Answer is given below
Explanation:
The comparison is an indication to determine if the treatment is the same. Mentioned may be another person or a group of people similar to them. The Reference Canal may be a person with a previous job or anyone has guesses as to what the result/input ratio will be. Employees are treated equally when they feel that their result / input ratio is equal to the output or input ratio mentioned. Equity is related to the fairness of the results relative to the inputs. Managers help treat employees equally by ensuring that those who provide multiple inputs are rewarded with more results than those who provide less input. If a person changes one aspect of his ratio, the manager must ensure that the other side of the ratio also changes. As the input increases, so does the outcomhold. If the input decreases, the results also decrease. Equity is present when an individual's own result / input ratio is less than the forecast. This happens when an employee compares him or her to a reference and does not want to achieve the results he or his investment has achieved. Equity can be restored by trying to increase growth (by inputs, bonuses or allocating time) or by removing inputs (being late or falling short, doing less work) and turning it into a more accurate indication. If these methods fail, a planned company will choose to departTo calculate the after-tax cost of debt, multiply the before-tax cost of debt by ________________
Water and Power Company (WPC) can borrow funds at an interest rate of 10.20% for a period of four years. Its marginal federal-plus-state tax rate is 45%. WPC's after-tax cost of debt is ______________ (rounded to two decimal places).
At the present time, Water and Power Company (WPC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,329.55 per bond, carry a coupon rate of 12%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 45%. If WPC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)?
A. 4.02%
B. 4.47%
C. 3.58%
D. 5.14%
Answer:
To calculate the after-tax cost of debt, multiply the before-tax cost of debt by (1 - tax rate).
Water and Power Company (WPC) can borrow funds at an interest rate of 10.20% for a period of four years. Its marginal federal-plus-state tax rate is 45%. WPC's after-tax cost of debt is = 10.20% x (1 - 45%) = 5.61%.
At the present time, Water and Power Company (WPC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,329.55 per bond, carry a coupon rate of 12%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 45%. If WPC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)?
B. 4.47%
pre-tax cost of debt = bond's yield to maturity
approximate YTM = {120 + [(1,000 - 1,329.55)/15] / [(1,000 + 1,329.55)/2] = 98.03 / 1,164.775 = 0.08416 = 8.416%
approximate after tax cost of debt = 8.4% x (1 - 45%) = 4.62 = 4.62
since I used the approximate yield to maturity, my answer is not exact. That is why I have to look for the closest available option.
Click to review the online content. Then answer the question(s) below, using complete sentences. Scroll down to view additional questions. Career Connection: Shin-fong How does Shin-fong keep track of his finances?
Answer:
By means of a budget he prepared.
Explanation:
According to the information available, Shing-fong has a carefully thought out strategy. Here's some of what he does;
he keeps tracks of his finances by means of a budget plan.he views all his transactions also checking his debit or credit cards to keep track of how much he spendsShing-Fong avoids eating out as much as he used to and preparing cheaper food at home.he also avoids unnecessarily spending with friends whenever he is invited.If sales are $803,000, variable costs are 66% of sales, and operating income is $262,000, what is the contribution margin ratio
Answer:
34%
Explanation:
The formula to calculate the contribution margin ratio is:
Contribution margin ratio= (Sales – variable expenses)/sales
Sales=$803,000
Variable expenses=$803,000*66%=$529,980
Now, you can replace the values:
Contribution margin ratio=($803,000-$529,980)/$803,000
Contribution margin ratio=0.34
According to this, the answer is that the contribution margin ratio is 34%.
Effectiveness of a solution is equal to:_______
a. Quality of a Solution 20% (x) Acceptability of the Solution 80%
b. Quality of a Solution 80% (x) Acceptability of the Solution 20%
c. Quality of a Solution 10% (x) Acceptability of the Solution 90%
d. Quality of a Solution 90% (x) Acceptability of the Solution 10%
e. None of the above
Answer:
a. Quality of a Solution 20% (x) Acceptability of the Solution 80%
Explanation:
We say that a solution is effective i.e 100%, when it has a 20% of its quality and 80% of its acceptability.
A solution is effective when it has a 100% effect. The application of a solution to a problem which yields 100% effect is said to be effective and acceptable.
