Answer: the market supply to shift inward, driving the equilibrium price higher.
Explanation:
An increase in input prices will result into a rise in the production costs. This will result in a leftward shift of the supply curve.
Therefore, the market supply will shift inward, driving the equilibrium price higher. This simply means that there will be lesser supply of the product and hence, increase in price.
Listed below are transactions that might be reported as investing and/or financing activities on a statement of cash flows. Possible reporting classifications of those transactions are provided also.
Required:
Indicate the reporting classification of each transaction by entering the appropriate classification code. (The first item is provided as an example.)
Classifications
+ I Investing activity (cash inflow)
– I Investing activity (cash outflow)
+ F Financing activity (cash inflow)
– F Financing activity (cash outflow)
N Noncash investing and financing activity
X Not reported as an investing and/or a financing activity
Classifications Transactions
+I 1. Sale of land.
2. Issuance of common stock for cash.
3. Purchase of treasury stock.
4. Conversion of bonds payable to common stock.
5. Lease of equipment.
6. Sale of patent.
7. Acquisition of building for cash.
8. Issuance of common stock for land.
9. Collection of note receivable (principal amount).
10. Issuance of bonds.
11. Issuance of stock dividend.
12. Payment of property dividend.
13. Payment of cash dividends.
14. Issuance of short-term note payable for cash.
15. Issuance of long-term note payable for cash.
16. Purchase of marketable securities ("available for sale").
17. Payment of note payable.
18. Cash payment for five-year insurance policy.
19. Sale of equipment.
20. Issuance of note payable for equipment.
21. Acquisition of common stock of another corporation.
22. Repayment of long-term debt by issuing common stock.
23. Payment of semiannual interest on bonds payable.
24. Retirement of preferred stock.
25. Loan to another firm.
26. Sale of inventory to customers.
27. Purchase of marketable securities (cash equivalents).
Answer:
Investing Activities refer to cashflow activities that have to do with Fixed assets as well as the ownership of the securities of other companies.
Financing Activities refer to cashflow activities that have to do with how the company sources funds for the company so this includes Equity related activities and long term liabilities.
1. Sale of land. +I
2. Issuance of common stock for cash. +F
3. Purchase of treasury stock. -F
4. Conversion of bonds payable to common stock. N
5. Lease of equipment. N
6. Sale of patent. +I
7. Acquisition of building for cash. -I
8. Issuance of common stock for land. N
9. Collection of note receivable (principal amount). +I
10. Issuance of bonds. +F
11. Issuance of stock dividend. X
12. Payment of property dividend. X
13. Payment of cash dividends. -F
14. Issuance of short-term note payable for cash. +F
15. Issuance of long-term note payable for cash. +F
16. Purchase of marketable securities ("available for sale"). -I
17. Payment of note payable. -F
18. Cash payment for five-year insurance policy. X
19. Sale of equipment. +I
20. Issuance of note payable for equipment. N
21. Acquisition of common stock of another corporation. -I
22. Repayment of long-term debt by issuing common stock. N
23. Payment of semiannual interest on bonds payable. X
24. Retirement of preferred stock. -F
25. Loan to another firm. -I
26. Sale of inventory to customers. X
27. Purchase of marketable securities (cash equivalents). X
Please see appropriate classification below.
+ I Investing activity (cash inflow)
1. Sale of land. +I
6. Sale of patent. +I
9. Collection of note receivable (principal amount). +I
19. Sale of equipment. +I
– I Investing activity (cash outflow)
7. Acquisition of building for cash. -I
16. Purchase of marketable securities ("available for sale"). -I
21. Acquisition of common stock of another corporation. -I
25. Loan to another firm. -I
+ F Financing activity (cash inflow)
2. Issuance of common stock for cash. +F
10. Issuance of bonds. +F
14. Issuance of short-term note payable for cash. +F
15. Issuance of long-term note payable for cash. +F
– F Financing activity (cash outflow)
3. Purchase of treasury stock. -F
13. Payment of cash dividends. -F
17. Payment of note payable. -F
24. Retirement of preferred stock. -F
N Noncash investing and financing activity
4. Conversion of bonds payable to common stock. N
5. Lease of equipment. N
8. Issuance of common stock for land. N
20. Issuance of note payable for equipment. N
22. Repayment of long-term debt by issuing common stock. N
X Not reported as an investing and/or a financing activity
11. Issuance of stock dividend. X
12. Payment of property dividend. X
18. Cash payment for five-year insurance policy. X
23. Payment of semi-annual interest on bonds payable. X
26. Sale of inventory to customers. X
27. Purchase of marketable securities (cash equivalents). X
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It is important negotiators consider the shadow negotiation carefully before meeting with the other party so they:________
a. understand where the boundaries of the current negotiations are and should be.
b. are clear in their own minds about the scope of the negotiations.
c. understand how they would ideally like to work with the other party.
d. determine what ground the negotiation is going to cover and how the negotiators are going to work together.
e. understand that all the above are important to the shadow negotiations.
