Answer:
a. True.
Explanation:
In determining whether a company's financial condition is improving or deteriorating over time, horizontal analysis of financial statement data would be more useful than vertical analysis.
In Financial accounting, Horizontal analysis can be defined as an analysis and evaluation of a financial statement which illustrates or gives information about changes in the amount of corresponding financial statement items, benchmarks or financial ratio over a specific period of time. It is one of the most important technique that is used to measure how a business is doing financially. Hence, it is also referred to as the trend analysis.
Under the horizontal analysis of financial statement, we use the financial statements of two or more periods; earliest and latter periods.
Generally, the earliest is chosen as the base period while all other items on the statement for a latter period will be compared with the items on the statement of the base period.
Tatham Corporation produces a single product. The standard costs for one unit of its Clan product are as follows:
Direct materials (8 pounds at $0.70 per pound) $5.60
Direct labor (2 hours at $8 per hour) 16.00
Variable manufacturing overhead
(2 hours at $7 per hour) 1,400
Total 3,560
During November Year 2, 3,500 units of Clan were produced. The costs associated with November operations were as follows:
Material purchased (35,000 pounds at $0.80 per pound) 28,000
Material used in production (31,500 pounds)
Direct labor (7,500 hours at $7.50 per hour) 56,250
Variable manufacturing overhead incurred 55,500
What is the variable overhead efficiency variance for Clan for November Year 2?
1. $3,500 favorable.
2. $3,500 unfavorable.
3. $4,000 favorable.
4. $4,000 unfavorable.
Answer:
$3,500 Unfavorable
Explanation:
The computation of variable overhead efficiency variance for Clan for November Year 2 is shown below:-
Variable overhead efficiency variance
= (Standard labor hours - actual labor hours) × (Standard variable overhead rate)
= (3,500 × 2 - 7,500) × $7
= (7,000 - 7,500) × $7
= $3,500 Unfavorable
Therefore for computing the Variable overhead efficiency variance we simply applied the above formula.
In its third year, a project is expected to produce earnings before interest and taxes of $671,551 and depreciation expense of $125,193. If the company’s tax rate is 34%, what is the project’s expected operating cash flow?
Answer:
Operating cash flow= $568,416.66
Explanation:
Giving the following information:
Earnings before interest and taxes= $671,551
Depreciation expense= $125,193.
Tax rate= 34%
To calculate the operating cash flow, we need to use the following structure:
EBIT= 671,551
Tax= (671,551*0.34)= (228,327.34)
Depreciation= 125,193
Operating cash flow= 568,416.66
If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of interest rates being increased? Borrowing will decrease. Investing will decrease. Inflation will increase. Liquidity will increase.
Answer:
The answer is: interest rates will decrease
Explanation:
Just got correct on edge
If there is an increase in the interest rate, then borrowing will decrease.
The term "domino effect" refers to the cumulative effect that is produced by one event that eventually leads to the same effect on others. In other words, the domino effect is when one disaster affects or brings destruction or disruption to others, leading to similar events.
One result will lead to a chain reaction in this event, affecting the rest of the cycle. This means that like one domino's downfall brings the next domino down, one destruction will lead to the fall of the next, taking the cycle to the end until all falls. In this scenario, if the interest rates are being increased, then it will lead to a decreased rate of borrowing. A change in the money supply will increase the interest rate. This will only leave the customers looking for a way out, which means there will be a lower rate of borrowing.In a domino effect, one event will bring the fall of the other. Therefore, if the interest rates increase, there will only be more problems for the customers. This will leave them reducing or decreasing the borrowing rate in the market. Thus, the correct answer is the first option.
Learn more about "domino theory" here:
brainly.com/question/12039657
Prepare the journal entry to record Jevonte Company’s issuance of 35,000 shares of its common stock assuming the shares have a: $3 par value and sell for $22 cash per share. $3 stated value and sell for $22 cash per share.
