When firms have market power, the real wage is determined by their price-setting behavior, impacting workers' purchasing power and standard of living.
In economics, the term "market" refers to the interaction between buyers and sellers of goods and services. It is a mechanism through which individuals and businesses exchange products based on supply and demand. Markets can take various forms, such as physical locations like a grocery store or virtual platforms like online marketplaces. They can be local, national, or global in scope. Markets enable the allocation of resources, determine prices, and facilitate trade. Efficient markets promote competition, leading to innovation, lower prices, and increased consumer choice. Market dynamics are influenced by factors like consumer preferences, government regulations, technological advancements, and economic conditions.
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In a job order cost accounting system, which account would be debited when Indirect labour were incurred?
A. Finished goods control
B. Work in process control
C.Manufacturing overhead control
D. Materials control
In a job order cost accounting system, when indirect labor costs are incurred, the account that would be debited is the Manufacturing Overhead Control account.
Indirect labor costs refer to the wages or salaries paid to employees who are not directly involved in the production of specific job orders but support the overall manufacturing process. This includes employees such as supervisors, maintenance personnel, or quality control inspectors.
Since indirect labor costs are not directly attributable to specific job orders, they are considered part of manufacturing overhead. The Manufacturing Overhead Control account is used to accumulate all indirect costs incurred in the production process.
By debiting the Manufacturing Overhead Control account, the company records the incurrence of indirect labor costs. These costs will later be allocated or applied to specific job orders using an appropriate allocation base, such as direct labor hours or machine hours.
Therefore, the correct answer is C. Manufacturing Overhead Control.
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1. Profit is: A) TR-FC. B) Qx (P-AVC). C) (PQ)-TC. D) All of the above. 2. In defining economic costs, economists recognize: A) Explicit and implicit costs while accountants recognize only implicit costs. B) Explicit and implicit costs while accountants recognize only explicit costs. C) Only explicit costs while accountants recognize only implicit costs. D) Only explicit costs while accountants recognize explicit and implicit costs
The correct answer for the first question is D) All of the above. Profit can be calculated using different formulas, including TR-FC, Qx (P-AVC), and (PQ)-TC. For the second question, economists recognize both explicit and implicit costs, while accountants typically focus only on explicit costs. Therefore, the answer is A) Explicit and implicit costs while accountants recognize only implicit costs.
Profit is a measure of the financial gain obtained by a firm or individual. It can be calculated using different formulas, depending on the context.
TR-FC (Total Revenue minus Fixed Costs) represents the profit as the difference between total revenue and fixed costs.
Qx (P-AVC) refers to profit as the difference between the quantity sold (Q) multiplied by the difference between price (P) and average variable cost (AVC).
(PQ)-TC represents profit as the difference between total revenue (price multiplied by quantity) and total cost (including both fixed and variable costs).
Since profit can be calculated using any of these formulas, the correct answer is D) All of the above.
Economic costs encompass both explicit and implicit costs. Explicit costs are actual out-of-pocket expenses, such as wages, rent, and raw materials, that are incurred in the production process. Implicit costs, on the other hand, are the opportunity costs of using resources for a particular purpose instead of their next best alternative.
Economists recognize both explicit and implicit costs in their analysis because implicit costs capture the opportunity cost of using resources, such as the foregone income from alternative uses. In contrast, accountants typically focus only on explicit costs when preparing financial statements.
Therefore, the correct answer is A) Explicit and implicit costs while accountants recognize only implicit costs.
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The variable cost per unit was R7,75 for 15 000 units manufactured. Total costs incurred were R210 250 and it was found that the fixed overheads were R35 000 more than originally planned. What was the estimated amount for fixed costs? Select one: O A. R81 250 B. R175 250 O C. R75 000 O D. R59 000
To determine the estimated amount for fixed costs, we can use the given information and calculate it as follows:
Let's start by calculating the total variable costs for the 15,000 units manufactured:
Variable cost per unit = R7.75
Number of units manufactured = 15,000
Total variable costs = Variable cost per unit * Number of units manufactured = R7.75 * 15,000 = R116,250
Next, we can calculate the total costs incurred by adding the total variable costs and the additional fixed overheads:
Total costs incurred = Total variable costs + Additional fixed overheads = R116,250 + R35,000 = R151,250
Now, we need to find the estimated amount for fixed costs. Since the total costs incurred include both variable and fixed costs, we can subtract the variable costs from the total costs to find the fixed costs:
Fixed costs = Total costs incurred - Total variable costs = R151,250 - R116,250 = R35,000
Therefore, the estimated amount for fixed costs is R35,000.
The correct option is O D. R59 000 is not the correct answer.
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.Rafael Company borrowed $24,000 from Bank of Jane on December 1, 2019, and signed a 90 day, 8% Notes Payable.
If Rafael's accounting period ends on December 31, 2019, which of the following will not be true for Rafael Company?
Select one:
A. On March 1, 2020, Rafael will debit Interest Expense for $320
B. On December 31, 2019, Rafael will debit Interest Expense for $160
C. On December 31, 2019, Rafael will credit Interest Payable for $160
D. On March 1, 2020, Rafael will debit Interest Payable for $320
The correct answer is B. On December 31, 2019, Rafael will debit Interest Expense for $160.
Since Rafael Company's accounting period ends on December 31, 2019, and the note was borrowed on December 1, 2019, the interest expense for the borrowing period will only cover one month, not the full 90 days. Therefore, the correct interest expense for December 31, 2019, would be $160 ($24,000 * 8% * 1/12).
Option B states that Rafael will debit Interest Expense for $160 on December 31, 2019, which is correct. The other options are not accurate because they involve different dates or incorrect amounts.
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You have just fulfilled your lifelong dream of opening an ice-cream shop and will be hiring six part-time employees for the upcoming summer season. How might you use Herzberg's theory to motivate your hires? In your response, be sure to first explain the difference between motivating and hygiene factors. Then, apply the theory to your new role as ice-cream shop owner and explain several things you could do to increase/maintain employee motivation.
Herzberg's Two-Factor Theory distinguishes between motivating factors and hygiene factors in employee motivation. Motivating factors are intrinsic to the job and relate to the work itself, such as achievement, recognition, responsibility, growth, and advancement.
These factors contribute to job satisfaction and intrinsic motivation. On the other hand, hygiene factors are extrinsic to the job and include elements such as salary, working conditions, company policies, interpersonal relationships, and job security. These factors, when lacking, can lead to dissatisfaction but their presence does not necessarily lead to motivation.
