Analysis reveals that a company had a net increase in cash of $22,750 for the current year. Net cash provided by operating activities was $20,500; net cash used in investing activities was $11,250 and net cash provided by financing activities was $13,500. If the year-end cash balance is $27,750, the beginning cash balance was: Multiple Choice $5,000. $17,750. $50,500. $45,500. $44,500.

Answers

Answer 1

Answer:

The correct answer = $5,000

Explanation:

First of all, let us find the difference between the total cash provided and the total cash used up within the period:

Total cash provided = operating activities + financing activities

Total cash provided = 20,500 + 13,500 = $34,000

Total cash used up = investing activities = $11,250

Retained balance from the activities of the period = Total cash provided - Total cash used up

= 34,000 - 11,250 = $22,750

Retained balance from the activities of the period = $22,750

However, we are told that the year-end cash balance = $27,750. This means that the excess cash on the retained balance from operating activities within the period is from the beginning cash balance, and this is calculated as follows:

year-end cash balance = Retained balance from the activities  + beginning cash balance

27,750 = 22,750 + beginning cash balance

∴ beginning cash balance = 27,750 - 22,750 = $5,000

∴ beginning cash balance = $5,000


Related Questions

Ellie (a single taxpayer) is the owner of ABC, LLC. The LLC (a sole proprietorship) reports QBI of $900,000 and is not a specified services business. ABC paid total W-2 wages of $300,000, and the total unadjusted basis of property held by ABC is $30,000. Ellie's taxable income before the QBI deduction is $740,000 (this is also her modified taxable income). What is Ellie's QBI deduction for 2019

Answers

Answer:

QBI deduction for 2019 is   $148,000

Explanation:

Description                                                            Amount

Taxable income before QBI deduction

exceed $207,500 threshold.

Capital investment limit is considered

QBI deduction is lesser of:

1) 20% of qualified business income                     $180,000

($900,00 × 20%)

or Greater of

2) 50% 0f W-2 wages                                             $150,000

($300,000 × 50%)

or

25% 0f W-2 wages + 2.5% of unadjustment

basis pf qualified property

($300,000 × 25%) + ($300,000 × 2.5%)                      $75,750

3)Not more than 20% of modified taxable income

($740,000 × 20%)                                                          $148,000

Therefore, QBI deduction for 2019   is   $148,000

Zolezzi Inc. is preparing its cash budget for March. The budgeted beginning cash balance is $27,000. Budgeted cash receipts total $104,000 and budgeted cash disbursements total $87,000. The desired ending cash balance is $70,000. The company can borrow up to $90,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for March in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.

Answers

Answer:

                                                     Zolezzi Inc.

                                          Cash budget for March

                                                       Amount in $'000                          

Opening balance                                27

Add;

Cash receipts                                    104      

Less;

Cash disbursements                        (87)                

Ending balance                                  44  

Amount to be borrowed                   26  

Desired ending balance                   70                                                                                                

Explanation:

The cash budget a forecast of the expected movement in cash balance. This is as a result of expected cash receipts and disbursements and may be expressed mathematically as

opening cash balance + cash receipts - Cash disbursed = closing cash balance

27 + 104 - 87 = ending balance

Ending balance = 44

Desired ending balance = 70

Amount to be borrowed = 70 - 44

= 26

Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: Service Depts. Production Depts. Payroll Maintenance Cutting Assembly Direct costs $ 20,400 $ 25,500 $ 76,500 $ 105,400 No. of personnel 15 15 45 Sq. ft. of space 10,000 15,000 The total cost of operating the Maintenance Department for the current period is:

Answers

Answer:

The total cost of operating the Maintenance Department for the current period is $29,580

Explanation:

In order to calculate The total cost of operating the Maintenance Department for the current period we would have to calculate first the Overhead allocated to Maintenance from Payroll department as follows:

Overhead allocated=Payroll overhead×(Maintenance payroll personnel/Total personnel)

Overhead allocated=$ 20,400×(15/15+15+45)

Overhead allocated=$4,080

Therefore, to calculate the The total cost of operating the Maintenance Department for the current period we would have to use the following formula:

Total cost of operating Maintenance Department=Overhead allocated+Direct overhead incurred

Total cost of operating Maintenance Department=$4,080+$25,500

Total cost of operating Maintenance Department=$29,580

The total cost of operating the Maintenance Department for the current period is $29,580

Beerbo purchased a patent from Mitter Lite Co. for $1,000,000 on January 1, 2018. At that time, the patent's useful life was 10 years, expiring on December 31, 2027. In early 2020, Beerbo determined that the economic benefits of the patent would not last longer than 4 more years (6 years from the date of acquisition). Given the revised useful life, Beerbo expects the useful life of the patent to expire on December 31, [a1]. (Input year; e.g. "2020") At the end of 2019 / beginning of 2020, what was the value / net book value of the patent in Beerbo's books

Answers

Answer:

$800,000

Explanation:

As per the data given in the question,

Beerbo expects patent's useful life to expire on Dec-31 2023.