Answer:
b. are clear in their own minds about the scope of the negotiations.
Explanation:
Shadow negotiations refer to the unspoken assumptions that determine how those involved in a deal with each other, whose opinions get heard, whose interests hold sway. Therefore, this is important so the negotiators are clear in their own minds about the scope of the negotiations. Meaning that they go into the negotiation knowing who has more bargaining power and how far they can actually take the negotiation.
Income statement.
Use the data from the following financial statement in the popup window, Complete the partial income statement if the company paid interest expense of $18,100 for 2014 and had an overall tax rate of 40% for 2014. Complete the income statement below:
(Round to the nearest dollar.)
Income Statement Year Ending 2014
Sales revenue $360,000
Cost of goods sold $150,000
Fixed costs $42,900
Selling, general, and administrative expenses $27,200
Depreciation $45,900 EBIT $
Interest expense $ 18100
Taxable income $
Taxes $
Net income $
Find the accumulated depreciation for 2014 first.
The accumulated depreciation for 2014 is:_____(Round to the nearest dollar.)
Answer:
Income Statement Year Ending 2014
Sales revenue $360,000
Cost of goods sold $150,000
Gross profit $210,000
Fixed costs $42,900
Selling, general, and
administrative expenses $27,200
Depreciation $45,900
EBIT $94,000
Interest expense $18,100
Taxable income $ 75,900
Taxes $ 30,360
Net income $ 45,540
Find the accumulated depreciation for 2014 first.
The accumulated depreciation for 2014 is:_$45,900____(Round to the nearest dollar.)
Explanation:
A company's income statement is one of the three financial statements prepared by the entity at the end of its fiscal period. The statement compares the company's revenue with the expenses. After deducting the total expenses from the total revenue, the net income or loss is obtained. But before arriving at the net income or loss, there are other profit points that are usually calculated. The first is the gross profit, which is the difference between the sales revenue and the cost of goods sold. It shows the ability of the management to generate enough revenue to cover the cost of goods sold and make a profit from its trading or primary activities.
The next profit point is the Earnings before Interests and Taxes (EBIT). This is an important index for checking the financial performance of a company. The next is the Taxable Income on which the tax rate is determined and paid to government as Company Income Tax. After deducting the tax expense from the pre-tax income, the final profit point is the After-Tax Income or the Net Income. This determines the dividends policy and the share of retained earnings of the entity.
Mogul Company ships merchandise to Ski Outfit in a consignment arrangement. The arrangement specifies that Ski Outfit will attempt to sell the merchandise, and in return, Mogul will pay to Ski Outfit a commission of 25% of the selling price on any merchandise sold. During the year, Mogul ships inventory with a cost of $81,000 to Ski Outfit and pays shipping costs of $8,700. By the end of the year, $61,000 of the merchandise has been sold to customers for a total of $86,000. Mogul allocates $6,500 of the shipping costs to inventory sold and the other $2,200 to inventory not sold. Mogul also paid advertising costs during the year of $10,500. What amount of inventory will Mogul report at year end
Answer:
$22,200
Explanation:
With regards to the above information Mogul company,
Cost of goods
= $81,000 + $8,700
= $89,700
= $61,000 + $6,500
= $67,500
Inventory = Cost of goods - Cost of goods sold
= $89,700 - $67,500
= $22,200
It therefore means that the amount of inventory Magu company will report at the year end is $22,200
What is the beta for a company with a 12% expected return, while treasury bills are yielding 5% and the market risk premium is 7%
Answer:
The beta for the company is 1.
Explanation:
A beta is the measure of systematic risk associated to a stock or the portfolio. Systematic risk is the market risk that affects all the stocks in the market due to factors that are uncontrollable. Such a risk is what the companies compensate the investors for. Using the CAPM equation, we calculate the expected rate of return of a stock. The equation is,
r = rRF + Beta * rpM
Where,
rRF is the risk free raterpM is the risk premium on marketWe already have the values for r, rRF and rpM. Plugging them in the formula, we calculate the beta to be,
0.12 = 0.05 + Beta * 0.07
0.12 - 0.05 = Beta * 0.07
0.07/ 0.07 = Beta
Beta = 1
hi , what is third-party companies??? thank
Answer:
A 'third party', is any entity that a company does business with. This may include suppliers, vendors, contract manufacturers, business partners and affiliates, brokers, distributors, resellers, and agents.
eally Great Corporation manufactures industrial−sized landscaping trailers and uses budgeted machine−hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: Budgeted output units 51,000 units Budgeted machine−hours 10,200 hours Budgeted variable manufacturing overhead costs for 51,000 units $387,600 Actual output units produced 35,750 units Actual machine−hours used 14,300 hours Actual variable manufacturing overhead costs $328,900 What is the budgeted variable overhead cost rate per output unit?
