Answer:
39,300 ounces
Explanation:
Calculation for How many ounces were started and completed during the period
Using this formula
Numbers of ounces started and completed during the period= Filling Department completed ounces during the period - Work in process at the beginning of the period
Let plug in the formula
Numbers of ounces started and completed during the period=46,800 ounces -7,500 ounces
Numbers of ounces started and completed during the period=39,300 ounces
Therefore How many ounces were started and completed during the period is 39,300 ounces
When should you use capitalization?
Answer:
you should use capitalization at the beginning of a sentence. you should also use capitalization for pronouns. names of things for example cities and states people names etc
What are the costs and sources of inefficiency in a barter B apply.) A. Productivity is increased by specialization. B. Each good has only one price. C. There is increased time and effort spent looking for trading partners. D. There is a lack of standardization. E. There is difficulty in accumulating wealth. OF. Transactions costs are almost always high.
Answer:
C)There is increased time and effort spent looking for trading partners.
D)There is a lack of standardization.
E)There is difficulty in accumulating wealth.
Explanation:
barter in a trade can be regarded as a system of exchange that involves exchange of goods and services for another without using money as a medium of exchange. Barter is been considered as 'inefficient' as a result of the needs for 'double coincidence of wants'. For instance in a situation whereby someone is buying particular amount of another's goods, but the payment he/she has is for just one indivisible unit of another good, and the worth is higher than what he/she want to obtain, in this case there won't be barter transaction.
It should be noted that the costs and sources of inefficiency in a barter are;
✓There is increased time and effort spent looking for trading partners.
✓There is a lack of standardization.
✓There is difficulty in accumulating
brainly Stuart Manufacturing Company was started on January 1, year 1, when it acquired $89,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of six years. The company paid $12,000 for salaries of administrative personnel and $21,000 for wages to production personnel. Finally, the company paid $26,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Stuart completed production on 10,000 units of product and sold 8,000 units at a price of $9 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) calculate assets
Answer:
Stuart Manufacturing Company
Assets = $107,200
Explanation:
a) Data and Calculations:
Cash Account
Common stock $89,000
Furniture (32,000)
Equipment (40,000)
Salaries (12,000)
Wages (21,000)
Raw materials (26,000)
Sales 72,000
Cash balance $30,000
Inventory:
Cost = $26,000
Units produced = 10,000 units
Cost per unit = $2.60 ($26,000/10,000)
Cost of goods sold = 8,000 * $2.60 = $20,800
Ending inventory = 2,000 * $2.60 = $5,200
Sales Revenue = 8,000 * $9 = $72,000
Assets:
Cash $30,000
Ending inventory 5,200
Furniture 32,000
Equipment 40,000
Total $107,200
b) An asset is something that brings in future cash flows to the business entity. It is made up of Cash and Cash Equivalents, Inventories, Property, Plant, Equipment, and other business investments. Assets are funded from finance provided by creditors and the equity owners, and they generate economic values.
What are fixed assets?
Explanation:
Fixed assets, also known as long-lived assets, tangible assets or property, plant and equipment, is a term used in accounting for assets and property that cannot easily be converted into cash. This can be compared with current assets such as cash or bank accounts, described as liquid assets.
Answer:
Fixed assets, also known as long-lived assets, tangible assets or property, plant and equipment, is a term used in accounting for assets and property that cannot easily be converted into cash. This can be compared with current assets such as cash or bank accounts, described as liquid assets.
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Explanation:
In a certain manufacturing industry, some amount of air pollution is
unavoidable. What would be a reasonable CSR approach for a business to
take in light of this fact?
A. Limit the pollution as much as possible, and invest in research into
new production methods that would be more environmentally
friendly.
B. Because some pollution is unavoidable, the business need not
concern itself with spending money in better equipment and
technology.
C. Because the air pollution is unavoidable, the business should
move into a different field of industry if they are truly committed to
CSR values.
D. Because the pollution is unavoidable, consumers will not holly the
company responsible; the company has no need to implement any
costly practices.
Answer:
Limit the pollution as much as possible, and invest in research into
new production methods that would be more environmentally
friendly.
Kevin's boat was wrecked by hurricane Harvey (a federally declared natural disaster). Damage to the boat was estimated at $30,000. The original cost was $25,000. The boat was partially insured, and Kevin received an insurance reimbursement of $15,000. Kevin's adjusted gross income is $50,000, and he had no other losses during the year. What amount can Keith deduct on his tax return for this year
Answer:
A) $4,900
Explanation:
Options are: "A) $4,900 B) $5,000 C) $9,900 D) $14,900"
Particulars Amount
Original cost $25,000
Damage $30,000
Lower of the two is $25,000
Less: Insurance reimbursement $15,000
Actual loss $10,000
Less: Deduction $100
Less: 10% of AGI (10% of 50,000) $5,000
Final Deduction $4,900
Note: Flat $100 is deducted from this amount and also 10% of AGI, i.e 10% of $50,000 is deducted to finally arrive at the deduction.
