Answer:
Script, Inc.
Territory and Company Income Statements
For the Month of September
Florida$ Alabama$ Company Total$
Sales
Pens 18000 12000 30000
Pencils 9000 21000 30000
Total sales [A] 27000 33000 60000
Variable cost
Pens 7200 4,800 12000
[18000*.4] [12000*.4]
[12000 Variable cost / 30000 = 0.40 per pen ]
Pencils 3600 8400 12000
[9000*.4] [21000*.4]
[12000 Variable cost /30000 = 0.4 per pencil]
Total var. cost [B] 10800 13200 24000
Contribution A-B 16200 19800 36000
D. fixed expenses 2000 3000 5000
Territory margin 14200 16800 31000
Common fixed expenses
Pen 9000
Pencil 7000
Home office 1000
Total 17,000 (17000)
Net income 14000
E-tailers, such as Amazon and Expedia, that sell products and services directly to final buyers exclusively over the Internet are known as ________.
Answer:
E-tailers
Explanation:
E-tailers are also known as e-retailers. Where you can purchase things via the internet.
Glad I could help you!
On July 31, the company’s Cash account has a $25,274 debit balance, but its July bank statement shows a $26,612 cash balance. 1. Prepare the bank reconciliation for this company as of July 31.
Answer:
A lot of information was missing, so I looked for a similar question but couldn't find one with the same exact numbers, but I believe the following question should be very similar and you can use it as an example:
a.On July 31, the company’s Cash account has a $24,756 debit balance, but its July bank statement shows a $26,449 cash balance.
b.Check No. 3031 for $1,270 and Check No. 3040 for $627 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $411 and Check No. 3069 for $2,038, both written in July, are not among the canceled checks on the July 31 statement.
c.In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent was correctly written and drawn for $1,240 but was erroneously entered in the accounting records as $1,230.
d.A credit memorandum enclosed with the July bank statement indicates the bank collected $9,000 cash on a non-interest-bearing note for Branch, deducted a $45 collection fee, and credited the remainder to its account. Branch had not recorded this event before receiving the statement.
e. A debit memorandum for $805 lists a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
f.Enclosed with the July statement is a $14 debit memorandum for bank services. It has not yet been recorded because no previous notification had been received.
g.Branch’s July 31 daily cash receipts of $10,152 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.
Bank account reconciliation:
Bank account balance July 31, 202x, $26,449
+ deposits in transit $10,152
- outstanding checks ($3,719)
Reconciled bank account $32,882
Cash account reconciliation:
Cash account balance July 31, 202x, $24,756
+ Note collected by bank (net of fees) $8,955
- Bank fees ($14)
- NSF check + bank fees ($805)
- Error in recording check 3056 ($10)
Reconciled cash account $32,882
On December 31, 2016, when its Allowance for Doubtful Accounts had a debit balance of $1,432, Sunland Company estimates that 9% of its accounts receivable balance of $105,900 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2017, Sunland Company determined that B. Jared’s account was uncollectible and wrote off $1,091. On June 12, 2017, Jared paid the amount previously written off.Required:Prepare the journal entries on December 31, 2016, May 11, 2017, and June 12, 2017.
Answer: Please see explanation column for answers
Explanation:
1) To record bad debts expense
Date Account Debit Credit
Dec 31, 2016 Bad Debt Expense $10,963
Allowance for doubtful account $10,963
Calculation ;
Bad debts expense
9% x $105,900 = $9,531
Adjustment= $9,531 + debit balance of $1,432=$10,963
2) To write off uncollectible accounts receivables
Date Account Debit Credit
May 11, 2017 Allowance for doubtful account $1,091.
Accounts receivable--- B. Jared $1,091.
3) To reinstate accounts accounts previously written off
Date Account Debit Credit
June 12, 2017 Accounts receivable--- B. Jared $1,091.
Allowance for doubtful account $1,091.
3b)to collect cash from receivables
Date Account Debit Credit
June 12, 2017 Cash $1,091.
Accounts receivable--- B. Jared $1,091.
Annabelle owns an Italian ice shop. If she decided to expand the size of her shop so that she could sell more Italian ices, how would she know if she is experiencing economies of scale in the long run
Answer:
her long-run average cost of selling each Italian ice decreases.
