Answer:
Use the equation for total return:
total stock return= (P1-P0)+D/P0
P0=Initial Stock Price
P1=Ending Stock Price (Period One)
D=Dividends
-3.15%---Percentage of total return
Dividend Yield-2.41%
Capital Gains-- -5.56%
People had been expecting the price level to be 140 but it turns out to be 138. Johnson Family Restaurants increases the number of workers it employs. What could explain this
Answer:
neither sticky wage theory nor sticky price theory
Explanation:
People had been expecting the price level to be 140 but it turns out to be 138. Johnson Family Restaurants increases the number of workers it employs. Sticky wage theory nor sticky price theory could explain this.
What makes wages and prices sticky?Sticky wages are a result of a number of factors, including the minimum wage, employee contracts, labor unions, the efficiency wage theory, and the expense of hiring and terminating employees. It is challenging to exit a recession when wages and prices are stuck, creating a vicious cycle.
A theoretical market condition known as "stickiness" occurs when a certain nominal price resists change. Stickiness, also known as price stickiness, is a term that is frequently used to describe market prices even though it frequently refers to wages.
Many economists think that prices are "sticky" and that they change gradually. According to them, this stickiness indicates that changes in the money supply have an effect on the real economy, causing changes in investment, employment, output, and consumption. Policymakers can take advantage of this effect.
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(A) What price should the company charge for the phones, and how many phones should be produced to maximize the weekly revenue? What is the maximum weekly revenue?
Answer:
2500 phones produced at $250 per phone
Max weekly revenue would be $625,000.
Explanation:
p = 500 - 0.1x
p is the price per unit
revenue = quantity * price/unit
R(x) = revenue = p(x)*x = 500x - 0.1x²
p(x) maximum when first derivative is set to 0
500 - 0.2x = 0 ==> x = 500/0.2 = 2500 quantities
price/unit : p = 500 - 0.1*2500 = 500 - 250 = 250
revenue :
r(2500) = 500*2500 - 0.1*2500²
r(2500) = 2500(500 - 250) = 625000
The company should produce 2500 phones each week at a price of $250
The maximum weekly revenue is $625000
The right of a defaulted taxpayer to recover his or her property before its sale for unpaid taxes is the: Group of answer choices statutory right of r
Answer:
equitable right of redemption
Explanation:
the right of redemption gives those people who can be referred to as defaulted taxpayers the right to recover their properties before it is sold off due to unpaid taxes.
This person is able to take back the property following a legal process which can be called Foreclosure. The individual will have to pay the balance of what is owed and also pay for all those costs that occured during the process of disclosure. This right has a time frame for it to be exercised(redemption period).
Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.80 .190 Repete Co. 1.49 .163 a. Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the risk-free rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
a. 12.03%
b. 3.32%
Explanation:
The computation is shown below:
As we know that
Expected rate of return = Risk free rate of return + [Beta × Risk premium]
Let us assume Risk free rate of return be x and Risk premium be y
Now the equations are as follows
For Pete Corp
19 = x + 1.80y ...................... (1)
For Repete Corp
16.3 = x + 1.49y .....................(2)
Now Solving (1) and (2)
After solving we get
y = 8.70967741935
x = 3.3225806452
i.e Risk free rate = x = 3.32%
And, the Risk premium = 8.70967741935%
So,
Expected return on market = Risk free rate + Risk premium
= 3.3225806452 + 8.70967741935
= 12.03%
July 1 Purchased merchandise from Boden Company for $6,300 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1.
2 Sold merchandise to Creek Co. for $1,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost S567.
3 Paid $115 cash for freight charges on the purchase of July 1.
8 Sold merchandise that had cost $2, 100 for $2, 500 cash.
9 Purchased merchandise from Light Co. for $2, 700 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
11 Received a $700 credit memorandum from Light Co. for the return of part of the merchandise purchased on July 9.
12 Received the balance due from Creek Co. for the invoice dated July 2, net of the discount.
16 Paid the balance due to Boden Company within the discount period.
19 Sold merchandise that cost $1,000 to Art Co. for $1, 500 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
21 Issued a $250 credit memorandum to Art Co. for an allowance on goods sold on July 19.
24 Paid Leight Co. the balance due after deducting the discount.
30 Received the balance due from Art Co. for the invoice dated July 19, net of discount.
31 Sold merchandise that cost $5, 600 to Creek Co. for $7, 500 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.
Required:
Prepare journal entries to record the above merchandising transactions of Blink Company, which applies the perpetual inventory system.
Answer:
July 1 Purchased merchandise from Boden Company for $6,300 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July 1.
Dr Merchandise inventory 6,300
Cr Accounts payable 6,300
July 2 Sold merchandise to Creek Co. for $1,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost S567.
Dr Accounts receivable 1,000
Cr Sales revenue 1,000
Dr Cost of goods sold 567
Cr Merchandise inventory 567
July 3 Paid $115 cash for freight charges on the purchase of July 1.
