Consider the following estimates from the early 2010s of shares of income to each group. Country Poorest 40% Next 30% Richest 30% Bolivia 10 25 65 Chile 10 20 70 Uruguay 20 30 50 1.) Using the 4-point curved line drawing tool, plot the Lorenz curve for Bolivia. Properly label your curve. 2.) Using the 4-point curved line drawing tool, plot the Lorenz curve for Uruguay. Properly label your curve. Carefully follow the instructions above, and only draw the required objects. Which country has the most nearly equal income distribution? ▼ Chile Uruguay Bolivia .
Answers
Answer:
Check the explanation
Explanation:
Kindly check the attached images below to see the step by step explanation to the question above.
Related Questions
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 6.90 pounds $ 2.60 per pound $ 17.94 Direct labor 0.30 hours $ 7.00 per hour $ 2.10 During the most recent month, the following activity was recorded: 19,250.00 pounds of material were purchased at a cost of $2.40 per pound. All of the material purchased was used to produce 2,500 units of Zoom. 450 hours of direct labor time were recorded at a total labor cost of $4,500. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month.
Answers
Answer:
1. Material Variances
Material Price Variance = $3,850 F
Material Quantity Variance = $5,200 U
2. Labor Variances
Labor Rate Variance = $1,350 U
Labor Efficiency Variance = $2,100 F
Explanation:
Calculation is as follows:
1. Material Variances
Material Price Variance = (Standard Price - Actual Price) x Actual units
Material Price Variance = ($2.60 - $2.4) x 19,250 pounds
Material Price Variance = $3,850 (favorable)
As the actual rate is less than standard rate the variance is favorable.
Standard Quantity = 2,500 x 6.9 = 17,250 pounds
Material Quantity Variance = (Standard Quantity - Actual Quantity) x Standard Rate
Material Quantity Variance = (17,250 - 19,250) x $2.60
Material Quantity Variance = $5,200 (Unfavorable)
As the actual raw material quantity used is higher than standard raw material quantity the variance is unfavorable.
2. Labor Variances
Actual Labor Rate = 4,500/450 = $10/hour
Labor Rate Variance = (Standard Rate - Actual Rate) x Actual Hours
Labor Rate Variance = ($7 - $10) x 450
Labor Rate Variance = $1,350 (Unfavorable)
As actual rate is higher than standard rate thus the variance is unfavorable.
Standard Hours = 2,500 x 0.3 = 750
Labor Efficiency Variance = (Standard Hours - Actual Hours) x Standard Rate
Labor Efficiency Variance = (750 - 450) x $7
Labor Efficiency Variance = $2,100 (Favorable)
As the Standard Hours is more than Actual Hours the variance is favorable.
Answer:
Check the explanation
Explanation:
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On December 31, 2019, Irey Co. has $3,000,000 of short-term notes payable due on February 14, 2020. On February 8, 2020, Irey borrowed $1,200,000 (long-term loan) from County Bank and used $1,000,000 additional cash to liquidate $2,200,000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2019 balance sheet which is issued on March 5, 2020 is
Answers
Answer:
$1,800,000
Explanation:
Given short term notes payable = $3,000,000
Total amount used to liquidate short term notes = $2,200,000
Balance = $3,000,000 - $2,200,000 = $800,000
The additional $1,200,000 which is borrowed from Country Bank will not increase the short term notes payable because it's a long term credit
The additional $1,000,000 cash used will now be added to the balance amount
Amount to be reported as current liabilities = $1,000,000 + $800,000
= $1,800,000
Therefore the amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2019 balance sheet which is issued on March 5, 2020 is $1,800,000
Market researchers have determined nine categories of lifestyles for computer users. One of the categories is described as "Mouse Potatoes," who like the Internet for entertainment and can't wait to buy the latest in "techno-entertainment." In terms of the diffusion process, how would "Mouse Potatoes" be classified?
Answers
Answer: Innovators.
Explanation:
The Diffusion Process defines how new products are able to spread across a market.
It does this by using the Adoption Process to determine the various groups in the market and how fast the product gets to those groups. There are 5 groups in total.
- Innovators
- Early Adopters
- Early Majority
- Late Majority
- Laggards.
In the above scenario, the Mouse Potatoes would be the Innovators. These are the first buyers of a product and as such their opinions are very important as they then tell others how useful the product is. Mouse Potatoes regularly browse the net looking for the latest in "techno-entertainment", so they can buy or use it first thus making them Innovators.
Suppose the economy is in long-run equilibrium. In a short span of time, there is a sharp rise in the stock market, an increase in government purchases, an increase in the money supply and a decline in the value of the dollar. In the short run a. the price level and real GDP will both rise. b. the price level and real GDP will both fall. c. neither the price leave nor real GDP will change. d. All of the above are possible.
Answers
Answer:
All of the above are possible.