The scale used is the relationship given as:
Effectiveness of a solution = Quality of a Solution 20% (x) Acceptability of the Solution 80%
A bond issue with a face amount of $1,200,000 bears interest at the rate of 9%. The current market rate of interest is 10%. These bonds will sell at a price that is:
Answer: The selling price of the bond will be less than $1,200,000
Explanation:
From the question, we are informed that a bond issue with a face amount of $1,200,000 bears interest at the rate of 9% and that the current market rate of interest is 10%.
Since the market rate is 10% which is higher than coupon rate of 9%, this means that the market price for the bond will be smaller than the bond's face value.
Therefore, the selling price of the bond will be less than $1,200,000.
Under a contract with Bucolic Farms, Agro Excavation, Inc., begins digging an agricultural pond. In mid-project, Agro asks for $15,000 over the contract price, claiming an increase in the "cost of doing business." Bucolic agrees but later refuses to pay. Their agreement is
Answer:
unenforceable because Agro's performance was preexisting duty.
Explanation:
In the situation being described, it can be said that their agreement is unenforceable because Agro's performance was preexisting duty. This refers to the party's offer of a performance that was already required of them under the existing contract making a modification null. In this scenario, this is exactly what is happening, Agro Excavations has already signed a contract to dig the pond and has no enforceable reason to add $15,000 to the contract price mid-project and must finish digging the pond for the agreed-upon price of the first contract.
g The company plans a 4-for-1 stock split. How many shares will you own and what will the share price be after the stock split?
Answer: 14,400; $17
Explanation:
Stock splits are a strategy by firms to increase the liquidity of their shares especially when they are trading at a high price. The firm divides the stock by a certain number thus increasing the number of shares by the multiple of the number. This action will divide the price of the stock and thus allow for more trade as they are cheaper.
A 4-for- stock split means that each share will become 4.
Your total number of share will become;
= 4 * 3,600
= 14,400 shares
The new price will be;
= 68/4
= $17 per share
Fetzer Company declared a $0.55 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the payment of the dividend is:
Answer:
Please see journals below
Explanation:
Retained earnings Dr $104,000
Common dividend payable Cr $104,000
Common dividend payable Dr $104,000
Cash Cr. $104,000
Retained earnings Dr $100,100
Common dividends payable Cr $100,100
Common dividends payable Dr $100,100
Cash Cr $100,100
Retained earnings Dr $110,000
Common dividends payable Cr $110,000
Working
Dividends payable
= 190,000 × $0.55
= $104,000
Common dividend payable
= $0.55 × (190,000 shares - 8,000 shares)
= $100,100
___________is a partnership Is also called the articles of incorporation.
a) Is the same as a limited liability partnership.
b) Is not binding unless it is in writing.
c) Is binding even if it is not in writing.
d) Does not generally address the issue of the rights and duties of the partners.
Answer:
c
Explanation:
here is the correct question :
A partnership agreement:
A. Is not binding unless it is in writing.
B. Is the same as a limited liability partnership.
C. Is binding even if it is not in writing.
D. Does not generally address the issue of the rights and duties of the partners.
E. Is also called the articles of incorporation.
A partnership agreement is a contract between partners in a partnership. it contains guidelines on the relationship between the partners and responsibilities of partners. the partnership agreement creates legally binding relationships among the partners
Where can a Master Admin Accountant User view the apps connected to a client’s QuickBooks Online account from within QuickBooks Online Accountant?
Answer:
The answer is below
Explanation:
A Master Administrator is normally the individual who is tasked at establishing the company file in QuickBooks Online.
In other words, Master Admin possesses access to all portions of the company file and can grant authorizations and access to other users.
Therefore, a Master Admin Accountant User can view the apps connected to a client’s QuickBooks Online account from within QuickBooks Online Accountant by doing the following:
1. Go to Settings
2. Select Manage Users.
3. Select Accounting firms.
4. Under the Company section, Select View Apps.
Answer:
Left Navigation Bar > Apps > Client Apps
Explanation:
Suppose that you have an old car that is a real gas guzzler. It is 10 years old and could be sold to a local dealer for $ cash. The annual maintenance costs will average $ per year into the foreseeable future, and the car averages only miles per gallon. Gasoline costs $ per gallon, and you drive miles per year. You now have an opportunity to replace the old car with a better one that costs $. If you buy it, you will pay cash. Because of a 2-year warranty, the maintenance costs are expected to be negligible. This car averages miles per gallon. Should you keep the old car or replace it? Utilize a 2-year comparison period and assume that the new car can be sold for $ at the end of year 2. Assume that the salvage value of the old car at the end of year 2 will be $0. Ignore the effect of income taxes and let your MARR be %.
