Answer:
Accounting uses the Revenue recognition principle which means that a business should only recognize revenue when it has provided the service for which it was paid for.
a.
Date Account Title Debit Credit
12/31/2016 Cash $16,000
Sales Revenue $16,000
Working
= 4,000 issues sold for December * $4 per copy
= $16,000
Date Account Title Debit Credit
12/31/2016 Cash $216,000
Unearned Subscription Revenue $216,000
Working
= 6,000 subscriptions * $36 per subscription
= $216,000
b.
Date Account Title Debit Credit
12/31/2016 Unearned Subscription Revenue $18,000
Sales revenue $18,000
Working
= 216,000 * 1/ 12 months
= $18,000
A set of procedures and approvals for verifying, approving and recording liabilities for eventual cash payment, and for issuing checks for payment only of verified, approved, and recorded liabilities is referred to as a(n):
Answer:
Voucher system.
Explanation:
voucher system can be regarded as methodused in authorizing when it comes to disbursement of cash. A voucher that will give identification of
amount, account number that is needed to pay on is been filled.
It should be noted that the A set of procedures and approvals for verifying, approving and recording liabilities for eventual cash payment, and for issuing checks for payment only of verified, approved, and recorded liabilities is referred to as Voucher system..
Equilibrium in financial markets occurs at an interest rate where the quantity of loanable funds demanded is
Answer: c. equal to the quantity of loanable funds supplied.
Explanation:
Equilibrium in any market occurs when the quantity demanded is equal to the quantity supplied and the loanable funds market are no different except that the quantity that is demanded and supplied in this market is the loanable funds and the price is the interest rate.
When the interest rate being offered by the financial institutions lending money is the same as the one being demanded by the people and companies who want loanable funds, the market is said to be in equilibrium.
hen Steve Jobs updated his company name from Apple Computer to Apple in 2007, which part of the brand positioning was he changing
Answer:
Frame of reference
Explanation:
In simple words, The "frame of reference" in marketing refers to how the targeted customer perceives a latest brand, service, or proposition. This conjures up a certain image or impression of a product, service, or concept that is being promoted. A frame of reference can be understood as the point of comparative valuation that your advertisers may use to assist position and distinguish your goods in the business.
At year-end, Barr Co. had shipped $12,500 of merchandise FOB destination to Lee Co. Which company should include the $12,500 of merchandise in transit as part of its year-end inventory?
Answer: Barr Co.
Explanation:
Merchandise in transit refers to the merchandise which has already left the seller's shipping dock but hasn't gotten to the buyer's shipping dock.
In this case, since Barr Co. shipped the $12,500 of merchandise FOB destination to Lee Co and the goods have gotten to Lee Co, the company that they should include the $12,500 of merchandise in transit as part of its year-end inventory is Barr Co.
Poe Company is considering the purchase of new equipment costing $81,500. The projected net cash flows are $36,500 for the first two years and $31,500 for years three and four. The revenue is to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of 1 and present value of an annuity for different periods is presented below. Compute the net present value of the machine.
Answer:
$27,028.45
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.
Cash flow in year 0 = $-81,500
Cash flow in year 1 and 2 = $36,500
Cash flow in year 3 and 4 = $31,500
I - = 10%
NPV = $27,028.45
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Corporations differ from partnerships and other forms of business association in two ways. One of these is that:________.
a. they are regulated by the Federal Trade Commission.
b. they are formed simply by an agreement entered into among their members.
c. they must be publicly registered or in some way officially acknowledged by the law.
d. their shareholders are entitled to their share of the company's profits as soon as they are ascertained or determined.
Answer: c. they must be publicly registered or in some way officially acknowledged by the law.
Explanation:
Corporations tend to have many shareholders who would get hurt if the company fails and for this reason they are regulated by the law. They must be publicly registered to allow people to purchase and sell shares and they must have the official acknowledgement of the law.
The formation of a corporation can be complicated and require a relatively high number of legal processes and corporations are not regulated by the Federal Trade Commission.
Also, even though shareholders are technically entitled to the company's profits, they don't get to collect it immediately because the company needs money to function and grow.
