Answer: See explanation
Explanation:
Your question isn't complete but I got a similar question online and here is the question that was asked.
What is the present value of interest tax shields if it expects to maintain this debt level into the far future?
The present value of the interest tax shield will be calculated as:
= Tax rate x Debt
= 890million x 21%
= $186.90 million
Consider the following information: Portfolio Expected Return Beta Risk-free 5 % 0 Market 10.6 1.0 A 8.6 0.9 a. Calculate the expected return of portfolio A with a beta of 0.9. (Round your answer to 2 decimal places.) b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) c. If the simple CAPM is valid, is the above situation possible?
Answer:
a. Expected return of portfolio A = 10.04%
b. Alpha of portfolio A = 1.44%
c. No, the above situation is NOT possible. This is because return as per CAPM and expected return have different values. Therefore, we say that CAPM is NOT valid.
Explanation:
Given:
Portfolio Expected Return Beta
Risk-free 5 % 0
Market 10.6 1.0
A 8.6 0.9
a. Calculate the expected return of portfolio A with a beta of 0.9. (Round your answer to 2 decimal places.)
Expected return of portfolio A = Return as per CAPM = Risk free rate + (Beta * (Market return - Risk free rate)) = 5% + (0.9 * (10.6% - 5%)) = 10.04%
b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Alpha of portfolio A = Return as per CAPM - Expected return = 10.04% - 86% = 1.44%
c. If the simple CAPM is valid, is the above situation possible?
No, the above situation is NOT possible. This is because return as per CAPM and expected return have different values. Therefore, we say that CAPM is NOT valid.
If the amount of beachfront land in Malibu supplied to the market remains the same even when the price of beachfront land in Malibu increases, the:_________.
a. demand for beachfront land in malibu must be perfectly inelastic,
b. supply of beachfront land in Malibu must be perfectly elastic.
c. demand for beachfront land in Malibu must be perfectly elastic.
d. supply of beachfront land in Malibu must be perfectly inelastic.
Answer:
D
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
Infinitely elastic demand is perfectly elastic demand. Demand falls to zero when price increases
Perfectly inelastic demand is demand where there is no change in the quantity demanded regardless of changes in price.
Supply is perfectly inelastic if a small change in price has no effect on quantity supplied
In June 2007 General Motors (GM) posted a price-earnings ratio of 9.84. If
the price of the stock at that time was $36 per share, which of the following
must have been true?
a. GMâs earnings per share was 3.66.
b. GMâs coupon payment was $35 per year.
c. GMâs dividend yield for the year was 26%.
d. GMâs revenues that month were $366 million.
Answer:
General Motors (GM)
If the price of the stock at that time was $36 per share, the true statement is:
a. GM's earnings per share was 3.66.
Explanation:
a) Data and Calculations:
Price-earnings ratio = 9.84
Market price of stock at that time = $36 per share
Earnings per share = Market price per share/Price-earnings ratio
= $36/9.84 = 3.659
= $3.66
Check:
Price-earnings ratio = Market price per share/Earnings per share
= 9.84 ($36/$3.66)
(Advanced analysis) Answer the question on the basis of the following information for a mixed open economy. The letters Y, Ca, Ig, Xn, G, and T stand for GDP, consumption, gross investment, net exports, government purchases, and net taxes respectively. Figures are in billions of dollars. Refer to the information. If government desired to raise the equilibrium GDP to $650, it could:
Answer:
The correct option is c. raise G by $30 or reduce T by $40.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
(Advanced analysis) Answer the question on the basis of the following information for a mixed open economy. The letters Y, Ca, Ig, Xn, G, and T stand for GDP, consumption, gross investment, net exports, government purchases, and net taxes respectively. Figures are in billions of dollars.
