Answer:
$1,960,623
($24,505,180 × .04) + ($24,510,387 × .04) = $1,960,623.
Explanation:
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $348,400 and direct labor hours would be 47,000. Actual manufacturing overhead costs incurred were $304,000, and actual direct labor hours were 52,400. The journal entry to apply the factory overhead costs for the year would include a
Answer:
Journal Entry
Debit Work-in-Process $388,284
Credit Manufacturing Overhead $388,284
To record the application of factory overhead costs for the year.
Explanation:
a) Data and Calculations:
Estimated factory overhead costs = $348,400
Estimated direct labor hours = 47,000
Predetermined overhead rate = $7.41 ($348,400/47,000)
Actual overhead costs = $304,000
Actual direct labor hours = 52,400
Applied overhead costs = $388,284 (52,400 * $7.41)
b) The overhead applied to the production for the year will be the actual direct labor hours by the predetermined overhead rate. This yields a cost that is greater than the actual overhead costs, which means that the manufacturing overhead was overapplied. The cause of this situation is the number of actual direct labor hours worked vis-a-vis the actual overhead costs and the predetermined rate.
GoodStuff, Inc. is considering investing in Project Awesome. The Project costs $120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. GoodStuff, Inc.'s required rate of return for the project is 10%. The internal rate of return for the Project is
Answer:
35.27%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = -$120,000
Cash flow in year 1 = $64,000
Cash flow in year 2 = $67,000
Cash flow in year 3 = $56,000
Cash flow in year 4 = $45,000
IRR = 35.27%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Your family is expanding in number, and so you decide to sell your current home and upgrade to a larger home. You estimate that you can sell your current home for $100,000 and can buy a larger home for $475,000. You plan to use the entire $100,000 sale proceeds as a down payment on the new home and will finance the remainder for 15 years at 4% nominal annual interest compounded monthly. What is your estimated monthly mortgage payment
Answer:
The Estimated Monthly Mortgage Payment
= $2,810.81
Explanation:
Data and Calculations:
House price = $475,000
Down payment = $100,000
Percentage of down payment = 21.05% ($100,000/$475,000 * 100)
Finance period = 15 years = 180 months (15 * 12)
Nominal annual interest compounded monthly = 4%
The estimated monthly mortgage payment using an online finance calculator:
Monthly Pay: $2,810.81
House Price $475,000.00
Loan Amount $380,000.00
Down Payment $95,000.00
Total of 180 Mortgage Payments $505,946.54
Total Interest $125,946.54
Mortgage Payoff Date Jan. 2036
The total cost accumulated in the sales department using the reciprocal method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar): $150,050. $142,471. $102,222. $122,402. $127,778.
Answer:
$127,778
Explanation:
Calculation for total cost accumulated in the sales department using the reciprocal method
Direct operating cost$70,000
Acturial Cost allocated 24,000
Premium Ratings allocated cost 24,000
Acturial Cost allocated 6400
Premium Ratings allocated cost 2400
Acturial Cost allocated 640
Premium Ratings allocated cost 240
Acturial Cost allocated 64
Premium Ratings allocated cost 24
Acturial Cost allocated 6
Premium Ratings allocated cost 2
Acturial Cost allocated 1
Premium Ratings allocated cost 0
Total cost accumulated $127,778
Therefore total cost accumulated in the sales department using the reciprocal method is $127,778
As CEO of ​, knows it is important to control costs and to respond quickly to changes in the highly competitive​ boat-building industry. When Consulting proposes that invest in an ERP​ system, she forms a team to evaluate the​ proposal: the plant​ engineer, the plant​ foreman, the systems​ specialist, the human resources​ director, the marketing​ director, and the management accountant. A month​ later, management accountant reports that the team and estimate that if implements the ERP​ system, it will incur the following​ costs:
a. $435,000 in software costs
b. $95,000 to customize the ERP software and load Aqua Marine's data into the new ERP system
c. $105,000 for employee training
The team estimates that the ERP system should provide several benefits:
a. More efficient order processing should lead to savings of $105,000.
b. Streamlining the manufacturing process so that it maps into the ERP system will create savings of $125,000.
c. Integrating purchasing, production, marketing, and distribution into a single system will allow Aqua Marine to reduce inventories, saving $225,000.
d. Higher customer satisfaction should increase sales, which, in turn, should increase profits by $155,000.
