Muy Bueno Bakery sells three different products. Currently they are not able to meet all of their customers' demand. Using the following information, determine the price of the cake needed to meet the same contribution margin as the cookies. Cake Pie Cookies Contribution margin $18 $11 $3 Production hours 2 1.5 .25 Variable cost $12 $7 $1 Contribution margin/hr. $9 $7.33 $12 Current selling price $30 $18 $5 a.$45 b.$30 c.$42 d.$36

Answers

Answer 1

Answer:

d. $36

Explanation:

The Contribution margin is the net of selling price and variable cost of a product. It is calculated by deducting the variable cost from the selling price of a product.

                                          Cake   Pie    Cookies

Current selling price          $30    $18    $5

Variable cost                      $12     $7      $1

Contribution margin           $18     $11     $3

Production hours                2        1.5     0.25

Contribution margin/hr.     $9     $7.33  $12

Required Contribution margin per hour of cake = $12

Required Contribution margin = $12 x 2 = $24

Required Selling Price = Contribution margin + variable cost = $24 + $12 = $36

Note there is a mistake in the calculation of Contribution margin of Cookies as it is given $3 but after deducting the variable cost from selling price is should be $4 ( $5 - $1 ), I used the given contribution margin for the calculation.


Related Questions

What are the benefits and risks associated with social networks? Support your answers with relevant examples

Answers

Answer:

Explanation:

There are many benefits as well as risks to social networks. The greatest benefit is that they allow us to connect with individuals from anywhere in the world, at any distance, and in a seconds notice. This is incredibly powerful and opens the door for many opportunities in all types of markets. Social networks also come with risks, since everyone is on it people tend to share all of their information which can cause problems for that individual if it falls into the wrong hands. For example, an individual connects with a family member who lives in Brasil and has casual conversations with that family member every other day. A hacker may be able to access that information and extract all the valuable information needed to steal that individual's identity.

________ is the idea that organizations tend to be more effective when they are structured to fit the demands of the situation.

Answers

Answer:  Contingency Approach

Explanation: The contingency approach is the idea that organizations tend to be more effective when they are structured to fit the demands of the situation. By fitting to the demands of the situation, it means that they are better equipped with alternatives to be put into operation if needed, especially in the case of emergencies, or in situations where earlier arrangements failed. The approach claims that there is no best way to organize a corporation, to lead a company, or to make decisions and therefore posits that the optimal course of action is contingent (dependent) upon the demands of the situation.

Which one of the following are tools that company managers can use to promote operating excellence in performing value chain activities?
a. Benchmarking, cost effciency optimization, and value chain performance optimazation programs
b. Six signma programs, value chain performance optimazation programs, and best practice innovation programs
c. Total quality management, cost optimization, and value chain efficient programs
d. Business process reengineering, best practice standardization programs, and six sigma
e. adoption of best practices, TQM, and business process reengineering

Answers

Answer:

e. adoption of best practices, TQM, and business process reengineering

Explanation:

To promote operational excellence in the execution of value chain activities, the most appropriate tools to be implemented in an organization are the adoption of best practices, TQM and business process reengineering.

Total quality management refers to the continuous improvement of all operational processes, in order to reduce costs, failures, and waste, leading to the implementation, control and review of all organizational processes, including the adoption of advanced technology, adequate training for employees, etc.

Business process reengineering would also help the organization reevaluate its value chain and implement improvements that would increase the performance and functionality of each essential step in the value chain.

Therefore, these integrated tools would ensure continuous optimization at all stages of the value chain, which would mean for the company the effectiveness of the channels and activities for the company to produce the right product, in the right quantity, in the right place and at the right time.

3. There a number of market entry strategies that businesses use in entering into markets outside their countries. a) Distinguish between the use of Franchising and Joint Venture as modes of entry into other countries by global businesses. b) What are the respective advantages and disadvantages of both strategies?

