Answer:
B
Explanation:
Labeau Products, Ltd., of Perth, Australia, has $21,000 to invest. The company is trying to decide between two alternative uses for the funds as follows:
Invest in Invest in
Project X Project Y
Investment required $ 21,000 $ 21,000
Annual cash inflows $ 8,000
Single cash inflow at the end of 6 years $50,000
Life of the project 6 years 6 years
The company’s discount rate is 18%.
Required:
Determine the net present values. (Any cash outflows should be indicated by a minus sign.
Answer:
Project X = $6,980.82
Project Y = - $2,478.42
Explanation:
The Present value is the price today of future cash flows and is calculated as follows :
Project X
($21,000) CF 0
$8,000 CF 1
$8,000 CF 2
$8,000 CF 3
$8,000 CF 4
$8,000 CF 5
$8,000 CF 6
I/YR = 18%
Therefore, NPV is $6,980.82
Project Y
($21,000) CF 0
$0 CF 1
$0 CF 2
$0 CF 3
$0 CF 4
$0 CF 5
$50,000 CF 6
I/YR = 18%
Therefore, NPV is - $2,478.42
When converting net income to net cash provided (used) by operating activities under the indirect method increases in accounts receivable and increases in accrued liabilities are deducted. decreases in accounts payable and decreases in inventory are deducted. decreases in accounts receivable and increases in prepaid expenses are added. decreases in inventory and increases in accrued liabilities are added.
Answer:
Decrease in inventory and increases in accrued liabilities are added.
Explanation:
oneycutt Co. is comparing two different capital structures. Plan I would result in 39,000 shares of stock and $108,000 in debt. Plan II would result in 33,000 shares of stock and $324,000 in debt. The interest rate on the debt is 7 percent. a. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $160,000. The all-equity plan would result in 42,000 shares of stock outstanding. What is the EPS for each of these plans
Answer:
All equity plan:
EPS = $160,000 / 42,000 = $3.81
Plan I:
EPS = [$160,000 - ($108,000 x 7%)] / 39,000 = $152,440 / 39,000 = $3.91
Plan II:
EPS = [$160,000 - ($324,000 x 7%)] / 33,000 = $137,320 / 33,000 = $4.16
Plan II is better since the resulting EPS is higher than the other alternatives.
Assume that Jordan Enterprises's radio broadcast license is renewable at the end of each 10-year term and management has provided evidence that approval of the renewal is highly probable. In this case, the broadcast license qualifies as anindefinite-life intangible asset and is not subject to amortization. Therefore, the firm carries the broadcast license at its original cost of $786,000.
On December 31, 2015 the company noted substantial declines in radio advertising revenues over the past year due to expanded satellite radiosubscriptions, Internet broadcasts, and the use of iPod players. Based on the required annual review and consideration of the available impairment indicators, management believes that it is more likely than not that the broadcast license may be impaired. Therefore, the company must test the broadcast license for impairment. Similar broadcast licenses have been sold in auctions for $676,000.
Assuming that renewal of the broadcast license is probable for this indefinite-life intangible asset, analyze the accounting for impairment and prepare the journal entries.
1.) Conduct the impairment test indicated forindefinite-life intangible asset at the end of the year and determine the impairment loss, if any. (If you selected "No" that an impairment loss is not indicated, then leave the impairment loss input cell blank. Show a loss with a parentheses or minus sign.)
2.) Next, prepare the journal entry required to record any impairment loss. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the tableblank.)
Answer:
Jordan Enterprises
1) The impairment loss = $110,000.
2) Journal Entry to record the impairment loss:
Debit Broadcast License Impairment Loss $110,000
Credit Accumulated Impairment Loss $110,000
Explanation:
a) Data and Calculations:
Broadcast license original cost (book value) = $786,000
Market value of similar broadcast license = 676,000
Impairment loss = $110,000
b) US GAAP defines impairment loss as the decrease in an asset's net carrying value. This means that impairment loss arises when the book or net carrying value is greater than the future estimated cash flows or the market value of the asset.
