Answer: informational question
Explanation:
The kind of question Abel asked baker is known as an informational question.
Informational questions are usually used by interviewers during an interview to get first hand informations from the individual being interviewed. This kind of information can be classified as a primary source as they are gotten directly from the person who has had the experience or involvement. Just like in the case of Baker he was asked the question because it’s believed he witnessed the development of the controls.
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2021 ($ in thousands): Sales revenue $ 24,000 Cost of goods sold $ 13,500 Interest revenue 220 Selling and administrative expense 3,100 Interest expense 420 Restructuring costs 1,400 In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.2 million and a gain on disposal of the component’s assets of $3.2 million. 600,000 shares of common stock were outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25% on all items of income (loss). Required: Prepare a multiple-step income statement for 2021, including EPS disclosures. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)
Answer:
Rembrandt Paint CompanyIncome Statement - December 31, 2021Sales revenues $24,000,000
- Cost of goods sold ($13,500,000)
Gross margin $10,500,000
Operating expenses:
- Selling and adm. expenses ($420,000)
- Restructuring costs ($1,400,000)
Total operating expenses ($1,820,000)
Income from operations $8,620,000
Other revenue and expenses:
Gain on sales of assets $3,200,000
Interest revenue $220,000
Loss from discontinued oper. ($2,200,000)
Interest expense ($420,000)
Total other revenue and expenses $800,000
Net income pre-tax $9,420,000
Income taxes (25%) ($2,355,000)
Net income after taxes $7,065,000
Shares outstanding 600,000
Earnings per share (EPS) $11.78
Crimson Inc. recorded credit sales of $779,000, of which $590,000 is not yet due, $110,000 is past due for up to 180 days, and $79,000 is past due for more than 180 days. Under the aging of receivables method, Crimson Inc. expects it will not collect 3% of the amount not yet due, 14% of the amount past due for up to 180 days, and 21% of the amount past due for more than 180 days. The allowance account had a debit balance of $3,500 before adjustment. After adjusting for bad debt expense, what is the ending balance of the allowance account
Answer:
$49,690 credit balance
Explanation:
total credit sales = $590,000
past due up to 180 days = $110,000
past due for more than 180 days = $79,000
Crimson expects to not collect:
3% of credit sales not due yet = $590,000 x 3% = $17,70014% of credit sales past due up to 180 days = $110,000 x 14% = $15,400 21% of credit sales past due for more than 180 days = $79,000 x 21% = $16,590total = $49,690Allowance for uncollectible amounts has $3,500 debit balance
the adjusting entry should be:
Dr Bad debt expense 53,190
Cr Allowance for uncollectible accounts 53,190
The ending balance = $53,190 - $3,500 = $49,690
Your firm runs a factory that currently produces only jump ropes. You forecast that you will generate $200,000 in after-tax operating cash flows from jump ropes next year. You are considering expanding to produce pogo sticks as well. If you produce pogo sticks then your projected after-tax operating cash flows from jump ropes will be $160,000 and you will have $50,000 in after-tax operating cash flows from pogo sticks.
What are the incremental cash flows that you should consider for this project?
Answer:
Incremental cash-flow $10,000
Explanation:
The incremental cash flow would be the difference between the cash flow before the expansion and after the expansion.
$
After tax cash flow from Jump before the decision 200,000
After tax cash flow from Jump after the decision 160,000
loss in cash flow ( 40,000)
add After tax cash flow from Pogo 50,000
Incremental cash-flow 10,000
Majer Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.2 ounces $ 4.00 per ounce $ 24.80 Direct labor 0.5 hours $ 17.00 per hour $ 8.50 Variable overhead 0.5 hours $ 4.00 per hour $ 2.00 The company reported the following results concerning this product in February. Originally budgeted output 4,900 units Actual output 5,000 units Raw materials used in production 30,200 ounces Actual direct labor-hours 2,080 hours Purchases of raw materials 32,600 ounces Actual price of raw materials $ 67.10 per ounce Actual direct labor rate $ 57.60 per hour Actual variable overhead rate $ 5.80 per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for February is:
Answer:
Variable overhead efficiency variance $1,680 Favorable
Explanation:
Variable overhead efficiency variance: Variable overhead efficiency variance aims to determine whether or not their exist savings or extra cost incurred on variable overhead as a result of workers being faster or slower that expected.
