Charles Chadwick opened a business called Charlie's Detective Service in January 2019. At the end of January the accounts had the following balances:
Prepare a trial balance for Charlie's Detective Service as of January 31, 2019.
Accounts Payable $4,000
Accounts Receivable $3,000
Cash $24,400
Charles Chadwick, Capital $30,000
Charles Chadwick, Drawing $3,000
Computer Equipment $8,000
Office Furniture $5,000
Office Supplies $300
Professional Fees $12,000
Rent Expense $1,500
Utilities Expense $800
Answers
Answer:
Please find the complete solution in the attached file.
Explanation:
Related Questions
Natasha and Link have been married for 2 years. They live in North Carolina and are about to make an offer on their first home. Their goal is to own the property so that if either Natasha or Link were to die, the surviving spouse would own the property outright. They also want to keep things private and avoid probate. How should they title their new home?
A. Link should own the house fee simple and name Natasha as his beneficiary.
B. Tenancy in common is the best way to title the property because it meets all their objectives.
C. They should title the home as JTWROS as a way to accomplish their goals.
D. Because they live in North Carolina, they should title the home as community property.
Answers
Answer:
Natasha and LInk
Based on the spouses goal to own the property so that if either Natasha or LInk were to die, the surviving spouse would own the property outright, keeping things private and avoid probate, they should title their new home as:
C. They should title the home as JTWROS as a way to accomplish their goals.
Explanation:
The arrangement that meets their goals is Joint tenancy with rights of survivorship (JTWROS) which affords survivorship rights to either Natasha or Link in the event of the death of either spouse. In other words, JTWROS allows either Natasha or Link to automatically own the property without publicity or probate. This arrangement will meet all their arrangements, unlike tenancy in common. Moreover, there is no community property provision in North Carolina where they live. Lastly, naming Natasha presupposes that Link would die first. This does not meet their expectations.
______contains journal vouchers of past periods for audit trail
Answers
Answer:
Journal voucher history file
Future pension liabilities are estimated based on all of the following except a.expected employee compensation levels. b.federal withholding income tax. c.employee life expectancy. d.employee turnover.
Answers
Answer:
The answer is B.
Explanation:
The correct option is B. - federal withholding income tax.
Pension liability is the amount of money that a company or government at any level(federal or state) has to account for in order to make future pension payments. It is a future payment that a company or government is obligated to pay its retired employees.
They take into considerations:
1. Their employees turnover
2. Their employees life expectancy
3. Their employees compensation level.
Federal tax level is not the issue because the payment is futuristic and federal tax can change.
The San Pedro Company forecasts that total overhead for the current year will be $10,000,000 and that total machine hours will be 200,000 hours. Year to date, the actual overhead is $8,000,000 and the actual machine hours are 100,000 hours. If the company uses a predetermined overhead rate based on machine hours for applying overhead, what is that overhead rate
Answers
Answer:
the overhead rate is $50 per machine hour
Explanation:
The computation of the overhead rate is shown below:
Predetermined overhead rate
= Estimated total Overhead ÷ Estimated total machine hour
= $10,000,000 ÷ 200,000 hours
= $50 per machine hour
hence, the overhead rate is $50 per machine hour
The same should be considered and relevant
While under contract to play professional basketball for the Philadelphia 76ers, Billy Cunningham, an outstanding player, negotiated a three-year contract with the Carolina Cougars, another professional basketball team. The contract with the Cougars was to begin at the expiration of the contract with the 76ers. In addition to a signing bonus of $125,000, Cunningham was to receive under the new contract a salary of $100,000 for the first year, $110,000 for the second, and $120,000 for the third. The contract also stated that Cunningham "had special, exceptional and unique knowledge, skill and ability as a basketball player" and that Cunningham therefore agreed the Cougars could enjoin him from playing basketball for any other team for the term of the contract. In addition, the contract contained a clause prohibiting its assignment to another club without Cunningham’s consent. In 1971, the ownership of the Cougars changed, and Cunningham’s contract was assigned to Munchak Corporation, the new owners, without his consent. When Cunningham refused to play for the Cougars, Munchak Corporation sought to enjoin his playing for any other team. Cunningham asserts that his contract was not assignable. Was the contract assignable? Explain.