Answer: Please see answer in explanation column
Explanation:
a)journal entry to record Jevonte Company’s issuance at $3 par value and $22 cash per share
Account Debit Credit
Cash(35,000 x $22) $770,000
Common stock, $3 par value(35,000 x 3) $105, 000
Paid-in captial in excess of par value, common stock
($770,000 - $105, 000 ) $665,000
b)journal entry to record Jevonte Company’s issuance at $3 stated value and $22 cash per share
Account Debit Credit
Cash (35,000 x $22) $770,000
Common stock, $3 stated value (35,000 x 3) $105, 000
Paid-in captial in excess of stated value, common stock
($770,000 - $105, 000 ) $665,000
"Rihanna Company is considering purchasing new equipment for $379,200. It is expected that the equipment will produce net annual cash flows of $48,000 over its 10-year useful life. Annual depreciation will be $37,920. Compute the cash payback period. (Round answer to 1 decimal place, e.g. 10.5.)"
Answer:
Cash payback period is 7.9 years
Explanation:
Payback period = Initial investment / Cash inflow per period
=$379,200 / $48,000
=7.9 years
Thus, the cash payback period is 7.9 years.
Note: It is assumed that the net annual cash flows are after considering the annual depreciation.
Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Current Year Previous Year Sales $4,000,000 $3,600,000 Cost of goods sold 2,280,000 1,872,000 Selling expenses 600,000 648,000 Administrative expenses 520,000 360,000 Income tax expense 240,000 216,000 a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to the nearest whole percentage. Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Current year Amount Current year Percent Previous year Amount Previous year Percent Sales $4,000,000 % $3,600,000 % Cost of goods sold (2,280,000) % (1,872,000) % $ % $ % Selling expenses $(600,000) % $(648,000) % Administrative expenses (520,000) % (360,000) % $ % $ % $ % $ % Income tax expense (240,000) % (216,000) % $ % $ % b. The vertical analysis indicates that the cost of goods sold as a percent of sales by 5 percentage points, while selling expenses by 3 percentage points, and administrative expenses by 3 percentage points. Thus, net income as a percent of sales by 5 percentage points.
Answer:
Innovation Quarter Inc.
a) Comparative Vertical Analysis of Income Statement
Current Year % Previous Year %
Sales $4,000,000 100% $3,600,000 100%
Cost of goods sold 2,280,000 57% 1,872,000 52%
Gross profit $1,720,000 43% $1,728,000 48%
Selling expenses 600,000 15% 648,000 18%
Administrative expenses 520,000 13% 360,000 10%
Income tax expense 240,000 6% 216,000 6%
After Tax Income $360,000 9% $504,000 14%
b. The vertical analysis indicates that the cost of goods sold as a percent of sales increased by 5 percentage points, while selling expenses decreased by 3 percentage points, and administrative expenses increased by 3 percentage points. Thus, net income as a percent of sales decreased by 5 percentage points.
Explanation:
Data and Calculations:
Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:
Current Year Previous Year
Sales $4,000,000 $3,600,000
Cost of goods sold 2,280,000 1,872,000
Selling expenses 600,000 648,000
Administrative expenses 520,000 360,000
Income tax expense 240,000 216,000
Innovation Quarter Inc. can use this vertical analysis to express the relationship between each line item and the sales revenue. The vertical analysis helps in ascertaining the percentage increases in each variable. With the analysis, the management of Innovation Quarter Inc. can undertake further investigations to learn the causes of the different performances and learn ways to control them.
"A retired customer that has a portfolio of blue chip stocks is looking to supplement his retirement income. An appropriate recommendation would be to:"
Answer: sell covered calls
Explanation:
A retired customer that has a portfolio of blue chip stocks is looking to supplement his retirement income. An appropriate recommendation would be to sell covered calls.
It should be noted that a covered call is a financial transaction that takes place when a call option is sold by an investor even though the investor still owns part of the security based on what's sold.
Pisa, Inc. leased equipment from Williamsburg Company under a four-year lease requiring equal annual payments of $68,830, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4-year useful life and no salvage value. Pisa, Inc.'s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Pisa, Inc.) is 8%. Assuming that this lease is properly classified as a capital lease, what is the approximate amount of principal reduction recorded when the second lease payment is made in Year 2?
