22. On January 1, 2021, Princess Corporation leased equipment to King Company. The lease term is eight years. The first payment of $675,000 was made on January 1, 2021. The equipment cost Princess Corporation $3,600,000. The present value of the lease payments is $3,961,183. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 10%, how much interest revenue will Princess record in 2022 on this lease

Answers

Answer 1

Answer:

$293,980.13

Explanation:

Calculation of how much of the interest revenue Princess will record in 2022 on the lease

First Step is to find the interest for year 2021

Present Value January 1, 2021 $3,961,183

Less Payment January 1, 2021 (675,000)

=$3,286,183

Hence,

2021 Interest =$3,286,183× 10%

2021 Interest = $328,618.3

Second Step

Second Payment $675,000

Less Interest (328,618.3)

Reduced balance $346,381.7

Third Step is to find the how much interest revenue will Princess record in 2022 on the lease

2021 $3,286,183

Less Reduced balance (346,381.7)

January 1 2022 Liability = $2,939,801.3× 10%

2022 Interest Revenue =$293,980.13

Therefore the amount of interest revenue that Princess will record in 2022 on the lease will be $293,980.13


Related Questions

The managerial accountant at Space Right Office Cubicles calculates fixed overhead variances to complete the August report. The actual fixed overhead cost in the month of August was and the budgeted fixed overhead cost was . The standard hours in August were and the standard rate per machinehour was . Calculate the standard fixed overhead cost allocated to​ production, the fixed overhead budget​ variance, and the fixed overhead volume variance. A. ​; ​F; U B. ​; ​F; U C. ​; ​F; U D. ​; ​F; U

Answers

Answer: d. $36,400; $1700 F; $500 U

Explanation:

1. Standard fixed overhead cost allocated to​ production

= Standard Hours * Standard rate per machine hour

= 2,600 * 14

= $36,400

2.  Fixed overhead budget​ variance

= Budget overhead cost - Actual overhead cost

= 36,900 - 35,200

= $1,700 favorable

3. Fixed Overhead Volume Variance

= Standard fixed overhead cost - Budgeted overhead

= 36,400 - 36,900

= -$500

= $500 Unfavorable

A vendor at a carnival sells cotton candy and caramel apples for $2.00 each. The vendor is charged $60 to set up his booth. Furthermore, the vendor’s average cost for each product he produces is approximately $0.80.

a. Write a linear cost function representing the cost C(x) (in $) to the vendor to produce x products.b. Write a linear revenue function representing the revenue R(x) (in $) for selling x products.c. Determine the number of products to be produced and sold for the vendor to break even.d. If 60 products are sold, will the vendor make money or lose money?

Answers

Answer with its Explanation:

Requirement A. The cost function is equal to variable cost for "x" units and fixed cost which remains fixed. Hence:

Cost Function = C(x) = $60  +  $0.8x

Requirement B. The revenue for any units "x" sold can be calculated by simply multiplying "x" with sales price per unit. Which means that:

Revenue Function = R(x) = $2 * x  = $2x

Requirement C. Now we have to find the breakeven quantity and this could be calculated using the following formula:

Breakeven Point = Fixed Cost / (Selling Price per Unit  - Variable Cost Per Unit)

By putting values we have:

Breakeven Point = $60 / ($2 - $0.8)    = 50 units

Requirement D. As the number of units are above breakeven point (No profit and loss position), hence making sales above 50 units will generate profit for the company.

The profit for the company would be:

Total Profit = Contribution per unit * Units above Breakeven point

Total Profit = ($2 - $0.8)  *  10 Units = $12

You put up $40 at the beginning of the year for an investment. The value of the investment grows 5% and you earn a dividend of $4.50. Your HPR was ____. A. 5.0% B. 4.5% C. 11.3% D. 16.3%

Answers

Answer:

16.3%

Explanation:

$40 was put at the beginning of the year for an investment

The investment grows by 5%

= 5/100

= 0.05

The dividend is $4.50

The first step is to calculate the dividend yield

= $4.50/40

= 0.1125

Therefore, the HPR can be calculated as follows

= 0.1125+0.05

= 0.163×100

= 16.3%

Hence the HPR was 16.3%

"A tender offer has been made for PDQ common shares. The brokerage firm department that would handle the tendering of shares is the:"

Answers

Answer: Re-organization department

Explanation:

A tender offer is a public takeover bid that consists of an offer to buy either some or all of the shares that are available in a corporation.