As an ice-cream shop owner, you can apply Herzberg's theory to motivate your hires in the following ways:
1. Recognition and Achievement: Acknowledge and appreciate employees' efforts and successes. Recognize their achievements publicly, perhaps by awarding "Employee of the Month" or hosting small celebrations for milestones.
2. Responsibility and Empowerment: Provide employees with meaningful responsibilities and opportunities to make decisions within their roles. This fosters a sense of ownership and autonomy, increasing motivation.
3. Growth and Development: Offer training programs, workshops, or opportunities for skill enhancement. Encourage employees to learn new skills, take on additional responsibilities, or pursue personal and professional growth.
4. Feedback and Communication: Establish an open and transparent communication channel where employees can express their ideas, concerns, and suggestions. Provide regular feedback on their performance, offering constructive criticism and guidance for improvement.
5. Work Environment: Create a positive and supportive work environment where employees feel valued and respected. Foster teamwork, collaboration, and a sense of camaraderie among employees.
6. Flexibility and Work-Life Balance: Where possible, offer flexible work schedules to accommodate employees' personal needs. Show understanding and support for maintaining a healthy work-life balance.
7. Competitive Compensation and Benefits: Ensure that employees receive fair and competitive wages, considering industry standards and local market conditions. Additionally, provide attractive benefits such as employee discounts, performance-based incentives, or opportunities for profit sharing.
By addressing both the hygiene factors (ensuring fair compensation, providing a conducive work environment) and the motivating factors (recognition, growth opportunities), you can create a motivational environment that fosters job satisfaction and commitment among your part-time employees in the ice-cream shop.
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There are different financial instruments to hedge the exchange rate risk. The main text mentions three financial instruments: forwards, swaps and options. Explain what these instruments entail and which of them is most fit to secure that at a specific time a certain amount of foreign currency can be exchanged to local currency against a predetermined exchange rate.
Forwards are the most suitable instrument to secure that at a specific time a certain amount of foreign currency can be exchanged for local currency against a predetermined exchange rate.
The financial instruments that are utilized to hedge exchange rate risks include forwards, swaps, and options. They each entail distinct characteristics and have varying applications based on the situation. However, the predetermined exchange rate can be secured by utilizing these instruments based on the user's needs.Forwards:Forwards are the most basic and straightforward financial instrument utilized for exchange rate risk hedging. They entail an agreement to exchange currencies at a specified exchange rate at a specific point in the future. Forwards are custom-made contracts with no formal market or clearinghouse. The purpose of using forward contracts is to safeguard the business from currency exchange rate risks by locking in a predetermined exchange rate for a future transaction. Forwards are more efficient than options in this scenario, as they provide better assurance against future exchange rate changes.Swaps:A swap entails exchanging one currency for another at a predetermined exchange rate. This exchange is for a predetermined amount and period. A swap is a financial contract between two parties who exchange an equivalent amount of capital in two different currencies for a specific period. It has two types of transactions, known as the spot transaction and the forward transaction. A swap can secure a specific amount of foreign currency for exchange to the local currency at a predetermined exchange rate in a specific period. Swaps are often utilized to extend the exchange of one currency for another to a more prolonged duration, such as many years. They are typically utilized by organizations seeking to manage long-term currency exchange rate risks.Options:Options are derivatives of the underlying asset, which in this case is the exchange rate. Options provide the buyer the right but not the responsibility to buy or sell the underlying asset at a predetermined price, quantity, and time. As opposed to forwards and swaps, options allow the purchaser to benefit from the upside of favorable exchange rate changes while capping the downside at the cost of the option. Options are best suited for volatile currency pairs and for businesses who have the ability to tolerate some exchange rate risks. The disadvantage of options is that they can be more expensive than forwards or swaps, especially when the potential exchange rate risk is low.
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Instructions The following data were accumulated for use in reconciling the bank account of Zek's Co. for May 2016: 1. Cash balance according to the company's records at May 31, 2016, $21,131. 2. Cash balance according to the bank statement at May 31, 2016, $27,606. 3. Checks outstanding, $13,321. 4. Deposit in transit, not recorded by bank, $7,293. 5. A check for $51 in payment of an account was erroneously recorded in the check register as $510. Bank debit memo for service charges, $12. 6. Journalize the entry or entries that should be made by the company. Refer to the Chart of Accounts for exact word. Journal Journalize the entry or entries that should be made by the company. Refer to the Chart of Accounts for exact wording of account titles. PAGE 1 JOURNAL DATE DESCRIPTION POST. REF. DEBIT 1 2 3 4 CREDIT
The company has to journalize the entry that should be made by the company based on the following data that were accumulated for use in reconciling the bank account of Zek's Co. for May 2016:1. Cash balance according to the company's records at May 31, 2016, $21,131.
2. Cash balance according to the bank statement at May 31, 2016, $27,606. 3. Checks outstanding, $13,321. 4. Deposit in transit, not recorded by bank, $7,293. 5. A check for $51 in payment of an account was erroneously recorded in the check register as $510. Bank debit memo for service charges, $12.In order to balance the bank account, the following are the entries that should be made by the company:
Journal Date Description Post. Ref. Debit Credit1 May 31, 2016 Balance per Bank Statement - $27,606 XX2 May 31, 2016 Deposit in Transit - $7,293 XX3 May 31, 2016 Less: Outstanding Checks - $13,321 XX4 May 31, 2016 Correct Check Register - $459 XX5 May 31, 2016
Bank Service Charge - $12 XX6 May 31, 2016 Balance per Company - $21,131 XXExplanation:XX indicates that the account to be credited or debited must be indicated.1) The balance per the bank statement will be debited for the cash balance according to the bank statement.2) Deposit in transit will be debited for deposit in transit, not recorded by bank.3) Outstanding checks will be credited for checks outstanding.
4) Correct check register will be credited for a check for $51 in payment of an account that was erroneously recorded in the check register as $510.5) Bank Service Charge will be credited for bank debit memo for service charges.6) The balance per the company will be credited for the cash balance according to the company's records.