At the beginning of 2020 / end of 2019, the value of the patent in Beerbo's book = $1,000,000 - ($1,000,000 ÷ 10×2))

= $800,000

Amortix patent year = 4

Patent amortization expense at the end of 2020 = $800,000 ÷ 4

=$200,000

The Baldwin Company currently has the following balances on their balance sheet: Total Assets $255,213 Total Liabilities $151,328 Retained Earnings $47,588 Suppose next year the Baldwin Company generates $44,200 in net profit, pays $12,000 in dividends, total assets increase by $55,000, and total liabilities remain unchanged. What will ending Baldwins balance in Common Stock be next year? Select: 1 $79,097 $509,129 $381,753 $143,497

Answers

Answer:

$79,097

Explanation:

The accounting equation shows the relationship between the elements of a balance sheet which are assets liabilities and equity. This may be expressed mathematically as

Assets = Liabilities + Equity

While assets include fixed assets, cash, inventories, account receivables etc, liabilities include accounts payable, loans payable, accrued expenses etc.

Equity which represents the amount owed to the owners of the business includes retained earnings (which is the accumulation of the net income/loss over the years less dividends paid) and common shares.

Hence in current year,

Total equity = $255,213 - $151,328

= $103,885

If retained earnings is $47,588 then common stock

= $103,885  - $47,588

= $56,297

Change to equity next year

= $55,000

Change to retained earnings

= $44,200 - $12,000

= $32,200

Hence change in common stock

= $55,000 - $32,200

= $22,800

Common stock balance

= $56,297  + $22,800

= $79,097

Assume that you are a retail customer. Use the information below to answer the following question. Bid Ask Borrowing Lending S0($/€) $1.42 = €1.00 $1.45 = €1.00 i$ 4.25% APR 4% APR F360($/€) $1.48 = €1.00 $1.50 = €1.00 i€ 3.10% APR 3% APR If you borrowed $1,000,000 for one year, how much money would you owe at maturity? A. $1,450,352 B. $1,042,500 C. € 1,024,500 D. $1,525,400

Answers

Answer:

$1,042,500.

Explanation:

From the question above, we are given the following parameters; under the bid, we have $1.42 = €1.00 and $1.48 = €1.00; the borrowing and lending are $ 4.25% and 4% APR respectively for S0($/€).

Also, for F360($/€), the bid and ask values are: $1.48 = €1.00 and $1.50 = €1.00 respectively; the borrowing and lending values are 3.10% APR and 3% APR.

Therefore, the Borrowing rate is ($) 4.25% in $ . Thus, $1,000,000 for one year, one we owe

$1,000,000 × (1 + 0.0425) = $1,042,500 at maturity.

Windsor Co. is building a new hockey arena at a cost of $2,420,000. It received a down payment of $510,000 from local businesses to support the project, and now needs to borrow $1,910,000 to complete the project. It therefore decided to issue $1,910,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 9%.

Prepare the journal entry to record the issuance of the bonds on January 1, 2019.

Answers

Answer:

Dr    Cash   $2,032,577.26

Cr premium on bonds payable  $122,577.26  

Cr bonds payable                        $1,910,000

Explanation:

First and foremost the proceeds received from the bond issuance needs to determine the pv formula in excel as follows:

=-pv(rate,nper,pmt,fv)

rate is the yield  to maturity of 9%

nper is the number of annual coupons payable by the bond which is 10

pmt is the amount of annual coupon i.e  $1,910,000*10%=$191000

fv is the face value of the bond which is  $1,910,000

=-pv(9%,10,191000,1910000)=$2,032,577.26  

premium on bonds issuance= 2,032,577.26-1,910,000.00= $122,577.26  

Oldham Corporation bases its predetermined overhead rate on a variable manufacturing overhead cost of $4.00 per machine-hour and fixed manufacturing overhead cost of $87,822 per period. If the denominator level of activity is 4,100 machine-hours, what would be the fixed component in the predetermined overhead rate

Answers

Answer:

$21.42

Explanation:

The computation of fixed component in the predetermined overhead rate is shown below:-

Fixed component in the predetermined overhead rate = Fixed Overhead ÷ Machine Hours

= $87,822 ÷ 4,100

= $21.42

Therefore for computing the fixed component in the predetermined overhead rate we simply divide the fixed overhead by machine hours.

