6. Paid February and March Rent in advance for $1,800. When we pay for an expense in advance, it is an asset. We want to increase the asset Prepaid Rent and decrease Cash. To increase an asset, we debit and to decrease an asset, use credit.
7. Performed work for customers and received $50,000 cash. We analyzed this transaction to increase the asset cash and increase the revenue Service Revenue. To increase an asset, use debit and to increase a revenue, use credit.
8. Performed work for customers and billed them $10,000. We analyzed this transaction to increase the asset accounts receivable (since we have not gotten paid but will receive it later) and increase revenue. To increase an asset, use debit and to increase a revenue, use credit.
9. Received $5,000 from customers from work previously billed. We analyzed this transaction to increase cash since we are receiving cash and we want to decrease accounts receivable since we are receiving money from customers who we billed previously and not new work we are doing. To increase an asset, we debit and to decrease an asset, use credit.
10 Paid office salaries $900. We analyzed this transaction to increase salaries expense and decrease cash since we paid cash. To increase an expense, we debit and to decrease an asset, use credit.
11. Paid utility bill $1,200. We analyzed this transaction to increase utilities expense and decrease cash since we paid cash. To increase an expense, we debit and to decrease an asset, use credit.
On January 1, 2020, Marigold Corp. purchased a machine costing $355000. The machine is in the MACRS 5-year recovery class for tax purposes and has an estimated $74000 salvage value at the end of its economic life. It's based on half year convention. Assuming the company uses the general MACRS approach, the amount of MACRS deduction for tax purposes for the year 2020 is
Answer:
$71,000
Explanation:
Note: The MARCS Table is attached below
Depreciation for 2020 = Cost*Rate%
Depreciation for 2020 = $355000*20%
Depreciation for 2020 = $71,000.
Note: MACRS depreciation disregards the salvage value and depreciates the asset to zero over the life of the asset.
XYZ Corporation had 158 million shares outstanding on January 1, 2012. On February 2,2012, it issued an additional 30 million shares to the market at the market priceof $55 per share. What was the effect of this share issue on the price per share
Answer:
There was no effect of this share issue on the price per share
Explanation:
First, we need to determine the pre-issuance value
Numbers of outstanding shares = 158,000,000 shares
Total Value of equity = Numbers of outstanding shares x Market value per share = 158,000,000 shares x $55 per share = $8,690,000,000
Now calculate the issuance values
Numbers of shares issued = 30,000,000 shares
Vaue of issued equity = NUmbers of shares issued x Mrket value per share = 30,000,000 x $55 per share = $1,650,000,000
Now determien the post issuance value
Numbers of outstanding shares = 158,000,000 shares + 30,000,000 shares = 188,000,000 shares
Total Value of equity = $8,690,000,000 + $1,650,000,000 = $10,340,000,000
Now calcuate the Value per share
Value per share = Post Issuance Total value of equity / Post issuance total numbers of shares = $10,340,000,000 / 188,000,000 shares = $55 per share
There is no effect of share issue on the price of the share.
In the fall of 2014, China and the United States agreed to expand the Information Technology Agreement to drop tariffs on a number of technology products. This is an example of_________ reducing protectionist measures.
Answer:
Free trade policy.
Explanation:
Trade can be defined as a process which typically involves the buying and selling of goods and services between a producer and the customers (consumers) at a specific period of time.
In the fall of 2014, China and the United States agreed to expand the Information Technology Agreement to drop tariffs on a number of technology products. Therefore, this is an example of free trade policy reducing protectionist measures.
Free trade policy includes the adoption and implementation of tariffs and quotas between countries.
Trade policies tariffs and quotas will most likely benefit domestic producers of the protected good and harm domestic consumers of the protected good as they're made to pay for the consumption of imported products. Hence, under free trade there are more societal benefits due to the specialization of domestic goods.
Tariffs can reduce both the volume of exports and imports in a country.
In order to generate revenues, domestic government make use of tariffs while quotas do not generate any revenue for them.