Answer:
$54,639
Explanation:
the approximate amount of principal reduction when the second lease payment is made in Year 2 can be calculated by making the Lease amortization table as follows
DATA
Annual payments = 68,830
Implicit rate = 8%
Annuty factor for 4 years at 8% = 3.55710
Present value of lease payment =$246,212 (68830*3.57710 )
Year 1 Year 2
Opening balance - $177,382(w)
interest - $14,191(w)
payments $68,830 $68,830
principal payments $68,830 $54,639
closing balance $177,382(w) $122,743
Working
Closing balance = Present value of lease payment - Annual payment
Closing balance = $256,212 - $68,830
Closing balance = $177,382
Interest = closing balance x implicit rate
Interest = $177,382 x 8%
Interest = $14,190.56
2. The world has now become a “global village” in many respects. a) Explain any 5 factors working to make the world “a global village” for businesses. b) Discuss 4 major reasons why businesses go global.
Answer:
the watch has been totally fed tractors working to make a words a Glover villa for measures reserve between two globin respect as a global wind I have been by practice and a business discuss and white business as a work of the word for
Georgia is the primary shareholder in Acme, Inc., a small corporation. After its corporate certificate was issued by the state, there were no other formalities or documentation. In fact, Georgia does not keep separate books for the corporation, and sometimes combines her personal assets with those of the corporation. If she is sued individually by a corporate creditor, what would be the likely outcome
Answer:
The likely outcome would be the judgement debt being settled from her personal assets.
Explanation:
Georgia being a primary shareholder in the small corporation, it was expected that she should keep accounts that differentiate the corporation from her personal expenses. Unfortunately such didn't happen.
Since she was sued individually by a corporate creditor, it was expected that the judgement debt should be settled from her individual account which is quite different form the corporate account.
Answer: Georgia would likely be liable
Explanation:
Based on the scenario that have been provided in the question, Georgia would likely be liable because the creditors can end up piercing the corporate veil.
This means that Georgia would be held responsible for the activities of the organization.
Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division’s return on investment (ROI), which has been above 20% each of the last three years. Derrick is considering a capital budgeting project that would require a $3,080,000 investment in equipment with a useful life of five years and no salvage value. Holston Company’s discount rate is 17%. The project would provide net operating income each year for five years as follows:
Sales $3,400,000
Variable expenses 1,450,000
Contribution margin 1,950,000
Fixed expenses:
Advertising, salaries, and other fixed
out-of-pocket costs $670,000
Depreciation 828,000
Total fixed expenses 1,498,000
Net operating income $452,000
Required:
a. Compute the project's net present value.
b. Compute the project's simple rate of return.
c. Would the company want Derrick to pursue this investment opportunity?
d. Would Derrick be inclined to pursue this investment opportunity?
Answer:
a. Project's net present value is $1,015,163.09
b. Simple rate of return is 15%
c. Yes. The reason is that the project has a positive net present value of $1,015,163.09.
d. No. The reason is that the simple rate of return of 15% obtained in part b is lower the division’s return on investment (ROI), which has been above 20% each of the last three years.
Explanation:
a. Compute the project's net present value.
To compute this, we first calculate the annual cash inflow as follows:
Annual cash inflow = Net operating income + Depreciation = $452,000 + $828,000 = $1,,280,000
Now, the project's net present value can be calculated using the formula for calculating the present of an ordinary annuity as follows:
PV = P * [{1 - [1 / (1 + r)]^n} / r] …………………………………. (1)
Where;
PV = Present value of the annual cash flow = ?
P = Annual cash inflow = $1,280,000
r = Discount rate = 17%, or 0.17
n = Equipment useful years = 5
Substitute the values into equation (1) to have:
PV = $1,280,000 * [{1 - [1 / (1 + 0.17)]^5} / 0.17]
PV = $4,095,163.09
Project's net present value = PV - Project's initial investment = $4,095,163.09 - $3,080,000 = $1,015,163.09
b. Compute the project's simple rate of return
This can be computed as follows:
Simple rate of return = Net operating income / Initial investment = $452,000 / $3,080,000 = 0.15, or 15%
c. Would the company want Derrick to pursue this investment opportunity?
Yes. The reason is that the project has a positive net present value of $1,015,163.09.
Note that had it been the net present value of the project was negative, the company would not want to Derrick to pursue this investment opportunity since the decision of the company is based on whether the project's NPV is positive or negative.
d. Would Derrick be inclined to pursue this investment opportunity?
