Answer: Please refer to Explanation
Explanation:
A Nominal Scale is a scale where variables are grouped and categorized according to certain characteristics. You cannot perform normal mathematical functions on them such as addition, subtraction and the like.
Ordinal Scales are like nominal scale but in this case the variables can be ranked. You can have a first position and a last position.
An Interval scale is numeric and as such can be ordered. You can also perform mathematical functions on them. Interval scales have no true zero and an example is Temperature. That's why temperature can drop to the negatives.
A Ratio Scale is in many ways like an Interval Scale. The main distinguishing factor is that a Ratio Scale has a true 0. This means that at there is no number before 0 and at 0 level, the variable is considered finished.
Classifying the above therefore,
a. Star ratings of hotels.
ORDINAL because they can be ranked.
b. Sales revenues of companies.
RATIO because there is a true 0. At $0, there is no revenue.
c. Grades of officers in armed forces.
ORDINAL as it can be ranked.
d. House numbers in a street.
NOMINAL as the street numbers don't mean a house is higher ranked than another.
e. Prices of cars.
RATIO as there is a true zero. A car at $0 is free. Price cannot be below $0.
f. Classes of accommodation on passenger flights.
ORDINAL as it can be ranked according to treatment in the various classes.
g. Passport numbers.
NOMINAL as the different passport numbers are simply used for identification and cannot rank people.
h. Numbers in a rating scale on a questionnaire.
ORDINAL because the variables can be ranked from top to bottom.
i. Index numbers.
ORDINAL if the index can be ranked.
NorthEast Towers Company produces a single product. For the most recent year, the company's net operating income computed by the absorption costing method was $17,450, and its net operating income computed by the variable costing method was $15,259. The company's unit product cost was $45 under variable costing and $52 under absorption costing. If the ending inventory consisted of 948 units, the beginning inventory must have been:
Answer:
1,261 units
Explanation:
To determine the Units of Beginning Inventory, prepare a Reconciliation of Absorption Costing Profit to Variable Costing Profit.
Reconciliation of Absorption Costing Profit to Variable Costing Profit
Absorption Costing Net Income $17,450
Add Fixed Costs in Opening Stock (948×($52-$45)) $ 6,636
Less Fixed Costs in Closing Stock Balancing Figure ($8,827)
Variable Costing Net Income $15,259
Units of Beginning Inventory = $8,827 / ($52-$45)
= 1,261
Jiminy’s Cricket Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 4 percent 3 years ago. The bond currently sells for 108 percent of its face value. The company’s tax rate is 22 percent. The book value of the debt issue is $30 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 10 years left to maturity; the book value of this issue is $15 million, and the bonds sell for 73 percent of par. a.What is the company’s total book value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)b.What is the company’s total market value of debt? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.)c.What is your best estimate of the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
Explanation:
a.What is the pre-tax cost of debt?This question is basically asking for the bond’s current yield to maturity, which is the pre-tax cost of long term debt in the capital markets for this company today.Price = 1.08 * 1000 = 1080+/- PV23 * 2 = 46 N.10 * 1000 = 100 / 2 = 50 PMT1000 FVSolve for i/y = 4.5801 is the semi-annual yield to maturity * 2 = 9.1601% annual YTM
b.What is the after-tax cost of debt?9.1601 * (1 - .35) = 5.9541 after tax cost of debt.This is the true cost of debt to the company because the company gets a tax deduction (a tax shield!) for paying interest on its debt.
Medallion Cooling Systems, Inc., has total assets of $9,800,000, EBIT of $2,050,000, and preferred dividends of $201,000 and is taxed at a rate of 40%. In an effort to determine the optimal capital structure, the firm has assembled data on the cost of debt, the number of shares of common stock for various levels of indebtedness, and the overall required return on investment:
Capital structure/debt Cost of debt Number of stock shares Rate of return
0% 0% 200,000 12.3%
15 7.8 175,000 13.1
30 9.1 140,000 14.2
45 12.1 111,000 16.3
60 15.2 75,000 20.1
Calculate earnings per share for each level of indebtedness.
Answer:
Earnings per share:
0% debt = $5.145 per share
15% debt = $5.487 per share
30% debt = $6.203 per share
45% debt = $6.386 per share
60% debt = $6.570 per share
Explanation:
The earnings per share is the monetary value of how much each share of common stock outstanding has earned. The earnings per share can be calculated by dividing the Net Income attributable to common stockholders by the number of common stock shares outstanding.
Net Income attributable to Common stockholders = Net Income - Preferred stock dividends
Thus, Earnings per share = (Net Income - Preferred stock dividends) / Number of common stock shares outstanding
To calculate Earnings per share at each level of indebtedness, we first need to calculate the net income at each debt level. The net income will change as interest is deducted before calculating net income.