Since the variable overhead is charged using labour hours, any amount by which the actual labour hours differ from the standard allowable hours would result in a variance
Hours
5000 units should have taken (5000×0.5 hours) 2,500
but did take 2,080
Labour hours variance 420 favorable
Standard variable overhead rate ×$ 4.00 per hour
Variable overhead efficiency variance $1,680 Favorable
COST VOLUME PROFIT ANALYSIS Comfort Homeless Inc, a factory that produces beds for homeless shelters, is considering extending its production and introducing a new bed with ungraded features this upcoming spring season. The selling price for the each of the beds is $48. Currently, to produce the beds, Comfort Homeless Inc states it cost $22. The variable cost total $6, whereas month fixed costs are $16,000. Instructions: a. Calculate the breakeven point in units .(20 points) b. Comfort Homeless Inc. increases its selling price from $48 a bed to $49.95 a bed. Calculate the new breakeven points in units. (20 points) c. Find the new breakeven point in units if the cost to produce the beds will decrease to $19 each because a new supplier was found when purchasing the raw materials. (20 points) d. Comfort Homeless Inc. is considering selling mattresses. It only expects to sell one mattress for every bed it sells. Comfort Homeless Inc. can purchase the mattresses for $5 each and sell them for $9 each. Total fixed cost should remain the same at $16,000 per month. Calculate the breakeven point in units for beds and mattresses. (40 points)
Answer:
Instructions are below.
Explanation:
Giving the following information:
Selling price per unit= $48
Unitary variable cost= $6
Total fixed costs= $16,000
A)
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 16,000/ (48 - 6)
Break-even point in units= 381 units
B) Selling price= $49.95 a bedpoints
Break-even point in units= 16,000/ (49.95 - 6)
Break-even point in units= 364 units
C) Unitary variable cost= 6 - 3= 3
Break-even point in units= 16,000 / (48 - 3)
Break-even point in units= 356 units
D) Matresses= 1
Beds= 1
Proportions of sales:
Matreses= 0.5
Beds= 0.5
Selling price per matress= $9
Unitary variable cost= $5
Break-even point (units)= Total fixed costs / Weighted average contribution margin ratio
Weighted average contribution margin ratio= (weighted average selling price - weighted average unitary variable cost)
Weighted average contribution margin ratio= (0.5*9 + 0.5*48) - (0.5*5 + 0.5*6)
Weighted average contribution margin ratio= $23
Break-even point (units)= 16,000/23
Break-even point (units)= 696 units
A factory machine was purchased for $70,000 on January 1. It was estimated that it would have a $14,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the five years. If the actual number of machine hours ran in the first year was 4,000 hours and the company uses the units-of-activity method of depreciation, the amount of depreciation expense for year 1 would be
Answer:
$5600
Explanation:
The amount of depreciation expense for year 1
depreciation under the first year under units of activity method
[ (cost - salvage value) / estimated machine hours ] * actual machine hours worked in the first year
= [(70000 - 14000) / 40000 ] * 4000
= 56000 / 40000 ) * 4000
= 1.4 * 4000 = $5600 ( amount of depreciation expense for year 1 )
Chiasso Co. reported a retained earnings balance of $200,000 at December 31, 2020. In September 2021, Chiasso determined that insurance premiums of $30,000 for the three-year period beginning January 1, 2020, had been paid and fully expensed in 2020. Chiasso has a 25% income tax rate. What amount should C report as adjusted beginning retained earnings in its 2021 statement of retained earnings?
Answer:
$215,000
Explanation:
Retained Earning is an equity account and its balance is credit in nature. It is the accumulated balance of all the prior year's income / losses after paying all the dividend. This balance can be used for the dividend payment or reinvestment in the business.
Any prior years adjustment in the revenue and expense will be recorded in the retained earning because it carry the accumulated profit all the prior years.
The premium on insurance for only one year should be recorded, but premium of 3 years is expense in 2020, from which there is an advance premium of 2 years.
Adjustment Value = $30,000 x 2/3 x (1-0.25) = $15,000
The adjustment should be added in the retained earning balance as it was expensed earlier.
Adjusted retained earning balance = $200,000 + $15,000 = $215,000
(Ignore income taxes in this problem) The management of Serpas Corporation is considering the purchase of a machine that would cost $180,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $46,000 per year. The company requires a minimum pretax return of 13% on all investment projects. The net present value of the proposed project is closest to:
Answer:
-$18,207
Explanation:
Net present value is the Net value all cash inflows and outflows in present value term. All the cash flows are discounted using a required rate of return.
Net Present Value = Initial Investment + Present value of reduced Labor and other costs
Net Present value = -$180,000 + $46,000( 1 - ( 1 + 13% )^-5 / 13% )
Net Present value = -$180,000 + 161,793
Net Present value = -$18,207
Bramble Company purchased equipment on January 1, 2018 at a total invoice cost of $347000; additional costs of $5000 for freight and $32000 for installation were incurred. The equipment has an estimated salvage value of $11000 and an estimated useful life of five years. The amount of accumulated depreciation at December 31, 2019 if the straight-line method of depreciation is used is:__________
a. $153600.
b. $136400.
c. $134400.
d. $149200.
Answer:
d. $149200.
Explanation:
Depreciation is a method used in expensing the cost of an asset.
Deprecation expense using the straight line method = (Cost of asset - Salvage value) / useful life
Cost of asset = $347,000 + $5,000 + $32,000 = $384,000
( $384,000 - $11,000) / 5 = $74,600
Deprecation expense each year would be $74,600.