Ca = 25 + 0.75(Y - T)
Ig = Ig0 = 50
Xn = Xn0 = 10
G = G0 = 70
T = T0 = 30
Refer to the information. If government desired to raise the equilibrium GDP to $650, it could:
a. raise G by $45 or reduce T by $10.
b. raise G by $40 and reduce T by $30.
c. raise G by $30 or reduce T by $40.
d. raise both and T by $40.
e. reduce G by $30 and increase T by $40.
The explanation of the answer is now provided as follows:
Equilibrium GDP (Y) can be obtained as follows:
Y = C + G + I + Xn …………………….. (1)
Substituting all the values in the question into equation (1) and solve for Y, we have:
Y = 25 + 0.75(Y - 30) + 70 + 50 + 10
Y = 0.75Y - 22.50 + 155
Y – 0.75Y = 132.50
0.25Y = 132.50
Y = 132.50 / 0.25
Y = 530
Therefore, we have:
Y = Current equilibrium GDP = $530
Amount of increase in equilibrium GDP required = Desired equilibrium GDP – Current equilibrium GDP = 650 - 530 = 120
From the question, we have:
Ca = 25 + 0.75(Y - T) ………………. (2)
The 0.75 in equation (2) is the marginal propensity to consume (MPC). Therefore, we have:
MPC = 0.75
Expenditure multiplier = 1 / (1 - 0.75) = 4
Tax multiplier = - MPC / (1 – MPC) = -0.75 / (1 – 0.75) = -3
Amount of increase in G or government expenditure required = Amount of increase in equilibrium GDP required / Expenditure multiplier = 120 / 4 = $30
Amount of tax cut or decrease in T required = Amount of increase in equilibrium GDP required / Tax multiplier = 120 / (-3) = -$40
Therefore, correct option is c. raise G by $30 or reduce T by $40.
The board of directors of Synergie Incorporation discussed a few goals for the new fiscal year. The chief goals included maximizing total sales revenue and improving the overall market position of the firm. These goals are categorized as:
Answer: offensive
Explanation:
Offensive goals are the goals that maximize sales revenue, increase long term growth and profit, improve market position and take advantage of economics of scale.
Since the chief goals included maximizing total sales revenue and the improvement of the overall market position of the firm, then these goals are categorized as offensive goals.
Use the following information for a manufacturer to compute cost of goods manufactured and cost of goods sold:
(Click the icon to view the information.)
First, compute cost of goods manufactured.
Schedule of Cost of Goods Manufactured
Beginning Work-in-Process Inventory $42,000
Direct Materials Used:
Beginning Direct Materials $28,000 Purchases of Direct Materials 70,000
Direct Materials Available for Use 98,000 Ending
Direct Materials (30,000)
Direct Materials Used $68,000
Direct Labor 86,000
Manufacturing Overhead 38,000
Total Manufacturing Costs Incurred during the Year 192,000
Total Manufacturing Costs to Account For 234,000
Ending Work-in-Process Inventory (35,000)
Cost of Goods Manufactured $199,000
Now compute cost of goods sold.
Cost of Goods Sold Direct Materials Available for Use 98000 Cost of Goods Manufactured 199000
Cost of Goods Available for Sale
Total Operating Costs
Cost of Goods Sold
Answer:
Results are below.