No. The reason is that the simple rate of return of 15% obtained in part b is lower the division’s return on investment (ROI), which has been above 20% each of the last three years.
Pursuing this investment opportunity will therefore reduce the Overall ROI of the division and Derrick will not get annual pay raises if this happens.
The Atlantic Division of Stark Productions Company reported the following results for 2019:
Sales $4,000,000
Variable costs 3,200,000
Controllable fixed costs 300,000
Average operating assets 2,500,000
Management is considering the following independent alternative courses of action in 2020 in order to maximize the return on investment for the division.
1. Reduce controllable fixed costs by 10% with no change in sales or variable costs.
2. Reduce average operating assets by 10% with no change in controllable margin.
3. Increase sales $500,000 with no change in the contribution margin percentage.
Compute the return on investment for 2019.
Answer:
The Atlantic Division of Stark Productions Company
Return on Investment = Net Income/Average operating assets x 100
1. Reduced controllable fixed costs by 10% with no change in sales or variable costs:
Net Income = $530,000 ($500,000 + 30,000)
Return on investment = $530,000/$2,500,000 x 100
= 21.2%
2. Reduced average operating assets by 10% with no change in controllable margin:
Net Income = $500,000 and average operating assets = $2,250,000
Return on Investment = $500,000/$2,250,000 x 100
= 22.22%
3. Increased sales to $4,500,000 with no change in the contribution margin percentage:
Sales $4,500,000
Variable costs 3,600,000
Contribution $900,000
Controllable fixed costs 300,000
Net operating income $600,000
Average operating assets 2,500,000
Return on Investment = $600,000/$2,500,000 x 100
= 24%
Explanation:
a) Data and Calculations:
Sales $4,000,000
Variable costs 3,200,000
Contribution $800,000
Controllable fixed costs 300,000
Net operating income $500,000
Average operating assets 2,500,000
Return on investment = Net Income/Average operating assets x 100 = $500,000/$2,500,000 x 100 = 20%
Contribution margin ratio = $800,000/$4,000,000 x 100 = 20%
The Atlantic Division's Return on Investment, as a performance measure, evaluates the efficiency of the investment in Atlantic Division. This ratio is obtained by dividing the returns or benefits of the investment by the cost of the investment, and then multiplying by 100.
A decline in the domestic real interest rate would cause a ________ in net exports and a ________ in the exchange rate.
Answer: fall; rise
Explanation:
The real interest rate is the rate of interest that is received by an investor, lender or after inflation has been taken into consideration.
The real interest rate is when the inflation rate is deducted from the nominal interest rate. A reduction in the domestic real interest rate would cause a fall in net exports and a rise in the exchange rate.
The market for hot dogs on the streets of New York City can be considered close to a perfectly competitive market. Because there are so many individuals buying and selling hot dogs:
Question:
The market for hot dogs on the streets of New York City can be considered close to a perfectly competitive market. Because there are so many individuals buying and selling hot dogs:
A) there is a shortage of hot dogs
B) there is a surplus of hot dogs
C) market forces set the price in the market
D) firms are able to make large economic profits
E) firms cannot make positive accounting profits
Answer:
The correct answer is C.
Explanation:
Perfect competition is a market/ industry situation where there are numerous companies producing similar or perfect substitute products. Also, in the same market, none of the players is large enough to single-handedly influence the market especially with respect to price.
Cheers!
Keith, an employee of Sunbeam, Inc., has gross salary for May of $15,000. The entire amount is under the OASDI limit of $118,500 and thus subject to FICA. He is also subject to federal income tax at a rate of 20%. Which of the following is a part of the journal entry to record the disbursement of his net pay? (Assume a FICAOASDI Tax of 6.2% and FICAMedicare Tax of 1.45%.) (Round the final answer to the nearest dollar.)
Answer:
there are no options listed, but the journal entry to record Keith's salary should be:
May 31, wages expense
Dr Wages expense 15,000
Dr FICA taxes expense 1,147.50
Dr FUTA taxes expense 900
Cr Federal income taxes withheld payable 3,000
Cr FICA OASDI taxes withheld payable 930
Cr FICA Medicare taxes withheld payable 217.50
Cr FICA OASDI taxes payable 930
Cr FICA Medicare taxes payable 217.50
Cr Wages payable 10,852.50
I didn't include SUTA taxes or any other discount (e.g. health insurance, IRA contributions, union contributions, etc.) because sometimes they do not exist, but the previous ones always exist.