Answers

Answer:

a) Distinguish between the use of Franchising and Joint Venture as modes of entry into other countries by global businesses.

Franchising consists in the licensing of aspects of production and intellectual property to a another party: the franchise.

A Joint Venture is a business union between two or more parties, in which they split profit as well as costs and responsabilities.

b) What are the respective advantages and disadvantages of both strategies?

Franchising can be a quicker way to expand into foreign markets. The flexibility of the method, and the lower capital requirements are the reason why. This can be seen in the success that American fast-food brands have had using this method to expand in global markets.

A Joint-Venture can be more difficult to use for market expansion, however, it can be more profitable, because the profit will not be split among as many parties as in franchising, and more importantly, the firm maintains a higher control of the operation.

Jock and Kyla decide to wager, in violation of a state statute, on the outcome of a football game. They each deposit money with Len, who agrees to pay the winner of the bet. Before the game begins, Kyla tells Len that she changed her mind about the bet. Kyla can recover Group of answer choices

Answers

Answer:

The amount of her bet only

Explanation:

A wager is a gamble on a particular outcome of a situation. In this case the outcome of a football match.

However wagering in such a manner is a violation of state staute. So this is an illegal activity.

Jock and Kyla deposit funds for the wager with Len. Before the bet of Kyla changes her mind she can recover the money she deposited.

Len will not be able to withhold he deposit because she can sue and claim this is an illegal activity that she does not want to be part of. Len will be forced.to return at least her own money.

An investment offers a total return of 12.0 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 6.0 percent. What does Janice believe the inflation rate will be over the next year?

Answers

Answer:

inflation rate= 0.06= 6%

Explanation:

Giving the following information:

Interest rate= 12%

Real rate of return= 6%

The inflation rate is counterproductive to the interest rate. The inflation rate reduces the purchasing price, therefore it decreases the interest rate effect on nominal money.

Real interest rate= interest rate - inflation rate

0.06 = 0.12 - inflation rate

inflation rate= 0.12 - 0.06

inflation rate= 0.06= 6%

TB MC Qu. 7-77 Corbel Corporation has two divisions: Division A and ... Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $47,700 for Division A. Division B had a contribution margin ratio of 35% and its sales were $231,000. Net operating income for the company was $27,200 and traceable fixed expenses were $59,700. Corbel Corporation's common fixed expenses were:

Answers

Answer:

Corbel Corporation's common fixed cost  is $41,650

Explanation:

Division A contribution margin       $47,700

Division B contribution Margin       $80,850           $128,550

($231,000 * 35%)

Less: Traceable fixed cost              $59,700

Operating Income                           $27,200           ($86,900)

Common fixed cost                                                   $41,650

The Whistling Straits Corporation needs to raise $74 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $45 per share and the company's underwriters charge a spread of 6 percent. If the SEC filing fee and associated administrative expenses of the offering are $825,000, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, e.g., 1,234,567.)

Answers

Answer:

1,768,913 new stocks

Explanation:

the company needs to raise amount needed to finance expansion plus SEC's filing and administrative fees = $74,000,000 + $825,000 = $74,825,000

net amount received per stock issued = stock price x (1 - underwriting fee) = $45 x (1 - 6%) = $42.30 per stock

the company needs to issue = $74,825,000 / $42.30 per stock = 1,768,912.53 = 1,768,913 new stocks

Terrance needs to comminicate with managers in several different locations regarding a sensitive complex topic. Therefore he should choose the communication medium highest in information richness which would be a:______

a. Voice mail message.
b. Group email.
c. Videoconference.
d. Recorded presentation.

Answers

The correct answer is b

A food manufacturer reports the following for two of its divisions for a recent year.
($millions) Beverage Division Cheese Division
Invested assets, beginning $ 2,662 $ 4,455
Invested assets, ending 2,593 4,400
Sales 2,681 3,925
Operating income 349 634
1. Compute return on investment.
2. Compute profit margin.
3. Compute investment turnover for the year.A food manufacturer reports the following for two of its divisions for a recent year.