Determine the amount of the standard deduction for each of the following taxpayers for tax year 2020: Christina, who is single. Adrian and Carol, who are filing a joint return. Their son is blind. Peter and Elizabeth, who are married and file separate tax returns. Elizabeth will itemize her deductions. Karen, who earned $1,100 working a part-time job. She can be claimed as a dependent by her parents. Rodolfo, who is over 65 and is single. Bernard, who is a nonresident alien with U.S. income. Manuel, who is 70, and Esther, who is 63 and blind, will file a joint return. Herman, who is 75 and a qualifying widower with a dependent child.
Answer:
Christina, who is single. STANDARD DEDUCTION FOR SINGLE FILER $12,400
Adrian and Carol, who are filing a joint return. Their son is blind. STANDARD DEDUCTION FOR MARRIED FILING JOINTLY $24,800
Peter and Elizabeth, who are married and file separate tax returns. Elizabeth will itemize her deductions. PETER'S STANDARD DEDUCTION IS $12,400 (MARRIED FILING SEPARATELY), WHILE ELIZABETH DOES GET A STANDARD DEDUCTION (SHE WILL ITEMIZE)
Karen, who earned $1,100 working a part-time job. She can be claimed as a dependent by her parents. STANDARD $1,100 DEDUCTION FOR A DEPENDENT.
Rodolfo, who is over 65 and is single. STANDARD DEDUCTION OF $14,050 FOR BEING SINGLE AND OVER 65.
Bernard, who is a nonresident alien with U.S. income.
NO STANDARD DEDUCTION
Manuel, who is 70, and Esther, who is 63 and blind, will file a joint return.
STANDARD DEDUCTION FOR MARRIED FILING JOINTLY $27,400, ONE BEING OVER 65 AND THE OTHER ONE BEING BLIND
Herman, who is 75 and a qualifying widower with a dependent child.
STANDARD DEDUCTION FOR MARRIED FILING JOINTLY $26,100 (QUALIFYING WIDOWER) AND ONE BEING OVER 65
Bridges and Lloyd, an accounting firm, provides consulting and tax planning services. For many years, the firm's total administrative cost (currently $250,000) has been allocated to services on the basis of billable hours to clients. A recent analysis found that 65% of the firm's billable hours to clients resulted from tax planning services, while 35% resulted from consulting services. The firm, contemplating a change to activity-based costing, has identified three components of administrative cost, as follows: Staff Support $ 180,000 In-house computing charges 50,000 Miscellaneous office costs 20,000 Total $ 250,000 A recent analysis of staff support found a strong correlation between the number of staff personnel and the number of clients served (consulting, 20; tax planning, 60). In contrast, in-house computing and miscellaneous office cost varied directly with the number of computer hours logged and number of client transactions, respectively. Consulting consumed 30% of the firm's computer hours and had 20% of the total client transactions. If Bridges and Lloyd switched from its current accounting method to an activity-based costing system, the amount of administrative cost chargeable to consulting services would:
Answer: Decrease by $23,500
Explanation:
The Consulting cost under their current accounting system is:
= 250,000 * 35%
= $87,500
Under Activity based:
Staff support for Consulting:
20 goes to Consulting, 60 to tax planning.
Total = 20 + 60 = 80
Consulting is 20/80 of Staff support amount
= 20/80 * 180,000
= $45,000
In house computing charges for Consulting
Consulting consumed 30% of the firm's computer hours.
= 30% * 50,000
= $15,000
Miscellaneous office costs
Consulting consumed 20% of total client transactions
= 20% * 20,000
= $4,000
Total cost for Consulting under Activity based = 45,000 + 15,000 + 4,000
= $64,000
Difference = 87,500 - 64,000
= $23,500
In its first year of operations, Cullumber Company recognized $33,700 in service revenue, $6,700 of which was on account and still outstanding at year-end. The remaining $27,000 was received in cash from customers. The company incurred operating expenses of $17,100. Of these expenses, $13,300 were paid in cash; $3,800 was still owed on account at year-end. In addition, Cullumber prepaid $2,730 for insurance coverage that would not be used until the second year of operations.
Required:
a. Calculate the first year’s net earnings under the cash basis of accounting, and the first year’s net earnings under the accrual basis of accounting.
b. Which basis of accounting (cash or accrual) provides more useful information for decision-makers?
Answer:
A. Cash basis of accounting $10,970
Accrual basis of accounting $13,870
B. Accrual basis of accounting
Explanation:
a. Calculation of the first year net earnings under the cash basis of accounting, and the first year net earnings under the accrual basis of accounting.