Net Income = EBIT - interest - tax
Total debt = Total assets * weightage of debt in capital structure
Tax = EBT * tax rate
a. 0% debt
Net Income = 2,050,000 - 0 - (2050000 * 0.4) = $1,230,000
Earnings per share = (1230000 - 201000) / 200000 = $5.145 per share
b. 15% debt
Total debt = 9,800,000 * 0.15 = 1470000
EBT = 2,050,000 - (1470000 * 0.078) = $1935340
Net Income = 1935340 - ( 1935340 * 0.4) = $1161204
Earnings per share = (1161204 - 201000) / 175000 = $5.487 per share
c. 30% debt
Total debt = 9,800,000 * 0.30 = 2940000
EBT = 2050000 - (2940000 * 0.091) = $1782460
Net Income = 1782460 - (1782460 * 0.4) = $1069476
Earnings per share = (1069476 - 201000) / 140000 = $6.203 per share
d. 45% debt
Total debt = 9,800,000 * 0.45 = 4410000
EBT = 2050000 - (4410000 * 0.121) = $1516390
Net Income = 1516390 - (1516390 * 0.4) = $909834
Earnings per share = (909834 - 201000) / 111000 = $6.386 per share
e. 60% debt
Total debt = 9,800,000 * 0.60 = 5880000
EBT = 2050000 - (5880000 * 0.152) = $1156240
Net Income = 1156240 - (1156240 * 0.4) = $693744
Earnings per share = (693744 - 201000) / 75000 = $6.570 per share
Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $235,000, variable expenses of $132,600, and traceable fixed expenses of $63,800. The Alpha Division has sales of $545,000, variable expenses of $309,800, and traceable fixed expenses of $121,500. The total amount of common fixed expenses not traceable to the individual divisions is $120,200. What is the company's net operating income
Answer:
Operating income $32,100
Explanation:
The operating income for the company is the to be determined by aggregating the sales and cost figures of the two divisions . This is done as follows
$
Total sales (235,000 + 545,000) = 780,000
Variable expenses(132600+309800) = (442,400)
Traceable fixed expenses(63800+121500) = (185300)
Common fixed expenses (120200 )
Operating income 32,100
The XYZ Corporation reported the following balance sheet data for 2018 and 2017: 2018 2017 Cash $60,375 $22,955 Available-for-sale debt securities (not cash equivalents) 15,500 85,000 Accounts receivable 91,000 68,250 Inventory 165,000 145,000 Prepaid insurance 1,500 2,000 Land, buildings, and equipment 1,260,000 1,125,000 Accumulated depreciation (610,000) (572,000) Total assets $983,375 $876,205 Accounts payable $70,340 $148,670 Salaries payable 20,000 24,500 Notes payable (current) 25,000 75,000 Bonds payable 200,000 0 Common stock 300,000 300,000 Retained earnings 368,035 328,035 Total liabilities and shareholders' equity $983,375 $876,205 Additional information for 2018: (1.) Sold available-for-sale debt securities costing $69,500 for $74,000. (2.) Equipment costing $20,000 with a book value of $5,000 was sold for $6,000. (3.) Issued 6% bonds payable at face value, $200,000. (4.) Purchased new equipment for $155,000 cash. (5.) Paid cash dividends of $20,000. (6.) Net income was $60,000. Required: Prepare a statement of cash flows for 2018 in good form using the indirect method for cash flows from operating activities
Answer:
Dividends actually paid is $10000 as per the reconciliationshown in the entry below (attachment)
Answer:
statement of cash flows for 2018 using the indirect method
Cash Flow from Operating Activities
Net income for the year $60,000
Adjustment of Non-Cash Items :
Profit from Sale of Equipment ($1,000)
Depreciation (Workings) $107,500
Adjustments for Working Capital items :
Increase in Accounts receivable ($22,750)
Increase in Inventory ($20,000)
Decrease in Prepaid insurance $500
Decrease in Accounts Payable ($78,330)
Decrease in Salaries payable ($4,500)
Decrease in Notes payable ($50,000)
Cash Flow from Investing Activities
Proceeds from Sale of Equipment $6,000
Purchase of New Equipment ($155,000)
Cash Flow from Financing Activities
Proceeds from Issue of 6% bonds $200,000
Dividends Paid ($20,000)
Proceeds from Available-for-sale debt securities $74,000
Net Cash Inflow / Outflow during the Period $37,420
Cash and Cash Equivalents at Beginning of the Period $22,955
Cash and Cash Equivalents at End of the Period $60,375
Explanation:
Available-for-sale debt securities - T- Account
Debit :
Ending Balance 15,500
Sale 69,500
Totals 85,000
Credit:
Beginning Balance 85,000
Totals 85,000
Equipment T - Account
Debit :
Beginning Balance 1,125,000
Purchase 155,000
Totals 1,280,000
Credit:
Ending Balance 1,260,000
Sold 20,000
Totals 1,280,000
Accumulated Depreciation Equipment T - Account
Debit :
Ending Balance 610,000
Disposal 69,500
Totals 679,500
Credit:
Beginning Balance 572,000
Depreciation 107,500
Totals 679,500
Happy Hands Is A Monopolistically Competitive Firm That Faces The Following Demand Schedule For Its Gloves. In the long run, what is the likely outcome for Happy Hands?
A. Happy Hands will no have any excess capacity.
B. Happy Hands will not charge a price that is exactly equal to the marginal cost.
C. Happy Hands firm will not have any markup to its price.
D. Happy Hands will face lower demand and reach a long run equilibrium at a lower price.
Answer:B
Explanation:
Happy Hands will not charge a price that is exactly equal to the marginal cost, which is the likely outcome for Happy Hands. Therefore option B is correct.