A student borrows $95,000 for business school at 4.5% stated annual interest with monthly repayment over 9 years. Consider this as a loan with no payments or interest during school so that the problem structure is equivalent to a standard loan received one period before the first payment. Suppose that to better match expected student salary growth over time, the loan is structured as a growing annuity with each monthly payment growing by 0.3% compared to the previous monthly payment. How much is the first monthly payment
Answer:
$918.70 or $900
Explanation:
The computation of the first monthly payment is given below:
Interest rate per Month is
= Annual Rate ÷ 12
= 4.50% ÷ 12
= 0.375%
Now
Present Value of Growing Annuity = First payment × (1 - ((1 + Growth Rate) ÷ (1 + Interest Rate))^Periods) × 1 ÷ (Interest Rate - Growth Rate)
95000 = First payment × (1 - ((1 + 0.30%) ÷ (1 + 0.375%))^108) × 1 ÷ (0.375% - 0.30%)
95000 = First payment × (1 - 0.999252^108) × 1 ÷ (0.075%)
95000 = First payment × (1 - 0.92244) × 1 ÷ (0.075%)
95000 = First payment × 103.4067
First payment = $918.70 or $900
Description Term or Phrase 1. Examines whether financial statements are prepared using GAAP. 2. Procedures set up to protect company property and equipment, ensure reliable accounting, promote efficiency, and encourage adherence to policies. 3. A less expensive and more effective means to stop fraud. 4. Three factors push a person to commit fraud: opportunity, pressure, and rationalization. 5. Beliefs that distinguish right from wrong.
Answer:
1. Audit
2. Internal control
3. Prevention
4. Fraud triangle
5. Ethics
Explanation:
1. Audit: it involves the process of examining whether financial statements are prepared using the Generally Accepted Accounting Principles (GAAP).
2. Internal control: they are procedures set up to protect company property and equipment, ensure reliable accounting, promote efficiency, and encourage adherence to policies.
Internal controls can be defined as the policies, set of rules, and procedures implemented or put in place by an organization to protect its assets, boost efficiency, enhance financial accountability, enforce adherence to company policies and prevent fraudulent behaviors among the employees.
The main purpose of internal controls is to guarantee that loss is eliminated by ensuring that there is an accurate and reliable accounting system.
3. Prevention: it's a less expensive and more effective means to stop fraud.
4. Fraud triangle: three factors push a person to commit fraud: opportunity, pressure, and rationalization.
5. Ethics: beliefs that distinguish right from wrong.
1. Generally accepted accounting principles (GAAP), the accepted standards for financial reporting, are examined to see whether the financial statements were prepared in accordance with them.
2. Internal controls are safeguards implemented by a business to protect its resources, ensure correct accounting, promote efficiency, and encourage adherence to policies. They help reduce risk and protect resources for the business.
3. Cost-effective prevention: This idea emphasizes fraud prevention strategies that are both less expensive and more successful. It focuses on the application of effective techniques to identify and discourage fraudulent activity within an organization.
4. According to the fraud triangle, opportunity, pressure and rationalization are the three elements that can lead to fraudulent behavior. When these factors come together, people may be more likely to commit fraud.
5. Ethical Values: Moral standards are the ideas and precepts that help people to decide what is right and what is wrong. They act as a moral guide for choices and mold the behavior of people and organizations by promoting integrity and accountability.
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As the number of people holding college degrees increases, assuming the demand for college educated labor stays constant, the wages of college educated people would
Answer:
decrease
Explanation:
An increase in the supply of people with college degrees would lead to a rightward shift of the supply curve. This leads to a decrease in equilibrium wages and an increase in labour
A monopolistically competitive firm is currently producing 20 units of output. At this level of output the firm is charging the highest price it can at $20, has marginal revenue equal to $12, has marginal cost equal to $12, and has average total cost equal to $18. From this information we can infer that a. firms are likely to leave this market in the long run. b. the firm is currently maximizing its profit. c. the firm is earning zero profit. d. the profits of the firm are negative.
Answer:
Option b (the firm is currently maximizing its profit) is the right approach.
Explanation:
Given values are:
[tex]P=20[/tex][tex]Q=20[/tex][tex]ATC=18[/tex]Now,
The profit will be:
= [tex]P\times Q-(ATC\times Q)[/tex]
By substituting the values, we get
= [tex]20\times 20-18\times 20[/tex]
= [tex]400-360[/tex]
= [tex]40[/tex]
Thus, the above is the correct answer.