And all the other information i.e given is not relevant. Hence, ignored it

Vandy Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 31 $ 29 Accounts receivable 61 73 Inventory 59 61 Property, plant, and equipment 684 550 Less accumulated depreciation 349 319 Total assets $ 486 $ 394 Liabilities and stockholders' equity: Accounts payable $ 53 $ 54 Accrued liabilities 20 21 Income taxes payable 52 48 Bonds payable 203 190 Common stock 61 60 Retained earnings 97 21 Total liabilities and stockholders' equity $ 486 $ 394 Income Statement Sales $ 807 Cost of goods sold 492 Gross margin 315 Selling and administrative expense 182 Net operating income 133 Gain on sale of equipment 16 Income before taxes 149 Income taxes 45 Net income $ 104 The company sold equipment for $18 that was originally purchased for $14 and that had accumulated depreciation of $12. It paid a cash dividend of $28 during the year and did not retire any bonds payable or repurchase any of its own common stock. Required: Prepare a statement of cash flows for the year using the indirect method.

Answers

Answer:

See below the statement of Cash flow from Vandy Corporation.

Explanation:

Vandy Corporation

Statement of Cash Flow

CASH FLOW FROM OPERATING ACTIVITIES:

Net Income                                                                                     $104

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation on Fixed Assets ($349-$319+$12)                             $42

Gain on Sale of Equipment                                                              ($16)

(Increase) Decrease in Current Assets:

Accounts Receivables                                                                       $12

Inventory                                                                                             $2

Increase (Decrease) in Current Liabilities:

Accounts Payable                                                                              ($1)

Accrued Liabilities                                                                              ($1)

Income taxes payable                                                                        $4

Net Cash provided by Operating Activities                                $146

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of Equipment                                                    $18

Purchase of Property, plant and equipment ($684-$550+$14)     ($148)

Net Cash Flow from Investing Activities                                      ($130)

CASH FLOWS FROM FINANCING ACTIVITIES:

Bonds Payable                                                                                       $13

Issuance of Common Stock                                                                   $1

Payment of Dividends                                                                       ($28)

Net Cash from Financing Activities                                                ($14)

Net Increase (Decrease) in Cash                                                        $2

Opening Cash Balance                                                                       $29

Ending Cash Balance                                                                           $31

Which of the following would shift the long-run aggregate supply curve right? a. both an increase in the capital stock and an increase in the price level b. an increase in the capital stock, but not an increase in the price level c. an increase in the money supply, but not an increase in the capital stock d. neither an increase in the money supply nor an increase in the capital stock

Answers

Answer:

b. an increase in the capital stock, but not an increase in the price level.

Explanation:

In order to understand both short-run economic fluctuations and how the economy movement from short to long run, we need the aggregate supply and aggregate demand model.

An increase in the capital stock, but not an increase in the price level would shift the long-run aggregate supply curve right.

The long-run aggregate supply curve would shift rightward when immigration from foreign countries rises or technology improves.

When the price level rises, the wealth effect and the interest-rate effect provide incentives for consumers to spend less. The price level of goods and services in an economy influences the exchange rate, imports and exports

Use of the marginal cost of capital

a. None of these options are correct.
b. recognizes that the return from the last dollar of funds generated should be greater than or equal to the cost of the last dollar of funds raised.
c. acknowledges that when retained earnings are used up as a source of equity, the cost of capital rises as new common stock is sold to support more growth and recognizes that the return from the last dollar of funds generated should be greater than or equal to the cost of the last dollar of funds raised.
d. acknowledges that when retained earnings are used up as a source of equity, the cost of capital rises as new common stock is sold to support more growth.

Answers

Answer:

The correct answer is the option B: recognizes that the return from the last dollar of funds generated should be greater than or equal to the cost of the last dollar of funds raised.

