Using the following accounts and balances, prepare the "Stockholders’ Equity" section of the balance sheet using 20,000 shares of common stock authorized, and 1,000 shares have been reacquired.

Common Stock, $ 120 par $48,000,000
Paid In Capital from Sale of Treasury Stock 45,00,000
Paid In Capital in Excess of Par—Common Stock 64,00,000
Retained Earnings 63,680,000
Treasury Stock 5,200,000

Answers

Answer 1

Answer and Explanation:

The preparation of the stockholder equity of the balance sheet is presented below:

Shares issued  $48,000,000

Add: Paid-In Capital in Excess of Par $6,400,000

Add: Paid in Capital from Sale of Treasury Stock $4,500,000

Add: Retained Earnings $63,680,000

Less: Treasury Stock, 40,000 shares -$5,200,000

Total stockholders' equity $117,380,000


Related Questions

Your grandfather has great faith in bonds and has heard about some "high yield bonds" that are available. He has asked you for your opinion. What advice will you give him?

Answers

Answer: That they are risky

Explanation:

Bonds tend to give a low return compared to other investments such as stocks which is because they offer a constant payout. However even with bonds there will still be those that promise a higher return than the others and this is because they are riskier.

Bonds are debt instruments which means that the rate they pay is directly related to the risk attached. This is because the interest payment is meant to compensate you for the risk you are taking by getting that bond.

If the yield/return is high it would therefore follow that the risk Is high as well. Your Grandfather should therefore be aware of this risk before investing because riskier bonds might not pay back.

You expect General Motors​ (GM) to have a beta of 1.3 over the next year and the beta of Exxon Mobil​ (XOM) to be 0.9 over the next year.​ Also, you expect the volatility of General Motors to be​ 40% and that of Exxon Mobil to be​ 30% over the next year. Which stock has more systematic​ risk? Which stock has more total​ risk?

Answers

Answer:

As the beta of GM (1.3) is more than that of XOM (0.9), GM has more systematic risk than XOM.

The volatility of GM (40%) is higher than that of XOM (30%). Thus, GM has a higher total risk than XOM.

Explanation:

The systematic risk is the risk caused by factors that affect all of the market and are unavoidable. Such a risk is also known as a market risk and is measured by the beta of a stock. The market beta is always 1. A stock having a beta higher than 1 has higher systematic risk than market and a stock having a lower beta than 1 has a lower systematic risk than the market.

As the beta of GM (1.3) is more than that of XOM (0.9), GM has more systematic risk than XOM.

Total risk, on the other hand, is the risk that comprises of both systematic and unsystematic risk. The systematic risk is the market risk as mentioned above while the unsystematic risk is the firm specific risk and is avoidable. The total risk is measured by the standard deviation or volatility of the stock. The stock with higher volatility has higher total risk and vice versa.

The volatility of GM (40%) is higher than that of XOM (30%). Thus, GM has a higher total risk than XOM.

Assume you have a margin account with a 50% initial margin. You purchase 100 shares of stock at $80 per share. The price increases to $100 per share. What is the net value of your investment (margin) now

Answers

Answer:

Net value of the investment (margin) is $6,000

Explanation:

The initial margin = (100 shares * $80) * 50%

The initial margin = $4,000

Increase in the Margin value = 100 shares* ($100-$80)

Increase in the Margin value = 100 shares * $20

Increase in the Margin value =$2,000

Net value of the investment (margin) = $4,000 + $2,000

Net value of the investment (margin) = $6,000

Duval inc budgets direct materials at $1/liter and requires 4 liters per unit of finished product. April’s activities show usage of 832 liters to complete 196 units at a cost of $798.72. Calculate the direct materials price and quantity variances and indicate favorable or unfavorable results.

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Duval inc budgets direct materials at $1/liter and requires 4 liters per unit of the finished product.

April’s activities show usage of 832 liters to complete 196 units at a cost of $798.72.