Accumulated depreciation in 2019 would be the sum of deprecation expense in 2018 and 2019
$74,600 × 2 = $149,200
I hope my answer helps you
Capacity management, denominator-level capacity concepts. Match each of the following numbered descriptions with one or more of the denominator-level capacity concepts by putting the appropriate letter(s) by each item:a) Theoretical capacity b) Practical capacity c) Normal capacity utilization d) Master-budget capacity utilization 1. Measures the denominator level in terms of what a plant can supply. 2. Is based on producing at full efficiency all the time.3. Represents the expected level of capacity utilization for the next budget period. 4. Measures the denominator level in terms of demand for the output of the plant. 5. Takes into account seasonal, cyclical, and trend factors. 6. Should be used for performance evaluation in the current year. 7. Represents an ideal benchmark. 8. Highlights the cost of capacity acquired but not used. 9. Should be used for long-term pricing purposes. 10. Hides the cost of capacity acquired but not used. 11. If used as the denominator-level concept, would avoid the restatement of unit costs when expected demand levels change?
Answer:
1. Theoretical and Practical capacity: Measures the denominator level in terms of what a plant can supply
2. Theoretical capacity: Is based on producing at full efficiency all the time.
3. Master-budget capacity utilization: Represents the expected level of capacity utilization for the next budget period.
4. Normal and Master-budget capacity: Measures the denominator level in terms of demand for the output of the plant.
5. Normal capacity utilization: Takes into account seasonal, cyclical, and trend factors.
6. Master-budget capacity utilization: Should be used for performance evaluation in the current year.
7. Theoretical capacity: Represents an ideal benchmark.
8. Theoretical and Practical capacity: Highlights the cost of capacity acquired but not used.
9. Master-budget capacity utilization: Should be used for long-term pricing purposes.
10. Normal and Master-budget capacity: Hides the cost of capacity acquired but not used.
11. Theoretical and Practical capacity: If used as the denominator-level concept, would avoid the restatement of unit costs when expected demand levels change.
Explanation:
Capacity is the maximum level of output that an organization can optimally sustain, to produce goods or provide service to meet it's customer demands.
The denominator-level capacity is a concept used under the capacity management. Denominator-level capacity concept is used to ascertain the capacity level that is considered for analyzing a production process or business operations. They are classified as follows;
i. Normal capacity utilization is based on the level of capacity utilization which satisfy the average customer demand periodically such as trend, cyclical and seasonal factors.
ii. Master-budget capacity utilization is based on the level of capacity expected for the current budget period, typically a year.
iii. Theoretical capacity is the denominator-level concept based on producing continuously at full efficiency.
iv. Practical Capacity is based on the level of capacity that involves unavoidable operating interruptions, such as scheduled equipment maintenance or repair time, holiday shutdowns etc.
A strategic plan is a carefully crafted set of steps that a firm intends to follow in order to be successful. The business model is a central element of a firm’s strategic plan and describes the process whereby a company hopes to earn profits and outperform the competition. The importance of an effective strategy cannot be overstated. With this in mind provide a substantive response to the questions below: Think about the best and worst companies you know. What is extraordinary (or extraordinarily bad) about these firms? Are their strategies clear and focused or difficult to define? Explain.
Answer:
A business model integrated with the well-developed and analytical strategic plan is essential for any company that plans to achieve market position, without these two tools it is impossible for a company to survive in the highly competitive market in the long term.
It is through the business model and strategic planning that the company identifies itself, outlines its mission, values and action plans to achieve the objectives.
The most successful companies in the world are well-organized companies, who know what direction they want to go, their identity, their strengths and weaknesses, their competitors, etc.
A company with clear and focused strategies is Apple, one of the largest technology companies in the world, which strategically sought to become the most important company in the world, therefore it developed innovative products that revolutionized the market and made the company a reference in the manufacture of cell phones, computers and electronic devices. Apple has created a value and consumer identity proposition for its products that was only possible thanks to analytical strategic decisions envisaged through effective planning.
Sizzlin' Shine is a company that uses trained detailing professionals to apply wax to automobiles by hand and utilize mechanical polishing equipment. Because what Sizzlin' Shine provides cannot be touched, seen, or felt in the same manner as an automobile part such as a tire, what is considered?
Answer:
b) intangible
Explanation:
In the scenario described above, the company Sizzlin 'Shine offers services through professionals trained to apply wax in automobiles and use mechanical polishing equipment.
An intangible service is one that cannot be touched, seen or felt as a tangible asset, therefore there is no possibility of experiencing the service before it is rendered.
However, there are some ways for service providers to demonstrate their credibility and quality, through the use of trained personnel, marketing communication, symbols, references, and other elements that help to attest their efficiency and to improve the perception of the target audience. regarding the services provided.
