Answer: a.may increase while conversion costs decrease because the two are separately calculated and depend on separate costs.
Explanation:
When the cost of production report is being used to analyze change in direct materials cost per equivalent unit when compared to the conversion cost per equivalent unit, we should note that an investigation may end up showing that the fluctuation in the the direct materials costs which then brings about an increase or a decrease.
Therefore, the correct option is A "may increase while conversion costs decrease because the two are separately calculated and depend on separate costs".
Reynolds Manufacturers Inc. has estimated total factory overhead costs of $104,000 and expected direct labor hours of 13,000 for the current fiscal year. If job number 117 incurs 1,720 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for a.$104,000 b.$52,000 c.$1,720 d.$13,760
Answer:
Work in Process 13.760
Manufacturing Overhead 13,760
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 104,000 / 13,000
Predetermined manufacturing overhead rate= $8 per direct labor hour
Now, we can allocate overhead to Job 117:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 8*1,720
Allocated MOH= $13,760
Work in Process 13.760
Manufacturing Overhead 13,760
The sensitivity of a system for disciplining and possibly terminating employees is important, and it is critical that the system be seen as fair. Employees form conclusions about the system's fairness based on the system's outcomes and procedures and the way managers treat employees when carrying out those procedures. Three principles of justice are outcome fairness, procedural justice, and interactional justice.
Outcome fairness involves the ends of a discipline process or action, while procedural and interactional justice focus on the means to those ends. Not only is behavior ethical that is in accord with these principles, but research has also linked the last two categories of justice with employee satisfaction and productivity
Place each of the following labels in one of the columns.
Listen closely
College buddies
Project work
Family friendly
Explanations
Family relations
Accommodations
Gender benefits
Team raises
Promotion
Respect
Qualifications
Outcome fairness Procedural justice International justice
Answer:
You and a friend apply for a job and you believe that you are more qualified - Outcome Fairness
You find out that your friend's uncle is hiring a manager for the company- Procedural justice
Explanation:
Outcome Fairness is the situation where we perceive that the results for a certain situation will be based on fair judgement.
Procedural Justice is a situation where a man believes that there will be pure justice in resource allocation and decision making will be based on judgement.
Assume that the entry closing total revenues of $284,900 and total expenses of $212,600 has been made for the year ending December 31. At the end of the fiscal year, Teresa Schafer, Capital has a credit balance of $330,000 and Teresa Schafer, Drawing has a balance of $27,600.
A. Journalize the entry required to close the Teresa Schafer, Drawing account.
B. Determine the amount of Teresa Schafer, Capital at the end of period.
Answer and Explanation:
a. The journal entry to record the closing of drawing account is given below:
Teresa Schafer, Capital $27,600
Teresa Schafer, Drawing $27,600
(Being closing of drawing account is recorded)
b. The ending capital is
= Credit balance of capital - drawings
= $330,000 - $27,600
= $302,400
Testbank Multiple Choice Question 110 On January 1, 2021, Marigold Corp. redeemed its 15-year bonds of $6920000 par value for 101. They were originally issued on January 1, 2009 at 91 with a maturity date of January 1, 2024. Marigold amortizes discounts and premiums using the straight-line method. What amount of loss should Marigold recognize on the redemption of these bonds (ignore taxes)
Answer:
$193,760
Explanation:
Calculation to determine the amount of loss should Marigold recognize on the redemption of these bonds
Bonds edemption=[($6,920,000*1.01)-$6,920,000]+[(100%-91%*$6,920,000)-((100%-91%*$6,920,000)/15 years*12)]
Bonds redemption=[($6,989,200-$6,920,000]+[(9%*$6,920,000)-((9%*$6,920,000)/15 years*12)]
Bonds redemption=$69,200+[($622,800-($622,800/15 years*12)]
Bonds redemption=$69,200+[($622,800-$498,240)]
Bonds redemption=$69,200+$124,560
Bonds redemption=$193,760
Therefore the amount of loss should Marigold recognize on the redemption of these bonds is $193,760
Determine the amount to be paid in full settlement of each of two invoices, (a) and (b), assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. If required, round the answers to the nearest dollar. Merchandise (Invoice Amount) Freight Paid by Seller Freight Terms Returns and Allowances (Invoice Amount) a. $5,300 $400 FOB destination, 2/10, n/30 $1,250 b. 2,700 200 FOB shipping point, 1/10, n/30 800 a. $fill in the blank 1 b. $fill in the blank 2
Answer:
a. Amount to be paid = $4,369
b. Amount to be paid = $1,881
Explanation:
Note: Thee data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
a. Invoice (a)
Amount to be paid = (Invoice amount - Returns and Allowances) - ((Invoice amount - Returns and Allowances) * 2%) + Freight Paid by Seller = ($5,300 - $1,250) - (($5,300 - $1,250) * 2%) + $400 = $4,369
b. Invoice (b)
Amount to be paid = (Invoice amount - Returns and Allowances) - ((Invoice amount - Returns and Allowances) * 1%) = ($2,700 - $800) - (($2,700 - $800) * 1%) = $1,881
How does a realistic market potential estimate affect small business success?