To calculate the direct material price and quantity variance, we need to use the following formulas:

Direct material price variance= (standard price - actual price)*actual quantity

Actual price= 798.72/832= $0.96

Direct material price variance= (1 - 0.96)*832

Direct material price variance= $33.28 favorable

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Standard quantity= 4*196= 784

Direct material quantity variance= (784 - 832)*1

Direct material quantity variance= $48 unfavorable

Time Again LLC produces and sells a mantel clock for $150.00 per unit. In​ 2017, 43,000 clocks were produced and 36,000 were sold. Other information for the year​ includes: Direct materials $43.00 per unit Direct manufacturing labor $8.00 per unit Variable manufacturing costs $4.00 per unit Sales commissions $15.00 per part Fixed manufacturing costs $63.00 per unit Administrative​ expenses, all fixed $38.50 per unit What is the inventoriable cost per unit using absorption​ costing?

Answers

Answer:

Unitary cost= $118

Explanation:

Giving the following information:

Production= 43,000

Direct materials $43.00 per unit

Direct manufacturing labor $8.00 per unit

Variable manufacturing costs $4.00 per unit

Fixed manufacturing costs $63.00 per unit

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

Unitary cost= 43 + 8 + 4 + 63

Unitary cost= $118

Sally Eason put $4,000 in her deductible IRA this year. If Sally is in the 25 percent marginal tax bracket, the government actually contributed ____ of that amount for her. Group of answer choices

Answers

Answer: $1000

Explanation:

From the question, we are informed that Sally Eason put $4,000 in her deductible IRA this year and that Sally is in the 25 percent marginal tax bracket.

Based on the above information, the government contributed:

= 25% × $4,000

= 25/100 × $4,000

= 0.25 × $4,000

= $1000

Garcia Co. sells snowboards. Each snowboard requires direct materials of $105, direct labor of $35, and variable overhead of $50. The company expects fixed overhead costs of $645,000 and fixed selling and administrative costs of $111,000 for the next year. It expects to produce and sell 10,500 snowboards in the next year.

Required:
What will be the selling price per unit if Garcia uses a markup of 15% of total cost?

Answers

Answer:

Selling price = $301.3

Explanation:

The selling price would be determined by adding the total unit cost to the mark- up.

Mark up is the proportion of cost that is to be earned as profit.

Selling price = Total unit cost + Profit

Profit = 25% × unit cost

Selling price = Unit cost + Mark-up

Selling price = Unit cost + (15%× unit cost)

Total unit cost =Variable cost + unit fixed cost

Total fixed cost = 645,000 +  111,000 = 756,000

Unit fixed cost = $756,000 /10,500 =×72

Total unit cost = 105 + 35 + 50 + 72 = 262

Selling price = 262 + ( 15% + 262) = 301.3

Selling price = $301.3

Suppose we have the following information for 2008: Potential output: $17 trillion Actual output: $16 trillion Actual Deficit: $ 500 billion Tax Rate: 15% What is the structural deficit in 2008

Answers

Answer:

The structural budget in 2008 is $350 billion

Explanation:

Actual deficit = Government spending - Tax Revenue Collection

i.e Actual deficit = G-T

T = (Tax rate) (Actual output)

$500 billion = G - (0.15)($16 trillion)

$500 billion = G - 2400 billion

G =  $500 billion + 2400 billion

G =  $2900 billion

Thus, Government spending is $2900 billion

Structural deficit = G - T'

T' = (Tax rate)(Potential output)

T' = (0.15)(17000 billion)

T' = $2550 billion

Structural deficit = G - T'

Structural deficit = $2900 billion - $2550 billion

Structural deficit = $350 billion

Thus, the structural budget in 2008 is $350 billion

Use information from the Washington Post article "Why We've Been Hugely Underestimating the Overfishing of the Oceans" to determine whether each statement is true or false.

a. According to the Food and Agriculture Organization of the United Nations (FAO), worldwide catches peaked in 2001 at 86 million tons.
b. Using catch reconstruction, researchers estimate that the actual peak catch was 50% larger than the reported peak catch.
c, Catch reconstruction shows that, since the peak, catches have been increasing, not decreasing as previously reported.
d. The Sea Around Us Project found several problems with the FAO data, such as the fact that data that were not available were reported as catches of zero fish.