Explanation:
Economies of scale is when a firm produces more units of goods or services on a much larger scale, with very little input cost(average cost). Invariably, this implies that the production units of a firm increases as it grows while having a decreased input costs.
A firm will experience economies of scale in the long run if it's average total costs(cost per unit required for production which remains the same irrespective of output) decreases as it increases its scale of production.
Nichols, Inc. has 1,000 shares of 4%, $100 par value, cumulative preferred stock and 75,000 shares of $1 par value common stock outstanding at December 31 of the current year and has declared a dividend for the year. What is the annual dividend that will be paid to the preferred stockholders
Answer: $20,000
Explanation:
The dividends due to preferred stock are fixed and quoted on the preference shares.
The above shares are to get 4% of their par value in dividends.
= (4% * 100) * 5,000 shares
= $20,000
A yearly dividend is a the price paid per share of funds by the firm to its stockholders.
The yearly dividend that will be paid to the elected stockholders will be $20,000
It can be determined by using the formula:[tex]= \text{Monthly Shares} \times \text{Number of payments per year}[/tex]
The above shares are to get 4% of their par price in interests:[tex]= (4\% \times 100) \times 5,000 \; \text{shares}[/tex]
= $20,000
Therefore, $20,000 will be paid to the stockholders.
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The federal gas tax has been stuck at 18.4cents¢ a gallon since 1993. Today, Americans are driving fewer miles, and vehicles have become more fuel-efficient. Less gas consumption means less gas-tax revenue to repair the nation's roads. Source: Bloomberg News, July 17, 2014 Would a tax per mile driven by more efficient or less efficient than a tax per gallon of gasoline? Which tax would be more regressive? Explain your answers.
Answer:
1. A Tax per mile driven would be more efficient than a tax per gallon of gasoline.
2. A tax per gallon of gasoline is more regressive. The tax is based on a fixed dollar per gallon since 1993. instead of being based on a percentage per the price of gasoline per gallon. With the current rate, the price of gasoline per gallon may even be less than the tax. One can then ask, "what is the purpose of the tax?" Is the tax a road tax or a per gallon use tax?
Explanation:
When the federal gas tax remains at 18.4 cents per gallon for a very long period, the tax can be described as regressive as it does not take into consideration the trend that Americans are driving fewer miles, and vehicles have become more fuel-efficient. This means that the gas tax is not fit for purpose. If its purpose is to generate revenue for road repairs, then instead of a gallon tax, government should institute a road use tax.
Companies whose stock is traded in a public market must report EPS in the notes of their financial statements. must report EPS on their income statement. must report EPS on their balance sheet. are not required to report EPS.
Answer:
The answer is B. must report EPS on their income statement
Explanation:
If a company's share is being traded publicly, its Earnings Per Share (EPS) must be shown on its income statement(Statement of profit or loss and other comprehensive income).
Earnings Per Share (EPS) is calculated as follows:
Earnings (profit after tax) ÷ total number of shares outstanding.
Note: EPS does not recognize/consider discontinue operations.
Coney Island Entertainment issues $1,300,000 of 5% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year.
Calculate the issue price of a bond and complete the first three rows of an amortization schedule when:
Required:
1. The market interest rate is 5% and the bonds issue at face amount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors.)
Issue price
Date Cash Paid Interest Expense Increase in Carrying value Carrying value
1/1
6/30
13/31
2. The market interest rate is 6% and the bonds issue at a discount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors.)
3. The market interest rate is 4% and the bonds issue at a premium. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors.)
Answer:
1) The market interest rate is 5% and the bonds issue at face amount.