Explanation:

To begin with, the concept of ''marginal cost of capital'' refers to the composite rate of return that is required by the shareholders and the debt-holders in order to establish a new investment in the actual company. Moreover, this type of cost relates to the weighted average cost of the last dollar of new capital raised by the company and is has the necessity of being greater than or at least equal to the cost of the last dollar of funds raised due to the fact that only in that way the investors will consider to invest again in a new project for the company.

Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 37,000 customers, but actually served 27,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:

Revenue: $5.50q

Wages and salaries: $35,200 + $1.70q

Supplies: $1.10q

Insurance: $12,400

Miscellaneous expenses: $8,400 + $0.50q

The company reported the following actual results for February:

Revenue $ 159,800
Wages and salaries $ 70,000
Supplies $ 16,400
Insurance $ 12,400
Miscellaneous expense $ 27,700


Required:

Prepare the company's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Answers

Answer and Explanation:

The preparation of company's flexible budget performance report for February is shown below:-

                                    Arrasmith Corporation

                           Flexible budget performance report

                             For the month ended February

                        Planing     Activity      Flexible   Revenue and   Actual

                        budget       variance    budget   spending           result

                                                                                 variance

Customer

served               37,000       -                  27,000                           27,000

Revenue         $203,500    $55,000 U  $148,500  $11,300 F     $159,800

               (37,000 × $5.50q)              (27,000 × $5.50q)    

Expenses

Wages and

salaries           $98,100      $17,000 F     $81,100     $11,100 F        $70,000

      (37,000 × 1.70) + 35,200)             (27,000 × 1.70) + 35,200

Supplies          $40,700     $11,000 F      $29,700   $13,300 F      $70,000

                             (37,000 × 1.10)       (27,000 × 1.10)

Insurance        $12,400     $0                   $12,400      0                 $12,400

Miscellaneous

expenses        $26,900    $5,000 F       $21,900      $5,800 U      $27,700

             (37,000 × 0.50) + 8,400        (27,000 × 0.50) + 8,400

Total

expenses     $178,100        $33,000 F   $141,500     $18,600 F      $126,500

Net operating

income            $25,400    $22,000 U    $3,400       $29,900 F      $33,300

Therefore to reach net operating income we simply deduct the total expenses from Revenue.

Answer and Explanation:

As per the data given in the question,

ArraSmith Corporation

Flexible budget performance report

                    Planning    Activity      Flexible   Revenue & spending    Actual

                       budget     Variance    budget      Variance                     Results

Customer served 37,000                    27,000                                        27,000

Revenue       $203,500  $55,000 U   $148,500       $11,300 F          $159,800

Expenses:

Wages and Salaries $98,100 $17,000 F $81,100       $11,100 F          $70,000

Supplies      $40,700      $11,000 F     $29,700         $13,300 F         $16,400

Insurance    $12,400           0              $12,400                 0                 $12,400

Miscellaneous expense $26,900 $5,000 F $21,900 $5,800 U       $27,700

Total expense $178,100 $33,000 F $145,100 $18,600 F $126,500

Net Operating Income $25,400 $22,000 U $3,400  $29,900 F   $33,300

On January 1, 2020, Martinez Company makes the two following acquisitions. 1. Purchases land having a fair value of $330,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $483,153. 2. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $380,000 (interest payable annually). The company has to pay 10% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Martinez Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method.

Answers

Answer:

Explanation:

a)

Date Account Titles and Explanation Debit Credit

January 1, 2020 Land $360,000.00

Discount on notes payable $246,621.00

Notes payable $ 606,621.00

(To record purchase of land by issuing note payable)

PV of $606,621 discounted at 11% =606,621/(1.11)^5 = $ 360,000

2.

Computation of the discount on notes payable:

Maturity value $560,000

Present value of $560,000 due in 8 years at 11% = $560,000 * 0.43393 = $ 243,000

Present value of $39,200 payable annually for 8 years at 11% annually—$39,200 * 5.14612 = $ 201,728

Present value of the note = $ 243,000 + $ 201,728 = $ 444,728

Discount = $ 560,000 - $ 444,728 = $ 115,272

Date Account Titles and Explanation Debit Credit

January 1, 2020 Equipment $444,728.00

Discount on notes payable $115,272.00

Notes payable $ 560,000.00

(To record purchase of equipment by issuing note payable)

b)

1.

Date Account Titles and Explanation Debit Credit

December 31, 2020 Interest expense ($ 360,000*11%) $39,600

Discount on notes payable $39,600

(To record the interest expense recorded and discount amortized)

2.