When a tender offer has been made for PDQ common shares. The re-organization department is the brokerage firm department that would handle the tendering of shares.

a project that costs 25500 today will generate cash flows of 8800 per year for seven years. what is the project's payback

Answers

Answer:

d

Explanation:

d on edg

Mary Martin, the owner of Martin Consulting, Inc., started the business by investing $48,000 cash. Identify the general journal entry below that Martin Consulting, Inc. will make to record the transaction.

A

Cash 48,000
Increased Equity 48,000
B

Investments 48,000
Cash 48,000
C

Cash 48,000
Common stock 48,000
D

Common stock 48,000
Cash 48,000
E

Investments 48,000
Common stock 48,000
Expert Answer

Answers

Answer:

The correct option is C.

Cash                               48,000

Common stock                                        48,000

Explanation:

When the owner of a business introduces or invests cash into his own company, it is regarded as a capital or common stock.

The cash invested is therefore recorded in the owner's equity account or as a common stock in order to the stake of the owner in the business. That is, the equity or common stock account show the amount of the assets of the company that are owned by the owner but not by the creditors.

The investment of $48,000 in Martin Consulting, Inc. by Mary Martin, the owner, implies that Martin Consulting, Inc. receives cash from the owner and this will be recorded in the Common Stock of owner.

Therefore, the account the general journal entry to be made in the book of Martin Consulting, Inc. to record this transaction is as follows:

Debit Cash for $48,000

Credit Common stock for $48,000

This will appear as follows:

Particulars                              Dr ($)               Cr ($)        

Cash                                     48,000

     Common Stock                                     48,000

(To record cash investment by the owner.)                            

Therefore, the correct option is C.

Masterson, Inc., has 3.6 million shares of common stock outstanding. The current share price is $85.50, and the book value per share is $9.25. The company also has two bond issues outstanding. The first bond issue has a face value of $73 million, a coupon rate of 5.3 percent, and sells for 95.7 percent of par. The second issue has a face value of $45 million, a coupon rate of 5.9 percent, and sells for 104.9 percent of par. The first issue matures in 23 years, the second in 11 years. The most recent dividend was $4.04 and the dividend growth rate is 4.3 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 23 percent.
1. What is the company's cost of equity?
2. What is the company's aftertax cost of debt?
3. What is the company's weight of equity?
4. What is the company's weight of debt?
5. What is the company's WACC?

Answers

Answer:

1. 9.03 %

2. 7.56 %

3. 72.45 %

4. 27.55 %

5. 8.63 %

Explanation:

Cost of equity is the return that is required by holders of Common Stocks

Cost of equity = Recent year`s dividend / Current Market Price + Expected Growth Rate

                       = $4.04 / $85.50 + 0.043

                       = 0.0903 or 9.03 %

1st bond issue

PV = $69,861,000

Pmt = ($73,000,000 × 5.30%) ÷ 2 = - $1,934,500

p/y = 2

n  = 23 × 2 = 46

Fv = 0

i = ?

Cost of the 1st Bond Issue, i is : 2.1571 %

After tax cost = 2.1571 % × 77 %

                      = 1.66%

2nd Bond Issue

PV = $47,205,000

Pmt = ($45,000,000 × 5.90%) ÷ 2 = - $1,327,500

p/y = 2

n  = 11 × 2 = 22

Fv = 0

i = ?