Dr Cash 1,300,000
Cr Bonds payable 1,300,000
Year Interest payment Book value of bonds
June/1 $32,500 $1,300,000
Dec/1 $32,500 $1,300,000
June/2 $32,500 $1,300,000
2) The market interest rate is 6% and the bonds issue at a discount.
price of bonds:
PV of face value = $1,300,000 / (1 + 3%)³⁰ = $535,582.79
PV of coupons = $32,500 x 19.600 (PV annuity factor, 3%, 30 periods) = $637,000
market price = $1,172,582.79
Dr Cash 1,172,582.79
Dr Discount on bonds payable 127,417.21
Cr Bonds payable 1,300,000
discount amortization per coupon payment = $127,417.21 / 30 = $4,247.24
Year Cash paid Interest Amortization Bond Book
expense bond discount discount value
June/1 $32,500 $36,747.24 $4,247.24 $123,169.97 $1,176,830.03
Dec/1 $32,500 $36,747.24 $4,247.24 $118,922.73 $1,181,077.27
June/2 $32,500 $36,747.24 $4,247.24 $114,675.49 $1,185,324.51
3. The market interest rate is 4% and the bonds issue at a premium.
price of bonds:
PV of face value = $1,300,000 / (1 + 2%)³⁰ = $717,692.16
PV of coupons = $32,500 x 22.396 (PV annuity factor, 2%, 30 periods) = $727,870
market price = $1,445,562.16
Dr Cash 1,445,562.16
Cr Bonds payable 1,300,000
Cr Premium on bonds payable 145,562.16
discount amortization per coupon payment = $145,562.16 / 30 = $4,852.07
Year Cash paid Interest Amortization Bond Book
expense bond discount premium value
June/1 $32,500 $27,647.93 $4,852.07 $140,710.09 $1,440,710.09
Dec/1 $32,500 $27,647.93 $4,852.07 $135,858.02 $1,435,858.02
June/2 $32,500 $27,647.93 $4,852.07 $131,005.95 $1,431,005.95
The 2016 annual report for Mega Mills disclosed that 1 billion shares of common stock have been authorized. At the end of 2015, 760 million shares had been issued and the number of shares in treasury stock was 101 million. During 2016, the only common share transactions were that 18 million common shares were reissued from treasury and 24 million common shares were purchased and held as treasury stock.Required: Determine the number of common shares a. Issued b. In treasuryc. Outstanding at the end of 2016.
Answer:
a. 760 million shares
b. 107 million shares
c. 653 million shares
Explanation:
a. The number of Issued stock is unchanged because Issued stock encompasses both outstanding and treasury stock.
b. Treasury Stock = Beginning balance - Reissued from treasury + repurchased for treasury
= 101 - 18 + 24
= 107 million shares
c. Outstanding stock = Issued Stock - Treasury Stock
= 760 - 107
= 653 million shares
Drew and Tammy decide to start a new cake-decorating business. They each contribute $10,000 to get the business off the ground. This money is considered
Answer: a down payment or deposit
Explanation:
Drew and Tammy decide to start a new cake-decorating business. They each contribute $10,000 to get the business off the ground. This money is considered as equity capital.
What do you mean by Business?The exchange, acquisition, sale, or creation of goods and services with the aim of making money and meeting client demands constitutes business. Businesses can be for-profit or nonprofit entities that work to further a social cause or make a profit, respectively.
Equity in the context of finance refers to ownership of assets with potential obligations such as debts. For accounting reasons, equity is calculated by deducting liabilities from the value of the assets. The difference of $14,000, for instance, is equity if a person owns a car worth $24,000 and owes $10,000 on the loan used to purchase the vehicle.
A single asset, like a car or house, or an entire company may be covered by equity. A company that needs to launch or grow its operations can sell equity to raise money that doesn't need to be repaid on a predetermined timeline.
Therefore, The money will be considered as Equity capital.
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Bramble Corp. uses flexible budgets. At normal capacity of 19000 units, budgeted manufacturing overhead is: $57000 variable and $270000 fixed. If Stone had actual overhead costs of $328800 for 21000 units produced, what is the difference between actual and budgeted costs
Answer:
$4,200 Favorable
Explanation:
Given the above information,
Variable overhead rate
= $57,000 / 19,000 units
= $3 per unit
Overhead variance = Real - Allocated
= $328,800 - ($3 × 21,000 + $270,000)
= $328,800 - $333,000
= $4,200 Favorable
Which of the following is most correct according to the CAPM: Group of answer choices A stock’s risk premium depends on its beta. Company specific risk is the most relevant risk. A stock’s risk premium depends on its firm-specific risk. There is a linear and positive relationship between a stock’s total risk and its required return.