Answer:
you should replace the old car with a newer and more efficient one
Explanation:
all the numbers are missing, so I looked them up:
current sale value of old car $400
maintenance costs per year $800
gasoline expense per year = $3.50 x 1/10 x 15,000 = $5,250
resale value in 2 years = $0
cost of replacing old car = $8,000
maintenance costs per year $0
gasoline expense per year = $3.50 x 1/30 x 15,000 = $1,750
resale value in 2 years = $5,000
MARR = 15%
if you keep the old car, your net cash flows will be:
Year 1 = -$6,050
Year 2 = -$6,050
if you change your car, your net cash flows will be:
Year 0 = -$8,000 + $400 = -$7,600
Year 1 = -$1,750
Year 2 = $3,250
keeping the old car results in a NPV = -$6,050/1.15 - $6,050/1.15² = -$5,260.87 - $4,574.67 = -$9,835.54
changing for a new car results in a NPV = -$7,600 -$1,750/1.15 + $3,250/1.15² = -$7,600 -$1,521.74 + $2,457.47 = -$6,664.27
since both options result in negative cash flows, we must select the option that results in a smaller loss
Mojo Mining has a bond outstanding that sells for $2,120 and matures in 18 years. The bond pays semiannual coupons and has a coupon rate of 6.66 percent. The par value is $2,000. If the company's tax rate is 40 percent, what is the aftertax cost of debt?
A. 3.96%
B. 6.24%
C. 5.82%
D. 3.66%
E. 3.45%
Answer:
D. 3.66%
Explanation:
For computing the after tax cost of debt we need to apply the RATE formula i.e to be shown in the attachment
Given that,
Present value = $2,120
Future value or Face value = $2,000
PMT = $2,000 × 6.6% ÷ 2 = $66.60
NPER = 18 years × 2 = 36 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is 3.05% × 2 % = 6.10%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 6.10% × ( 1 - 0.40)
= 3.66%
If we had a situation of Diminishing Marginal Productivity, then this would be great news for the firm. Senior management loves this kind of cost reduction outcome.
True or False
Answer:
The correct answer is the second option: False.
Explanation:
To begin with, the well known term of "Diminishing Marginal Productivity" is understood to be an economic law whose main purpose is to explain that given a certain level of an input, the production of the company will start to go down eventually after adding more and more of that variable. Therefore that this theory states that when a company adds more of a factor of production, everything else constant, when it reaches a certain level that input will start to affect the output of the good and with it the profits of the business. That is why that if the company is in a situation of diminishing marginal productivity the senior management would not be pleased.
Vince offers to buy a book owned by Sun-Hi for twice what Sun-Hi paid for it. She accepts and hands the book to Vince. Sun-Hi's delivery of the book is
Answer:
Vince and Sun-Hi's Book
With Sun-Hi's delivery of the book, the offer by Vince is accepted by Sun-Hi.
Acceptance of an offer is necessary to make a contract.
Explanation:
An offer by Vince is not a contract, but its acceptance by Sun-Hi without a counter-offer makes it a valid contract that can be enforced in law if other ingredients for a valid contract are present. Acceptance establishes the agreement between Vince and Sun-Hi. Once Sun-Hi accepts Vince's offer with valid considerations (the book and double the price), the agreement for a business transaction between them is consummated. It is acceptance that completes the exchange of promises in this simple contract.
You have gathered the following information on your investments. What is the expected return on the portfolio? Stock Number of Shares Price per Share Expected Return F 310 $ 40 13.32 % G 315 $ 26 10.05 % H 255 $ 52 10.59 %
Answer:
Expected return on the portfolio = $3,879.00
Explanation:
a) Data and Calculations:
Stock Number of Shares Price per Share Expected Return Expected
Value
F 310 $ 40 13.32 % $1,651.68
G 315 $ 26 10.05 % $823.09
H 255 $ 52 10.59 % $1,404.23
Total 880 $3,879.00
b) The expected return on the portfolio is the addition of the expected returns of each class of shares. This is obtained by multiplying the number of shares in each class with the price and the expected return in percentage. This gives a weighted value for the class of shares, which are then added to obtain the expected return on the portfolio.