Date Account Titles and Explanation Debit Credit

December 31, 2020 Interest expense ($444,728 * 11%) $48,920

Discount on notes payable $9,720

Interest Payable ( $ 560,000 * 7%) $39,200

(To record the interest expense recorded)

The following is cash flow data for Rocket Transport: Cash dividend $ 98,000 Purchase of bus $ 18,000 Interest paid on debt $ 25,000 Sales of old equipment $ 45,000 Repurchase of stock $ 127,000 Cash payments to suppliers $ 125,000 Cash collections from customers $ 480,000 a. Find the net cash provided by or used in investing activities. (Input the amount as positive value.) b. Find the net cash provided by or used in financing activities. (Input the amount as positive value.)

Answers

Answer:

a. Net cash flows from investing activities       $27,000

b. Net cash flows from investing activities   ($225,000)

Explanation:

Rocket Transport

Statement of cash flows (extract)

Purchase of vehicle                                          ($18,000)

Proceeds from disposal of equipment            $45,000

Net cash flows from investing activities       $27,000

Dividend paid                                                  ($98,000)

Repurchase of stock                                      ($127,000)

Net cash flows from investing activities   ($225,000)

Note that interest paid, cash payments to suppliers and cash collections from customers affect the net cash flows from operating activities.

Answer:

Net Cash flow from Investing activities   $27,000

Net Cash flow from Financing activities ($250,000)

Explanation:

a.

All the cash flows related to the fixed asset is called cash flows from the investing activities. Cash inflows from the sale fixed asset and cash outflows from the purchase of fixed assets are included in it.

Purchase of bus                                       ($18,000)

Sales of old equipment                            $45,000

Net Cash flow from Investing activities $27,000

b.

Cash flow from financing activities is the cash inflows and outflows related to the fund of the business.

Cash dividend                                             ($98,000)

Repurchase of stock                                   ($127,000)

Interest paid on debt                                   ($25,000)

Net Cash flow from Financing activities     ($250,000)

Sheffield Corp. issued $7080000 of 11%, ten-year convertible bonds on July 1, 2020 at 96.1 plus accrued interest. The bonds were dated April 1, 2020 with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1416000 of these bonds were converted into 600 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion. If "interest payable" were credited when the bonds were issued, what should be the amount of the debit to "interest expense" on October 1, 2020

Answers

Answer:

The amount of the debit to "interest expense" on October 1, 2020 is $194,700

Explanation:

According to the given data we have the following:

Bond face value=$7,080,000

interest rate=11%

There are 3 months interest recognized from july to september, therefore, to calculate the amount of the debit to "interest expense" on October 1, 2020 we would have to make the following calculation:

amount of the debit to "interest expense" on October 1, 2020=$7,080,000*11%*3 months / 12 months

amount of the debit to "interest expense" on October 1, 2020=$194,700

The amount of the debit to "interest expense" on October 1, 2020 is $194,700

On December 31,2018,Infinity Inc.records an adjusting entry to accrue interest on a note.On January 31,2019,Infinity receives a check for $4,680,which represents two months of accumulated interest on the note.Upon receipt of this interest payment,Infinity should debit: A)Interest Receivable for $2,340,debit Cash $2,340,and credit Interest Revenue for $4,680. B)Cash for $4,680,credit Interest Receivable for $2,340,and credit Interest Revenue for $2,340. C)Cash for $4,680 and credit Interest Receivable for $4,680. D)Cash for $4,680 and credit Interest Revenue for $4,680.

Answers

Answer:

D)Cash for $4,680 and credit Interest Revenue for $4,680.

Explanation:

The Journal entry with their narrations and explanation is here shown below:-

Cash Dr, $4,680

   To Interest revenue $4,680

(Being receipt of interest payment is recorded)

Therefore for recording this entry here we debited the cash as it is received and we credited the interest revenue as it is decreasing.