Requirements
a. If the ERP installation succeeds, what is the dollar amount of the benefits?
b. Should Aqua Marine install the ERP system? Why or why not? Show your calculations.
c. Why did Easton create a team to evaluate Rose's proposal? Consider each piece of cost-benefit information that management accountant Cole reported. Which person on the team is most likely to have contributed each item? (Hint: Which team member is likely to have the most information about each cost or benefit?)
Answer:
a.) Total benefit if the ERP installation succeeds = $610,000
b.) They should not install the ERP system.
c.) For Estimating software costs - Systems specialist
For Estimating cost of loading data into the new ERP system - Management accountant , Systems specialist
For Customize the ERP software - Management accountant , Systems specialist
For Estimating customization costs - All team members
For Estimating training costs - Human resource director
For Savings from more efficient order processing - Systems specialist , Management accountant
For Savings from streamlining the manufacturing process - Plant engineer , Plant foreman
For Evaluating the effects of integrating purchasing, production, marketing, and distribution into a single system - Plant foreman
For Estimating increase in sales from higher customer satisfaction - Marketing director
For Estimating benefits and costs - All team members
For Evaluating the effects of integrating purchasing, production, marketing, and distribution into a single system - Plant foreman
For Estimating increase in sales from higher customer satisfaction - Marketing director
For Estimate benefits and costs - All team members
Explanation:
a.)
If the ERP installation succeeds , the dollar amount of the benefit is as follows :
From more efficient order processing savings = $105,000
From streamlining the manufacturing process savings = $125,000
From reduce inventories savings = $225,000
From increased sales profit = $155,000
⇒Total benefit = $ 105,000 + 125,000 + 225,000 + 155,000
= $610,000
⇒Total benefit if the ERP installation succeeds = $610,000
b.)
Firstly check the Costs for installation of ERP:
Software cost = $435,000
Customizing ERP and loading data cost = $95,000
Employee training cost = $105,000
⇒Total cost = $ 435,000 + 95,000 + 105,000
= $635,000
⇒Total cost = $635,000
Now,
As we have
Total Benefit in installation of ERP = $610,000
Total cost in installation of ERP = $635,000
⇒Net benefit = $610,000 - $635,000 = -$ (25,000)
∴ we get
If Aqua Marine install the ERP system , them they face loss.
So, They should not install the ERP system.
c.)
For Estimating software costs - Systems specialist
For Estimating cost of loading data into the new ERP system - Management accountant , Systems specialist
For Customize the ERP software - Management accountant , Systems specialist
For Estimating customization costs - All team members
For Estimating training costs - Human resource director
For Savings from more efficient order processing - Systems specialist , Management accountant
For Savings from streamlining the manufacturing process - Plant engineer , Plant foreman
For Evaluating the effects of integrating purchasing, production, marketing, and distribution into a single system - Plant foreman
For Estimating increase in sales from higher customer satisfaction - Marketing director
For Estimating benefits and costs - All team members
For Evaluating the effects of integrating purchasing, production, marketing, and distribution into a single system - Plant foreman
For Estimating increase in sales from higher customer satisfaction - Marketing director
For Estimate benefits and costs - All team members
The Blueberry Designs ads show a lifestyle that is sophisticated and timeless. They recently launched a sportswear line with their trademark DB pattern and patented Blueberry soles on both hiking boots and casual footwear. Those who follow the Blueberry lifestyle are part of
Answer:
A reference group
Explanation:
Reference groups are are set of people who are used as a standard for how to comply with social norms thereby influencing our ideas, values, behaviour, and appearance.
For example a reference group can be a set of people that have achieved a certain level of importance in a field by following a standard.
In the given scenario Blueberry Designs ads show a lifestyle that is sophisticated and timeless.