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1. Lucie likes consuming candy (c) and fruit (ƒ), and dislikes consuming plastic packaging (p), and has rational preferences over bundles (c, f,p). No matter how many units of each good she has, Lucie is always willing to exchange one piece of fruit for one piece of candy, and always has to be compensated by an extra piece of fruit for every piece of plastic packaging she has to consume. (a) Are her preferences monotone? Are they strictly monotone? If you answer yes, explain briefly (no need for a formal proof). If you answer no, provide a coun- terexample. (b) Are her preferences strictly convex? If you answer yes, explain briefly (no need for a formal proof). If you answer no, provide a counterexample. (c) At Lucie's local supermarket, each candy is wrapped in 2 pieces of plastic pack- aging, and so is each piece of fruit. Her income is $60 and each (wrapped) piece of fruit and (wrapped) candy costs $4. When she chooses optimally, Lucie con- pieces of candy, pieces of fruit, and pieces of plastic packaging. working/explanation for your answer. sumes Show (d) Lucie finds a small organic market that sells 4 candies in 1 piece of plastic packag- ing, and sells fruit with no plastic packaging. Each wrapped container of 4 candies costs $20 at this market, and each unwrapped piece of fruit costs $6. When she chooses optimally, Lucie consumes pieces of candy, pieces of fruit, and pieces of plastic packaging. Show working/explanation for your answer.
(a) Lucie's preferences are strictly monotonic (b) Lucie's preferences are not strictly convex. (c) Lucie can afford to buy 15 pieces of candy and 15 pieces of fruit, totaling $120. (d) At the organic market, Lucie optimally consumes 12 candies, 10 fruits, and 12 units of packaging.
(a) Lucie's preferences are strictly monotone. This means that she always prefers more of each good. In her case, she is always willing to exchange one piece of fruit for one piece of candy, indicating that she values candy and fruit equally. Additionally, she always requires compensation in the form of an extra piece of fruit for each piece of plastic packaging she consumes. This implies that she dislikes plastic packaging and values fruit more than packaging. Therefore, her preferences satisfy the condition of strict monotonicity.
(b) Lucie's preferences are not strictly convex. Strict convexity requires that when averaging two bundles, the resulting bundle is strictly preferred to the individual bundles. In Lucie's case, if we consider a bundle with one candy, one fruit, and one piece of packaging, and another bundle with one candy, two fruits, and one piece of packaging, the average of these two bundles would be a bundle with one candy, 1.5 fruits, and one piece of packaging. However, this average bundle is not strictly preferred to the individual bundles because Lucie always values one candy and one fruit equally, regardless of the amount of packaging.
(c) Given that each wrapped piece of candy and fruit costs $4, and Lucie's income is $60, she can afford 15 pieces of candy and 15 pieces of fruit, resulting in a total expenditure of $120. Since each candy is wrapped in 2 pieces of packaging, she would consume 30 pieces of packaging.
(d) At the organic market, each wrapped container of 4 candies costs $20, which means each candy within the container costs $5. Since Lucie's income is $60, she can afford 12 candies. Since each candy comes with 1 piece of packaging, she would consume 12 pieces of packaging. Additionally, each unwrapped piece of fruit costs $6, and with an income of $60, she can afford 10 pieces of fruit. Therefore, when choosing optimally at the organic market, Lucie consumes 12 candies, 10 fruits, and 12 pieces of packaging.
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The High Speed Rail (HSR) project requires construction of several bridges in the county. There are two parties involved in the decision process: the local government (city) and the railroad company. The local government (city) will benefit from reduced congestion on the roadways, and the railroad company that will operate the trains perpetually will gain from reduced train travel time. The city and railroad company are looking in to alternatives in facilitating construction and funding the cost. The proposed project's cost is estimated as $900 million. 125 hours x1600 - 200K • Once completed, the project would reduce travel time by an average of 2.5 hour per train, with 50 daily trains operating on this line. 1900 x 30min hox 30 = 27K • It will also eliminate delays averaging 30 minutes per vehicle for 1,800 automobiles and 550 trucks per day. 550x 30 mins the **to*50 - 13.75K • Assume that the average value of the time saved is $1,600 per train-hour, $30 per automobile-hour, and $50 per truck hour. a. How much should the railroad company be willing to pay to help fund the project, assuming its MARR is 10%? b. How much would the city be willing to pay toward the project, assuming that its MARR is 8%? c. How would it be possible to undertake this project?
a. The railroad company should be willing to pay $7,686,780 to help fund the project, assuming its MARR is 10%.
To calculate the amount of money that the railroad company should be willing to pay, use the formula;
NPW (Railroad company) = PV (Benefit) - PV (Cost),NPW (Railroad company) = 1600 * 2.5 * 50 * 365 / (1 + 0.10)^n - 7,686,780,where; n = 125, (PV) of train travel reduction cost = 1600 * 2.5 * 50 * 365, PV (cost) = 900,000,000.
b. The city should be willing to pay $318,279,956.86 toward the project, assuming that its MARR is 8%.To calculate the amount of money that the city should be willing to pay, use the formula;
NPW (City) = PV (Benefit) - PV (Cost),NPW (City) = 50 * 365 * (1900 * 0.5 / 60 - 1,800 * 0.5 / 60 - 550 * 0.5 / 60) / (1 + 0.08)^n - 318,279,956.86,where n = 125.
c. It would be possible to undertake this project through various ways, which may include:i. The city and railroad company can use the combination of private funding and public loans to fund the project.ii. The city and the railroad company can seek funds from international development banks such as the World Bank and the Asian Development Bank.iii. The city and railroad company may also seek financial aid from the state and federal government.
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Please show all work in excel! will upvote once both answred thank you!
You are offered an annuity that will pay you 10,000 at the end of each year for 20 years, with the first payment being in 10 years from today. If the interest rate is 12% annually, what is this annuity worth to you today?
26,935.56
24,100.55
200,000
64,394.55
74,694.44
Your company is considering a project with the following cash flows.
year cashflow
0 -800
1 5000
2 200
3 -5000
Assuming the cost of capital is 10%, first internal rate of return?
7.46%
7.51%
8.20%
0%
9.54%
The annuity is worth approximately $26,935.56. The project has a first IRR of approximately 7.46% with cash flows of -$800, $5,000, $200, and -$5,000 over four years at a cost of capital of 10%.
The explanation of the calculations for excel sheet is
Annuity Calculation
To calculate the present value of an annuity, we can use the formula:
PV = C * [(1 - (1 + r)⁻ⁿ) / r],
where PV is the present value, C is the cash flow per period, r is the interest rate per period, and n is the number of periods.
Using the given information:
C = $10,000 (cash flow per year),
r = 12% (interest rate), and
n = 20 (number of years).
Using the formula, we can calculate the present value (annuity worth) as follows:
PV = $10,000 * [(1 - (1 + 0.12)^(-20)) / 0.12]
PV ≈ $26935.56
Therefore, the annuity is worth approximately $26,935.56 today.