Just Born found that the improvement process emphasized in the management leadership program saved the company millions of dollars. This is an example of a(n)
Answer: Results outcome
Explanation:
Just Born found that the improvement process emphasized in the management leadership program saved the company millions of dollars. This is an example of a results outcome.
This shows that the improvement process emphasized in the management leadership program brought about a positive outcome.
The federal government doesn't have a capital budget; however, private enterprises do have a capital budget and when they invest in productive assets such as machinery it is recorded in their capital budget as an asset. What is one of the explanations why the federal government's investments are not discussed in relation to a capital budget and recorded as an asset like a private enterprise's investments are
Answer:
Hello the options in regards to your question is missing attached below is the complete question
Answer : Private enterprise's investments are in assets that are meant to increase production, which are going to earn revenues and pay for themselves. Thus, private enterprise's spending is unambiguously going towards investments. It is very difficult to determine when the federal government's spending is an investment. ( B )
Explanation:
The federal government's investments are not discussed in relation to a capital budget and recorded as an asset because It is very difficult to determine when the federal government's spending is an investment, because Federal Government is not actually designed to operate as a business entity
Harry Company sells 20,000 units at $42 per unit. Variable costs are $26.88 per unit, and fixed costs are $105,800. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Harry Company sells 20,000 units at $42 per unit. Variable costs are $26.88 per unit, and fixed costs are $105,800.
To calculate the contribution margin ratio, we need to use the following formula:
contribution margin ratio= contribution margin / selling price
contribution margin ratio= (42 - 26.88) / 42
contribution margin ratio= 0.36
Now, the contribution margin:
Contribution margin= 42 - 26.88= $15.12
Finally, income from operations:
Contribution margin= 20,000*15.12= 302,400
Fixed costs= (105,800)
Net operating income= 196,600
"A customer has an existing margin account and wants to write five covered calls against 500 shares of stock in the account. The margin requirement to write the calls is:"
Answer: 0
Explanation: The sale of the stock call, would be covered by the ownership of the stock ( someone who owns the said stock). The required margin needed to sell the stock would be ‘0’ since there is no evidence that points to any available risks on the short calls. as short calls helps to predict of prices would drop or not.
Given the following data: Average operating assets $ 504,000 Total liabilities $ 23,520 Sales $ 168,000 Contribution margin $ 85,680 Net operating income $ 45,360 Return on investment (ROI) is:
Answer:
9%
Explanation:
According to the given situation, the solution of return on investment is shown below:-
Return on investment = (Net operating income ÷ Average operating assets) × 100
now, we will put the values into the above formula
= ($45,360 ÷ $504,000) × 100
= 0.09 × 100
= 9%
Therefore for computing the return on investment we simply applied the above formula.
A project that provides annual cash flows of $2,700 for nine years costs $8,800 today.
Requirement 1:A. At a required return of 9 percent, what is the NPV of the project?
B. At a required return of 28 percent, what is the NPV of the project?
C. At what discount rate would you be indifferent between accepting the project and rejecting it?
Answer:
A. $8,187.17
B. $597.38
C. 30%
Explanation:
Calculate the Net Present Value of the Project at the Required Return of 9%
The following is the calculation of NPV using a financial calculator :
($8,000) CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
9.00 % i/yr
Shift NPV $8.187.1666 or $8,187.17
Calculate the Net Present Value of the Project at the Required Return of 9%
The following is the calculation of NPV using a financial calculator :
($8,000) CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
28.00 % i/yr
Shift NPV $597.3765 or $597.38
You will be indifferent between accepting the project and rejecting it at the internal rate of return. The Internal Rate of Return is the interest rate that makes the Present Vale of Cash Flows to equal the Initial Cost of the Investment.
Use the Data given to find the Internal Rate of Return :
($8,000) CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
Shift IRR 30%
Lake Co. receives nonrefundable advance payments with special orders for containers constructed to customer specifications. Related information for 2021 is as follows ($ in millions): Customer advances balance, Dec. 31, 2020 $ 120 Advances received with 2021 orders 189 Advances applicable to orders shipped in 2021 182 Advances from orders canceled in 2021 36 What amount should Lake report as a current liability for advances from customers in its Dec. 31, 2021, balance sheet
Answer:
Lake Co.