Cash basis of accounting
Revenue 27,000
Less Expenses -$13,300
Less Prepaid Assets -$2,730
Total $10,970
Accrual basis of accounting
Revenue 33,700
Less Expenses -$17,100
Less Prepaid Asset -$2,730
Total $13,870
(b) Based on the above Calculation the basis of accounting that provides more useful information for decision-makers will be ACCRUAL basis of accounting of the amount of
$13,870 reason been that it help to show the complete company financial considerations.
England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour.
If free trade exists between the countries, then each country will benefit if
a. England exports scones, Scotland exports sweaters.
b. England exports sweaters, Scotland exports scones.
c. both countries export scones.
d. given the production possibilities, both countries will not benefit from trade.
Answer:
A
Explanation:
The country with a comparative advantage in the production of a good should export the good
A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.
England
Comparative advantage in the production of scones = 1/50 = 0.02
Comparative advantage in the production of sweater = 50/1 = 50
Scotland
Comparative advantage in the production of scones = 2/40 = 0.05
Comparative advantage in the production of sweater = 40/2 = 20
England has a comparative advantage in the production of scones and should export scones
Scotland has a comparative advantage in the production of sweaters and should export sweaters
An entrepreneur recently purchased Cocoon's, a local deli, on the beach. To operate the business, she estimates that selling and administrative expenses will be $98,510.00 per year and that depreciation will be $20,000.00 per year. As part of her purchase, she took out a bank loan that will require $76,265.00 per year in interest. She anticipates paying a 32.00% tax rate on income. She estimates that the deli will attract 200.00 customers per day. Each customer will spend $12.00 on average. The cost of goods per customer will be $4.50. She will operate the deli 350.00 days per year. What is the projected net profit margin for the deli
Answer:
27%
Explanation:
The computation of the net profit margin is shown below;
As we know that
net profit margin = Net profit ÷ sales
where
net profit is
Particulars Amount
Sales (200 customers × $12 × 350 days) $840,000
Less: cost of goods sold (200 customers × $4.50 × 350 days) -$315,000
Gross profit $525,000
Less:
Selling and admin expense -$98,510
Depreciation expense - $20,000
Bank loan interest -$76,265
Net income before tax $330,225
Less tax at 32% -$105,672
Net income after tax $224,553
Now the net profit margin is
= $224,553 ÷ $840,000
= 27%
Woodman Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Estimated and actual data for direct labor and manufacturing overhead for last year are as follows:
Estimated Actual
Direct Labor Hours: 600,000 550,000
Manufacturing Overhead Estimated $720,000 $680,000
Answer:
Underapplied overhead= $20,000
Explanation:
Giving the following information:
Estimated Actual
Direct Labor Hours: 600,000 550,000
Manufacturing Overhead Estimated $720,000 $680,000
I assume that we need to calculate the over/under applied overhead.
First, we need to determine the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 720,000/600,000
Predetermined manufacturing overhead rate= $1.2 per direct labor hour
Now, we apply overhead based on actual hours:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.2*550,000
Allocated MOH= $660,000
Finally, the under/over applied overhead:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 680,000 - 660,000
Underapplied overhead= $20,000
Many small firms seek to establish a particular niche in the market, realizing that they cannot afford to operate on a larger scale without exposing themselves to considerable risk of retaliation from larger companies. When a number of small businesses are operating in this manner, they are forcing the larger businesses to recognize and account for their influence on the market. In this way, small businesses are primarily Question 49 options:
Answer:
fostering competition
Explanation:
By deciding to focus on a particular niche these smaller firms in effect foster competitions among other larger firms.
For example, if in a market for shoes, a small firm A, that is newly established decides to focus only on selling shoes for children after recognizing they cannot match up with an existing larger company B that sells a variety of shoes (both children and adult shoes). At a point in time when a number of small businesses are operating in this manner, the larger companies would recognize and account for their influence on the market.
Last month, you lent a work colleague $5000 to cover some overdue bills. He agreed to pay you in 1 month with interest at 2% for the month, thus owing you $5100. Today, when the repayment is due, he asked you to extend the loan for another month and he would pay you the $5100 next month. In the meantime, you have had the offer to invest as much as you wish in an oil-well venture that is expected to pay 40% per year and a hot new IT stock that is estimated to return 39% the first year. If you let your colleague have another month, what is the opportunity cost of your decision
Answer:
The opportunity cost of lending the money to the friend is the largest expected return that could be earned with the money loaned to the friend. From the available opportunity, the investor could earn maximum of 40% by investing in oil well venture. Thus, the opportunity cost to the investor is 40%
The opportunity cost in dollar = Investment * Opportunity cost in %
= $5,000 * 40%
= $2,000
Thus, the opportunity cost in dollar is $2,000
postretirement health care benefit plan. On January 1 of the current calendar year, the following plan-related data were available. Net loss-postretirement benefit plan $ 222,000 Accumulated postretirement benefit obligation $ 2,100,000 Fair value of plan assets $ 440,000 Average remaining service period to retirement 12 years Average remaining service period to full eligibility 10 years The rate of return on plan assets during the year was 12%. The expected return was 10%. The actuary revised assumptions regarding the APBO at the end of the year, resulting in a $32,000 increase in the estimate of the obligation. Required: 1. Calculate any amortization of net loss that should be included as a component of postretirement benefit expense for the current year. 2. Determine the net loss or gain as of December 31 of the current year.