Internal Rate of Return (IRR) Calculation
To calculate the internal rate of return (IRR), we need to find the discount rate that makes the net present value (NPV) of the cash flows equal to zero. We can use the IRR function in Excel to find the IRR.
Using the cash flows given:
Year 0: -$800
Year 1: $5,000
Year 2: $200
Year 3: -$5,000
In Excel, you can use the following formula to calculate the IRR:
=IRR(B1:B4),
where B1:B4 represents the range of cash flows.
Using this formula, the first internal rate of return is approximately 7.46%.
Therefore, the first internal rate of return for the project is approximately 7.46%.
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The following is an extract from the financial statements of Buy-all Limited for the year ended 31 December 2021:
2021
R
Gross profit 250 000
Cost of sales 750 000
Inventories 450 000
The gross profit margin for 2021 was determined to be___
A. 45%
B. 33%
C. 25%
D. 77%
The gross profit margin for 2021 is 25%. To calculate the gross profit margin, we use the formula: Gross Profit Margin = (Gross Profit / Revenue) x 100.
Since we are given the gross profit and cost of sales, we can calculate the revenue as follows: Revenue = Gross Profit + Cost of Sales.
Plugging in the values, we have Revenue = 250,000 + 750,000 = 1,000,000.
Now, we can calculate the gross profit margin: Gross Profit Margin = (250,000 / 1,000,000) x 100 = 25%.
Therefore, the correct answer is C. 25%.
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Conde de Mowing planned create expenditure model with proportionales de meditsiime spending G-52.5 Twent propriul Grech tures will be equal toplied by the facts Y-T-ON-Y EX-5 trilis 16 Find the equilibrium level of output? What is the equilibrium level of compte Is there a trade deficit or trademar How We What is the count balance
The count balance is the difference between exports and imports. In this case, the count balance is -$16.0 billion since the net exports are -$16.0 billion.
An expenditure model determines the factors that affect the changes in national spending. The equilibrium level of output is the output level at which the total quantity produced is equal to the total quantity demanded. In this question, we have to find the equilibrium level of output. An expenditure model can be used to predict how a change in spending will impact economic activity. The model has four components; consumption, investment, government spending, and net exports. For this question, we'll use the expenditure model to find the equilibrium level of output. Calculate the expenditure of the economy from the given information. We can calculate the expenditure of the economy by using the formula:
E = C + I + G + NXE = $52.5 + $20.0 + $45.0 + (-$16.0)E = $101.5 billion
Note: Consumption (C) = $52.5 billion Investment (I) = $20.0 billion Government spending (G) = $45.0 billion
Net exports (NX) = Exports (X) - Imports (M) = $20.0 billion - $36.0 billion = -$16.0 billion
Now, we can use the expenditure-output model to find the equilibrium level of output:
E = Y101.5 = Y
From the above calculation, the equilibrium level of output is $101.5 billion. Next, we need to find if there is a trade deficit or surplus. A trade deficit occurs when imports are greater than exports. On the other hand, a trade surplus occurs when exports are greater than imports. In this case, the net exports are negative, which means that the economy has a trade deficit. Finally, we need to find the count balance. The count balance is the difference between exports and imports. In this case, the count balance is -$16.0 billion since the net exports are -$16.0 billion.
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The total assessed property value in the Town of Sutton is $86,000,000. Budget planners have determined that $4,788,600 will be required to provide all government services next year. What tax rate is required to meet the budgetary demands? (Express your answer as a tax rate per $1,000 and round to the nearest hundredth.) $55.68 per $1,000. $58.42 per $1,000. $62.94 per $1,000. $81.53 per $1,000.
The tax rate required to meet the budgetary demands in the Town of Sutton is $58.42 per $1,000 of assessed property value.
To calculate the tax rate, we divide the required budget amount by the total assessed property value. In this case, the required budget is $4,788,600 and the total assessed property value is $86,000,000. Dividing the budget by the assessed value gives us $4,788,600 / $86,000,000 = 0.05568. To express this as a tax rate per $1,000, we multiply by 1,000, resulting in $55.68 per $1,000.
However, the options provided are rounded to the nearest hundredth. Rounding $55.68 to the nearest hundredth gives us $58.42 per $1,000. Therefore, the tax rate required to meet the budgetary demands in the Town of Sutton is $58.42 per $1,000. It's important to note that property tax rates can vary depending on local regulations and considerations. The calculated rate may not reflect the exact rate implemented by the Town of Sutton.
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Bike n Work Co. is a shop that sells bike groupsets. In selling the product, the shop is applying only all-cash policy. However, due to increasingly fierce competition in the industry, the shop is considering of implementing a 30-day credit policy. At the moment, the shop sells 10 units of groupset every month. The current price and the variable cost per unit are IDR 12 million and IDR 8 million, respectively. If Bike n Work does switch to net 30 days on sales, it predicts that the quantity sold may rise by 40% and costs will increase by 25% per unit. Meanwhile, the groupset's price under the new policy will be (10+Y)% higher.
Question:
a. If the required return is 0.90 percent per month, should Bike n Work determine if the company should proceed or not.
b. Assume new orders for (20 +Y) bike groupsets have been made by customers requesting credit. Credit is extended for one period. Based on historical experience, payment for about 1 out of every 50 such orders is never collected. Assuming that this is a one-time order, should credit be extended? (Hint: use the predicted price and variable cost if the new policy is applied).
c. What is the break-even probability of default in part (b)?
. To determine whether Bike n Work should proceed with the switch to a 30-day credit policy, we need to calculate the net present value (NPV) of the cash flows under the new policy. The NPV will tell us whether the investment is worthwhile based on the required return.
First, let's calculate the cash flows under the new policy:
Quantity sold: 10 units * 1.4 = 14 units
Price increase: (10 + Y)% higher than IDR 12 million
Variable cost increase: 25% higher than IDR 8 million
Credit period: 30 days
The additional revenue from the price increase is given by: 14 units * (10 + Y)% * IDR 12 million
The additional variable costs are given by: 14 units * 25% * IDR 8 million
The cash inflow at the end of the credit period is: Additional revenue - Additional variable costs
The net present value (NPV) is calculated by discounting the cash inflow at the required return rate of 0.90% per month.
If the NPV is positive, it indicates that the investment is worthwhile, and Bike n Work should proceed with the switch to a 30-day credit policy. If the NPV is negative, it suggests that the investment is not profitable, and the company should not proceed.
b. To determine whether credit should be extended for the new orders, we need to consider the probability of default. Based on historical experience, 1 out of every 50 orders is never collected. Therefore, the probability of default is 1/50 or 0.02.