Answers

Answer and Explanation:

1. Return on investment is

= Operating Income ÷ Average invested Assets

here, average invested assets is

= (Invested assets, beginning + Invested assets, ending) ÷ 2

For Beverage Division

= $349 ÷ (($2,662 + $2,593) ÷ 2)

= $349 ÷ $2,628

= 13.28%

For Cheese Division

= $634 ÷ (($4,455 + $4,400) ÷ 2)

= $634 ÷ $4,428

= 14.32%

2. Profit margin = (Operating income ÷ sales) × 100

For Beverage Division

= ($349 ÷ $2,681) × 100

= 13.02%

For Cheese Division

= ($634 ÷ $3,925) × 100

= 16.15%

3. Investment turnover = Sales ÷ Average Operating Assets

For Beverage Division

= $2,681 ÷ (($2,662 + $2,593) ÷ 2)

= $2,681 ÷ $2,628

= 1.02 times

For Cheese Division, it would be

= $3,925 ÷ (($4,455 + $4,400) ÷ 2)

= $3,925 ÷ $4,428

= 0.89 times

Activity-Based Costing: Selling and Administrative Expenses Jungle Junior Company manufactures and sells outdoor play equipment. Jungle Junior uses activity-based costing to determine the cost of the sales order processing and the customer return activity. The sales order processing activity has an activity rate of $20 per sales order, and the customer return activity has an activity rate of $100 per return. Jungle Junior sold 2,500 swing sets, which consisted of 750 orders and 80 returns.

Required:
a. Determine the total sales order processing and customer return activity cost for swing sets.
b. Determine the per-unit sales order processing and customer return activity cost for swing sets. Round your answer to the nearest cent.

Answers

Answer: 1}ToTAL Activity cost =$23,000

2a)  Sales order Processing Activity per unit sale=$6.00

2b)customer return activity per unit sale=$3.20

Explanation:

a. total sales order processing and customer return activity cost for swing sets

Sales order Processing Activity =Number of orders x rate per sales order

                                       =750 x 20 =  $15,000

customer return activity  = Number of returns x rate per return

                                         = 80 x 100= $8,000

ToTAL Activity cost = Sales order Processing Activity +customer return activity= $15,000 + $8000 = $23,000

b)per-unit sales order processing and customer return activity cost for swing sets

Cost of Sale order processing = $15,000

Number of swing set sold = 2,500

Therefore Sales order Processing Activity per unit sale =  Cost of Sale order processing/ Number of swing set sold = $15,000/ 2,500= $6.00

customer return activity cost  = $8,000

Number of swing set sold = 2,500

Therefore customer return activity per unit sale=  customer return activity cost / Number of swing set sold = $8,000/ 2,500= $3.20

ToTAL Activity cost  per unit sale = Sales order Processing Activity  cost per unit +customer return activity cost per unit = $6.00 +  $3.20 = $9.20

If a firm pays labor $5 and receives a MPL of 10, while paying capital $100 and receiving a MPC of 100, to lower production costs it should hire more labor and less capital.
a. True
b. False

Answers

Answer:

True

Explanation:

Here, we want to evaluate the validity of the given statement whether true or false.

The correct answer is true.

For a firm that pays $5 labor and receives a MPL of 10, while paying capital of $100, and receiving a MPC of 100, to lower production costs, it should higher more labor and less capital.

Prepare journal entries to record the following four separate issuances of stock. A corporation issued 9,000 shares of $10 par value common stock for $108,000 cash. A corporation issued 4,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,500. The stock has a $1 per share stated value. A corporation issued 4,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,500. The stock has no stated value. A corporation issued 2,250 shares of $25 par value preferred stock for $105,750 cash.

