Answer:
A. dividendsminus−received deduction.
Explanation:
This allows companies to avoid mostly third taxes on the same earnings.
It is explained to be a federal tax deduction in the U.S. that is given to certain corporations that get dividends from related entities. The amount of the dividend that a company can deduct from its income tax is tied to how much ownership the company has in the dividend-paying company. However, there are criteria that must be met in order to qualify for a DRD.
The dividends received deduction allows a company that receives a dividend from another company to deduct that dividend from its income and reduce its income tax accordingly.
Final Examination Hide or show questions Calculator Problem 9-23 (b) (LO. 2) Ricardo, who is self-employed, uses his automobile 85% for business and during 2019 drove a total of 32,200 business miles. Information regarding his car expenses is listed below. Business parking $345 Auto insurance 2,800 Auto club dues (includes towing service) 275 Toll road charges (business-related) 205 Oil changes and engine tune-ups 180 Repairs 1,890 Depreciation allowable 3,600 Fines for traffic violations (incurred during business use) 95 Gasoline purchases 4,125 What is Ricardo's deduction in 2019 for the use of his car if he uses:
Answer:
Explanation:
a) actual cost method:-
=deductions × percentage
= 345 + 205 + 85% (2800 + 275 + 180 + 1890 +3600 +4125 )
=550 + 10939.5
=11489.5 = 11490
Note :- fines are not taken.
b) automatic mileage method:-
=total number of business miles × standard rate
=32200×0.58 +345+205
=19226
Ellie (a single taxpayer) is the owner of ABC, LLC. The LLC (a sole proprietorship) reports QBI of $900,000 and is not a specified services business. ABC paid total W-2 wages of $300,000, and the total unadjusted basis of property held by ABC is $30,000. Ellie's taxable income before the QBI deduction is $740,000 (this is also her modified taxable income). What is Ellie's QBI deduction for 2019
Answer:
QBI deduction for 2019 is $148,000
Explanation:
Description Amount
Taxable income before QBI deduction
exceed $207,500 threshold.
Capital investment limit is considered
QBI deduction is lesser of:
1) 20% of qualified business income $180,000
($900,00 × 20%)
or Greater of
2) 50% 0f W-2 wages $150,000
($300,000 × 50%)
or
25% 0f W-2 wages + 2.5% of unadjustment
basis pf qualified property
($300,000 × 25%) + ($300,000 × 2.5%) $75,750
3)Not more than 20% of modified taxable income
($740,000 × 20%) $148,000
Therefore, QBI deduction for 2019 is $148,000
The Edwards Construction Supply Company is adopting a just-in-time inventory system. Jim Edwards, the president, has decided that restocking only when the inventory falls below a specific level will save the company thousands of dollars. Many of Edwards’ employees have been with the company for 30 years or more, and change like this might be unsettling for them. Edwards knows that his employees will be more comfortable with the system if their supervisors understand it fully. What purpose will this meeting serve?
Answer: To Provide a Smooth Transition
Explanation:
As the text mentions, many of Edwards’ employees who have been with the company for 30 years or more, might find change unsettling. However, they trust their supervisors enough to be comfortable if the Supervisors understand the new system.
For this reason, this meeting is very important as it is a chance to get the supervisors on board. Here the Edwards Company can explain in detail the new system so that the Supervisors can understand it thoroughly so that the employees might be able to follow them. Any questions or concerns can be dealt with which would make the transition smoother for the company and it's employees.