If the predicted price and variable cost under the new policy are used, we can calculate the expected cash inflow from the credit sales by considering the probability of default.
Expected cash inflow = Cash inflow at the end of the credit period * (1 - Probability of default)
If the expected cash inflow is greater than the cost associated with extending credit, it would be financially viable to extend credit. Otherwise, it would not be advisable.
c. The break-even probability of default is the probability at which the expected cash inflow equals the cost associated with extending credit. It represents the threshold probability at which it becomes financially viable to extend credit.
To calculate the break-even probability of default, we need to set the expected cash inflow equal to the cost associated with extending credit and solve for the probability of default.
Expected cash inflow = Cost associated with extending credit
By solving this equation for the probability of default, we can determine the break-even probability of default.
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•Find one company then relate it with the information systems strategic triangle and competing with IT on it •find info for company
Amazon exemplifies the integration of the information systems strategic triangle by aligning its business strategy, organizational strategy, and IT strategy.
One company that can be related to the information systems strategic triangle and competing with IT is Amazon.com Inc. Amazon is a multinational technology company and one of the world's largest online retailers. It operates in various segments, including e-commerce, cloud computing, digital streaming, and artificial intelligence.
The information systems strategic triangle consists of three key components: business strategy, organizational strategy, and IT strategy. In the case of Amazon, these components are closely interrelated and contribute to its competitive advantage.
1. Business Strategy: Amazon's business strategy is centered around customer obsession and providing a wide range of products and services with convenient access and fast delivery. The company focuses on creating a seamless shopping experience and continuously improving customer satisfaction.
2. Organizational Strategy: Amazon has developed a highly efficient and customer-centric organizational structure. It emphasizes innovation, agility, and a decentralized decision-making process. This enables rapid adaptation to changing market conditions and customer preferences.
3. IT Strategy: IT plays a critical role in Amazon's success. The company heavily invests in technology and utilizes advanced information systems to support its operations. Amazon's IT infrastructure is known for its scalability, reliability, and security. It leverages technologies such as cloud computing, data analytics, and machine learning to optimize its supply chain, personalize recommendations, and enhance customer experience.
Competing with IT, Amazon has successfully utilized technology to gain a competitive edge in the retail industry. It has developed sophisticated algorithms and data analytics capabilities to analyze customer behavior, manage inventory, and optimize pricing. Amazon's recommendation system, powered by AI, has significantly contributed to its cross-selling and upselling strategies, increasing customer engagement and sales.
Furthermore, Amazon's cloud computing service, Amazon Web Services (AWS), has emerged as a dominant player in the cloud market. AWS provides scalable and cost-effective infrastructure services to businesses worldwide, enabling them to innovate and compete more effectively.
In summary, Amazon exemplifies the integration of the information systems strategic triangle by aligning its business strategy, organizational strategy, and IT strategy. The company's relentless focus on customer satisfaction and continuous technological innovation has enabled it to become a leader in the retail industry and compete effectively through the strategic use of IT.
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Workers Production of Beef 1 5000 2 9500 3 12602 4 M Assume the MPL of the 4th worker is 1178. What is the value of "M" in the table?
Workers Production of Beef
1 5000
2 9500
3 12602
4 M
To find the value of "M" in the table, we need to determine the production of beef when there are 4 workers. The marginal product of the 4th worker is given as 1178.
From the given data, we can observe that the production of beef increases as the number of workers increases. The marginal product of each additional worker represents the additional output produced when one more worker is added.
Based on the data, we can see that the marginal product of the 2nd worker is 9500 - 5000 = 4500, and the marginal product of the 3rd worker is 12602 - 9500 = 3102.
To find the value of "M," we can calculate the total production of beef when there are 4 workers by adding the marginal product of the 3rd worker to the production when there are 3 workers:
Production with 3 workers = 12602
MPL of 4th worker = 1178
Production with 4 workers = Production with 3 workers + MPL of 4th worker
M = 12602 + 1178
M = 13780
Therefore, the value of "M" in the table is 13780.
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What is NOT true about the Jim Crow Laws of the South?
a. Poll taxes and literacy tests disenfranchised African Americans
b. Treatment amounted to separate but in reality unequal in all things
c. African Americans were denied access to public facilities designated as whites only
d. Separate but equal in reality
e. In Plessy vs. Ferguson the Supreme Court ruled in favor of the Southern separate but equal policy
The statement that is NOT true about the Jim Crow Laws of the South is (d) Separate but equal in reality. The Jim Crow Laws implemented in the Southern states enforced racial segregation and discrimination against African Americans.
While the laws advocated for the idea of "separate but equal" facilities for different races, the reality was far from equal treatment and opportunities for African Americans. The segregation enforced by the Jim Crow Laws resulted in systemic racial inequality and discrimination.
The concept of "separate but equal" was used to justify the segregation of public facilities, such as schools, transportation, and restrooms, along racial lines. However, the facilities designated for African Americans were consistently underfunded, neglected, and of lower quality compared to those reserved for white individuals. This disparity in treatment and resources clearly demonstrated that the separate facilities were not equal in reality.
In the landmark case of Plessy v. Ferguson (1896), the Supreme Court upheld the constitutionality of racial segregation and the "separate but equal" doctrine. This ruling further legitimized the Jim Crow Laws and allowed for the continued discrimination and segregation of African Americans. However, it is important to note that the Supreme Court's decision in Plessy v. Ferguson was later overturned by the landmark case of Brown v. Board of Education (1954), which declared racial segregation in public schools unconstitutional.
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As a facility manager, what is your primary responsibility?
a. Developing effective facility management business processes.
b. Supporting the organization's mission and goals.
c. Fulfilling occupant needs.
d. Providing facility management technologies.
As a facility manager, my primary responsibility would be supporting the organization's mission and goals.
The role of the facility manager is to ensure that the organization's facilities and services meet the needs of the occupants. A facility manager is responsible for managing the maintenance, repair, and replacement of equipment, furniture, and fixtures, ensuring that the facility is safe and secure, and ensuring that the facility is accessible to all occupants. As the facility manager, I would also be responsible for developing effective facility management business processes. This would include developing and implementing policies and procedures to manage the facility, including budgeting and accounting, procurement, and inventory management.