What is Monoplantic?Possessing or attempting to have total control over anything, especially over a business area, without allowing others to participate: She didn't think the fine was enough to stop monopolistic behavior by large producers. The business is charged with monopolistic behavior. Look up the monopoly.
Monopolistic competition has the following characteristics:
The existence of numerous businesses
Each business creates things that are comparable but different.
Companies do not accept prices.
Free admission and exit from the sector Businesses compete on the basis of the goods' quality, cost, and marketing strategy
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Assume that the electricity from nuclear power has become a preferred source of electricity because it is cleaner than electricity produced by burning coal. At the same time, new regulations make it more expensive to produce electricity from nuclear power. What are the consequences?
Answer:
The answer to this question can be described as follows:
Explanation:
In the given statement some information is missing that is choices so, the correct choice can be described as follows:
The most important source of electricity is nuclear energy. It will boost demand for the nuclear energy century of electric power. The demand curve also is moving to the right. At the very same time, it increases in power generation rates would also increase the cost of energy generation via nuclear power plant. This will lead to a shift to the left. The nuclear demand curve will change to just the right and the nuclear power source will switch to the left. It will lead to an increase in the balance cost value with an uncertain shift in the balance quantities.Suppose the market for widgets can be described by the following equations: Demand: P equals 14minus2.00Q Supply: P equals 2.00Qminus4, where P is the price in dollars per unit and Q is the quantity in thousands of units. What is the equilibrium price and quantity? The equilibrium quantity is 4.5 thousand units and the equilibrium price is $ 5. (Enter your responses rounded to two decimal places.) Suppose the government imposes a tax of $1 per unit to reduce widget consumption and raise government revenues. What will be the new equilibrium quantity? What price will the buyer pay? What amount per unit will the seller receive? The new equilibrium quantity will be 4.25 thousand units. (Enter your response rounded to two decimal places.) The price paid by buyers will be $ 5.5. (Enter your response rounded to two decimal places.) The amount kept by sellers will be $ 4.5. (Enter your response rounded to two decimal places.)
Answer:
Explanation:
Demand P = 14 - 2Q
Supply P = 2Q - 4
Since Demand = Supply
14 - 2Q = 2Q - 4
Collect the like terms on either side
-2Q - 2Q = -4 - 14
-4Q = -18
Dividing both sides by -4, we will have
Q = -18/-4
Q = 4.50 units
P = 14 - 2Q
P = 14 - 2(4.5)
P = 14 - 9
P = $5.00
Therefore Equilibrium price is $5.00 and Equilibrium unit is 4.50
If the government impose a tax of $1 per unit. If price paid but buyer is P, then price received by seller will be (P - 1)
for demand
P = 14 - 2Q
2Q = 14 - P
Q = 7 - 0.5P
For supply
P = 2Q - 4
Q = 2 + 0.5P
Q = 2+ 0.5(P - 1)
Q = 2 + 0.5P - 0.5
Q = 2-0.5 + 0.5P
Q = 1.5 + 0.5P
if Demand = Supply
7 - 0.5P = 1.5 + 0.5P
Collect the like terms on either sides
-0.5P - 0.5P = 1.5 - 7
-1P = -5.5
Dividing both sides by -1, we will have
P = -5.5/-1
P = $5.50
Q = 1.5 + 0.5P
If we substitute 5.5 for P in the above eqn, we will have
Q = 1.5 + 0.5(5.5)
Q = 1.5 + 2.75
Q = 4.25 units
Paradise Cruises has a monopoly in renting luxury yachts for sailing in the Caribbean Sea. In summer its monthly inverse demand is p Subscript Upper Sequals400minus2Upper Q Subscript Upper S. In winter the inverse demand is p Subscript Upper Wequals400minusUpper Q Subscript Upper W. Paradise has a total of 150 yachts available for rental on a monthly basis. Which season is peak season? Why? What are the profit-maximizing prices in both seasons? Assume marginal cost is zero. Peak season is winter because demand is higher . The profit-maximizing peak-load price for the summer is p Subscript Upper Sequals$ nothing and the optimal peak-load price for the winter is p Subscript Upper Wequals$ nothing. (
Answer:
Explanation:
In economics, profit maximization is an optimization problem for producers, who choose the quantity of output to maximize revenue net of total costs. Profit is maximized when the marginal revenue form the last unit produced is equal to the marginal cost.
Answer and Explanation:
The Winter is the peak season because for the same quantity demanded, consumers are willing to offer a higher price, as indicated by the demand curve.
Martinez Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2020.
January 1, 2020 December 31, 2020
Projected benefit obligation $1,517,000 $1,545,000
Market-related and fair value of plan assets 803,000 1,132,300
Accumulated benefit obligation 1,580,000 1,698,300
Accumulated OCI (G/L)—Net gain 0 (201,700 )
The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $118,300. The company’s actual funding (contributions) of the plan in 2020 amounted to $249,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,183,000 on January 1, 2020. Assume no benefits paid in 2020.
Determine the amounts of the components of pension expense that should be recognized by the company in 2020.