Monsanto Company, a large chemical and fibers company, invested $37 million in state-of-the-art systems to improve process control, laboratory automation, and local area network (LAN) communications. The investment was not justified merely on cost savings but was also justified on the basis of qualitative considerations. Monsanto management viewed the investment as a critical element toward achieving its version of the future. What qualitative and quantitative considerations do you believe Monsanto would have considered in its strategic evaluation of these investments
Solution :
The investment which was made by the Monsanto Company had both qualitative as well as quantitative aspects. The quantitative aspect of the investment represents the strategic evaluation which relates to the investment in order to improve the process control and the laboratory automation. While improving the process control helps in controlling the working process of the machines and the human force which reduces the wastage to a large extent, it also increases the efficiency and it reduces the cost per unit.
The laboratory automation increases the efficiency of working and also increases the production. Strengthening the LAN network improves the organizations' communication and also reduces the unnecessary delays in the work saving cost. Improving the local area network provides qualitative improvement and it speeds up the work thus reducing the wastage of time and promotes effective communication.
The Pines Company, which manufactures office equipment, is ready to introduce a new line of portable copiers. The following copier data are available:
Variable manufacturing cost $ 180
Variable selling and administrative cost 90
Applied fixed manufacturing cost 60
Allocated fixed selling and administrative cost 75
What price will the company charge if the firm uses cost-plus pricing based on total manufacturing cost and a markup percentage of 160%?
Answer:
$ 624
Explanation:
Given :
Variable manufacturing cost = $ 180
Applied fixed manufacturing cost = $ 60
Therefore, total manufacturing cost = 180 + 60
= $ 240
Mark up percentage = 160%
Price to be charged = 240 + 160% of 240
= 240 + 384
= $ 624
The Foundational 15 (Static) [LO13-2, LO13-3, LO13-4, LO13-5, LO13-6] Skip to question [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 30 $ 12 Direct labor 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 8 Common fixed expenses 15 10 Total cost per unit $ 100 $ 68 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Foundational 13-1 (Static) Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products
Answer:
Cane Company
Total traceable fixed manufacturing overhead:
Alpha = $1,600,000
Beta = $1,800,000
Explanation:
a) Data and Calculations:
Alpha Beta
Selling price per unit $120 $80
Direct materials $ 30 $ 12
Direct labor 20 15
Variable manufacturing overhead 7 5
Traceable fixed manufacturing overhead 16 18
Variable selling expenses 12 8
Common fixed expenses 15 10
Total cost per unit $ 100 $ 68
Total traceable fixed manufacturing overhead:
Alpha = $1,600,000 ($16 * 100,000)
Beta = $1,800,000 ($18 * 100,000)
Market screening is a method of market analysis and assessment that permits management to identify a small number of desirable markets by eliminating those judged to be less attractive.
When considering initial entry into international markets, or later expansion of international presence, companies Inust screen the large number of potential markets to identify the smaller subset of most promising candidates. This exercise examines one type of market screening, called country screening, and reviews the steps in this screening process as well as key tasks and considerations in each step.
Place the country screening steps in the order they occur, from first to last.
Rank the options below
1. Assess competitive forces such as the number, size, and financial strength of the competitors.
2. Assess economic and financial forces such as trends in inflation, currency exchange rates, and interest rates.
3. Assess sociocultural forces associated with doing business in a particular area or country,
4. Assess basic need potential of specific goods or services
5. Assess political and legal forces such as profit remittance barriers and policy stability
6. Assess prospective markets through personal visits to those markets with the best potential
Answer: See explanation
Explanation:
The country screening steps when placed accordingly from the first to the last will be:
1. Assess basic need potential of specific goods or services.
2. Assess economic and financial forces such as trends in inflation. currency exchange rates, and interest rates.
3. Assess political and legal forces such as profit remittance barriers and policy stability.
4. Assess sociocultural forces associated with doing business in a particular area or country.
5. Assess competitive forces such as the number, size, and financial strength of the competitors.
6. Assess prospective markets through personal visits to those markets with the best potential.
Question 3 of 10
A typical point-of-sale display features products that are likely to be
O A. luxury goods
O B. sophisticated electronics
O C. impulse purchases
O D. display samples
SUBMIT
Answer:
C. impulse purchases
Explanation:
I just took the test
it's c. impulse purchases
Candy or cookies? i want to know
Answer:
Candy
Explanation:
FOLLOW MY ACCOUNT PLS PLS
Super Clinics offers one service that has the following annual cost and utilization estimates: Variable cost per visit $ 10 Annual direct fixed costs $50,000 Allocation of overhead costs $20,000 Expected utilization 1,000 visits What price per visit must be set if the clinic wants to make an annual profit of $10,000 on the service? A. $ 70 B. $ 80 C. $ 90 D. $100 E. $110
Answer:
C. $ 90
Explanation:
Number of visits = 1,000
Variable cost = $10 × 1,000 = $10,000
Fixed cost = $50,000
Overhead cost = $20,000
Required profit = $10,000
So,Total Cost = Variable Cost+ Fixed Cost+ Overhead Cost
= $10,000 + $50,000 + $20,000
= $80,000
Now, Price per Visit = (Total Cost+ Required Profit) ÷ Number of visits
= ($80,000 + $10,000) ÷ 1,000
= $90,000 ÷ 1,000
= $90
what happens in your retirement if you have a lapse in your years of work history?
Your monthly benefit will be lower
A lapse in your years of work history refers, There are generally the four ways by which we can handle it, various points are as leave it where it is, and the second point refers that, roll it over an ira.
What is employment?In most cases, employment refers to the status of having a paid job—of being employed. Employing someone is paying them to work. Employees are employed by an employer. Employment can also refer to the act of hiring individuals, as in We're trying to hire more women.
The employment lapse refers that, The working period of an employee and, The commencing of the individual's termination from the service date. He can continue to begin the performance services as an employee.
Therefore. As a result, The ends of the benefits, or the privileges are been applicable under a policy.
Learn more about employment here:
https://brainly.com/question/1361941
#SPJ6
The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow. Each segment includes a number of businesses, examples of which are indicated in parentheses.
Time Warner, Inc.
Segment Revenues
(in millions)
Turner (cable networks and digital media) $21,700
Home Box Office (pay television) 22,200
Warner Bros. (films, television, and videos) 80,600
Assume that the variable costs as a percent of sales for each segment are as follows:
Turner 22%
Home Box Office 47%
Warner Bros. 32%
Determine the contribution margin and contribution margin ratio. Enter amounts in millions. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689). Round contribution margin ratio to the nearest whole percent for each segment from the information given. Enter all amounts as positive numbers. 40% 35% 25% Turner Home Box Office Warner Bros. Revenues Variable costs Contribution margin Contribution margin ratio (as a percent) b. Does your answer to (b) mean that the other segments are more profitable businesses?
Answer:
Time Warner, Inc.
a.
Turner Home Box Office Warner Bros. Total
Segment Revenues
(in millions) $21,700 $22,200 $80,600 $124,500
Variable costs 4,774 10,434 25,792 41,000
Contribution margin $16,926 $11,766 $54,808 $83,500
Contribution ratio 78% (100 - 22) 53% (100 -47) 68% (100 -32) 67%
b. Certainly, Turnover and Warner Bros. are more profitable businesses than Home Box Office in terms of total contribution margin (dollars) and contribution margin ratio.
Explanation:
a) Data and Calculations:
Segment Revenues
(in millions)
Turner (cable networks and digital media) $21,700
Home Box Office (pay television) 22,200
Warner Bros. (films, television, and videos) 80,600
Assume that the variable costs as a percent of sales for each segment are as follows:
Turner 22%
Home Box Office 47%
Warner Bros. 32%
b) The contribution margin ratio for the three segments can easily be determined by subtracting the variable costs percentages from 100 for each segment instead of doing more computations (Contribution margin/Sales Revenue * 100). But the results are the same for either method.
How much interest (to the nearest dollar) would be saved on the following loan if the condominium were financed for 15 rather than 30 years? A $256,000 condominium bought with a 30% down payment and the balance financed for 30 years at 3.05%
Answer:
The interest saved is $49569.228 or $49569.