Answer:
1. Amortization of net loss = $1000
2. Ending Net Loss: $244,200
Explanation:
Data Given:
Net Loss Post Retirement Benefit Plan = $222,000
Accumulated Port Retirement Benefit Obligation = $2,100,000
Fair value of Plan Assets = $440,000
Average Remaining Service period to Retirement = 12 years
Average Remaining Service period to full eligibility = 10 years
Rate of Return on Plan Assets during the year = 12%
Expected Return = 10%
Estimate in the obligation = $32,000
Required:
1. Amortization of net loss
Solution:
For Amortization of net loss, we need to have the value of excess at the beginning of the year and average remaining service years.
So,
Net loss = $222,000
And
Accumulated Port Retirement Benefit Obligation = $2,100,000
Expected Return = 10%
So,
Find 10% of the Accumulated Port Retirement Benefit Obligation
$2,100,000 x 10% = $210,000
Now, for excess at the beginning of the year:
$222,000 - $210,000
excess at the beginning of the year = $12,000
And we know that,
Average Remaining Service period to Retirement = 12 years
Amortization of net loss = $12,000/12 years
Amortization of net loss = $1000
2. Net loss or gain at the end of the year.
Solution:
We know the beginning net loss = $222,000
Estimate in the obligation = $32,000
Now, we need to find the excess actual return over expected return:
Amortization of net loss = $1000
Fair value of Plan Assets = $440,000
Rate of Return on Plan Assets during the year = 12%
Expected Return = 10%
excess actual return over expected return: $440,000 x (12% - 10%)
excess actual return over expected return: $440,000 x (2%)
excess actual return over expected return: $8,800
Now,
For the Ending Net Loss:
(beginning net loss + Estimate in the obligation - excess actual return over expected return - Amortization of net loss)
$222,000 + $32,000 -$8,800 - $1000 = $244,200
Ending Net Loss: $244,200
You discover that your supervisor/team leader stole a password and she has been secretly logging into the computer of another team leader to get information about their team’s funding sources. She is aware that you caught her and tells you that this information has helped your team stay competitive and get ahead. She prefers that you keep her secret. How would you handle this situation?
Answer:
I would probably tell him/her that I wouldn't really keep it a secret if she keeps doing the same things over and OVER again the first time I would keep it a secret though if she does it again I'll have to tell someone right away.
Explanation:
University Car Wash built a deluxe car was across the street from campus. The new machines cost $246,000 including installation. The company estimates that the equipment will have a residual value of $27,000. University Car Wash also estimates it will use the machine for six years or about 12,000 total hours.
1) 2,800
2) 1,900
3) 2,000
4) 2,000
5) 1,800
6) 1,500
Prepare a schedule for six-years using straight- line, double-declining balance, and activity-based method.
Answer:
straight line depreciation
depreciable value = $246,000 - $27,000 = $219,000
depreciation rate per year = $219,000 / 6 = $36,500
double-declining balance
depreciation rate year 1 = 2 x 1/6 x $246,000 = $82,000
depreciation rate year 2 = 2 x 1/6 x $164,000 = $54,667
depreciation rate year 3 = 2 x 1/6 x $109,333 = $36,444
depreciation rate year 4 = 2 x 1/6 x $72,889 = $24,296
depreciation rate year 5 = 2 x 1/6 x $48,593 = $16,198
depreciation rate year 6 = $32,395 - $27,000 = $5,395
units of activity
depreciable value = $246,000 - $27,000 = $219,000
depreciation rate per unit = $219,000 / 12,000 = $18.25 per unit
depreciation rate year 1 = $18.25 x 2,800 = $51,100
depreciation rate year 2 = $18.25 x 1,900 = $34,675
depreciation rate year 3 = $18.25 x 2,000 = $36,500
depreciation rate year 4 = $18.25 x 2,000 = $36,500
depreciation rate year 5 = $18.25 x 1,800 = $32,850
depreciation rate year 6 = $18.25 - 1,500 = $27,375
In 1963, an investor opened a savings account with $LaTeX: \text{K} K earning simple interest at annual rate of LaTeX: 2.5\% 2.5 % . Four years later, the investor closed the account and invested the accumulated amount in a savings account earning LaTeX: 5\% 5 % compound interest. Determine the number of years (since 1963) necessary for the balance to reach $LaTeX: 3K 3 K .