Answer:
$1,337,700
Explanation:
The computation of the amounts of the components of pension expense is shown below:
Service cost $78,000
Amortization of Prior Service cost $1,183,000 ($1,698,300 - $1,580,000)
Interest on PBO $157,000 ($1,517,000 ×10%)
Less: Expected return on plant assets $80,300 ($803,000 × 10%)
Pension expense $1,337,700
We simply applied the above formula so that the amount of pension expense could come
Marcellus Company is involved in a lawsuit. Footnote disclosure of the contingent liability which could arise does not have to be presented if the probability of Marcellus owing money as a result of the lawsuit is A) reasonably possible and the amount cannot be reasonably estimated. B) probable and the amount cannot be reasonably estimated. C) reasonably possible and the amount can be reasonably estimated. D) remote and the amount can be reasonably estimated.
Answer:
The answer is option B) probable and the amount cannot be reasonably estimated.
Explanation:
Contingency liability is the likelihood that a liability might occur sometimes in the future in the face of uncertain circumstances. To validate a contingency liability, the fa cts presented has to be reasonably possible and reasonably estimated.
in the case of Marcellus Company, footnote disclosure of the contingent liability which could arise does not have to be presented if the probability of Marcellus owing money as a result of the lawsuit is probable and the amount cannot be reasonably estimated.
The Widget Co. purchased all of its fixed assets three years ago for $4 million. These assets can be sold today for $2 million. The current balance sheet shows net fixed assets of $2,500,000, current liabilities of $1,375,000, and net working capital of $725,000. If all the current assets were liquidated today, the company would receive $1.9 million in cash. The book value of the total assets today is ________ and the market value of those assets is ________. $6,500,000; $3,900,000 $4,600,000; $3,125,000 $5,000,000; $3,125,000 $4,600,000; $3,900,000 $5,000,000; $3,900,000
Answer:
$4,600,000; $3,900,000
Explanation:
Book value of the asset are the recorded costs of the assets included any adjustments like depreciation or amortization. Market value is the fair value and Ne realizable value of the assets.
Total Assets = Fixed Assets + Current Assets
Total Assets = Fixed Assets + (Working capital + Current Liabilities)
Placing Value in above formula
Total Assets = $2,500,000 + ($725,000 + $1,375,000)
Total Assets = $4,600,000
Market Value = Fair value of Fixed assets + Current assets fair value
Market Value = $2,000,000 + $1,900,000 = $3,900,000
Assume that the economy is in long-run equilibrium. Now, assume that there is an unexpected increase in the price of oil. As a result of higher oil prices, the A. short-run aggregate supply curve will shift left. B. long-run aggregate supply curve will shift left. C. short-run aggregate supply curve will shift right. D. aggregate demand curve will shift left. The new short-run equilibrium will be
Answer:
The correct answer is D)
The aggregate demand curve will shift left.
Aggregate supply is stimulated only by labour, capital, and technology.
Equilibrium refers to the price point where demand or supply intersect.
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Dexter Industries purchased packaging equipment on January 8 for $116,600. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $6,600. The equipment was used for 8,700 hours during Year 1, 7,380 hours in Year 2, and 3,920 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. (Note: For STRAIGHT-LINE ONLY, round the first two years to the nearest whole dollar, then round the third year as necessary. For DECLINING BALANCE ONLY, round the multiplier to five decimal places. Then round the answer for each year to the nearest whole dollar.) 2. What method yields the highest depreciation expense for Year 1
Answer:
Straight-line method: $36,667 yearly depreciation expense for 3 years. Unit-of-production method: Year 1 - $47,850, Year 2 - $40,590, Year 3 - $21,560Double-declining method: Year 1 - $77,737, Year 2 - $25,910, Year 3 - $6,353Total for 3 years is $110,000 for all the depreciation methods.
Explanation:
(A) Under straight-line method, depreciation expense is (cost - residual value) / Estimated useful life = ($116,600 - $6,600) / 3 years = $36,667 yearly depreciation expense.
Accumulated depreciation for 3 years is $36,667 x 3 years is $110,000.
(B) The unit-of-production method is used when the asset value closely relates to the units of output it is able to produce. It is expressed with the formula below:
(Original Cost - Salvage value) / Estimated production capacity x Units/year
At Year 1, depreciation expense (DE) is: ($116,600 - $6,600) / 20,000 operating hours x 8,700 hours = $47,850
At Year 2, depreciation expense (DE) is: ($116,600 - $6,600) / 20,000 operating hours x 7,380 hours = $40,590
At Year 3, depreciation expense (DE) is: ($116,600 - $6,600) / 20,000 operating hours x 3,920 hours = $21,560
Accumulated depreciation for 3 years is $47,850 +$40,590 + $21,560 = $110,000.
Note that this depreciation method results in higher depreciation charge when the asset is heavily used, at this time, it was in Year 1.
(C) The double-declining method is otherwise known as the reducing balance method and is given by the formula below:
Double declining method = 2 X SLDP X BV
SLDP = straight-line depreciation percentage
BV = Book value
SLDP is 100%/3 years = 33.33%, then 33.33% multiplied by 2 to give 66.67% or 2/3
At Year 1, 66.67% X $116,600 = $77,737
At Year 2, 66.67% X $38,863 ($116,600 - $77,737) = $25,910
At Year 3, 66.67% X $12,953 ($38,863 - $25,910) = $8,636. This depreciation will decrease the book value of the asset below its salvage value $12,953 - $8,636 = $4,317 < $6,600. Depreciation will only be allowed up to the point where the book value = salvage value. Consequently the depreciation for Year 3 will be $6,353.