Explanation:
Total price of Condominium=$256,000
Downpayment=30% of total price=30%x$256,000= 76800
Amount Financed=Total Payment-Downpayment
Amount Financed=256000-76800=179200
Annual Interest rate=3.05%
Monthly interest rate =[tex]\frac{3.05\%}{12}[/tex]=0.25146%
The montly installment is calculated as follows:
[tex]M=\dfrac{P}{\dfrac{1-\left(\dfrac{1}{1+\dfrac{r}{100}}\right)^{nt}}{\dfrac{r}{100}}}[/tex]
Here
M is the montly installmentP is the amount financedr is the montly rate in percentagen is the number of yearst is the number of months in a yearCase 1 when the number of years is 30.
So the equation becomes
[tex]M=\dfrac{P}{\dfrac{1-\left(\dfrac{1}{1+\dfrac{r}{100}}\right)^{nt}}{\dfrac{r}{100}}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1+\dfrac{0.25146}{100}}\right)^{30*12}}{\dfrac{0.25146}{100}}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1+0.0025146}\right)^{30*12}}{0.0025146}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1.0025146}\right)^{30*12}}{0.0025146}}\\\\M=\dfrac{179200\times {0.0025146}}{1-\left(\dfrac{1}{1.0025146}\right)^{30*12}}\\M=\dfrac{450.61632}{0.59510 }\\M=\$757.2087[/tex]
So the total amount paid in installments is
[tex]T=M\times n\times t[/tex]
So the equation becomes
[tex]T=M\times n\times t\\T=757.2087\times 30\times 12\\T=\$272595.132[/tex]
So the interest is given as
[tex]I=T-P\\I=272595.132-179200\\I=\$93395.132[/tex]
So a total interest of $93395.132 is paid when the amount is financed for 30 years.
Case 2 when the number of years is 15.
So the equation becomes
[tex]M=\dfrac{P}{\dfrac{1-\left(\dfrac{1}{1+\dfrac{r}{100}}\right)^{nt}}{\dfrac{r}{100}}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1+\dfrac{0.25146}{100}}\right)^{15*12}}{\dfrac{0.25146}{100}}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1+0.0025146}\right)^{15*12}}{0.0025146}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1.0025146}\right)^{15*12}}{0.0025146}}\\\\M=\dfrac{179200\times {0.0025146}}{1-\left(\dfrac{1}{1.0025146}\right)^{15*12}}\\M=\dfrac{450.61632}{0.36368 }\\M=\$1239.0328[/tex]
So the total amount paid in installments is
[tex]T=M\times n\times t[/tex]
So the equation becomes
[tex]T=M\times n\times t\\T=1239.0328\times 15\times 12\\T=\$223025.904[/tex]
So the interest is given as
[tex]I=T-P\\I=223025.904-179200\\I=\$43825.904[/tex]
So a total interest of $43825.904 is paid when the amount is financed for 15 years.
The savings on interest if the condominium is financed for 15 years is given as
[tex]S=I_{30}-I_{15}\\S=93395.132-43825.904\\S=49569.228[/tex]
The interest saved is $49569.228 or $49569.
Den-Tex Company is evaluating a proposal to replace its HID (high intensity discharge) lighting with LED (light emitting diode) lighting throughout its warehouse. LED lighting consumes less power and lasts longer than HID lighting for similar performance. The following information was developed: HID watt hour consumption per fixture 500 watts per hr. LED watt hour consumption per fixture 300 watts per hr. Number of fixtures 700 Lifetime investment cost (in present value terms) to replace each HID fixture with LED $500 Operating hours per day 10 Operating days per year 300 Metered utility rate per kilowatt-hour (kwh)* $0.11
*Note: A kilowatt-hour is equal to 1,000 watts per hour.
a. Determine the investment cost for replacing the 700 fixtures.
$?
b. Determine the annual utility cost savings from employing the new energy solution.
$?
c. Evaluate the proposal using net present value, assuming a 15-year life and 8% minimum rate of return. (Click here to view Present Value of Ordinary Annuity.)
$?