Which of the following has the greatest impact on how long an employee stays with an organization and how productive the employee is while there?
a. The employee's coworkers
b. The employee's relationship with their immediate manager
c. How much the employee is paid
d. Promotion opportunities
Answer: The employee's relationship with their immediate manager.
Explanation:
Despite the fact that the options given have an effect on how long an employee will stay in an organization, the greatest impact will be the employee's relationship with their immediate manager.
When a worker has a bad relationship with their immediate manager, this beings about disruption in communication and there won't be a cordial relationship with the manager. This affects the worker and can lead to the worker finding another job.
Bellevue Company has 26,000 units of inventory on hand at December 31. It sold 1,950 units which are in transit and were shipped FOB destination. Bellevue purchased 3,250 units which were shipped FOB shipping point by the seller and are still in transit. What is the total amount of inventory to which Bellevue has legal title at December 31
Answer:
24050
Explanation:
Calculation to determine the total amount of inventory to which Bellevue has legal title at December 31
Using this formula
Inventory=Inventory on hand at December 31- Units in Transit
Let plug in the formula
Inventory=26,000 units- 1,950 units
Inventory=24050
Therefore the total amount of inventory to which Bellevue has legal title at December 31 is 24050
special - time order for 15,000 bird feeders at $ 3,50 per unit Bluebird currently produces and sells . This level represents 80 % of its capachy These bird feeders would be marketed under the wholesaler's name and would not Bluebird's through normal channels Production costs for these units are $ 4 25 per unit which includes $ 250 variable cost and 175 fed cost . If Bluebird accepts this additional business , the effect on net income will be :
Answer:
$15,000 Increase
Explanation:
Calculation to determine what the effect on net income will be :
Effect on net income = (15,000 x $3.50) – ($2.50x 15,000)
Effect on net income = $52,500-$37,500
Effect on net income = $15,000 Increase
Therefore If Bluebird accepts this additional business , the effect on net income will be :$15,000 Increase
Here are data on two companies. The T-bill rate is 4.8% and the market risk premium is 5.9%. Company $1 Discount Store Everything $5 Forecast return 12 % 11 % Standard deviation of returns 12 % 14 % Beta 1.6 1.0 What would be the fair return for each company, according to the capital asset pricing model (CAPM)? (Round your answers to 2 decimal place
Answer and Explanation:
The computation of the fair return for each company is shown below:
Fair Return = Risk free rate of return + Beta × market risk premium
= 4.8 + 1.6 × 5.9
= 14.24%
Now
Everything $5 is
= 4.8 + 1 × 5.9
= 10.7%
Hence, the same should be considered
However, similar to bonds, preferred stockholders receive a fixed payment—their dividend—before the company’s residual earnings are paid out to its common stockholders and, as with common stock, preferred stockholders can benefit from an appreciation in the value of the firm’s stock securities. Consider the following case of Wellington Industries: Wellington Industries pays an annual dividend rate of 8.00% on its preferred stock that currently returns 10.72% and has a par value of $100.00 per share. What is the value of Wellington’s preferred stock?
Answer: $74.63
Explanation:
Preferred shares are treated like perpetuities which means that the value is:
= Annual dividend/required return
Annual dividend:
= Dividend rate * Par value
= 8% * 100
= $8.00
Value of share = 8 / 10.72%
= $74.6269
= $74.63
3) Monopolists set prices A) At the minimum of the long-run average total cost curve. B) Without constraints since there is no competition. C) On the marginal revenue curve. D) At the output where marginal revenue equals marginal cost.
Answer:
D At the output where marginal revenue equals marginal cost.
Explanation:
As we know that the monopolist have the market power so we can said that the prices can be set at the output level i.e. when the marginal revenue is equivalent to the marginal cost
So as per the given options, the option d is correct
And, the same should be considered and relevant
The Devon Motor Company produces automobiles. On April 1st the company had no beginning inventories and it purchased 8,000 batteries at a cost of $80 per battery. It withdrew 7,600 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in cars being used by the company’s traveling sales staff. The remaining 7,500 batteries withdrawn from the storeroom were placed in cars being produced by the company. Of the cars in production during April, 90 percent were completed and transferred from work in process to finished goods. Of the cars completed during the month, 30 percent were unsold at April 30th. Required: 1. Determine the cost of batteries that would appear in each of the following accounts on April 30th.