Answer:
$7.60 per unit of output
Explanation:
Budgeted output units 51,000 units
Budgeted machine−hours 10,200 hours
Budgeted variable manufacturing overhead costs for 51,000 units $387,600
budgeted variable overhead cost per unit of output = $387,600 / 51,000 units = $7.60 per unit of output
In this case, the applied variable overhead rate = 35,750 units x $7.60 = $271,700, which would have been under-applied since the actual variable overhead costs were much higher, $328,900.
One Step, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 27 years to maturity that is quoted at 105 percent of face value. The issue makes semiannual payments and has a coupon rate of 4 percent.
Requried:
a. What is the company's pretax cost of debt?
b. If the tax rate is 23 percent, what is the aftertax cost of debt?
Answer:
Before tax cost of debt=3.72%
After-tax cost of debt =2.87 %
Explanation:
The yield to maturity to Maturity van be worked out using the formula below:
YM =( C + F-P/n) ÷ ( 1/2× (F+P))
C- annual coupon,
F- face value ,
P- current price,
n- number of years to maturity
YM - Yield to maturity
DATA
C- 4%× 100 = 4, P- 105, F- 100
AYM = 4 + (100-105)/27 ÷ 1/2× (100+105)
=0.0372 × 100= 3.72%
Yield to maturity =3.72%
Before tax cost of debt = Yield to maturity
Before tax cost of debt=3.72%
After tax cost of debt =Before tax cost of debt × (1-T)
Before tax cost of debt = 3.72%
Tax rate = 23%
After-tax cost of debt = 3.72%× (1-0.23) =2.87 %
After-tax cost of debt =2.87 %
Haruto Kawa, a Japanese citizen who works for Shin-Ro Corp. in Japan, has been asked to head the company's sales office in the United States. Upon taking the assignment, Haruto will be a(n) _____ manager.
Answer:
The correct answer will be "Expatriate".
Explanation:
An expatriate seems to be a migrant worker through his or her occupation, a specialist, or maybe even a skilled worker. Expatriate managers could've been characterized because of those who aren’t residents including its country during which individuals work, and were employed because of everyone's specialized operational skills but rather because of about there willingness to employ organization knowledge.Tax Services prepares tax returns for senior citizens. The standard in terms of (direct labor) time spent on each return is hours. The direct labor standard wage rate at the firm is per hour. Last month, direct labor hours were used to prepare tax returns. Total wages were .
Answer:
Tax Services
Total wages were:
= hourly wage rate * total hours spent on returns for the month
For example, if the hourly wage rate is $50 and the total hours spent on the returns equal 560 hours, the total wages will be equal to $28,000 ($50 x 560).
Explanation:
The Tax Services' total wages will be equal to the hourly wage rate multiplied by the total hours spent on returns during the month. The total hours spent on the returns for the month is obtained by adding up the hours spent on all the returns. The total wages depend on the hours worked and the standard wage rate that has been established in the firm.
Merry Maidens Cleaning generally charges $280 for a detailed cleaning of a normal-size home. However, to generate additional business, Merry Maidens is offering a new-customer discount of 10%. On May 1, Ms. E. Pearson has Merry Maidens clean her house and pays cash equal to the discounted price. Required: Record the revenue earned by Merry Maidens Cleaning on May 1.
Answer:
May 1
DR Cash $252
CR Service Revenue $252
(To record payment for services rendered)
Working
Cash = Net Service revenue
Net Service revenue = $280 * ( 1 - 10%)
= 280 * 90%
= $252
Rose Corporation, a calendar year corporation, had accumulated earnings and profits of $40,000 as of January 1, 2014. However, for the first six months of 2014 Rose Corporation had an operating loss of $36,000, and finished the year with a total net operating loss for tax year 2014 of $55,000. Rose Corporation distributed $15,000 to its shareholders on July 1, 2014. Which of the following is correct?A. The entire distribution of $15,000 is taxable as a dividend.B. The entire distribution is not taxable.C. The part of the distribution which is taxable as a dividend is $12,500.D. The part of the distribution which is taxable as a dividend is $14,000.
Answer:
C. The part of the distribution which is taxable as a dividend is $12,500.
Explanation:
Rose's total loss for the year = $55,000
we must prorate the loss: $55,000 / 12 months = $4,583.33 per month
loss allocated to the first 6 months = $4,583.33 x 6 = $27,500
retained earnings before the distribution = $40,000 - $27,500 = $12,500
since distributions must come from retained earnings to be considered dividends, then only $12,500 will be considered dividends. The remaining $2,500 will be considered a return of capital
The treasurer of Riley Coal Co. is asked to compute the cost of fixed income securities for her corporation. Even before making the calculations, she assumes the aftertax cost of debt is at least 3 percent less than that for preferred stock.