Answer:
a. Investment cost of replacing one fixture = $500
Number of fixtures = 700
Investment cost of replacing 700 fixtures = $500 * 700
Investment cost of replacing 700 fixtures = $350,000
b. Total Hours annually = Operating hours per day 8 Operating days per year = 10 * 300 = 3000 hours
Utility cost per kilowatt hour = $0.11
Savings in consumption per hour per fixture = 500 watts - 300 watts = 0.2 kilowatt per hour
Annual Savings in utility cost = Savings in consumption per hour * Total Hours * Utility cost * Number of fixtures
Annual Savings in utility cost = 0.2 * 3000 * 0.11 * 700
Annual Savings in utility cost = $46,200
c. Net present Value = PV of Annual Savings - Initial Investment
When Annual Savings = $46,200, Initial Investment = $350,000, Cumulative discounting factor of 8% for 15 years = 8.5595
Net present Value = ($46,200 * 8.5595) - $350,000
Net present Value = $395,448.90 - $350,000
Net present Value = $45,448.90
George is responsible for examining the heating and air conditioning system of an upcoming hotel. So, George is a mechanical____
Answer:
a mechanical inspector
Apple Inc. is the number one online music retailer through its iTunes music store. Apple sells iTunes gift cards in $15, $25, and $50 increments. Assume Apple sells $20.0 million in iTunes gift cards in November, and customers redeem $13.0 million of the gift cards in December.
8.
value:
10.00 points
Required information
Required:
1. & 2. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5.5 should be entered as 5,500,000).)
9-
3. What is the ending balance in the Deferred revenue account? (Enter your answer in dollars, not in millions. (i.e. 5.5 should be entered as 5,500,000).)
Answer:
1. & 2. Nov 30
Dr Cash $20.0 million
Cr Deferred Revenue $20.0 million
(To record the cash received for gift cards)
Dec 31
Dr Deferred Revenue $13.0 million
Cr Sales Revenue $13.0 million
3. $7,000,000
Explanation:
1. & 2. Preparation of the necessary journal entries
APPLE INC.
Journal Entries
Nov 30
Dr Cash $20.0 million
Cr Deferred Revenue $20.0 million
(To record the cash received for gift cards)
Dec 31
Dr Deferred Revenue $13.0 million
Cr Sales Revenue $13.0 million
(To record the redemption of gift cards)
3) Calculation to determine the ending balance in the Deferred revenue account
Ending Balance in Deferred revenue = $20.0 million - $13.0 million
Ending Balance in Deferred revenue= $7,000,000
Therefore ending balance in deferred revenue account is $7,000,000
One thousand adults live in Milltown. Every day, they all leave work at 4:30 p.m., arrive home at exactly 5:00 p.m., and go to bed at 9:00 p.m. Three fundraisers, Alpha, Beta, and Charlie, have targeted Milltown's population. To get a donation, they must call Milltown's residents after they get home from work but before they go to bed. Because the charities raising the funds are identical, the first to call a willing donor will get the donation. Beta's manager has decided that the best time to call is 7:00 p.m. because it is exactly halfway between 5:00 p.m. and bedtime. Which of the following is true?
a. Alpha and Charlie will also make calls at 7:00 p.m.
b. Beta's manager did not choose wisely.
c. Alpha and Charlie will divide up the rest of the market, with one choosing to call at 6:00 p.m. and the other at 8:00 p.m.
d. Beta is certain to generate the most donations.
Answer:
b. Beta's manager did not choose wisely.
Explanation:
If you know that you are competing with identical charities, calling later will only result in fewer donations. The calls should start at 5 PM, and probably the three fundraisers will start calling at the same time. The only advantage that they can have depends on reaching the adults first, so the time of the calls is important.
Jennifer is preparing for a conference. For that, she needs to access various websites to secure relevant information on various companies participating in the conference. Which software application will enable her to view the websites of all the companies?
A.
Internet
B.
URL
C.
browser
D.
email
E.
malware
Answer:
C. browser
internet is the software and the browser is the application.
Akers Company sold bonds on July 1, 20X1, with a face value of $100,000. These bonds are due in 10 years. The stated annual interest rate is 6% per year, payable semiannually on June 30 and December 31. These bonds were sold to yield 8%. By July 1, 20X2, the market yield on these bonds had risen to 10%.
Required:
What was the bonds' market price on July 1 20x2?
Answer:
$76,620.83
Explanation:
According to the scenario, computation of the given data are as follows
Future Value (FV) = $100,000
Rate of interest = 10% yearly
Rate of interest (Rate) = 10%÷ 2 = 5% semiannually
Number of period (Nper) = 9 × 2 = 18
Face value = $100,000
Payment (pmt) = $100,000 × (6%÷2) = $3,000
By putting the value in excel present value formula, we get,
PV = $76,620.83
Attachment is attached below
On January 1, 2019, the ledger of Whispering Winds Corp. contains the following liability accounts.