The following materials standards have been established for a particular product: Standard quantity per unit of output 5.3 pounds Standard price $ 14.10 per pound The following data pertain to operations concerning the product for the last month: Actual materials purchased 6,150 pounds Actual cost of materials purchased $ 63,780 Actual materials used in production 5,650 pounds Actual output 790 units The direct materials purchases variance is computed when the materials are purchased. What is the materials quantity variance for the month?The following materials standards have been established for a particular product: Standard quantity per unit of output 5.3 pounds Standard price $ 14.10 per pound The following data pertain to operations concerning the product for the last month: Actual materials purchased 6,150 pounds Actual cost of materials purchased $ 63,780 Actual materials used in production 5,650 pounds Actual output 790 units The direct materials purchases variance is computed when the materials are purchased. What is the materials quantity variance for the month?
Answer:
Direct material quantity variance= $20,628.3
Explanation:
Giving the following information:
Standard quantity per unit of output 5.3 pounds
Standard price $14.10 per pound
Actual materials used in production 5,650 pounds
Actual output 790 units
To calculate the direct material quantity variance, we need to use the following formula.
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (5.3*790 - 5,650)*14.1
Direct material quantity variance= $20,628.3
Martin Services Company provides its employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $49,000 for the period. The pension plan requires a contribution to the plan administrator equal to 6% of employee salaries. Salaries were $500,000 during the period. a. Provide the journal entry for the vacation pay. b. Provide the journal entry for the pension benefit.
Answer:
a. Provide the journal entry for the vacation pay
Debit Vacation and Holiday expense $49,000
Credit Vacation and Holiday payable $49,000
(To record earned Vacation and Holiday expenses)
b. Provide the journal entry for the pension benefit
Debit Pension expense $30,000
Credit Pension liability $30,000
(Being pension benefit recognition)
Explanation:
The earned vacation and holiday expense has to be recognized in line with the accrual principle of accounting.The pension benefit was also recognized in line with the accrual principle of account. The pension plan is a contribution of 6% of employee salaries, which amounted to $500,000. So, 0.06 x 500,000 = $30,000.Sheffield Co. is building a new hockey arena at a cost of $2,630,000. It received a downpayment of $520,000 from local businesses to support the project, and now needs to borrow $2,110,000 to complete the project. It therefore decides to issue $2,110,000 of 12%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 11%. Sheffield paid $50,000 in bond issue costs related to the bond sale.
Required:
(a) Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 2019.
(b) Prepare a bond amortization schedule up to and including January 1, 2023, using the effective-interest method.
Answer:
Explanation:
a.
Prepare the journal entry to record the issuance of the bonds on January 1, 2019.
Accounting homework question answer, step 1, image 1
Accounting homework question answer, step 1, image 2
Step 2
b.
Prepare a bond amortization schedule up to and including January 1, 2023, using the effective-interest method.
The file attached below has the calculations
What accounting assumption, principle, or constraint would Target Corporation use in each of the situations below? (a) Target was involved in litigation over the last year. This litigation is disclosed in the financial statements. select an option (b) Target allocates the cost of its depreciable assets over the life it expects to receive revenue from these assets. select an option (c) Target records the purchase of a new Dell PC at its cash equivalent price. select an option
Answer:
a. ASC 450 (previously recognized as SFAS 5) includes the declaration of a risk in proceedings and there is at minimum a "fair probability" that a loss has been sustained, and the report must provide an estimation of the probable damage or extent of damage or a declaration that this very calculation is not practicable.
b. Three specific criteria dictate however much depreciation they can subtract: (1) the real estate value, (2) the property rehabilitation time and (3) the form of depreciation utilized. You can't actually subtract as an benefit the lease or interest contributions, or the cost of furniture, decorations and appliances. The depreciation will only be deducted on the specific property used during leasing purposes.
c. For overclockers as well as operation in the federation the Computer is still the obvious winner. If you want to change hardware to maintain the cutting edge of your program, then a Laptop is the way forward. Further software must be installed for the PC like a large and ever-growing free software computer collection. Even so, thanks to an embedded tool named "Boot camp," you can install a Windows ® operating system on a Mac along with PC applications
Schwiesow Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.05 Direct labor $ 3.50 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 11,000 Sales commissions $ 1.00 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 5,500 If the selling price is $18.70 per unit, the contribution margin per unit sold is closest to:
Answer:
The contribution margin per unit is $5.1
Explanation:
The contribution margin per unit is the amount from selling price per unit after deducting all the related variable costs per unit. This is the amount that each product contributes towards covering the fixed costs.