Answer:
Estimating market size is a crucial first step in the development of any startup or small business. And it really doesn't matter what industry you're in — or want to be in — getting an accurate picture of your market size reveals insights that can drive both the present and future success of your business.
eamish Incorporated, which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 10,700 Variable costs per unit: Direct materials $ 108 Direct labor $ 51 Variable manufacturing overhead $ 7 Variable selling and administrative expense $ 9 Fixed costs: Fixed manufacturing overhead $417,300 Fixed selling and administrative expense $834,600 There were no beginning or ending inventories. The absorption costing unit product cost was:
Answer:
$205 per unit
Explanation:
Calculation to determine what The absorption costing unit product cost was:
Using this formula
Absorption costing unit product cost = Direct material + Direct labour + Variable manufacturing overheads + (Fixed manufacturing overheads / Number of units produced)
Let plug in the formula
Absorption costing unit product cost= $108 + $51 + $7 + ($417,300 / 10,700)
Absorption costing unit product cost=$108 + $51 + $7 + $39
Absorption costing unit product cost= $205 per unit
Therefore The absorption costing unit product cost was:$205 per unit
An investment project has annual cash inflows of $4,300, $4,000, $5,200, and $4,400, for the next four years, respectively. The discount rate is 13 percent. a. What is the discounted payback period for these cash flows if the initial cost is $5,800? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period for these cash flows if the initial cost is $7,900? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the discounted payback period for these cash flows if the initial cost is $10,900? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
1.64 years
2.27 years
3.13 years
Explanation:
Discounted payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative discounted cash flows
Present value of cash flow in year 1 = 4300 / 1.13 = 3805.31
Amount recovered in year 1 = -5800 + 3805.31 = -1994.69
Present value of cash flow in year 2 = 4000 / (1.13^2) = 3132.59
Amount recovered in year 2 =-1994.69 + 3132.59 = 1137.90
Payback period = 1 + 1994.69/3132.59 = 1.64 years
B
Present value of cash flow in year 1 = 4300 / 1.13 = 3805.31
Amount recovered in year 1 = -7900 + 3805.31 = -4094.69
Present value of cash flow in year 2 = 4000 / (1.13^2) = 3132.59
Amount recovered in year 2 = -4094.69 + 3132.59 = -962.10
Present value of cash flow in year 3 = 5200 / (1.13^3) = 3603.86
Amount recovered in year 3 = -962.10 + 3603.86 = 2641.76
Payback period = 2 years + -962.10 / 3603.86 = 2.27 years
C
Present value of cash flow in year 1 = 4300 / 1.13 = 3805.31
Amount recovered in year 1 = -10900 + 3805.31 = -7094.69
Present value of cash flow in year 2 = 4000 / (1.13^2) = 3132.59
Amount recovered in year 2 = -7094.69 + 3132.59 = -3962.10
Present value of cash flow in year 3 = 5200 / (1.13^3) = 3603.86
Amount recovered in year 3 = -3962.10 + 3603.86 = -358.24
Present value in year 4 = 4400 / (1.13^4) = 2698.60
Amount recovered in year 4 = -358.24 + 2698.60 = 2340.36
Payback period = 3 years + 358.24 + 2698.60 = 3.13 years
Triple Tier Bakery is a locally-owned business offering custom cakes, cupcakes, desserts and wedding cakes. At year end, Triple Tier's balance of Allowance for Uncollectible Accounts is $550 (credit) before adjustment. The Accounts Receivable balance is $22,500. During the next year, Triple Tier estimates that 10% of accounts will be uncollectible. Record the adjustment required for Allowance for Uncollectible Accounts?