Explanation:
First, we need to calculate the cost of goods manufactured using the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 42,000 + (28,000 + 70,000 - 30,000) + 86,000 + 38,000 - 35,000
cost of goods manufactured= $199,000
Now, the cost of goods sold:
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
We do not have information regarding the beginning and ending finished goods inventory. But, suppose the beginning inventory equals $45,000 and the ending inventory $30,000:
COGS= 45,000 + 199,000 - 30,000
COGS= $214,000
The standard amount of materials required to make one unit of Product Q is 4 pounds. Tusa's static budget showed a planned production of 6,200 units. During the period, the company actually produced 6,300 units of product. The actual amount of materials used averaged 3.9 pounds per unit. The standard price of material is $2 per pound. Based on this information, the materials usage variance was:\
Answer: $1,260 Favorable
Explanation:
Material usage variance = (Standard quantity of materials actually produced - Actual quantity of materials actually produced) * Standard price of material
= [ ( 4 * 6,300 ) - (3.9 * 6,300) ] * 2
= [ 25,200 - 24,570 ] * 2
= 630 * 2
= $1,260 Favorable
Craig Company asks you to review its December 31, 2014, inventory values and prepare the necessary adjustments to the books. The following information is given to you. 1. Craig uses the periodic method of recording inventory. A physical count reveals $234,890 of inventory on hand at December 31, 2014.2. Not included in the physical count of inventory is $13,420 of merchandise purchased on December 15 from Browser. This merchandise was shipped f.o.b. shipping point on December 29 and arrived in January. The invoice arrived and was recorded on December 31.3. Included in inventory is merchandise sold to Champy on December 30, f.o.b. destination. This merchandise was shipped after it was counted. The invoice was prepared and recorded as a sale on account for $12,800 on December 31. The merchandise cost $7,350, and Champy received it on January 3.4. Included in inventory was merchandise received from Dudley on December 31 with an invoice price of $15,630. The merchandise was shipped f.o.b. destination. The invoice, which has not yet arrived, has not been recorded.5. Not included in inventory is $8,540 of merchandise purchased from Glowser Industries. This merchandise was received on December 31 after the inventory had been counted. The invoice was received and recorded on December 30.6. Included in inventory was $10,438 of inventory held by Craig on consignment from Jackel Industries.7. Included in inventory is merchandise sold to Kemp f.o.b. shipping point. This merchandise was shipped after it was counted. The invoice was prepared and recorded as a sale for $18,900 on December 31. The cost of this merchandise was $10,520, and Kemp received the merchandise on January 5.8. Excluded from inventory was a carton labeled "Please accept for credit." This carton contains merchandise costing $1,500 which had been sold to a customer for $2,600. No entry had been made to the books to reflect the return, but none of the returned merchandise seemed damaged.Craig Company asks you to review its December 31, 1. Determine the proper inventory balance for Craig Company at December 31, 2014.Inventory balance as on December 31, 2014 2. Prepare any correcting entries to adjust inventory to its proper amount at December 31, 2014. Assume the books have not been closed.
Answer:
1. $237,392
2. Dr Sales Revenue $12,800
Cr Accounts Receivable $12,800
Dr Purchases (Inventory) $15,630
Cr Accounts Payable $15,630
Dr Sales Returns and Allowances $2,600
Cr Accounts Receivable $2,600
Explanation:
1. Calculation to determine the proper inventory balance for Craig Company at December 31, 2014.
December 31, 2014 Inventory balance=$234,890+$13,420+$8,540-$10,438-$10,520+$1,500
December 31, 2014 Inventory balance=$237,392
Therefore Inventory balance as on December 31, 2014 is $237,392
2. Preparation of any correcting entries to adjust inventory to its proper amount at December 31, 2014.
Dr Sales Revenue $12,800
Cr Accounts Receivable $12,800
Dr Purchases (Inventory) $15,630
Cr Accounts Payable $15,630
Dr Sales Returns and Allowances $2,600
Cr Accounts Receivable $2,600
One thousand dollars is invested at 5% continuous annual interest. this means the value of the investment will grow exponentially, with k equaling the decimal rate of interest. What will the value of the investment be after 7 1/2 years?
a. $1, 375.00.
b. $375.00.
c. $1, 454.99.
d. $454.99.
Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $475,000, have a fifteen-year useful life, and have a total salvage value of $47,500. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 240,000 Less operating expenses: Commissions to amusement houses $ 70,000 Insurance 45,000 Depreciation 28,500 Maintenance 30,000 173,500 Net operating income $ 66,500 Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick’s Novelties, Inc., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?
Answer:
a. 5 years
b. Yes they will because the payback period is 5 years.