Contribution margin per unit:
Selling price per unit 18.7
Less : Variable cost per unit
Direct material (7.05)
Direct labor (3.5)
Variable manufacturing Overhead (1.65)
Sales commission (1.00)
Variable Admin expense (0.40)
Contribution margin per unit 5.1
A consumer values a house at $525,000 and a producer values the same house at $485,000. If the transaction is completed at $510,000, the transaction will generate: a. No surplus b. $25,000 worth of seller surplus and unknown amount of buyer surplus c. $15,000 worth of buyer surplus and $25,000 of seller surplus d. $25,000 worth of buyer surplus and unknown amount of seller surplus
Answer:
c. $15,000 worth of buyer surplus and $25,000 of seller surplus
Explanation:
Consumer surplus is the different between the value a consumer places on a product and the price of the product.
Consumer surplus = value of the product - price of the product
$525,000 - $510,000 = $15,000
Producer surplus is the difference between the price and the least price the seller is willing to sell his product.
Producer surplus = price - least price the seller is willing to sell his product
$510,000 - $485,000 = $25,000
I hope my answer helps you
Robert has a passion for making ice cream. Assume that ice cream parlors have a market structure of monopolistic competition. Between the local Amy's, Cold Stone Creamery, Marble Slab, Ben & Jerry's, and Baskin Robbins, he has an uphill battle to break into the local ice cream market. Determine which suggestions below might help Robert differentiate his ice cream shop, JubJub's, so that he can garner some market power.
Select all of the following ideas that will help differentiate JubJub's from the other ice cream parlors.
1. Changes his menu to include only the exact flavors of his competitors, including the ice cream flavor names.
2. Open JubJub's next to "The Triangle, " an area with an elementary school, a middle school, and a high school less than 5 minutes away.
3. Make ice cream using fresh organic milk and fruit, something none of the other competitors are doing.
4. Price ice cream at JubJub's to appeal to the luxury crowd - $100 a scoop.
Answer:
The Ideas that will assit the JubJub's to diffrentiate from other icecream parlors are "2, 3 and 4"
Explanation:
Individual Robert can utilize Customer focusing on that pull specifically cates.ory of client and make advantage by lessening the opposition. Individual R can pick Location inclinations system under which he picks an area where he can draw in the potential purchasers or he can utilize one of a kind items to pull in individuals and separate items from contenders will give him showcase power.
Answer:
2. Open JubJub's next to "The Triangle, " an area with an elementary school, a middle school, and a high school less than 5 minutes away.
3. Make ice cream using fresh organic milk and fruit, something none of the other competitors are doing.
4. Price ice cream at JubJub's to appeal to the luxury crowd - $100 a scoop.
Explanation:
The following ideas that will help differentiate JubJub's from the other ice cream parlors:
Open JubJub's next to "The Triangle, " an area with an elementary school, a middle school, and a high school less than 5 minutes away. Make ice cream using fresh organic milk and fruit, something none of the other competitors are doing. Price ice cream at JubJub's to appeal to the luxury crowd - $100 a scoop.Individual Robert can utilize Customer focusing on that pull specifically catesgory of client and make advantage by lessening the opposition.Thus , the correct answer is 2,3 and 4.
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Morrish Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 7,100 direct labor-hours will be required in January. The variable overhead rate is $1.80 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $102,950 per month, which includes depreciation of $19,880. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Answer:
$95,850
Explanation:
To calculate cash disbursements for manufacturing overhead:
Direct labor cost + Fixed manufacturing overhead
where,
direct labor cost = Direct labor hours × per labor rate
= $7,100 x $1.8 =
$12,780
Budgeted fixed manufacturing overhead - depreciation
102,950 - 19880 =
Direct labor cost + Fixed manufacturing overhead =
$83,070 + $12,780
= $95,850
The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be $95,850
Answer:
The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be $95,850
Explanation:
In order to calculate the the January cash disbursements for manufacturing overhead on the manufacturing overhead budget we would have to use the following formula:
Total cash disbursement for overhead in January =Variable overhead+Cash portion of fixed manufacturing overhead
Variable overhead = 7,100 direct labor-hours × $1.80 = $12,780
Cash portion of fixed manufacturing overhead = $102,950 - $19,880 = $83,070
Therefore, Total cash disbursement for overhead in January = $12,780 + $83,070
Total cash disbursement for overhead in January =$95,850
The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be $95,850
Garison Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Garison uses two sales promotion techniques— warranties and premiums— to attract customers.
Below is the information to answer the required question.
a. Musical instruments and sound equipment are sold with a one- year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 2% of sales.
b. The premium is offered on the recorded and sheet music. Customers receive a coupon for each dollar spent on recorded music or sheet music. Customers may exchange 200 coupons and $ 20 for a CD player. Garison pays $ 32 for each CD player and estimates that 60% of the coupons given to customers will be redeemed.
c. Garison’s total sales for 2010 were $ 7,200,000—$ 5,700,000 from musical instruments and sound reproduction equipment and $ 1,500,000 from recorded music and sheet music.
d. Replacement parts and labor for warranty work totaled $ 164,000 during 2010.
e. A total of 6,500 CD players used in the premium program were purchased during the year and there were 1,200,000 coupons redeemed in 2010.
f. The accrual method is used by Garison to account for the warranty and premium costs for financial reporting purposes.