Answer and Explanation:
The adjusting entry is
Bad Debts expense ($22,500 ×10% - $550) $1,700
To Allowance for uncollectible accounts $1,700
(Being adjustment for Allowance for Uncollectible Accounts is recorded)
Here bad debt expense is debited as it increased the expense and credited the allowance as it reduced the assets
The purpose of charging different prices to different groups of customers is to multiple choice decrease costs and in turn increase profits. Student discounts are an example of this type of pricing. increase revenue, but not profits. Higher holiday airfares are an example of this type of pricing. increase revenue and in turn costs. Senior citizen discounts are an example of this type of pricing. increase revenue and in turn profits. Lower afternoon movie prices are an example of this type of pricing.
Answer:
increase revenue and in turn profits. Lower afternoon movie prices are an example of this type of pricing.
Explanation:
Price discrimination is defined as the situation where the same product is being sold to different customers at different prices.
This is mostly based in the ability of the customers to pay at the varying amounts.
In the given instance when afternoon movie tickets are sold at lower prices, that rational is that there is lower demand for movies in the afternoon.
As such the price will need to be lowered to encourage people to buy tickets.
However at night people are less busy and demand for movies will be high. Tickets can now be sold at higher prices with the assurance that people will buy
Student discounts are an example of this type of pricing of increase revenue and in turn profits. Lower afternoon movie prices are an example of this type of pricing.
The following information should be considered;
Price discrimination is defined as the situation where the same product is being sold to different customers at different prices. This is mostly based in the ability of the customers to pay at the varying amounts.Learn more: brainly.com/question/16911495
A truck was acquired on July 1, 2018, at a cost of $311,850. The truck had a six-year useful life and an estimated salvage value of $34,650. The straight-line method of depreciation was used. On January 1, 2021, the truck was overhauled at a cost of $28,875, which extended the useful life of the truck for an additional two years beyond that originally estimated (salvage value is still estimated at $34,650). In computing depreciation for annual adjustment purposes, expense is calculated for each month the asset is owned.
Answer:
Details Amount($)
Cost $311,850
Less: Salvage value ($34,650)
Depreciation base July 1, 2018 $277,200
Less: Depreciation to date ($277,200/6)*2.5 ($115,500)
Depreciation base Jan 1, 2021 (unadjusted) $161,700
Overhaul $28,875
Depreciation base Jan 1, 2021 (adjusted) $190,575
Date Particulars Debit($) Credit($)
2021, Jan 1 Depreciation accumulated A/c Dr $34,650
To cash A/c $34,650
2021, Dec 31 Expense for depreciation A/c Dr $19,922
($109,575/5.5)
To Depreciation accumulated A/c $19,922
The following information pertains to Flaxman Manufacturing Company for April. Assume actual overhead equaled applied overhead. April 1 Inventory balances Raw materials $ 123,700 Work in process 119,900 Finished goods 77,800 April 30 Inventory balances Raw materials $ 85,500 Work in process 145,200 Finished goods 81,700 During April Costs of raw materials purchased $ 118,500 Costs of direct labor 100,100 Costs of manufacturing overhead 61,700 Sales revenues 353,000 Required Prepare a schedule of cost of goods manufactured and sold. Calculate the amount of gross margin on the income statement.