Answers
Answer:
Billy Cunningham and the Cougars
The contract was not assignable to another club.
But, the contract (assets and liabilities) can be inherited by a successor entity using the same club, the Cougars.
Explanation:
The contract was not assigned to another club, despite the change of ownership of the Cougars. Interestingly, the contract between Cunningham and Carolina Cougars was inheritable with the change of ownership of the Cougar Club from the formers owners, Carolina Cougars, to the new owners, Munchak Corporation. The clause prohibiting the contract's assignment to another club without Cunningham's consent was not violated.
The purpose of managerial accounting is to provide useful information to management and other internal decision makers. It does this by collecting, managing, and reporting both monetary and nonmonetary information in a manner useful to internal users. Major characteristics of managerial accounting include (1) focus on internal decision makers, (2) emphasis on planning and control, (3) flexibility, (4) timeliness, (5) reliance on forecasts and estimates, (6) focus on segments and projects, and (7) reporting both monetary and nonmonetary information. Ethics are beliefs that distinguish right from wrong. Ethics can be important in reducing fraud in business operations.
The purposes of managerial accounting are to provide useful information to aid in: __________
a. Renewing pest activities,
b. Determining costs of products and services.
c. Determining costs of employee wages and "lanes
d. Comparing actual to planned
Answers
Answer:
d. Comparing actual to planned
Explanation:
The purpose of managerial accounting are to provide useful information to aid managers. It is important to remember that managerial accounting is for internal use only whilst financial accounting is for external use (reporting purposes).
Since one of the characteristics of managerial accounting is planning and control, this is made possible by comparing actual to planned.
Assume the risk-free rate is 4%. You are a financial advisor, and must choose one of the funds below to recommend to each of your clients. Whichever fund you recommend, your clients will then combine it with risk-free borrowing and lending depending on their desired level of risk.
Expected Return Volatility
Fund A 10% 10%
Fund B 15% 22%
Fund C 6% 2%
Required:
a. Which fund would you recommend to a client seeking the highest possible expected return with a maximum volatility of 22%?
b. Which fund would you recommend to a client seeking the highest possible expected return with a maximum volatility of 22%?
c. Which fund would your recommend without knowing your clients risk preference?
Answers
Answer:
Following are the solution to the given point.
Explanation:
Calculate each fund's Sharpe ratio. It Fund is the best danger reward with the highest Sharpe ratio.
[tex]\text{Sharpe Ratio} = \frac{\text{(Fund return - \text{risk free return)}}}{Volatility}\\\\\to Fund A= \frac{(10\%-4\%)}{10\%} = 0.6\\\\\to Fund B= \frac{(15\%-4\%)}{22\%} = 0.5\\\\\to Fund C = \frac{(6\%-4\%)}{2\%}=1.0\\\\[/tex]
Fund C consequently offers the best risk-benefit. and without understanding client risk preference, we will advise Fund C for any clients. If a client wants to have a 22 percent minimum volatility, we'll nevertheless propose that Fund C instead of Fund B is available, because an investor can take risk-free rates to the degree that the total portfolio volatility stands at 22 percent and deposit it in Fund C.
