Answer:
v
Explanation:
On June 1, 20--, a depreciable asset was acquired for $5,460. The asset has an estimated useful life of five years (60 months) and no salvage value. Using the straight-line depreciation method, calculate the book value as of December 31, 20--. If necessary, round your answer to two decimal places.
Answer:
$4823
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
5460 / 5 = 1092
7/12 X 1092 = 637
5460 - 637 = 4823
Of the travelers arriving at a small airport, 60% fly on major airlines, 20% fly on privately owned planes, and the remainder fly on commercially owned planes not belonging to a major airline. Of those traveling on major airlines, 40% are traveling for business reasons, whereas 70% of those arriving on private planes and 80% of those arriving on other commercially owned planes are traveling for business reasons. Suppose that we randomly select one person arriving at this airport.
What is the probability that the person is traveling on business?
Answer: 54% or 0.54
Explanation:
The probability that the person is travelling on business is the expected value of the various probabilities that they are travelling on business.
= (Percentage using major airlines * percentage using major airlines to travel for business) + (Percentage using private * percentage using private airlines to travel for business) + (Percentage using commercial * percentage using commercial airlines to travel for business)
= (60% * 40%) + (20% * 70%) + ( (100% - 60% - 20%) * 80%)
= 24% + 14% + 16%
= 54%
Starfish Enterprises management has obtained data on the material costs for a selected job which used 300 feet of materials, while estimates for the job required only 260 feet of materials. The materials price per unit was the same. Which is not a reason for the difference in material usage? A new employee worked on the job. The material used was of poor quality. The cutting tools were in need of repair. The cost of materials increased from the time of the estimate.
Answer:
Starfish Enterprises
The reason that is not the cause of the difference in material usage is:
The cost of materials increased from the time of the estimate.
Explanation:
a) Data and Calculations:
Units of materials used for the job = 300 feet
Standard units of materials for similar job = 260 feet
Unit variance = 40 Unfavorable (300 - 260)
b) Material usage variance does not concern with the cost of materials. Since it is stated that the materials price per unit remained the same in both instances, the cost of materials increasing is certainly not a factor for the material usage variance. The variance is caused by the other factors.
Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Atkins?A. Assets would decrease $1,750 and liabilities would decrease $1,750.B. One asset would increase $1,750 and a different asset would decrease $1,750, causing no effect.C. Assets would increase $1,750 and liabilities would increase $1,750.D. Assets would increase $1,750 and equity would increase $1,750.E. Liabilities would decrease $1,750 and equity would increase $1,750.
Answer: B. One asset would increase $1,750 and a different asset would decrease $1,750, causing no effect
Explanation:
From the information given in the question, the journal entry at the time of sales will be represented as:
Debit Accounts receivable $1,750
Credit Sales $1750
Now, when the credit receipt is received as illustrated in the question, the journal entry will be:
Debit Cash $1,750
Credit Accounts receivable $1,750
Therefore, one asset would increase $1,750 and a different asset would decrease $1,750, causing no effect.
The correct option is B.
Costs of $5,000 were incurred to acquire goods and make them ready for sale. The goods were shipped to the buyer (FOB shipping point) for a cost of $200. Additional necessary costs of $400 were incurred to acquire the goods. No other incentives or discounts were available. What is the buyer's total cost of merchandise inventory?a. $5,000.b. $5,200.c. $5,400. d. $5,600.
Answer:
d. $5,600
Explanation:
The computation of the total cost of merchandise inventory is shown below:
Cost of goods purchased $5,000
Add: Shipping charges (FOB point) $200
Additional necessary costs to purchase the goods $400
Buyer’s total cost of merchandise inventory $5,600
Hence, the total cost of merchandise inventory is $5,600
Therefore the option d is correct
Krenshaw Company reported total sales revenue of $80,000, total expenses of $72,000, and net income of $8,000 for the year ended December 31, 2009. During 2009, accounts receivable increased by $3,000, merchandise inventory decreased by $2,000, accounts payable increased by $1,000, and $5,000 in depreciation expense was recorded. Assuming no other adjustments to net income are needed, the net cash inflow from operating activities using the indirect method was:
Answer: $13000
Explanation:
Following the information provided in the question, the net cash inflow from operating activities using the indirect method will be calculated as follows:
Net Income = $8,000
Add: Depreciation expense = $5,000
Add: Decrease in inventory = $2,000
Add: Increase in account payable = $1,000
Less: Increase in account receivable (3,000)
Cash inflow from operating activities = $13000
Wildhorse Company has been in business several years. At the end of the current year, the ledger shows the following:
Accounts Receivable $325,200 Dr.