Answers

Answer:

"Why We've Been Hugely Underestimating the Overfishing of the Oceans"

Determining whether each statement is true or false:

a. False

b. True

c. False

d. True

Explanation:

The article "Why We've Been Hugely Underestimating the Overfishing of the Oceans," was published by the Washington Post on January 19, 2016.  It was written by Chelsea Harvey.  It tried to show how the world fish stock had been declining due to overfishing.  This is why it provided a report contrary to the FAO report.  

While the FAO report noted that the peak of worldwide catches was at 86 million tons in 1996, the contrary and independent report, using "catch reconstruction" showed that the peak was at 130 million tons in 1996.  The reconstructed research also showed that worldwide fish catches had suffered declines ever since the 1996 peak, thereby threatening "world food security and marine ecosystems".  The contrary report also suggested that all stakeholders must collaborate so that fish stocks can rebuild naturally.

The Retained earnings account for Nathan Corporation had a credit balance of $800,000 at the end of 2016. Selected transactions during 2017 follow:

a. Net income was $130,000.
b. Cash dividends declared were $60,000
c. Repurchased 100 shares of Nathan Corporation common stock, paying S20 per share. Each share has a $5 par value and was originally issued for $35.
d. Sold 20 shares of Nathan Corporation common stock for $22 each.

Required:
Calculate Nathan's retained earnings balance as of the end of 2011. How large of a dividend could Nathan have declared in 2011?

Answers

Answer:

1 & 2. $870,000

Explanation:

1. Retained Earnings is an equity account from which dividends are paid. The Net Income is added to this and the dividends are deducted from this.

Retained Earnings for the year = Beginning balance + Net Income - Dividends

= 800,000 + 130,000 - 60,000

= $870,000

2. Nathan Corporation could have declared the entire retained earnings of $870,000. This is however, not a recommended action because the Retained Earnings maintain a cushion for the company and as such contribute to financial health and structure of the company.

A firm has current assets of $36,000, cash of $5,000, current liabilities of $20,000, total assets of $80,000 and total liabilities of $45,000. What is its net working capital?
a. $16,000
b. $28,000
c. $35,000
d. $44,000

Answers

Answer:

Option A, $16000, is the right answer.

Explanation:

The current assets = $36000

Cash = $5000

Current liabilities = $20000

Total assets = $80000

Total liabilities  = $45000

Use the below formula to find the net working capial.

Net working capital = Current assets - Current Liabilities

Net working capital = 36000 – 20000

Net working capital = 16000

Therefore, option A, $16000 is correct.

When Production decreases what is a very likely possibility? a hire new workers b expand production c purchase new equipment d downsizing

Answers

The correct answer is D. Downsizing

Explanation:

In businesses, the term "downsizing" is used to describe a reduction in the number of workers or the total labor force. This often means non-essential workers are fired or even complete departments are eliminated. Moreover, this is likely to occur if the business expenses are higher than its profits or if the production decreases because in both situations fewer workers are needed to eliminate unnecessary expenses. In this context, if production decreases it is likely downsizing occurs.

A three-year annuity-immediate will be issued a year from now with annual payments of 5,000. Using the forward rates, calculate the present value of this annuity a year from now.

Answers

Answer:

13,152.5

Explanation:

Given the the above parameters as mentioned in the question

To calculate the PV (Present Value)

We have PV = 5000 * 1.05 * [ 1/(1.0575)² + 1/(0.625)³ + 1/(1.065)⁴]

PV = 5000 * 1.05 * (0.8942094350 + 0.8337064929 + 0.7773230908) =

=> PV = 5000 * 1.05 * 2.5052390187

= 13,152.50

Therefore, in this case, using the forward rates, the present value of this annuity a year from now is 13,152.50

Hotel Cortez is an all-equity firm that has 10,900 shares of stock outstanding at a market price of $37 per share. The firm's management has decided to issue $66,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 8 percent. What is the break-even EBIT

Answers

Answer:

$32,264.07

Explanation:

The computation of the Break-even EBIT  is shown below:

(EBIT ÷ Number of shares) = (EBIT - Interest) ÷ Number of shares  

(EBIT ÷ 10,900) = (EBIT - $66,000 × 0.08) ÷ (10,900 - (66,000 ÷ $37))

(EBIT ÷ 10,900) = (EBIT - $5,280) ÷ (10,900 - 1,783.78)

(EBIT ÷ 10,900) = (EBIT - $5,280) ÷ (9116.22)

After solving this, the value of break-even EBIT is $32,264.07

A firm has the following gross requirements for Item OF. Ordering costs are $60 per order and carrying costs are $0.50 per period.