Explanation:
Discussions here center on equilibrium of an economy in a long run, and here after the government activities, their is a decline in dollar value; therefore in the short run, the price level and real GDP will both rise in as much as the price level and real GDP will also both fall. It is also gathered that neither the price leave nor real GDP will change.
The transition from the short run to the long run may be done by considering some short run equilibrium that is also a long run equilibrium as to supply and demand, then comparing that state against a new short run and long run equilibrium state from a change that disturbs equilibrium, say in the sales tax rate, tracing out the short run adjustment first, then the long run adjustment.
With your team you are working on a project that is supposed to be completed in FOUR months. You planned that EACH MONTH you are going to spend $15000 on the work for the month. At the end of the FIRST month you have spent the expected amount of $15000, but you have completed only two thirds (2/3) of the work. Answer the following questions: a) What is the Earned Value at the end of the first month. b) Calculate the Cost Variance and the Schedule Variance c) Calculate the Cost Performance Index and the Schedule Performance Index d) Analyze the progress of the project. Is the project behind or on schedule
Answers
Answer:
(a). $10000.
(b). Cost variance and Scheduled variance = -$5000.
(c). 0.66 and 0.66.
(d). task is behind schedule and the task is over budget.
Explanation:
(a). Earned value at the end of the first month can be calculated by using the formula below;
= A × B.
Where A = first month budget and B = rate at which the work is getting completed.
Earned value at the end of the first month = 15000× (2/3)
Earned value at the end of the first month = $10000
(b). The Cost Variance and the Schedule Variance can be calculated using the formula below;
Cost variance = Earned value at the end of the first month - monthly budget
Cost variance= 10000 - 15000
Cost variance = -$5000
Also, the Scheduled variance = Earned value at the end of the first month - monthly budget
= 10000 - 15000
= - $5000
(c). The cost Performance Index and the Schedule Performance Index can be calculated by using the formula below;
Cost performnace index = 10000 / 15000
= 0.66
Schedule performance index = the amount Earned / the amount that was planned.
Schedule performance index = 10000 / 15000
= 0.66.
(d). Since both schedule performance index and the Cost performance index are less than one that is 0.66, task is behind schedule and the task is over budget respectively.
Crane Corporation had the following 2020 income statement. Sales revenue $197,000 Cost of goods sold 124,000 Gross profit 73,000 Operating expenses (includes depreciation of $19,000) 48,000 Net income $25,000 The following accounts increased during 2020: Accounts Receivable $10,000, Inventory $10,000, and Accounts Payable $11,000. Prepare the cash flows from operating activities section of Crane’s 2020 statement of cash flows using the direct method.
Answers
Answer:
$35,000
Explanation:
Crane Corporation
CASH FLOW STATEMENT
FOR THE YEAR ENDING 2020
Cash Flows from Operating Activities:
Net Income $25,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation on Fixed Assets $19,000
(Increase) Decrease in Current Assets:
Accounts Receivable ($10,000)
Inventory ($10,000)
Increase (Decrease) in Current Liabilities:
Accounts Payable $11,000
Net Cash Provided by operating activities $35,000
Cash Flow from Investing Activities: -
Cash Flow from Financing Activities: -
Net Increase (Decrease) in Cash $35,000
Crowl Corporation is investigating automating a process by purchasing a machine for $793,800 that would have a 9-year useful life and no salvage value. By automating the process, the company would save $133,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,200. The annual depreciation on the new machine would be $88,200. The simple rate of return on the investment is closest to
a. 5.80%
b. 11.12%
c. 16.72%
d. 5.12%
Answers
Answer:
Simple rate of return is 5.8%
Therefore option (a) is correct option.
Explanation:
It is given that purchase cost = $793800
Company saving per year = $133000
Yielding = $21200
Annual depreciation = $88200
Annual profit = $133000 - $88200 = $44800
Net investment is equal to = $793800 - $21200 = $772600
Simple rate of return [tex]=\frac{44800}{772600}=0.0579[/tex]
= 5.8%
Therefore simple rate of return is 5.8 %
So option (a) is correct.
The stock of Cooper Corporation is 70% owned by Carole and 30% owned by Carole's brother, Chris. During 2017, Chris transferred property (basis of $100,000 and FMV of $120,000) as a contribution to the capital of Cooper. During February 2018, Cooper adopted a plan of liquidation and subsequently made a pro rata distribution of the property back to Carole and Chris. At the time of the liquidation, the property had an FMV of $80,000. What amount of loss can be recognized by Cooper on the distribution of property?
Answers
Answer:
$0
Explanation:
Since 100% of Cooper Corporation's stock were owned by Carole and Chris (who are siblings), then no one can recognize any loss or gain from the contribution of property (nor the distribution of property). Under section 351, no gain or loss can be recognized for the contribution of property in exchange for stocks in a controlled corporation.