Those that follow the standards set by Blueberry designs can be said to be a reference group
In the text, we supposed a college education raised a person's wage by $30,000 per year, from $40,000 to $70,000. Assume the relevant interest rate is 3%, there is no growth in wages, and you are expected to retire at 65 years old after you graduate high-school. (a): Suppose you are a 18 year old graduating high school senior deciding whether or not to go to college. What is the present discounted value of your labor earnings if you chose not to attend college
Answer:
$1,010,668
Explanation:
if you choose not to attend college, you should be working for 65 - 18 = 47 years
your expected annual salary is $40,000
the present value of your future earnings = $40,000 x PV annuity factor
PV annuity factor = = [1 - 1/(1 + i)ⁿ] / i = [1 - 1/(1 + 0.03)⁴⁸] / 0.03 = 25.2667
present value of future earnings = $40,000 x 25.2667 = $1,010,668
Someone offers to buy your old Ford F-150 truck for 4 equal annual payments, beginning 2 years from today. If you think that the present value of your Ford Truck is only $9,000 and you assume the interest rate is 10%, which one of the below would be the minimum annual payment that youâ d be willing to accept? $2,839.24 $3,435.48 $3,123.16 $2,250
Answer:
$3,123.16
Explanation:
The computation of the minimum annual payment is as follows:
Given that
RATE = 10%
NPER = 10%
PV = $9,000 × (1 + 0.1) = $9,900
FV = $0
The formula is shown below:
= PMT(RATE,NPER,-PV,FV,TYPE)
After applying the above formula, the monthly payment is $3,123.16
When using the Copy to Purchase Order feature from within an Estimate , where do you need to turn on USE Purchase orders?
Answer: From expenses within the Accounts & settings.
Explanation:
When using the copy to purchase order feature within an estimate, to turn on USE purchase orders you navigate to expenses under accounts and settings. When you get to the accounts and settings you would see the feature that shows "Expenses" tab. In the Purchase orders section, select the edit icon. Turn on the Use purchase orders options.
Answer:account and settings, expenses, purchase order
Explanation:
Radek Company estimates its uncollectible accounts by aging its accounts receivable and applying percentages to various aged categories of accounts. Radek computes a total of $3,200 in estimated uncollectible accounts as of its current year-end. Its accounts receivable has a balance of $73,000, and its allowance for uncollectible accounts has an unused balance of $900 before any year-end adjustments. What amount of bad debts expense will Radek Company report in its income statement for the current year
Answer:
the bad debt expense that reported in the income statement is $2,300
Explanation:
The computation of the bad debt expense that reported in the income statement is as follows;
= Total estimated uncollectible accounts - unused balance
= $3,200 - $900
= $2,300
Hence, the bad debt expense that reported in the income statement is $2,300
Sunland Company, has 14700 shares of 4%, $100 par value, cumulative preferred stock and 60200 shares of $1 par value common stock outstanding at December 31, 2021. There were no dividends declared in 2019. The board of directors declares and pays a $113000 dividend in 2020 and in 2021. What is the amount of dividends received by the common stockholders in 2021
Answer:
2021 Common Stockholders dividends = $49,600
Explanation:
Preference Shareholders are always paid their dividends first before Common Stockholders. If dividend is not declared, Preference dividends are cumulated to the next period and are due !
2019
Preferred Stockholders Dividends = 14700 x $100 x 4% = $58,800
Common Stockholders dividends = $ 0
2020
Preferred Stockholders Dividends = $58,800 (2019) + $54,200 (2020)
Common Stockholders dividends = $0
2021
Preferred Stockholders Dividends = $4,600 (2020 arrears) + $58,800 (2021) = $63,400
Common Stockholders dividends = $113,000 - $63,400 = $49,600
ExxonMobil reports total assets of $188 billion and total liabilities of $87 billion. Citigroup reports total liabilities of $1,300 billion and stockholders' equity of $90 billion. Amazon reports total assets of $2.7 billion and total stockholders' equity of $0.10 billion. Nike reports an increase in assets of $1.00 billion and an increase in liabilities of $0.5 billion. Kellogg's reports a decrease in liabilities of $0.44 billion and an increase in stockholders' equity of $0.04 billion. (Enter your answers in billions rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) Required: What is the amount of stockholders' equity of ExxonMobil
Answer:
$101 billion
Explanation:
The computation of the amount of stockholders' equity of ExxonMobil is shown below:
As we know that
Total assets = Total liabilities + stockholder equity
where,
total assets is $188 billion
And, the total liabilities is $87 billion
So, the stockholder equity is
= $188 billion - $87 billion
= $101 billion
The cost of direct materials transferred into the Filling Department of Eve Cosmetics Company is $194,560. The conversion cost for the period in the Filling Department is $98,340. The total equivalent units for direct materials and conversion are 25,600 ounces and 29,800 ounces, respectively. Determine the direct materials and conversion costs per equivalent unit. If required, round to the nearest cent.