Accumulated depreciation for 3 years is $77,737 + $25,910 + $6,353 = $110,000.
In the Assembly Department of Concord Company, budgeted and actual manufacturing overhead costs for the month of April 2020 were as follows. Budget Actual Indirect materials $14,200 $13,700 Indirect labor 19,100 19,900 Utilities 11,400 12,100 Supervision 4,600 4,600 All costs are controllable by the department manager. Prepare a responsibility report for April for the cost center.
Answer and Explanation:
The preparation of responsibility report for April for the cost center is shown below:-
Concord Company,
Assembly Department
Manufacturing Overhead Cost Responsibility Report
For the Month Ended April
Controllable Cost Budget Actual Difference Remark
Indirect materials $14,200 $13,700 $500 Favorable
Indirect Labor $19,100 $19,900 -$800 Unfavorable
Utilities $11,400 $12,100 -$700 Unfavorable
Supervision $4,600 $4,600 0 None
Total $49,300 $50,300 -$1,000 Unfavorable
Discuss economic theory related to the quote above. Be sure to include a definition of Labor Force Participation Rate (LFPR) within your discussion. Locate and incorporate outside research that gives evidence and explanation as to the possible causes of these declines in the Labor Force Participation rate. Integrate biblical insights into your discussion board thread. In what way does scripture influence our decision to work
Answer:
The labor force is the group of individuals for employment. The labor force investment rate is the proportion of labor force partitioned by all out populace of the applicable age. As per month to month work survey, the labor force support rate keeps on falling. As indicated by different market analysts, this wonder is because of the blend of segment, basic, and repetitive elements. Also, due to LFPR , the support of youth and the primary age bunch is required to decay. Likewise, the investment paces of laborers of more seasoned age are additionally anticipated to increment, yet remain essentially lower than those of the prime age group. These aspects have applied descending weight on the general labor force support proportion over the 2012–2022 time period and the proportion is relied upon to decrease further, to 61.6% in 2022.
The drawn out issue of joblessness is because of repetitive and auxiliary reasons, when numerous individuals the segment organization of a nation mirrors the portions of men, ladies, and the distinctive age, race, and ethnic gatherings inside that populace. The case of the time of increased birth rates age in segment change influences the labor force investment rate. Consistently after 2000, the portion of the time of increased birth rates populace has moved into the 55-years-and-more seasoned age bunch which transfers from the principal age gathering to one with considerable lesser investment proportions, origins the general cooperation of the labor force to decay.
Which statement is false? Marginal cost and marginal productivity are inversely related. Marginal cost is the change in a firm's total cost due to a one unit change in output. Costs that are small and unimportant with little impact on profits are called marginal costs. A marginal cost curve will always intersect the average total cost curve at the minimum average total cost. Consider the table. Output 0 1 2 3 4 5 6 7 8 9 10 Total cost 100 110 115 125 140 160 190 230 280 340 420 What is the marginal cost of the fifth unit based on the table? $0 −$20 $20 $160
Answer:
Option (c) Marginal cost of fifth unit = $20
Explanation:
According to the scenario, computation of the given data are as follows:
1)
Option (b) : Marginal cost is the change in the total cost of firm due to one unit change in output.
We can calculate the marginal cost by using following formula :
Marginal cost = Total cost ÷ Quantity
2)
Marginal cost of fifth unit = Total cost at unit 5 - total cost at unit 4
= $160 - $140
= $20
Brooke and John formed a partnership. Brooke received a 40% interest in partnership capital and profits in exchange for contributing land (basis of $30,000 and fair market value of $120,000). John received a 60% interest in partnership capital and profits in exchange for contributing $180,000 of cash. Three years after the contribution date, the land contributed by Brooke is sold by the partnership to a third party for $150,000. What gain must Brooke recognize on the land contribution when establishing the partnership
Answer:
$102,000
Explanation:
According to 26 US code Section 704(c) - Partner's distributive share :
Taxable gain to be recognized from sale = Sale value - ( Partner's share * Fair market value )
Brooke contributed the land, the gain realized before the land was contributed = $120,000 - $90,000 will be allocated entirely to her. She will also be allocated 40% of the gain after the contribution was made = ($150,000 - $120,000) x 40% = $30,000 x 40% = $12,000.
So the total gain recognized by Brooke will be $90,000 + $12,000 = $102,000.
Partnerships are pass through entities, the partners are taxed, not the partnership itself.
Markley Manufacturing calculated its predetermined overhead rate to be 120% of direct labor cost. During June, the company incurred $90,000 of factory labor costs, of which $85,000 is direct labor and $5,000 is indirect labor. Actual overhead incurred was $84,000. Compute the amount of manufacturing overhead applied during the month. Determine the amount of under- or over-applied manufacturing overhead.