Answer:
Cost of goods manufactured $293,200
Gross margin $63,700
Explanation:
Flaxman manufacturing company
Income statement for April
Sales revenue $353,000
March 1, Inventory balance raw materials
$123,700
Add: raw materials purchased
$118,500
Less April 31, Inventory balance raw materials
$85,500
Raw materials used $156,700
Cost of direct labor
$100,100
Cost of manufacturing overhead
$61,700
Total manufacturing costs $318,500
Add work in process
$119,900
Cost of goods available for manufacturing
$438,400
Less ending work in process
$145,200
Cost of goods manufactured
$293,200
Add finished goods at the beginning
$77,800
Cost of goods available for sale
$371,000
Less finished goods at ending
$81,700
Cost of goods sold
$289,300
Gross margin
$63,700
We arrived at the gross margin by deducting cost of goods sold from sales revenue
The corporate charter of Maine Yacht Corporation allows the issuance of a maximum of 3,000,000 shares of $1 par value common stock. During its first three years of operation, Maine issued 2,200,000 shares at $15 per share. It later acquired 30,000 of these shares as treasury stock for $25 per share. Based on the above information, answer the following questions:
a. How many shares were authorized?
b. How many shares were issued?
c. How many shares are outstanding?
d. What is the balance of the Common Stock account?
Answer:
a)3,000,000 shares
b)2,200,000 shares
c)2,170,000 shares
d)$2,200,000
Explanation::
a) Based on the information given 3,000,000 shares were authorized
b) Based on the information given 2,200,000 shares were issued
c) Calculation for many shares are outstanding
Outstanding shares= (2,200,000 issued-30,000 in treasury)
Outstanding shares=2,170,000 shares
d) Calculation for the balance of the Common Stock account
Balance of the Common Stock account = ($1 × 2,200,000 shares
Balance of the Common Stock account=$2,200,000
Bob lives in Philadelphia and runs a business that sells guitars. In an average year, he receives $704,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,000. He owns his showroom; if he chooses to rent it out, he will receive $3,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Bob does not operate this guitar business, he can work as an accountant, receive an annual salary of $20,000 with no additional monetary costs, and rent out his showroom at the $3,000 per year rate. No other costs are incurred in running this guitar business.
Identify each of Charles's costs in the following table as either an implicit cost or an explicit cost of selling guitars
Implicit Cost Explicit Cost
1. The wholesale cost for the guitars that Charles pays the manufacturer
2. The wages and utility bills that Charles pays
3. The salary Charles could earn if he worked as an accountant
4. The rental income Charles could receive if he chose to rent out his showroom
Complete the following table by determining Charles's accounting and economic profit of his guitar business.
Profit (Dollars)
Accounting Profit
Economic Profit
Answer:
Explicit Cost
1. The wholesale cost for the guitars that Charles pays the manufacturer
2. The wages and utility bills that Charles pays
Implicit cost
3. The salary Charles could earn if he worked as an accountant
4. The rental income Charles could receive if he chose to rent out his showroom
$14,000
Economic profit = $-9000
Explanation:
Accounting profit= total revenue - explicit cost
Total revenue =price x quantity sold
Explicit cost includes the amount expended in running the business. They include rent , salary and cost of raw materials
Economic profit = accounting profit - implicit cost
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives
Accounting profit = $704,000 - ( $404,000 + $286,000) = $14,000
Economic profit = $14,000 - ($3000 + $20,000) =$-9000
Two-Stage ABC for Manufacturing: Reassigning Costs to Cost Objectives National Technology, LTD. has developed the following activity cost information for its manufacturing activities:
Activity Activity Cost
Machine setup $75.00 per batch
Movement 22.00 per batch
0.10 per pound
Drilling 3.00 per hole
Welding 6.00 per inch
Shaping 32.00 per hour
Assembly 18.00 per hour
Inspection 2.00 per unit
Filling an order for a batch of 50 fireplace inserts that weighed 150 pounds each required the following:
Three batch moves .