Sales Revenue 2,619,000 Cr.
Allowance for Doubtful Accounts 7,500 Cr.
Bad debts are estimated to be 5% of accounts receivable. Prepare the entry to adjust Allow- ance for Doubtful Accounts.
Answer:
uhhhhhh
Explanation:
Your uncle repays a $150 loan from Tenth National Bank (TNB) by writing a $150 check from his TNB checking account. Assume these funds are the only loans and deposits available for your uncle and the bank.
Required:
Write the T-account table.
Answer: See explanation
Explanation:
The T-account for your uncle before the loan is repaid will be:
Your Uncle:
Assets: Bank accounts $150
Liabilities: Loan $150
Tenth National Bank
Assets: Loan and advance $150
Liabilities: Deposits $150
The T-account and TNB for your uncle after the loan is repaid will be:
Your Uncle
Assets: Bank account $0
Liabilities: Loan $0
Tenth National Bank
Assets: Loan and advance $0
Liabilities: Deposits $0
Which ratio measures the number of dollars of operating cash available to meet each dollar of interest and other fixed charges that the firm owes?
Answer:
Fixed-charge coverage ratio
Explanation:
The fixed-charge coverage ratio can be regarded as a rato that gives the measurements of the ability of a firm have to cover all her fixed charges. These fixed charges could be expense as well as debt payments and interest. It displays the wellness that earnings of a company has to cover its fixed expenses. This ratio is considered by bank before they lend money to a business. It should be noted that Fixed-charge coverage ratio measures the number of dollars of operating cash available to meet each dollar of interest and other fixed charges that the firm owes.
Denzel Brooks opened a Web consulting business called Venture Consultants and completes the following transactions in March.
March
1 Brooks invested $185,000 cash along with $26,000 in office equipment in the company
2 The company prepaid $8,000 cash for six months' rent for an office. Hint: Debit Prepaid Rent for $8,000.
3 The company made credit purchases of office equipment for $5,100 and office supplies for $2,000. Payment is due within 10 days.
6 The company completed services for a client and immediately received $5,500 cash.
9 The company completed a $8,500 project for a client, who must pay within 30 days.
12 The company paid $7,100 cash to settle the account payable created on March 3.
19 The company paid $6,200 cash for the premium on a 12-month insurance policy. Hint: Debit Prepaid Insurance for $6,200.
Required:
a. Prepare general journal entries to record these transactions.
b. Post the journal entries from part 1 to the ledger accounts.
c. Prepare a trial balance as of the end of March.
Answer:
Venture Consultants
1. Journal Entries:
March 1 Debit Cash $185,000
Debit Office equipment $26,000
Credit Common stock $211,000
March 2 Debit Prepaid Rent $8,000
Credit Cash $8,000
March 3 Debit Office equipment $5,100
Debit Office supplies $2,000
Credit Accounts payable $7,100
March 6 Debit Cash $5,500
Credit Service revenue $5,500
March 9 Debit Accounts receivable $8,500
Credit Service revenue $8,500
March 12 Debit Accounts payable $7,100
Credit Cash $7,100
March 19 Debit Prepaid Insurance $6,200
Credit Cash $6,200
b. T-accounts:
Cash
Date Account Titles Debit Credit
March 1 Common stock $185,000
March 2 Prepaid Rent $8,000
March 6 Service revenue 5,500
March 12 Accounts payable 7,100
March 19 Prepaid Insurance 6,200
March 31 Balance $169,200
Prepaid Rent
Date Account Titles Debit Credit
March 2 Cash $8,000
Prepaid Insurance
March 19 Cash $6,200
Office equipment
Date Account Titles Debit Credit
March 1 Common stock $26,000
March 3 Accounts payable 5,100
March 31 Balance $31,100
Office supplies
Date Account Titles Debit Credit
March 3 Accounts payable $2,000
Accounts receivable
Date Account Titles Debit Credit
March 9 Service revenue $8,500
Accounts payable
Date Account Titles Debit Credit
March 3 Office equipment $5,100
March 3 Office supplies $2,000
March 12 Cash $7,100
Common stock
Date Account Titles Debit Credit
March 1 Cash $185,000
March 1 Office equipment 26,000
March 31 Balance $211,000
Service revenue
Date Account Titles Debit Credit
March 6 Cash $5,500
March 9 Accounts receivable 8,500
March 31 Balance $14,000
c. Trial Balance as of March 31
Date Account Titles Debit Credit
Cash $169,200
Prepaid rent 8,000
Prepaid insurance 6,200
Accounts receivable 8,500
Office equipment 31,100
Office supplies 2,000
Common stock $211,000
Service Revenue 14,000
Totals $225,000 $225,000
Explanation:
a) Data and Analysis:
March 1 Cash $185,000 Office equipment $26,000 Common stock $211,000
March 2 Prepaid Rent $8,000 Cash $8,000
March 3 Office equipment $5,100 Office supplies $2,000 Accounts payable $7,100
March 6 Cash $5,500 Service revenue $5,500
March 9 Accounts receivable $8,500 Service revenue $8,500
March 12 Accounts payable $7,100 Cash $7,100
March 19 Prepaid Insurance $6,200 Cash $6,200
On March 29, a customer who owes $14,611 on account to Sonic Sales Company submits a payment of $7,547. Journalize this transaction.