Question Completion:
a) raw materials
b) work in process
c) finished goods
d) cost of goods sold
e) selling expense
Answer:
The Devon Motor Company
The cost of batteries that would appear in each of the following accounts on April 30th:
a) raw materials = $32,000
b) work in process = $60,000
c) finished goods = $162,000
d) cost of goods sold = $378,000
e) selling expense = $8,000
Total cost of batteries purchased = $640,000
Explanation:
a) Data and Calculations:
Beginning inventory = 0
Purchase of batteries = 8,000 at $80 = $640,000
Used batteries = 7,600
Ending inventory = 400 at $80 = $32,000 raw materials
Used batteries = 7,600:
Selling expenses = 100 * $80 = $8,000
Work in process = 7,500
Ending WIP = (7,500 - 6,750) * $80 = $60,000
Finished goods = 90% 6,750 * $80 = $540,000
Ending inventory 30% 2,025 * $80 = $162,000
Cost of goods sold 70% 4,725 * $80 = $378,000
For each of the following products and services, indicate whether it is more likely produced in a process operation or in a job order operation.
1. Beach towels
2. Bolts and nuts
3. Lawn chairs
4. Headphones
5. Designed patio
6. Door hardware
7. Cut flower arrangements
8. House paints
9. Concrete swimming pools
10. Custom tailored dresses
11. Grand pianos
12. Table lamps
Answer:
S/n Product and services Indication
1 Beach towels Process operation
2 Bolts and nuts Process operation
3 Lawn chairs Process operation
4 Headphones Process operation
5 Designed patio Job order operation
6 Door hardware Process operation
7 Cut flower arrangements Job order operation
8 House paints Process operation
9 Concrete swimming pools Job order operation
10 Custom tailored dresses Job order operation
11 Grand pianos Job order operation
12 Table lamps Process operation
____________ is a performance assessment in which companies identify which customers are leaving and measuring the rate at which they are leaving.
Kremena's bank account earns 4.5% simple interest. How much must she deposit in the account today if she wants it to be worth $1,250 in 3 years
Answer:
$1,101.32
Explanation:
Simple interest accounts balances are calculated using the following formula
A = P ( 1 + rt)
where:
A = final account balance
P = starting balance
r = interest rate (annually) percentage divided by 100
t = years
Therefore, we can plug in the values provided in this formula and solve for P which would be the amount that Kremena needs to deposit.
1,250 = P ( 1 + (0.045 * 3))
1,250 = P * 1.135 ... divide both sides by 1.135
1,101.32 = P
Finally, we can see that Kremena would need to deposit a total of $1,101.32 to have the amount that she wants after 3 years.
đối với những sản phẩm thuộc ô ngôi sao trong ma trận BCG thì lời khuyên dành cho nhà quản trị học là nên tiếp tục hi sinh lợi nhuận ngắn hạn để gia tăng thị phần trong tương lại. đúng hay sai giải thích
Answer:
??
Explanation:
Hocker Company issues $200,000 of ten-year, 8% bonds to yield 10% on January 1, 20X1. The bonds pay interest annually on December 31. The bonds were sold at a discount of $24,578. The bond interest expense for 20X1 is:
Answer:
$16,000.
$17,542.
$20,000.
Explanation:
It just is
The bonds were sold at a discount of $24,578. The bond interest expense for 20X1 is $16,000, $17,542, $20,000.
What is a bond?A bond is a sort of security used in finance where the issuer owes the holder a debt and is required, depending on the terms, to repay the principal and interest on the bond at the maturity date.
The interest is typically due at predetermined intervals, such semiannually, annually, and less frequently at various times.
A bond is therefore a type of loan or IOU. With the help of bonds, the borrower can finance long-term investments or, in the case of government bonds, current expenses.
Although both stocks and bonds are considered securities, stockholders have an equity ownership in a corporation, whereas bondholders have a creditor stake.