Cost of the 2nd Bond Issue, i is : 7,6681 %

After tax cost = 7,6681 % × 77 %

                      = 5.90%

Total Cost of Debt = 1.66% + 5.90%

                               = 7.56 %

Market Values :

Market Value of Equity = 3,600,000 shares × $85.50

                                      = $307,800,000

Market Value of Bonds

1st Issues  =  $69,861,000

2nd Issue  = $47,205,000

Total          = $117,066,000

Weight of equity = Market Value of Equity ÷ Total Market Value

                            = $307,800,000 ÷ ($307,800,000 + $117,066,000)

                            = 72.45 %

Weight of debt    = Market Value of Bonds ÷ Total Market Value

                            = $117,066,000 ÷ ($307,800,000 + $117,066,000)

                            = 27.55 %

WACC = Weighted Cost of Debt + Weighted Cost of Equity

           = 27.55 % × 7.56 % + 72.45 % ×  9.03 %

           = 8.63 %

Salah’s net income for the year ended December 31, Year 2 was $191,000. Information from Salah’s comparative balance sheets is given below. Compute the cash paid for dividends during Year 2. At December 31 Year 2 Year 1 Common Stock, $5 par value $ 506,000 $ 455,400 Paid-in capital in excess of par 954,000 858,400 Retained earnings 694,000 587,400

Answers

Answer:

Cash Dividends - Year 2 =  $84400

Explanation:

The net income of the business is usually appropriated or used for two purposes at the end of the year. It is either used to pay dividends or is retained in the business and is added to the retained earnings or both.

Thus, to calculate the dividends paid by the business in a particular year, we can calculate the change in retained earnings and deduct it from the net income.

Change in retained earnings = Ending balance of retained earnings - Beginning balance of retained earnings

Change in retained earnings = 694000 - 587400

Change in retained earnings = $106600

Thus, out of the net income of $191000, $106600 were transferred to retained earnings. So, the amount of dividends paid for the year is,

Cash Dividends - Year 2 = 191000 - 106600  = $84400

A firm is expected to have net earnings of $1,480,000 three years from now. There are 500,000 shares of stock outstanding. The firm's current P/E ratio is 18 and it is expected to remain at that level. What is the firm's expected stock price for year 3

Answers

Answer:

Stock price = $53.28

Explanation:

DATA

Earnings = $1,480,000

Shares outstanding = 500,000

P/E ratio = 18

Stock price = ?

he firm's expected stock price for year 3 can be calculated by using Price earning ratio formula

Formula:

P/E ratio = Stock price / EPS

Stock price = P/E ratio x EPS

Stock price =  18 x $2.96(w)

Stock price = $53.28

Workings

EPS = Earning per share

EPS = Earning /Shares

EPS = $1,480,000 /500,000

EPS = $2.96

Hickam Company makes one product, for which it has developed the following standard for labor: each unit should require 1.50 hours at $12/hour. In April, Hickam made 10,000 units, using 1.65 hours per unit at a cost of $11.50 per hour. What is the labor usage variance

Answers

Answer:

$1.8 Unfavourable

Explanation:

Labor usage variance can be calculated by deducting Standard hours from Actual hours and multiplying the result by the standard rate.

DATA

Standard hours = 1.50 hours

Standard rate = $12/hour

Actual hours = 1.65 hours

Actual rate = $11.5/hour

Calculation

LABOUR USAGE VARIANCE = (SH-AH)SR

LABOUR USAGE VARIANCE =(1.5 - 1.65) x $12

LABOUR USAGE VARIANCE = (-0.15) x $12

LABOUR USAGE VARIANCE = $1.8 Unfavourable

When selecting the best alternative in a cost-benefit analysis, what are the issues to be considered?

Answers

Answer: Analyse cost, risk with impacts and project benefits.

Explanation:

The best alternative in a cost-benefit analysis situation are the following;

•The cost types should be analyzed

•Potential risk and their impacts should be looking into

•It is recommended to weigh all the risk even when there is a lot of project benefits.

In the past year, TVG had revenues of $3 million, cost of goods sold of $2.5 million, and depreciation expense of $200,000. The firm has a single issue of debt outstanding with book value of $1 million on which it pays an interest rate of 8%. What is the firm’s times interest earned ratio?

Answers

Answer:

TVG

Times Interest Earned Ratio (TIER) = Earnings Before Interest & Taxes divided by Interest Expense

= $300,000/$$80,000 = 3.75 times

Explanation:

a) TVG Income Statement:

Revenue                $3,000,000

Cost of goods sold 2,500,000

Gross profit             $500,000

Depreciation             200,000

EBIT                        $300,000

Interest Expense       80,000

Pre-tax Income     $220,000

b) TVG's TIER shows the number of times that its earnings before interest and taxes covers the interest expense.  It shows the ability of the TVG to settle its maturing debt obligations from current earnings.  It is an important financial performance measure which potential investors in TVG will use to gauge the ability of TVG to meet financial obligations from the earnings it generates.