Accounts Payable $56,000
Sales Taxes Payable 8,800
Unearned Service Revenue 16,100
During January, the following selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.
12 Performed services for customers who had made advance payments of $11,500. (Credit Service Revenue.)
14 Paid state revenue department for sales taxes collected in December 2018 ($8,800).
20 Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax.
21 Borrowed $22,500 from Girard Bank on a 3-month, 8%, $22,500 note.
25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.
Required:
Journalize the January transactions.
Answer:
Whispering Winds Corp.
Journal Entries:
Jan. 5 Debit Cash $20,520
Credit Sales Revenue $19,000
Credit Sales Taxes Payable $1,520
To record the sale of goods for cash, including 8% sales tax.
Jan. 12 Debit Unearned Service Revenue $11,500
Credit Service Revenue $11,500
To record service revenue earned.
Jan. 14 Debit Sales Tax Payable $8,800
Credit Cash $8,800
To record the payment of December Sales Taxes.
Ja. 20 Debit Accounts Receivable $48,600
Credit Sales Revenue $45,000
Credit Sales Taxes Payable $3,600
To record the sale of goods on credit, including sales tax of 8%.
Jan. 21 Debit Cash $22,500
Credit 8% Notes Payable (Girard Bank) $22,500
To record the borrowing of cash for a 3-month, 8%, note.
Jan. 25 Debit Cash $12,420
Credit Sales Revenue $11,500
Credit Sales Taxes Payable $920
To record the sale of goods for cash, including 8% sales tax.
Explanation:
a) Data and Calculations:
Liability account balances:
Accounts Payable $56,000
Sales Taxes Payable 8,800
Unearned Service Revenue 16,100
Analysis of January transactions:
Jan. 5 Cash $20,520 Sales Revenue $19,000 Sales Taxes Payable $1,520
Jan. 12 Unearned Service Revenue $11,500 Service Revenue $11,500
Jan. 14 Sales Tax Payable $8,800 Cash $8,800
Ja. 20 Accounts Receivable $48,600 Sales Revenue $45,000 Sales Taxes Payable $3,600
Jan. 21 Cash $22,500 8% Notes Payable (Girard Bank) $22,500 a 3-month, 8%, note.
Jan. 25 Cash $12,420 Sales Revenue $11,500 Sales Taxes Payable $920
Shown below is a segmented income statement for Mullett Marina’s three main boating service lines:
Winter Storage Boat Fuel & Boat Total
Concessions Maintenance
Sales revenue $4,000,000 $1,000,000 $5,000,000 $10,000,000
Less: Variable expenses 2,000,000 200,000 4900,000 7,100,000
Contribution margin $2,000,000 $800,000 $100,000 $2,900,000
Less direct fixed expenses:
Garage/warehouse rent 700,000 55,000 350,000 1,105,000
Supervision 50,000 70,000 150,000 270,000
Equipment depreciation 250,000 75,000 100,000 425,000
Segment margin $1,000,000 $600,000 $(500,000) $1,100,000
Relevant fixed costs associated with this line include 60% of Boat Maintenance’s garage/warehouse rent and 50% of Boat Maintenance’s supervision salaries. In addition, assume that dropping the Boat Maintenance service line would reduce sales of the Winter Storage line by 20% and sales of the Boat Fuel & Concessions line by 10%. All other information remains the same.
Required:
1. If the Boat Maintenance service line is dropped, what is the contribution margin for the Boat Fuel & Concessions line? For the Winter Storage line?
2. Which alternative (keep or drop the Boat Maintenance line) is now more cost effective and by how much?
Answer:
1. We have:
Contribution margin for the Boat Fuel & Concessions line = $700,000
Contribution margin for the Winter Storage line = $1,200,000
2. Keeping Boat Maintenance service line by $630,000.
Explanation:
Note that after dropping Boat Maintenance service line, its Sales revenue and Variable expenses will be eliminated while all the fixed costs will be retained. This is because, generally in Management Accounting, the fact that a a fixed cost is a direct cost does NOT mean that it is avoidable.