Cullumber Corporation has announced that its net income for the year ended June 30, 2017, was $1,353,412. The company had EBITDA of $4,948,000, and its depreciation and amortization expense was equal to $1,128,000. The company's average tax rate is 34 percent. What was its interest expense
Answers
Answer:
See below
Explanation:
Net income = $1,353,412
Tax rate is 34% hence the company's EBT amount is calculated as
EBT = $1,353,412 / 0.66 = $2,050,624.24
Add back Depreciation and amortization to the EBT
= $2,050,624.24 + $1,128,000
= $3,178,624.24
The difference between the above and EBITDA amount will be the interest expense for the year
= $4,948,000 - $3,178,624.24
= $1,769,375.76
Therefore, the interest expense is $1,769,375.76
As Laura checks items off her meeting agenda and various individuals provide input and insight, she beams at her team. She is so proud of the work they do at her clinic every day. They have always been a very high performing team, and for that, she has always been thankful.
Select the statement that is true about high performing teams.
a) High performing teams are able to come up with more rapid solutions and have increased productivity.
b) High performing teams never face obstacles.
c) High performing teams should only have about 4-6 members.
d) High performing teams are most effective when all members share the same skills and experience.
Answers
Answer: a) High performing teams are able to come up with more rapid solutions and have increased productivity.
Explanation:
A high performing team is as the term implies, one that is productive. To be productive one has to be able to come up with solutions to problems as fast as possible and implement those solutions so as to continue or even increase production.
A high performing team is one that would do the above. Laura's team provides inputs and insights which means they come up with solutions and they also show up to work every day to be productive. They are indeed a high performing team.
At the end of January, the unadjusted trial balance of Windsor, Inc. included the following accounts: DEBIT CREDIT Sales (80% of this is credit sales) $500,000 Accounts Receivable $340,000 Allowance for Doubtful Accounts $800 Answer the following 2 questions: 1) Windsor uses the balance sheet approach in estimating uncollectible accounts expense, and aging the accounts receivable indicates the estimated uncollectible portion to be $7,400. What is the amount of uncollectible accounts expense recognized in Windsor's income statement for January
Answers
Answer:
$6,600
Explanation:
Calculation to determine What is the amount of uncollectible accounts expense recognized in Windsor's income statement for January
Using this formula
Uncollectible accounts expense=estimated uncollectible portion-Allowance for Doubtful Accounts
Let plug in the formula
Uncollectible accounts expense=$7400-$800
Uncollectible accounts expense=$6,600
Therefore the amount of uncollectible accounts expense recognized in Windsor's income statement for January is $6,600
During 2004, Thor Lab supplied hospitals with a comprehensive diagnostic kit for $120. At a volume of 80,000 kits, Thor had fixed costs of $1,000,000 and a profit before income taxes of $200,000. Due to an adverse legal decision, Thor’s 2005 liability insurance increased by $1,200,000 over 2004. Assuming the volume and other costs are unchanged, what should the 2005 price be if Thor is to make the same $200,000 profit before income taxes?
a. $120.00
b. $135.00
c. $150.00
d. $240.00
Answers
Answer:
d. $240.00
Explanation:
Calculation to determine what should the 2005 price be if Thor is to make the same $200,000 profit before income taxes?
2004 CM% = 12.5% ($15/$120)
2005 CM = $2,400,000 ($1,000,000 + $200,000)
2005 CM per unit = $2,400,000/80,000 units
2005 CM per unit= $30 CM per unit;
2005 selling price per unit = $30/.125
2005 selling price per unit= $240
Therefore what should the 2005 price be if Thor is to make the same $200,000 profit before income taxes is $240
A company uses return on investment (ROI) to measure the performance of its business units. The company manufactures and distributes consumer goods. Last year, management identified a possible shortage of raw materials. To mitigate this risk, a large amount of raw material was bought in advance and stored in the manufacturing plant inventory. As a result of this decision, ROI will A. Have an unpredictable change. B. Decrease. C. Increase. D. Not change.
Answers
Answer: B. Decrease
Explanation:
Return on investment refers to the ratio between the net income and investment. It should be noted that a high return on investment implies that the investment's gains compare favourably to the cost.
In this scenario, since a large amount of raw material was bought in advance and stored in the manufacturing plant inventory, this will lead to an increase in the cost of production which therefore will reduce the return in investment.