Two sets of inspections .
Drilling five holes in each unit
Completing 80 inches of welds on each unit .
Thirty minutes of shaping for each unit .
One hour of assembly per unit
Determine the activity cost of converting the raw materials into 50 fireplace inserts
Fireplace Inserts
Activity Cost
Set-up $
Movement
Batch 60V
Weight
Inspection
Drilling
Welding
Shaping
Assembly
Total
Answer:
$27,541
Explanation:
Calculation to Determine the activity cost
Activity Cost
Set-up $75.00
Movement:
Batch 60V $66
(Three batch moves *22.00 per batch)
Weight $750
(150 pounds*0.10 per pound*50)
Inspection $200
(Two sets of inspections*50*2.00 per unit)
Drilling $750
(3.00 per hole*five holes in each unit*50)
Welding $24,000
(6.00 per inch*80*50)
Shaping $800
(32.00 per hour*(30 minutes/60)*50)
Assembly $900
(18.00 per hour*1*50)
Total $27,541
Therefore the activity cost is $27,541
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $320,000 for November, $300,000 for December, and $290,000 for January. Collections are expected to be 55% in the month of sale and 45% in the month following the sale. The cost of goods sold is 70% of sales. The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $23,800. Monthly depreciation is $14,800. Ignore taxes. Balance Sheet October 31 Assets Cash $ 21,400 Accounts receivable 71,400 Merchandise inventory 156,800 Property, plant and equipment, net of $573,400 accumulated depreciation 1,095,400 Total assets $ 1,345,000 Liabilities and Stockholders' Equity Accounts payable $ 255,400 Common stock 821,400 Retained earnings 268,200 Total liabilities and stockholders' equity $ 1,345,000 The difference between cash receipts and cash disbursements for December would be:
Answer:
Bramble Corporation
The difference between cash receipts and cash disbursements for December would be:
= $71,000
Explanation:
a) Data and Calculations:
Balance Sheet October 31
Assets Cash $ 21,400
Accounts receivable 71,400
Merchandise inventory 156,800
Property, plant and equipment,
net of $573,400 accumulated
depreciation 1,095,400
Total assets $ 1,345,000
Liabilities and Stockholders' Equity
Accounts payable $ 255,400
Common stock 821,400
Retained earnings 268,200
Total liabilities and
stockholders' equity $ 1,345,000
November December January
Budgeted sales $320,000 $300,000 $290,000
Cash Collections:
55% month of sale 176,000 165,000 159,500
45% following month 71,400 144,000 135,000
Total collections $247,400 $309,000 $294,500
Cost of goods sold $224,000 $210,000 $203,000
= (70% of Sales for the month)
Ending Inventory 147,000 142,100
Goods available $371,000 $352,000
Beginning Inventory 156,800 147,000 142,100
Purchases $214,200 $205,000
Cash disbursements:
Payment to suppliers 255,400 214,200 205,000
Other monthly exp. 23,800 23,800
Total disbursements $279,200 $238,000
Comparison of Cash receipts with Cash disbursements:
November December
Cash receipts $247,400 $309,000
Cash disbursements $279,200 $238,000
Difference ($31,800) $71,000
Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5.00 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3.00 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales. Square Yard Products Inc.'s total operating income will increase by
Answer: $80,000
Explanation:
First, we'll need to calculate division 3's income from the increase in operations and this will be:
= (40000 × $5) - ($40000 × $3.20)
= $200,000 - $128,000
= $72000
Division 6 income from operation increase will be:
= 40000 × ($3.20 - $3.00)
= 40000 × 0.2
= $8000
Therefore, Square Yard Products Inc.'s total operating income will increase by:
= $72000 + $8000
= $80000
the role of remuneration committee in the company
In August, one of the processing departments at Tsuzuki Corporation had beginning work in process inventory of $24,000 and ending work in process inventory of $13,000. During the month, $283,000 of costs were added to production. In the department's cost reconciliation report for August, the cost of units transferred out of the department would be: Multiple Choice $294,000 $270,000 $281,000 $307,000
Answer:
$294,000
Explanation:
The computation of the cost of units transferred out of the department would be shown below:
= Opening work in process + cost added to the production - ending work in process
= $24,000 + $283,000 - $13,000
= $294,000
Sunland purchased the license for distribution of a popular consumer product on January 1, 2020, for $158,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominal fee, Sunland can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year ended December 31, 2020
Answer:
No amount should be amortized since the license can be renewed indefinitely for successive 5-year terms.