The balances in the accounts related to warranties and premiums on January 1, 2010, were as shown below.
Inventory of Premium CD Players $ 37,600
Estimated Premium Claims Outstanding 44,800
Estimated Liability from Warranties 136,000
Question:
(a) Garison Music Emporium is preparing its financial statements for the year ended December 31, 2010. Determine the amounts that will be shown on the 2010 financial statements for the following.
(1) Warranty Expense -
(2) Estimated Liability from Warranties -
(3) Premium Expense -
(4) Inventory of Premium CD Players -
(5) Estimated Premium Claims Outstanding -
Answer:
Explanation:
(a)
Given:
Warranty exp = 2% of musical instrument & sound equipment
Calculation:
Warranty exp = Warranty exp * 5,424,000
Warranty exp = 2% * 5,424,000
Warranty exp = 108,480
(b)
Warranty liability as on December 2017 = Opening Balance + Warranty Expense - Warranty Claim
Warranty liability as on December 2017 = 138,000 + 108,480 - 156,400
Warranty liability as on December 2017 = $90,080
(c)
The customer receives one coupon for each dollar spend 2,138,000 only 50% coupon will be redeemed.
Exp provision liability created = 50% * 2,138,000
Exp provision liability created = 1,069,000
Customer can exchange 200 coupon & $30 for MP3 player which is purchase for 42 that mean 200 coupon will be for 12 i.e. (42-30) value of coupon will be
12
200
= 0.06.
Value of 1,069,000 coupon = 1,069,000 * 0.06
Value of 1,069,000 coupon = 64,140
(d)
1,138,000 coupons had been redeemed during the year each MP3 player required 200 coupons.
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Cost = 5,690 * 42
Cost = 238,980
Inventory Premium = Opening Balance + Purchases - Utilized Redeemed Coupon
Inventory Premium = 39,210 + (7,010 * 42) - 238,980
Inventory Premium = 39,210 + 294,420 - 238,980
Inventory Premium = $94,650
(e)
Premium liability balance = Opening Balance + Premium Exp Provision - Coupon Redeemed
Premium liability balance = 41,670 + 64,140 - (1,138,000 * 0.06)
Premium liability balance = 41,670 + 64,140 - 68,280
Premium liability balance = 37,530
In this assignment, you will develop a more personalized understanding of the Balanced Scorecard concept and see how your vision and mission can be linked to your goals and objectives. Using the S-M-A-R-T tools in section 6.7 of Chapter 6 in the text, create your own list of goals and objectives.
Create 4 to 5 S-M-A-R-T goals and objectives and demonstrate how they link to your Strategy Diamond and personal vision and mission statements.
Explanation:
The following are my SMART goals:-
Specific
1. I want to be physically fit within 6 months on order to be able to run a marathon in less than 3 hours.
2. I want to become a manager in my current organization from my current position as an assistant manager within the next 3 years in order to be able lead a team.
3. I want to be a lovable dad to my daughter in the next 3 months so that I can spend more quality time with her.
4. I want to become an amazing husband to my wife by spending more quality time with her and also taking her on vacations in the next 6 months.
Measurable
1. I would start my training from next week. Initially I would run 3 to 5 kilometers with walk breaks.
2. I would talk to my boss next week to ask for more responsibilities and also to ask him to let me know what is required to get promoted.
3. I would start leaving office early by being more efficient and effective in the office. I will also take my daughter on walks and play with her for 1 hour daily.
4. I would come back from office early and spend time with my wife.
Attainable
1. I will talk to other marathoners to know whether my goal is attainable and will also research about it.
2. I will talk to my colleagues whom are managers about what they did to get promoted.
3. I will talk to other dads to know whether my goal is attainable.
4. I will talk to other husbands that are successful.
Realistic
When I start measuring my progress weekly and getting a feedback from people whom I admire, then I would know how realistic my goals are.
Timely
I have given a time frame for the attainment of all these goals which is very vital.
For implementing these goals, I m going to use the Plan-Do-Act-Dare cycle.
Since my objective is to become a well rounded person in my personal and also my professional life, the above steps will surely help me in becoming that person.
The strategy diamond will consist of:-
1. Arenas- Professional and Personal
2. Vehicles- Focus and hard work
3. Differentiation- Being different and unique from others.
4. Staging- Speed of initiatives
Also, there should be an economic logic binding this.