Therefore, the correct option is B.
Commercial Services.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
Sales $3,000,000
Net operating income $150,000
Average operating assets $750,000
Required:
Consider each question below independently. Carry out all computations to two decimal places.
1. Compute the company’s return on investment (ROI).
2. The entrepreneur who founded the company is convinced that sales will increase next year by 50% and that net operating income will increase by 200%, with no increase in average operating assets. What would be the company's ROI?
3. The chief financial officer of the company believes a more realistic scenario would be a $1,000,000 increase in sales, requiring a $250.000 increase in average operating assets, with a resulting $200,000 increase in net operating income. What would be the company’s ROI in this scenario?
Answers
Answer:
1. ROI = Margin * Turnover
Margin = Net operating income / Sales
= 150,000 / 3,000,000
= 5%
Turnover = Sales / Average operating assets
= 3,000,000 / 750,000
= 4 times
ROI = 5% * 4
= 20%
2. Sales will increase by 50% and NOI will increase by 200%.
Margin = (150,000 * (1 + 200%)) / (3,000,000 * ( 1 + 50%))
= 10%
Turnover = (3,000,000 * ( 1 + 50%)) / 750,000
= 6
ROI = 10% * 6
= 60%
3. Sales will increase by $1,000,000. Average operating assets by $250,000 and NOI will increase by $200,000
Margin = (150,000 + 200,000) / (3,000,000 + 1,000,000)
= 8.75%
Turnover = (3,000,000 + 1,000,000) / (750,000 + 250,000)
= 4
ROI = 8.75% * 4
= 35%
Auto Industries Company reported the following on its income statement:
Income before income taxes $420,000
Income tax expense (120,000)
Net income $300,000
If the income statement also shows interest expense equal to $80,000, what is the company's times interest earned ratio?
a. 5 times.
b. 6.25 times.
c. 5.25 times.
d. 8 times.
Answers
Answer:
Option c. 5.25 times is the correct answer.
Explanation:
Below is the calculation:
Income before income tax = $420000
Income tax expenses = 120000 dollars
Net income = $300000
Interest expense = $80000
Interest earned ratio = Earning Before Interest and Taxes / Interest Expenses
Interest earned ratio = 420000 / 80000
Interest earned ratio = 5.25 times
Option c. 5.25 times is the correct answer.
Kiley Corporation had these transactions during 2022. Analyze the transactions and indicate whether each transaction is an operating activity, investing activity, financing activity, or noncash investing and financing activity.
a. Purchased a machine for $30,000, giving a long-term note in exchange.
b. Issued $50,000 par value common stock for cash.
c. Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.
d. Declared and paid a cash dividend of $13,000.
Answers
Answer:
A. Noncash investing and financing activities
B. Financing activities
C. Noncash investing and financing activities
D. Financing activities
Explanation:
To Analyze the transactions and indicate whether each transaction is AN OPERATING ACTIVITY, INVESTING ACTIVITY, FINANCING ACTIVITY, OR NONCASH INVESTING AND FINANCING ACTIVITY
A. Based on the information given the transaction is a NONCASH INVESTING AND FINANCING ACTIVITIES
B. Based on the information given the transaction is a FINANCING ACTIVITIES
C. Based on the information given the transaction is a NONCASH INVESTING AND FINANCING ACTIVITIES
D.Based on the information given the transaction is a FINANCING ACTIVITIES
a. Purchased a machine for $30,000, giving a long-term note in exchange, this transaction is an investing activity because it involves the acquisition of a long-term asset (machine) in exchange for a long-term note.
b. Issued $50,000 par value common stock for cash, this transaction is a financing activity because it involves the issuance of common stock in exchange for cash.
c. Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000,this transaction is a non-cash investing and financing activity because it involves the conversion of bonds into common stock.
d. Declared and paid a cash dividend of $13,000, This transaction is a financing activity because it involves the distribution of cash to shareholders as a dividend.