Debt can be issued at a yield of 11.0 percent, and the corporate tax rate is 20 percent. Preferred stock will be priced at $60 and pay a dividend of $6.40. The flotation cost on the preferred stock is $6.
a. Compute the aftertax cost of debt. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
b. Compute the aftertax cost of preferred stock. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
c. Based on the facts given above, is the treasurer correct?
Answer:
a. Compute the after tax cost of debt.
after tax cost of debt = 11% x (1 - tax rate) = 11% x 0.8 = 8.8%
b. Compute the after tax cost of preferred stock.
after tax cost of preferred stock = cost of preferred stock (no taxes are deducted for paying preferred dividends since they are paid in capital)
cost of preferred stocks = $6.40 / ($60 - $6) = $6.40 / $54 = 11.85%
c. Based on the facts given above, is the treasurer correct?
the difference = 11.85% - 8.8% = 3.05%, so the treasurer was right
Which of the following policies often contains clauses that permit a social networking operator to collect and store data on users or even share it with third parties?
1) Terms of Trade policy
2) Terms of Use policy
3) Terms of Endearment policy
4) Terms of Retention policy
Answer: 2) Terms of Use policy
Explanation:
Terms of service are a contract or agreement between the user of a website or in this case a social networking operator and the social networking operator itself. This agreement is meant to govern the terms of the relationship between the 2 parties in terms of what will be expected of both, i.e, their rights and responsibilities.
On the side of the social networking operator, one of the rights usually listed is one stating that the operator can collect and store data on users or even share it with third parties and so it is important to read the terms of use policy as best you can when you can.
Calculate gross profit ratio and cost of goods sold Refer to the consolidated statements of earnings in the Campbell Soup Company annual report in the appendix.
Required:
a. Calculate the gross profit ratio for each of the past three years.
b. Assume that Campbell's net sales for the first four months of 2015 totaled 527 billion. Calculate an estimated cost of goods sold and gross profit for the four months.
Answer:
gross profit ratio = (total revenue - cost of goods sold) / total revenue
I looked for the missing information:
year total sales cost of goods sold
2012 $7,175 $4,365
2013 $8,052 $5,140
2014 $8,268 $5,370
a)
gross profit ratio:
2012 = ($7,175 - $4,365) / $7,175 = 39.16%
2013 = ($8,052 - $5,140) / $8,052 = 36.16%
2014 = ($8,268 - $5,370) / $8,268 = 35.05%
b)
since the gross profit margin ratio is decreasing every year, we can assume that it will keep decreasing in 2015. Using linear regression, the slope is -0.02055. So the estimated gross profit margin ratio for 2015 = 34.33%
estimated cogs (first four months of 2015) = $527 billion x (1 - 34.33%) = $346.08 billion
estimated gross profit (first four months of 2015) = $527 billion x 34.33% = $180.92 billion
Cantor Corporation acquired a manufacturing facility on four acres of land for a lump-sum price of $9,000,000. The building included used but functional equipment. According to independent appraisals, the fair values were $4,500,000, $3,000,000, and $2,500,000 for the building, land, and equipment, respectively. The initial values of the building, land, and equipment would be:
Answer:
Initial value of building = $4,050,000
Initial value of land = $2,700,000
Initial value of equipment = $2,250,000
Explanation:
The fair value of an asset refers to a unbiased estimate of the likely market price of the asset.
The initial value of a fixed asset refers to the amount of money that spent to acquire or create the asset.
The initial value of each asset from a group of asset can be calculated using the following formula:
Initial value of an asset = Lump-sum price * (FVA / TFV) ............ (1)
Where, from the questio;
Lump-sum price = $9,000,000
FVA = Fair value of a particular asset. From the question, we have:
Building fair value = $4,500,000
Land fair value = $3,000,000
Land fair value = $2,500,000
TFV =Total fair value = Building fair value + Land fair value + Land fair value = $4,500,000 + $3,000,000 + $2,500,000 = $10,000,000
Substituting the values into equation (1), we can determine the initial value of each asset as follows:
Initial value of building = $9,000,000 * ($4,500,000 / $10,000,000) = $9,000,000 * 0.45 = $4,050,000
Initial value of land = $9,000,000 * ($3,000,000 / $10,000,000) = $9,000,000 * 0.30 = $2,700,000
Initial value of equipment = $9,000,000 * ($2,500,000 / $10,000,000) = $9,000,000 * 0.25 = $2,250,000
The accountant for Mandarin Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year $949,000
Net income for the year 295,000
Cash dividends declared for the year 55,000
Retained earnings balance at the end of the year 1,397,000
Cash dividends payable at the beginning of the year 12,600
Cash dividends payable at the end of the year 14,900
What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?
a. $55,000.
b. $57,300.
c. $82,500.
d. $2,300.
e. $52,700.