Andy Pearson ran PepsiCo Inc. for nearly 15 years, driving revenues from $1 billion to $8 billion. In 1980, Fortune named him one of the 10 toughest bosses in the United States. Pearson was singled out for the relentless demands that he put on his people. As one employee put it, Pearson's talents were often "brutally abrasive." Every year, without hesitation, he fired the least productive 10% to 20% of his workforce. Pearson used a(n) _____ leadership style.
Answer:
authoritarian leadership style
Explanation:
In simple words, An authoritarian form of leadership relates to the leadership style where a leader determines strategies and practices, defines what objectives are to be accomplished, and manages and monitors all operations without substantive involvement by subordinates. An authoritative style of management can be highly successful in some cases, but also has negative consequences on community participants or staff.
Luther Corporation Consolidated Balance Sheet December 31, 2006 and 2005 (in $ millions) Assets 2006 2005 Liabilities and Stockholders' Equity 2006 2005 Current Assets Current Liabilities Cash 58.5 Accounts payable 73.5 Accounts receivable 39.6 Notes payable / shortterm debt 9.6 Inventories 42.9 Current maturities of longterm debt 36.9 Other current assets 3.0 Other current liabilities 6.0 12.0 Total current assets 144.0 Total current liabilities 132.0 LongTerm Assets LongTerm Liabilities Land 62.1 Longterm debt 168.9 Buildings 91.5 Capital lease obligations Equipment 99.6 Less accumulated depreciation () (52.5) Deferred taxes 22.8 22.2 Net property, plant, and equipment 200.7 Other longterm liabilities Goodwill 60.0 Total longterm liabilities 191.1 Other longterm assets 63.0 42.0 Total liabilities 323.1 Total longterm assets 242.7 Stockholders' Equity 63.6 Total Assets 386.7 Total liabilities and Stockholders' Equity 386.7 Refer to the balance sheet above. Luther's current ratio for 2006 is closest to:
Answer:
Luther Corporation
Current Ratio for 2006 is closest to:
1.1 : 1
Explanation:
a) Data and Calculations:
Total Current Assets = $144 million
Total Current Liabilities = $132 million
Current Ratio = Current Assets/Current Liabilities
= $144/$132
= 1.1 : 1
b) Luther Corporation's current ratio is a liquidity measure that shows Luther's ability to pay off short-term obligations worth $132 million or those due within one year with its current assets of $144 million. The ratio tells investors and analysts of Luther Corporation how Luther can use its current assets to pay off its current debts. Since Luther's current ratio is higher than 1, it is considered good, depending on the industry average. This means that Luther's current ratio of 1.1 : 1 should not be considered in isolation, but in comparison with other firms in the industry and its performance over a number of years.
What is the relationship between total surplus and economic efficiency?
Answer: When total surplus gets maximized, then economy meet economic efficiency.
Explanation:
Economic efficiency is described as a thinking that there is one possible way to make situation better by imposing a cost on another.
Total surplus is described as the sum of producer and consumer surplus.
It gets maximized in a perfect competition (hit free-market equilibrium).
i.e. It gets maximized when both consumer and producer surplus is maximum, and then the economy meet economic efficiency.
The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: Rails Division Locomotive Division Corporate Total Cost of goods sold $45,500 $30,500 Direct operating expenses 27,600 23,000 Sales 92,300 67,600 Interest expense $2,100 General overhead 18,900 Income tax 4,000 The income from operations for the Locomotive Division is a.$44,600 b.$67,600 c.$14,100 d.$37,100
Answer:
$14,100
Explanation:
To find the answer, we use the following formula:
Income from operations = Sales - Cost of Goods Sold - Direct Operating Expenses - General Overhead
Income from operations = $67,600 - 30,500 - 23,000
= $14,100
On November 15, 20X3, Chow Inc., a U.S. company, ordered merchandise FOB shipping point from a German company for €200,000. The merchandise was shipped and invoiced on December 10, 20X3. Chow paid the invoice on January 10, 20X4. The spot rates for euros on the respective dates were
Answer:
$4,000 gain
Explanation:
Some information was missing:
the spot rates for euros were:
November 15, 20X3 $0.4955 per €1 December 10, 20X3 $0.4875 per €1December 31, 20X3 $0.4675 per €1January 10, 20X4 $0.4475 per €1In Chow's December 31, 20X3, income statement, the foreign exchange gain is ?