In a production bottleneck situation, the product with the highest contribution margin per unit should be given priority over a product that has the highest contribution margin per bottleneck hour.

a. True
b. False

Answers

Answer:

b. false

Explanation:

A bottleneck is a point at which there is the stoppage in the system of production. The inefficiencies that are generated through the bottleneck developed the delays and leads to the high cost of production

Here in the given situation, since there is the highest contribution margin per unit that gives more priority as compared with the contribution margin per bottleneck hour i.e. totally wrong as it should give the priority to the contribution margin per bottleneck hour

Therefore the given statement is false

Moped, Inc. purchased machinery at a cost of $44,000 on January 1, 2017. The expected useful life is 5 years and the asset is expected to have salvage value of $4,000. Moped depreciates its assets using the double-declining balance method. What is the firm's depreciation expense for the year ended December 31, 2017?

Answers

Answer:

Annual depreciation= $16,000

Explanation:

Giving the following information:

Purchase price= $44,000

Useful life= 5 years

Salvage value= $4,000

To calculate the depreciation expense under the double-declining balance, we need to use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

Annual depreciation= 2*[(44,000 - 4,000) / 5]

Annual depreciation= 16,000

At the beginning of the current year, both Doug and Amelia each own 50% of Amaryllis Corporation (a calendar year taxpayer). In July, Doug sold his stock to Kevin for $140,000. At the beginning of the year, Amaryllis Corporation had accumulated E& P of $240,000 and its current E & P is $280,000 (prior to any distributions). Amaryllis distributed $300,000 on February 15 ($150,000 to Doug and $150,000 to Alfred) and distributed another $300,000 on November 1 ($150,000 to Kevin and $150,000 to Alfred). Kevin has dividend income of:_______

a. $150,000.b. $140,000.c. $110,000.d. $70,000.e. None of the above.

Answers

Answer:

Kevin has dividend income of:_______

a. $150,000.

Explanation:

Kevin became a 50% shareholder of Amaryllis in July.  So, Kevin is entitled to receive 50% of any distributions made by Amaryllis from the July date.  Since Amaryllis distributed $300,000 on November 1, Kevin will receive a dividend income equivalent to $150,000 from Amaryllis.  The remaining 50% goes to his partner in business.  Kevin could not be entitled to the distribution made on February 15, by which date he was not yet a shareholder of Amaryllis.

The _________ price is the price at which a dealer is willing to sell a security. A. bid B. ask C. clearing D. settlement

Answers

Answer: B. ask

Explanation:

The ask also known as the offer price is the price at which seller is willing to sell a security after which the buyer must have stated a bid price of how much he or she wants to pay for the security.  The bid price is known to be always lower than the ask price , of which the difference between both prices is called a bid-ask spread.

For example, if an investor wants to buy a security, he or she  will first determine  how much the seller  is willing to sell it for, which is the  ask price--- least price the seller  is willing to sell the security for. However on the other hand, the seller in order to sell his or her security will first determine the highest price at which a buyer would be willing to pay for the  security.

The understatement of the ending inventory balance causes: Multiple Choice Cost of goods sold to be understated and net income to be overstated. Cost of goods sold to be overstated and net income to be correct. Cost of goods sold to be overstated and net income to be understated.

Answers

Answer:

Cost of goods sold to be overstated and net income to be understated.

Explanation:

Ending Inventory are deducted from the cost of sales figure to reach the gross profit amount in the trading account.

Understatement of Inventory means that Cost of goods sold will overstated and gross profit understated, consequently, net income will be also understated.