Answers

Answer: Please see answer in explanation column

Explanation:

1. Being issued in excess of par value

Account titles & Explanations              Debit             Credit  

Cash                                           $108,000    

Common stock(9,000 x 10)                                      $90,000  

paid in capital in excess of par value

Common Stock(108,000 - 90,000)                          $18,000

2.Being issued to promoters at stated value

Account titles & Explanations     Debit           Credit  

Organisational expense           $49,500  

common stock (4500 x 1 )                                          $4,500  

paid in capital in excess of stated value

Common stock   (49,500 -4,500)                                   $45,000  

3 Being issued to promoters at no stated value

Account titles & Explanations              Debit                Credit  

        organisational expense          $49,500

Common stock of no par value                                 $49,500  

         

4 Being issued  of preferred shared in excess of par value

Account titles & Explanations           Debit                 Credit  

               Cash           $105,750  

Preferred Stock(2,250 X $25)                                   $56,250  

paid in capital in excess of par value

of preferred stock (  $105,750-  $56,250)                $49,500                  

Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity for both contracts but is uncertain whether they will be profitable. Using the information below, a) calculate the activity-based costs and profits for each contract (this requires more than one step) and b) calculate the profit for each job using absorption costing, absorbing overheads using molding hours: Enter all answers in number format without commas, decimals, or dollar signs. Customer AAA BBB Component Type A999 B999 Contract Value ($) $27,000 $100,000 Contract Quantity 1,000 unit 2,000 unit Material cost/unit $15 $20 Molding time/batch 5 hours 7.5 hours Batch size 100 units 50 unitsAnnual Budgeted overheads as follows:Activity Cost Driver Cost driver CostMolding Molding hours 2,000 $150,000Inspection Batches 150 $75,000Production Mgmt Contracts 20 $125,000 Required:Calculate the activity-based costs and profits for each contract.

Answers

Answer:

The contract A yields a loss under ABC but Contract B yields a profit.

ABC Profit  contract A  $ (3000) contract B  $ 11250

Under absorption costing both contract yield profits.

Absorption Profit    contract A  $ 3250 contract B    $7500  

Management should make decisions using ABC and reject Contract A and accept Contract B.

Explanation:

Customer                         AAA               BBB

Component Type           A999                B999

Contract Value ($)       $27,000            $100,000

Contract Quantity         1,000 unit        2,000 unit

Material cost/unit              $15                        $20

Molding time/batch          5 hours            7.5 hours

Batch size                       100 units                50 units

Activity Based Rate= Cost per Unit of Cost Driver

Activity                Cost driver         Cost                 Rate

Molding                2,000              $150,000        $150,000 / 2,000 = 75

Inspection            150                   $75,000        $75,000/150 = 500

Production             20                 $125,000        $125,000/20=  6250        

Total                                             $ 350,000                                          

Cost Drivers Consumed

Activity                              A999                                      B999

Molding time/batch          5 hours* 10                    7.5 hours *40

                                            50                                   300

Batch size              1,000 unit/ 100 units          2,000 unit/50 units

                                     = 10                                      =40

ABC  Profits for Each Contract

                                         A999                                      B999

Selling Price                  $27,000                              $100,000

Materials                      15*1000                                  20 * 2000  

                                    =   15000                                   =   40,000

Molding                   50 hours *75                               300* 75

                                    3750                                       22500

Inspection             10 batches *500                       40 batches *500

                                 $ 5000                                    $ 20000

Management Contracts    $ 6250                             $ 6250

Total                            $ 30,000                               $ 88,750

Profit                            $ (3000)                                $ 11250

Overhead Rate  Absorption Costing

Total Overheads= ( 150,000 + 125,000+ 75000) = $ 350000

Annual Molding Hours = 2000

Rate= $ 350,000/2000=$ 175 per molding hour

Absorption Costing

Profit For each Contract

                                         A999                                      B999

Selling Price                  $27,000                              $100,000

Materials                      15*1000                                  20 * 2000  

                                    =   15000                                   =   40,000

Overheads                50 hours *175                           300 Hours *175

                               =  8750                                            = 52,500

Total Cost                    23750                                      92500            

Profit                             3250                                            7500        

The contract A yields a loss under ABC but Contract B yields a profit.