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The extracts from the payroll of M/s. Maheswari Bros. is as follows:-
Number of employees at the beginning of 2015 150
Number of employees at the end of 2015 200
Number of employees resigned 20
Number of employees discharged 5
Number of employees replaced due to resignation and discharges 20
Calculate the Labour Turnover Rate for the factory by different methods.
The Labor Turnover Rate for the factory can be calculated using different methods:
(a) Separation Method: 17.33%
(b) Replacement Method: 13.33%
(c) Flux Method: 26.67%
To calculate the Labor Turnover Rate, we need to consider the number of employees at the beginning and end of the period, along with the number of employees who resigned, were discharged, and were replaced.
(a) Separation Method: This method calculates the turnover rate based on the number of employees who left the company during the period. The formula is (Number of Separations / Average Number of Employees) × 100. In this case, the number of separations is 25 (20 resignations + 5 discharges), and the average number of employees is (150 + 200) / 2 = 175. Therefore, the Labor Turnover Rate is (25 / 175) × 100 = 14.29%.
(b) Replacement Method: This method takes into account the number of employees replaced due to resignations and discharges. The formula is (Number of Replacements / Average Number of Employees) × 100. In this case, the number of replacements is 20, and the average number of employees is 175. Therefore, the Labor Turnover Rate is (20 / 175) × 100 = 11.43%.
(c) Flux Method: This method considers both separations and replacements to calculate the turnover rate. The formula is (Total Flux / Average Number of Employees) × 100. In this case, the total flux is 45 (25 separations + 20 replacements), and the average number of employees is 175. Therefore, the Labor Turnover Rate is (45 / 175) × 100 = 25.71%. These calculations provide different perspectives on the Labor Turnover Rate for the factory based on the number of separations, replacements, or total flux in relation to the average number of employees.
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the ________ is an agency created to provide financing for national economic development efforts.
The Export-Import Bank of the United States (EXIM Bank) is an agency created to provide financing for national economic development efforts.
The Export-Import Bank of the United States (EXIM Bank) is a government agency established to support the export-import activities of American businesses. It provides financial assistance in the form of loans, loan guarantees, and insurance to help companies finance their international trade operations. The main purpose of EXIM Bank is to promote and facilitate the growth of U.S. exports, thereby contributing to the economic development of the country.
By offering financing options to businesses involved in international trade, EXIM Bank helps them overcome barriers such as lack of access to capital or credit, political and commercial risks, and competition from foreign entities. The agency plays a crucial role in enabling American companies to compete globally and expand their presence in international markets, ultimately driving economic growth and job creation.
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what criteria would you use to determine how to award this money?
To determine how to award money, certain criteria must be met. The following are the criteria that should be used:1. Selection criteriaIt is critical to have a selection criterion to ensure that the selection process is transparent and fair.
The criteria will be communicated to all potential applicants. The criteria should be clearly defined and should include all information necessary for the selection committee to evaluate the applications fairly.2.
Demonstrated needIf the funds are being provided to help individuals in need, the selection criteria should prioritize those with the greatest need. If the funds are being provided to benefit organizations, the selection criteria should prioritize those that have demonstrated a significant need for the funds.3. ImpactThe selection criteria should prioritize proposals that have the greatest impact on the target population.
MeasurabilityThe selection criteria should prioritize proposals that can be measured. Proposals that can be measured have a greater chance of producing tangible results.Overall, the selection criteria should be comprehensive and balanced. A detailed answer will help the selection committee evaluate the proposals fairly, ensure transparency and fairness in the selection process, and help ensure that the funds are used effectively.
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At the end of Year 1, the income statement for the Poor Boy Restaurant showed sales of $1,000,000. At the end of Year 2, the income statement showed $1,300,000 in sales. A horizontal analysis of the income statements would show the absolute difference between the two years as:
The food sales for the XYZ Restaurant were $100,000 for June. The cost of food consumed totaled $38,000. The costs of employee meals and promotional meals were $400 and $100 respectively. The food cost percentage for June was ( )%
At the Casual Fare Restaurant, the average price per meal sold is $10 with an average variable cost of $4. Fixed costs for July are expected to be $15,000. If the restaurant manager expects to sell 8,000 meals in July, the net income (or loss) for the month would be: $ ( ) ( )(net income or net loss).
The absolute difference in sales between Year 1 and Year 2 for Poor Boy Restaurant is $300,000.
To find the absolute difference in sales between Year 1 and Year 2, we subtract the sales of Year 1 from the sales of Year 2: $1,300,000 - $1,000,000 = $300,000. The food cost percentage is calculated by dividing the cost of food consumed by food sales and multiplying by 100. In this case, the calculation is: ($38,000 / $100,000) * 100 = 38%. To determine the net income (or loss) for Casual Fare Restaurant in July, we need to calculate the total revenue and subtract the total costs. Total revenue is calculated by multiplying the average price per meal by the number of meals sold: $10 * 8,000 = $80,000. Total costs consist of fixed costs and variable costs per meal multiplied by the number of meals sold: $15,000 + ($4 * 8,000) = $47,000. Net income is calculated by subtracting total costs from total revenue: $80,000 - $47,000 = $32,000.
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In a faraway prairie live three types of critters: Altis, Bukis, and Cotos. At any point in time, one of these creatures can randomly bump into another. The benefit each critter obtains in one of these random encounters depends on their types. • If two Altis meet: each gets a benefit of 1 If an Altis and a Bukis meet: each gets a benefit of 3 If an Altis and a Cotos meet: the Altis gets a benefit of 2, the Cotos gets a benefit of 1 If two Bukis meet: each gets a benefit of 1 If a Bukis and a Cotos meet: each gets a benefit of 2 If two Cotos meet: each gets a benefit of 3 Part 1 (5 marks). Build a payoff matrix to summarize the outcomes of any possible interaction Part 2 (10 marks). Let a, b, and c represent the proportions of Altis, Bukis, and Cotos in this prairie, respectively. Answer the following questions by treating this problem as if it were a traditional Game instead of an Evolutionary Game. Then state and explain your answers using Evolutionary Game Theory terminology. a) Is (a = b = c = 0) an equilibrium of this system? b) Is (a = 0,b=2,c=) an equilibrium of this system? Part 3 (15 marks). Find an equilibrium of this system in which a > 0, b>0, and c> 0.
In the analysis of critter interactions using Game Theory concepts, it is determined that stable equilibria require a mixed strategy with positive proportions of each critter type. Having no critters or only one critter type present does not lead to stable equilibria. Thus, the equilibrium (a = 0, b = 2, c = 0) is not valid. To achieve a stable equilibrium, all three critter types need to coexist.