Net Present Value Method
The following data are accumulated by Geddes Company in evaluating the purchase of $150,000 of equipment, having a four-year useful life:
Net Income Net Cash Flow
Year 1 $42,500 $80,000
Year 2 27,500 65,000
Year 3 12,500 50,000
Year 4 2,500 40,000
Present Value of $1 at Compound Interest
Year 6% 10% 12% 15% 20%
1 0.943 0.909 0.893 0.870 0.833
2 0.890 0.826 0.797 0.756 0.694
3 0.840 0.751 0.712 0.658 0.579
4 0.792 0.683 0.636 0.572 0.482
5 0.747 0.621 0.567 0.497 0.402
6 0.705 0.564 0.507 0.432 0.335
7 0.665 0.513 0.452 0.376 0.279
8 0.627 0.467 0.404 0.327 0.233
9 0.592 0.424 0.361 0.284 0.194
10 0.558 0.386 0.322 0.247 0.162
a. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. If required, round to the nearest dollar. Use the table of the present value of $1 presented above.
Present value of net cash flow $
Amount to be invested
Net present value $
b. Would management be likely to look with favor on the proposal?
Yes , because the net present value indicates that the return on the proposal is greater than the minimum desired rate of return of 15%.

Answers

Answer:

year               net cash flow

0                     -$150,000

1                        $80,000

2                       $65,000

3                       $50,000

4                       $40,000

A) NPV = -$150,000 + ($80,000 x .87) + ($65,000 x .756) + ($50,000 x .658) + ($40,000 x .572) = -$150,000 + $69,600 + $49,140 + $32,900 + $22,880 = -$150,000 + $174,520 = $24,520

B) Yes , because the net present value indicates that the return on the proposal is greater than the minimum desired rate of return of 15%. Since the NPV is positive ($24,520), it means that the cash inflows are higher than the cash outflows when we use a 15% discount rate.

Waterway Industries expects to purchase $260000 of materials in July and $270000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be

Answers

Answer:

Total cash disbursement= $267,500

Explanation:

Giving the following information:

Purchase:

July= $260,000

August= $270,000

Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase.

Cash disbursement August:

Purchase in cash from August= 270,000*0.75= 202,500

Purchase on account July= 260,000*0.25= 65,000

Total cash disbursement= $267,500

Abica Roast Coffee Company produces Columbian coffee in batches of 6,000 pounds. The

standard quantity of materials required in the process is 6,000 pounds, which cost $5.00per pound. Columbian coffee can be sold without further processing for $8.40 per pound.

Columbian coffee can also be processed further to yield Decaf Columbian, which can

be sold for $10.00 per pound. The processing into Decaf Columbian requires additional

processing costs of $9,450 per batch. The additional processing will also cause a 5% loss

of product due to evaporation.



Columbian coffee can be sold without further processing for $8.40 per pound.

Columbian coffee can also be processed further to yield Decaf Columbian, which can

be sold for $10.00 per pound. The processing into Decaf Columbian requires additional

processing costs of $9,450 per batch. The additional processing will also cause a 5% loss

of product due to evaporation.

a. Prepare a differential analysis dated August 28, 2012, on whether to sell regular

Columbian (Alternative 1) or process further into Decaf Columbian (Alternative 2).

b. Should Abica Roast sell Columbian coffee or process further and sell Decaf

Columbian?

c. Determine the price of Decaf Columbian that would cause neither an advantage or

disadvantage for processing further and selling Decaf Columbian.

Answers

Answer:

A)

                                       no further          further                 differential

                                       processing        processing          amount

price per pound             $8.40                 $10.00                $1.60

materials                         $5                      $5.25                 ($0.25)

processing costs            $0                      = $9,450 /          ($1.66)

                                                                  5,700 = $1.66

operating profit per        $3.40                 $3.09                 ($0.31)

pound

                                     

B)

The company should sell coffee without any further processing, just sell it as normal Colombian coffee.

C)

In order to eliminate the financial disadvantage of processing further the decaf coffee, the the price should be $10 + $0.31 = $10.31 per pound.

A proposed new investment has projected sales of $543,000. Variable costs are 46 percent of sales, and fixed costs are $129,500; depreciation is $50,250. Prepare a pro forma income statement assuming a tax rate of 21 percent. What is the projected net income? (Input all amounts as positive values. Do not round intermediate calculations.)

Answers

Answer:

Pro forma Income Statement

Projected Sales   $543,000

Variable costs        249,780

Contribution        $293,220

Sales /Fixed costs  129,500

Depreciation           50,250

Pre-tax Income    $113,470

Income Tax (21%)  23,828.70

After-tax Income $89,641.30

Explanation:

This company's pro forma income statement shows the contribution to be made by a project and the projected after-tax income.  With it management can decide whether to accept the project or not.  Preparing this pro forma income statement also enables management to know the impact on profits that the project will make.  When the project is complete, this pro forma income statement becomes a basis for reviewing the actual income statement to understand variances.