Under absorption costing both contract yield profits.

Management should make decisions using ABC and reject Contract A and accept Contract B.

the annual discount rate is 10% beginning in 2016, you will receive $10000 on the first day of every year. what is the resent value of this inginite sequence of cash flow

Answers

Answer:

$100,000

Explanation:

Data provided

Perpetual cash flow = $10,000

Discount rate = 10%

According to the given situation, the computation of Present value of this inginite sequence of cash flow is shown below:-

Present value = Perpetual cash flow ÷ discount rate

= $10,000 ÷ 10%

= $10,000 ÷ 0.1

= $100,000

Therefore for computing the present value we simply applied the above formula.

Explain how you would value a stock. Provide an example of a valuation of a stock based on retrieved real data. Include evidence of the retrieved data in your answer. Compare your valuation with the actual price of the stock at the designated time for your valuation.

Answers

Answer with Explanation:

There are numerous stock valuing models but here, I will use Dividend Valuation Model which is based on finding the intrinsic value of Stock which is the present value of the stock at a required rate of return. The formula to calculate Intrinsic value of stock is given as under:

P0= D0   *  (1 + g) / (ke - g)

Here

P0 is the intrinsic value of the stock

D0 is the dividend just paid

g is the growth rate

ke is the investor's required rate of return

The model doesn't holds if the company doesn't pays Dividend.

Now suppose that the Dividend just paid by Apple is $20 per stock. The anticipated growth rate of dividend is 10% and the required rate of return is at 15%.

By putting values in the above equation, we have:

P0= $20 * (1 + 10%) / (15% - 10%)

= $20 / (15% - 10%)

= $400 per share

The value of stock of Apple is $400 per share which must be its fair market value as per the Dividend Valuation Model.

As per the model, if the value of stock is higher as per dividend valuation model then we must purchase the stock as it will generate higher value and vice versa. The inherent limitation of the model is that it assumes that the dividend is growing at constant rate and is consistently paid. The main disadvantage of Dividend valuation model is that it doesn't account for political factors, economical factors, evolving business risks, technological factors, etc.

An investor in the United States bought a one year Brazilian security valued at $195,000 Brazilian reals. The U.S. dollar equivalent was 100,000. The Brazilian security earned 16.00% during the year, but the Brazilian real depreciated 5 cents against the us dollar during the time period ($0.51 to $0.46)

Required:
a. After the transfer of funds back to the united states, what was the investors return on her $100,000?
b. Determine the total ending value of the Brazilian investment in Brazilian reals and then translate this Brazilian value to US dollar’s. Then compute the return on the $100,000.

Answers

Answer:

S

Explanation:

Gabriel, Harris and Ida are members of Jeweled Watches, LLC. What are their options with respect to the management of their firm?

Answers

Answer:

They could be a Member-managed Limited Liability Company or a Manager-managed Limited Liability Company.

Explanation:

A Limited Liability Company is usually run by two or more partners. In managing this type of company, the members might choose to manage the company themselves. This is known as a member-managed Limited Liability Company. In such cases, if any member makes a decision in behalf of the business, with his signature appended to it, such a decision is considered legally binding on all other members of the company. Every member also has a say in the company's decision-making.

If they choose to be a manager-managed Limited Liability Company, they can appoint one or more non-members to manage the company for them. They do not interfere with how the manager chooses to run the company. They can still make important decisions but this is quite limited. However, they can choose to remove the manager/managers as they will.

the fair value of Blossom is estimated to be $820,800. The carrying value of Blossom’s net identifiable assets, including the goodwill, at year-end is $855,000. Prepare Cullumber’s journal entry, if necessary, to record impairment of goodwill.