Answer: A stock’s risk premium depends on its beta
Explanation:
The Capital Asset Pricing Model (CAPM) helps in knowing the relationship that exists between the systematic risk and return whihc an individual or a firm expects for an assets, such as stocks.
It should be noted that the beta influences the return. Therefore, stock’s risk premium depends on its beta.
Skysong, Inc. reports the following liabilities (in thousands) on its December 31, 2020, balance sheet and notes to the financial statements. Accounts payable $4,392.0 Mortgage payable $6,845.0 Unearned rent revenue 1,650.0 Notes payable (due in 2023) 351.0 Bonds payable 2,003.0 Salaries and wages payable 651.0 Current portion of mortgage payable 2,228.0 Notes payable (due in 2021) 2,584.0 Prepare the liabilities section of Skysong’s balance sheet as at December 31, 2020.
Answer:
Skysong, Inc.
Liabilities section
Current liabilities:
Accounts payable $4,392Salaries and wages payable $651Unearned rent revenue $1,650Mortgage payable $2,228Notes payable $2,584Total current liabilities $11,505Long term liabilities:
Mortgage payable $4,617 Notes payable (due in 2023) $351Bonds payable $2,003Total long term liabilities $6,971Total liabilities: $18,476
Spruce Ceramics produces large planters to be used in urban landscaping projects. A special earth clay is used to make the planters. The standard quantity of clay used for each planter is 24 pounds. The company uses a standard cost of $2.20 per pound of clay. Spruce produced 3,000 planters in May. In that month, 75,000 pounds of clay were purchased and used at the total cost of $162,000 Read the requirementsLOADING.... Requirement 1. Calculate the direct material price variance. Begin by determining the formula for the price variance, then compute the price variance for the direct materials. (Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials)
Answer:
1. $3,000 Favorable
2. $6,600 Unfavorable.
Explanation:
This is an incomplete question. However, the completed part is question number 2, which has been solved below.
1. Direct material price variance
= (Actual price - Standard price) Actual quantity
= ($2.16 - $2.20) × 75,000
= -$0.04 × 75,000
= $3,000 Favorable
Note: Actual price is gotten by; $162,000 / 75,000
= $2.16
2. Direct material quantity variance
= (Actual quantity - Standard quantity) × Standard price
= (75,000 - $72,000) × $2.20
= 3,000 × $2.20
= $6,600 Unfavorable
Note: Standard quantity is gotten by;
24 × 3,000
= 72,000
Statement of retained earnings. Use the data from the following financial statements in the popup window,
LOADING...
Partial Income Statement Year Ending 2014
Sales revenue
$350,200
Cost of goods sold
$141,800
Fixed costs
$42,900
Selling, general, and administrative expenses
$28,000
Depreciation
$46,200
Partial Balance Sheet 12/31/2013
ASSETS
LIABILITIES
Cash
$16,000
Notes payable
$14,000
Accounts receivable
$27,800
Accounts payable
$19,100
Inventories
$48,000
Long-term debt
$189,900
Fixed assets
$368,000
OWNERS' EQUITY
Accumulated depreciation (-)
$140,200
Retained earnings
Intangible assets
$82,000
Common stock
$131,900
Partial Balance Sheet 12/31/2014
ASSETS
LIABILITIES
Cash
$26,200
Notes payable
$11,900
Accounts receivable
$18,800
Accounts payable
$24,100
Inventories
$53,200
Long-term debt
$161,800
Fixed assets
$447,800
OWNERS' EQUITY
Accumulated depreciation (-)
Retained earnings
Intangible assets
$82,200
Common stock
$181,900
. The company paid interest expense of
$ 18 comma 700$18,700
for 2014 and had an overall tax rate of
40 %40%
for 2014. Complete the statement of retained earnings for2014, and determine the dividends paid last year.
The distributed earnings is
$nothing.
(Round to the nearest dollar.)
Complete the statement of retained earnings: (Round to the nearest dollar.)