niversal Studios sold the Mamma Mia! DVD around the world. Universal charged $21.40 in Canada and $32 in Japanlong dashmore than the $20 it charged in the United States. Assume Universal's marginal cost of production (m) is $1.20. Determine what the elasticities of demand must be in Canada and in Japan if Universal is profit maximizingLOADING.... The elasticity of demand in Canada must be epsilon Subscript Upper Cequals nothing. (Enter a numeric response using a real
Answer:
Explanation:
Lerner Index = -1 / Elasticity of demand = (P - MC) / P
(1) Canada:
- 1 / Ec = (21.4 - 1.20) / 21.4
- 1 / Ec = 20.2 / 21.4
- 1 / Ec = 0.9344
Ec = -1 / 0.9344
Ec = - 1.059
(2) Japan:
Lerner Index = -1 / Elasticity of demand = (P - MC) / P
- 1 / Ej = (32 - 1.2) / 32
- 1 / Ej = 30.8 / 32
- 1 / Ej = 0.9625
Ej = -1 / 0.9625
Ej = - 1.039
Blue Space Corporation launches exploratory space flights to the moon and Mars. The purpose is to discover and retrieve minerals and other resources. Under U.S. Law, Blue Space a. must share with all interested parties what it retrieves in space. b. cannot profit from resources retrieved in space. c. cannot legally retrieve resources in space. d. owns what it retrieves in space.
Answer:
D. Owns what it retrieves in space.
Explanation:
This explains the right of an american that entails that anybody that retrieves minerals or other useful resources own or has control over what it retrieves in space.
Americans however should have the right to engage in commercial exploration, recovery, and use of resources in outer space, consistent with applicable law. Outer space is a legally and physically unique domain of human activity, and the United States does not view it as a global commons. Accordingly, it shall be the policy of the United States to encourage international support for the public and private recovery and use of resources in outer space, consistent with applicable law.
Cully Furniture buys two products for resale: king beds (K) and queen beds (Q). Each king bed costs $500 and requires 100 cubic feet of storage space, and each queen bed costs $250 and requires 80 cubic feet of storage space. The company has $80,000 to invest in shelves this week, and the warehouse has 30,000 cubic feet available for storage. Profit for each king bed is $400 and for each queen bed is $200. 1). (10’) Please set up the LP model for the above situation.2). (20’) How many king beds (K) and how many queen bed (Q) should be purchased at optimal? 3). (10’) Whether we have slack or surplus variable applicable in this question? If we do, what is the value of slack (or/and surplus) variable? What is the meaning behind it?4). (10’) If the furniture company purchases no king beds and 300 queen beds, which resources will be completely used (at capacity)?
Answer:
1) 500K + 250Q ≤ 80,000
100K+80Q≤ 30,000
K≥0
Q≥0
P= 400K + 200Q
2) zero king beds and 320 queen beds
or zero queen beds and 160 king beds
3) surplus variable
surplus variable is storage space
values of surplus variable is 14,000 cubic feet if zero queen beds and 160 king beds
value of surplus variable is 4,400 cubic feet if zero king beds and 320 queen beds.
surplus is the extra amount available after all resources have been utilized to theri maximum.
4) none of the resources will be completely used. There will be surplus of both
Explanation:
1) Implicit variables: K≥0 ; Q ≥ 0
Explicit variables:
500K + 250Q ≤ 80,000-------------------------- from investment constraint
100K+80Q≤ 30,000 ---------------------- from storage space constraint
LP: P= 400K + 200Q
2) See the attachment for profit maximization graph
3) From graph in the attachment, it can be inferred that storage space is the surplus variable since graph of that equation lies completely outside of optimal area.
Also,
if K=160 and Q=0, the inequality of investment gives
500(160) + 250(0)= 80,000
if K=0 and Q=320, the inequality of investment gives
500(0)+ 250(320) =80,000
if K=0 and Q = 320, the inequality of space gives
100(0) + 80(320)= 25,600
surplus= 30,000- 25,600= 4,400
if K=160 and Q=0, the inequality of space gives
100(160) +250(0)= 16000
surplus= 30000-16000= 14000
4) K=0 and Q=300
investment inequality gives
500(0) + 250(300) ≤ 80,000
75,000≤ 80,000
space inequality gives
100(0) + 80(300) ≤ 30,000
24,000≤ 30,000
Both space and investment are in surplus
All of the following statements regarding leases are true except _______.