Answers

Answer:

Cullumber Company

Journal Entry:

Debit Loss on Goodwill Impairment $34,200

Credit Goodwill $34,200

To record the loss on goodwill impairment.

Explanation:

a) Data and Calculation:

Fair value = $820,800

Carrying value of net identifiable assets, including goodwill = $855,000

Goodwill impairment = $34,200 ($855,000 - $820,800)

b) Cullumber, which acquired Blossom is expected to check for the impairment of goodwill yearly.  The impairment occurs when the carrying value of the net identifiable assets of Blossom is more than the fair value of Blossom.  Generally Accepted Accounting Standards require the annual review of the fair value of goodwill to check for its impairment.  By the above entry, the goodwill will be reduced by $34,200 and a loss debited in Cullumber's accounts.

Evaluate the Ritz-Carlton business model and associate key quality characteristics in the operations of a hotel set-up process.

Answers

Answer:

Ritz Carlton is luxury hotel chain of America. The company has 101 luxury hotel in more than 30 countries of the world. The success of Ritz Carlton is mainly because they keep the comfort of their guests as their highest priority. Their mission statement clearly states that comfort and genuine care of their guests is utmost important to them.

Explanation:

Their business model focuses entirely on their customers. Ritz Carlton has created its leading brand by providing great ambiance to the visitors and its guest. One can dream of staying at such luxury hotel. They are famous for their hospitality of their guests. The hotel management believes on total quality management. It has set highest standard for themselves and strive to meet them by providing better and better service to its guests.

Time Warner shares have a market capitalization of billion. The company is expected to pay a dividend of per share and each share trades for . The growth rate in dividends is expected to be ​% per year. ​ Also, Time Warner has billion of debt that trades with a yield to maturity of ​%. If the​ firm's tax rate is ​%, compute the​ WACC?

Answers

Complete Question:

Time Warner shares have a market capitalization of $50 billion. The company is expected to pay a dividend of $0.30 per share and each share trades for $30. The growth rate in dividends is expected to be 7% per year. Also, Time Warner has $15 billion of debt that trades with a yield to maturity of 8%. If the firm's tax rate is 30%, what is the WACC?

Answer:

7.5%

Explanation:

We can calculate WACC using the following formula:

WACC = Ke * MV of Equity / (MV of Equity  + MV of Debt)    +   Kd * MV of Debt / (MV of Equity  + MV of Debt)

Here:

Market Value of Equity is $50 billion

Market Value of Debt is $15 billion

Ke is % (Step 1)

Kd is 8%

By putting values, we have:

WACC =  8.07% * $50 Billion / ($50 Billion + $15 Billion)     +  8% * $50 Billion / ($50 Billion + $15 Billion)

WACC = 7.5%

Step 1: Calculate Ke

We can calculate Ke using the following formula:

Ke = Do * (1 + g) / P               + g

Here

Do is the dividend per share which is $0.3

g is the growth rate which is 7%

And

P is the market value of share which is $30 per share.

Ke = $30 * (1 + 7%) / $30     +  7%   =  8.07%

A one-month summary of manufacturing costs for Rapid Routers Company follows.

Direct materials $40,000
Direct labour 20,000
Material handling costs 1,500
Product inspection and rework 2,000
Materials purchasing and inspection 500
Routine maintenance and equipment servicing 1,200
Repair of equipment 300

Required:
Classify each cost as value-added or non-value-added

Answers

Answer:

        Cost                                                                 Classification

Direct materials                                                       Value added

Direct labor                                                              Value added

Material handling costs                                           Non-value added

Product inspection and rework                              Non-value added

Materials purchasing and inspection                     Value added

Routine maintenance and equipment                    Non-value added

servicing

Repair of equipment                                                Non-value added

If an investor purchases a bond when its current yield is higher than the coupon rate, then the bond's price will be expected to

Answers

Answer:

The answer is: The bond price is expected to Increase over time, reaching par value at maturity

Explanation:

If an investor purchased a bond when the bond current yield-to-maturity is higher than the bond's price, the bond is said to be bought at discount (its price is less than the face value at maturity). With this, the bond price will be expected to Increase over time, reaching par value at maturity.