A management dilemma defines the research question. Group startsTrue or FalseTrue, selectedFalse, unselected
Answer:
False
Explanation:
It is not always the case that a management dilemma results in the research question. However, a research question might be defined by an identified need for improvement.
A management dilemma defines the research question is false. The correct option is false.
A research topic is defined as "a question that a research project seeks to answer." A research question must be chosen for both quantitative and qualitative research. Data gathering and analysis will be required for the investigation, and the methods for this may vary greatly. Good research topics are usually focused and specific in order to improve understanding on an essential topic.
To formulate a research topic, one must first decide if the study will be qualitative, quantitative, or mixed. Other circumstances, such as project finance, may have an impact not only on the research topic itself, but also on when and how it is created during the research process.
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Last month, you lent a work colleague $5000 to cover some overdue bills. He agreed to pay you in 1 month with interest at 2% for the month, thus owing you $5100. Today, when the repayment is due, he asked you to extend the loan for another month and he would pay you the $5100 next month. In the meantime, you have had the offer to invest as much as you wish in an oil-well venture that is expected to pay 40% per year and a hot new IT stock that is estimated to return 39% the first year. If you let your colleague have another month, what is the opportunity cost of your decision
Answer:
The opportunity cost of lending the money to the friend is the largest expected return that could be earned with the money loaned to the friend. From the available opportunity, the investor could earn maximum of 40% by investing in oil well venture. Thus, the opportunity cost to the investor is 40%
The opportunity cost in dollar = Investment * Opportunity cost in %
= $5,000 * 40%
= $2,000
Thus, the opportunity cost in dollar is $2,000
The Tinsley Company exchanged land that it had been holding for future plant expansion for a more suitable parcel located farther from residential areas. Tinsley carried the land at its original cost of $62,500. According to an independent appraisal, the land currently is worth $150,000. Tinsley paid $25,000 in cash to complete the transaction. Required: 1. What is the fair value of the new parcel of land received by Tinsley assuming the exchange has commercial substance
Answer:
$175,000
Explanation:
When an exchange transaction has commercial substance, the accounting standard IAS 16 requires that the cost price of the item acquired be at fair Value of the asset given up.
Fair Value of Asset given up is $150,000.
However Tinsley has also paid a trade -in allowance for the new parcel of land of $25,000.
Therefore, the fair value of the new parcel of land received by Tinsley assuming the exchange has commercial substance is $175,000 ($150,000 + $25,000)
What are the five components of internal control briefly explain each component?
Answer: The five components of internal control are control environment, risk assessment, control activities, information and communication, and monitoring.
Explanation:
The five components of internal control are control environment, risk assessment, control activities, information and communication, and monitoring.
Control environment; is also known as internal control environment. These are set of standards and structures that guides the basis of carrying out internal control within an organization. It is the awareness, attitude and action of the management team regarding internal control and it's relevance to the organization
Risk assessment is used to describe the process and method of identifying hazard and risk which have potentials to raise harm in an environment
Control activities are policies, techniques and procedures that are pit in place to manage or reduce risk in an environment. Their actions carried out to minimize or limit risk in an environment
Information and communication is a method of information being passed through systems by means of communication. To place everyone involved in the system enlightened by communicating properly to them.
Monitoring is the act of observing a process to control both success and failure that may tend to arise within the process.
Kevin's boat was wrecked by hurricane Harvey (a federally declared natural disaster). Damage to the boat was estimated at $30,000. The original cost was $25,000. The boat was partially insured, and Kevin received an insurance reimbursement of $15,000. Kevin's adjusted gross income is $50,000, and he had no other losses during the year. What amount can Keith deduct on his tax return for this year
Answer:
A) $4,900
Explanation:
Options are: "A) $4,900 B) $5,000 C) $9,900 D) $14,900"
Particulars Amount
Original cost $25,000
Damage $30,000
Lower of the two is $25,000
Less: Insurance reimbursement $15,000
Actual loss $10,000
Less: Deduction $100
Less: 10% of AGI (10% of 50,000) $5,000
Final Deduction $4,900
Note: Flat $100 is deducted from this amount and also 10% of AGI, i.e 10% of $50,000 is deducted to finally arrive at the deduction.