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Suppose that Canada can produce 15units of timber or 3 units of grain. Suppose that Mexico can produce 6 units of timber or 2 units of grain. Which of the following is CORRECT?
a. Canada has a comparative advantage in grain production.
b. Mexico has a comparative advantage in grain production.
c. The countries would find trade mutually beneficial at a trading ratio of 1 grain for 2 timber.
d. Mexico has an absolute advantage in timber production.
Answers
Answer: B. Mexico has a comparative advantage in grain production.
Explanation:
Comparative advantage simply means when an economy can produce a good at a lower opportunity cost than another economy.
From the information given, since Canada can produce 15units of timber or 3 units of grain. Therefore, 1 grain = 15/3 = 5 timber
On the other hand, Mexico can produce 6 units of timber or 2 units of grain. Therefore, 1 grain = 6/2 = 3 timber.
Therefore, Mexico haa a comparative advantage in grain based on the above.
Mid-Town Copy Service processes 2,100,000 photocopies per month at its mid-town service center. Approximately 50 percent of the photocopies require collating. Collating is currently performed by high school and college students who are paid $8 per hour. Each student collates an average of 5,000 copies per hour. Management is contemplating the lease of an automatic collating machine that has a monthly capacity of 6,000,000 photocopies, with lease and operating costs totaling $1,550, plus $0.05 per 1,000 units collated.(a) Determine the total costs of collating 500,000 and 1,500,000 per month:1. With student help.2. With the collating machine.(b) Determine the monthly volume at which the automatic process becomes preferable to the manual process.
Answers
Answer:
Mid-Town Copy Service
a. The total costs of collating 500,000 and 1,500,000 per month are:
500,000 1,500,000
1. With student help $800 $2,400
2. With the collating machine $1,575 $1,625
b. The monthly volume at which automatic process becomes preferable to the manual process is:
= 1,050,000 photocopies.
Explanation:
a) Data and Calculations:
Monthly photocopies processed per month = 2,100,000
Photocopies requiring collation = 1,050,000 (50% * 2,100,000)
Cost of collating per hour = $8
Average number of copies collated by a student per hour = 5,000
Total cost of manual collating copies = $8 * 1,050,000/5,000 = $1,680
Lease cost of automatic collating machine = $1,550 + $0.05 per 1,000 units collated
The total costs of collating 500,000 and 1,500,000 per month:
500,000 1,500,000
1. With student help $800 $2,400
($8 * 500,000/5,000) ($8 * 1,500,000/5,000)
2. With the collating machine $1,575 $1,625
($1,550 + $0.05* 500,000/1,000) ($1,550 + $0.05* 1,500,000/1,000)
b. The monthly volume at which automatic process becomes preferable to the manual process is 1,050,000.
At this volume, costs are:
Manual Process = $1,680 ($8 * 1,050,000/5,000)
Automatic Process = $1,603 ($1,550 + $0.05* 1,050,000/1,000)
Given the following production plan, use a chase production strategy to compute the monthly production, ending inventory/(backlog), net requirements and required workforce levels. A worker can produce 75 units per month. Assume that the beginning inventory in January is 750 units, and the firm desires to have 750 units of inventory at the end of June.
Month Jan Feb Mar Apr May Jun
Demand 2100 3000 5100 6000 4800 2400
Required:
a. What are the net requirements for January?
b. What month has the highest number of workers required?
c. What is the production level for June?
d. How many people will be employed for the month of January?
Answers
Answer:
Computation of the monthly production, ending inventory/(backlog), net requirements and required workforce levels:
a. The net requirements for January = 2,025 units and 27 workers.
b. The month with the highest number of workers required is April.
c. The production level for June is 2,475 units
d. 27 workers will be employed for the month of January.