Answer:
Applied Manufacturing Overheads are $102,000
Overapplied Manufacturing overheads are $18,000
Explanation:
Under or over applied manufacturing overhead can be determined by comparing the actual and applied manufacturing overheads.
Applied overheads can be calculated by multiplying pre-determined overhead rate and actual level of quantity. Predetermined overhead rate is calculated using estimated overhead and estimated activity on which overheads are applied.
In this question the predetermined overhead rate is 120% of direct labor cost.
Applied overhead = Direct labor cost x 120% = $85,000 x 120% = $102,000
Actual overheads incurred = $84,000
Overapplied Manufacturing overheads = $102,000 - $84,000 = $18,000
Kellen orders 1,000 pounds of strawberries from Lucy so he can make his famous strawberry sundaes at his ice cream store. Lucy ships him 1,000 pounds of blueberries instead. Kellen puts the blueberries in cold storage and notifies Lucy that she sent the wrong stuff. Lucy does not pay for the storage. Kellen sells the blueberries to a grocery store, keeping a commission on the sale and sending the rest of the money to Lucy. This sale represents _____.
a. a mitigation of damages.b. rescission and restitution.c. specific performance.d. a breach of contract.
Answer:
B. Rescission and Restitution
Explanation:
This sale represents rescission and restitution.
Rescission can be describe as when the contract is voided, and the parties are placed in the same position as if they had never joined in the first place.
Restitution can be defined as when item or the monetary worth of item loss is returned to the rightful owner.
Here Lucy ships 1,000 pounds of blueberries instead of strawberries and Kellen sold blueberries to grocery store shows rescission whereas Kellen sends the money of sale to Lucy shows restitution.
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If the distribution of water is a natural monopoly, then a. a single firm cannot serve the market at the lowest possible average total cost. b. multiple firms would likely each have to pay large fixed costs to develop their own network of pipes. c. allowing for competition among different firms in the water-distribution industry is efficient. d. average cost increases as the quantity of water produced increases.
Answer:
The correct option is C) If the distribution of water is a natural monopoly, average cost increases as the quantity of water produced increases.
Explanation:
Natural monopoly occurs when there is a hig cost of entry into a particular market niche. The high cost is usually caused by expensive equipment and infrastructural set up for manufacturing as well as maintenance costs.
Therefore, If the distribution of water is a natural monopoly, average cost increases as the quantity of water produced increases.
Distribution of water falls into the category of natural monopoly. Due to the prevailing circumstances, Fixed cost is larger comparable to variable cost such that it is cheaper for a single firm to serve the market.
The Stores and Service Fund of the City of Monroe had the following account balances as of January 1, 2017:
Debits Credits
Cash $28,000
Due from other funds 27,000
Inventory of supplies 27,500
Land 18,000
Buildings 84,000
Accumulated depreciation—buildings $30,000
Equipment 46,000
Accumulated depreciation—equipment 25,000
Accounts payable 19,000
Advance from water utility fund 30,000
Net position 126,500
Totals $ 230,500
Required:
a. Open a general journal for the City of Monroe Stores and Service Fund and record the following transactions.
(1) A budget was prepared for FY 2017. It was estimated that the price charged other departments for supplies should be 1.25% of cost to achieve the desired breakeven for the year.
(2) The amount due from other funds as of January 1, 2017, was collected in full.
(3) During the year, supplies were ordered and received in the amount of $307,000. This amount was posted to accounts payable.
(4) $15,000 of the advance from the Water Utility Fund, originally provided for construction, was repaid. No interest is charged. (5) During the year, supplies costing $250,560 were issued to the General Fund, and supplies costing $46,400 were issued to the Water Utility Fund. These funds were charged based on the previously determined markup ($ 313,200 to General Fund and 58,000 to the Water Utility Fund).
(6) Operating expenses, exclusive of depreciation, were recorded in accounts payable as follows: Purchasing, $15,000; Warehousing, $16,900; Delivery, $17,500; and Administrative, $9,000.
(7) Cash was received from the General Fund in the amount of $310,000 and from the Water Utility Fund in the amount of $50,000.
(8) Accounts payable were paid in the amount of $365,000.
(9) Depreciation in the amount of $10,000 was recorded for buildings and $4,600 for equipment.
Answer and Explanation:
The Journal entry is shown below:-
1. No Journal entry is required
2. Cash Dr, $27,000
To Due from other funds $27,000
(Being the cash collected which is due from others is recorded)
3. Inventory of suppliers Dr, $307,000
To Accounts payable $307,000
(Being purchase of supplies is recorded)
4. Advance from water utility fund Dr, $15,000
To Cash $15,000
(Being repayment of advance of water utility fund is recorded)
5. Operating expenses Dr, $296,960
($250,560 + $46,400)
To Inventory of supplies $296,960
(Being issue of supplied is recorded)
5. Due from other funds Dr, $371,200
($313,200 + $58,000)
To Revenue charged for services and sales $371,200
(Being the charge of supplies is recorded)
6. Operating expenses of sale and services Dr, $49,400
($15,000 + $16,900 + $17,500)
Operating expenses of administrative Dr, $9,000
To Accounts payable $58,400
(Being operating expenses is recorded)
7. Cash Dr, $350,000
($310,000 + $50,000)
To Due from others $350,000
(Being cash received from general fund is recorded)
8. Accounts Dr,$365,000
To Cash $365,000
(Being the payment of accounts payable is recorded)
9. Operating expenses cost of depreciation Dr, $14,600
To Accumulated Dep - Building $10,000
To Accumulated Dep - Equipment $4,600
(Being depreciation expenses is recorded)
Revenue charged for sales and services Dr, $444,200
To operating expenses cost of depreciation $14,600
To operating expenses cost of administrative $9,000
To operating expenses cost of sale and services $49,400
To operating expenses cost of sale $371,200
(Being transfer the operating expenses is recorded)
The student-run newspaper asks students to visit a web page and respond to questions regarding a proposed tuition increase. Only responses to the questions are recorded. Summary statistics based on the survey responses are used in an article published the following week, and no one outside of the newspaper has access to the individual responses. The newspaper's survey is considered to be A) confidential. B) anonymous. C) both anonymous and confidential. D) neither anonymous nor confidential.