the goods costed €200,000 x 0.4875 = $97,500 on December 10, 20x3
the goods costed €200,000 x 0.4675 = $93,500 on December 31, 20x3
Since the goods were sold FOB shipping point, we have to use the shipping date (December 10) to calculate the original price. By December 31, the price in US dollars had decreased by $4,000 resulting in a foreign exchange gain.
A small distribution organization uses a payroll company to provide employee compensation services and keep timesheet records and employee attendance history. This situation is an example of
Complete Question:
A small distribution organization uses a payroll company to provide employee compensation services and keep timesheet records and employee attendance history. This situation is an example of?
Group of answer choices.
A. Offshoring
B. Centralized work surveillance.
C. Outsourcing.
D. Telecommuting.
Answer:
Outsourcing.
Explanation:
When a small distribution organization uses a payroll company to provide employee compensation services and keep timesheet records and employee attendance history. This situation is an example of outsourcing.
Outsourcing can be defined as a contractual agreement in which a company contracts another firm (third-party) to be responsible for providing certain job functions, tasks or services rather than use employees or departments within the company.
In this scenario, the outsourcing firm or company is saddled with the responsibility of providing employees compensation services, keep timesheet records, and manage the attendance history of employees working at the outsourced distribution organization.
Jay owns Gatsby Islands and wants to convey it to his good friends, Nick and Daisy. Nick lives next door to Jay while Daisy lives across the waters. He conveys an interest in Gatsby Islands "to Nick as tenants by the entirety." Two months later, he makes a corresponding conveyance to Daisy. Jay created the following:_______
a. tenancy in common
b. severalty community property
c. joint tenancy with rights of survivorship
d. tenancy by entirety
Answer:
Correct Answer:
c. joint tenancy with rights of survivorship
Explanation:
The property Jay owes on Gatsby Island belongs to him but he wishes to share th ownership with his 2 good friends. His conveyance of the message to both which reads "tenants by the entirety" shows that he and his friends has equal ownership and rights to the Gatsby Island property.
In the event that either him or one of the friends dies, the full title of the property automatically passes to the surviving person.
________ means that service quality depends on the quality of buyer-seller interaction during the service encounter.
Answer: interactive marketing
Explanation:
Interactive marketing is also referred to as event-driven marketing or trigger based marketing and it simply has to do with using an effective communication which is two-ways to enable the consumers connect directly with a company.
Interactive marketing means service quality depends on the quality of buyer-seller interaction during the service encounter.
The net income reported on the income statement for the current year was $121,900. Depreciation recorded on store equipment for the year amounted to $20,100. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $48,030 $44,190 Accounts receivable (net) 34,440 32,660 Merchandise inventory 47,020 49,710 Prepaid expenses 5,280 4,200 Accounts payable (merchandise creditors) 45,000 41,800 Wages payable 24,590 27,310 a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: $ Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities $ b. Cash flows from operating activities differs from net income because it does not use the of accounting. For example revenues are recorded on the income statement when .
Answer:
See answers below.
Explanation:
In order to get net cash flow through indirect method, we will have to make adjustment to the net income; hence we get the increase or decrease of different accounts with the data balance.
a) End beginning cash $48,030 $44,190
Increase in cash $3,840
Accounts receivable(net) $34,440 $32,660
Increase in accounts receivable $1,780
Merchandise Inventory $47,020 $49,710
Decreased inventory -$2,690
Prepaid expenses $5,280 $4,200
Increase prepaid expenses $1,080
Accounts payable(Merchandise creditors) $45,000 $41,800
Accounts payable increase $3,200
Wages payable $24,590 $27,310
Decreased wages payable -$2,720
Per below, we have some accounts that are added (+) to the net income while some are also deducted (-).