Direct materials cost per equivalent unit: $ per ounce
Conversion costs per equivalent unit: $ per ounce
The costs per equivalent unit of direct materials and conversion in the Filling Department of Eve Cosmetics Company are $2.20 and $0.65, respectively. The equivalent units to be assigned costs are as follows:
Equivalent Units
Direct Materials Conversion
Inventory in process, beginning of period 0 3,600
Started and completed during the period 45,000 45,000
Transferred out of Filling (completed) 45,000 48,600
Inventory in process, end of period 3,000 1,500
Total units to be assigned costs 48,000 50,100
The beginning work in process inventory had a cost of $2,380. Determine the cost of completed and transferred-out production and the ending work in process inventory. If required, round to the nearest dollar.
Completed and transferred-out production $
Inventory in process, ending $
Answer:
Part 1
Direct material cost per equivalent units = $194,560 / 25,600 ounces
Direct material cost per equivalent units = $ 7.60 per ounce
Conversion Cost per equivalent units = $98,340 / 29,800 ounce
Conversion Cost per equivalent units = $3.30 per ounce
Part 2
Completed and Transferred out of production = $2380 + (45,000* $2.20) + (3,600 * $0.65) + (45,000 * $0.65)
= $2,380 + $99,000 + $2,340 + $29,250
= $132,970
Inventory in process, ending = (3000 * $2.20) + (1500 * $0.65)
= $6,600 + $975
= $7,575
Swifty Corporation issued 100000 shares of $10 par common stock for $1250000. A year later Swifty acquired 15900 shares of its own common stock at $15 per share. Three months later Swifty sold 8500 of these shares at $19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 8500 treasury shares, Swifty should credit
Answer:
the journal entries should be:
Dr Cash 1,250,000
Cr Common stock 1,000,000
Cr Additional paid in capital 250,000
Dr Treasury stock 238,500
Cr Cash 238,500
Dr Cash 161,500
Cr Common stock 85,000
Cr Additional paid in capital 76,500
EVO, Inc. is evaluating a project that will have a life of four years. The operating cash flow each year is expected to be $51,500. There is a need to invest in net working capital at the start of the project in the amount of $4,250. EVO, Inc. will recover this investment in net working capital at the end of the project. EVO also needed to spend $22,400 on equipment in order to get the project started. The book value for this equipment when the project is finished, is estimated to be $4,660. This equipment will be sold at the end of the project for an estimated sales price of $5,670. EVO has a tax rate relevant to this analysis of 34 percent. Calculate the amount of cash flow in year 4 of this project
Answer:
$61,763.40
Explanation:
The computation of the amount of cash flow in year 4 is shown below:
Terminal Cash flow in year 4 is
= operating cash flow + net working capital invested + sale price of equipment - tax on profit from sale
= operating cash flow + net working capital invested + sale price of equipment - tax rate × (Sale price - book value)
= $51,500 + $4,250 + $5,670 - 34% × ($5,670 - $4,660)
= $61,763.40
Lois tells Stew he can buy her pool house for $100,000. Stew is so excited to own a home of his own that he leaves a $10,000 check in her mailbox as a starting payment on the pool house. Then, he begins remodeling the pool house, spending $3,000 in repairs and improvements. Lois decides she made a big mistake and attempts to cancel this agreement. The most likely outcome will be:
Answer:
The most likely outcome would be that Lois will still have to sell Stew the house
Explanation:
The most likely outcome would be that Lois will still have to sell Stew the house. This is mainly because Lois accepted Stew's offer of $100,000 and Stew already fulfilled part of the agreement. By simply paying the $10,000 that he left Stew he has already fulfilled part of his side of the agreement which solidifies the agreement and makes it legally binding. Therefore, he would most likely win a court case if Lois decides to back out of the agreement.