Answer and Explanation:
The journal entry is given below:
Cash $7,547
To Accounts Receivable $7,547
(Being cash collection is recorded)
Here cash is debited as it increased the assets and credited the account receivable as it decreased the assets
The same should be considered and relevant
Suppose Ningbo Steel had sales revenue of $11,000 sales revenue, cost of goods sold of $5,000, operating expenses of $3,000, interest expense of $1,000, a tax rate of 20%, and 1,000 shares of common stock outstanding. Based on this information, net profit after tax was:
Answer:
Net profit after tax = $1600
Explanation:
Below is the calculation for net profit after tax:
Net profit = Sales revenue - cost of good sold - operating expenses - interest expenses
Net profit = 11000 - 5000 - 3000 -1000
Net profit = 2000
Net profit after tax = 2000 - (20 % of 2000)
Net profit after tax = 2000 - 400
Net profit after tax = $1600
Maxim manufactures a hamster food product called Green Health. Maxim currently has 15,500 bags of Green Health on hand. The variable production costs per bag are $2.90 and total fixed costs are $21,000. The hamster food can be sold as it is for $10.00 per bag or be processed further into Premium Green and Green Deluxe at an additional cost. The additional processing will yield 15,500 bags of Premium Green and 4,100 bags of Green Deluxe, which can be sold for $9 and $7 per bag, respectively. The incremental revenue of processing Green Health further into Premium Green and Green Deluxe would be:_________.
a. $163,200.
b. $13,200.
c. $8,200.
d. $5,000.
e. $168,200.
Answer:
b. $13,200.
Explanation:
Revenue from the sale of Green Health bags = Number of bags * Selling price
Revenue from the sale of Green Health bags = 15,500 bags * $10
Revenue from the sale of Green Health bags = $155,000
Revenue from Premium Green = Number of bags * Selling price
Revenue from Premium Green = 15,500 bags * $9
Revenue from Premium Green = $139,500
Revenue from Green Deluxe = Number of bags * Selling price
Revenue from Green Deluxe = 4,100 bags * $7
Revenue from Green Deluxe = $28,700
Incremental revenue = Revenue from Premium Green + Revenue from Green Deluxe - Revenue from Green Health\
Incremental revenue = $139,500 + $28,700 - $155,000
Incremental revenue = $13,200
So, the incremental revenue of processing Green Health further into Premium Green and Green Deluxe would be $13,200.
An existing partner wants to contribute property having a basis less than its FMV for an additional interest in a partnership. a. Should he contribute the property to the partnership
Answer:
He should not contribute the property to the partnership.
Explanation:
There is an ensuing loss if the partner contributes the property to the partnership instead of a gain. Partnerships recognize the basis of contributed capital. They usually compare the fair market value with the book value to determine if a loss has been incurred or a gain made. However, the tax consequences of the contributed property will be allocated to the partner making the property contribution.
Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $44 per unit, and variable manufacturing costs are $100 per unit. Production was 67,200 units, while sales were 50,400 units. a. Determine whether variable costing operating income is less than or greater than absorption costing operating income. b. Determine the difference in variable costing and absorption costing operating income. $fill in the blank 2
Answer:
a. The variable costing operating income is less than absorption costing operating income.
b. The difference in variable costing and absorption costing operating income is:
= $739,200.
Explanation:
a) Data and Calculations:
Fixed manufacturing costs per unit = $44
Variable manufacturing costs per unit = $100
Production units = 67,200
Sales units = 50,400
Ending inventory = 16,800
Income Statements Variable Absorption
Costing Costing
Costs of goods sold: $5,040,000 $7,257,600
Fixed expenses 2,956,800
Total costs $7,996,800 $7,257,600 $739,200
b) The difference in variable costing and absorption costing operating income is because of the absorbed fixed costs in ending inventory, which is now carried forward to the next accounting period.