Note: See part a of the attached excel for the Segmented Income Statement Before Dropping Boat Maintenance service line, and see part b of the attached excel for the Segmented Income Statement After Dropping Boat Maintenance service line.
1. If the Boat Maintenance service line is dropped, what is the contribution margin for the Boat Fuel & Concessions line? For the Winter Storage line?
In the part b of the attached excel, we have:
Contribution margin for the Boat Fuel & Concessions line = $700,000
Contribution margin for the Winter Storage line = $1,200,000
2. Which alternative (keep or drop the Boat Maintenance line) is now more cost effective and by how much?
From the part a of the attached excel file, we have:
Operating income before dropping Boat Maintenance service line = $815,000
Operating income after dropping Boat Maintenance service line = -$185,000
Cost saving = $815,000 - $185,000 = $630,000
Therefore, keeping Boat Maintenance service line by $630,000.
In June 2000, the SEC brought civil charges against seven top executives of Cendant Company. The SEC alleged that these officials had, among other things, inflated income by more than $100 million through improper use of company reserves. These proceedings were a result of a longstanding investigation by the SEC of financial fraud that started back in the 1980s. In your opinion, in which stage of the criminal litigation process is this case? Why?
Answer:
First stage
Explanation:
Filing of criminal charges against an offender is usually the first stage in a criminal litigation process. The investigation carried out by SEC is a preliminary process and may not be counted as First stage.
The criminal litigation process is made up seven ( 7 ) process and the investigative part of the process is to Identify the civil charges
Computing Straight-Line and Double-Declining-Balance Depreciation
On January 2, 2016, Dechow Company purchases a machine to help manufacture a part for one of its key products. The machine cost $306,180 and is estimated to have a useful life of six years, with an expected salvage value of $32,760.
Compute each year's depreciation expense for 2016 and 2017 for each of the following depreciation methods.
a. Straight-line.
b. Double-declining balance.
Answer:
a.
2016 = $45,570
2017 = $45,570
b.
2016 = $102,080
2017 = $68,014
Explanation:
Straight line method
Straight line method charges a fixed amount of depreciation
Depreciation Charge = (Cost - Salvage Value) ÷ Estimated useful life
2016
Depreciation Charge = $45,570
2017
Depreciation Charge = $45,570
Double declining method
Double declining method charges a higher amount of depreciation at the early years and less in the later years
Depreciation Charge = 2 x SLDP x BVSLDP
2016
Depreciation Charge = 2 x 16.67 % x $306,180 = $102,080
2017
Depreciation Charge = 2 x 16.67 % x ($306,180 - $102,080) = $68,014
An analysis of stockholders' equity of Hahn Corporation as of January 1, 2020, is as follows: Common stock, par value $20; authorized 100,000 shares; issued and outstanding 90,000 shares $1,800,000 Additional Paid-in capital 900,000 Retained earnings 760,000 Total $3,460,000 During 2020, the company entered into the following transactions: Acquired 2,500 shares of its stock for $75,000. Sold 2,000 treasury shares at $35 per share. Sold the remaining treasury shares at $20 per share. Assuming no other equity transactions occurred during 2020, what should Hahn report at December 31, 2020, as total additional paid-in capital?