Current Liability for Advances from Customers in Dec. 31, 2021 balance sheet:
Amount to report as current liability for advances from customers:
= $127
Explanation:
Advances from Customers:
Dec. 31, 2020 balance $120
Cash received 189
Total liability $309
Earned Revenue 182
Current liability $127
Advances, which Lake Co., received from customers for orders not yet fulfilled are recorded as deferred revenue or liabilities because Lake Co. is still owing the respective customers until the services or goods are provided. Earned Revenue is the value of revenue that would be reported in the income summary for which exchange of value or promises had been completed.
Answer:
the guy above me is correct!!
Explanation:
Common stock is called a hybrid security because it takes on the attributes of both preferred stock and bonds.
a. True
b. False
Answer:
false
Explanation:
examples of hybrid stocks is convertible preferred shares
A common stock is a stock that entitles owners of the stock to a fixed amount of shares and holders of the stock are owners of the company where the stock is bought.
Answer:
a. True
Explanation:
In most stocks that attributes of both bonds and preferred stock, it is referred to as a hybrid security. Most organisations and the government recognized it as a medium of security in situations of seeking for loan.
The following data was collected from the manufacturing of an auto component. It represents the diameter (in mm) of that component. What is the LCL for a control chart using this data (z=3)?Sample Obs 1 Obs 2 Obs 3 Obs 41 10 12 12 142 12 11 13 163 11 13 14 144 11 10 7 85 13 12 14 13
Answer:
9.37
Explanation:
The computation of LCL for a control chart is shown below:-
Sample Obs 1 Obs 2 Obs 3 Obs 4 Mean observation Range
1 10 12 12 14 12 4
2 12 11 13 16 13 5
3 11 13 14 14 13 3
4 11 10 7 8 9 4
5 13 12 14 13 13 2
For computing the mean observation and range we will use the below formulas
Mean observation = ( Obs 1 + Obs 2 + Obs 3 + Obs 4) ÷ 4
Range = Highest value - Lowest value
[tex]LCL = \bar{\bar{X}} - A2 \bar{R}[/tex]
[tex]\bar X[/tex] = ( 12 + 13 + 13 + 9 + 13 ) ÷ 5
= 12
[tex]\bar R[/tex] = ( 4 + 5 + 3 + 4 + 2 ) ÷ 5
= 3.6
Since we found the value of A2 with the help of constants table for control charts for a 4 subgroup size.
A2 = 0.729
[tex]LCL = \bar{\bar{X}} - A2 \bar{R}[/tex]
12 - 0.729 × 3.6
= 9.37
Mathys Inc. has recently hired a new independent auditor, Karen Ogleby, who says she wants "to get everything straightened out." Consequently, she has proposed the following accounting changes in connection with Mathys Inc.'s 2017 financial statements.1. At December 31, 2016, the client had a receivable of $820,000 from Hendricks Inc. on its balance sheet. Hendricks Inc. has gone bankrupt, and no recovery is expected. The client proposes to write off the receivable as a prior period item.2. The client proposes the following changes in depreciation policies.(a) For office furniture and fixtures, it proposes to change from a 10-year useful life to an 8-year life. If this change had been made in prior years, retained earnings at December 31, 2016, would have been $250,000 less. The effect of the change on 2017 income alone is a reduction of $60,000.(b) For its new equipment in the leasing division, the client proposes to adopt the sum-of-the-years'-digits depreciation method. The client had never used SYD before. The first year the client operated a leasing division was 2017. If straight-line depreciation were used, 2017 income would be $110,000 greater.3.In preparing its 2016 statements, one of the client's bookkeepers overstated ending inventory by $235,000 because of a mathematical error. The client proposes to treat this item as a prior period adjustment.4. In the past, the client has spread preproduction costs in its furniture division over 5 years. Because its latest furniture is of the "fad" type, it appears that the largest volume of sales will occur during the first 2 years after introduction. Consequently, the client proposes to amortize preproduction costs on a per-unit basis, which will result in expensing most of such costs during the first 2 years after the furniture's introduction. If the new accounting method had been used prior to 2017, retained earnings at December 31, 2016, would have been $375,000 less.5. For the nursery division, the client proposes to switch from FIFO to LIFO inventories because it believes that LIFO will provide a better matching of current costs with revenues. The effect of making this change on 2017 earnings will be an increase of $320,000. The client says that the effect of the change on December 31, 2016, retained earnings cannot be determined.6. To achieve an appropriate recognition of revenues and expenses in its building construction division, the client proposes to switch from the completed-contract method of accounting to the percentage-of-completion method. Had the percentage-of-completion method been employed in all prior years, retained earnings at December 31, 2016, would have been $1,075,000 greater.Instructions(a) For each of the changes described above, decide whether:(1) The change involves an accounting principle, accounting estimate, or correction of an error.(2) Restatement of opening retained earnings is required.(b) What would be the proper adjustment to the December 31, 2016, retained earnings?