Statement of Retained Earnings
Year Ending December 31, 2014
Beginning balance
$
Add net income
$
Subtract dividends
$
Ending balance
$
Some 150 million customers a month visit Amazon and the company passes through $160 billion in sales via its global supply channels and partnerships making interorganizational relationships very important to the company. Which interacting organization has a low coordination, low integration, transactional focus
Answer with Explanation:
Amazon is fastest growing company in the world which has crossed 2 billion customer visits. It has also increased the worth of the company to $1.14 trillions. The supply chain management is where the strengths of the company lies and nobody can match the pricing strategy, quality management and other significant factors that are included in the supply chain management to ensure that the customer is having what they are paying for.
Supply chain management process includes the key partners which includes their suppliers, partners, clients and customers as well who play important roles in the supply chain process by coordinating, integrating systems with each other and are involved in the transaction-al process.
The customers are the one who interact fewer than partners, suppliers, clients, etc because all they do is order a particular product. This is the first interaction of the customer with Amazon and the last interaction is when the customer received the order. So this means they are less interacting party in this process.
Suppliers are continuously contacted and informed about the pricing, supply chain issues, etc so that the company is able to deliver its customers what they are desiring. Supply chain partners also in the process of interacting with Amazon as they have to move products from supplier to the customer. These partners are highly interacted, possess integrating systems and of transaction-al importance to the company.
As flextime, consulting, telecommuting, and downsizing make it more difficult for
people to donate blood at the workplace, Canadian Blood Services has launched a
CRM marketing campaign in Toronto to boost awareness and repeat donations.
Early in the campaign, it went to its listings of previous donors and pulled out
those with birthdays in February, March, and April. These donors were sent a
birthday card with the greeting, "On the anniversary of your life, would you
consider saving another's life?"
Refer to the scenario.
What technique did the organization use to analyze its donor information?
Answer:
The technique which the organization used in analyzing its donor is called Customer segmentation
Explanation:
Customer segmentation is the process of breaking large groups of customers into smaller, more homogeneous groups. This division are done specifically probably for marketing using attribute such as age, gender, interests and spending habits.
In the case of the CRM marketing campaign in Toronto, they inability to analyze all the data they had poses a challenge hence they reason why they segmented their customers according to their birthday. And customers are reached out according to those whose birthday falls nearby.
7. Ms. House utilizes a strategy of "Check 1 – 2- 3". Why does she do this? How do you think this was initially taught?
Explanation:
To get her student's attention. Remember, the check 1 2 3 strategy allows teachers to get an inside into the students understanding.
However, in this scenario, Ms. House uses the strategy to lower her student's voices, so as to get their attention. She likely started using this strategy at the start of the school year and kept doing it.
the price of envelopes was $3 a box, and Julie was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Julie is now willing to buy 8 boxes. Is Julie's demand for envelopes elastic or inelastic? What is Julie's elasticity of demand?
Answer:
Her elasticity of demand is the absolute value of -0.8, or 0.8. Julie's elasticity of demand is inelastic, since it is less than 1.
Explanation:
% Change in Quantity = (8 - 10)/(10) = -0.20 = -20%
% Change in Price = (3.75 - 3.00)/(3.00) = 0.25 = 25%
Elasticity = |(-20%)/(25%)| = |-0.8| = 0.8
7.. Getaway Travel Company reported net income for 2021 in the amount of $50,000. During 2021, Getaway declared and paid $2,000 in cash dividends on its nonconvertible preferred stock. Getaway also paid $10,000 cash dividends on its common stock. Getaway had 40,000 common shares outstanding from January 1 until 10,000 new shares were sold for cash on July 1, 2021. A 2-for-1 stock split was granted on July 5, 2021. What is the 2021 basic earnings per share
Answer:Earnings per share fOR 2021= 0.53
Explanation:
Earnings per share =Total earnings available to shareholders(Net income - preferred dividends )/Weighted Average Outstanding shares
Net income = $50,000
preferred dividend= $2,000
Total earnings available to common shareholders = $50,000 - $2000= $48,000
using a 2-1 stock spilt , outstanding shares= 40,000 x 2 + 10,000 x 6/12(jan- 1st july ) x 2 = 80,000 + 10,000 = $90,000
Earnings per share = $48,000/ $90,000 =0.53
Suppose taxi fares from Logan Airport to downtown Boston is known to be normally distributed and a sample of seven taxi fares produces a mean fare of $22.31 and a 95% confidence interval of [$20.5051, $24.2091]. Which of the following statements is a valid explanation of the confidence interval.