Explanation:
a. Payback period
First calculate the annual cash inflow:
= Net income + Depreciation
= 66,500 + 28,500
= $95,000
The investment cost was $475,000
Payback period = Investment cost / Annual cash inflow
= 475,000 / 95,000
= 5 years
b. The company will purchase the games because they have a payback period of 5 years.
When Get the Glare Out needed some information about the potential market for its product, the marketing team looked to the Internet to find industry trends and at the market for eyewear products, which uses the same technology that is used in its self-darkening windshield. The type of information the marketing team was using is referred to as Multiple Choice surveys. focus groups. primary data. secondary data.
Answer:
secondary data.
Explanation:
Market research can be defined as a strategic technique which typically involves the process of identifying, acquiring and analyzing informations about a business. It involves the use of product test, surveys, questionnaire, focus groups, interviews, etc.
Secondary market research can be defined as a method designed to determine the demographics of a particular target market.
A secondary data can be defined as any form of data that has been obtained or collected earlier by someone else through primary sources for their own purpose and made readily available for other researchers to use. Thus, a secondary data is a type of data that has been previously obtained or collected.
In this scenario, the type of information the marketing team was using is referred to as secondary data because it looked to the Internet to find industry trends and at the market for eyewear products, which uses the same technology that is used in manufacturing its self-darkening windshield.
In conclusion, a secondary data is typically reliant or based on the primary source of information and as such it isn't a first hand experience.
Part E14 is used by M Corporation to make one of its products. A total of 19,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $ 4.10 Direct labor $ 8.70 Variable manufacturing overhead $ 9.20 Supervisor's salary $ 4.60 Depreciation of special equipment $ 3.00 Allocated general overhead $ 8.20 An outside supplier has offered to make the part and sell it to the company for $29.50 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part E14 could be used to make more of one of the company's other products, generating an additional segment margin of $31,000 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part E14 from the outside supplier should be:
Answer: ($24100)
Explanation:
The annual financial advantage (disadvantage) for the company goes thus:
The relevant cost to produce will be:
= ($4.10 × 19,000) + ($8.70 × 19,000) + ($9.20 × 19,000) + ($4.60 × 19,000) + $31,000
= $77900 + $165300 + $174800 + $87400 + $31000
= $536,400
The relevant costs to buy will be:
= 19,000 × $29.5
= $560,500
Since the relevant cost to buy is more than the relevant cost to produce, then the financial disadvantage will be:
= $560500 - $536,400
= $24,100
The answer is ($24,100)
The short-run elasticity of demand for gasoline sold at gasoline stations is 0.20. If terrorism causes the supply of gasoline to fall, resulting in a 5 percent drop in quantity, if other things remain the same, the price per gallon will increase by:___________
Answer:
25%
Explanation:
Price elasticity of supply measures the responsiveness of quantity supplied to changes in price of the good.
Price elasticity of supply = percentage change in quantity supplied / percentage change in price
0.2 =5% / percentage change in price
percentage change in price = 5/0.2 = 25%
If the absolute value of price elasticity is greater than one, it means supply is elastic. Elastic supply means that quantity supplied is sensitive to price changes.
Supply is inelastic if a small change in price has little or no effect on quantity supplied. The absolute value of elasticity would be less than one
Supply is unit elastic if a small change in price has an equal and proportionate effect on quantity supplied.
A cash register tape shows cash sales of $3180 and sales taxes of $210. The journal entry to record this information is
Answer:
Debit cash $3,390
Credit sales revenue $210
Cales tax payable $3,180
Explanation:
Preparation of the journal entry to record the information given.
Journal entry
Debit cash $3,390
($3,180+$210)
Credit sales revenue $210
Cales tax payable $3,180
The ________ function is responsible for making sure customers are aware of the company's products. Group of answer choices
Answer:
sales and marketing.
Explanation:
The sales and marketing function is essential to ensure that the customer knows and has access to the company's products through an effective communication, distribution and customer service system.