Since the contribution was made through a carryover basis transaction less than 5 years before the liquidation, the distribution is carried out in the same way.
g The December 31, 2021, adjusted trial balance for the Blueboy Cheese Corporation is presented below. Account Title Debits Credits Cash 41,500 Accounts receivable 305,000 Prepaid rent 10,500 Inventory 45,000 Office equipment 550,000 Accumulated depreciation 230,000 Accounts payable 62,000 Notes payable (due in six months) 45,000 Salaries payable 7,000 Interest payable 1,500 Common stock 400,000 Retained earnings 125,000 Sales revenue 700,000 Cost of goods sold 420,000 Salaries expense 105,000 Rent expense 31,500 Depreciation expense 55,000 Interest expense 3,000 Advertising expense 4,000 Totals 1,570,500 1,570,500 Required: 1-a. Prepare an income statement for the year ended December 31, 2021. 1-b. Prepare a classified balance sheet as of December 31, 2021. 2. Prepare the necessary closing entries at December 31, 2021.
Answers
Answer:
Check the explanation
Explanation:
The right choice is Income summary account, since that is not in the account, closing entries can be in the following ways,
Alternative 1, one combined entry with balancing figure as retained earnings,
Date General Journal Debit Credit
Dec 31 Sales revenue $7,60,000
Cost of goods sold $4,56,000
Salaries expense $1,14,000
Rent expense $40,500
Depreciation expense $62,000
Interest expense $4,400
Advertising expense $5,400
Retained Earnings $77,700
Alternative 2, Transfer of Revenue and expenses separately to Retained Earnings
Date General Journal Debit Credit
Dec 31 Sales revenue $7,60,000
Retained Earnings $7,60,000
Dec 31 Retained Earnings $6,82,300
Cost of goods sold $4,56,000
Salaries expense $1,14,000
Rent expense $40,500
Depreciation expense $62,000
Interest expense $4,400
Advertising expense $5,400
You can repair your furnace for $500 and it will last 5 more years, but your heating bills will cost you about $1500 per year. Alternatively, a new furnace can be installed for $3000 that will reduce your annual heating bill to $1200. Suppose you sell the house in 5 years and receive an additional $1000 in the sales price of your home (salvage value) because of having a fairly new furnace. Should you replace it? Use a 5-year analysis period and a MARR of 5%
Answers
Answer:
By present value old furnace should not be replaced, since the new furnace costs more.
Explanation:
Solution
For the old furnace
Present value = - 500 - 1500 = (1 +i)^n-1/i (1+i)n
= - 500-1500 * 1.05^⁵/0.05 * 1.05^⁵
= -$6994.215
Now,
For the new furnace
The present value = - 3000 - 1200 * 1.05^⁵ - 1/0.05 * 1.05^⁵ + 1000/ (1.05)⁵
= -$7411.845
Therefore, As the new furnace costs more by present value old furnace should not be replaced
Goshford Company produces a single product and has capacity to produce 105,000 units per month. Costs to produce its current sales of 84,000 units follow. The regular selling price of the product is $126 per unit. Management is approached by a new customer who wants to purchase 21,000 units of the product for $77.40 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company’s regular selling territory, so there will be a $7.60 per unit shipping expense in addition to the regular variable selling and administrative expenses. Per Unit Costs at 84,000 Units Direct materials $ 12.50 $ 1,050,000 Direct labor 15.00 1,260,000 Variable manufacturing overhead 14.00 1,176,000 Fixed manufacturing overhead 17.50 1,470,000 Variable selling and administrative expenses 14.00 1,176,000 Fixed selling and administrative expenses 13.00 1,092,000 Totals $ 86.00 $ 7,224,000 Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $77.40 per unit.
Answers
Answer:
Net income= $4,836,200
Explanation:
Giving the following information:
Offer:
21,000 units for $77.4
An increase in variable cost= $7.6 per unit
Direct materials $ 12.50 $ 1,050,000
Direct labor 15.00 1,260,000
Variable manufacturing overhead 14.00 1,176,000
Fixed manufacturing overhead 17.50 1,470,000
Variable selling and administrative expenses 14.00 1,176,000
Fixed selling and administrative expenses 13.00 1,092,000
Totals $ 86.00 $ 7,224,000
First, we need to calculate the effect on the income of accepting the offer:
Effect on income= 21,000*77.4 - 21,000*(12.5 + 15 + 14 + 14 + 7.6)
Effect on income= 1,625,400 - 1,325,100
Effect on income= 300,300
Net income= 84,000*140 + 300,300 - 7,224,000
Net income= $4,836,200
Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $69, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6 percent, and sells for 94 percent of par. The second issue has a face value of $55 million, a coupon rate of 5 percent, and sells for 106 percent of par. The first issue matures in 24 years, the second in 9 years.Suppose the most recent dividend was $4.25 and the dividend growth rate is 4.4 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 25 percent. What is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answers
Answer:
10.83%
Explanation:
The simplest way to determine the if we use the Gordon growth model for determining the company's stock price:
stock price = [dividend x (1 + growth rate)] / (WACC - growth rate)
dividend = $4.25g = 4.4%stock price = $69WACC - g = [dividend x (1 + g] / price
WACC = {[dividend x (1 + g] / price} + g
WACC = {[$4.25 x (1 + 4.4%] / $69} + 4.4% = 0.1083 or 10.83%
If the marginal propensity to consume decreases, then the marginal propensity to save will decrease by the same percentage. the spending multiplier will decrease. the money multiplier will decrease. the rate of savings will decrease. the spending multiplier will increase.