Item F Period
LT: 1 1 2 3 4
Gross Requirements 60 40 80 60
Schedule Receipts
Project on Hand 100
Net Requirements
Planned Order Receipts
Planned Order Releases

If EOQ lot sizing is used the minimum order quantity would be:_______

a. 85
b. 100
c. 120
d. 150

Answers

Answer:

c. 120

Explanation:

The economic order quantity is the minimum amount of inventory that a seller must keep to demand and lower the holding cost. The formula for Economic order quantity is represented by the formula:

EOQ = [tex]\sqrt{\frac{2*Demand*Ordering Cost}{Holding cost} }[/tex]

EOQ = [tex]\sqrt{\frac{2*240*60}{0.5} }[/tex]

EOQ = 120

The amortization of bond premium on long-term debt should be presented in a statement of cash flows (using the indirect method for operating activities) as a(n)

Answers

Answer:

Operating Activity

Explanation:

The Indirect method, reconciles the Operating Profit to the Operating Cash Flow by adjusting the following items (1) Non Cash flow items previously added or deducted from Operating Profit and (2) Changes in Working Capital items.

Amortization of bond premium is an item of non-cash flow that was previously deducted from Operating Profit and needs to be added back.

If D​ = 8,200 per​ month, S​ = ​$44 per​ order, and H​ = ​$2.00 per unit per​ month, ​a) What is the economic order​ quantity? The EOQ is 601601 units ​(round your response to the nearest whole​ number). ​b) How does your answer change if the holding cost​ doubles? The EOQ is 425425 units ​(round your response to the nearest whole​ number). ​c) What if the holding cost drops in​ half? The EOQ is nothing units ​(round your response to the nearest whole​ number).

Answers

Answer: A) The Economic Order Quantity is 601 units.  

B)The Economic Order Quantity is 425 units.

C )The Economic Order Quantity is 849 units

Explanation:

EOQ, economic order​ quantity = [tex]\sqrt{ 2 x Dx S/ H}[/tex]

where D=  demand

S = Order cost

H= holding cost.

a)when  D​ = 8,200 per​ month, S​ = ​$44 per​ order, and H​ = ​$2.00

EOQ, economic order​ quantity = [tex]\sqrt{2x D x S /H}[/tex]

=  [tex]\sqrt{2 x 8,200 x 44 /2 }[/tex] =  [tex]\sqrt{360,800}[/tex] = 600.666= 601 units

b) if the holding cost​ doubles, holding cost = HX 2 = 2 X 2  = 4

EOQ, economic order​ quantity =[tex]\sqrt{ 2 x D xS /H }[/tex]

= [tex]\sqrt{2 X 8,200 X 44 / 2 X $2}[/tex] = [tex]\sqrt{180,400}[/tex] = 424.73 = 425units

C) if the holding cost drops in​ half, holding cost = H/2 = 2 X 1/2 = 1

EOQ, economic order​ quantity =[tex]\sqrt{ 2 x D xS /H }[/tex]

= [tex]\sqrt{2 X 8200 x 44/1}[/tex] = [tex]\sqrt{721,600}[/tex] = 849.47 = 849units

the annual discount rate is 10% beginning in 2016, you will receive $10000 on the first day of every year. what is the resent value of this inginite sequence of cash flow

Answers

Answer:

$100,000

Explanation:

Data provided

Perpetual cash flow = $10,000

Discount rate = 10%

According to the given situation, the computation of Present value of this inginite sequence of cash flow is shown below:-

Present value = Perpetual cash flow ÷ discount rate

= $10,000 ÷ 10%

= $10,000 ÷ 0.1

= $100,000

Therefore for computing the present value we simply applied the above formula.