Answer:
The number of years necessary for the balance to turn from K to 3K (since 1963) in the given situation = 24.5636 years rounded off to 25 years
Explanation:
The simple interest earned is at the rate of 2.5%. The formula for simple interest per year is,
Simple interest per year = Investment * interest rate
Simple interest per year = 1K * 2.5% => $0.025K
Simple interest for 4 years = 0.025 * 4 = $0.1K
So, total investment at the after 4 years = 1K + 0.1K = $1.1K
The formula for future value of a sum of amount will be used to calculate the value of investment at a future date. The formula is as follows,
Future value = Present value * (1+r)^t
Where,
r is the interest rate or rate of returnt is the time periodSo, accumulated earnings ($1.1K) are invested at 5% compound interest. The value of t necessary for 1.1K to turn into 3K can be found as follows,
3 = 1.1 * (1.05)^t
3 / 1.1 = 1.05^t
2.727272727 = 1.05^t
ln(2.727272727) / ln(1.05) = t
t = 20.5636 years rounded off to 21 years
The number of years necessary for the balance to turn from K to 3K in the given situation = 4 + 20.5636 = 24.5636 rounded off to 25 years
Wolfpack Construction has the following account balances at the end of the year.
Accounts Balances Equipment $26,000
Accounts payable 3,000
Salaries expense 33,000
Common stock 11,000
Land 18,000
Notes payable 20,000
Service revenue 39,000
Cash 6,000
Retained earnings ?
Required:
Use only the appropriate accounts to prepare a balance sheet.
Answer:
Retained Earnings $16,000
Total assets $50,000
Total liabilities and equity $50,000
Explanation:
Preparation of appropriate accounts to prepare a balance sheet
BALANCE SHEET
ASSETS
Cash 3,000
Land 18,000
Equipment 26,000
Total assets $ 50,000
LIABILITIES
Accounts Payable 3,000
Notes payable 20,000
Total Liabilities 23,000
STOCKHOLDERS EQUITY
Common Stock 11,000
Retained Earnings 16,000
[(3,000+18,000+26,000)-(3,000+20,000+11,000]
Total Equity 27,000
Total liabilities and equity $50,000
Therefore the balance sheet include:
Total assets $50,000
Total liabilities and equity $50,000
a) Calculate the PV of a perpetuity with a cash flow of $111,111 received every year. The first cash flow occurs in year 1. The interest rate is 11% simple annual rate. b) Calculate the PV of a perpetuity with a cash flow of $222,222 received every second year. The first cash flow occurs in year 2. The interest rate is 11% simple annual rate. c) Calculate the PV of a perpetuity with a cash flow of $333,333 received every third year. The first cash flow occurs in year 3. The interest rate is 11% simple annual rate.
Answer:
a) Calculate the PV of a perpetuity with a cash flow of $111,111 received every year. The first cash flow occurs in year 1. The interest rate is 11% simple annual rate.
PV of a perpetuity = annual payment / interest rate = $111,111 / 11% = $1,010,100
b) Calculate the PV of a perpetuity with a cash flow of $222,222 received every second year. The first cash flow occurs in year 2. The interest rate is 11% simple annual rate.
PV of a perpetuity = annual payment / interest rate = $222,222 / (11% x 2) = $1,010,100
c) Calculate the PV of a perpetuity with a cash flow of $333,333 received every third year. The first cash flow occurs in year 3. The interest rate is 11% simple annual rate.
PV of a perpetuity = annual payment / interest rate = $333,333 / (11% x 3) = $1,010,100
Explanation:
Since the interest rate is simple, not compounded, the three perpetuities have the same present value.
National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $500,000 on January 1, 2021. The bonds mature on December 31, 2024 (4 years). For bonds of similar risk and maturity the market yield was 10%. Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2021. 2. Prepare the journal entry to record their issuance by National on January
Answer:
The price of the bonds $483,841.97
Journal entry:
Dr cash $483,841.97
Dr discount on bonds payable $16,158.03
Cr bonds payable $500,000.00
Explanation:
Using a financial calculator, we determine the bond price by using the following inputs:
N=8(number of semiannual coupons in 4 years=4*2=8)
PMT=22500 (semiannual coupon=face value*coupon rate*6/12= $500,000*9%*6/12=$22,500)
I/Y=5(semiannual yield=10%%*6/12=5%)
FV=500000( the face value is $600,000)
CPT PV=$483,841.97
Bond discount=face value-bond price
Bond discount=$500,000-$483,841.97
Bond discount=$16,158.03
The double entries are to debit cash and discount on bonds payable with $483,841.97 and $16,158.03 respectively while bonds payable is credited with the face value of $500,000
how the equilibrium price and quantity change when a change in demand occurs and the supply stays constant, and when a change in supply occurs and the demand stays constant.