Bondholders have precedence over stockholders in terms of debt. In the event of bankruptcy, they will receive payment before stockholders but after secured creditors.
Another distinction is that, unlike stocks, which often have an unlimited shelf life, bonds typically have a defined term, or maturity, after which the bond is repaid.
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Song, Inc., uses the high-low method to analyze cost behavior. The company observed that at 22,000 machine hours of activity, total maintenance costs averaged $33.40 per hour. When activity jumped to 25,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $30.40.On the basis of this information, the variable cost per machine hour was:___________A. $8.40.B. $22.00.C. $25.00.D. $30.40.E. $33.40.
Answer:
Variable cost per unit= $8.4
Explanation:
First, we need to calculate the total cost for each level of machine hours:
Low activity level:
Total cost= 22,000*33.4= $734,800
High activity level:
Total cost= 25,000*30.4= $760,000
Now, we can determine the variable and fixed costs:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (760,000 - 734,800) / (25,000 - 22,000)
Variable cost per unit= $8.4
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 760,000 - (8.4*25,000)
Fixed costs= $550,000
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 734,800 - (8.4*22,000)
Fixed costs= $550,000
According to a survey done by the Anti-Fraud Collaboration, the majority of participants believe it is the job of senior executives within an organization to set the tone to deter fraud.
a) true
b) false
Wilson's is reviewing a project with an internal rate of return of 13.09 percent and a beta of 1.42. The market risk premium is 8.1 percent, the tax rate is 35 percent, and the risk-free rate is 2.9 percent. The firm's WACC is 12.68 percent. Will the project be accepted if the WACC is used as the discount rate for the project
Answer:
Yes, The project will be accepted.
Explanation:
Projects should be accepted when their internal rate of return is greater than the Weighted Average Cost of Capital (WACC). The WACC represents the cost or risk of the company so if the return is greater than the risk, then this will be favorable.
Good Note Company specializes in the repair of music equipment and is owned and operated by Robin Stahl. On November 30, 2016, the end of the current year, the accountant for Good Note Company prepared an unadjusted trial balance and an adjusted trial balance.Compare the unadjusted trial balance to the adjusted trial balance. Journalize the seven entries that adjusted the accounts at November 30. None of the accounts were affected by more than one adjusting entry. Refer to the Chart of Accounts for exact wording of account titles.Adjusted Trial BalanceGood Note CompanyADJUSTED TRIAL BALANCENovember 30, 2016 ACCOUNT TITLE DEBIT CREDIT1 Cash 38,250.002 Accounts Receivable 89,500.003 Supplies 2,400.004 Prepaid Insurance 3,850.00 5 Equipment 290,450.006 Accumulated Depreciation-Equipment 106,100.007 Automobiles 129,500.008 Accumulated Depreciation-Automobiles 62,050.009 Accounts Payable 26,130.0010 Salaries Payable 8,100.0011 Unearned Service Fees 9,000.0012 Common Stock 100,000.0013 Retained Earnings 224,020.0014 Dividends 75,000.0015 Service Fees Earned 742,800.0016 Salaries Expense 525,000.0017 Rent Expense 54,000.0018 Supplies Expense 8,850.0019 Depreciation Expense-Equipment 11,600.0020 Depreciation Expense-Automobiles 7,300.0021 Utilities Expense 14,100.0022 Taxes Expense 8,175.0023 Insurance Expense 10,400.0024 Miscellaneous Expense 9,825.0025 Totals 1,278,200.00 1,278,200.00Chart of AccountsCHART OF ACCOUNTSGood Note CompanyGeneral Ledger ASSETS11 Cash12 Accounts Receivable13 Supplies14 Prepaid Insurance16 Equipment17 Accumulated Depreciation-Equipment18 Automobiles19 Accumulated Depreciation-Automobiles LIABILITIES21 Accounts Payable22 Salaries Payable23 Unearned Service Fees EQUITY31 Common Stock32 Retained Earnings33 Dividends REVENUE41 Service Fees Earned EXPENSES51 Salaries Expense52 Rent Expense53 Supplies Expense54 Depreciation Expense-Equipment55 Depreciation Expense-Automobiles56 Utilities Expense57 Taxes Expense58 Insurance Expense59 Miscellaneous ExpenseJournalShaded cells have feedback.Compare the unadjusted trial balance to the adjusted trial balance. Journalize the seven entries that adjusted the accounts at November 30. None of the accounts were affected by more than one adjusting entry. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
Good Note Company
Journal Entries:
Debit 23 Unearned Service Fees $9,000
Credit 41 Service Fees Earned $9,000
To record earned fees.