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month: Direct materials $ 81,000 Direct labor $ 41,000 Variable manufacturing overhead $ 19,800 Fixed manufacturing overhead 31,600 Total manufacturing overhead $ 51,400 Variable selling expense $ 14,400 Fixed selling expense 22,800 Total selling expense $ 37,200 Variable administrative expense $ 5,200 Fixed administrative expense 27,400 Total administrative expense $ 32,600 Required: 1. With respect to cost classifications for preparing financial statements: a. What is the total product cost
Answer:
the total product cost is $153,600
Explanation:
The computation of the total product cost is as follows;
= Direct material cost + direct labor cost + total manufacturing overhead cost
= $81,000 + $41,000 + $31,600
= $153,600
Hence, the total product cost is $153,600
The other values would be ignored for determining the product cost
This type of insurance pays to fix damages that you cause, but does not cover your own car
9. Galloway, Inc. has an odd dividend policy. The company has just paid a dividend of $7 per share and has announced that it will increase the dividend by $2 per share for each of the next 5 years, and then never pay another dividend. How much are you willing to pay per share today to buy this stock if you require a 15 percent return
Answer:
P0 = $41.7196815 rounded off to $41.72
Explanation:
To calculate the price of the stock today, we will use the discounted cashflow model. The formula for price under this model will be the present value of the expected future cash flows. The formula is as follows,
P0 = D1 / (1+r) + D2 / (1+r)^2 + ... + Dn / (1+r)^n
Where,
D1, D2,...,Dn are the dividends in year 1, years 2 and so on to year nr is the required rate of returnP0 = (7+2) / (1+0.15) + (7+2+2) / (1+0.15)^2 + (7+2+2+2) / (1+0.15)^3 +
(7+2+2+2+2) / (1+0.15)^4 + (7+2+2+2+2+2) / (1+0.15)^5
P0 = $41.7196815 rounded off to $41.72
Elliot, Inc., uses the high-low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $10.50 per hour. When activity jumped to 24,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $9.75. On the basis of this information, the company's fixed maintenance costs were:
Answer:
$90,000
Explanation:
At the activity level of 20,000 machine hours:
total maintenance costs=20,000* $10.50=$210,000
At the activity level of 24,000 machine hours:
total maintenance costs=24,000*$9.75=$234,000
variable maintenance cost per hour=(total maintenance costs at higher activity level-total maintenance costs at lower activity level)/(higher activity level-lower activity level)
variable maintenance cost per hour=($234,000-$210,000)/(24000-20000)
variable maintenance cost per unit=$6
Using the higher activity level data:
total cost=fixed cost+(variable maintenance cost per unit*number of hours)
$234,000=fixed cost+($6*24000)
234,000=fixed cost+$144,000
fixed cost=$234,000-$144,000
fixed cost=$90,000
Listed below are several transactions that took place during the first two years of operations for the law firm of Pete, Pete, and Roy.
Year 1 Year 2
Amounts billed to clients for services rendered $ 170,000 $ 220,000
Cash collected from clients 160,000 190,000
Cash disbursements
Salaries paid to employees for services rendered during the year 90,000 100,000
Utilities 30,000 40,000
Purchase of insurance policy 60,000 0
In addition, you learn that the firm incurred utility costs of $35,000 in year 1, that there were no liabilities at the end of year 2, no anticipated bad debts on receivables, and that the insurance policy covers a three-year period.
Required:
1. & 3. Calculate the net operating cash flow for years 1 and 2 and determine the amount of receivables from clients that the firm would show in its year 1 and year 2 balance sheets prepared according to the accrual accounting model.