Answer: e. $52,700
Explanation:
Cash Dividend to be paid = Cash dividends payable at the beginning of the year + Cash dividends declared for the year - Cash dividends payable at the end of the year
= 12,600 + 55,000 - 14,900
= $52,700
The standard quantity allowed for the units produced was 4000 pounds, the standard price was $2.50 per pound, and the materials quantity variance was $350 favorable. Each unit uses 1 pound of materials. How many units were actually produced
Answer:
Unites actually produced = 4,000 units
Explanation:
Material quantity variance occurs when the actual quantity used to achieved a given level of output is more or less than the standard quantity.
It is determined by the difference between the actual and standard quantity of material for the actual level of output multiplied by the the standard price
Material quantity variance in unit = Materials quantity variance in value /standard price
Material quantity variance in unit = 350/2.50 =140 pounds
Actual quantity used (in pounds) = standard quantity allowed - Material quantity variance
= 4000 - 140 = 3,860 pounds
Actual units produced = Standard quantity allowed/ standard quantity per unit
= 4,000/1 = 4000 units
Unites actually produced = 4,000 units
Research an organization that makes people their primary focus and another organization that makes productivity and efficiency their primary focus. Compare, contrast, and discuss the control techniques and measurements for each organization.
Answer:
Ritz Carlton hotel focuses on people.
Sony Focuses on their products.
Explanation:
Ritz Carlton has created its leading brand by providing great ambiance to the visitors and its guest. One can dream of staying at such luxury hotel. They are famous for their hospitality of their guests. The hotel management believes on total quality management. It has set highest standard for themselves and strive to meet them by providing better and better service to its guests. The success of Ritz Carlton is mainly because they keep the comfort of their guests as their highest priority.
Sony has always been striving to serve its customer better. Millennial are the top brands that are considered in market. They are the organizations which capture major market share and are massive market segment. Sony has offered wide range of products to its customers. Their main focus is on their product features and its qualities.
Manufacturing produces self-watering planters for use in upscale retail establishments. Sales projections for the first five months of the upcoming year show the estimated unit sales of the planters each month to be as follows:
Inventory at the start of the year was 975 planters. The desired inventory of planters at the end of each month should be equal to 25% of the following month's budgeted sales. Each planter requires four pounds of polypropylene (a type of plastic). The company wants to have 30% of the polypropylene required for next month's production on hand at the end of each month. The polypropylene costs $0.20 per pound.
Number of planters to be sold
January 3900
February 3200
March 3700
April 4400
May 4900
Required:
Prepare a production budget for each month in the first quarter of the year, including production in units for each month and for the quarter.
Answer:
Production budget for the first quarter of 202x
Particulars January February March Total
Expected sales 3,900 3,200 3,700 10,800
Required ending 800 925 1,100 2,825
inventory
Less beginning 975 800 925 2,700
inventory
Required number 3,725 3,325 3,875 10,925
of units to be produced
The production budget for the first quarter includes the months of January, February and March. It doesn't include any materials, since they are included in the materials purchase budget.
If interest rates rise, which of the following U.S. Government debt instruments would show the greatest percentage drop in value?
a. treasury bills.
b. treasury notes.
c. treasury bonds.
d. savings bonds.
Answer: treasury bonds
Explanation:
The treasury bonds are typically debt securities for the government that have a long maturity period e.g ten years ane above.
If interest rates rise, the U.S. Government debt instruments that would show the greatest percentage drop in value is the treasury bonds because of its longer maturity period.
Which of the following is included in the entry to record the issuance of shares of par value common stock at per share for cash?
A) Cash is debited for $294,000.
B) Common Stock is debited for $98,000.
C) Common Stock is credited for $294,000.
D) Paid-In Capital in Excess of Par-Common is debited for $196,000.
Answer:
A) Cash is debited for $294,000. and,
C) Common Stock is credited for $294,000.
Explanation:
When Shares are Issued for Cash, recognize the Assets of Cash (Debit) and also recognize an equity element - Common Stock (Credit).
Oligopoly firms will seldom change prices but if one firm increases their price, others may follow if costs have ____________ .
Answer:
decreased
Explanation:
if firms have decreased then it would be likely to follow other firms to increase popularity
Oligopoly firms will seldom change prices but if one firm increases its price, others may follow if costs have Decreased.
What is Oligopoly?A market structure known as an oligopoly has a limited number of enterprises, none of which can prevent the others from having a large impact. The market share of the major companies is calculated using the concentration ratio.