There needs to be planning and research to identify who your potential consumer is, what are their needs and preferences, where they usually buy the product, how often, what their income, which media they access most, etc., so that there is the correct allocation of resources for advertising, product distribution and other variables, so that the product is available to the customer in the right place, in the right quantity, at the right time and quality.
Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special-order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine.
Lost Mine has offered to buy 1,500 of the US umbrellas at a price of $11 each. Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella:
Direct materials $5.00
Direct labor 2.00
Variable manufacturing overhead 3.50
Fixed manufacturing overhead 2.50
Total cost $13.00
Regular sales price $19.00
Required:
1. Compute the incremental profit (or loss) from accepting the special order.
2. Should Mohave accept the special order?
3. Suppose that the special order had been to purchase 2,000 umbrellas for $9.00 each. Recompute the incremental profit (or loss) from accepting the special order under this scenario.
4. Assume that Mohave is operating at full capacity. Calculate the special-order price per unit at which Mohave would be indifferent between accepting or rejecting the special order.
Answer:
Mohave Corp.
1. The incremental profit from accepting the special order is:
= $750.
2. Mohave should accept the special order.
Explanation:
a) Data and Calculations:
Special order quantity = 1,500
Special order price = $11 per unit
Direct materials $5.00
Direct labor 2.00
Variable manufacturing overhead 3.50 $10.50
Fixed manufacturing overhead 2.50
Total cost $13.00
Regular sales price $19.00
Relevant costs:
Direct materials $5.00
Direct labor 2.00
Variable manufacturing overhead 3.50 $10.50
Incremental Analysis:
Special order price = $11.00
Variable cost per unit = $10.50
Incremental profit per unit $0.50
Total incremental profit = $750 ( $0.50 * 1,500)
Other things equal, diversification is most effective when Group of answer choices Securities returns are uncorrelated. Securities' returns are high. Both securities' returns are positively correlated and securities' returns are high. Securities' returns are positively correlated. You hold equal proportions of each security in a portfolio.
Answer:
Securities returns are uncorrelated.
Explanation:
Portfolio diversification is the process of holding different asset and security classes in order to minimise the non systemic risk of the portfolio
Non systemic risk are risks that can be diversified away. they are also called company specific risk. Examples of this type of risk is a manager engaging in fraudulent activities.
Correlation is a statistical measure used to measure the relationship that exists between two variables.
1. Positive correlation : it mean that the two variables move in the same direction. If one variable increases, the other variable also increases.
For example, there should be a positive correlation between quantity supplied and price
When there is a positive correlation, the graph of the variables is upward sloping
2. Negative correlation : it mean that the two variables move in different direction. If one variable increases, the other variable decreases.
For example, there should be a negative correlation between quantity demanded and price
When there is a negative correlation, the graph of the variables is downward sloping
3. Zero correlation : there is no relationship between the variables
In order to achieve the highest benefit of diversification, there should be no relationship between the assets in the portfolio
Preparing Adjusting Entries in a Worksheet
Following is the unadjusted trial balance of Skylar Gaming, Inc. at the end of its first year of operations, December 31, 20x7:
Account Name DR. CR.
Cash $71,550
Accounts Receivable $25,200
Supplies $550
Prepaid Insurance $12,000
Equipment $31,750
Accumulated Depreciation-Equipment $4,050
Accounts Payable $6,700
Salaries Payable $0
Unearned Revenue $2,200
Common Stock $45,700
Retained Earnings $23,850
Dividends $3,500
Revenue $80,750
Depreciation Expense-Equipment $2,000
Salaries Expense $4,750
Insurance Expense $3,100
Rent Expense $4,200
Supplies Expense $2,500
Utilities Expense $2,150
$163,250 $163,250
The following additional information is available:
Skylar Gaming, Inc. needs to accrue $2,000 in salaries that will not be paid until next month.
Skylar Gaming, Inc. has earned $2,000 of the services that were paid for in advance as included in the unearned revenue account.