2. Prepare an income statement for each year according to the accrual accounting model.
Revenues not attempted not attempted
Expenses:
Salaries 90,000selected answer correct 100,000selected answer correct
Utilities 30,000selected answer incorrect 40,000selected answer incorrect
Insurance 60,000selected answer incorrect 0selected answer incorrect
Net income (loss)
Answer:
Pete, Pete, and Roy
1. Net operating cash flow for years 1 and 2
Year 1 Year 2
Cash collected from clients $160,000 190,000
Cash disbursements
Salaries paid to employees 90,000 100,000
Utilities 30,000 40,000
Purchase of insurance policy 60,000 0
Total disbursements $180,000 $140,000
Net operating cash flow ($20,000) $50,000
3. Amount of receivables in year 1 and 2:
Year 1 Year 2
Beginning balance $10,000
Amounts billed to clients for
services rendered $ 170,000 $ 220,000
Cash collected from clients 160,000 190,000
Balance $10,000 $40,000
2. Pete, Pete, and Roy
Income Statements for years 1 and 2:
Year 1 Year 2
Service Revenue $ 170,000 $ 220,000
Expenses:
Salaries expense 90,000 100,000
Utilities expense 35,000 35,000
Insurance expense 20,000 20,000
Total expenses $145,000 $155,000
Net income $25,000 $65,000
Explanation:
a) Data and Calculations:
Year 1 Year 2
Amounts billed to clients for
services rendered $ 170,000 $ 220,000
Cash collected from clients 160,000 190,000
Cash disbursements
Salaries paid to employees 90,000 100,000
Utilities 30,000 40,000
Purchase of insurance policy 60,000 0
Utility costs incurred in year 1 = $35,000
Net operating cash flow for years 1 and 2
Year 1 Year 2
Cash collected from clients $160,000 190,000
Cash disbursements
Salaries paid to employees 90,000 100,000
Utilities 30,000 40,000
Purchase of insurance policy 60,000 0
Total disbursements $180,000 $140,000
Net operating cash flow ($20,000) $50,000
Insurance expense per year = $60,000/3 = $20,000
Utilities for year 1 = $35,000
Utilities for year 2 = $35,000
Xercise Cycles Company has provided its year ended accounts receivables that were uncollected. The Controller has asked you to help prepare the Aging of Accounts Receivable Schedule and the corresponding journal entries. Use the information included in the Excel Simulation and the Excel functions described below to complete the task.
1) Calculate the number of days unpaid, USING THE EXCEL DAYS FUNCTION (fx).
2) Use the information above to complete the Aging of Accounts Recievable Schedule Below.
Create a formula for each age category, using the Excel IF and AND FUNCTION (fx) to determine where each customer amount belongs.
3) Prepare the adjusting journal entry for recording bad debt expense if the allowance for doubtful accounts had the following unadjusted balance:
4) Prepare the adjusting journal entry for recording bad debt expense if the Allowance for Doubtful Accounts had the following unadjusted balance:
Answer:
In the number of days unpaid column (E8), input the formula; "=DAYS(D8, C8)" then copy it down to the last item on the table.
Explanation:
Answering just the first question, the DAYS function is used to calculate the difference between day timelines. The function accepts two parameters, the first date which is the current date we are subtracting from, and the second date which is the previous date.
Suppose two projects have the same expected business value. Project A has a very high estimated business value along with a high probability of failure. Project B has a much lower estimated business value along with a low probability of failure. If you could do only one of the projects, which one would you choose and under what conditions
Answer:
Project B has a much lower estimated business value along with a low probability of failure.
Explanation:
In order to do only one type of project that has the same business values. I would choose a project that has a low probability of failure. Though it has a low value but in the long run will lead to economic profit and shareholders value. For selection, we need to find out the benefits gained by the project.If a person could choose only one project he must select Project B as it has a much lower estimated business value along with a low probability of failure.
What are the selection criteria for the project?Project B would be a better option to choose as it is giving less risk to business as compared to Project B in terms of failure. However, the value of Project B is less but it has the potential to generate economic profits in the long run.
Therefore, by evaluating the cost and benefit from two projects shareholder's interest would be intact more through Project B.
Learn more about project managemnet here:
https://brainly.com/question/26266895
Healthy competition among businesses is good for consumers.
True or False
I say true because it seems like most likely answer.
Suppose you consider buying a bond promising to pay you $25 one year from now and then the same amount every year through the fifth year (that is, you should receive a total of five coupon payments). At the time you receive your fifth payment, you will also receive the bond's face value of $5,000. Suppose the interest rate for a riskless bond is 7%. The most you would be willing to pay for this bond is $ . Give your answer to two decimals.