Though not specifically cited in the producer's contract, the producer is expected to telephone prospects on the insurer's behalf to arrange sales appointments. This is an example of what kind of producer authority?

Answers

Answer:

Implied authority

Explanation:

Implied authority defines an authority with respect to agent that involves jurisdiction to perform the acts so that the objectives of the organization could be achieved. Also, it is a binding contract on other person behalf or company

Therefore according to the given situation, this is an example of implied authority

The Asian Garden​, a local Thai​ restaurant, expects sales to be $ 285,000 in January. Its average customer restaurant bill is $ 15. Only 20 % of the restaurant bills are paid with​ cash; 60 % are paid with credit cards and 20 % with debit cards. The transaction fees charged by the credit and debit card issuers are as​ follows:Credit​ cards: $0.60 per transaction​ + 2 % of the amount chargedDebit​ cards: $0.55 per transaction​ + 1% of the amount chargedRequried:a. How much of the total sales revenue is expected to be paid in​cash?b. How many customer transactions does the company expect in​January?c. How much of the total sales revenue is expected to be paid with credit​ cards?d. How many customer transactions will be paid for by customers using credit​cards?e. When budgeting for​ January's operating​ expenses, how much should the restaurant expect to incur in credit card transaction​fees?f. How much of the total sales revenue is expected to be paid with debit​ cards?g. How many customer transactions will be paid for by customers using debit​cards?h. When budgeting for​ January's operating​ expenses, how much should the restaurant expect to incur in debit card transaction​fees?i. How much money will be deposited in the​ restaurant's bank account during the month of January related to credit and debit card​ sales? Assume the credit and debit card issuers deposit the funds on the same day the transactions occur at the restaurant​(there is no processing​ delay).j. What is the total amount of money that the restaurant expects to deposit in its bank account during the month of January from​ cash, credit​ card, and debit card​ sales? Again assume the credit and debit card issuers deposit the funds on the same day that the transaction occurs.

Answers

Answer:

a. How much of the total sales revenue is expected to be paid in​cash?

$855,000

b. How many customer transactions does the company expect in​January?

19,000

c. How much of the total sales revenue is expected to be paid with credit​ cards?

$171,000

d. How many customer transactions will be paid for by customers using credit​cards?

11,400

e. When budgeting for​ January's operating​ expenses, how much should the restaurant expect to incur in credit card transaction​fees?

$10,260

f. How much of the total sales revenue is expected to be paid with debit​ cards?

$57,000

g. How many customer transactions will be paid for by customers using debit​cards?

3,800

h. When budgeting for​ January's operating​ expenses, how much should the restaurant expect to incur in debit card transaction​fees?

$2,660

i. How much money will be deposited in the​ restaurant's bank account during the month of January related to credit and debit card​ sales? Assume the credit and debit card issuers deposit the funds on the same day the transactions occur at the restaurant​(there is no processing​ delay).

$215,080

j. What is the total amount of money that the restaurant expects to deposit in its bank account during the month of January from​ cash, credit​ card, and debit card​ sales? Again assume the credit and debit card issuers deposit the funds on the same day that the transaction occurs.

$272,080

Explanation:

total sales $285,000 / $15 = 19,000 customers

cash sales = $285,000 x 20%  = $57,000credit cards = $285,000 x 60%  = $171,000debit cards = $285,000 x 20%  = $57,000

credit card fees = (11,400 x $0.60) + ($171,000 x 2%) = $10,260

debit card fees = (3,800 x $0.55) + ($57,000 x 1%) = $2,660

Explain how you would value a stock. Provide an example of a valuation of a stock based on retrieved real data. Include evidence of the retrieved data in your answer. Compare your valuation with the actual price of the stock at the designated time for your valuation.