Net income $121,900
Adjustment to reconcile the net income to cash
+ Depreciation $20,100
+ Increase in cash $3,840
- Increase in accounts receivable ($1,780)
+ Inventory decrease $2,690
- Increase prepaid expenses ($1,080)
+ Accounts payable increase $3,200
- Decreased wages payable ($2,720)
Net cash $146,150
b) Briefly explain why net cash flow from operating activities is different other than net income.
The reason is that while net income refers to the earned profit by a company for a period ; cash flow from operating activities are measurement of daily cash (in and out) expended on business operation. Cash flow give explanation on the use of cash in an organization on a daily basis which includes net income from the income statement, changes in working capital, adjustments to net profits etc. t is to be noted that the starting point of calculating cash flow from operating activities is the net income.
Michelle gives out a business card with an e-mail address on it. According to the comments that accompany the UETA, it may be reasonable to infer that Michelle has consented to
Answer:
Explanation:
transact business electronically.
If a company uses straight-line depreciation, the annual average investment can be calculated as: (Check all that apply.)
Answer: beg book value +the salvage value) / 2.
(the sum of annual average book values) ÷ asset’s life
(beg book value +the end book value) ÷ 2.
Explanation:
Depreciation is simply when an asset begin to wear and tear and thereby its value is reduced.Straight line depreciation is calculated when the difference between the cost of an asset and the expected salvage value is divided by the number of years it is projected to be used.
Using this method, the annual average investment can be calculated as:
• beg book value +the salvage value) / 2.
• (the sum of annual average book values) ÷ asset’s life
• (beg book value +the end book value) ÷ 2.
Rank the following investments from lowest to highest, for overall historical returns experienced by investors over long periods of time:
a. Treasury Bills
b. AAA Rated Corporate Bonds
c. Common Stocks
Answer:
Treasury BillsAAA Rated Corporate BondsCommon StocksExplanation:
Treasury Bills are considered risk-less investments. As a result the interest rate will not be adjusted for risk and will be relatively low compared to other securities. It will give the lowest return overtime here.
AAA Rated Corporate Bonds are the highest rated Corporate bonds there are. Even still, they will pay an interest rate that has a little risk premium in it which will make its returns overtime higher than a T-bill.
Common Stocks will provide the highest rate of return overtime on average simply because as well as the dividend payments that are paid to holders, the stock also has a chance of rising in value overtime which will give the holder a Capital gain as well. Something that the other 2 investments cannot give.
Part-time workers likely result in A. inaccurately high estimates of the labor force. B. inaccurately low estimates of the labor force. C. a disincentive for the unemployed to seek employment. D. lower incomes and fewer jobs.
Answer:
Correct answer:
A. inaccurately high estimates of the labor force.
Explanation:
Part-time work is the type of work where an individual has a flexible work plan is a given company unlike the traditional full-time work. Doing such work create the impression that, there is high labour force among the various industries and sectors. For example, someone might be working in two different firms under part-time basis same day which create an impression of two different individuals.
fremont which uses the high-low method reported total cost of $10 per unit its lowest production level, 5000 units. when production tripled to its highest level, the total cost per unit dropped to $5 variable cost per unit
Answer:
$2.50
Explanation:
Calculation for the estimation of variable cost per unit
Units Total cost
High method 15,000×$5 per units =$75,000
(5,000*3)=15,000
Low method 5,000*$10 per units=$50,000
Difference 10,000 $25,000
Variable cost per unit =$25,000/10,000
Variable cost per unit=$2.50
Note: Based on the information given we were told that production tripled to its highest level which means the high method units will be 15,000 units (5,000 units*3)
Therefore Fremont would estimate its variable cost per unit as: $2.50
Slack Inc. borrowed $400,000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest is recognized for the period from April 1 to December 31? a. $0. b. $48,000. c. $32,000. d. $36,000
Answer:
D.$36,000
Explanation:
Calculation for How much interest is recognized for the period from April 1 to December 31
First step is to find the 12% of the amount that was borrowed which is $400,000
$400,000×12%
=$48,000
Now let calculate for the amount of interest that is recognized from April 1 to December 31
Interest =$48,000×3/12
Interest =$12,000
Hence,
Interest =$48,000-$12,000
Interest=$36,000
Therefore the amount of interest that is recognized from April 1 to December 31 will be $36,000