Answer:
C) both anonymous and confidential
Explanation:
As the student-run, the new paper and ask other students to visit a link firm the new paper and respond to those questions and the responses for only those questions were recorded. This indicates that the newspaper survey is anonymous and confidential as the ant student can fill the survey and the information that is confidential as none outside the newspaper has access to those responses.Matrix Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 23 $ 22 Accounts receivable 39 40 Inventory 43 44 Property, plant, and equipment 587 500 Less accumulated depreciation 359 347 Total assets $ 333 $ 259 Liabilities and stockholders' equity: Accounts payable $ 30 $ 26 Accrued liabilities 15 18 Income taxes payable 39 40 Bonds payable 109 120 Common stock 51 50 Retained earnings 89 5 Total liabilities and stockholders' equity $ 333 $ 259 Income Statement Sales $ 972 Cost of goods sold 620 Gross margin 352 Selling and administrative expense 200 Net operating income 152 Gain on sale of equipment 14 Income before taxes 166 Income taxes 50 Net income $ 116 The company sold equipment for $20 that was originally purchased for $7 and that had accumulated depreciation of $1. It paid a cash dividend during the year and did not issue any bonds payable or repurchase any of its own common stock. Required: Determine the net cash provided by (used in) operating activities for the year using the indirect method.
Answer:
Check the explanation
Explanation:
Cash flow from operating activities:
Net income $116
Adjustment to reconcile net income to cash basis:
Depreciation expense ($359+1-347) $13
Gain on sale of equipment (14)
Decrease in account receivable (40-39) $1
Decrease in inventory (44-43) $1
Increase in account payable (30-26) $4
Decrease in accrued liabilities (18-15) (3)
Decrease in income tax payable (40-39) (1)
Net cash flow from operating activities $117
Blossom Companyhad the following transactions during 2022: 1. Issued $182500 of par value common stock for cash. 2. Recorded and paid wages expense of $87600. 3. Acquired land by issuing common stock of par value $73000. 4. Declared and paid a cash dividend of $14600. 5. Sold a long-term investment (cost $4380) for cash of $4380. 6. Recorded cash sales of $584000. 7. Bought inventory for cash of $233600. 8. Acquired an investment in Zynga stock for cash of $30660. 9. Converted bonds payable to common stock in the amount of $730000. 10. Repaid a 6-year note payable in the amount of $321200. What is the net cash provided by investing activities
Answer:
($26,280)
This represents net cash used up by investing activities
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow and vice versa.
Hence net cash provided by investing activities
= $4380 - $30660
= ($26,280)
Other activities are operating and financing activities.
The general fund of the Town of Dean levied property taxes of $3,000,000 for the fiscal year beginning on January 1, 20X8. It was estimated that 1% of the levy would be uncollectible. During the period January 1, 20X8, through December 31, 20X8, $2,960,000 of the property tax levy was collected. At December 31, 20X8, Dean estimated that $10,000 of property taxes levied in 20X8 would be collected during the first 60 days of 20X9. What amount of property tax revenue should be reported by the general fund for the year ended December 31, 20X8?
Answer: $2,970,000
Explanation:
According to US tax laws, property taxes can be recognised for 60 days into the next financial period because it is assumed that within this period, the taxes can still cover expenses related to the period that it is from.
Therefore, if Property taxes are paid within the first 60 days in 20X9 then the Town of Dean should recognise those taxes paid.
Those taxes amount to $10,000 so therefore, the amount to be reported in the fund is,
= 2,960,000 + 10,000
= $2,970,000
$2,970,000 is amount of property tax revenue that should be reported by the general fund for the year ended December 31, 20X8.
How Hard The Day, Inc. makes a product that has the following direct labor standards: Standard direct labor-hours 1.4 hours per unit Standard direct labor rate $ 12.00 per hour The company budgeted for production of 5,400 units in January, but actual production was 5,500 units. The company used 6,800 direct labor-hours to produce this output. The actual total direct labor cost was $82,960. The direct labor efficiency variance for January is:
Answer:
Direct labor time (efficiency) variance= $10,800 favorable
Explanation:
Giving the following information:
Standard direct labor-hours 1.4 hours per unit
Standard direct labor rate $ 12.00 per hour
Actual production was 5,500 units.