Answers
Answer:
1.If the marginal propensity to consume decreases, then
a)the marginal propensity to save will decrease by the same percentage.
b)the spending multiplier will decrease.
c)the money multiplier will decrease.
d)the rate of savings will decrease.
e)the spending multiplier will increase.
2.Which of the following might cause stagflation in an open-market economy operating at equilibrium in the intermediate range of the aggregate supply curve?
a)Over the course of time, companies begin to provide educational opportunities for their employees.
b)The price of oil decreases as new reserves are found in the Alaskan wilderness.
c)The government sets a price ceiling for gasoline below market equilibrium.
d)An earthquake causes a serious rupture in the Alaskan oil pipeline that will take 6 months to repair.
e)Consumers fear a recession so they cut back on spending causing massive layoffs in major cities across the United States.
3.According to Classical economists,
a)the economy is stable in the long run causing unemployment to increase during time of recession.
b)the economy is stable in the long run and macroeconomic equilibrium can occur at less than full employment.
c)the economy is stable in the long run and self correcting to full employment.
d)the economy is unstable in the long run causing unemployment to increase during time of recession.
e)the economy is unstable in the long run and self correcting to full employment.
4.Which of the following will cause a decrease in SRAS?
a)An increase in labor productivity
b)An decrease in employee wages
c)An increase in government regulations on businesses
d)An increase in consumer spending
e)A decrease in investment spending
5.When inflation has reached a peak, economists would say that the economy has reached the
a)trough of the business cycle.
b)expansion of the business cycle.
c)peak of the business cycle.
d)contraction of the business cycle.
e)bottom of the business cycle.
6.In the circular flow diagram, tourists spend money in
a)the product market that provides goods and services to firms.
b)the product market that provides profit for firms.
c)the product market that provides revenue for firms.
d)the factor market that provides profit for firms.
e)financial markets that provides profit for firms.
7.Which of the following statements about the official rate of unemployment in the United States is most accurate?
a)The official unemployment rate includes only structurally and frictionally unemployed persons.
b)The official unemployment rate is greater than the natural rate of unemployment.
c)The official unemployment rate does not include discouraged workers.
d)The official unemployment rate includes all unemployed persons except teenagers who would be counted as seasonally unemployed.
e)The official unemployment rate includes all people in the labor force who do not have jobs.
8.If the Federal Reserve purchases securities, then
a)consumer spending will increase and AD will shift right.
b)consumer spending will decrease and AD will shift left.
c)government spending will increase and AD will shift right.
d)investment spending will increase and AD will shift right.
e)investment spending will decrease and AD will shift left.
9.If, while maintaining a balanced budget, Congress decreases spending and taxes by $100 each, then
a)aggregate demand will shift right.
b)aggregate demand will shift left.
c)aggregate demand will remain the same.
d)aggregate supply will shift right.
e)aggregate supply will shift left
10)If Congress wanted to lower inflation and unemployment at the same time, it would most likely
a)increase the international value of the dollar.
b)increase spending on public works projects across the United States.
c)decrease personal income taxes.
d)pay subsidies to businesses that increase economic investment and provide increased training and education to their workers.
e)decrease welfare payments to the working poor.
Explanation:
Pronghorn Appliances provides a 3-year warranty with one of its products which was first sold in 2017. Pronghorn sold $1,840,000 of products subject to the warranty. Pronghorn expects $202,000 of warranty costs over the next 3 years. In 2017, Pronghorn spent $106,000 servicing warranty claims. Prepare Pronghorn’s journal entries to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs; Pronghorn now expects future warranty costs of $115,000
Answers
Answer:
See the explanation below.
Explanation:
Balance in the warranty liability account after claim = $202,000 - $106,000 = $96,000
Amount needed to reduce expected warranty to $115,000 = $155,00 - $96,000 = $19,000
The journal entries will be as follows:
Details Dr ($) Cr ($) .
Cash 1,840,000
Sales revenue 1,840,000
To record the sales of products .
Warranty expenses 202,000
Estimated warranty liability 202,000
To record the expected warranty expenses .
Warranty liability account 106,000
Inventory 106,000
To record the warranty claim .