Final Examination Hide or show questions Calculator Problem 9-23 (b) (LO. 2) Ricardo, who is self-employed, uses his automobile 85% for business and during 2019 drove a total of 32,200 business miles. Information regarding his car expenses is listed below. Business parking $345 Auto insurance 2,800 Auto club dues (includes towing service) 275 Toll road charges (business-related) 205 Oil changes and engine tune-ups 180 Repairs 1,890 Depreciation allowable 3,600 Fines for traffic violations (incurred during business use) 95 Gasoline purchases 4,125 What is Ricardo's deduction in 2019 for the use of his car if he uses:

Answers

Answer:

Explanation:

a) actual cost method:-

=deductions × percentage

= 345 + 205 + 85% (2800 + 275 + 180 + 1890 +3600 +4125 )

=550 + 10939.5

=11489.5 = 11490

Note :- fines are not taken.

b) automatic mileage method:-

=total number of business miles × standard rate

=32200×0.58 +345+205

=19226

The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 1 $ 59,000 $ 5,000 2 $ 9,000 $ 10,000 3 $ 20,000 4 $ 21,000 5 $ 24,000 6 $ 22,000 7 $ 20,000 8 $ 18,000 9 $ 17,000 10 $ 17,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large

Answers

Answer:

4.5 years

No

Explanation:

The Payback period calculates the amount of time it takes to recover the amounts invested in a project from its cumulative cash flows.

Total investments = $-59,000 - $9,000 = $-68,000

In the first year: $-68,000 + $5,000 = $-63,000 is recovered

In the 2nd year: $-63,000 + $ 10,000 = $-53,000 is recovered

In the 3rd year: $-53,000 +  $ 20,000 = $-33,000 is recovered

In the 4th year $-33,000 + 21,000 = $-12,000

In the 5th year $-12000 + $24,000 = $12,000

The amount invested is recovered between the 4th and 5th year

4 years + $-12000 / $24,000 = 4.5years

The Payback period  would not be affected if the cash inflow in the last year were several times as large because the cash flow would have been recovered by the 5tj year.

I hope my answer helps you

Answer:

Explanation:

Year        Investment               Cash Inflow         Accumulate Cash Inflow

1               $59,000                   $5,000       $5000

2              $9,000                     $10,000       $15000

3                                               $20,000       $35000

4                                                $21,000       $56000

5                                                $24,000       $12000

6                                               $22,000       $34000

7                                                $20,000       $54000

8                                               $18,000       $72000

9                                               $17,000       $89000

10                                              $17,000                        $106000

Pay back period ⇒ 4.5year ⇒ 68000/68000 + 12000/24000

⇒ 4.5years

2. Dexrease payback period

All of the following statements regarding leases are true except _______.
Multiple Choice:
A) For a finance lease, the lessee records the leased item as its own asset.
B) For a finance lease, the lessee amortizes the right-of-use asset acquired under the lease.
C) Finance leases create a liability on the balance sheet.
D) Finance leases do not transfer ownership of the asset under the lease, but operating leases often do.
E) For a short-term lease of a few days or weeks, the lessee records payments as rental expense.

Answers

Answer:

I think its D

Explanation:

Hpe this helps.

All of the following statements regarding leases are true except finance leases do not transfer ownership of the asset under the lease, but operating leases often do. Thus, option (d) is correct.

What is finance?

Finance includes borrowing money to go through tough times, saving money, and investing money. Finance is the provision of funds for credit against anything. Personal, public, and business finance are the three different categories.

Capital leases and finance leases are both common terms for the same thing. The duration of long-term leases is usually anticipated. When the operating lease expires, the leasing firm will return the asset.

Therefore, option (d) is correct.

Learn more about on finance, here:

https://brainly.com/question/21658099

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A well-known financial writer argues that he can earn 148 percent per year buying wine by the case. Specifically, he assumes that he will consume one $12 bottle of fine Bordeaux per week for the next 12 weeks. He can either pay $12 per week or buy a case of 12 bottles today. If he buys the case, he receives a 9 percent discount and, by doing so, earns the 148 percent. Assume he buys the wine and consumes the first bottle today. Calculate the EAR.

Answers

Answer:

EAR = 148%

Explanation:

calculating the EAR ( applying the formula for present value of annuity )

cost of case = 12 * 12 * ( 1 - 0.09 ) = 131.04

Pv   =  131.04

cost per case =  $12

no of weeks = 12 weeks

rate of the wine per ( IRR ) = IRR(57;56;55;;;;1)=  1.76319

rate of the wine per week = 1.76319%

therefore EAR = ( 1 + 0.0176319) ^52 - 1 = 148.15% ≈ 148%

According to a summary of the payroll of Mountain Streaming Co., $110,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $25,000 was subject to state and federal unemployment taxes. a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%. $ b. Journalize the entry to record the accrual of payroll taxes. If an amount box does not require an entry, leave it blank.

Answers

Answer:

a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.

$9,800

b. Journalize the entry to record the accrual of payroll taxes. If an amount box does not require an entry, leave it blank.