Answer:
Mathys Inc.
a. (1) Change in accounting principle, accounting estimate, or correction of an error:
1. Write-off of Accounts Receivable = Change in accounting estimate
2. Changes in depreciation policies = Changes in accounting estimate for the office furniture and the introduction of the sum-of-years' digit for the new leasing division's equipment.
3. Overstated Ending Inventory = Correction of an error
4. New accounting method for pre-production costs = Change in accounting estimate
5. Change from FIFO to LIFO = Change in accounting principle
6. Change from completed-contract method of accounting to the percentage-of-completion method = Change in accounting principle
a. (2) If Restatement of opening retained earnings is required:
1. No restatement of opening retained earnings is required.
2. No restatement of opening retained earnings is required.
3. Restatement of opening retained earnings is required.
4. No restatement of opening retained earnings is required.
5. Restatement of opening retained earnings is required.
6. Restatement of opening retained earnings is required.
b) December 31, 2016 Retained Earnings Adjustments:
3. Debit Retained Earnings = ($235,000)
5. Debit Retained Earnings = ($320,000)
6. Credit Retained EArnings = $1,075,000
Net effect on 2016 Retained Earnings = an increase of $520,000
Explanation:
a) Data:
1. December 31, 2016 Write-off of Receivable (Hendricks Inc.) = $820,000
2. Changes in depreciation policies:
a) Office Furniture and Fixtures 10-year to 8-year useful life: Effect on Retained Earnings at December 31, 2016 = $250,000 less. Effect on 2017 Income = $60,000 less.
b) Equipment: sum-of-the-years' digits depreciation method: Effect on 2017 income = $110,000 more.
3. Ending inventory for 2016 overstated by $235,000 Prior period adjustment.
4. Preproduction costs for furniture division: New accounting method. Effect on 2016 Retained earnings = $375,000 less.
5. Inventories for Nursery division, from FIFO to LIFO to match current costs with revenues. Effect on 2017, an increase in Earnings = $320,000.
6. Building Construction Division from completed-contract method of accounting to the percentage-of-completion method. Effect on Retained Earnings 2016 = $1,075,000 greater.
b) Mathys Inc. must correct accounting errors by adjusting previously issued financial statements retrospectively. An example of an accounting error is the overstatement of the ending inventory by $235,000. This implies that the 2016 Retained Earnings were overstated.
c) A good example of a change in accounting estimate is the change Mathys Inc. made of the office furniture's useful life from 10 years to 8. Such changes are not applied retroactively to prior years' financial statements.
d) When Marthys Inc. change the inventory valuation method from LIFO to FIFO, it made a change in an accounting principle. Such principle changes are done retroactively, with the restatement of the financial statements.
Managers of an American television network have been told they need to employ a localization strategy if they want to break into the European and Australian markets. What specifically should they do to implement this strategy
Answer:
they will need to follow the television viewing habits,and cultural differences in the locality.
Explanation:
This is very important so as to determine what would work best in each region. An extensive research into television habits as well as cultural norms would need to be carried out.
For example, program schedule times may need adjustments based on a different viewing time.
Income statement data for Boone Company for two recent years ended December 31, are as follows:
Current Year Previous Year
Sales $396,000 $330,000
Cost of goods sold 330,400 280,000
Gross profit $65,600 $50,000
Selling expenses $17,600 $16,000
Administrative expenses 16,520 14,000
Total operating expenses $34,120 $30,000
Income before income tax $31,480 $20,000
Income tax expenses 12,600 8,000
Net income $18,880 $12,000
a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place.