Multiple Choice:
A) For a finance lease, the lessee records the leased item as its own asset.
B) For a finance lease, the lessee amortizes the right-of-use asset acquired under the lease.
C) Finance leases create a liability on the balance sheet.
D) Finance leases do not transfer ownership of the asset under the lease, but operating leases often do.
E) For a short-term lease of a few days or weeks, the lessee records payments as rental expense.
Answer:
I think its D
Explanation:
Hpe this helps.
All of the following statements regarding leases are true except finance leases do not transfer ownership of the asset under the lease, but operating leases often do. Thus, option (d) is correct.
What is finance?
Finance includes borrowing money to go through tough times, saving money, and investing money. Finance is the provision of funds for credit against anything. Personal, public, and business finance are the three different categories.
Capital leases and finance leases are both common terms for the same thing. The duration of long-term leases is usually anticipated. When the operating lease expires, the leasing firm will return the asset.
Therefore, option (d) is correct.
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The following is cash flow data for Rocket Transport: Cash dividend $ 98,000 Purchase of bus $ 18,000 Interest paid on debt $ 25,000 Sales of old equipment $ 45,000 Repurchase of stock $ 127,000 Cash payments to suppliers $ 125,000 Cash collections from customers $ 480,000 a. Find the net cash provided by or used in investing activities. (Input the amount as positive value.) b. Find the net cash provided by or used in financing activities. (Input the amount as positive value.)
Answer:
a. Net cash flows from investing activities $27,000
b. Net cash flows from investing activities ($225,000)
Explanation:
Rocket Transport
Statement of cash flows (extract)
Purchase of vehicle ($18,000)
Proceeds from disposal of equipment $45,000
Net cash flows from investing activities $27,000
Dividend paid ($98,000)
Repurchase of stock ($127,000)
Net cash flows from investing activities ($225,000)
Note that interest paid, cash payments to suppliers and cash collections from customers affect the net cash flows from operating activities.
Answer:
Net Cash flow from Investing activities $27,000
Net Cash flow from Financing activities ($250,000)
Explanation:
a.
All the cash flows related to the fixed asset is called cash flows from the investing activities. Cash inflows from the sale fixed asset and cash outflows from the purchase of fixed assets are included in it.
Purchase of bus ($18,000)
Sales of old equipment $45,000
Net Cash flow from Investing activities $27,000
b.
Cash flow from financing activities is the cash inflows and outflows related to the fund of the business.
Cash dividend ($98,000)
Repurchase of stock ($127,000)
Interest paid on debt ($25,000)
Net Cash flow from Financing activities ($250,000)
In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available: Net income for the year was $ 57,000 Accounts payable increased by 23,000 Accounts receivable decreased by 35,000 Inventories decreased by 10,000 Cash dividends paid were 19,000 Depreciation expense was 30,000 Net cash provided by operating activities was:
Answer:
Net Cash Flow from Operating Activities = $155,000
Explanation:
Cash flow from Operating activities:
Particular Amount
Income During the year $57,000
Adjustments :
Depreciation $30,000
Changes in Current assets and liabilities:
decreased in Accounts receivable $35,000
decreased in Inventory $10,000
increased in Accounts payable $23,000
Net Cash Flow from Operating Activities $155,000
Note: Dividend paid compute under financing activities.
A domestic manufacturer of watches purchases quartz crystals from a Swiss firm. The crystals are shipped in lots of . The acceptance sampling procedure uses randomly selected crystals. a. Construct operating characteristic curves for acceptance criteria of , , and (to 4 decimals). b. If is and , what are the producer's and consumer's risks for each sampling plan in part (a) (to 4 decimals)? c At Producer's Risk At Consumer's Risk
Answer:
The curve and calculation are attached below
Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of inventory costing $620 for $960 on account?A. Inventory 620Cost of Goods Sold 620Sales Revenue 960Accounts Receivable 960B. Accounts Receivable 960Sales Revenue 960Cost of Goods Sold 620Inventory 620C. Inventory 620Gain 340Sales Revenue 960D. Accounts Receivable 960Sales Revenues 620Gain 340
Answer:
B. Accounts Receivable 960
Sales Revenue 960
Cost of Goods Sold 620
Inventory 620
Explanation:
Under perpetual inventory system the sale is recorded separately by sale value and the cost of the sold inventory is deducted from the inventory and added in the cost of goods sold.