The company used 6,800 direct labor-hours to produce this output.
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Standard quantity= 5,500*1.4= 7,700
Direct labor time (efficiency) variance= (7,700 - 6,800)*12
Direct labor time (efficiency) variance= $10,800 favorable
LaserLife Printer Company is a decentralized organization with several autonomous divisions. The division managers are evaluated, in part, on the basis of the change in their return on invested assets. Operating results for the Packer Division for 2019 are budgeted as follows:
Sale $5,000,000
Less variable costs 2,500,000
Contribution margin 2,500,000
Less fixed expenses 1,800,000
Net operating income $ 700,000
Invested capital for the division are currently $3,600,000. For 2019, the division can add a new product line for an investment of $600,000. The new product line will generate sales of $1,600,000 and will incur fixed expenses of $600,000 annually. Variable costs of the new product will average 60% of the selling price.
REQUIRED:
1. What is current ROI? Profit margin (or Return on sales)? Investment (or Capital) turnover?
2. What is the effect on ROI of accepting the new product line?
If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers, would this encourage the division to accept the new product line? Explain and show computations.
Answer:
1. The current ROI is 19.44%. The Profit margin (or Return on sales) is 14%. TheInvestment (or Capital) turnover is 1.39 times.
2. The effect on ROI of accepting the new product line is 17.62%. ROI will be decreased by 1.82%
If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers the residual income amount would be of $4,000 and so Managers should accept the new product line
Explanation:
1. To calculate the profit margin we have to use the following formula:
Profit margin= Net operating income/Sale
Hence, Profit margin = $700,000/$5,000,000 = 14%
ROI= Net operating income/Invested capital
Hence, ROI = $700,000/$3,600,000 = 19.44%
Investment (or Capital) turnover=Sale/Invested capital
Hence, Investment (or Capital) turnover = $5,000,000/$3,600,000 = 1.39 times
2. The Net operating income= ($5,000,000+$1,600,000)-($2,500,000+1,600,000*60%)-$(1,800,000+$600,000) = $740,000
Hence, ROI = $740,000/$4,200,000 = 17.62%
ROI will be decreased by (19.44-17.62) 1.82%.
In order to know if the division would accept the new product line If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers, we would have to calculate the residual income as follows:
Residual income = operating income - invesed capital*required rate of return
= ($740,000-$700,000)-$600,000*6%
= $4,000
Therefore, Managers should accept the new product line.
revorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 7,000 units, but its actual level of activity was 6,960 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Fixed element per month Variable element per unit Revenue - $ 28.40 Direct labor $ 0 $ 2.80 Direct materials 0 10.70 Manufacturing overhead 38,000 1.50 Selling and administrative expenses 23,600 0.30 Total expenses $ 61,600 $ 15.30 Actual results for June: Revenue $ 205,320 Direct labor $ 18,974 Direct materials $ 72,252 Manufacturing overhead $ 48,320 Selling and administrative expenses $ 25,768 The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for June would be closest to:
Answer:
$9,906 F
Explanation:
Calculation as follows:
Budget Income Statement
Particular $
Revenue (28.4 x 7,000) 198,800
Direct Labor (2.8 x 7,000) (19,600)
Direct Material (10.7 x 7,000) (74,900)
Manufacturing Overheads
(38,000 + [1.5 x 7,000] ) (48,500)
Selling and administrative Expenses
(23,600 + [0.3 x 7,000] ) (25,700)
Net Operating Income 30,100
Actual Income Statement
Particular $
Revenue 205,320
Direct Labor (18,974)
Direct Material (72,252)
Manufacturing Overheads (48,320)
Selling and administrative Expenses (25,768)
Net Operating Income 40,006
Activity variance for net operating income = Net operating income actual - Net operating income budgeted
Activity variance for net operating income = 40,006 - 30,100
Activity variance for net operating income = $9,906 F
Alden Trucking Company is replacing part of their fleet of trucks by purchasing them under a note agreement with Kenworthy on January 1, 2009. The note agreement will require $10 million in annual payments starting on December 31, 2009 and continuing for a total of five years (final payment December 31, 2013). Kenworthy will charge Alden Trucking Company the market interest rate of 10% compounded annually.
Required:
1. How much will Alden record as a debit to their equipment account and as acredit to their notes payable account on January 1, 2009?
2. How much ofthe first $10 million payment on December 31, 2009 isinterest?
3. What is theremaining obligation on January 1, 2010 after the first payment hasbeen made?
Answer:
1. $37,907,868
2. $3,790,787
3. $31,698,654
Explanation:
The cost of the trucks according to IAS 16, is the amount of cash or cash equivalent paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition.
Thus=, we need to find the Fair Value or Present Value of the Note as Follows:
Pmt = $10,000,000
P/yr = 1
i = 10%
N = 5
Pv = ?
Pv = 37,907,868
Therefore Alden will record $37,907,868 as a debit to their equipment account and as a credit to their notes payable
Interest on First Payment = $37,907,868×10%
= $3,790,787
Remaining Obligation = $37,907,868 - $6,209,213 (Capital Portion) - $3,790,787 (Interest Portion)
= $31,698,654