A) 95% of all taxi fares are between $20.51 and $24.21.
B) We are 95% confident that a randomly selected taxi fare will be between $20.51 and $24.21.
C) The mean amount of a taxi fare is $22.31, 95% of the time.
D) We are 95% confident that the average taxi fare between Logan Airport and downtown Boston will fall between $20.51 and $24.21.
Answer: D) We are 95% confident that the average taxi fare between Logan Airport and downtown Boston will fall between $20.51 and $24.21.
Explanation:
The Confidence interval allows one to speculate between which values the average of a population will be. In a 95% confidence interval, this means that we are 95% certain that the average value of a variable will be between the higher and lower limits set by the interval.
The 95% confidence interval here has an upper limit of $24.2091 and a lower limit of $20.5051 for taxi fares from Logan Airport to downtown Boston. This means that with a 95% certainty, the taxi charge from Logan Airport to downtown Boston will be between these 2 charges so you can expect to pay an amount between them.
Bland Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2003, and charged the $4,200 premium to Insurance expense. At its December 31, 2003, year-end, Bland Foods would record which of the following adjusting entries?A) Insurance expense 875 Prepaid insurance 875
B) Prepaid insurance 875 Insurance expense 875
C) Insurance expense 875
Prepaid insurance 3,325
Insurance payable 4,200
D) Prepaid insurance 3,325
Insurance expense 3,325
Answer:
D) Prepaid insurance 3,325
Insurance expense 3,325
Explanation:
insurance cost per month = $4,200 / 24 months = $175 per month
August, September, October, November and December = 5 months = $875
$4,200 - $875 = $3,325
The correct journal entries should have been:
August 1, 2003, purchased 2 year insurance policy
Dr Prepaid insurance 4,200
Cr Cash 4,200
December 31, 2003, accrued insurance expense
Dr Insurance expense 875
Cr Prepaid insurance 875
But, since the purchase was incorrectly journalized as:
Dr Insurance expense 4,200
Cr Cash 4,200
the adjusting entry must be:
Dr Prepaid insurance 3,325
Cr insurance expense 3,325
You are considering an investment in software company. The beta of software companies is 1.5. The annual risk-free rate is 2% and the annual market premium is 8%. The expected annual profit from the software subscription is $100,000 and it is expected to grow at the rate of 6% per year. What is the maximum price you are willing to pay for the company? A. $1,370,925.78 B. $1,250,000.00 C. $1,123,221.12 D. $908,153.55
Answer:
Maximum price = $ 1,325,000
Explanation:
The maximum price to be paid for the company is the present value of the annual profit discounted at the rate of return on equity.
The return on equity can be calculated using the capital asset pricing model (CAPM)
Under CAPM,
E(r)= Rf + β(Rm-Rf)
E(r)- expected return, Rf-risk-free rate , β= Beta, Rm= Return on market.
Using this model, we can work out the value of beta as follows:
Ke= ?., Rf- 2%, Rm-Rf - 8%
Ke- 2% + 1.5× (8%)= 14 %
Price for the company can now be determined using the present value of the perpetuity formula with growth as follows:
The model is represented below:
P = A ×(1+g)/ ke- g
DATA
A- 100,000
g- 6%
ke- 14%
Price = 100,000× (1.06)/(0.14-0.06)= $ 1,325,000
Maximum price = $ 1,325,000
Assuming a bottom-up process of budget development, which of the following should be initially responsible for developing sales estimates?
a. The budget committee.
b. The accounting department.
c. The sales department.
d. Top management.
e. The marketing department.
Answer: The Sales Department
Explanation:
In budgeting, a bottom-up approach simply means that each head of department in the organization create a budget that'll be sent upwards for approval.
Assuming a bottom-up process of budget development, the sales department should be initially responsible for developing sales estimate.