Ne benefit of $340 (960-620) is automatically recorded and it will be measure at end of the period by formatting the income statement. It does not need to be recorded separately.
Perteet Corporation's relevant range of activity is 6,300 units to 12,500 units. When it produces and sells 9,400 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor $ 3.65 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 2.90 Fixed selling expense $ 0.65 Fixed administrative expense $ 0.35 Sales commissions $ 0.45 Variable administrative expense $ 0.50 If 6,800 units are produced, the total amount of manufacturing overhead cost is closest to:
Answer:
For 6,800 units the the manufacturing overheads will be $ 3120
Explanation:
Particulars Average Cost per Unit
Direct materials $ 7.20
Direct labor $ 3.65
Variable manufacturing overhead $ 1.70
Fixed manufacturing overhead $ 2.90
Total Manufacturing Costs $ 15.45
The Manufacturing Overheads = Variable manufacturing overhead + Fixed manufacturing overhead = $ 1.70 + $ 2.90 = $ 4.6 per unit
For 6,800 units the the manufacturing overheads will be 4.6 * 6,800=$ 3120
We calculate the manufacturing overheads for 6800 by multiplying it with the
manufacturing overheads per unit.
Suppose Clifford recently discovered oil in his fields, which greatly excites him because he can earn a profit of $ 31.00 per barrel based on present market conditions. Because production costs will be lower in five years, Clifford estimates that he can pump the oil out at a profit of $ 49.00 per barrel if he chooses to wait. If the interest rate currently is 1.00 %, what is the present value of the oil if he waits five years?
Answer:
$46.62
Explanation:
Kindly check the attached picture for detailed explanation
Warren Buffet opposes stock splits to lower the share price because he believes:________.
a. lower share price will encourage other companies to try to take over the company from existing shareholders.
b. lower stock price encourages short term investing, whereas he is looking for long-term investors.
c. stock splits encourage long-term investing, which is detrimental to his firm's investment policy.
d. lower share price indicates poor growth prospects..
Answer:. b. lower stock price encourages short term investing, whereas he is looking for long-term investors.
Explanation:
Warren Buffet has stated that he does not want to split Berkshire Hathaway's stock because he believes that it would attract short term investors whereas he is looking for long term investors. He believes that a stock being split makes it susceptible to investors who just want to buy it for the meantime, wait for it to appreciate a bit and then sell. He however prefers Companies with a long term potential so he prefers people investing for the long run.
Brad operates a storage business on the accrual method. On July 1 Brad paid $48,000 for rent on his storage warehouse and $18,000 for insurance on the contents of the warehouse. The rent and insurance cover the next 12 months. What is Brad's deduction for the rent and insurance?
Guarder Consulting enters into a contract with Smith Co. to restructure some of Smith's processes with a goal of cost savings. The contract states that Guarder will earn a fixed fee of $35,000 and earn an additional $10,000 bonus if Smith achieves $100,000 of cost savings. Guarder estimates a 55% chance that Smith will achieve $100,000 of cost savings. Assuming that Guarder determines the transaction price as the expected value of consideration, what transaction price will Guarder estimate for this contract
Answer:
The transaction price that Guarder will estimate for this contract is $40,500
Explanation:
In order to calculate what transaction price will Guarder estimate for this contract Assuming that Guarder determines the transaction price as the expected value of consideration, we would have to calculate the expected value of expected consideration as follows:
expected value of expected consideration=Fixed Fee + Additional Income
expected value of expected consideration=$35,000+($10,000*55%)
expected value of expected consideration=$35,000+$5,500
expected value of expected consideration=$40,500
The transaction price that Guarder will estimate for this contract is $40,500
Use of the marginal cost of capital
a. None of these options are correct.