At the end of the period, Skylar Gaming, Inc. has provided services in the amount of $500 to another customer (John Gartner). However, Skylar has not billed them yet since they only issue bills at the beginning of each month.
Skylar Gaming, Inc. needs to record the annual $1,025 of depreciation on the equipment.
One month of the 12-month insurance policy in prepaid insurance has been used up, and a journal entry is needed to reflect this.
At the end of the period, $125 in supplies are remaining.
Required:
Prepare all necessary adjusting entries at December 31, 20x7 Descriptions are not needed.
Using the below linked template prepare an adjusted trial balance at December 31, 20x7.
Using a worksheet template, prepare an income statement, statement of retained earnings, and a balance sheet.
Prepare closing entries including descriptions.
Answer:
Salaries Expense (Dr.) $2,000
Salaries Payable (Cr.) $2,000
Unearned revenue (Dr.) $2,000
Revenue (Cr.) $2,000
Accounts Receivable (Dr.) $500
Revenue (Cr.) $500
Depreciation expense (Dr.) $1,025
Accumulated Depreciation (Cr.) $1,025
Insurance Expense (Dr.) $1,000
Prepaid insurance (Cr.) $1,000
Supplies Expense (Dr.) $425
Office supplies (Cr.) $425
Explanation:
Adjusting entries are prepared for Skylar Gaming Inc., for the transactions that are already recorded. These transaction are adjusted for the change in effects at the month end. Skylar Gaming has prepared all necessary adjusting entries to reflect true accounting impact of every transaction.
the common sources of secondary data in tourism research are
Explanation:
Secondary data sources, such as industry statistics, surveys/censuses, and big data indicators, cover a wide array of topics that can be leveraged in tourism research..
pls Mark brainliest if it was helpfull
One of the examples given by Agnew and Brezina as a way to reduce crime by reducing situational strains is to:
Answer:
Reduce the amount of media violence.
Explanation:
Reducing crime reducing situational stains is the method to minimize the impact of crime and being it public. Media is the most effective way which reports details of crime very quickly. Agnew and Brezina had tried to reduce the impact of crime and avoid distribution of details to public about the reported crime to reduce situational stains.
Situation 2: You are a Department Head* of Generation Z. You are going to arrange a session for your team.
How you communicate with a guest to take a session on behalf of our organization. The things to be aware of,
1. The guest is not familiar with you.
2. You have to manage him/her to take a session without a monetary benefit.
3. You have to Communicate with him/her through social media
4. The person is so friendly to communicate with new people.
Note: You have to manage a session for your own department. If you are in the Graphics Team then consider yourself as Graphics Designing Head and you have to arrange a session related to it.
Ans.
Answer:
As a Department Head* of Generation Z who is charged with communicating with a guest to take a session on behalf of the organization who is not familiar with me, has to communicate via social media and manage the guest to take a session without monetary benefit, then the following steps should be considered:
1. Reach out to the guest on social media
2. Explain how important his presence would be important to the company
3. Explain that his services would have to be without monetary payment
4. Discuss ways that his presence would be beneficial to his public image
explain briefly features of creativity
Answer:
In conclusion we can say that if we want to run a creative activity in the classroom, we need to check for the presence of these four features: imagination, purpose, originality and value, and organise the process in a way that all these can be incorporated.
Explanation:
hope it helps!
Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 61% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 26,400 curtain rods per year.
A supplier offers to make a pair of finials at a price of $13.30 per unit. If Pottery Ranch accepts the supplier’s offer, all variable manufacturing costs will be eliminated, but the $40,400 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products.
Required:
Prepare the incremental analysis for the decision to make or buy the finials.
Answer:
Pottery Ranch Inc.