What the difference between international accounting and domestic accounting
Explanation:
International accounting (IAS) includes accounting standards and concepts of various countries. MNC's which operates in various countries need to follow the local accounting procedure and then need to compile the data so the overall performance of the company, can be determined. This also involves different currencies making the work difficult.
Domestic accounting (DAS) - every country have their own accounting standards and methods which must be followed while preparing books of accounts and are called domestic accounting. It is followed by companies which deal in only domestic business. Domestic accounting is done in home currency and is easier than international accounting.
Andrews Company currently has the following balances in their liability and equity accounts: Total Liabilities: $52,319,000 Common Stock: $8,808,000 Retained Earnings: $45,066,000 Next year the Andrews Company generates $11,500,000 in Net Profit, pays $5,000,000 in dividends, and total liabilities and common stock remain unchanged. What will their total assets be next year
Answer: $112,693,000
Explanation:
Total assets = Equity + Liabilities
Liabilities will not change in the new year.
Retained earnings = Beginning retained earnings + Net income - Dividends
= 45,066,000 + 11,500,000 - 5,000,000
= $51,566,000
Assets = (8,808,000 + 51,566,000) + 52,319,000
= $112,693,000
Note: Equity is the sum of common stock and retained earnings
Reynolds Co. issued $16 million face amount of 6.00% bonds when market interest rates were 6.40% for bonds of similar risk and other characteristics. Required: a. How much interest will be paid annually on these bonds
Answer: $960,000
Explanation:
The interest to be paid annually is the coupon rate of the bonds as a percentage of the bond's face value.
The coupon rate here is 6%
Face value is $16 million.
Annual interest is therefore:
= 16,000,000 * 6%
= $960,000
On November 1, 2015, Lendem, Inc. loaned an employee $100,000 at 6% with both the interest and principal due in one year. The adjusting entry to record the interest earned but not received as of December 31, 2015 includes a: A. debit to Interest Receivable of $1,000 B. debit to Interest Revenue of $1,000 C. debit to Interest Payable of $6,000 D. debit to Cash of $5,000 E. debit to Interest Receivable of $6,000
Answer:
A. debit to Interest Receivable of $1,000
Explanation:
The journal entry is given below;
Interest Receivables ($100,000 × 6% × 2 ÷ 12) $1,000.00
To Interest Revenue $1,000.00
(being the interest earned but not received is recorded)
Here the interest receivable is debited as it increased the assets and credited the interest revenue as it also increased the revenue
NFL players and owners are trying to negotiate a new labor contract. The owners are getting ready to send the contract over to the players who can then choose to accept the terms or keep bargaining. The owners are deciding whether to stipulate 16 games or 18 games as part of the contract. They would prefer 18 games, but they are worried that the players will not accept the contract and will keep bargaining if they put 18 games in the contract. The situation is described by the sequential game tree below: In the Nash equilibrium, the owners will choose ____________ and the players will respond by choosing to _________________.
Answer:
The answer is "16 games; accept the terms".
Explanation:
In this case, the players will decide the strategy first, followed by the owners.
Participants will choose the Keep Bargaining strategy to maximize its reward in the subgame of Owners' 18 games. "As a consequence, and here is the outcome:"
Players will choose the Accept Terms strategy to maximize the reward in the subgame Players on Owners' 16 games. (350M) and (250M) are the results.
To get a larger payout of $350M, the Owner would have to select a strategy among 16 games. Nash equilibrium is ($350M, $250M) in this case. It implies that the Owner's strategy in Nash equilibrium is to play 16 games, while the Players' strategy is to accept Terms.
When it comes to retaining employees, it is not enough to have a diverse organization, it must be inclusive too. A. True B. False
Answer: True
Explanation:
Diversity involves having different demographical groups being represented in a company's labor force such as different races and genders. This gives the company an edge because they can draw upon the experiences of these workers to find out how best to appeal to a particular demographical group.
Diversity is not enough however because inclusion is important as well. Inclusion means that these various groups are able to contribute meaningfully to the company instead of just being hired for publicity purposes. They should have management positions and the like to show that they are indeed part of the company.