Pacific Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships.Required:a. The likelihood of a payment occurring is probable, and the estimated amount is $1.17 million. b. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $0.97 to $1.17 million. c. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.17 million. d. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.17 million.

Answers

Answer:

a. The likelihood of a payment occurring is probable, and the estimated amount is $1.17 million.

THE CONTINGENT LIABILITY NEEDS TO BE RECORDED SINCE IT IS PROBABLE THAT IT WILL OCCUR AND THE AMOUNT CAN BE ESTIMATED.

b. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $0.97 to $1.17 million.

YOU ONLY HAVE TO DISCLOSE THE LIABILITY IN THE NOTES OF THE FINANCIAL STATEMENTS SINCE THE AMOUNT CANNOT BE DETERMINED.

c. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.17 million.

YOU ONLY HAVE TO DISCLOSE THE LIABILITY IN THE NOTES OF THE FINANCIAL STATEMENTS SINCE THE EVENT IS ONLY REASONABLY POSSIBLE AND NOT PROBABLE.

d. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.17 million.

NO RECORDING NOR DISCLOSING IS REQUIRED SINCE THE POSSIBILITY OF OCCURRING IS REMOTE.

Central to agency theory is the concern with problems that can arise between the principals who are the owners of the firm and the agents who are the people who are paid by outside consultants to perform a job on their behalf.

a. True
b. False

Answers

Answer:

Correct Answer:

a. True

Explanation:

Agency theory is a principle that is used to explain and resolve issues in the relationship between business principals and their agents in any given company's establishment. In addition, the relationship could be one that is between shareholders, as principals on one hand, and company executives, as agents.

Agency problem is that many authors have found that include separations of ownership from control, conflict of interest and risk adverseness etc.

What is the term agency theory about?

Agency theory is a principle that is used to explain and resolve issues in the relationship between business principals and their agents in any given company's establishment.

In addition, the relationship could be one that is between shareholders, as principals on one hand, and company executives, as agents.

Therefore, correct option is True.

Learn more about agency theory, refer to the link:

https://brainly.com/question/26253714

The government wants to set the socially optimal level of nitrogen runoff, and government regulators believe that the actual marginal benefit of pollution (MBP) is given by the estimated MBP curve. The deadweight loss associated with a quota is _____, w

Answers

Answer:

Hello your question is incomplete attached below is the complete question

Explanation:

Dead weight loss = 0.5 [( Δp ) * ( ΔD ) ]

D = DEMAND

P = PRICE

DWL with quota = 0.5 [ ( $10 -$6 ) * (12 - 8 ) ]

                           = 0.5 ( 4*4 ) = $8

DWL with pigouvian tax  = 0.5 [ ($10- $6 )*(9 - 8 ) ]

                                         = 0.5 [ 4 * 1 ] = $2

The owner of a large machine shop has just finished its financial analysis from the prior fiscal year. Following an excerpt from the final report:
Net revenue $375000
Cost of goods sold 322000
Value of production materials on hand 42500
Value of work-in-progress inventory 37000
Value of finished goods on hand 12500
a. Compute the inventory turnover ratio (ITR). (Round your answer to 1 decimal place.)
Inventory turnover ratio ......... per year
b. Compute the weeks of supply (WS). (Do not round intermediate calculations. Round to 1 decimal place.)
Weeks of supply ........

Answers

Answer:

a. Inventory turnover ratio = Cost of goods sold / Average Aggregate Inventory Value

Inventory turnover ratio = $322,000 / $42,500 + $37,000 + $12,500

Inventory turnover ratio = $322,000 / $92,000

Inventory turnover ratio = 3.5

Therefore, the inventory turnover ratio is 3.5

b. Weeks of supply = Average Aggregate Inventory Value / Cost of Goods Sold * 52 (weeks)

Weeks of supply = $42,500 + $37,000 + $12,500 / $322,000 * 52

Weeks of supply = $92,000 / $322,000 * 52 weeks

Weeks of supply = 14.85 weeks

Therefore, the weeks of supply is 14.85 weeks

Jesse Livermore, Human Resources Director of GA Trading Company recently read a report on "The state of the Baby Boomer generation between the years 2011-2030," that he believes to be factually correct. To respond to this growing trend, he has created an employee program that hopes to attract and retain _____ workers through flexible schedules, training opportunities, and creative pay schedules.