Dr FICA Social Security expense 6,600Dr FICA Medicare expense 1,650Dr Federal unemployment tax expense 200Dr State unemployment tax expense 1,350     Cr FICA Social Security payable 6,600     Cr FICA Medicare payable 1,650     Cr Federal unemployment tax payable 200     Cr State unemployment tax payable 1,350

Explanation:

payroll taxes should be:

social security $110,000 x 6% = $6,600

Medicare $110,000 x 1.5% = $1,650

federal unemployment $25,000 x 0.8% = $200

state unemployment $25,000 x 5.4% = $1,350

total = $9,800

Both employees and employers must pay equal amounts of FICA taxes (social security and medicare), but only employees pay unemployment taxes.

Exercise 24-5 Payback period computation; even cash flows LO P1 Compute the payback period for each of these two separate investments: A new operating system for an existing machine is expected to cost $520,000 and have a useful life of six years. The system yields an incremental after-tax income of $150,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000. A machine costs $380,000, has a $20,000 salvage value, is expected to last eight years, and will generate an after-tax income of $60,000 per year after straight-line depreciation.

Answers

Answer and Explanation:

The computation of the payback period is shown below:

1. Payback period = Initial investment ÷ Net cash flow      

where,

Initial investment is $520,000

Net cash flow is =  incremental after-tax income + depreciation expense

= $150,000 + $85,000

= $235,000

The depreciation expense is

= ($520,000 - $10,000) ÷ (6 years)

= $85,000

Now the payback period is

= $520,000 ÷ $235,000

= 2.21 years

2. Payback period = Initial investment ÷ Net cash flow      

where,

Initial investment is $380,000

Net cash flow is =  incremental after-tax income + depreciation expense

= $60,000 + $45,000

= $105,000

The depreciation expense is

= ($380,000 - $20,000) ÷ (8 years)

= $45,000

Now the payback period is

= $380,000 ÷ $105,000

= 3.62 years

An individual is planning to set-up an education fund for his grandchildren. He plans to invest $17,500 annually at the end of each year. He expects to withdraw money from the fund at the end of 10 years and expects to earn an annual return of 8%. What will be the total value of the fund at the end of 10 years? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Answers

Answer:

Pv=$8105.86

Fv=$37,781.18

Pva=$691,014.62

Fva=$117426.42

Explanation:

Kindly check the attached picture for detailed explanation

An acquisition premium is the amount by which the price offered for an existing business exceeds the Select one: a. amount paid as a down payment to be held in escrow until closing. b. difference between the amount that was offered and the amount that is escrowed c. comparable value of similar companies within the same market. d. preacquisition market value of the target company e. fair market value of similar companies in the same geographic locale.

Answers

Answer:

d. pre-acquisition market value of the target company.

Explanation:

An acquisition premium is the amount by which the price offered for an existing business exceeds the pre-acquisition market value of the target company.

An acquisition premium gives the difference between the actual amount of money paid in acquiring a target firm and the estimated real value of obtaining the firm before the acquisition.

Acquisition premium are usually recorded on the balance sheet as "goodwill."

Mills Corporation's balance sheet included the following information: Accounts Receivable $ 580,000 Less: Allowance for Doubtful Accounts 73,000 Accounts Receivable, Net of Allowance $ 507,000 If the Allowance account had a credit balance of $31,500 immediately before the year-end adjustment for bad debts and no accounts were written-off or allowed for during the year, what was the amount of Bad Debt Expense recognized during the year

Answers

Answer:

The amount of Bad Debt Expense recognized during the year is $41,500.

Explanation:

Bad debt expense is an estimate of the accounts receivable that is deemed uncollectible. At times, it is determined by percentage of credit method or aging method.

If the allowance account had an opening balance of $31,500 before adjustment and there was no rite-off during the period, with a closing balance of $73,000, the bad debt expense is simply the difference between the closing balance and the opening balance, that is , $73,000 - $31,500 = $41,500.

Consider a portfolio manager with a $20,500,000 equity portfolio under management. The manager wishes to hedge against a decline in share values using stock index futures. Currently a stock index future is priced at 1250 and has a multiplier of 250. The portfolio beta is 1.25. Calculate the number of contracts required to hedge the risk exposure and indicate whether the manager should be short or long.

Answers

Answer:

Assume that a month later the equity portfolio has a market value of $20,000,000 and the stock index future is priced at 1150 with a multiplier of 250. Calculate the profit on the equity position.