A market with a monopoly has only one producer, a duopoly has two businesses, and an oligopoly has three or more businesses. The maximum number of firms in an oligopoly is unknown, but it must be low enough so that each firm's actions have a significant impact on the others.
In the past, oligopolies have existed in the steel industry, the oil industry, the railroad industry, the tire industry, grocery store chains, and the wireless industry. An oligopoly can prevent new competitors from entering the market, stifle innovation, and raise prices, all of which are detrimental to consumers.
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Improvements in labor productivity: A. affect the level of wages, but do not affect the rate of economic growth. B. affect the level of profit, but do not affect the rate of economic growth. C. contribute to economic growth. D. hinder economic growth, because they cause unemployment.
Answer:
C. contribute to economic growth
Explanation:
Economic growth is an increase in the the production of goods and services produced in an economy.
Improvements in labor productivity increases the output of labour and as a result contributes to economic growth.
The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects:
Year Cash Flow (I) Cash Flow (II)
0 –$87,000 –$55,000
1 36,900 11,700
2 47,000 34,500
3 27,000 28,500
Requirement 1:
(a) If the required return is 10 percent, what is the profitability index for each project? (Do not round intermediate calculations). Round your answers to 3 decimal places.
(b) If the required return is 10 percent and the company applies the profitability index decision rule, which project should the firm accept?
Requirement 2:
(a) If the required return is 10 percent, what is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places .
Answer:
PI for the first project = 1 + ($5,673.93 / 87,000) = 1.065
PI for the second project = 1 + ($5,561.23 / $55,000) = 1.101
b. the second project should be chosen because the PI is higher
NPV for 1 = $5,673.93
NPV for 2 = $5,561.23
Explanation:
profitability index = 1 + (NPV / Initial investment)
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
for the first project
Cash flow in year 0 = –$87,000
Cash flow in year 1 = 36,900
Cash flow in year 2 = 47,000
Cash flow in year 3 = 27,000
I = 10%
NPV = $5,673.93
for the second project
Cash flow in year 0 = –$55,000
Cash flow in year 1 = 11,700
Cash flow in year 2 = 34,500
Cash flow in year 3 = 28,500
I = 10%
NPV = $5,561.23
PI for the first project = 1 + ($5,673.93 / 87,000) = 1.065
PI for the second project = 1 + ($5,561.23 / $55,000) = 1.101
b. the second project should be chosen because the PI is higher
To find the NPV 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
Corporation has found that % of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales, Corporation has experienced the following collection pattern: 20% received in the month of the sale 40% received in the month after the sale 24% received two months after the sale 16% of the credit sales are never received November sales for last year were , while December sales were . Projected sales for the next three months are as follows: January sales. . . . . . . . . . . . . . . . $150,000 February sales. . . . . . . . . . . . . . . $130,000 March sales. . . . . . . . . . . . . . . . . $175,000 Requirement Prepare a cash collections budget for the first quarter, with a column for each month and for the quarter. (Round your answers to the nearest whole dollar.) Sweeney Corporation Cash Collections Budget For the Months of January through March January Cash sales Collections on credit sales: 20% Month of sale 40% Month after 24% Two months after Total cash collections Enter any number in the edit fields and then click Check An
Answer:
Some information is missing, specifically the % of credit sales. Similar questions use 80%, so I will use that %. Also, November sales were $85,000 and December sales were $115,000.
Cash collections budgetJanuary February March
Cash sales $30,000 $26,000 $35,000
Collection from Nov. sales $16,320
Collection from Dec. sales $36,800 $22,080
Collection from Jan. sales $24,000 $48,000 $28,800
Collection from Feb. sales $20,800 $41,600
Collection from March sales $28,000
Total cash collections $107,120 $116,880 $133,400
Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. All of the company's transactions with customers, employees, and suppliers are conducted in cash; there is no credit.
The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $76,500 of manufacturing overhead for an estimated activity level of $45,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:
Raw materials $10,200
Work in process $4,200
Finished goods $8,200
During the year, the following transactions were completed:
a. Raw materials purchased for cash, $170,000.
b. Raw materials requisitioned for use in production, $141,000 (materials costing $121,000 were charged directly to jobs; the remaining materials were indirect).
c. Costs for employee services were incurred as follows: |Direct labor|$156,000
Indirect labor $185,900
Sales commissions $22,000
Administrative salaries $50,000
d. Rent for the year was $18,800 ($13,600 of this amount related to factory operations, and the remainder related to selling and administrative activities).
e.Utility costs incurred in the factory, $16,000.
f.Advertising costs incurred, $13,000.
g. Depreciation recorded on equipment, $21,000. ($15,000 of this amount was on equipment used in factory operations; the remaining $6,000 was on equipment used in selling and administrative activities.)
h. Manufacturing overhead cost was applied to jobs, $?
i.Goods that had cost $226,000 to manufacture according to their job cost sheets were completed.
j. Sales for the year totaled $514,000. The total cost to manufacture these goods according to their job cost sheets was $220,000.