Explanation:
a) Data and Calculations:
Production per worker per month = 75 units
Beginning inventory in January = 750 units
Desired ending inventory in June = 750 units
Production Schedule, using the chase production strategy:
Month Jan Feb Mar Apr May Jun
Beginning inventory 75 0 0 0 0 0
Monthly production 2,025 3,000 5,100 6,000 4,800 2,475
Net requirements 2,100 3,000 5,100 6,000 4,800 2,400
Ending inventory/(backlog) 0 0 0 0 0 75
Required workforce levels 27 40 68 80 64 33
Angelina's made two announcements concerning its common stock today. First, the company announced that its next annual dividend has been set at $2.16 a share. Secondly, the company announced that all future dividends will increase by 4% annually. What is the maximum amount you should pay to purchase a share of Angelina's stock if your goal is to earn a 10% rate of return?
A. $21.60
B. $22.46
C. $27.44
D. $34.62
E. $36.00
Answers
A company pays its employees $2,900 each Friday, which amounts to $580 per day for the five-day workweek that begins on Monday. If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at the end of the accounting period is:
Answers
Answer:
$2,320
Explanation:
Calculation to determine what amount of salaries earned but unpaid at the end of the accounting period is:
Ending salaries earned but unpaid=$2,900-$580
Ending salaries earned but unpaid=$2,320
($2,900-580)
Therefore the amount of salaries earned but unpaid at the end of the accounting period is: $2,320
The purpose of GAAP's flexibility in its reporting standards allows companies to: Select one: a. Smooth reported revenues and earnings over several reporting periods. b. Change accounting estimates to meet target sales or earnings. c. Change accounting principles to improve reported earnings. d. Adopt specific accounting and reporting procedures to represent the firm's activities more accurately.
Answers
Answer:
D. Adopt specific accounting and reporting procedures to represent the firm's activities more accurately.
Explanation:
GAAP in accounting means Generally accepted accounting principle. It is a uniform collection of accounting rules and standards for reporting financial accounting for organizations
The main reason or purpose of GAAP is to ensure that there is transparency and consistency in the reporting of financial details from one organization to another. The aim is to also help firms record their financial activities accurately by adopting specific accounting and reporting procedures as stipulated by GAAP.
Transactions for Jayne Company for the month of June are presented below.
June 1 Issues common stock to investors in exchange for $5,000 cash.
2 Buys equipment on account for $1,100.
3 Pays $740 to landlord for June rent.
12 Sends Wil Wheaton a bill for $700 after completing welding work.
Requied:
Record journal entries.
Answers
Answer:
below
Explanation:
Assets Liabilities Reserves $3000 Deposits $22,000 Loans $20,000 Debt $2000 Securities $5,000 Balance sheet for Fictional First bank Refer to the balance sheet above. Suppose the reserve requirement is 10%. What is the maximum amount that Fictional First can loan out and still meet the reserve requirement?a. $1200 b. $3000 c. $800 d. $2200 e. $0
Answers
Answer: $800
Explanation:
If the reserve requirement is 10%, then the maximum amount that Fictional First can loan out and still meet the reserve requirement will be:
Deposits = $22000
Then, the required reserve will be
= 10% × $22000
= 0.1 × $22000
= $2200
Since, the reserves is $3000, then the additional amount that's held as reserves will be:
= $3000 - $2200
= $800.
Therefore, the maximum amount that Fictional First can loan out and still meet the reserve requirement is $800.
The maximum amount that Fictional First can loan out is $800 and still meet the reserve requirement.
How to calculate the maximum loan amount?The reserve requirement is given as 10% and deposits $22000, the amount required to set aside as reserves would be;
[tex]0.1*22000\\=2200[/tex]
Now, with Assets Liabilities Reserves as $3000, the more amount that should be reserved would be;
[tex]3000-2200\\=800[/tex]
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Wally owns 200 acres of land.Wally offers to sell the land to Robert for $1,500 per acre.Robert replies that he does not need 200 acres of land but would like to buy 40 acres at $1,500 per acre.Wally agrees to sell but does not identify which 40 acres.Later,Wally refuses to sell any land to Robert.What is the result?