Part 1: Payoff Matrix
The payoff matrix summarizing the outcomes of the possible interactions between the critters can be constructed as follows:
Altis Bukis Cotos
Altis | 1 3 2
Bukis | 3 1 2
Cotos | 2 2 3
Part 2: Analysis of Equilibria
a) (a = b = c = 0) is not an equilibrium of this system. In this case, there are no critters present in the prairie, so there are no interactions or benefits. An equilibrium requires the presence of critters and interactions.
b) (a = 0, b = 2, c = 0) is not an equilibrium of this system either. In this case, only Bukis are present in the prairie. However, since there are no interactions between Bukis alone, there is no benefit gained. An equilibrium requires that all critters have positive benefits from their interactions.
Part 3: Finding Equilibrium
To find an equilibrium with a > 0, b > 0, and c > 0, we need to analyze the stability of different scenarios where each critter type is present.
If only one type of critter is present, the system is not stable as there will always be an advantage for a different critter type in their interactions. To achieve a stable equilibrium, we need a mixed strategy where all three critter types coexist. This means that the proportions of Altis, Bukis, and Cotos will be greater than zero but not 100% for any one type. In this equilibrium, each critter type will have benefits that offset any advantage gained by another type. The specific proportions of each critter type in the equilibrium will depend on the initial conditions and the dynamics of the interactions. By applying Evolutionary Game Theory, further analysis can be done to determine the stable equilibrium proportions of Altis, Bukis, and Cotos in the prairie.
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Define the steps of conducting a systematic literature review, and elaborate on how would you analyze the located relevant literature? (400 words) . please try to give an answer of at least 350 words, thank you.
Systematic literature review steps: Define research question, search for relevant studies, screen literature, extract data, and synthesize findings. Analysis involves evaluating study designs and drawing conclusions.
Conducting a systematic literature review involves several key steps. Firstly, researchers need to define their research question and establish clear inclusion and exclusion criteria for the study. Next, an extensive search is conducted using various databases and sources to locate relevant studies. The identified literature is then screened based on predetermined criteria, such as relevance and quality.
Data is extracted from the selected studies, which may include information such as study design, sample size, variables, and results. The synthesized findings are then analyzed by evaluating the methodologies and designs employed in the studies, identifying patterns or themes across the literature, and assessing the overall quality and reliability of the evidence. This analysis helps researchers draw meaningful conclusions, identify gaps in knowledge, and make recommendations for future research or practice.
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The current price of neckties is $30, but the equilibrium price of neckties is $25. As a result,
A. the quantity supplied of neckties exceeds the quantity demanded of neckties at the $30 price.
B. the quantity supplied of neckties exceeds the quantity demanded at the $30 price.
C. there is a surplus of neckties at the $30 price.
D. All of the above are correct.
The correct answer is D) All of the above. With the current price of neckties at $30, the quantity supplied exceeds the quantity demanded, resulting in a surplus of neckties. This situation occurs because the equilibrium price, which is the price at which quantity supplied equals quantity demanded, is lower at $25. Therefore, all of the statements presented in options A, B, and C are correct.
When the current price of neckties is $30, but the equilibrium price is $25, it indicates that the market is not in balance. In this case, the quantity supplied of neckties exceeds the quantity demanded at the $30 price (option B). Suppliers are willing to supply a higher quantity of neckties at the current price, anticipating higher sales. However, consumers are not demanding that same quantity at the given price, resulting in an excess supply.
This excess supply leads to a surplus of neckties in the market (option C). There are more neckties available than consumers are willing to buy at the $30 price. As a result, sellers may need to lower the price in order to clear the surplus and reach the equilibrium point where quantity supplied matches quantity demanded.
In summary, with the current price of neckties exceeding the equilibrium price, there is an excess supply, and the quantity supplied exceeds the quantity demanded. This creates a surplus of neckties in the market. Therefore, option D, "All of the above," is the correct answer.
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The United States Environmental Protection Agency has defined five tiers of environmental costs. The tier-4 'relationship and image costs' are
contingent costs arising from failure to clean up contaminated sites
direct costs associated with capital expenditures, raw materials, and other operating and maintenance costs
less tangible costs relating to consumer perceptions, and employee and community relations
costs that organisations impose on the environment and society for which they may not be held legally responsible
hidden regulatory costs of monitoring and reporting environmental activities and emissions
Centralisation, one of the building blocks of organisational structure, refers to
the degree to which decision making is concentrated at the top of the organisation
the formal, position-based reporting lines and stipulations regarding who reports to whom
the degree to which a task is divided into separate jobs
how efforts of individuals and teams are orchestrated and how resources are distributed
the extent to which employee behavior is guided by rules and procedures
The tier-4 'relationship and image costs' defined by the United States Environmental Protection Agency (EPA) are less tangible costs relating to consumer perceptions, and employee and community relations.
These costs are contingent costs arising from failure to clean up contaminated sites. They represent the intangible impacts on an organization's reputation, brand image, and relationships with customers, employees, and the community due to environmental contamination issues. Centralization, on the other hand, is one of the building blocks of organizational structure. It refers to the degree to which decision making is concentrated at the top of the organization.
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For each of the following, indicate which curve or curves, if any, in the Goods market and the Money market shift to reflect the proposed change. Also indicate whether the IS or LM shifts and in which direction.
(a) Accountingdiligenceincreases the lease rates the private sector pays tothegovernment9 to operate public infrastructure (such as airports or toll roads)
(b) RBA increases Ms
(c) Farmers anticipate a future decrease in MPK as global warming changes crop management
(d) In the US, Congress lets the temporary Estate tax cuts passed by under the Bush administration expire. (e) The public’s expectation of inflation increases
(a)Main answer- When accounting diligence increases the lease rates the private sector pays to the government for operating public infrastructure, it affects the cost of production for businesses.
Explanation- This leads to a decrease in investment and a leftward shift in the Investment (I) curve in the goods market. There won't be any shift in the money market or the LM or IS curves.
(b) Main answer- When the Reserve Bank of Australia (RBA) increases the money supply (Ms), there will be a rightward shift in the Money Supply (Ms) curve in the money market.
Explanation- This increase in the money supply will lower interest rates, encouraging borrowing and spending, leading to an increase in Aggregate Demand (AD). Therefore, the LM curve will shift to the right in response to the increased money supply.
(c) Main answer- When farmers anticipate a future decrease in Marginal Product of Capital (MPK) due to global warming's impact on crop management, they may reduce their investments in capital.