Mcfarlain Corporation is presently making part U98 that is used in one of its products. A total of 18,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $ 4.70 Direct labor $ 4.20 Variable overhead $ 1.70 Supervisor's salary $ 5.10 Depreciation of special equipment $ 5.10 Allocated general overhead $ 5.50 An outside supplier has offered to produce and sell the part to the company for $22.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition to the facts given above, assume that the space used to produce part U98 could be used to make more of one of the company's other products, generating an additional segment margin of $73,100 per year for that product. What would be the financial advantage (disadvantage) of buying part U98 from the outside supplier and using the freed space to make more of the other product
Answer:
company's net profit will decrease by $54,700
Explanation:
the avoidable costs of producing part U98 are:
direct materials = $4.70direct labor = $4.20variable overhead = $1.70supervisor's salary = $5.10total cost per unit = $15.70avoidable cost of producing 18,000 units = 18,000 x $15.70 = $282,600
depreciation of special equipment and fixed overhead costs are not avoidable.
revenue generated by using the spare plant area = $73,100
total relevant savings and additional revenue = $355,700
if you purchase the product from a vendor, total costs will be:
purchase price = 18,000 x $22.80 = $410,400
Since the total cost of purchasing the parts is higher than the relevant savings and additional revenue, then the company's net profit will decrease by = $410,400 - $355,700 = $54,700
Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales $ 600,000 Variable expenses $ 241,000 Fixed manufacturing expenses $ 232,000 Fixed selling and administrative expenses $ 180,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $192,500 of the fixed manufacturing expenses and $107,500 of the fixed selling and administrative expenses are avoidable if product D14E is discontinued. Required: a. According to the company's accounting system, what is the net operating income earned by product D14E
Answer:
$127,000
Explanation:
Suire Corporation Net operating income
Sales $ 600,000
Variable Costs $ 241,000
Contribution Margin $ 359,000
Fixed Expenses $232,000
Net Operating Income $127,000
The Red Wolf Society, a nongovernmental not-for-profit organization, receives numerous contributed hours from volunteers during its busy season. Tom, a clerk at the local government utility’s office, volunteered ten hours per week for 8 weeks transferring wolf food from the port to the wolf shelter. His rate of pay at the utility office is $20 per hour, and the prevailing wage rate for laborers is $15 per hour. What amount of contribution revenue should Red Wolf Society record for this service? Multiple Choice $1,200 $400 $1,600 $0
Answer:
$1,600
Explanation:
Revenue is recognized as and when the control of a good or service is transferred to the customer.
Total Hours = 10 hours × 8 weeks
= 80 hours
Use the rate of pay at the utility office to determine the contribution revenue for Red Wolf Society
Revenue = 80 hours × $20 per hour
= $1,600
Paolucci Corporation's relevant range of activity is 8,400 units to 17,000 units. When it produces and sells 12,700 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.10 Direct labor $ 4.00 Variable manufacturing overhead $ 2.00 Fixed manufacturing overhead $ 3.60 Fixed selling expense $ 1.30 Fixed administrative expense $ 0.60 Sales commissions $ 1.25 Variable administrative expense $ 0.50 If 11,700 units are sold, the variable cost per unit sold is closest to:
Answer:
The variable cost per unit sold is closest to $14.85
Explanation:
In order to calculate the variable cost per unit sold we would have to use the following formula:
Total variable cost per unit=(Direct materials+Direct labor+Variable manufacturing overheads+Sales commissions+Variable adminsitrative expenses)
Therefore,Total variable cost per unit=$7.10+$4.00+$2.00+$1.25+$0.50
Total variable cost per unit=$14.85
The variable cost per unit sold is closest to $14.85
19. Jay is a member of Klondike Coffee, LLC, a limited liability company. Jay is liable for Klondike's debts a. in proportion to the total number of members. b. to the extent of his investment in the firm. c. to the extent that the other members do not pay the debts. d. to the full extent.
Answer: . b. to the extent of his investment in the firm.
Explanation:
In a Limited Liability Company, the legal characteristics of the company is that the owners be liable for debts only up to the amount of capital that they invested. That is where the name comes from because the liability that the owners can take on are limited.
For instance, if in the above scenario Klondike went bankrupt and owed people $3,000. If all Jay had invested was $1,000, the maximum amount that can be taken from Jay is his $1,000 capital and nothing more.