Answer:
$3,667.44
Explanation:
The amount you would be willing to pay today can be determined by finding the present value of the cash flows
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow each year from year 1 to 4 = $25
Cash flow in year 5 = $25 + $5000
I = 7%
Present value = $3,667.44
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Financial Statements of a Manufacturing Firm The following events took place for Sorensen Manufacturing Company during January, the first month of its operations as a producer of digital video monitors: Purchased $250,000 of materials. Used $180,000 of direct materials in production. Incurred $450,000 of direct labor wages. Incurred $180,000 of factory overhead. Transferred $760,000 of work in process to finished goods. Sold goods for $1,200,000. Sold goods with a cost of $675,000. Incurred $215,000 of selling expense. Incurred $125,000 of administrative expense. Using the information given, complete the following: a. Prepare the January income statement for Sorensen Manufacturing Company. Sorensen Manufacturing Company Income Statement For the Month Ended January 31 Revenues $fill in the blank f6cd0703e073f92_2 Cost of goods sold fill in the blank f6cd0703e073f92_4 Gross profit $fill in the blank f6cd0703e073f92_6 Operating expenses: Selling expenses $fill in the blank f6cd0703e073f92_8 Administrative expenses fill in the blank f6cd0703e073f92_10 Total operating expenses fill in the blank f6cd0703e073f92_11 Net income $fill in the blank f6cd0703e073f92_13
Answer:
Missing word "b. Determine the inventory balances at the end of the first month of operations."
a) Income statement
Sales $1,200,000
Cost of goods sold $675,000
Gross profit $525,000
Selling and administrative expense
Selling expense $215,000
Administrative expense $125,000
Total Selling and administrative expense $340,000
Operating income $185,000
b) Inventory balance
Raw material inventory ($250,000 - $180,000) = $70,000
Work in process ($180,000+$450,000+$180,000-$760,000) = $50,000
Finished goods ($760,000-$675,000) = $85,000
The capital balance for Messalina is $210,000 and for Romulus is $140,000. These two partners share profits and losses 60 percent (Messalina) and 40 percent (Romulus). Claudius invests $100,000 in cash in the partnership for a 20 percent ownership. The bonus method will be used. What are the capital balances for Messalina, Romulus, and Claudius after this investment is recorded
Answer: $216,000 , $144,000 , $90,000
Explanation:
The capital balances for Messalina, Romulus, and Claudius after this investment is recorded will be calculated thus:
Messalina:
Capital balance: $210,000
Bonus share: 60% × $10000 = $6,000
New capital balance: $216,000
Romulus:
Capital balance: $140,000
Bonus share: 40% × $10000 = $4,000
New capital balance: $144,000
Claudius:
Capital balance: $100,000
Bonus share: 10% × $10000 = ($10,000)
New capital balance: $90,000
The answer is $216,000 , $144,000 , $90,000
Ken Young and Kim Sherwood organized Reader Direct as a corporation; each contributed $47,000 cash to start the business and received 4,000 shares of stock. The store completed its first year of operations on December 31, 2017. On that date, the following financial items for the year were determined: cash on hand and in the bank, $42,500; amounts due from customers from sales of books, $27,700; equipment, $46,000; amounts owed to publishers for books purchased, $8,200; one-year notes payable to a local bank for $4,050. No dividends were declared or paid to the stockholders during the year. Assuming that Reader Direct generates net income of $7,000 and pays dividends of $2,800 in 2018, what would be the ending Retained Earnings balance at December 31, 2018?
Answer:
Reader Direct Corporation
The ending Retained Earnings balance at December 31, 2018 is:
$14,150
Explanation:
a) Data and Calculations:
Cash on hand and in the bank, $42,500;
Amounts due from customers from sales of books, $27,700;
Equipment, $46,000;
Amounts owed to publishers for books purchased, $8,200;
One-year notes payable to a local bank for $4,050
Common Stock ($47,000 * 2) = $94,000
Assets:
Cash $42,500
Accounts Receivable 27,700
Equipment 46,000
Total assets $116,200
Liabilities + Equity:
Accounts Payable $8,200
Notes Payable 4,050
Total liabilities $12,250
Equity:
Common Stock $94,000
Retained Earnings 9,950
Total equity $103,950
Liabilities + equity $116,200
Retained Earnings:
Dec. 31, 2017 $9,950
Net income 7,000
less Dividends (2,800)
Dec. 31, 2017 $14,150
Consider a town in which only two residents, Bob and Cho, own wells that produce water safe for drinking. Bob and Cho can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water.