Answers

Answer with Explanation:

There are numerous stock valuing models but here, I will use Dividend Valuation Model which is based on finding the intrinsic value of Stock which is the present value of the stock at a required rate of return. The formula to calculate Intrinsic value of stock is given as under:

P0= D0   *  (1 + g) / (ke - g)

Here

P0 is the intrinsic value of the stock

D0 is the dividend just paid

g is the growth rate

ke is the investor's required rate of return

The model doesn't holds if the company doesn't pays Dividend.

Now suppose that the Dividend just paid by Apple is $20 per stock. The anticipated growth rate of dividend is 10% and the required rate of return is at 15%.

By putting values in the above equation, we have:

P0= $20 * (1 + 10%) / (15% - 10%)

= $20 / (15% - 10%)

= $400 per share

The value of stock of Apple is $400 per share which must be its fair market value as per the Dividend Valuation Model.

As per the model, if the value of stock is higher as per dividend valuation model then we must purchase the stock as it will generate higher value and vice versa. The inherent limitation of the model is that it assumes that the dividend is growing at constant rate and is consistently paid. The main disadvantage of Dividend valuation model is that it doesn't account for political factors, economical factors, evolving business risks, technological factors, etc.

If bookstore ABC Books determines it is going to sell books at its profit-maximizing price of $15 in a market facing monopolistic competition, calculate total profit for the store

ABC Books Revenue and Cost

Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost

0 $26 $0 $325

10 $23 $230 $23 $365 $4

20 $20 $400 $17 $425 $6

30 $18 $540 $14 $505 $8

40 $16 $640 $10 $605 $10

50 $14 $700 $6 $725 $12

60 $12 $720 $2 $865 $14

Answers

Answer: $35

Explanation:

Profit will be the Total Revenue less the total costs involved with selling the goods.

Total Revenue at $16 is $640.

Total Cost at $16 is $605.

Profit = 640 - 605

= $35

Note; Your question has $15 as the maximizing price which is not available in the table. It might be a typo so I attached the question.

Many of today’s ____________________ systems concentrate on hiring and managing existing employees to get the total potential of the human talent in the organization.

Answers

Answer:

The correct answer is: Human Resource Management

Explanation:

To begin with, the Human Resource Management Systems are the ones that focus on the managing of the human factor inside the organization with the purpose of making easier the processes of hiring, collecting data and more. So therefore that this systems concentrate on hiring and managing existing employees to get the total potential of the human talent in the organization by having a better and more organized place in where the managers can deal with those issues and other stuff related to that.

Marigold Corp. issues $220,000, 20-year, 8% bonds at 104. Prepare the journal entry to record the sale of these bonds on June 1, 2020

Answers

Answer:

Selling Price of Bonds = Value of bonds * Issue price / Face price

Selling Price of Bonds = $220,000 * 104/100

Selling Price of Bonds = $228,800

                                   Journal Entry

Date        Account Title and Explanation        Debit       Credit

1 June      Cash                                                $228,800  

                         Bond payable                                           $220,000

                         Premium on bond payable                       $8,800

                (To record issuance of bond)

Working

Premium On Bonds Payable = Selling Price of Bonds - Value of Bonds

= $228,800 - $220,000

= $8,800

Midyear on July 31st, the Digby Corporation's balance sheet reported: Total Assets of $205.498 million Total Common Stock of $6.350 million Cash of $10.050 million Retained Earnings of $44.117 million. What were the Digby Corporation's total liabilities?
a) $165.081 million.
b) $144.981 million.
c) $155.031 million.
d) $161.381 million.

Answers

Answer:

The value of total liabilities is $155.031 million and option c is the correct answer.

Explanation:

The basic accounting equation states that the total value of assets is always equal to the sum of the total value of liabilities and the total value of equity.

Thus, we can say that,

Total Assets = Total Liabilities + Total Equity

The equity part can contain various components. In the given question it has two components namely Common Stock and retained earnings.