Answers

Answer: younger

Explanation:

From the question, we are informed that Jesse Livermore, Human Resources Director of GA Trading Company recently read a report on "The state of the Baby Boomer generation between the years 2011-2030," that he believes to be factually correct.

To respond to this growing trend, Jesse has created an employee program that hopes to attract and retain younger workers through a flexible schedule, training opportunities, and creative pay schedules.

McConnel corporation has bonds on the market with 16.5 years to maturity, a YTM of 7.7 percent, a par value of 1000 and current price of 1065. The bonds make semiannual payment and have a par value of $1,000.Required:What must the coupon rate be on these bonds?

Answers

Answer:

Coupon rate = 0.08402 or 8.402%

Explanation:

To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,

Coupon Payment (C) = x

Total periods (n)= 16.5 * 2 = 33

r or YTM = 7.7% * 1/2 = 3.85% or 0.0385

The formula to calculate the price of the bonds today is attached.

Using the bond price formula and the available values, we calculate the coupon rate to be,

1065 = x * [( 1 - (1+0.0385)^-33) / 0.0385]  +  1000 / (1+0.0385)^33

1065 = x * (18.50739407)  +  287.4653284

1065 - 287.4653284 = x * 18.50739407

777.5346716 / 18.50739407  = x

x  =  42.012 rounded off to $42.01

If the semi annual coupon payment is $42.01, the annual coupon payment will be 42.01 * 2 = $84.02

The coupon rate on bonds is = 84.02 / 1000

Coupon rate = 0.08402 or 8.402%

Emira wants to buy a classic drawing from an art centre in Kuala Lumpur. She managed to secure a painting by a renowned Malaysian artist that costs her RM99,800. Currently, she only has RM12,650 in her savings account and she intends to use 70% of her saving to fund the purchase. If she borrows the remaining amount from Bank Atlantis that levies 4.77% of interest rates, determine the total interest payment that she will pay if the agreement takes 10 years of settlement.

Answers

Answer:

RM23,617.80

Explanation:

cost of the painting RM99,800

she has RM12,650 on her bank account and she will use 70% = RM8,855 as down payment. She will borrow the rest = RM99,800 - RM8,855 = RM90,945

interest charged on the loan 4.77% / 12 = 0.3975%

120 monthly periods (10 years)

using the present value formula to determine the monthly payment:

PV = monthly payment x annuity factor

monthly payment = PV / annuity factor

PV = 90,945

annuity factor (120 periods, 0.3975%) = 95.26168

monthly payment = 90,945 / 95.26168 = 954.69

total payments = 120 x 954.69 = RM114,562.80

interests paid = RM114,562.80 - RM90,945 = RM23,617.80

Exercise 7-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, LO7-2, LO7-3]
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:
Variable costs per unit:
Manufacturing:
Direct materials $ 25
Direct labor $ 15
Variable manufacturing overhead $5
Variable selling and administrative $2
Fixed costs per year:
Fixed manufacturing overhead $250,000
Fixed selling and administrative expenses $80,000
During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $60 per unit.
Required:
1. Assume the company uses variable costing:
a. Compute the unit product cost for Year 1 and Year 2.
b. Prepare an income statement for Year 1 and Year 2.
2. Assume the company uses absorption costing:
a. Compute the unit product cost for Year 1 and Year 2.
b. Prepare an income statement for Year 1 and Year 2.
3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1.