Instead, the license should be tested for impairment annually to determine impairment loss.
Explanation:
An intangible asset that can be used indefinitely is treated like purchased Goodwill. It should never be amortized. Annually, the asset should be tested for impairment. The test is to compare the market value of the license with the book value.
Prescott gave land to his aunt, Janice. Prescott's basis in the land was $45,000, and its fair market value at the date of the gift was $62,000. Janice borrowed $40,000 from a bank; she used the funds to improve the property. She sold the property to Marshall for $220,000. Marshall paid Janice $80,000 in cash, assumed her $30,000 mortgage, and agreed to pay $110,000 in two years. Janice's selling expenses were $2,000. Marshall is going to pay adequate interest.
a. Janice's basis in the land at the time of the sale is __________.
b. When computing her realized gain, what amount does Janice use as the selling price and as the contract price?
Contract price:__________.
c. Janice's total realized gain on the sale is $fill in the blank 4, but her recognized gain in the year of the sale is ________.
Answer:
A. 220k
B. 45k
C. 2k
Explanation:
Fiscal expansion Group of answer choices decreases aggregate demand and causes output to decline. decreases aggregate demand and causes output to rise. decreases government expenditures. stimulates aggregate demand and causes output to rise. stimulates aggregate demand and causes output to decline.
Answer:
Fiscal expansion
stimulates aggregate demand and causes output to rise.
Explanation:
The Federal Government employs a fiscal expansion policy when it wants to boost economic growth. Such a policy is always needed during the contractionary phase of the business cycle. The purposes of a fiscal expansion policy by the government are to reduce unemployment, engender consumer demand and growth, and avoid an economic downturn.
Generally, a loan obtained from a bank will be a _____ loan.
A. Taxed
B. Term
C. Variable
D. Collateral-free
Answer:
Term
Explanation:
Cynthia, a sole proprietor, was engaged in a service business and reported her income on the cash basis. On February 1, 2013, she incorporates her business as Dove Corporation and transfers the assets of the business to the corporation in return for all of the stock in addition to the corporation’s assumption of her proprietorship’s liabilities. All of the receivables and the unpaid trade payables are transferred to the newly formed corporation. The balance sheet of the corporation immediately after its formation is as follows:
Dove Corporation
Balance Sheet
February 1, 2013
Assets
Basis to Dove Fair Market Value
Cash $ 80,000 $ 80,000
Accounts receivable 0 240,000
Equipment (cost $180,000; 120,000 320,000
depreciation previously claimed $60,000)
Building (straight-line depreciation) 160,000 400,000
Land 40,000 160,000
Total $400,000 $1,200,000
Liabilities and Stockholder’s Equity
Liabilities:
Accounts payable—trade $ 120,000
Notes payable—bank 360,000
Stockholder’s equity:
Common stock 720,000
Total $1,200,000
Discuss the tax consequences of the incorporation of the business to Cynthia and to Dove Corporation.
Answer:
Cynthia and Dove CorporationAny profits generated by Dove Corporation will be taxed to the corporation and also taxed to Cynthia as a shareholder whenever Dove distributes the profits as dividends. Taxing Dove and Cynthia creates a double taxation burden for both Dove and Cynthia. Dove Corporation does not get a tax deduction when it distributes dividends to Cynthia. Furthermore, Cynthia cannot deduct any corporation loss when incurred. These are unlike when the business was only a sole proprietorship.