Answer:
because demand is not increaing constant supply is increasing that you ate a bit your amount of food is increasing supply of food chain is not increaing in the same hate also.now understand yourself
An analysis of the company's insurance policies provided the following facts.
Policy Date of Purchase Months of Coverage Cost
A April 1, 2017 24 $10,824
B April 1, 2018 36 9,576
C August 1, 2019 12 8,424
The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost. (Year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.)
Required:
So what would my adjusting journal entry be?
Answer:
Adjusting Journal in the year of payment:
December, 2017: Policy A
Debit Insurance Expense $4,059
Credit Prepaid Insurance $4,059
To record the insurance expense for the year (9 months).
December, 2018: Policy A and B
Policy A:
Debit Insurance Expense $5,412
Credit Prepaid Insurance $5,412
To record insurance expense for the year, 12 months.
Policy B:
Debit Insurance Expense $2,394
Credit Prepaid Insurance $2,394
To record insurance expense for the year, 9 months.
December, 2019:
Policy A:
Debit Insurance Expense $1,353
Credit Prepaid Insurance $1,353
To record insurance expense for the year, 3 months.
Policy B:
Debit Insurance Expense $3,192
Credit Prepaid Insurance $3,192
To record insurance expense for the year, 12 months.
Policy C:
Debit Insurance Expense $3,510
Credit Prepaid Insurance $3,510
To record insurance expense for the year, 5 months.
Explanation:
a) Data and Calculations:
Policy Date of Purchase Months of Cost Monthly
Coverage Cost
A April 1, 2017 24 $10,824 $451 ($10,824/24)
B April 1, 2018 36 9,576 $266 ($9,576/36)
C August 1, 2019 12 8,424 $702 ($8,424/12)
b) The insurance expenses recorded under the three policies have been determined using the monthly rates. In each year, the months covered are taken into consideration when computing the insurance expense for the year. In this way, only the expenses incurred for the period are accounted for, in accordance with the accrual concept of accounting.
The conceptual framework indicates the desired fundamental and enhancing qualitative characteristics of accounting information. Several constraints impede achieving these desired characteristics. Answer each of the following questions related to these characteristics and constraints.
1. Which component would allow a large company to record the purchase of a $120 printer as an expense rather than capitalizing the printer as an asset?
2. Donald Kirk, former chairman of the FASB, once noted that " . . . there must be public confidence that the standard-setting system is credible, that selection of board members is based on merit and not the influence of special interests . . ." Which characteristic is implicit in Mr. Kirk's statement?
3. Allied Appliances, Inc., changed its revenue recognition policies. Which characteristic is jeopardized by this change?
4. National Bancorp, a publicly traded company, files quarterly and annual financial statements with the SEC. Which characteristic is relevant to the timing of these periodic filings?
5. In general, relevant information possesses which qualities?
6. When there is agreement between a measure or description and the phenomenon it purports to represent, information possesses which characteristic?
7. Jeff Brown is evaluating two companies for future investment potential. Jeff's task is made easier because both companies use the same accounting methods when preparing their financial statements. Which characteristic does the information Jeff will be using possess?
8. A company should disclose information only if the perceived benefits of the disclosure exceed the costs of providing the information. Which constraint does this statement describe?
Answer:
1)Materiality
2)Reliability
3)Consistency
4)periodicity
5)Predictive Value, Confirmatory value, and/or Materiality
6)Faithful representation
7)Comparability
8)Cost effectiveness
Explanation:
1)Materiality can be regarded the cost or asset that is been considered having a great influence on the company. It is the relevancy of information as well as work of transaction as regards financial statement of the company.
2)Reliability in Accounting can be regarded as trustworthiness in a financial statements. It helps to know if a financial information is eligible to be utilized by investors as well as creditors ending up with the same results.
3)Consistency can be regarded as when the company follows accounting principles in subsequent years when presenting and presenting financial statements as well as internal working.
4)periodicity explained that financial results of a company can be reported within a designated periods of time. This could be on basis of monthly, quarterly as well as annual.
5)Predictive Value, Confirmatory value, and/or
Materiality
A relevant information are ones that has data from occured event i.e it is CONFIRMATORY. It should also encompass data as regards to the future I.e
PREDICTIVE.Relevant information helps in decision making
6)Faithful representation can be regarded as a concept that explained that financial statements of a company should be able to display the condition of a business accurately
7)Comparability can be regarded as the extent to which financial statements information can be compared in different firms as well as time period
8)Cost effectiveness can be regarded as when greatest benefits are recorded with a comparatively low price
Type the correct answer in the box. Spell all words correctly.