Price Quantity Demanded Total Revenue
(Dollars per gallon) (Gallons of water) (Dollars)
4.20 0 0
3.85 40 $154.00
3.50 80 $280.00
3.15 120 $378.00
2.80 160 $448.00
2.45 200 $490.00
2.10 240 $504.00
1.75 280 $490.00
1.40 320 $448.00
1.05 360 $378.00
0.70 400 $280.00
0.35 440 $154.00
0 480 0
Suppose Bob and Cho form a cartel and behave as a monopolist. The profit-maximizing __________price isper gallon, and the total output is__________gallons. As part of their cartel agreement, Bob and Cho agree to split production equally. Therefore, Bob's profit is__________, and Cho's profit is____________.
Suppose that Bob and Cho have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Bob says to himself, "Cho and I aren't the best of friends anyway. If I increase my production to 40 gallons more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow."
After Bob implements his new plan, the price of water ________ to__________per gallon. Given Cho and Bob's production levels, Bob's profit becomes________ and Cho's profit becomes___________. Because Bob has deviated from the cartel agreement and increased his output of water to 40 gallons more than the cartel amount, Cho decides that she will also increase her production to 40 gallons more than the cartel amount. After Cho increases her production, Bob's profit becomes__________, Cho's profit becomes_________, and total profit (the sum of the profits of Bob and Cho) is now____________.
Answer:
Suppose Bob and Cho form a cartel and behave as a monopolist. The profit-maximizing price is 2.10 per gallon, and the total output is 240 gallons. As part of their cartel agreement, Bob and Cho agree to split production equally. Therefore, Bob's profit is $252 and Cho's profit is $252.
Suppose that Bob and Cho have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Bob says to himself, "Cho and I aren't the best of friends anyway. If I increase my production to 40 gallons more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow."
After Bob implements his new plan, the price of water decreases to 1.75 per gallon. Given Cho and Bob's production levels, Bob's profit becomes 280 and Cho's profit becomes 210 . Because Bob has deviated from the cartel agreement and increased his output of water to 40 gallons more than the cartel amount, Cho decides that she will also increase her production to 40 gallons more than the cartel amount. After Cho increases her production, Bob's profit becomes 224 , Cho's profit becomes 224 , and total profit (the sum of the profits of Bob and Cho) is now 448.
Explanation:
Suppose Bob and Cho form a cartel and behave as a monopolist. The profit-maximizing price is 2.10 per gallon, and the total output is 240 gallons. As part of their cartel agreement, Bob and Cho agree to split production equally. Therefore, Bob's profit is $252 and Cho's profit is $252.
Suppose that Bob and Cho have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Bob says to himself, "Cho and I aren't the best of friends anyway. If I increase my production to 40 gallons more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow."
After Bob implements his new plan, the price of water decreases to 1.75 per gallon. Given Cho and Bob's production levels, Bob's profit becomes 280 and Cho's profit becomes 210 . Because Bob has deviated from the cartel agreement and increased his output of water to 40 gallons more than the cartel amount, Cho decides that she will also increase her production to 40 gallons more than the cartel amount. After Cho increases her production, Bob's profit becomes 224 , Cho's profit becomes 224 , and total profit (the sum of the profits of Bob and Cho) is now 448.
Two independent companies, Denver and Bristol, each own a warehouse, and they agree to an exchange in which no cash changes hands. The following information for the two warehouses is available:
Denver Bristol
Cost $80,000 $31,500
Accumulated depreciation 60,000 25,000
Fair value 17,000 17,000
Required:
1. Assuming the exchange has commercial substance, prepare journal entries for Denver and Bristol to record the exchange.
2. Assuming the exchange does not have commercial substance, prepare journal entries for Denver and Bristol to record the exchange.
Answer and Explanation:
The journal entries are shown below
1.
On Denver books
Equipment Dr $17,000
Accumulated depreciation $60,000
Loss on sale of equipment $3,000
To Equipment $80,000
(Being equipment recorded)
On Bristol books
Equipment Dr $17,000
Accumulated depreciation $25,000
To Gain on sale of equipment $10,500
To Equipment $31,500
(Being equipment recorded)
2.
On Denver books
Equipment Dr $20,000
Accumulated depreciation $60,000
To Equipment $80,000
(Being equipment recorded)
On Bristol books
Equipment Dr $6,500
Accumulated depreciation $25,000
To Equipment $31,500
(Being equipment recorded)