The balance sheets for Plasma Screens Corporation and additional information are provided below. PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets: Cash $ 242,000 $ 130,000 Accounts receivable 98,000 102,000 Inventory 105,000 90,000 Investments 5,000 3,000 Long-term assets: Land 580,000 580,000 Equipment 890,000 770,000 Less: Accumulated depreciation (528,000 ) (368,000 ) Total assets $ 1,392,000 $ 1,307,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 109,000 $ 95,000 Interest payable 7,000 13,000 Income tax payable 9,000 6,000 Long-term liabilities: Notes payable 110,000 220,000 Stockholders' equity: Common stock 800,000 800,000 Retained earnings 357,000 173,000 Total liabilities and stockholders' equity $ 1,392,000 $ 1,307,000 Additional information for 2021: Net income is $184,000. Sales on account are $1,890,000. Cost of goods sold is $1,394,250. Required: 1. Calculate the following risk ratios for 2021:
Answer and Explanation:
The risk ratios are calculated below:
1. Account Receivable Turnover
= Net credit Sales ÷ Average Accounts Receivable
= $1,890,000 ÷ (($98,000 + $102,000) ÷ 2)
= $1,890,000 ÷ $100,000
= 18.9 times
It shows the relation between the net credit sales and the average account receivable
2. Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
= $1394250 ÷ (($105,000 + $90,000) ÷ 2)
= $1,394,250 ÷ $97,500
= 14.3 times
It shows the relation between the cost of goods sold and the average inventory
c. Current Ratio = Current assets ÷ Current Liabilities
= ($242,000 + $98,000 + $105,000 + $5,000) ÷ ($109,000 + $7,000 + $9,000)
= $450,000 ÷ $125,000
= 3.6 times
It shows the relation between the current assets and the current liabilities
d. Acid Test Ratio = Liquid assets ÷ Current Liabilities
= ($450,000 - $105,000) ÷ ($125,000 )
= $345,000 ÷ $125,000
= 2.76 times
It shows the relation between the liquid assets which do not involved prepaid assets, inventory, etc and the current liabilities
e. Debt to Equity = Debt ÷ Equity
= ($109,000 + $7,000 + $9,000 + $110,000) ÷ ($800,000 + $357,000 )
= $235,000 ÷ $1,157,000
= 0.203
It shows the relation between the debt and equity
1. Account Receivable Turnover
= Net credit Sales ÷ Average Accounts Receivable
= $1,890,000 ÷ (($98,000 + $102,000) ÷ 2)
= $1,890,000 ÷ $100,000
= 18.9 times
It represents the relationship between the net credit sales and the average account receivable.
2. Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
= $1394250 ÷ (($105,000 + $90,000) ÷ 2)
= $1,394,250 ÷ $97,500
= 14.3 times
It represents the relationship between the cost of goods sold and the average inventory.
c. Current Ratio = Current assets ÷ Current Liabilities
= ($242,000 + $98,000 + $105,000 + $5,000) ÷ ($109,000 + $7,000 + $9,000)
= $450,000 ÷ $125,000
= 3.6 times
It represents the relationship between the current assets and the current liabilities.
d. Acid Test Ratio = Liquid assets ÷ Current Liabilities
= ($450,000 - $105,000) ÷ ($125,000 )
= $345,000 ÷ $125,000
= 2.76 times
It represents the relationship between the liquid assets in which it does include prepaid assets, inventory, etc and the current liabilities.
e. Debt to Equity = Debt ÷ Equity
= ($109,000 + $7,000 + $9,000 + $110,000) ÷ ($800,000 + $357,000 )
= $235,000 ÷ $1,157,000
= 0.203
It represents the relationship between the debt and equity.
Learn more: brainly.com/question/19682087
According to the Air Transport Association of America, the average operating cost of an MD-80 jet airliner is $2,087 per hour. Suppose the operating costs of an MD-80 jet airliner are normally distributed with a standard deviation of $174 per hour. (Round the value of z to 2 decimal places. Round your answers to 2 decimal places.) (a) At what operating cost would only 23% of the operating costs be less? $Entry field with correct answer 1958.44 (b) At what operating cost would 65% of the operating costs be more? $Entry field with correct answer 2019.95 (c) What operating cost would be more than 85% of operating costs ?
Answer:
(a)$1955
(b)$2017.19
(c)$2273.16
Explanation:
Check attachment
Method A assumes simple interest over final fractional periods, while Method B assumes simple discount over final fractional periods. The annual effective rate of interest is 20%. Find the ratio of the present value of a payment to be made in 1.5 years computed under method A to that computed under Method B.
Answer:
The answer is "1.1"
Explanation:
In the case of a single Interest, the principal value is determined as follows:
[tex]\ I = Prt \\\ A = P + I\\A = P(1+rt) \\\\A = amount \\P= principle\\r = rate\\t= time[/tex]
In case of discount:
[tex]D = Mrt \\P = M - D \\P = M(1-rt)\\\\Where, D= discount \\M =\ Maturity \ value \\[/tex]
Let income amount = 100, time = 1.5 years, and rate =20 %.
Formula:
A = P(1+rt)
A =P+I
by putting vale in the above formula we get the value that is = 76.92, thus method A will give 76.92 value.
If we calculate discount then the formula is:
P = M(1-rt)
M = 100 rate and time is same as above.
[tex]P = 100(1-0.2 \times 1.5) \\P = 100 \times \frac{70}{100} \\P = 70[/tex]
Thus Method B will give the value that is 70
calculating ratio value:
[tex]ratio = \frac{\ method\ A \ value} {\ method \ B \ value}\\\\\Rightarrow ratio = \frac{76.92}{70}\\\\\Rightarrow ratio = \frac{7692}{7000}\\\\\Rightarrow ratio = 1.098 \ \ \ \ or \ \ \ \ 1.[/tex]