Explanation:
a) Data and Calculations:
Dove Corporation
Balance Sheet
February 1, 2013
Assets
Basis to Dove Fair Market Value
Cash $ 80,000 $ 80,000
Accounts receivable 0 240,000
Equipment (cost $180,000; 120,000 320,000
depreciation previously claimed $60,000)
Building (straight-line depreciation) 160,000 400,000
Land 40,000 160,000
Total $400,000 $1,200,000
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable—trade $ 120,000
Notes payable—bank 360,000
Stockholders' equity:
Common stock 720,000
Total $1,200,000
A firm will maximize the present value of future profits by maximizing current profits when: the growth rate in profits is constant. the growth rate in profits is larger than the interest rate. Correct! the interest rate is larger than the growth rate in profits and both are constant. the growth rate and interest rate are constant and equal.
Answer:
the interest rate is larger than the growth rate in profits and both are constant.
Explanation:
In the case when the firm wants to maximize the present value of the profits that arise in near future so here the current profits would be maximize at the time when the rate of interest would be more than the growth rate and both would remain constant
Hence, the option c is correct
The following note transactions occurred during the year for Towell Company: Nov. 10 Towell issued a 90-day, 9% note payable for $8,000 to Hyatt Company for merchandise. Dec. 1 Towell signed a 120-day, 10% note at the bank for $12,000. Dec. 20 Towell gave Barr, Inc., a 60-day, 10%, $12,000 note for payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31. Use 360 days for calculations and round to the nearest dollar.
Answer: See explanation
Explanation:
The general journal entries necessary to adjust the interest accounts at December 31 will be:
1. December 31:
Debit: Interest Expenses = $8,000 × 9% × 51/ 360 = $102
Credit: Interest payable = $102
(To accrue interest expenses for the note issued on November 10).
2. December 31:
Debit: Interest Expenses = $12,000 × 10% ×30/360 = $120
Credit: Interest payable = $120
(To accrue interest expenses for the note issued on December 1)
3. December 31:
Debit: Interest Expenses = $12,000 × 10% × 11/360 = $36.67
Credit: Interest payable = $36.67
(To accrue interest expenses for the note issued on December 20).
Computing Basic and Diluted Earnings per Share Soliman Corporation began the year 2018 with 25,000 shares of common stock and 5,000 shares of convertible preferred stock outstanding. On May 1, an additional 9,000 shares of common stock were issued. On July 1, 6,000 shares of common stock were acquired for the treasury. On September 1, the 6,000 treasury shares of common stock were reissued. The preferred stock has a $4 per share dividend rate, and each share may be converted into 2 shares of common stock. Soliman Corporation’s 2018 net income is $230,000.
Required
a. Compute earnings per share for 2018. Round your answer to two decimal places.
b. Compute diluted earnings per share for 2018. Round your answer to two decimal places.
Answer:
Soliman Corporation
1. Basic EPS
= $6.18 per share
2. Diluted EPS
= $5.23 per share
Explanation:
a) Data and Calculations:
Convertible Preferred Stock = 5,000 or 10,000 Common Shares
Common Stock:
January 1, 2018 = 25,000
May 1, 2018 Issued 9,000
July 1, 2018 Treasury (6,000)
September 1, 2018 Treasury 6,000
Total outstanding 34,000
Converted preferred stock 10,000
Total outstanding 44,000
2018 Net Income = $230,000
Preferred dividend 20,000 ($4 * 5,000)
Income for Common $210,000
Basic Earnings per share = $210,000/34,000 = $6.18
Diluted Earnings per share = $230,000/44,000 = $5.23
You and your friends want to buy a condo at the beach to time share. Each of you has single peaked preferences with a most preferred value that you are willing to spend. These values are: Mabel, $10,000; Gertrude, $20,000; Myron, $30,000; Wilber, $40,000; and you, $50,000. The condo costs $150,000. Explain how to implement a uniform rule mechanism to allocate costs and shares.