b. recognizes that the return from the last dollar of funds generated should be greater than or equal to the cost of the last dollar of funds raised.
c. acknowledges that when retained earnings are used up as a source of equity, the cost of capital rises as new common stock is sold to support more growth and recognizes that the return from the last dollar of funds generated should be greater than or equal to the cost of the last dollar of funds raised.
d. acknowledges that when retained earnings are used up as a source of equity, the cost of capital rises as new common stock is sold to support more growth.
Answer:
The correct answer is the option B: recognizes that the return from the last dollar of funds generated should be greater than or equal to the cost of the last dollar of funds raised.
Explanation:
To begin with, the concept of ''marginal cost of capital'' refers to the composite rate of return that is required by the shareholders and the debt-holders in order to establish a new investment in the actual company. Moreover, this type of cost relates to the weighted average cost of the last dollar of new capital raised by the company and is has the necessity of being greater than or at least equal to the cost of the last dollar of funds raised due to the fact that only in that way the investors will consider to invest again in a new project for the company.
Scenario 28-1 Suppose that the Bureau of Labor Statistics reports that the entire adult population of Mankiwland can be categorized as follows: 25 million people employed, 3 million people unemployed, 1 million discouraged workers, and 1 million people who are either students, homemakers, retirees, or other people not seeking employment. Refer to Scenario 28-1. How many people are unemployed
Answer: 3 million.
Explanation:
Unemployment is defined as when a member of a Country's labor force is jobless but actively looking for work.
In the Scenario 28-1, the discouraged people are not counted as they are discouraged and not looking for work and 1 million other people being students and retirees amongst others are not looking for work either.
The unemployed section of Mankiwland is therefore the 3 million unemployed people.
Vital Industries manufactured 1,200 units of its product Huge in the month of April. It incurred a total cost of $120,000 during the month. Out of this $120,000, $45,000 was the cost of direct materials used in the product and the rest was incurred because of the conversion cost involved in the process. Ryan had no opening or closing inventory. What will be the total cost per unit of the product, assuming conversion costs contained $10,000 of indirect labor
Answer:
$100
Explanation:
In the question, we are given the following:
Total cost = $120,000
Units produced = 1,200 units
Therefore, we have:
Total cost per unit = $120,000 / 1,200 = $100
Assume that, on January 1, 2021, Sosa Enterprises paid $2,240,000 for its investment in 30,000 shares of Orioles Co. Further, assume that Orioles has 100,000 total shares of stock issued and estimates an eight-year remaining useful life and straight-line depreciation with no residual value for its depreciable assets.
At January 1, 2021, the book value of Orioles' identifiable net assets was $7,260,000, and the fair value of Orioles was $10,000,000. The difference between Orioles' fair value and the book value of its identifiable net assets is attributable to $1,950,000 of land and the remainder to depreciable assets. Goodwill was not part of this transaction. The following information pertains to Orioles during 2021:
Net Income $ 500,000 Dividends declared and paid $ 300,000 Market price of common stock on 12/31/2021 $ 80 /shareWhat amount would Sosa Enterprises report in its year-end 2021 balance sheet for its investment in Orioles Co.?
Answer:
Amount reported in the year-end 2021 is $2,270,375
Explanation:
[tex]\text{The percentage of investment in Orioles} = \frac{30000 \ shares }{100000 \ shares} = 30 \ percent.[/tex]
The difference between fair value and the book value attributable to depreciable assets = $10,000,000 -$7,260,000 -$1,950,000
=$790,000
Attributable to depreciation assets:
[tex]= \frac{790000}{8 \ years} \times 30 percent \\[/tex]
[tex]= 29625 dollars.[/tex]
Balance sheet for its investment in Orioles:
Particulars Amount
Cash paid to Orioles = $2,240,000
Add: net income (500,000 *30%) = $150,000
Less: Dividends(300,000 *30%) = ($90,000)
Less: Attributable to depreciation. = ($29,625)
Amount reported in the year-end 2021. = $2,270,375
ABC Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. It uses weighted-average costing. "What is the direct materials cost per equivalent unit during June?"