Answers

Answer:

1 a. Year 1 unit product cost = 45

     Year 2 unit product cost = 45

Notes: Unit product cost = Direct materials + direct labor + Variable manufacturing overhead = 25 + 15 + 5 = 45 units

1 b.                        Income statement

                                                     Year 1           Year 2

Sales                                         2,400,000    3,000,000

(40000*60); (50000*60)

Less:

Variable cost of goods sold     1,800,000     2,250,000    

Variable selling and adm.          80,000         100,000

Contribution margin                520,000        650,000

Less:

Fixed manufacturing overhead  250,000      250,000    

Fixed selling & adm expense      80,000         80,000

Net income                                  $190,000     $320,000

2 a.  Notes

                                                             Year 1   Year 2

Direct materials                                      25     25  

Direct labor                                              15     15  

Variable manufacturing overhead         5         5  

Fixed manufacturing overhead             5      6.25

(250,000/50,000); (250,000/40000)

Unit product cost                                    50    51.25

b.                                 Income statement

                                              Year 1         Year 2

Sales                                   2400000    3000000

Less: cost of goods sold   2000000    2550000

Gross margin                      400,000     450,000

Less: Selling and                160,000 180,000

administrative expense  

Net income                         240,000     270,000

Workings

Cost of goods sold for year 2 = (10,000* 50) + (40000 * 51.25)

= 500,000 + 2,050,000

= 25,500,000

3. Reconciliation                                Year 1          Year 2

Variable costing net operating        190,000      320,000

income (loss)    

Add: Deferred fixed overhead          50,000

in ending inventory (10000*5)  

Less: Fixed overhead realized                             -50,000

in beginning inventory(10000*5)

Absorption costing net operating   $240,000    270,000

income (loss)  

Answer 1:

Part a

Unit product cost = Direct materials + direct labor + Variable manufacturing overheadUnit product cost = 25 + 15 + 5 Unit product cost = 45 units

Year 1 -unit product cost = 45

Year 2 -unit product cost = 45

Part  b :

                                                   Income statement

                                                    Year 1           Year 2

Sales                                         2,400,000    3,000,000  

                                                 (40000*60)  (50000*60)  

Less:  

Variable cost of goods sold     1,800,000     2,250,000    

Variable selling and adm.          80,000         100,000

Contribution margin                  520,000        650,000

Less:

Fixed manufacturing overhead  250,000      250,000    

Fixed selling & adm expense      80,000         80,000

Net income                                  $190,000     $320,000

Answer 2 :

Part a  

                                                            Year 1   Year 2

Direct materials                                       25     25    

Direct labor                                               15     15    

Variable manufacturing overhead           5       5    

Fixed manufacturing overhead               5      6.25  

(250,000/50,000); (250,000/40000)  

Unit product cost                                    50    51.25

Part b.                                

                                          Income statement

                                              Year 1         Year 2  

Sales                                   2400000    3000000

Less: cost of goods sold   2000000    2550000

Gross margin                      400,000     450,000

Less: Selling and                160,000 180,000

 Net income                         240,000     270,000

An income statement for Year 1 - 240,000and Year 2-270,000.

(Working Notes):

Cost of goods sold for year 2 = (10,000* 50) + (40000 * 51.25)

Cost of goods sold for year 2 = 500,000 + 2,050,000

Cost of goods sold for year 2 = 25,500,000

Answer 3:

The difference between variable costing and absorption costing net operating income in Year 1.

        Reconciliation                                    Year 1          Year 2

Variable costing net operating         190,000      320,000

          income (loss)    

Add: Deferred fixed overhead          50,000

          in ending inventory (10000*5)  

Less: Fixed overhead realized                               -50,000

       in beginning inventory(10000*5)

      Absorption costing net operating    $240,000    270,000

 

The difference between variable costing and absorption costing net operating income in Year 1 is $2,40,000.

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Analyze global labor supply factors in terms of quality and quantity. In your own words, present an example of how it varies in quality.

Answers

Explanation:

The supply of labor in terms of quality and quantity will be influenced by micro and macroeconomic factors.

The labor market is constituted by a relationship of labor supply and demand for employees, which is totally influenced by the economic context that a particular country is experiencing. For example, if there is an economic downturn, then there is likely to be less labor supply and less demand.

Looking at the global labor market, we can see how it varies from country to country.

In terms of quality, we can mention China for example, which is a country where there is a lot of work, but the labor force is one of the cheapest in the world, which makes this an extremely attractive labor market for the international market, but due to poor working conditions, there is often no quality in the work process for these employees.

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