Debit 51 Salaries Expense $8,100
Credit 22 Salaries Payable $8,100
To record accrued salaries.
Debit 53 Supplies Expense $8,850
Credit 13 Supplies $8,850
To record used supplies.
Debit 54 Depreciation Expense-Equipment 11,600
Credit 17 Accumulated Depreciation-Equipment $11,600
To record depreciation expense for the period.
Debit 55 Depreciation Expense-Automobiles 7,300
Credit 19 Accumulated Depreciation-Automobiles $7,300
To record depreciation expense for the period.
Debit 56 Utilities Expense $1,200
Credit 21 Accounts Payable $1,200
To record accrued utilities expense.
Debit 58 Insurance Expense $10,400
Credit 14 Prepaid Insurance $10,400
To record expired insurance.
Explanation:
a) Data and Calculations:
Good Note Company
UNADJUSTED TRIAL BALANCE
November 30, 2016
ACCOUNT TITLE DEBIT CREDIT
1 Cash 38,250
2 Accounts Receivable 89,500
3 Supplies 11,250
4 Prepaid Insurance 14,250
5 Equipment 290,450
6 Accumulated Depreciation-Equipment 94,500
7 Automobiles 129,500
8 Accumulated Depreciation-Automobiles 54,750
9 Accounts Payable 24,930
10 Salaries Payable
11 Unearned Service Fees 18,000
12 Common Stock 100,000
13 Retained Earnings 224,020
14 Dividends 75,000
15 Service Fees Earned 733,800
16 Salaries Expense 516,900
17 Rent Expense 54,000
18 Supplies Expense
19 Depreciation Expense-Equipment
20 Depreciation Expense-Automobiles
21 Utilities Expense 12,900
22 Taxes Expense 8,175
23 Insurance Expense
24 Miscellaneous Expense 9,825
25 Totals 1,250,000 1,250,000
Good Note Company
ADJUSTED TRIAL BALANCE
November 30, 2016
ACCOUNT TITLE DEBIT CREDIT
1 Cash 38,250
2 Accounts Receivable 89,500
3 Supplies 2,400
4 Prepaid Insurance 3,850
5 Equipment 290,450
6 Accumulated Depreciation-Equipment 106,100
7 Automobiles 129,500
8 Accumulated Depreciation-Automobiles 62,050
9 Accounts Payable 26,130
10 Salaries Payable 8,100
11 Unearned Service Fees 9,000
12 Common Stock 100,000
13 Retained Earnings 224,020
14 Dividends 75,000
15 Service Fees Earned 742,800
16 Salaries Expense 525,000
17 Rent Expense 54,000
18 Supplies Expense 8,850
19 Depreciation Expense-Equipment 11,600
20 Depreciation Expense-Automobiles 7,300
21 Utilities Expense 14,100
22 Taxes Expense 8,175
23 Insurance Expense 10,400
24 Miscellaneous Expense 9,825
25 Totals 1,278,200.00 1,278,200
Analysis of Adjustments:
23 Unearned Service Fees $9,000 41 Service Fees Earned $9,000
51 Salaries Expense $8,100 22 Salaries Payable $8,100
53 Supplies Expense $8,850 13 Supplies $8,850
54 Depreciation Expense-Equipment 11,600 17 Accumulated Depreciation-Equipment $11,600
55 Depreciation Expense-Automobiles 7,300 19 Accumulated Depreciation-Automobiles $7,300
56 Utilities Expense $1,200 21 Accounts Payable $1,200
58 Insurance Expense $10,400 14 Prepaid Insurance $10,400
Any effort by the Federal Trade Commission (FTC) to evaluate expected deceptive marketing practices would be seriously flawed because it would mean punishing business on the basis of what the FTC thinks might happen rather than on what actually does happen.
