Mercury Company reports depreciation expense of $49,000 for Year 2. Also, equipment costing $168,000 was sold for its book value in Year 2. There were no other equipment purchases or sales during the year. The following selected information is available for Mercury Company from its comparative balance sheet. Compute the cash received from the sale of the equipment. At December 31 Year 2 Year 1 Equipment $ 655,000 $ 823,000 Accumulated Depreciation-Equipment 464,000 545,000 Multiple Choice $49,000. $87,000. $38,000. $81,000. $40,500.

Answers

Answer 1

Answer:

The cash received from sale is $38000

Explanation:

We first need to calculate the book value of the equipment that is sold.

Book value = Cost - Accumulated depreciation

The accumulated depreciation on the equipment sold can be calculated by calculating the change in overall accumulated depreciation. Using the following equation to calculate the closing balance of accumulated depreciation, we can calculate the accumulated depreciation for the equipment that is sold.

Closing balance = Opening balance + Depreciation expense for the year - Accumulated depreciation on the asset disposed

Let Accumulated depreciation on the asset disposed be x.

464000 = 545000 + 49000 - x

x = 594000 - 464000

x = 130000

Thus, the book value of the asset sold was,

Book value = 168000 - 130000  =  $38000

As the asset is sold for its book value, the cash received from sale is also $38000


Related Questions

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

Answers

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.

Indicate the effect—Understate, Overstate, No Effect—that each of the following errors has on 2020 net income and 2021 net income. 2020 2021 (a) Equipment (with a useful life of 5 years) was purchased and expensed in 2018. Select an option Select an option (b) Wages payable were not recorded at 12/31/20. Select an option Select an option (c) Equipment purchased in 2020 was expensed. Select an option Select an option (d) 2020 ending inventory was overstated. Select an option Select an option (e) Patent amortization was not recorded in 2021. Select an option Select an option

Answers

Answer: The answer is provided below

Explanation:

The net income is excess of revenues over expenses after the adjustment for depreciation expense and the income tax expense. Net income is also called the net profit.

(a) Equipment (with a useful life of 5 years) was purchased and expensed in 2018.

2020 : It will be overstated in the net income.

2021: It will be overstated in the net income.

b. Wages payable were not recorded at 12/31/20.

2020: It will be overstated in the net income.

2021: It will be understated in the net income.

c. Equipment purchased in 2020 was expensed.

2020: It will be understated in the net income.

2021: It will be overstated in the net income

d. 2020 ending inventory was overstated.

2020: It will be overstated in the net income.

2021: It will be understated in the net income.

e. Patent amortization was not recorded in 2021.

2020: It will be no effect in the net income.

2021: It will be overstated in the net income

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.

Answers

Answer:

a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.

$9,800

b. 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 1,350

Explanation:

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.

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.?

Answers

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

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.)

Answers

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)

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.

Answers

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.

An acquisition premium is the amount by which the price offered for an existing business exceeds the Select one: a. amount paid as a down payment to be held in escrow until closing. b. difference between the amount that was offered and the amount that is escrowed c. comparable value of similar companies within the same market. d. preacquisition market value of the target company e. fair market value of similar companies in the same geographic locale.

Answers

Answer:

d. pre-acquisition market value of the target company.

Explanation:

An acquisition premium is the amount by which the price offered for an existing business exceeds the pre-acquisition market value of the target company.

An acquisition premium gives the difference between the actual amount of money paid in acquiring a target firm and the estimated real value of obtaining the firm before the acquisition.

Acquisition premium are usually recorded on the balance sheet as "goodwill."

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?

Answers

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.

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

Answers

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.)

Answers

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

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?"

Answers

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

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?

Answers

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

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

Answers

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.

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)?

Answers

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

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

Answers

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

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:

Answers

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

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 %

Answers

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.

Question 2--/20 View Policies Current Attempt in Progress Stellar Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan. January 1, 2020 December 31, 2020 Vested benefit obligation $1,610 $1,910 Accumulated benefit obligation 1,910 2,590 Projected benefit obligation 2,400 3,120 Plan assets (fair value) 1,680 2,430 Settlement rate and expected rate of return 10 % Pension asset/liability 720 ? Service cost for the year 2020 400 Contributions (funding in 2020) 660 Benefits paid in 202- 180 (a) Compute the actual return on the plan assets in 2020.