Batch Co. employs knowledge workers and is finding that its employees are retiring closer to age 75 than to age 65. As a result, they recently amended their defined benefit pension plan such that benefits will begin at age 72, with certain exceptions for those employees demonstrating an earlier need, instead of at age 60. Batch Co. has been able to measure the actuarial present value of this amendment, which is the change in the projected benefit obligation (PBO) that results from the change. How will this affect pension expense in current and future periods?
Answer:
It will decrease prior service cost and, as prior service cost is amortized, will decrease pension expense.
Explanation:
In the given if there is any change in the projected benefit obligation so the pension expense would impact in the present and future period by reducing the service cost that incurred before also the service cost that incurred before would be amortized that ultimately reduce the pension expense
Therefore the first option is correct
In Marubeni America Corp. v. United States, the federal appellate court ruled that the Nissan Pathfinder was, for tariff classification purposes a motor vehicle for the transport of passengers. The classification of goods is significant because: Question 16 options: A) the fair value will vary depending on the classification B) the subsidy will vary depending on the classification C) the tariffs will vary depending on the classification D) the dumping duty will vary depending on the classification
Answer: the tariffs will vary depending on the classification.
Explanation:
Tariff is a form of tax that is usually imposed on the imports that are brought from other countries to a particular country.
With regards to information provided in the question, the classification of goods is significant because the tariffs will vary depending on the classification.
A review of Parson Corporation's accounting records found that at a volume of 90,000 units, the variable and fixed cost per unit amounted to $8 and $4, respectively. On the basis of this information, what amount of total cost would Parson anticipate at a volume of 85,000 units
Answer:
Total cost= $1,040,000
Explanation:
For 90,000 units:
Unitary variable cost= $8
Unitary fixed cost= $4
First, we need to calculate the total fixed cost:
Total fixed cost= 4*90,000= $360,000
Now, we can determine the total cost for 85,000 units:
Total cost= 85,000*8 + 360,000
Total cost= $1,040,000
Bob makes his first deposit into an IRA earning compounded annually on his th birthday and his last deposit on his birthday ( equal deposits in all). With no additional deposits, the money in the IRA continues to earn interest compounded annually until Bob retires on his th birthday. How much is in the IRA when Bob retires
Answer:
$187,881.52
Explanation:
The computation is shown below:
The future value would be
= PMT × ((1 + rate of interest)^number of years -1) ÷ (rate of interest)
= $1,500 × ((1 + 0.066)^13 - 1) ÷ (0.066)
= $1,500 × 19.626
= $29,439.14
Now when bob retired, the amount is
= $29,439.14 × (1 + 0.066)^29
= $29,439.14 × 6.383
= $187,881.52
What are Apple’s dollar amounts for assets, liabilities, and equity at September 29, 2018? Confirm that the accounting equation holds in this case. Assets = Liabilities + Equity Answer Answer Answer Round to one decimal place (i.e. 34.5%) What percent of Apple’s assets is financed from creditor financing sources?
Answer:
70.7%
Explanation:
Note: The full question is attached as picture below
Percent of Apple's assets is financed from creditor financing sources = Liabilities / Assets
Percent of Apple's assets is financed from creditor financing sources = $258,578 / $365,725
Percent of Apple's assets is financed from creditor financing sources = 0.70702851
Percent of Apple's assets is financed from creditor financing sources = 70.7%
In 2019, Martin had two employers during the year. Both employers withheld Social Security tax from his wages in the amounts of $4,314.05 and $4,274.75. What amount can Martin claim as a credit against his income tax when he files his income tax return
Answer:
$1241.80
Explanation:
From the given information:
the social security taxes withheld by both employers are $4314.05 and $4274.75 respectively.