Required:
(Round your intermediate calculations to 2 decimal places)
1. Prepare journal entries to record the transactions for the year.
2. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.
3. Prepare an income statement for the year.
Answer:
1)
a. Raw materials purchased for cash, $170,000.
Dr Materials inventory 170,000
Cr Cash 170,000
b. Raw materials requisitioned for use in production, $141,000 (materials costing $121,000 were charged directly to jobs; the remaining materials were indirect).
Dr Work in process: direct materials 121,000
Dr Manufacturing overhead 20,000
Cr Materials inventory 141,000
c. Costs for employee services were incurred as follows:
Dr Work in process: direct labor 156,000
Dr Manufacturing overhead 185,900
Dr Sales salaries expense 22,000
Dr Administrative salaries expense 50,000
Cr Cash 413,900
d. Rent for the year was $18,800 ($13,600 of this amount related to factory operations, and the remainder related to selling)
Dr Manufacturing overhead 13,600
Dr Rent expense 5,200
Cr Cash 18,800
e.Utility costs incurred in the factory, $16,000.
Dr Manufacturing overhead 16,000
Cr Cash 16,000
f. Advertising costs incurred, $13,000.
Dr Advertising expenses 13,000
Cr Cash 13,000
g. Depreciation recorded on equipment, $21,000. ($15,000 of this amount was on equipment used in factory operations; the remaining $6,000 was on equipment used in selling and administrative activities.)
Dr Manufacturing overhead 15,000
Dr Depreciation expense 6,000
Cr Accumulated depreciation: manufacturing equipment 15,000
Cr Accumulated depreciation: office equipment 6,000
h. Manufacturing overhead cost was applied to jobs, $?
Dr Work in process 265,200
Cr Manufacturing overhead 265,200 (170% of direct labor)
i. Goods that had cost $226,000 to manufacture according to their job cost sheets were completed.
Dr Finished goods inventory 226,000
Cr Work in process 226,000
j. Sales for the year totaled $514,000. The total cost to manufacture these goods according to their job cost sheets was $220,000.
Dr Cash 514,000
Cr Sales revenue 514,000
Dr Cost of goods sold 220,000
Cr Finished goods inventory 220,000
2)
Dr Manufacturing overhead ($265,200 - $250,500) 14,700
Cr Cost of goods sold 14,700
3) Gold Nest Company
Income Statement
Sales revenue $514,000
- Cost of goods sold -$205,300
Gross profit $308,700
Operating expenses:
Sales salaries expense -$22,000Administrative salaries expense -$50,000Rent expense -$5,200Advertising expenses -$13,000Depreciation expense -$6,000 -$96,200Operating profit $212,500
1. The preparation of journal entries to record the transactions for Gold Nest Company of Guandong, China, is as as follows:
a. Debit Raw materials $170,000
Credit Cash $170,000
b. Debit Work in Process $121,000
Debit Manufacturing Overhead $20,000
Credit Raw materials $141,000
c. Debit Work in Process $156,000
Debit Manufacturing Overhead $185,900
Credit Payroll Expenses $341,900
Debit Selling and Administrative Expenses $22,000
Credit Sales commissions $22,000
Debit Selling and Administrative Expenses $50,000
Credit Administrative salaries $50,000
d. Debit Manufacturing Overhead $13,600
Debit Selling and Administrative Expenses $5,200
Credit Rent Expenses $18,800
e. Debit Manufacturing Overhead $16,000
Credit Utilities Expense $16,000
f. Debit Selling and Administrative Expenses $13,000
Advertising costs $13,000
g. Debit Manufacturing Overhead $15,000
Debit Selling and Administrative Expenses $6,000
Credit Depreciation Expenses $21,000
h. Debit Work in Process $265,200
Credit Manufacturing Overhead (Applied) $265,200 ($1.70 x $156,000)
i. Debit Finished Goods Inventory $226,000
Credit Work in Process $226,000
j. Debit Cash $514,000
Credit Sales Revenue $514,000
j. Debit Cost of goods sold $220,000
Credit Finished Goods Inventory $220,000
2. The journal entry to close the balance in the Manufacturing Overhead account to the Cost of goods sold is as follows:
Debit Manufacturing Overhead $14,700
Credit Cost of goods sold $14,700
3. Gold Nest Company
Income Statementfor the year ended December 31
Sales Revenue $514,000
Cost of goods sold 205,300
Gross profit $308,700
Selling and Administrative Expenses:
Sales commission $22,000
Administrative salaries 50,000
Rent Expenses 5,200
Advertising Expenses 13,000
Depreciation Expenses 6,000
Total selling/admin. $96,200
Net income $212,500
Data Calculations:Estimated manufacturing overhead = $76,500
Estimated direct labor dollars = $45,000
Predetermined overhead rate = $1.70 ($76,500/$45,000)
Beginning inventory balances:Raw materials = $10,200
Work in process = $4,200
Finished goods = $8,200
Data Analysis:a. Raw materials $170,000 Cash $170,000