And when the opposite happens i.e coupon rate higher than the current yield-to-maturity, the bond is said to be bought at premium.

You own of the stock of a company that has 10 directors on its board. How much representation can you get on the board if the company has cumulative​ voting? How much representation can you ensure if the company has straight​ voting?

Answers

Answer:

B.With cumulative voting you are able to get proportional representation by putting all of your votes toward 3​directors, allowing you to elect representatives to 3 seats ​(30% of ten​ seats) on the board. B.With​ non-cumulative voting you vote on each director​ individually, and without a majority of the shares you cannot ensure that your representative will win any of the elections​ (you could lose 70% to 30% in each of the ten individual​ elections).

Explanation:

Cumulative voting is a method of voting that allows a shareholder to place all the votes they have to one or more person. Normally, during elections for a Board member, each shareholder will be given a certain number of votes and this is usually related to the number of shares they hold. In cumulative voting, they can place all these allowed votes in the corner of one person thereby increasing their chances of getting voted. By owning 30%, you will get 30% of the votes. If you decide to place all 30% for 3 people out of 10, you will get them elected.

With straight voting though, you can only vote once per share owned. That means that you cannot pledge all your votes to a single person or group of people. Should that happen, you cannot ensure that your representative will win as people may outvote your 30% in in each candidate.

Discount-Mart issues $18 million in bonds on January 1, 2021. The bonds have a eight-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: Date Cash Paid Interest Expense Increase in Carrying Value Carrying Value 01/01/2021 $ 16,180,939 06/30/2021 $ 900,000 $ 970,856 $ 70,856 16,251,795 12/31/2021 900,000 975,108 75,108 16,326,903 06/30/2022 900,000 979,614 79,614 16,406,517 12/31/2022 900,000 984,391 84,391 16,490,908 What is the carrying value of the bonds as of December 31, 2022

Answers

Answer:

Discount-Mart

The carrying value of the bonds as of December 31, 2022 is:

$16,490,908

Explanation:

a) Data and Calculations:

Bonds issued = $18 million

Date of issue = Jan. 1, 2021

Bond term = 8 years

Interest payable on June 30 and December 31 each year.

b) Partial bond amortization schedule for the bonds:

Date             Cash Paid     Interest Expense     Increase in    Carrying Value

                                                                     Carrying Value

01/01/2021                                                                              $ 16,180,939

06/30/2021 $ 900,000     $ 970,856          $ 70,856            16,251,795

12/31/2021      900,000         975,108               75,108           16,326,903

06/30/2022   900,000         979,614               79,614            16,406,517

12/31/2022     900,000         984,391               84,391           16,490,908

b) The carrying value of the bond is the net amount between the par value of $18 million and the unamortized premium or discount.  It is this value that is reported on the balance sheet.

On January 1, Bramble Corp. has a beginning cash balance of $42000. During the year, the company expects cash disbursements of $300000 and cash receipts of $340000. If Bramble requires an ending cash balance of $40000, the company must borrow:________

Answers

Answer:

this question is confusing me

Which statement thanks respondent for their participation, describes how incentives are received, and reassures them of the confidentiality of their responses

Answers

Answer:

Closing statement

Explanation:

Hope it helped

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:

June 1Balance 25 units at $60
6 Sale 20 units
8 Purchase 20 units at $61
16 Sale 10 units
20 Purchase 20 units at $62
23 Sale 25 units
30 Purchase 15 units at $63

Required:
Calculate the cost of the ending inventory at June 30, using (a) the first-in, first-out (FIFO) method and (b) the last-in, first-out (LIFO) method. Identify the quantity, unit price, and total cost of each lot in the inventory.