Answer:
The completed question is
ABC Inc. manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Timekeeper Inc. uses weighted−average costing.
Data for the Assembly Department for June 2017 are:
Work in process, beginning inventory
380 units
Direct materials (100% complete)
Conversion costs (50% complete)
Units started during June
950 units
Work in process, ending inventory:
160 units
Direct materials (100% complete)
Conversion costs (75% complete)
Costs for June 2017:
Work in process, beginning inventory:
Direct materials
$91,500
Conversion costs
$136,000
Direct materials costs added during June
$601,000
Conversion costs added during June
Explanation:
Ending work in process= $87,380
Working
Reconciliation of Units
A Beginning WIP 380
B Introduced 970
C=A+B TOTAL 1,350
D Transferred out 1,180
E=C-D Ending WIP 170
.
Statement of Equivalent Units(Weighted average)
Material Conversion cost
Units Complete % Equivalent units Complete % Equivalent units
Transferred out 1,180 100% 1,180 100% 1,180
Ending WIP 170 100% 170 70% 119
Total 1,350 Total 1,350 Total 1,299
.
Cost per Equivalent Units (Weighted average)
COST Material Conversion cost TOTAL
Beginning WIP Inventory Cost $ 93,000 $ 137,000 $ 230,000
Cost incurred during period $ 600,500 $ 400,500 $ 1,001,000
Total Cost to be accounted for $ 693,500 $ 537,500 $ 1,231,000
Total Equivalent Units 1,350 1,299
Cost per Equivalent Units $ 513.70 $ 413.78 $ 927.48
.
Statement of cost (Weighted average)
Cost Equivalent Cost/unit Ending WIP Transferred
Units Cost Allocated Units Cost Allocated
Material $ 513.70 170 $ 87,329.63 1,180 $ 606,170.37
Conversion cost $ 413.78 119 $ 49,239.80 1,180 $ 488,260.20
TOTAL $ 1,231,000 TOTAL $ 136,569 TOTAL $ 1,094,431
Selected data from the Florida Fruit Company are presented below: Total assets $1,500,000 Average total assets 1,850,000 Net income 175,000 Net sales 1,300,000 Average common stockholders' equity 1,000,000 Net cash provided by operating activities 275,000 Assume that no dividends were declared or paid during the period. Collapse question part (a) Calculate the profit margin. (Round answer to 1 decimal place, e.g. 15.2%.) Profit margin Enter percentages rounded to 1 decimal place %
Answer:
13.5%
Explanation:
Relevant data provided for computing the profit margin which is here below:-
Net Income = $175,000
Net Sales = $1,300,000
The computation of profit margin is shown below:-
Profit Margin = (Net Income ÷ Net Sales) × 100
= ($175,000 ÷ $1,300,000) × 100
= 13.5%
Therefore for computing the profit margin we simply applied the above formula.
Which of the following would shift the long-run aggregate supply curve right? a. both an increase in the capital stock and an increase in the price level b. an increase in the capital stock, but not an increase in the price level c. an increase in the money supply, but not an increase in the capital stock d. neither an increase in the money supply nor an increase in the capital stock
Answer:
b. an increase in the capital stock, but not an increase in the price level.
Explanation:
In order to understand both short-run economic fluctuations and how the economy movement from short to long run, we need the aggregate supply and aggregate demand model.
An increase in the capital stock, but not an increase in the price level would shift the long-run aggregate supply curve right.
The long-run aggregate supply curve would shift rightward when immigration from foreign countries rises or technology improves.