Warranty expenses 19,000
Estimated warranty liability 19,000
To record the reduction of expected warranty expenses to $115,000.
Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit: Manufacturing: Direct materials $6Direct labor $9Variable manufacturing overhead $3Variable selling and administrative $4Fixed costs per year: Fixed manufacturing overhead$300,000Fixed selling and administrative$190,000 During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the company’s product is $50 per unit. Required:1. Assume that the company uses absorption costing:a. Compute the unit product cost.b. Prepare an income statement for the year.2. Assume that the company uses variable costing:a. Compute the unit product cost.b. Prepare an income statement for the year.
Answers
Answer:
Instructions are below.
Explanation:
Giving the following information:
Variable costs per unit:
Direct materials $6
Direct labor $9
Variable manufacturing overhead $3
Variable selling and administrative $4
Fixed costs per year:
Fixed manufacturing overhead$300,000
Fixed selling and administrative $190,000
During the year, the company produced 25,000 units and sold 20,000 units.
The selling price of the company’s product is $50 per unit.
The difference between the absorption costing and variable costing methods is that the first one includes the fixed manufacturing overhead to the product cost.
1) Absorption costing:
Unitary fixed overhead= 300,000/25,000= $12 per unit
Unitary product cost= 6 + 9 + 3 + 12= $30
Income statement:
Sales= 20,000*50= 1,000,000
COGS= (20,000*30)= (600,000)
Gross profit= 400,000
Total selling and administrative= (190,000 + 20,000*4)= (270,000)
Net income= 130,000
2) Variable costing method:
Unitary variable cost= 6 + 9 + 3= $18
Income statement:
Sales= 1,000,000
Variable cost= (20,000*22)= (440,000)
Contribution margin= 560,000
Fixed manufacturing overhead= (300,000)
Fixed selling and administrative= (190,000)
net income= 70,000
Farrugia Corporation produces two intermediate products, A and B, from a common input. Intermediate product A can be further processed into Product X. Intermediate product B can be further processed into Product Y. The common input is purchased in batches that cost $89 each and the cost of processing a batch to produce intermediate products A and B is $36. Intermediate product A can be sold as is for $53 or processed further for $33 to make Product X that is sold for $79. Intermediate product B can be sold as is for $113 or processed further for $66 to make Product Y that is sold for $158.
Required:
A. Assuming that no other costs are involved in processing potatoes or in selling products, how much money does the company make from processing one batch of the common input into the end products X and Y?
B. Should each of the intermediate products, A and B, be sold as is or processed further into an end product?
Answers
Answer:
Explanation:
Product A Product B Total
Incremental rev. 79 158 237
Incremental cost 33 66 99
Contribution 46 92 138
common cost (89)
Cost of Processing (36)
Net income 13
B
Financial advantage - Incremental revenue- Incremental cost -Initial revenue
Product A
79-33-53 = - 7
Product B
158-66-113 = -21.
The two products are better sold at it is without further processing.
As no other cost is involved in the processing or selling and the initial selling price is greater than the incremental contribution , it is advisable that they are sold as they are
Which of the following is a manufacturing cost?
A. Indirect materials
B. Advertising expense
C. Depreciation of the office equipment used by the sales staff
D. Salary of clerical workers
Answers
Answer:
A and C
Explanation:
A manufacturing cost is the depreciation of the office supplies utilized by the sales team and indirect materials. As a result, choices (A) and (C) are the correct stuff.
What is manufacturing cost?The cost of all the resources used to produce a product, collectively referred to as the manufacturing cost, is what is considered. Direct labor, direct material costs, and manufacturing overhead make up the three areas that make up the cost of production. The whole cost of delivery is affected by it.
The raw materials known as "direct materials" are those that are included into the finished good. Applying a chain of processes to maintain a deliverable product provides value to raw materials in manufacturing. For example, welding, cutting, and painting are just a few of the many processes that can be used on raw materials. The difference between direct and indirect materials must be understood.
Hence, option (C) is accurate.
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Great Adventures Problem
[The following information applies to the questions displayed below.]
Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $15,600. They expect to use the Suburban for five years and then sell the vehicle for $6,300. The following expenditures related to the vehicle were also made on July 1, 2022:_________.
1. The company pays $2,700 to GEICO for a one-year insurance policy.
2. The company spends an extra $6,600 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides. An additional $2,900 is spent on a deluxe roof rack and a trailer hitch.
3. The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. In addition, on October 22, 2022, the company pays $2,200 for basic vehicle maintenance related to changing the oil, replacing the windshield wipers, rotating the tires, and inserting a new air filter.
Great Adventures
4. Record the depreciation expense and any other adjustments related to the vehicle on December 31, 2022. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answers
Answer and Explanation:
The Journal entry is shown below:-
Amount should be capitalized for new vehicle = Cost + Painting and new logo cost + Deluxe Roof rack and trailer hitch
= $15,600 + $6,600 + $2,900
= $25,100
We took the cost of painting and deluxe roof and trailer hitch costs into account as they are supposed to increase the vehicle's future benefits.