A company incurs $4,050,000 of overhead each year in three departments: Ordering and Receiving, Mixing, and Testing. The company prepares 2,000 purchase orders, works 50,000 mixing hours, and performs 1,500 tests per year in producing 200,000 drums of Goo and 600,000 drums of Slime. The following data are available: Department Expected use of Driver Cost Ordering and Receiving 2,000 $1,200,000 Mixing 50,000 1,500,000 Testing 1,500 1,350,000 Production information for Goo is as follows: Department Expected use of Driver Ordering and Receiving 400 Mixing 20,000 Testing 500 Compute the amount of overhead assigned to Goo. $2,760,000.
Answer:
$1,290,000
Explanation:
Goo:
Ordering and Receiving = 400 / 2,000 = 20%
Mixing = 20,000 / 50,000 = 40%
Testing = 500 / 1,500 = 33.33%
allocated overhead costs:
Ordering and Receiving = 20% x $1,200,000 = $240,000
Mixing = 40% x $1,500,000 = $600,000
Testing = 33.33% x $1,350,000 = $450,000
total allocated overhead costs = $1,290,000
LLP Company had the following stockholders’ equity as ofJanuary 1, 2017.
Common stock, $1 par value, 120,000 shares issued$120,000
Paid-in capital in excess of par—common stock833,000
Retained earnings408,000
Total stockholders’ equity$1,361,000
During 2017, the following transactions occurred.
Feb. 16LLP repurchased 5,000 shares of treasury stock at a price of $15 per share.
Mar. 8200 shares of treasury stock repurchased above were reissued at $16 per share.
Apr. 11800 shares of treasury stock repurchased above were reissued at $12 per share.
May. 82,000 shares of treasury stock repurchased above were reissued at $18 per share
Instructions:
a. Prepare the journal entries to record the treasury stock transactions in 2017, assuming Clemson uses the cost method.
b. Prepare the stockholders’ equity section as of April 30, 2017. Net income for the first 4 months of 2017 was $130,000.
Complete Question:
Clemenson LLP Company had the following stockholders’ equity as of January 1, 2017.
Common stock, $1 par value, 120,000 shares issued$120,000
Paid-in capital in excess of par—common stock 833,000
Retained earnings 408,000
Total stockholders’ equity$1,361,000
During 2017, the following transactions occurred.
Feb. 16: LLP repurchased 5,000 shares of treasury stock at a price of $15 per share.
Mar. 8: 2,000 shares of treasury stock repurchased above were reissued at $16 per share.
Apr. 11: 800 shares of treasury stock repurchased above were reissued at $12 per share.
May. 8: 2,000 shares of treasury stock repurchased above were reissued at $18 per share
Instructions:
a. Prepare the journal entries to record the treasury stock transactions in 2017, assuming Clemson uses the cost method.
b. Prepare the stockholders’ equity section as of April 30, 2017. Net income for the first 4 months of 2017 was $130,000.
Answer:
Clemson LLP Company
a. Journal Entries
Feb. 16:
Debit Treasury Stock account $75,000
Credit Cash Account $75,000
To record the repurchase of 5,000 shares of treasury stock at a price of $15 per share.
March 8:
Debit Cash Account $32,000
Credit Treasury Stock account $32,000
To record the resale of 2,000 shares of treasury stock at $16 per share.
April 11:
Debit Cash Account $9,600
Credit Treasury Stock account $9,600
To record the resale of 800 shares of treasury stock at $12 per share.
May 8:
Debit Cash Account $36,000
Credit Treasury Stock account $36,000
To record the resale of 2,000 shares of treasury stock at $18 per share.
b. Stockholders' Equity Section as of April 30, 2017:
Common stock, $1 par value, 120,000 shares issued $120,000
Treasury Stock, 200 shares 2,600
Paid-in capital in excess of par—common stock 833,000
Retained earnings 538,000
Total stockholders’ equity $1,493,600
Explanation:
a) Data and Calculations:
Stockholders’ equity as of January 1, 2017:
Common stock, $1 par value, 120,000 shares issued $120,000
Paid-in capital in excess of par—common stock 833,000
Retained earnings 408,000
Total stockholders’ equity $1,361,000
b) Retained Earnings:
Jan. 1, 2017 balance $408,000
Net Income $130,000
April 30, 2017 bal. $538,000
c) Since Clemenson accounts for the Treasury Stock transactions using the cost method, it means that all treasury transactions are recorded directly in the Treasury Stock account based on their cost and not the par value. This method of using the cost is one of the two methods for accounting for treasury stock transactions. The other method, which Clemenson can use is the par value method. Under this second method, Clemenson will record the above and below par value differences in the Paid-in Capital in excess of par account instead of the Treasury Stock account. While the treasury stock account is a contra account to the Common Stock account, in Clemenson's case, the Treasury Stock balance is not a debit but a credit balance.