Let's recall that the maximum amount the IRS can also withhold from wages is $7347.00.
Therefore;
the required amount that can be claimed as a credit is:
= $4,314.05 + $4,274.75 - $7347.00
= $1241.80
Answer:
$349
Explanation:
1) 4,314.05 + 4,274.75 = 8,588.80
2) Social security withheld max: 132,900 * 6.2% = 8,239.80
3) 8,588.80 - 8,239.80 = 349
A company uses a perpetual inventory system. The company began its fiscal year with inventory of $998,000. Purchases of merchandise on account during the year totaled $3,124,089. Merchandise costing $3,456,980 was sold on account for $6,909,879. Prepare the journal entries to record these transactions.
Answer:
Date Account Titles and Explanation Debit Credit
Inventory $3,124,089
Account payable $3,124,089
(To record purchase of merchandise inventory)
Account receivables $6,909,879
Sales revenues $6,909,879
(To record sales on account)
Cost of goods sold $3,456,980
Inventory $3,456,980
(To record the cost of sales)
Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. Set up a schedule of interest expense and discount amortization under the straight-line method
Answer:
Devon Harris Company
Schedule of Interest Expense and Discount Amortization under the straight-line method:
Time Cash Interest Interest Expense Amortization Carrying Amount
0 N/A N/A N/A $1,855,816
1 $200,000 $228,836.80 $28,836.80 $1,884,652.60
2 $200,000 $228,836.80 $28,836.80 $1,913,489.40
3 $200,000 $228,836.80 $28,836.80 $1,942,326.20
4 $200,000 $228,836.80 $28,836.80 $1,971,163.00
5 $200,000 $228,836.80 $28,837.00 $2,000,000
Explanation:
a) Data and Calculations:
10% Bonds' maturity value = $2,000,000
Bonds sales value = $1,855,816
Total discount = $144,184
Annual Interest = $200,000 ($2,000,000 * 10%)
Maturity period = 5 years (January 1, 2020 to January 1, 2025)
Annual amortization of discount = $28,836.80 ($144,184/5)
Total interest cost with amortized discount each year = $228,836.80
b) Under the straight line method, the premium or discount on the bond is amortized in equal amounts over the life of the bond, as demonstrated above.
Based on the information given, it should be noted that the Cash Interest, Discount amortized and Interest Expenses will be $20,000, $28836.80, and $228836.80 respectively.
Interest expenseFrom the information given, the following can be calculated:
Discount on issue = $2000000 - $1855816 = $144184
Discount to be amortized on each interest date = $144184 / 5 = $28836.80
Cash interest annual = $2000000 * 10% = $200000
Therefore, the Cash Interest, Discount amortized and Interest Expenses from 2020 to 2025 will be $20,000, $28836.80, and $228836.80 respectively.
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Time-tested practices for developing successful teams are Multiple Choice showing enthusiasm, making timely decisions, practicing innovation. admitting mistakes, being flexible, having persistence. giving credit to others, keeping people informed, keeping promises. putting others first and self last. all of these.
Answer:
all of these.