What are the three ways through which a company tries to sell its products?
Businesses generally sell through a product's features, benefits, or
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Answer:
Values
Explanation:
Businesses generally sell through a product's features, benefits, or values
Value selling refers to the process of convincing buyers that your products will add value to their lives. It involves giving reasons and reinforcing why your products are the most valuable in the market.
Value selling focuses on the value derived from consuming a product but not how much it costs. In value selling, the salesperson highlights the impact a product creates rather than its purchase costs.
The shift from PPF1 to PPF2 implies all of the following EXCEPT: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the maximum amount of dining sets that can be produced did not change. b the maximum amount of laptop computers that can be produced increased. c the maximum amount of both outputs that can be consumed increased. d the maximum amount of each good that can be produced increased.
Answer:
The shift from PPF1 to PPF2 implies all of the following EXCEPT:
a. the maximum amount of dining sets that can be produced did not change.
Explanation:
A production possibility frontier (PPF) indicates the maximum possible output combinations of two goods or services an economy can produce with the efficient and effective utilization of economic resources. The production possibility frontier illustrates the concepts of opportunity cost, trade-offs and also shows the effects of growth in any given economy. A shift from PPF1 to PPF2 implies an increase.
Billed Mercy Co. $2,400 for services performed.
how to journalize this?
When a business transaction requires a journal entry, we must follow these rules:
The entry must have at least 2 accounts with 1 DEBIT amount and at least 1 CREDIT amount.
The DEBITS are listed first and then the CREDITS.
The DEBIT amounts will always equal the CREDIT amounts.
For another example, let’s look at the transaction analysis we did in the previous chapter for Metro Courier (click Transaction analysis):
1. The owner invested $30,000 cash in the corporation. We analyzed this transaction by increasing both cash (an asset) and common stock (an equity) for $30,000. We learned you increase an asset with a DEBIT and increase an equity with a CREDIT. The journal entry would look like this:
2. Purchased $5,500 of equipment with cash. We analyzed this transaction as increasing the asset Equipment and decreasing the asset Cash. To increase an asset, we debit and to decrease an asset, use credit. This journal entry would be:
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Answer:
All the journal entries illustrated so far have involved one debit and one credit; these journal entries are called simple journal entries. Many business transactions, however, affect more than two accounts. The journal entry for these transactions involves more than one debit and/or credit. Such journal entries are called compound journal entries.
Explanation:
1. The owner invested $30,000 cash in the corporation. We analyzed this transaction by increasing both cash (an asset) and common stock (an equity) for $30,000. We learned you increase an asset with a DEBIT and increase an equity with a CREDIT
2. Purchased $5,500 of equipment with cash. We analyzed this transaction as increasing the asset Equipment and decreasing the asset Cash. To increase an asset, we debit and to decrease an asset, use credit.
3. Purchased a new truck for $8,500 cash. We analyzed this transaction as increasing the asset Truck and decreasing the asset Cash. To increase an asset, we debit and to decrease an asset, use credit.
4. Purchased $500 in supplies on account. We analyzed this transaction as increasing the asset Supplies and the liability Accounts Payable. To increase an asset, we debit and to increase a liability, use credit.
5. Paid $300 for supplies previously purchased. Since we previously purchased the supplies and are not buying any new ones, we analyzed this to decrease the liability accounts payable and the asset cash. To decrease a liability, use debit and to decrease and asset, use debit.
6. Paid February and March Rent in advance for $1,800. When we pay for an expense in advance, it is an asset. We want to increase the asset Prepaid Rent and decrease Cash. To increase an asset, we debit and to decrease an asset, use credit.
7. Performed work for customers and received $50,000 cash. We analyzed this transaction to increase the asset cash and increase the revenue Service Revenue. To increase an asset, use debit and to increase a revenue, use credit.
8. Performed work for customers and billed them $10,000. We analyzed this transaction to increase the asset accounts receivable (since we have not gotten paid but will receive it later) and increase revenue. To increase an asset, use debit and to increase a revenue, use credit.
9. Received $5,000 from customers from work previously billed. We analyzed this transaction to increase cash since we are receiving cash and we want to decrease accounts receivable since we are receiving money from customers who we billed previously and not new work we are doing. To increase an asset, we debit and to decrease an asset, use credit.
10 Paid office salaries $900. We analyzed this transaction to increase salaries expense and decrease cash since we paid cash. To increase an expense, we debit and to decrease an asset, use credit.
11. Paid utility bill $1,200. We analyzed this transaction to increase utilities expense and decrease cash since we paid cash. To increase an expense, we debit and to decrease an asset, use credit.