Stephen Battista argues that public relations should help Under Armour convince customers that the company has a new kind of sports apparel. One way that public relations differs from other kinds of marketing communications is that it substitutes the term ________ for target market. Multiple Choice target audience consumer referent group public market segment
Answer:
The correct answer is the option: Public.
Explanation:
To begin with, the term of "Public Relations" refers to the instrument that the marketing managers have in order to establish better relationships with agents that are outside the company with the primary focus of increasing those relations that will eventually increase the company's public image. Moreover, one the variables that changes when the company decides to use this type of strategy is the fact that the target audience or market changes to be the public in general and that is why that the company forgets about their customers and focus on the public as a whole.
The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $15.90 for each of the 25 million shares sold. The initial offering price was $17.50 per share, and the stock rose to $19.40 per share in the first few minutes of trading. Raven paid $860,000 in direct legal and other costs and $330,000 in indirect costs.What was the flotation cost as a percentage of funds raised?
Answer:
22.38%
Explanation:
Raven corporation has just gone public
They received $15.90 for each 25 million shares that was sold
The first step is to calculate the net amount raised
Net amount that was raised= 15.90×25,000,000 = 397,500,000
397,500,000-860,000-330,000
= 396,310,000
Underwriter spread= 17.50-15.90
= 1.6 per shares
Total underwriter spread= per share spread× number of shares that were offered
= 1.6×25,000,000
= 40,000,000
Total direct costs= 40,000,000+860,000
=40,860,000
Indirect flotation cost= indirect cost+price appreciation
= 330,000+(19.40-17.50)×25,000,000
= 330,000+1.9×25,000,000
=330,000+47,500,000
= 47,830,000
Total flotation cost= 47,830,000+40,860,000
= 88,690,000
Therefore, the flotation cost as a percentage of funds raised can be calculated as follows
= 88,690,000/396,310,000 × 100
= 0.2238×100
= 22.38%
Hence the flotation costs as a percentage of funds raised is 22.38%
Gilley Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,000,000 of 10% convertible bonds outstanding during 2015. The preferred stock is convertible into 40,000 shares of common stock. During 2015, Gilley paid dividends of $.90 per share on the common stock and $3.00 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2015 was $600,000 and the income tax rate was 30%.
Diluted earnings per share for 2015 is:_____________ (rounded to the nearest penny)
Answer:
Gilley Co.
Diluted earnings per share for 2015 is:_____________ $1.68
Explanation:
a) Data and Calculations:
Number of common stock shares = 200,000
Number of convertible preferred = 40,000
Number of convertible bonds = 45,000 ($1,000,000/$1,000 x 45)
Total shares = 285,000
Earnings = $600,000
Income tax (180,000)
Net Income $420,000
Plus preferred dividend = $60,000
Adjusted net income = $480,000
EPS = $480,000/285,000
= $1.68
b) After deducting income tax expense to arrive at the income after tax, then add the dividends of preferred stockholders before arriving at the adjusted net income for computing the earnings per share.
Consider a firm with a 2007 net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover?
Answer:
Inventory turnover days = 29.2 days
Explanation:
Inventory turnover is the average length of time it takes the item of stock to be sold and replaced. It can be measured in days or the number of times.
it can be calculated in days or in number of times
Inventory turnover number of times = cost of goods sold/average inventory
Inventory turnover days = (Average inventory /cost of good sold)× 365 days
It shorter the Inventory turnover in days the better. We will use the days formula.
Note average inventory = (opening inventory + closing inventory)/2
However, the average inventory concept will not be applicable in this question because the opening inventory figure is not given. Hence, we will use the closing inventory figure to represent the average inventory
Inventory turnover days = 2,000,000/25,000,000× 365 days= 29.2
Inventory turnover days = 29.2 days