205.498 = Total Liabilities + (6.350 + 44.117)

205.498 = Total Liabilities + 50.467

205.498 -  50.467 = Total Liabilities

Total Liabilities = $155.031

The master budget of Sheffield Corp. shows that the planned activity level for next year is expected to be 50000 machine hours. At this level of activity, the following manufacturing overhead costs are expected: Indirect labor$730000 Machine supplies200000 Indirect materials220000 Depreciation on factory building120000 Total manufacturing overhead $1270000 A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs of

Answers

Answer:

Total overhead= $1,500,000

Explanation:

Giving the following information:

First, we need to separate the variable overhead and the fixed overhead:

Variable overhead:

Indirect labor 730,000

Machine supplies 200,000

Indirect materials 220,000

Total variable overhead= $1,150,000

Fixed overhead:

Depreciation on factory building $120,000

Now, we need to calculate the unitary variable overhead:

unitary variable overhead= 1,150,000/50,000= $23

Finally, the total overhead for 60,000 units:

Total overhead= 23*60,000 + 120,000

Total overhead= $1,500,000

15. Karla Salons leased equipment from Smith Co. on July 1, 2021, in a finance lease. The present value of the lease payments discounted at 10% was $81,100. Ten annual lease payments of $12,000 are due each year beginning July 1, 2021. Smith Co. had constructed the equipment recently for $66,000, and its retail fair value was $81,100. What amount of interest revenue from the lease should Smith Co. report in its December 31, 2021, income statement

Answers

Answer: $3,455

Explanation:

The interest received by Smith can be calculated as;

Interest Value = Present value of lease payment * interest rate

Present Value of interest rate

Ten annual lease payments of $12,000 are due each year beginning July 1, 2021.

That means first payment has been made already. Present value is;

= 81,100 - 12,000

= $69,100

Only half a year has gone by so this will need to be reflected;

Interest Value = Present value of lease payment * interest rate

= 69,100 * 10% * 6/12

= $3,455

Kenneth Arrow discussed two important situations in which profit maximization can be socially inefficient. One of these occurs when

Answers

Answer:

Explanation:

One of these occurs when costs are not paid for, as in pollution, the other is when there is an imbalance of knowledge between buyer and seller. Pollution  can be a consequence that cannot be solved with money and can also be socially irresponsible for a company. On the other hand, an imbalance of knowledge can prevent a company from profit maximization if the seller does not understand the product or services that the buyer is selling.

Think of two methods used to improve productivity in business. Discuss your reasons for choosing these methods

Answers

Answer:

Actually we have 2 method of launching a product. First simultaneously which isn't the best way. Second is sequentially in one market after anther. And this method seems to be more useful than others.

Answer:

Planning is the first one because I believe this can improve productivity in everything.  Giving employees a schedule of what they day should look like is a great idea to give them an idea on what their time distribution should be.  It also makes their day less stressful without having to worry about unexpected jobs that need to be done and overall should make them more productive through a workday.  Having a organized process is another great attribute to improve productivity.  This will allow a clean process in creating your products and service and keep everything in place.  

Explanation:

Buster Evans is considering investing $20,000 in a project with the following annual cash revenues and expenses: Cash Cash Revenues Expenses Year 1 $ 8,000 $ 8,000 Year 2 $12,000 $ 8,000 Year 3 $15,000 $ 9,000 Year 4 $20,000 $10,000 Year 5 $20,000 $10,000 Depreciation will be $4,000 per year. What is the accounting rate of return on the investment

Answers

Answer:

Accounting rate of return= 20%

Explanation:

The accounting rate of return is the average annual income expressed as a percentage of the average investment.  

The simple rate of return can be calculated using the two formula below:  

Accounting rate of return  

= Annual operating income/Average investment × 100  

Average investment = (Initial cost + scrap value)/2  

Average profit = Total profit over investment period / Number of years

Total revenue = 8000+12000+ 15000 + 20,000+ 20,000 = 75000

Total expenses= 8000 + 8000 + 9000 +10,000 + 10,000 = 45000

Cash profit = 75,000 - 45,000 = 30,000

Depreciation = 4000× 5 = 20,000

Accounting profit = Cash profit - Depreciation = 30,000- 20,000 = 10,000

Average profit = 10,000/5 = 2,000

Accounting rate of return = 2,000/20000× 100 = 20%

Accounting rate of return= 20%

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