When the price level rises, the wealth effect and the interest-rate effect provide incentives for consumers to spend less. The price level of goods and services in an economy influences the exchange rate, imports and exports
Arrasmith Corporation uses customers served as its measure of activity. During February, the company budgeted for 37,000 customers, but actually served 27,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:
Revenue: $5.50q
Wages and salaries: $35,200 + $1.70q
Supplies: $1.10q
Insurance: $12,400
Miscellaneous expenses: $8,400 + $0.50q
The company reported the following actual results for February:
Revenue $ 159,800
Wages and salaries $ 70,000
Supplies $ 16,400
Insurance $ 12,400
Miscellaneous expense $ 27,700
Required:
Prepare the company's flexible budget performance report for February. Label each variance as favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Answer and Explanation:
The preparation of company's flexible budget performance report for February is shown below:-
Arrasmith Corporation
Flexible budget performance report
For the month ended February
Planing Activity Flexible Revenue and Actual
budget variance budget spending result
variance
Customer
served 37,000 - 27,000 27,000
Revenue $203,500 $55,000 U $148,500 $11,300 F $159,800
(37,000 × $5.50q) (27,000 × $5.50q)
Expenses
Wages and
salaries $98,100 $17,000 F $81,100 $11,100 F $70,000
(37,000 × 1.70) + 35,200) (27,000 × 1.70) + 35,200
Supplies $40,700 $11,000 F $29,700 $13,300 F $70,000
(37,000 × 1.10) (27,000 × 1.10)
Insurance $12,400 $0 $12,400 0 $12,400
Miscellaneous
expenses $26,900 $5,000 F $21,900 $5,800 U $27,700
(37,000 × 0.50) + 8,400 (27,000 × 0.50) + 8,400
Total
expenses $178,100 $33,000 F $141,500 $18,600 F $126,500
Net operating
income $25,400 $22,000 U $3,400 $29,900 F $33,300
Therefore to reach net operating income we simply deduct the total expenses from Revenue.
Answer and Explanation:
As per the data given in the question,
ArraSmith Corporation
Flexible budget performance report
Planning Activity Flexible Revenue & spending Actual
budget Variance budget Variance Results
Customer served 37,000 27,000 27,000
Revenue $203,500 $55,000 U $148,500 $11,300 F $159,800
Expenses:
Wages and Salaries $98,100 $17,000 F $81,100 $11,100 F $70,000
Supplies $40,700 $11,000 F $29,700 $13,300 F $16,400
Insurance $12,400 0 $12,400 0 $12,400
Miscellaneous expense $26,900 $5,000 F $21,900 $5,800 U $27,700
Total expense $178,100 $33,000 F $145,100 $18,600 F $126,500
Net Operating Income $25,400 $22,000 U $3,400 $29,900 F $33,300
Mills Corporation's balance sheet included the following information: Accounts Receivable $ 580,000 Less: Allowance for Doubtful Accounts 73,000 Accounts Receivable, Net of Allowance $ 507,000 If the Allowance account had a credit balance of $31,500 immediately before the year-end adjustment for bad debts and no accounts were written-off or allowed for during the year, what was the amount of Bad Debt Expense recognized during the year
Answer:
The amount of Bad Debt Expense recognized during the year is $41,500.
Explanation:
Bad debt expense is an estimate of the accounts receivable that is deemed uncollectible. At times, it is determined by percentage of credit method or aging method.
If the allowance account had an opening balance of $31,500 before adjustment and there was no rite-off during the period, with a closing balance of $73,000, the bad debt expense is simply the difference between the closing balance and the opening balance, that is , $73,000 - $31,500 = $41,500.
A well-known financial writer argues that he can earn 148 percent per year buying wine by the case. Specifically, he assumes that he will consume one $12 bottle of fine Bordeaux per week for the next 12 weeks. He can either pay $12 per week or buy a case of 12 bottles today. If he buys the case, he receives a 9 percent discount and, by doing so, earns the 148 percent. Assume he buys the wine and consumes the first bottle today. Calculate the EAR.