Depreciation = (Cost - Salvage Value) ÷ Number of Years
= ($25,100 - $6,300) ÷ 5
= $3,760 per year
In the year 2022 vehicle is used only for 6 months (July to Dec), depreciation expense for the year ended December 31, 2022 is
= $3,760 × 6 ÷ 12
= $1,880
So, the Journal entry is
Depreciation expense Dr, $1,880
To Accumulated Depreciation $1,880
(Being depreciation provided for the year 2022 is recorded)
Therefore for recording the depreciation provided for the year 2022 we simply debited the depreciation expenses while we credited the accumulated depreciation.
The journal entry will include a depreciation account as well as accumulated depreciation.
What is depreciation?Depreciation can be defined as the amount deducted from the asset because of the wear and tear of the asset after its use Which will reduce the price of the asset.
Capitalization for a new car should be calculated as follows: Cost + Painting and Logo Cost + Deluxe Roof Rack and Trailer Hitch
= $15,600 + $6,600 + $2,900
= $25,100
We factored in the price of the painting, a luxurious roof, and a trailer hitch because such expenses should raise the car's potential future value.
Depreciation is calculated as (Cost - Salvage Value) x Years.
= ($25,100 - $6,300) ÷ 5
= $3,760 annually
For the year ending December 31, 2022, the depreciation expense for the automobile operated for only 6 months (July to December) is
= $3,760 × 6 ÷ 12
= $1,880
The journal entry is therefore
depreciation costs (dr.) $1,880
accumulated depreciation $1,880
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The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $74,000. The machine would replace an old piece of equipment that costs $19,000 per year to operate. The new machine would cost $9,000 per year to operate. The old machine currently in use could be sold now for a salvage value of $31,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new bottling machine
Answers
Answer:
$7,400 per year
Explanation:
Data provided for computing the annual depreciation expense is here below:-
Automated bottling machine = $74,000
Useful life = 10 years
The calculation of annual depreciation expense is given below:-
Annual depreciation expense = Automated bottling machine ÷ Useful life
= $74,000 ÷ 10
= $7,400 per year
Therefore for computing the annual depreciation expense we simply divide the automated bottling machine by useful life.
Consider a market where the demand and supply for the good are described by the following equations: begin mathsize 14px style straight Q subscript straight D space equals space 225 space minus space 3 straight P end style and begin mathsize 14px style straight Q subscript straight S space equals space minus space 22.5 space plus space 1.5 straight P end style.
If the government implements a price ceiling of $45, this will result in a
A. surplus of 22.5 units.
B. a surplus of 45 units.
C. a shortage of 45 units.
D. a shortage of 22.5 units.
Answers
Answer:
The correct option is (c)a shortage of 45 units.
Explanation:
Solution
Given that:
Qd=225-3P
Qs=-22.5+1.5P
Then,
Set Qd=Qs for equilibrium
225-3P=-22.5+1.5P
4.5P=247.50
P=$55
Now
The government forces a ceiling of $45, it is binding as it is lesser than the equilibrium price.
Thus,
Let calculate the demanded quantity and supplied quantity at a price of $45
Now,
Qd=225-3*45=90
Qs=-22.5+1.5*45=45
Shortage=Qd-Qs=90-45=45 units .
Therefore, there is a shortage of 45 units.
g On July 1, 2019, Sheffield Corp. issued 9% bonds in the face amount of $12400000, which mature on July 1, 2025. The bonds were issued for $11859948 to yield 10%, resulting in a bond discount of $540052. Sheffield uses the effective-interest method of amortizing bond discount. Interest is payable annually on June 30. At June 30, 2021, Sheffield's unamortized bond discount should be
Answers
Answer:
$393,063
Explanation:
The bond is issued on discount when the issuance price is less than the face value of the bond. The discount is expensed over the bond period until maturity. It is added to the interest expense value to expense it.
Unamortized Discount is the discount balance which has not been expensed or discount balance for outstanding period of the bond to maturity.
Discount Balance = $540,052
Date Interest Paid Interest Expense Amortization Book Value
7/1/19 11,859,948
6/30/20 1,116,000 1,185,995 69,995 11,929,943
6/30/21 1,116,000 1,192,994 76,994 12,006,937
Unamortized Discount = Total Discount - Discount amortized
Unamortized Discount = $540,052 - ($69,995 + $76,994)
Unamortized Discount = $393,063
In 2020, Sheffield Corp., issued for $102 per share, 97000 shares of $100 par value convertible preferred stock. One share of preferred stock can be converted into three shares of Sheffield's $20 par value common stock at the option of the preferred stockholder. In August 2021, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $25 per share. What total amount should be credited to additional paid-in capital from common stock as a result of the conversion of the preferred stock into common stock
Answers
Answer:
Additional paid-in capital is $4,074,000.