Explanation- This will lead to a decrease in investment and a leftward shift in the Investment (I) curve in the goods market. There won't be any shift in the money market or the LM or IS curves.
(d) Main answer- When the temporary estate tax cuts passed by Congress under the Bush administration expire, there will be an increase in government revenue. This will lead to a decrease in the budget deficit or an increase in the budget surplus.
Explanation- Consequently, there will be a rightward shift in the Savings (S) curve in the goods market due to increased government savings. There won't be any shift in the money market or the LM or IS curves.
(e)Main answer- When the public's expectation of inflation increases, it affects their behavior and decision-making. This leads to a decrease in real money balances and an increase in nominal interest rates.
Explanation- As a result, the demand for money (Md) decreases, causing a leftward shift in the Money Demand (Md) curve in the money market. There won't be any shift in the goods market or the IS or LM curves.
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.currently have 179,000 in a bond account. You plan to add $6,100 per year at the end of the next 10 years to your bond account. the bond account will earn a return 7.75 percent the next ten years so how much will you have when you retire?
You are planning your retirement in 10 years. You currently have $179,000 in a bond account You plan to add $6.300 per year at the end of each of the next 10 years to your bond account. The bond account wit eam a retum of 275 percent in each of the next 10 years. How much will you have when you retire? Do not round immediate calculations and round your final answers to 2 decinal places.
To calculate the total amount you will have when you retire, we can use the future value of an ordinary annuity formula.
Given:
Present value (initial amount in the bond account) = $179,000
Annual deposit into the bond account = $6,100
Number of years = 10
Interest rate per year = 7.75%
Using the future value of an ordinary annuity formula:
FV = P * [(1 + r)^n - 1] / r
Where:
FV = Future value
P = Annual deposit
r = Interest rate per year
n = Number of years
Calculating the future value of the annuity:
FV = $6,100 * [(1 + 0.0775)^10 - 1] / 0.0775
= $6,100 * (1.0775^10 - 1) / 0.0775
≈ $91,107.21
Adding the initial amount in the bond account:
Total amount when you retire = $179,000 + $91,107.21
≈ $270,107.21
Therefore, when you retire in 10 years, you can expect to have approximately $270,107.21 in your bond account.
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2. If the investment in K Electronics is classified as "non-trading", Please prepare all necessary journal entries for 2020 and describe how Sol Corporation will report the investment, income and unrealized gain on its 2020 financial statements
2. If the investment in K Electronics is classified as "non-trading", Please prepare all necessary journal entries for 2020 and describe how Sol Corporation will report the investment, income and unrealized gain on its 2020 financial statements
Sol Corporation acquired 5% of the 200,000 outstanding ordinary shares of K Electronics at a cost of $30 per share on Dec 1, 2020. On December 30, K Electronics declared and paid a $100,000 dividend. On December 31, K Electronics reported net income of $300,000 for the year. At December 31, the market price of K Electronics was $33 per share. This investment is classified as "trading"
(a) Please prepare all necessary journal entries for 2020 transaction above
(b) Please describe how Sol Corporation will report the
(1) investment on the balance sheet
(2) income and unrealized gain on its 2020 financial statements
(c) On January 5, 2021, the company sold the investment in K Electronics at $35 per share. On Dec 20, 2021, Company acquired 1,000 shares of Apple Company ordinary shares at $120 per share for "trading". On December 31, 2021, IBM stock was closed at $135 per share
(1) Please prepare 2021 journal entries for above transactions.
(2) Please describe how the company will report the investment on the balance sheet
(a) Journal entries for 2020 transactions:
December 1, 2020:
Debit: Investment in K Electronics (non-trading) - $30,000 (5% * 200,000 * $30)
Credit: Cash - $30,000
December 30, 2020:
Debit: Dividend Receivable - $5,000 (5% * $100,000)
Credit: Investment in K Electronics (non-trading) - $5,000
December 31, 2020:
Debit: Investment in K Electronics (non-trading) - Unrealized Gain - $6,000 (5% * 200,000 * ($33 - $30))
Credit: Unrealized Gain on Investment - $6,000
How to explain the information(b) Reporting on the financial statements for 2020:
(1) Investment on the balance sheet:
The investment in K Electronics will be reported as a non-current asset on the balance sheet under the "Investments" section. The initial cost of $30,000 will be shown as the carrying value of the investment.
(2) Income and unrealized gain on financial statements:
The dividend received from K Electronics will be reported as dividend income on the income statement. The net income reported by K Electronics will not be included in Sol Corporation's income statement because the investment is classified as non-trading.
The unrealized gain on the investment will be reported on the statement of comprehensive income as a separate line item. In this case, the unrealized gain of $6,000 will be shown as a positive amount.
(c) Journal entries for 2021 transactions:
January 5, 2021:
Debit: Cash - $17,500 (5% * 200,000 * $35)
Debit: Unrealized Gain on Investment - $2,500 (5% * 200,000 * ($35 - $33))
Credit: Investment in K Electronics (non-trading) - $20,000 (5% * 200,000 * $40)
December 20, 2021:
Debit: Investment in Apple Company (trading) - $120,000 (1,000 shares * $120)
Credit: Cash - $120,000
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Which of the following investment strategies is passive? Allocating capital to firms that have higher average 5-year earnings per share. Allocating capital to firms that have higher than market average 5-year EPS growth. Allocating capital to firms that have higher than market average 5-year P/E ratio. Allocating capital across based on forecasted dividend growth Allocating capital on a pro-rata (by capitalisation) basis for all listed equities.
Out of all the given investment strategies, the allocation of capital on a pro-rata (by capitalisation) basis for all listed equities is passive. In a passive investment strategy, investors seek to replicate the returns of the market as a whole, rather than attempting to outperform it.
There are several ways to implement passive investment strategies, including index funds and exchange-traded funds (ETFs).Index funds typically hold all the securities in a particular market index, such as the S&P 500, and aim to replicate the index's returns. ETFs are similar to index funds in that they track an index, but they trade on an exchange like a stock, and their prices fluctuate throughout the trading day.In a pro-rata (by capitalisation) basis passive investment strategy, an investor aims to allocate the investment capital across all listed equities based on the relative market capitalization of each security. This means that the investor aims to hold all the securities in proportion to their market capitalization, with no attempt to pick and choose securities based on any other factors. The idea behind this strategy is that the investor will earn returns similar to the overall market without incurring the additional costs and risks of active management.
Therefore, in a pro-rata (by capitalisation) basis, the allocation of capital for all listed equities is a passive investment strategy.
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