Answers

Answer:

$270

Explanation:

The computation of the actual return on plant asset is shown below:

Fair value of the Plan assets at Ending of the year $2,430

Less: Fair value of the Plan assets at beginning of the year $1,680

Change in Plan Assets $750

Less  Contribution made -$660

Add: Benefits Paid $180

Actual Return $270

We simply applied the above equation to determine the actual return on the plant assets

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?

Answers

Answer:

$46.62

Explanation:

Kindly check the attached picture for detailed explanation

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.

Answers

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.

Vandy Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 31 $ 29 Accounts receivable 61 73 Inventory 59 61 Property, plant, and equipment 684 550 Less accumulated depreciation 349 319 Total assets $ 486 $ 394 Liabilities and stockholders' equity: Accounts payable $ 53 $ 54 Accrued liabilities 20 21 Income taxes payable 52 48 Bonds payable 203 190 Common stock 61 60 Retained earnings 97 21 Total liabilities and stockholders' equity $ 486 $ 394 Income Statement Sales $ 807 Cost of goods sold 492 Gross margin 315 Selling and administrative expense 182 Net operating income 133 Gain on sale of equipment 16 Income before taxes 149 Income taxes 45 Net income $ 104 The company sold equipment for $18 that was originally purchased for $14 and that had accumulated depreciation of $12. It paid a cash dividend of $28 during the year and did not retire any bonds payable or repurchase any of its own common stock. Required: Prepare a statement of cash flows for the year using the indirect method.

Answers

Answer:

See below the statement of Cash flow from Vandy Corporation.

Explanation:

Vandy Corporation

Statement of Cash Flow

CASH FLOW FROM OPERATING ACTIVITIES:

Net Income                                                                                     $104

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation on Fixed Assets ($349-$319+$12)                             $42

Gain on Sale of Equipment                                                              ($16)

(Increase) Decrease in Current Assets:

Accounts Receivables                                                                       $12

Inventory                                                                                             $2

Increase (Decrease) in Current Liabilities:

Accounts Payable                                                                              ($1)

Accrued Liabilities                                                                              ($1)

Income taxes payable                                                                        $4

Net Cash provided by Operating Activities                                $146

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of Equipment                                                    $18

Purchase of Property, plant and equipment ($684-$550+$14)     ($148)

Net Cash Flow from Investing Activities                                      ($130)

CASH FLOWS FROM FINANCING ACTIVITIES:

Bonds Payable                                                                                       $13

Issuance of Common Stock                                                                   $1

Payment of Dividends                                                                       ($28)

Net Cash from Financing Activities                                                ($14)

Net Increase (Decrease) in Cash                                                        $2

Opening Cash Balance                                                                       $29

Ending Cash Balance                                                                           $31

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

Answers

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.

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?

Answers

Hi I neeed a dollar

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.

Answers

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.

Learn more about on finance, here:

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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..

Answers

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.

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:

Answers

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.

Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: Service Depts. Production Depts. Payroll Maintenance Cutting Assembly Direct costs $ 20,400 $ 25,500 $ 76,500 $ 105,400 No. of personnel 15 15 45 Sq. ft. of space 10,000 15,000 The total cost of operating the Maintenance Department for the current period is:

Answers

Answer:

The total cost of operating the Maintenance Department for the current period is $29,580

Explanation:

In order to calculate The total cost of operating the Maintenance Department for the current period we would have to calculate first the Overhead allocated to Maintenance from Payroll department as follows:

Overhead allocated=Payroll overhead×(Maintenance payroll personnel/Total personnel)

Overhead allocated=$ 20,400×(15/15+15+45)

Overhead allocated=$4,080

Therefore, to calculate the The total cost of operating the Maintenance Department for the current period we would have to use the following formula:

Total cost of operating Maintenance Department=Overhead allocated+Direct overhead incurred

Total cost of operating Maintenance Department=$4,080+$25,500

Total cost of operating Maintenance Department=$29,580

The total cost of operating the Maintenance Department for the current period is $29,580

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:

Answers

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.

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

Answers

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

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.

Answers

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%

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