A) Robert wins; this is an enforceable contract with complete and definite terms.
B) Robert wins; the UCC will decide which 40 acres are to be sold.
C) Wally wins; the original offer was not intended to be an offer but merely an invitation to negotiate.
D) Wally wins; this agreement is too indefinite since it does not identify which 40 acres are to be sold.
Answers
Answer:
D) Wally wins; this agreement is too indefinite since it does not identify which 40 acres are to be sold.
Explanation:
Since in the given situation, wally agrees to sell but here the identification of the land is not mentioned i.e. 40 acres and at the later time the wally refused to sold any land so here wally should wins as the agreement is not definite which type of the land should be sold so it becomes the agreement void
Hence, the correct option is d.
Assume that you are a loan officer of a bank. A local church is seeking a $4 million, 20-year loan to construct a new classroom building. Church officers submit a comprehensive financial report that was audited by a reputable CPA firm. In summary form (the actual statement showed details), the church’s statement of revenues and expenditures indicated the following (in millions):
Revenues from dues and contributions .... $1.8
Revenues from other sources ....... 0.2
Total revenues ............. $2.0
Less: total expenditures .......... 2.0
Excess of revenues over expenditures .... $0.0
The church's balance sheet reported assets, mainly cash and investments (at market value), of $0.2 million. In addition, a note to the financial statements indicated that equipment is approximately $3 million. The church has no outstanding debt.
a. Is there any information in the financial statements that would make you reluctant to approve the loan? If so, indicate and explain.
b. Is there any other financial information of the type likely to be reported in a conventional annual report that you would like to review prior to making a loan decision? If so, indicate and explain.
c. Is there any other information, of any type, that you would like to review prior to making a loan decision? If so, indicate and explain.
d. Comment on the inherent limitations of the financial statements of this church, or any comparable not-for-profit organization, as a basis for making loan decisions.
Answers
Answer:
Explanation:
a.
There is little information on how funds are used or how much money is spent to manage the church. The financial statements have been prepared incorrectly.
Interpretation:
While drafting the financial accounts, the church committed many errors. The church's revenue is equivalent to its daily operations operating expenditures. They have approximately $3 million in funding assets that they do not owe any money on.
It may be deduced that the church is attempting to preserve asymmetric information, and therefore it will be better to justify its sources of income and use of money in order to determine whether they can or they cannot pay the debt.
b.
The revenue from various channels must be detailed in the yearly report so that the loan officer may make an informed judgment.
Interpretation:
Since payments and contributions account for 90% of revenue and revenue from other sources accounts for 10%, it's surprising how the church earns money in other ways as stated on the income statement. As a result, it's important to understand what other potential revenue streams the church has before approving the loan.
c.
The officer in charge of the loan should check the church's book records to make sure and guarantee that there are no outstanding loans. This situation necessitates a thorough examination and assessment.
Interpretation:
The church has $3 million worth of equipment. The church's expenses, on the other hand, are equivalent to the church's income. As a result, it's unclear how the church acquired the equipment without taking out a loan. As a result, the church must be urged to produce a full breakdown of its expenses, which may be thoroughly and fully studied to see whether there are any financing charges that the church is attempting to hide in its yearly reports.
d.
There is no direct or primary source of income for the church. It solely makes money from charity donations.
Interpretation:
The church's only sources of income are fundraisers and charitable donations. It also doesn't possess any significant revenue streams. Because the church is attempting to conceal numerous possible pieces of information, this may be a case of micro-management by the proprietors, and so these issues should be considered by the officer in charge of the loan before accepting the loan.