a. True
b. False
Answer:
True
Explanation:
This is true because the Federal Trade commission(FTC) analyze and investigate a seller or sellers who may be so cooperative as to make agreements that ensure large amounts of profit for them which is likely harmful and exploitative to consumers . FTC investigates business mergers which may be horizontal or vertical that are likely done for the purpose of increasing market share and fostering a sort of monopoly of the market. However, mergers and cooperation among businesses in the market do not always yield a monopoly and the FTC may be wrong(sometimes) to wave mergers that could increase the quality of goods or services in a market
Bloom Corporation purchased $1,450,000 of Taylor Company 5% bonds, at their face amount, with the intent and ability to hold the bonds until they matured in 2025, so Bloom classifies its investment as AFS. Unfortunately, a combination of problems at Taylor Company and in the debt securities market caused the fair value of the Taylor investment to decline to $960,000 during 2021.
Required:
For each of the following scenarios, prepare appropriate entry(s) at December 31, 2018, and indicate how the scenario will affect the 2018 income statement (ignoring income taxes).
a. Bloom now believes it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $490,000 decline in fair value, Bloom attributes $295,000 to credit losses, and $195,000 to noncredit losses.
b. Bloom does not plan to sell the Taylor bonds prior to maturity, and does not believe it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $490,000 decline in fair value, Bloom attributes $295,000 to credit losses, and $195,000 to noncredit losses.
Answer:
a. Dr OTT impairment loss $490,000
Cr Discount on bond investment $490,000
Income statement -$490,000
B.Dr OTT impairment loss $295,000
Cr Discount on bond investment $295,000
Dr OTT impairment loss - other comprehensive income $195,000
Cr Fair value adjustment - non credit losses $195,000
Income statement-$295,000
Explanation:
a. Prepare of the appropriate entry(s) at December 31, 2018 and indication for how the scenario will affect the 2018 income statement
31.12.21
Dr OTT impairment loss $490,000
Cr Discount on bond investment $490,000
(To record impairment loss of investment)
Effect on net income : Earnings are reduced by $490,000
INCOME STATEMENT
Other than temporary impairment loss - $490,000
b. Prepare of the appropriate entry(s) at December 31, 2018 and indication for how the scenario will affect the 2018 income statement
31.12.2021
Dr OTT impairment loss $295,000
Cr Discount on bond investment $295,000
(To record credit losses of impairment of investment)
31.12.2021
Dr OTT impairment loss - other comprehensive income $195,000
Cr Fair value adjustment - non credit losses $195,000
(To record non - credit losses of impairment loss of investment)
Effort net income : Earnings are reduced by
INCOME STATEMENT
Other than temporary impairment loss -$490,000
Less : Portion recognized in other comprehensive income $195,000
Other than temporary recognized in earnings -$295,000
When Chernobyl melted down in the Soviet Union, the: a. price of U.S. basketballs increased. b. prices of assets reacted slowly to the information. c. price of U.S. potatoes increased. d. stock prices of U.S. nuclear plants increased.
Answer: d. stock prices of U.S. nuclear plants increased.
Explanation:
Chernobyl was a nuclear power plant in the former Soviet Union that was being used to produce electricity until it suffered a meltdown that effectively rendered the surrounding areas unlivable.
In response to this disaster, the stock prices of U.S. nuclear power plants went up because the Soviet meltdown not only reduced the supply of nuclear powered electricity but also showed that American engineering was superior and so people bought more American nuclear plant shares which took its price up.
A firm is considering a project requiring an investment of $30,000. The project would generate an annual cash flow of $7,251 for the next six years. The company uses the straight-line method of depreciation with no mid-year convention. Ignore income taxes. The approximate internal rate of return for the project is: __________
a.11%.
b.10%.
c.12%.
d.9%.
Answer:
c.12%
Explanation:
PVF of 12% for 6 years is 4.11
PVFof 11% for 6 years is 4.23
Present value of cash inflows, 12% = 7251*4.11
Present value of cash inflows, 12% = 29801.61
Present value of cash inflows, 11% = 7251*4.23
Present value of cash inflows, 11% = 30671.73
Internal rate of return = 11% + (30671.73 - 30000)/(30671.73-29801.61)
Internal rate of return = 11.7719969659%
Internal rate of return = 11.772%