Incremental Analysis
Make Buy Incremental
Production costs:
Variable manufacturing costs per unit:
Direct materials per unit $4.00
Direct labor per unit $5.00
Variable manufacturing per unit $3.05
Total variable manufacturing costs $12.05 $13.30 $1.25
Annual units of curtain rods 26,400 26,400 26,400
Variable manufacturing costs $318,120 $351,120 $33,000
Explanation:
a) Data and Calculations:
Production capacity = 100%
Variable manufacturing overhead = 61% of direct labor cost
Direct materials per unit = $4
Direct labor per unit = $5
Variable manufacturing per unit = $3.05 (61% of $5)
Total variable manufacturing cost per unit = $12.05
Normal production per year = 26,400 units
Total variable manufacturing costs = $318,120 ($12.05 * 26,400)
Fixed manufacturing overhead = $40,400
1. Sharon, a newly engaged woman, saw an advertisement in a bridal magazine for a beautiful pearl necklace priced at $69.99 from Precious Jewelry. She thought the necklace would be a wonderful present for her bridesmaids, so she ordered 5 necklaces from Precious Jewelry. After a few weeks, Sharon received a letter, along with her returned check from Precious Jewelry. The letter stated that the jeweler was sorry they could not fill her order because they had been overwhelmed with so many requests that their supply of necklaces ran out very quickly
Question Completion:
a. List the 3 elements of an offer and describe each (in your own words).
b. Did Precious Jewelry make an offer when they placed the ad in the magazine? Did Sharon make an offer when she placed the order? Why or why not?
c. What will be the likely outcome if Sharon sues Precious Jewelry to force them to fill her order? Explain your answer.
Answer:
a. The three elements of a valid offer are Communication, Commitment, and Definite Terms. Communication of an offer should be between the offeror and the offeree and not with the general public. Commitment in an offer requires that the two parties are identified and are committed to the exchange of offer and acceptance. Definite terms means that the terms of the offer must be clear and well-understood by the involved parties.
b. Precious Jewelry did not make an offer when it placed the ad in the magazine. The ad was an invitation to offer. Sharon was the party that made the offer when she ordered for the jewelries. It was then left for Precious Jewelry to accept or reject the offer.
c. If Sharon sues Precious Jewelry to force them to fill her order, she does not have the locus standi because there is no basis for the existence of a contract between Sharon and Precious Jewelry since Sharon's offer was not accepted by Precious Jewelry and there was no consideration.
Explanation:
For a valid contract to exist between Sharon and Precious Jewelry, the five elements of a contract must be present. They include valid offer, acceptance, mutual consent (or assent), consideration, and legality (including capacity).
The following general ledger accounts and additional information are taken from the records of Wolfe Corporation at the end of its fiscal year, December 31, 2019 Additional information:
a. The prepaid insurance is for a one-year policy, effective July 1, 2019.
b. A physical count indicated that $500 of supplies is still on hand.
c. $50 of December rent expense has not been recorded.
101 Unused Supplies 173 Advertising Exp. 610 Bal 700 Bal. 200 Cash Bal 2,700 Accounts Receivable110 Bal. 2,000 Common Stock Bal 320 3,800 Salaries Expense 656 Bal. 4,500 161 654 Prepaid Insurance Bal. 1,200 Repair Revenue Bal 450 7,750 Rent Expense Bal. 250
Required:
1. Record all necessary adjusting entries in general journal format including general ledger account numbers. Assume the following account numbers: Insurance Expense: 631; Supplies Expense: 668.
2. Post the adjusting entries to T-accounts and calculate balances.
3. Prepare all closing entries in general Journal format. Include general ledger account numbers.
4. Post the closing entries to the applicable general ledger accounts.
Answer:
a. Prepaid insurance (Dr.) $600
cash (Cr.) $600
b. Supplies expense (Dr.) $200
Unused supplies (Cr.) $200
c. Rent expense (Dr.) $50
Cash (Cr.) $50
Explanation:
Insurance expense : $1,200 * 6 / 12 = $600.