The Beauty Beyond Words Salon uses an activity-based costing system in its beauty salon to determine the cost of services. The salon has determined the costs of services by activity as follows:
Activity Activity Rate
Hair washing $4.00
Conditioning $3.50
Chemical treatment $25.00
Styling $10.00
Hair Washing
Conditioning Chemical Treatment
Styling
Haircut 1 1 0 0
Complete style 1 1 0 1
Perm 2 3 1 1
Highlights 3 4 2 1
Calculate the cost of services for a haircut.
a. $7.50
b. $4.00
c. $3.50
d. $11.50
Answers
Answer:
The correct option is a. $7.50.
Explanation:
Note: The data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
The explanation of the answer is now provided as follows:
Activity-based costing is a costing system that involves identifying an organization's activities and assigning the cost of each activity to all products and services based on actual consumption.
Based on the data in the question, a haircut requires one units each of Hair Washing and Conditioning, while it requires zero unit of each of Chemical Treatment and Styling.
Therefore, we have:
Cost of services for a haircut = (Units of Hair Washing * Rate of Hair Washing) + (Units of Conditioning * Rate of Conditioning) = (1 * $4.00) + (1 $3.50) = $4.00 + $3.50 = $7.50
Therefore, the correct option is a. $7.50.
Archer Inc. issued $4,000,000 par value, 7% convertible bonds at 99 for cash. If the bonds had not included the conversation feature, they would have sold for 95. Prepare the journal entry to record the issuance of the bonds.
Answers
Answer: Dr Cash $3,960,000
Dr Discount on bonds payable $40,000
Cr Bonds payable $4,000,000
Explanation:
The journal entry to record the issuance of the bonds will be prepared as follows:
Dr Cash = 4,000,000 × 99% = $3,960,000
Dr Discount on bonds payable = $40,000
Cr Bonds payable = $4,000,000
(To record bond issued on discount)
Prosecutors representing the Securities and Exchange Commission recentlyannounced criminal charges against 13 individuals for engaging in insidertrading. According to the SECs director of enforcement, a trading ring acting on inside information compromises the marketsintegrity and investorstrust. . . . Explain why.
Answers
Answer and Explanation:
Insider trading compromises the integrity of the market because insider investors have non-public information about the stocks of the company that could very much impact the value of the stock of the company. In other words, an insider knows what the public doesn't know about a company and it allows him an unfair advantage to trade the stocks of the company using this information and make large unusual profit. This could lead to market collapse as investors are no longer encouraged to invest seeing that they can't trust that the market is transparent and trustworthy(they don't have all the important information that would affect the company)
In order to update a production process, a company can spend money now or four years from now. If the amount now would be $20,000, what equivalent amount could the company spend four years from now at a compound interest rate of 15% per year?(All the alternatives presented below were calculated using compound interest factor tables including all decimal places
Answers
Answer: $34,980.13
Explanation:
The amount that the company will spend 4 years from now is simply the future value of the amount that it can spend today.
The amount to be spent today is $20,000 so the amount to be spent 4 years from now is the future value of $20,000:
= Amount * (1 + rate) ^ number of years
= 20,000 * ( 1 + 15%)⁴
= $34,980.13
Kingston Co. uses the percentage-of-receivables basis to record bad debt expense. It estimates that 1% of accounts receivable will become uncollectible. Accounts receivable are $420,000 at the end of the year, and the allowance for doubtful accounts has a credit balance of $1,500. (a) Prepare the adjusting journal entry to record bad debt expense for the year. (b) If the allowance for doubtful accounts had a debit balance of $800 instead of a credit balance of $1,500, determine the amount to be reported for bad debt expense
Answers
Answer:
a. Dr Bad Debts Expense $2,700
Cr Allowance for doubtful accounts $2,700
b. $5000
Explanation:
(a) Prepare the adjusting journal entry to record bad debt expense for the year.
Debit Bad Debts Expense [($420,000 x 1%) – $1,500] $2,700
Credit Allowance for doubtful accounts $2,700
(b) If the allowance for doubtful accounts had a debit balance of $800 instead of a credit balance of $1,500, determine the amount to be reported for bad debt expense
Bad debt expense = $4200 + $800 = $5000