Calculate the overall profit.

$1,550,000

Explanation:

Assume that a month later the equity portfolio has a market value of $20,000,000 and the stock index future is priced at 1150 with a multiplier of 250. Calculate the profit on the equity position.

Calculate the overall profit.

The manager should be short on the stock index futures because the position on the equity portfolio is long.

Number of contracts required to hedge

= [$20,500,000/(1250*250)] * 1.25 = 82 contracts

Profit on the equity portfolio

= $20,000,000 - $20,500,000 = -$500,000

Profit on the stock index future

= [(1250)(250) – (1150)(250)] x 82 = $2,050,000

Overall profit

=  $2,050,000 - $500,000

= $1,550,000

therefore, the overall profit is  $1,550,000

In its most recent financial statements, Del-Castillo Inc. reported $70 million of net income and $960 million of retained earnings. The previous retained earnings were $943 million. How much in dividends did the firm pay to shareholders during the year? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.

Answers

Answer:

$53,000,000

Explanation:

The amount of dividends paid by Del-Castillo Inc. can be ascertained using the retained earnings formula as follows:

retained earnings=net income+previous year retained earnings-dividends paid

retained earnings for current year is $960 million

net income is $70 million

previous year retained earnings were $943 million

dividends paid is unknown

dividends=net income+previous year retained earnings-current year retained earnings

dividends=$70 million+$943 million-$960 million

dividends=$53 million

The Edwards Construction Supply Company is adopting a just-in-time inventory system. Jim Edwards, the president, has decided that restocking only when the inventory falls below a specific level will save the company thousands of dollars. Many of Edwards’ employees have been with the company for 30 years or more, and change like this might be unsettling for them. Edwards knows that his employees will be more comfortable with the system if their supervisors understand it fully. What purpose will this meeting serve?

Answers

Answer: To Provide a Smooth Transition

Explanation:

As the text mentions, many of Edwards’ employees who have been with the company for 30 years or more, might find change unsettling. However, they trust their supervisors enough to be comfortable if the Supervisors understand the new system.

For this reason, this meeting is very important as it is a chance to get the supervisors on board. Here the Edwards Company can explain in detail the new system so that the Supervisors can understand it thoroughly so that the employees might be able to follow them. Any questions or concerns can be dealt with which would make the transition smoother for the company and it's employees.

Indicate the effect—Understate, Overstate, No Effect—that each of the following errors has on 2020 net income and 2021 net income. 2020 2021 (a) Equipment (with a useful life of 5 years) was purchased and expensed in 2018. Select an option Select an option (b) Wages payable were not recorded at 12/31/20. Select an option Select an option (c) Equipment purchased in 2020 was expensed. Select an option Select an option (d) 2020 ending inventory was overstated. Select an option Select an option (e) Patent amortization was not recorded in 2021. Select an option Select an option

Answers

Answer: The answer is provided below

Explanation:

The net income is excess of revenues over expenses after the adjustment for depreciation expense and the income tax expense. Net income is also called the net profit.

(a) Equipment (with a useful life of 5 years) was purchased and expensed in 2018.

2020 : It will be overstated in the net income.

2021: It will be overstated in the net income.

b. Wages payable were not recorded at 12/31/20.

2020: It will be overstated in the net income.

2021: It will be understated in the net income.

c. Equipment purchased in 2020 was expensed.

2020: It will be understated in the net income.

2021: It will be overstated in the net income

d. 2020 ending inventory was overstated.

2020: It will be overstated in the net income.

2021: It will be understated in the net income.

e. Patent amortization was not recorded in 2021.

2020: It will be no effect in the net income.

2021: It will be overstated in the net income

Warren Buffet opposes stock splits to lower the share price because he believes:________.
a. lower share price will encourage other companies to try to take over the company from existing shareholders.
b. lower stock price encourages short term investing, whereas he is looking for long-term investors.
c. stock splits encourage long-term investing, which is detrimental to his firm's investment policy.
d. lower share price indicates poor growth prospects..

Answers

Answer:. b. lower stock price encourages short term investing, whereas he is looking for long-term investors.

Explanation:

Warren Buffet has stated that he does not want to split Berkshire Hathaway's stock because he believes that it would attract short term investors whereas he is looking for long term investors. He believes that a stock being split makes it susceptible to investors who just want to buy it for the meantime, wait for it to appreciate a bit and then sell. He however prefers Companies with a long term potential so he prefers people investing for the long run.

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