Answers

Answer:

Under LIFO:

date       transaction         units          unit price          total

1             Balance               25             $60                 $1,500

6            Sale                     20             $60                $1,200

8            Purchase             20             $61                  $1,220

16           Sale                     10              $61                 $610

20          Purchase            20             $62                  $1,240

23          Sale                     20             $62                 $1,240

23          Sale                     5                $61                  $305

30          Purchase             15              $63                 $945

ending inventory = total purchases + beginning balance - COGS = ($1,220 + $1,240 + $945) + $1,500 - ($1,200 + $610 + $1,240 + $305) = $3,405 + $1,500 - $3,355 = $1,550

Under FIFO:

date       transaction         units          unit price          total

1             Balance               25             $60                 $1,500

6            Sale                     20             $60                $1,200

8            Purchase             20             $61                  $1,220

16           Sale                      5               $60                $300

16           Sale                      5               $61                 $305

20          Purchase            20             $62                  $1,240

23          Sale                      15             $61                  $915

23          Sale                      10             $62                  $620

30          Purchase             15              $63                 $945

ending inventory = total purchases + beginning balance - COGS = ($1,220 + $1,240 + $945) + $1,500 - ($1,200 + $300 + $305 + $915 + $620) = $3,405 + $1,500 - $3,340 = $1,565

Mr. Dow bought 100 shares of stock at $17 per share. Three years later, he sold the stock for $23 per share. What is his annual rate of return

Answers

Answer:

10.60%

Explanation:

The compound annual growth rate formula stated below can be used to determine the annual rate of return on the stock investment.

CAGR=(future value/present value)^(1/n)-1

future value is the future worth of the stock after three years i.e100*$23=$2300

Present value is the initial cost of the stock which is 100*$17=$1700

n is the number of years the stocks have been owned

CAGR=($2300/$1700)^(1/3)-1=10.60%

Company ABC is required to pay their customers $20,000 after 3 years. Based on an annual effective interest rate of 4%, Andy, the company’s actuary, uses full immunization strategy to construct a portfolio of assets using a 2-year zero-coupon bond and a 4-year zero-coupon bond. Calculate the par amount for the 2-year zero-coupon bond assuming full immunization is met.

Answers

Answer:

Par amount = $9,615.39

Explanation:

The condition that must hold in order to meet full immunization are as follows:

Condition 1: PV(assets) = PV(liabilities)

Condition 2: MD(assets) = MD(liabilities) or P'assets = P'liabilities

Condition 3: There is one asset cash inflow before the liability cash outflow, and there is also one asset cash inflow after the liability cash outflow.

Where PV denotes Present Value and MD denotes Macaulay Duration.

PV(liabilities) = Amount required to pay / (1 + i)^n ............ (1)

Where;

Amount required to pay = $20,000

i = interest rate = 4%

n = number of years after = 3 years

Substituting the values into equation (1), we have:

PV(liabilities) = $20,000 / (1 + 4%)^3 = 17,779.93

Let;

A = Weight of two-year-zero-coupon bond in the portfolio

n = Macaulay Duration of n-year-zero-coupon bond

Therefore, we can construct a portfolio of assets using a 2-year zero-coupon bond and a 4-year zero-coupon bond as follows:

A(2) + (1 – A)(4) = 3

2A + 4 – 4A = 3

2A – 4A = 3 – 4

-2A = - 1

A = -1/-2

A = 0.5

We can now calculate the par amount as follows:

Par amount = PV(liabilities) * A * (1 + i)^t .............. (2)

Where t = 2 as the duration of the bond

Substituting the values into equation (2), we have:

Par amount = 17,779.93 * 0.5 * (1 + 4%)^2

Par amount = 17,779.93 * 0.5 * 1.04^2

Par amount = 17,779.93 * 0.5 * 1.0816

Par amount = $9,615.39

Therefore, the par amount for the 2-year zero-coupon bond assuming full immunization is met is $9,615.39.

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