Answer:
Individual Cost Shares to be enjoyed
Mabel $10,000 10000 / 150000 = 6.67%
Gertrude $20000 20000 / 150000 = 13.3%
Myron $30000 30000 / 150000 = 20%
Wilber $40000 40000 / 150000 = 26.6%
You $50000 50000 / 150000 = 33.3%
Explanation:
peaked preferences
Most preferred value to spend :
Mabel = $10,000
Gertrude = $20,000
Myron = $30,000
Wilber = $40,000
you = $50,000
cost of Condo = $150,000
Implementing a Uniform rule mechanism to allocate costs and shares
The uniform rule ; ∑ j∈I Uj (p) = Ω.
where Ω = fixed amount of resource
hence the summation of all allotment should = Ω ( $150,000 )
Number of friends = 5
cost of condo = $150,000
If divide equally each person will have to pay ; $150,000 / 5 = $30,000
Total money to be spent by friends = 10,000 + 20,000 + 30,000 + 40,000 + 50,000 = $150,000
Individual Cost shares to be enjoyed
Mabel $10,000 10000 / 150000 = 6.67∑%
Gertrude $20000 20000 / 150000 = 13.3%
Myron $30000 30000 / 150000 = 20%
Wilber $40000 40000 / 150000 = 26.6%
You $50000 50000 / 150000 = 33.3%
∑shares ≈ 100% ( 150,000 )
Windsor, Inc. decided to establish a petty cash fund to help ensure internal control over its small cash expenditures. The following information is available for the month of April.
1. On April 1, it established a petty cash fund in the amount of $268.
2. A summary of the petty cash expenditures made by the petty cash custodian as of April 10 is as follows. Delivery charges paid on merchandise purchased $76 Supplies purchased and used 41 Postage expense 49 I.O.U. from employees 33 Miscellaneous expense 52 The petty cash fund was replenished on April 10. The balance in the fund was $8.
3. The petty cash fund balance was increased $116 to $384 on April 20.
Prepare the journal entries to record transactions related to petty cash for the month of April.
april 1
pety cash 342 (d)
cash 342 (c)
april 10
???????????????????? 72 (d)
miscellaneous expense 48 (d)
postage expense 52 (d)
accounts recievable 29 (d)
???????????????????
??????????????????
??????????????????
petty cash ??
cash ??
Answer:
April 1
Dr Petty cash $268
Cr Cash $268
April 10
Dr Freight-in (Or Inventory) $76
Dr Supplies expense $41
Dr Dr Postage expense $49
Dr Accounts Receivable/Loan to employees $33
Dr Miscellaneous expense $52
Cr Cash over and short $9
Cr Cash $260
April 20
Dr Petty cash $116
Cr Cash $116
Explanation:
Preparation of the journal entries to record transactions related to petty cash for the month of April.
April 1
Dr Petty cash $268
Cr Cash $268
April 10
Dr Freight-in (Or Inventory) $76
Dr Supplies expense $41
Dr Dr Postage expense $49
Dr Accounts Receivable/Loan to employees $33
Dr Miscellaneous expense $52
Cr Cash over and short $9
($260-$76-$41-$49-$33-$52)
Cr Cash $260
($268-$8)
April 20
Dr Petty cash $116
Cr Cash $116
Elizabeth reports the following items for the current year: Nonbusiness capital gains $ 5,000 Nonbusiness capital losses (3,000) Interest income 3,000 Itemized deductions (including a $20,000 casualty loss in a Federal disaster area) (27,000) In calculating Elizabeth's net operating loss and with respect to these amounts only, what amount must be added back to taxable income (loss)
Answer: $2000
Explanation:
In calculating Elizabeth's net operating loss and with respect to these amounts only, the amount that must be added back to taxable income (loss) will be the difference between the nonbusiness capital gains and the nonbusiness capital losses. This will be:
= $5000 - $3000
= $2000