Explanation:
Time-tested practices can be regarded as methods , ways that has been usings for long period of time that has produced a successful teams and can be trusted any time. It should be noted that Time-tested practices for developing successful teams are the followings;
✓showing enthusiasm
✓making timely decisions
✓ practicing innovation
✓admitting mistakes
✓ being flexible,
Use the following items to prepare a balance sheet and a cash flow statement. Determine the total assets, total liabilities, net worth, total cash inflows, and total cash outflows. Balance Sheet and Cash Flows Rent for the month$1,240 Monthly take-home salary$3,420 Cash in checking account 700 Savings account balance 2,110 Spending for food 820 Balance of educational loan 2,930 Current value of automobile 8,590 Telephone bill paid for month 69 Credit card balance 236 Loan payment 177 Auto insurance 239 Household possessions 3,680 Stereo equipment 3,240 Payment for electricity 110 Lunches/parking at work 271 Donations 169 Home computer 1,870 Value of stock investment 1,750 Clothing purchase 148 Restaurant spending 177
Answer:
1. Balance Sheet:
Assets:
Cash in checking account $700
Savings account balance 2,110
Current value of automobile 8,590
Home computer 1,870
Value of stock investment 1,750
Household possessions 3,680
Stereo equipment 3,240 $21,940
Liabilities:
Balance of educational loan 2,930
Credit card balance 236 $3,166
Net Worth $18,774
2. Cash Flows:
Cash Inflows:
Monthly take-home salary $3,420
Outflows:
Rent for the month $1,240
Spending for food 820
Telephone bill paid for month 69
Auto insurance 239
Payment for electricity 110
Lunches/parking at work 271
Donations 169
Clothing purchase 148
Restaurant spending 177
Loan payment 177
Total cash outflows $3,420
Explanation:
Monthly take-home salary $3,420
Rent for the month $1,240
Spending for food 820
Telephone bill paid for month 69
Auto insurance 239
Payment for electricity 110
Lunches/parking at work 271
Donations 169
Clothing purchase 148
Restaurant spending 177
Loan payment 177
Assets:
Cash in checking account 700
Savings account balance 2,110
Current value of automobile 8,590
Home computer 1,870
Value of stock investment 1,750
Household possessions 3,680
Stereo equipment 3,240
Liabilities:
Balance of educational loan 2,930
Credit card balance 236
The conceptual framework indicates the desired fundamental and enhancing qualitative characteristics of accounting information. Several constraints impede achieving these desired characteristics. Answer each of the following questions related to these characteristics and constraints.
1. Which component would allow a large company to record the purchase of a $120 printer as an expense rather than capitalizing the printer as an asset?
2. Donald Kirk, former chairman of the FASB, once noted that " . . . there must be public confidence that the standard-setting system is credible, that selection of board members is based on merit and not the influence of special interests . . ." Which characteristic is implicit in Mr. Kirk's statement?
3. Allied Appliances, Inc., changed its revenue recognition policies. Which characteristic is jeopardized by this change?
4. National Bancorp, a publicly traded company, files quarterly and annual financial statements with the SEC. Which characteristic is relevant to the timing of these periodic filings?
5. In general, relevant information possesses which qualities?
6. When there is agreement between a measure or description and the phenomenon it purports to represent, information possesses which characteristic?
7. Jeff Brown is evaluating two companies for future investment potential. Jeff's task is made easier because both companies use the same accounting methods when preparing their financial statements. Which characteristic does the information Jeff will be using possess?
8. A company should disclose information only if the perceived benefits of the disclosure exceed the costs of providing the information. Which constraint does this statement describe?
Answer:
1)Materiality
2)Reliability
3)Consistency
4)periodicity
5)Predictive Value, Confirmatory value, and/or Materiality
6)Faithful representation
7)Comparability
8)Cost effectiveness
Explanation:
1)Materiality can be regarded the cost or asset that is been considered having a great influence on the company. It is the relevancy of information as well as work of transaction as regards financial statement of the company.
2)Reliability in Accounting can be regarded as trustworthiness in a financial statements. It helps to know if a financial information is eligible to be utilized by investors as well as creditors ending up with the same results.
3)Consistency can be regarded as when the company follows accounting principles in subsequent years when presenting and presenting financial statements as well as internal working.
4)periodicity explained that financial results of a company can be reported within a designated periods of time. This could be on basis of monthly, quarterly as well as annual.
5)Predictive Value, Confirmatory value, and/or
Materiality
A relevant information are ones that has data from occured event i.e it is CONFIRMATORY. It should also encompass data as regards to the future I.e
PREDICTIVE.Relevant information helps in decision making
6)Faithful representation can be regarded as a concept that explained that financial statements of a company should be able to display the condition of a business accurately
7)Comparability can be regarded as the extent to which financial statements information can be compared in different firms as well as time period
8)Cost effectiveness can be regarded as when greatest benefits are recorded with a comparatively low price