Boone Company
Comparative Income Statement
For the Years Ended December 31
Current year Amount Previous year Amount Increase (Decrease) Amount Increase (Decrease) Percent
Sales $396,000 $330,000 $ %
Cost of goods sold 330,400 280,000 %
Gross profit $65,600 $50,000 $ %
Selling expenses 17,600 16,000 %
Administrative expenses 16,520 14,000 %
Total operating expenses $34,120 $30,000 $ %
Income before income tax $31,480 $20,000 $ %
Income tax expense 12,600 8,000 %
Net income $18,880 $12,000 $ %
b. The net income for Boone Company increased by 57.3% between years. This increase was the combined result of an in sales of 20% and percentage in cost of goods sold. The cost of goods sold increased at a rate than the increase in sales, thus causing the percentage increase in gross profit to be than the percentage increase in sales.
Answer:
a. Boone Company
Statement showing comparative income statement
Particulars Current (A) Previous(B) CHANGE PERCENT
Year Year (C=A-B) (C/B*100)
Sales $396,000 $330,000 $66,000 20%
Cost of goods $330,400 $280,000 $50,400 18%
sold
Gross profit $65,600 $50,000 $15,600 31.2%
Selling $17,600 $16,000 $1,600 10%
expenses
Administrative $16,520 $14,000 $2,520 18%
expenses
Total operating $34,120 $30,000 $4,120 13.73%
expenses
Income before $31,480 $20,000 $11,480 57.4%
income tax
Income tax $12,600 $8,000 $4,600 57.5%
expenses
Net income $18,880 $12,000 $6,880 57.3%
b. The cost of goods sold increased at a rate LOWER than the increase in sales, thus causing the percentage increase in gross profit to be GREATER than the percentage increase in sales.
Even if you cannot meet all of the elements of a contract, in special circumstances, courts may still find that there was an enforceable agreement.
a. True
b. False
Answer:
Correct answer:
a. True
Explanation:
A contract which is an agreement between two individual is meant to be kept in any given business situation. In a situation where there is a need not to meet the elements of the contracts, there might be cancellation of the contract if both parties agrees.
When one of the parties refuses, he or she would go to court inorder to enforce the agreement. In most cases, the court would see reasons on why the agreements must be enforced.
Cara Industries incurred the following costs for 50,000 units:
Variable costs $90,000
Fixed costs 120,000
Cara has received a special order from a foreign company for 5,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $4,250 for shipping.
If Cara wants to break even on the order, what should the unit sales price be?
A. $4.2
B. $5.05
C.$1.8
D. $2.65
Answer:
Selling price= $2.65
Explanation:
Because it is a special offer, and there is unused capacity, we will take into account only the incremental fixed costs.
First, we need to calculate the unitary variable cost:
Unitary variable cost= 90,000/50,000= $1.8
Now, we can determine the total unitary cost and the selling price per unit:
Total unitary cost= (4,250/5,000) + 1.8= $2.65
Selling price= $2.65
On October 10, the stockholder's equity of Sherman Systems appears as follows:
Common stock–$10 par value, 72,000 shares authorized,
issued, and outstanding $720,000
Paid-in capital in excess of par value, common stock 216,000
Retained earnings 864,000
Total stockholders’ equity $1,800,000
1. Prepare journal entries to record the following transactions for Sherman Systems.
1A. Purchased 5,000 shares of its own common stock at $25 per share on October 11.
1B. Sold 1,000 treasury shares on November 1 for $31 cash per share.
1C. Sold all remaining treasury shares on November 25 for $20 cash per share.
2. Prepare the revised equity section of its balance sheet after the October 11 treasury stock purchase.
Answer and Explanation:
The journal entries are shown below:
1A. Treasury Stock (5,000 × $25) $75,000
To Cash $75,000
(Being the purchased of its own common stock is recorded)
1B. Cash (1,000 × $31 shares) $31,000
To Treasury Stock (1,000 × $25) $25,000
To Paid-in Capital from Sale of Treasury Stock $6,000
(Being the sale of treasury stock is recorded)
1C. Cash (4,000 × $20) $80,000
Paid-in Capital from Sale of Treasury Stock $6,000
Retained Earnings $14,000
To Treasury Stock 99,000 (4,000 × 25) $100,000
(Being the sale of treasury stock is recorded)
2. The preparation of the revised equity section of its balance sheet is presented below:
Common stock 36,000 shares authorized, issued $720,000
Paid in capital in excess of par value
, common stock. $216,000
Retained Earnings. $864,000
Less: Treasury Stock - 5,000 shares -$75,000 $789,000
Total stockholders' equity $1,725,000