Answer:
$905,000
Explanation:
Calculation to determine what should Hahn report at December 31, 2020, as total additional paid-in capital
Total Additional Paid-in capital=$900,000 + (2,000 × $5) –[(2,500-2,000)× $10]
Total Additional Paid-in capital=$900,000 + (2,000 × $5) – (500 × $10)
Total Additional Paid-in capital=$900,000 + $10,000-$5,000
Total Additional Paid-in capital = $905,000
Therefore The amount that Hahn should report at December 31, 2020, as total additional paid-in capital is $905,000
g Earnings per share Financial statement data for the years 20Y5 and 20Y6 for Black Bull Inc. follow: 20Y5 20Y6 Net income $1,687,000 $2,632,000 Preferred dividends $40,000 $40,000 Average number of common shares outstanding 90,000 shares 120,000 shares a. Determine the earnings per share for 20Y5 and 20Y6. Round to two decimal places. 20Y5 20Y6 Earnings per Share $fill in the blank 1 $fill in the blank 2 b. Is the change in the earnings per share from 20Y5 to 20Y6 favorable or unfavorable
Answer:
a) EPS
2005 Earnings per share=$18.3
2005 Earnings per share=$21.6
b) EPS Variance = $3.3 favorable
Explanation:
Earnings per share(EPS) is the total earnings attributable to ordinary shareholders divided by the number of units of common stock
Earnings attributable to ordinary shareholders= Net income after tax - preference dividend
Earnings per share = (Net income after tax - preference dividend)/Number of shares
2005 Earnings per share = $1,687,000- $40,000/90,000 shares=$18.3
2006 Earnings per share=($2,632,000- $40,000)/120,000 shares=$21.6
2005 Earnings per share=$18.3
2006 Earnings per share=$21.6
EPS Variance
Comparing the EPS the Earning per share in 2006 is higher than that of 2005. Hence, the variance = 21.6-18.3= $3.3 favorable
EPS Variance = $3.3 favorable
The following information pertains to Lightning Inc., at the end of December: Credit Sales $ 20,000 Accounts Payable 10,000 Accounts Receivable 11,800 Allowance for Uncollectible Accounts 400 credit Cash Sales 20,000 Lightning uses the aging method and estimates it will not collect 7% of accounts receivable not yet due, 20% of receivables up to 30 days past due, and 46% of receivables greater than 30 days past due. The accounts receivable balance of $11,800 consists of $7,500 not yet due, $2,300 up to 30 days past due, and $2,000 greater than 30 days past due. What is the appropriate amount of Bad Debt Expense
Answer:
The appropriate amount of Bad Debt Expense is $3,345.20.
Explanation:
The appropriate amount of Bad Debt Expense can be calculated as follows:
Bad debt expense = (Percentage of accounts receivable not yet due it will not collect * Accounts receivable not yet due) + (Percentage of receivables up to 30 days past due it will not collect * Amount of receivables up to 30 days past due) + (Parentage of receivables of receivables greater than 30 days past due it will not collect * Amount of receivables greater than 30 days past due) - Allowance for Uncollectible Accounts (credit) ……………………… (1)
Substituting the relevant values into equation (1), we have:
Bad debt expense = (7% * $7,500) + (20% + $2,300) + (46% * $2,000) - $400 = $3,345.20
Therefore, the appropriate amount of Bad Debt Expense is $3,345.20.
Murray Motor Company wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (D1) of $1.30 per share, and the current price of its common stock is $40 per share. The expected growth rate is 5 percent. a. Compute the cost of retained earnings (Ke). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Click to watch the Tell Me More Learning Objective 5 video and then answer the questions below. 1. The entry to record the amortization of a patent would include a debit to __________ and a credit to __________. Amortization Expense; Patents Amortization Expense; Accumulated Amortization Patents; Accumulated Amortization Patents Expense; Accumulated Amortization 2. The exclusive right to publish and sell a literary, artistic, or musical composition is granted by a patent. trademark. copyright. franchise.
Answer:
1. Amortization Expense; Patents.
2. Copyright.
Explanation:
Patent can be defined as the exclusive or sole right granted to an inventor by a sovereign authority such as a government, which enables him or her to manufacture, use, or sell an invention for a specific period of time.
Generally, patents are used on innovation for products that are manufactured through the application of various technologies.
Basically, the three (3) main ways to protect an intellectual property is to employ the use of
I. Trademarks.
II. Patents.
III. Copyright.
Copyright law can be defined as a set of formal rules granted by a government to protect an intellectual property by giving the owner an exclusive right to use while preventing any unauthorized access, use or duplication by others.
Filling the missing words or texts in the question, we have;
1. The entry to record the amortization of a patent would include a debit to amortization expense and a credit to patents. Amortization in financial accounting is used to periodically lower the book value of a loan principal or an intangible asset such as intellectual property over a set period of time.
2. Copyright: the exclusive right to publish and sell a literary, artistic, or musical composition is granted by a patent.
Which is NOT a reason companies integrate horizontally?
A To expand internationally.
B Tobe in control of the resources used in the production process.
C To expand brand equity across new product lines.
D To increase production capacity.