For Crafton Company, indirect labor is budgeted for $57,000 and factory supervision is budgeted for $65,000 at normal capacity of 142,500 direct labor hours. If 145,000 direct labor hours are worked, how much is the flexible budget for these costs
Answer:
$124,700
Explanation:
Indirect labor budgeted is $57,000
Factory supervision is $65,000
The normal capacity is 142,500
Direct labor 145,000
Therefore the flexible budget can be calculated as follows
= 57,000+65,000/142,500
= 122,000/142,500
= 0.86
0.86×145,000
= 124,700
Hence the flexible budget is $124,700
The OHApp-717 Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the company worked 59,500 actual direct labor-hours and incurred $492,000 of actual manufacturing overhead cost. The company had estimated that it would work 61,400 direct labor-hours during the year and incur $423,660 of manufacturing overhead cost. The company's manufacturing overhead cost for the year was: (Round your intermediate calculations to 2 decimal places.)
Answer:
$81,450
Explanation:
The computation of the company's manufacturing overhead cost for the year was given below:
Predetermined overhead rate is
= ($423,660) ÷ 61,400 direct labor hours
= $6.90
And,
Actual overhead cost = $492,000
Now
Applied overhead cost is
= 59,500 × $6.90
= $410,550
So, the overhead underapplied by
= $492,000 - $410,550
= $81,450
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________.
Answer:
The correct answer is "$15,000".
Explanation:
Given:
Value,
= $250,000
Interest rate,
= 6%
The Interest Payment will be:
[tex]Value\times Interest \ rate[/tex]
= [tex]250,000\times 6[/tex]%
= [tex]15,000[/tex] ($)
If the actual output of a piece of equipment during an hour is 500 units and its best operating level is at a rate of 400 units per hour, which of the following is the capacity utilization rate?
a. 1.33
b. 1.00
c. 0.75
d. 1.25
Answer:
d. 1.25
Explanation:
In a business context, the capacity utilization rate is a value that allows the company know how well they are performing compared to what the recorded optimal levels are. In order to calculate this value we simply divide the current operating level for a specific time-period by the optimal level of that same time period, which in this case would be 1 hour. Therefore, in this case we would divide 500 by 400 which would give us 1.25.
As a firm keeps producing more of a product, it learns to make the product cheaper. This is an example of: Economies of scale The experience curve Economies of scope Location economies g
Answer:
Economies of scale
Explanation:
What should you not do in an adjustment letter?
a. Begin your letter with a positive sentence
b. Use negative words
c. Make unrealistic promises
d. Explain how you are complying
e. Blame customers
Answer:
c. Make unrealistic promises
b. Use negative words
e. Blame customers
Answer:
a
Explanation:
positivity always wins
You currently have $150,000 in an IRA designated for retirement. If you save an additional $100 at the end of every month and expect to earn an annual return of 12 percent, how much do you expect to have in the IRA in 10 years?
Answer:
$518,061.90
Explanation:
The value of the retirement savings at retirement date is the future value of both its current balance of $150,000 and future value of $100 per month for 10 years compounded at the monthly rate of return
FV=PV*(1+r)^n+ monthly savings*(1+r)^n-1/r
PV=$150,000
r=monthly rate of return=12%/12=1%=0.01
monthly savings=$100
n=number of monthly savings in 10 years=10*12=120
FV=$150000*(1+0.01)^120+$100*(1+0.01)^120-1/0.01
FV=$150000*(1.01)^120+$100*(1.01)^120-1/0.01
FV=$150000*3.30038689+$100*(3.30038689-1)/0.01
FV=$150000*3.30038689+$100*2.30038689/0.01
FV=$495,058.03+$ 23,003.87
FV=$518,061.90
If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is:
Answer:
the average product of 12 workers is 5
Explanation:
The computation of the average product of 12 workers is shown below:
= (Number of units of a product in the case of 11th workers + marginal product of units in 12th worker) ÷ number of workers
= (54 + 6) ÷ 12
= 5
Hence, the average product of 12 workers is 5
The same is to be considered
West Street Automotive is considering adding state safety inspections to its service offerings. The equipment necessary to perform these inspections will cost $551,000 and will generate cash flows of $193,000 over each of the next five years. If the cost of capital is 17 percent, what is the MIRR on this project
Answer:
19.7%
Explanation:
The modified internal rate of return is a capital budgeting method used to determine the profitability of an investment. The MIRR assumes that cash inflows are reinvested at the firm's cost of capital and outflows are financed at the firm's financing cost.
MIRR = (Future value of a firm's cash inflow / present value of the firm's cash outflow)^ (1/n) - 1
Future value = payment x[ (1 + interest rate)^n - 1 ] / interest rate
$193,000 x (1.17^5) - 1 / 0.17 = 1353779.24
1353779.24 / $551,000) ^0.2 - 1 = 19.7%