Explanation:
In 2020, Sheffield issued $102 per share and there were 97,000 shares of convertible preferred stock.
Preferred stock = 97,000 shares × $102 = $9,894,000
Also we were told that one preferred stock can be converted to 3 common stock i.e. 3 × Preferred stock = Common stock
Therefore, Common stock = [(97000 shares × 3 shares) × $20] = $5,820,000
Additional paid-in capital = $9,894,000 - $5,820,000 = $4,074,000.
Recent financial statement data for Harmony Health Foods (HHF) Inc. is shown below.
Current liabilities $ 197
Income before interest and taxes $ 116
10% Bonds, long-term 370
Interest expense 37
Total liabilities 567
Income before tax 79
Shareholders' equity
Income tax 22
Capital stock 210
Net income $ 57
Retained earnings 291
Total shareholders' equity 501
Total liabilities and equity $1,068
HHF's times interest earned ratio is (Round your answer to two decimal places.):
a. 10.00.
b. 3.14.
c. 1.54.
d. 2.14.
Current liabilities $ 180
Income before interest and taxes $ 118
10% Bonds, long-term 360
Interest expense 36
Total liabilities 540
Income before tax 82
Shareholders' equity
Income tax 20
Capital stock 201
Net income $ 62
Retained earnings 283
Total shareholders' equity 484
Total liabilities and equity $1,024
HHF's debt to equity ratio is:_____________. (Round your answer to two decimal places.):
a. 0.74.
b. 0.56.
c. 1.12.
d. 1.90.
Answers
Answer:
1. B. 3.14
2. C. 1.12
Explanation:
1. Times Interest Earned ratio
Measures how well a company is able to cover it's debt obligations using it's earnings.
The formula is simply,
= Earning before Interest and Tax / Interest Expense
Therefore,
Times Interest Earned ratio = 116/37
= 3.14
HHF's times interest earned ratio is Option B, 3.14.
2. Debt to Equity Ratio
This ratio compares the debt used to fund a company vs it's equity. It measures how much of either way used to fund the company.
The formula is,
= Total Debt / Total Equity
= 540/484
= 1.12
HHF's Debt to Equity ratio is 1.12, Option C.
71. When making decisions that are ethical under either profit maximization or corporate citizenship theories, a business should include all of the following steps except a. recognize that there is an ethical issue in the decision. b. apply ethical theories to reasonable alternatives. c. publicize the options you rejected with your reasons. d. reflect on the outcome of the decision once it is made
Answers
Answer:
The Correct Option of the given scenario is "C - Publicize the options you rejected with your reasons".
Explanation:
While creating business selection it is ought to seek for the philosophies and integrities. However, don't create it public the explanations of captivating some choices as they are having dissimilarities in philosophies which might drawback your businesses.
Answer: c. publicize the options you rejected with your reasons.
Explanation:
Under the Profit Maximisation theory where ethical behaviour does not necessarily benefit the company and the corporate citizenship theory that describes just how a company contributes to society, all the above are methods applied execpt the publication of the options rejected with reasons.
This is because certain things need to remain confidential for the protection of individuals and reputations as well as to avoid scrutiny because a Company's methodology might not be the methodology that a number of people would subscribe to.
January 1, 2021, Woody Forrest Corporation granted executive stock options to purchase 41,000 of its common shares at $9 each. The market price of common stock was $24 per share on December 31, 2021, and averaged $12 per share during the year then ended. There was no change in the 164,000 shares of outstanding common stock during the year. Net income for the year was $39,000. The number of shares to be used in computing diluted earnings per share for the quarter is:
Answers
Answer:
174,250 shares
Explanation:
The computation of the number of shares to be used in computing diluted earnings per share is shown below:
Proceeds from exercise of options (a) $369,000 (41,000 shares × $9)
Used to repurchased for common stock (b) 30,750 shares (41,000 shares × $9 ÷ $12)
Number of shares for exercised (c) 41,000 shares
Less: repurchased shares (d) -30,750 shares
Diluted common shares {e = c - d} 10,250 shares
Add: Common shares (f) 164,000 shares
Total number of shares for diluted earning per share 174,250 shares
We ignored the market price of common stock as it is not relevant.
i. Discuss the rationale of organizing an industrial strike in resolving employee dispute with the
state, focusing on the detrimental effects strikes has on various stakeholders in an economy.
Answers
Answer: The answer is provided below
Explanation:
Strike action, is a work stoppage, that is caused by mass refusal of employees to work and it usually takes place in response to the employee grievances.
Some of the reasons for strike include:
• Low wages: Employees engage in strik as a way to show their grievances to their employers that they're not well paid and want a pay rise.