Answer:
EAR = 148%
Explanation:
calculating the EAR ( applying the formula for present value of annuity )
cost of case = 12 * 12 * ( 1 - 0.09 ) = 131.04
Pv = 131.04
cost per case = $12
no of weeks = 12 weeks
rate of the wine per ( IRR ) = IRR(57;56;55;;;;1)= 1.76319
rate of the wine per week = 1.76319%
therefore EAR = ( 1 + 0.0176319) ^52 - 1 = 148.15% ≈ 148%
According to a summary of the payroll of Mountain Streaming Co., $110,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $25,000 was subject to state and federal unemployment taxes. a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%. $ b. Journalize the entry to record the accrual of payroll taxes. If an amount box does not require an entry, leave it blank.
Answer:
a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.
$9,800b. Journalize the entry to record the accrual of payroll taxes. If an amount box does not require an entry, leave it blank.
Dr FICA Social Security expense 6,600Dr FICA Medicare expense 1,650Dr Federal unemployment tax expense 200Dr State unemployment tax expense 1,350 Cr FICA Social Security payable 6,600 Cr FICA Medicare payable 1,650 Cr Federal unemployment tax payable 200 Cr State unemployment tax payable 1,350Explanation:
payroll taxes should be:
social security $110,000 x 6% = $6,600
Medicare $110,000 x 1.5% = $1,650
federal unemployment $25,000 x 0.8% = $200
state unemployment $25,000 x 5.4% = $1,350
total = $9,800
Both employees and employers must pay equal amounts of FICA taxes (social security and medicare), but only employees pay unemployment taxes.
Blue Sky Company’s 12/31/15 balance sheet reports assets of $6,000,000 and liabilities of $2,400,000. All of Blue Sky’s assets’ book values approximate their fair value, except for land, which has a fair value that is $360,000 greater than its book value. On 12/31/15, Horace Wimp Corporation paid $6,120,000 to acquire Blue Sky. What amount of goodwill should Horace Wimp record as a result of this purchase?
Answer:
$2,160,000
Explanation:
Goodwill is the amount of excess consideration payment over net asset value of acquiring company. It is the net value of consideration payment and Fair value of net assets.
To calculate goodwill first we need to determine fair value of assets and Liabilities.
Total Fair value of Assets = $6,000,000 + $360,000 = $6,360,000
Liabilities = $2,400,000
Net Asset value = Assets - Liability = $6,360,000 - $2,400,000 = $3,960,000
Goodwill = Consideration - Net Asset Value = $6,120,000 - $3,960,000 = $2,160,000
Job 397 was recently completed. The following data have been recorded on its job cost sheet. Direct materials $59,400 Direct labor-hours 1,254 DLHs Direct labor wage rate $11 per DLH Number of units completed 3,300 units The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $37 per direct labor-hour. Required: What's the unit product cost that would appear on the job cost sheet for this job
Answer:
$36.24
Explanation:
The computation of unit product cost is shown below:-
Unit product cost = Direct material + Direct labor + Manufacturing overhead) ÷ Unit completed
= ($59,400 + (1254 × $11) + (1254 × $37)) ÷ 3,300
= ($59,400 + $13,794 + $46,398) ÷ 3,300
= $119,592 ÷ 3,300
= $36.24
Therefore for computing the units product cost we simply applied the above formula.
n the Month of March, Chester Corporation received orders of 180 units at a price of $15.00 for their product Cid. Chester uses the accrual method of accounting and offers 30 day credit terms. Chester delivers 120 units in March and the balance of 60 units in April. They received payment for 60 units in March, 60 units in April, and 60 units in May. How much revenue is recognized on the March income statement from this order? How much in the April Income statement? (Answer in thousands)
Answer:
Explanation:
Under accrual basis, revenue will recognize only after order delivered. so in march they didn't deliver any order. so income statement will report 0. in April they delivered 180 units. they can recognize a revenue of $15*180 = $2,700 in their April income statement.
So, answer will be. 0, $2,700