Many investment advisors argue that after stocks have declined in value for 2 consecutive years, people should invest heavily because the market rarely declines 3 years in a row. a) Since the stock market began in 1872, there have been two consecutive losing years eight times. In six of those cases, the market rose during the following year. Does this confirm the advice
Answer: Yes it does
Explanation:
The investment advisors say that the market rarely declines three years in a row.
Since 1872, it has declined two years in a row 8 times and three years in a row, only twice.
This means out of 8 times, it declined twice. Percentage of times it declined was:
= 2 / 8 * 100%
= 25%
25% while not rare, is a good enough percentage to trust the advice of the investment advisors.
Determine the taxable amount of social security benefits for the following situations. If an amount is zero, enter "$0".
a. Erwin and Eleanor are married and file a joint tax return. They have adjusted gross income of $36,000, no tax-exempt interest, and $12,400 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
b. Assume Erwin and Eleanor have adjusted gross income of $12,000, no tax-exempt interest, and $16,000 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
c. Assume Erwin and Eleanor have adjusted gross income of $85,000, no tax-exempt interest, and $15,000 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
Answer:
a. Erwin and Eleanor are married and file a joint tax return. They have adjusted gross income of $36,000, no tax-exempt interest, and $12,400 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
Since their income is between $32,000 to $44,000, they have to pay income for 50% of their social security benefits = $12,400 x 50% = $6,200b. Assume Erwin and Eleanor have adjusted gross income of $12,000, no tax-exempt interest, and $16,000 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
Since their income is below $32,000, their social security benefits will not be taxed.c. Assume Erwin and Eleanor have adjusted gross income of $85,000, no tax-exempt interest, and $15,000 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
Since their income is higher than $44,000, they have to pay income for 85% of their social security benefits = $15,000 x 85% = $12,750
Better Corp. completed the following transactions during Year 2:
a. Purchased land for $10,500 cash.
b. Acquired $36,000 cash from the issue of common stock.
c. Received $75,000 cash for providing services to customers.
d. Paid cash operating expenses of $40,900.
e. Borrowed $21,000 cash from the bank.
f. Paid a $10,500 cash dividend to the stockholders.
g. Determined that the market value of the land purchased in event 1 is $46,000.
Required:
a. Record the transactions In the approprlate general ledger accounts. Record the amounts of revenue, expense, and dividends In the Retalned Earnings column. Provide the appropriate titles for these accounts In the last column of the table.
b. As of December 31, 2018, determine the total amount of assets, lablities, and stockholders' equity and present this Information In the form of an accounting equation.
c. What is the amount of total assets, liabilities, and stockholders' equity as of January 1, 2019?
Answer:
Better Corp.
a. Journal Entries:
a. Debit Land $10,500
Credit Cash $10,500
To record the purchase of land.
b. Debit Cash $36,000
Credit Common Stock $36,000
To record the issuance of stock for cash.
c. Debit Cash $75,000
Credit Service Revenue $75,000
To record the receipt of cash for services provided.
d. Debit Operating expenses $40,900
Credit Cash $40,900
To record the payment of operating expenses.
e. Debit Cash $21,000
Credit Bank Loan $21,000
To record the borrowing of cash from the bank.
f. Debit Dividends $10,500
Credit Cash $10,500
To record the payment of cash dividend to stockholders.
g. N/A
a2. a. Assets (Land +$10,500 + Cash- $10,500) = Liabilities + Equity
b. Assets (Cash + $36,000) = Liabilities + Equity (Common Stock + $36,000)
c. Assets (Cash $36,000 + 75,000) = Liabilities + Equity (Common Stock $36,000 + Retained Earnings + $75,000) Service Revenue
d. Assets (Cash 111,000 - $40,900) = Liabilities + Equity (Common Stock $36,000 + Retained Earnings $75,000 = $40,900) Operating Expense
e. Assets (Cash $70,100 + $21,000) = Liabilities (Bank Loan + $21,000) + Equity (Common Stock $36,000 + Retained Earnings $34,100)
f. Assets (Cash $91,100 - $10,500) = Liabilities (Bank Loan + $21,000) + Equity (Common Stock $36,000 + Retained Earnings $34,100 - $10,500) Dividends
g. Assets (Cash $80,600) = Liabilities (Bank Loan + $21,000) + Equity (Common Stock $36,000 + Retained Earnings $23,600)
b. Total amount of assets, liabilities, and stockholders' equity as of December 31, 2018:
Total assets $80,600 = Liabilities $21,000 + Equity (Common Stock $36,000 + Retained Earnings $23,600)
c. The amount of total assets, liabilities, and stockholders' equity as of January 1, 2019:
Assets = $80,600
Liabilities = $21,000
Equity = $59,600
Explanation:
The accounting equation is Assets = Liabilities + Equity. It is the basis of the double-entry system of accounting. With this equation, every transaction is always recorded twice.