Cash balance $2,700 - $600 - $50 = $2,050
On January 1, 2018, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2019. The company borrowed $2,350,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2018: $7,000,000, 14% bonds $3,000,000, 9% long-term note Construction expenditures incurred during 2018 were as follows: January 1 $ 960,000 March 31 1,560,000 June 30 1,232,000 September 30 960,000 December 31 760,000 Required: Calculate the amount of interest capitalized for 2018 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).)
Answer:
Highlands Company
The interest capitalized for 2018 using the specific interest method is:
= $268,740.
Explanation:
a) Data and Calculations:
Amount borrowed on January 1, 2018 = $2,350,000
Rate of interest for the construction loan = 9%
Outstanding debts throughout 2018:
$7,000,000, 14% bonds
$3,000,000, 9% long-term note
Construction Expenditures incurred during 2018:
Date Expenditure Weight Weighted Average
January 1 $ 960,000 12/12 $960,000
March 31 1,560,000 9/12 1,170,000
June 30 1,232,000 6/12 616,000
September 30 960,000 3/12 240,000
December 31 760,000 0/12 0
Total accumulated weighted-average expenditure = $2,986,000
Interest capitalized for 2018 using the specific interest method:
= $268,740 ($2,986,000 * 9%)
Tri Fecta, a partnership, had revenues of $364,000 in its first year of operations. The partnership has not collected on $46,700 of its sales and still owes $38,000 on $175,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $33,100 in salaries. The partners invested $48,000 in the business and $27,000 was borrowed on a five-year note. The partnership paid $2,430 in interest that was the amount owed for the year and paid $8,900 for a two-year insurance policy on the first day of business. Ignore income taxes.Compute the net income for the first year for Tri Fecta
A. $189,000
B. $155,900
C.$149,020
D.$233,430
Answer:
C
Explanation:
A 5-year treasury bond with a coupon rate of 8% (paid semiannually) has a face value of $1,000. What is the semiannual coupon payment
Answer:
$40
Explanation:
Coupon payment = Face value * Coupon rate * 1/2
Coupon payment = $1,000 * 8% * 1/2
Coupon payment = $1,000 * 0.08 * 1/2
Coupon payment = $40
So, the semiannual coupon payment is $40.
Calculating the Cost of Equity. Suppose stock in Lululemon Corporation has a beta of 0.80. The market risk premium is 10 percent and the risk-free rate is 2 percent. What is Lululemon's cost of equity capital?
Calculating the WACC. In addition to the information in the previous problem, suppose Boone has a target debt-equity ratio of 50 percent. Its cost of debt is 8 percent, before taxes. If the tax rate is 34 percent, what is the WACC?
Answer:
Cost of equity capital can be found by the Capital asset pricing model:
Cost of capital
= Risk free rate + beta * market premium
= 2% + 0.8 * 10%
= 10%
Weighted Average Cost of Capital:
= (weight of debt * after tax cost of debt) + (weight of stock * cost of stock)
= (50% * 8% * ( 1 - 34%)) + (50% * 10%)
= 10.28%
One year ago, Richard purchased $1,260 worth of Double GG Corporation common stock for $42 per share. During the year, Richard received two dividend payments, each equal to $.05 per share. The current market value of the stock is $44 per share. What yield did Richard earn on his investment during the year
Answer:
Yield earned by Richard on his investment during the year is 5%.
Explanation:
This can be calculated as follows:
Number of shares purchased = Worth of common stock one year ago / Price per share one year ago = $1,260 / $42 = 30 shares
Total dividend received during the year = Number of shares purchased * Dividend per share * 2 = 30 * $0.05 * 2 = $3
Current worth of common stock = Number of shares purchased * Current market value per share = 30 * $44 = $1,320
Yield earned during the year = (Current worth of common stock - Worth of common stock one year ago + Total dividend received during the year) / Worth of common stock one year ago = ($1,320 - $1,260 + $3) / $1,260 = 0.05, or 5%
Therefore, yield earned by Richard on his investment during the year is 5%.