• Poor communication with the organisation: Another reason for strikes is the lack of trust between employers and the trade unions. In cases whereby workers believe their employers aren't transparent with them, strike can take place.
• Employee debt: When employees are owed certain amount of money and the employer is not doing anything reasonable about paying, the workers may strike.
• Working conditions: Workers can engage in strike in order to seek for improvement in their working conditions. This may be probably because they need better equipments, medical facilities etc.
The detrimental effects that strikes has on various stakeholders in an economy are:
Effects on employers: Strike affects business and it is vital for employers to know their rights and keep up to date with the current labour laws and legislation. Strike leads to loss of revenue for the owner and if the strike continues.for a long time, it can badly affect the business.
Effects on employees: Striking employees who belong to a union are under the obligation to strike when the union wants. They can be at risk of losing their wages and benefits such as sick and holiday pay, medical aid insurance if the strike drags continues for an extended period of time.
Effect on the economy: The impact of strike will be felt by the economy in the immediate and long term future. Strike can harm a country’s investment and reputation internationally. The GDP growth will also be affected and consequences of higher wages in some sectors would lead to higher inflation.
Levine Company uses the perpetual inventory system. Apr. 8 Sold merchandise for $9,300 (that had cost $6,873) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee. 12 Sold merchandise for $5,000 (that had cost $3,240) and accepted the customer's Continental Card. Continental charges a 2.5% fee. Prepare journal entries to record the above credit card transactions of Levine Company
Answers
Answer:
Dr Apr 08 Cash $8,928
Dr Credit Card Expense $372
Cr Sales $9300
Apr 08 Cost of goods sold $6,873
Merchandise inventory $6,873
Dr Apr 12 Accounts receivable- Continental $4,875
Dr Credit card expense $125
Cr Sales $5,000
Dr Apr 12 Cost of Goods Sold $3,240
Cr Merchandise Inventory $3,240
Explanation:
Levine CompanyJournal entries
Date General Journal Debit Credit
Dr Apr 08 Cash $8,928
Dr Credit Card Expense $372
(4%×9300)
Cr Sales $9300
Apr 08 Cost of goods sold $6,873
Merchandise inventory $6,873
Dr Apr 12 Accounts receivable- Continental $4,875
Dr Credit card expense $125
(2.5%×5000)
Cr Sales $5,000
Dr Apr 12 Cost of Goods Sold $3,240
Cr Merchandise Inventory $3,240
Carlinville Car Parts, Inc. has been provided by its lenders and owners with $46,000,000 to purchase assets. The most recent income statement showed Earnings Before Interest and Taxes (EBIT, or Operating Income) of $10,500,000, and net income of $3,950,000. Income tax was paid at a 25% average annual rate. What was Return on Invested Capital (ROIC) for the year?
Answers
Answer:
17%
Explanation:
The formula to calculate ROIC is:
ROIC= Net operating profit after tax/ Total invested capital
ROIC= EBIT*(1-Tax rate)/Total invested capital
ROIC= 10,500,000*(1-0.25)/46,000,000
ROIC= 7,875,000/46,000,000
ROIC= 0.17 → 17%
According to this, the answer is that the Return on Invested Capital (ROIC) for the year is 17%.
Assume that Parker Company will receive SF200,000 in 360 days. Assume the following interest rates: the 360-day borrowing rate in U.S. is 7% while the 360-day borrowing rate in Switzerland is 5%. The 360-day deposit rate in U.S. is 5% while the 360-day deposit rate in Switzerland is 4%. Assume the forward rate of the Swiss franc is $0.50 and the spot rate of the Swiss franc is $0.48. If Parker Company uses a money market hedge, it will receive ____ in 360 days.
Answers
Answer:
Company will receive = $96,000
Explanation:
As per the data given in the question,
Corresponding SF liability equals to pay SF200,000 including interest
= 200,000÷1.05 = SF190476.19
Now Convert the SF into $US at the current spot rate = $0.48×190476.19
= $91428.57
Now deposit the $ US at 5% and withdraw after 360 days =
= $91428.57 + $91428.57×5%
= $95999.99
This way the liability of SF 190476.19 + 190476.19×5% interest will be paid off when Parker company receives $200,000, Parker company will receive = $96,000 in 360 days.
The CFO’s objective is to make certain that the capital consumed in farming is renewed and that the farm remains efficient, utilizing the best technology and equipment appropriate for its competitive situation. How would you expect the CFO to calculate depreciation expense?
Answers
Explanation:
Since the CFO wants the company to be competitive in the Industry he has to upgrade the machines and equipment in time when a new technology hits the market. which makes the company to increase the depreciation expense and write of the asset as early as possible.
The members of the farm is sharing the profits and assumes no other way of remuneration or incentive, Hence there will not be any opposition in charging higher depreciation.
So it is suitable for the company to claim depreciation on Straight Line method or Double Decline method which will amortize the capital expense early.