b. Work in Process $121,000 Manufacturing Overhead $20,000 Raw materials $141,000
c. Work in Process $156,000 Manufacturing Overhead $185,900 Payroll Expenses $341,900
Selling and Administrative Expenses $22,000 Sales commissions $22,000
Selling and Administrative Expenses $50,000 Administrative salaries $50,000
d. Manufacturing Overhead $13,600 Selling and Administrative Expenses $5,200 Rent Expenses $18,800
e. Manufacturing Overhead $16,000 Utilities Expense $16,000
f. Selling and Administrative Expenses $13,000 Advertising costs $13,000
g. Manufacturing Overhead $15,000 Selling and Administrative Expenses $6,000 Depreciation Expenses $21,000
h. Work in Process $265,200 Manufacturing Overhead (Applied) $265,200 ($1.70 x $156,000)
i. Finished Goods Inventory $226,000 Work in Process $226,000
j. Cash $514,000 Sales Revenue $514,000
j. Cost of goods sold $220,000 Finished Goods Inventory $220,000
2. Manufacturing Overhead $14,700 Cost of goods sold $14,700
Manufacturing Overheadb. Raw materials $20,000
c. Payroll Expenses $185,900
d. Rent Expenses $13,600
e. Utilities Expense $16,000
g. Depreciation Expenses $15,000
h. Work in Process $265,200
Cost of goods sold (Over-applied
overhead) $14,700
Cost of goods soldFinished goods $220,000
Over-applied manufacturing overhead (14,700)
Adjusted cost of goods sold $205,300
What is a job-order costing system?A job-order costing system is a costing system that tracks the costs and revenues according to jobs, with jobs allocated job numbers. It is unlike process costing, which tracks jobs for each process in order to determine the unit costs instead of per job.
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Mangum Co. is a large company that segments its business into cost and profit centers. The Cost center for the manufacture of Product M2T incurred the following costs in October:
Direct Labor: $25/unit
Direct Materials: $80/unit
Variable Overhead: $15/unit
Traceable Fixed Costs: $62,000
Common Fixed Costs: $100,000
Sales were 2,000 units in October. Each unit sells for $210. The M2T Department is being evaluated on overall profitability. In September, the department margin was $100,000. By how much did the department margin increase or decrease in October?
a. $100,000 decrease
b. $118,000 increase
c. $18,000 increase
d. $82,000 decrease
Answer: c. $18,000 increase
Explanation:
Department margin was $100,000 in September.
October Margin = Sales - Variable Costs - Traceable Fixed Costs
= (2,000 *( 210 - 25 - 80 - 15) ) - 62,000
= (2,000 * 90) - 62,000
= $118,000
= October Margin - September Margin
= 118,000 - 100,000
= $18,000 increase
Which one of these is the best description of a comparative market analysis? It shows what similar homes in the area have recently sold for It shows the list prices of similar homes in the area It’s a guide to the minimum acceptable offer It discloses issues with the home that are known to the seller
Answer:
It shows what similar homes in the area have recently sold for.
Explanation:
Answer:
The statement "It shows the same types of homes in the area that are presently sold" is considered to be the best description for the comparative market analysis.
Explanation:
A comparative market analysis is a tool that is used by the real estate agent in order to remove the value of the particular property via evaluation of the same types of homes that could be presently sold in a similar area.
For finding the best description regarding the comparative market analysis, we need to determine the following information:
It does not show the list prices of the same types of homes in the area.It does not guide for a minimum acceptable offer.Also, it does not disclose the issues for the income that are aware to the seller.Therefore we can conclude that the first statement is correct
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When the Federal Reserve buys long term MBS and Treasury securities from banks and announces its intention to keep buying these assets in large quantities for a long time the effect on commercial banks is to increase the value of fixed income securities that are not sold and at the same time to lower the interest spread between new loans originated and the cost of financing these loans. True False
Answer:
True
Explanation:
Since, Federal reserve purchased long term MBS in order to pay the less market interest rate and this will cause a rise in the amount of income i.e fixed securities. Also, due to less market interest rate, the financing cost is less and at the same time interest spread is narrower as it provides more liquidity
Therefore the given statement is true