Dr Merchandise inventory 115
Cr Cash 115
July 8 Sold merchandise that had cost $2, 100 for $2, 500 cash.
Dr Cash 2,500
Cr Sales revenue 2,500
Dr Cost of goods sold 2,100
Cr Merchandise inventory 2,100
July 9 Purchased merchandise from Light Co. for $2, 700 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
Dr Merchandise inventory 2,700
Cr Accounts payable 2,700
July 11 Received a $700 credit memorandum from Light Co. for the return of part of the merchandise purchased on July 9.
Dr Accounts payable 700
Cr Merchandise inventory 700
July 12 Received the balance due from Creek Co. for the invoice dated July 2, net of the discount.
Dr Cash 980
Dr Sales discounts 20
Cr Accounts receivable 1,000
July 16 Paid the balance due to Boden Company within the discount period.
Dr Accounts payable 6,300
Cr Cash 6,174
Cr Purchase discounts 126
July 19 Sold merchandise that cost $1,000 to Art Co. for $1, 500 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
Dr Accounts receivable 1,500
Cr Sales revenue 1,500
Dr Cost of goods sold 1,000
Cr Merchandise inventory 1,000
July 21 Issued a $250 credit memorandum to Art Co. for an allowance on goods sold on July 19.
Dr Sales returns and allowances 250
Cr Accounts receivable 250
July 24 Paid Leight Co. the balance due after deducting the discount.
Dr Accounts payable 2,000
Cr Cash 1,960
Cr Purchase discounts 40
July 30 Received the balance due from Art Co. for the invoice dated July 19, net of discount.
Dr Cash 1,225
Dr Sales discounts 25
Cr Accounts receivable 1,250
July 31 Sold merchandise that cost $5, 600 to Creek Co. for $7, 500 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.
Dr Accounts receivable 7,500
Cr Sales revenue 7,500
Dr Cost of goods sold 5,600
Cr Merchandise inventory 5,6000
On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows:January 1, 2021 $290,000 September 1, 2021 $408,000 December 31, 2021 $408,000 March 31, 2022 $408,000 September 30, 2022 $290,000 Kendall borrowed $786,000 on a construction loan at 12% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,680,000 in 9% bonds payable outstanding in 2021 and 2022.Interest capitalized for 2021 was:__________
Answer:
Interest capitalized for 2021 was $51,120.
Explanation:
To calculate this, we use the weighted-average method of calculating capitalized interest which is calculated as the multiplication of interest rate and the sum of the weight of each expenditure based on the number of months within a year. This can be stated mathematically as follows:
Therefore, the interest capitalized for 2021 can be calculated as follows:
Weighted expenditure from January 1, 2021 to December 31, 2021 = $290,000 * (12 months / 12 months) = $290,000.
Weighted expenditure from September 1, 2021 to December 31, 2021 =$408,000 * (4 months / 12 months) = $136,000.
Weighted expenditure from December 31, 2021 to December 31, 2021 = $408,000 * (0 months / 12 months) = $0.
Sum of weighted expenditure for for 2021 = $290,000 + $136,000 + $0 = $426,000
Interest capitalized for 2021 = Sum of weighted expenditure for for 2021 * Interest on construction loan = $426,000 * 12% = $51,120
Therefore, interest capitalized for 2021 was $51,120.
Kaskin, Inc., stock has a beta of 1.2 and Quinn, Inc., stock has a beta of 0.6. Which of the following statements is most accurate? The equilibrium expected rate of return is higher for Kaskin than for Quinn. The stock of Kaskin has more total risk than Quinn. The stock of Quinn has more systematic risk than that of Kaskin.
Answer:
The equilibrium expected rate of return is higher for Kaskin than for Quinn.
Explanation:
Option A “The equilibrium expected rate of return is higher for Kaskin than for Quinn” is more accurate because the expected return is calculated by multiplying the risk premium with beta value and then adding with risk-free return. However, if the beta value is high, then the magnitude after multiplying with the risk premium will be high. Moreover, is magnitude will be added to risk-free return to find the expected return. Thus, it can be seen that Kaskin has high beta 1.2 as compared to Quinn’s beta value 0.6. So, the Kaskin has a higher expected return.
On November 1, 2018, Taylor signed a one-year contract to provide handyman services on an as-needed basis to King Associates, with the contract to start immediately. King agreed to pay Taylor $5,400 for the one-year period. Taylor is confident that King will pay that amount, but payment is not scheduled to occur until 2019. Taylor should recognize revenue in 2018 in the amount of:_______.
a. $900
b. $2,700
c. $0
d. $5,400
Job applicants generally face two kinds of interviews: screening interviews and hiring interviews. You will be better prepared if you know what to expect". An interview:_________If you want to ensure that you pass a screening interview, ______What can you expect in a one-on-one interview? a. You will be asked specific questions if the person is from human resources b. You will be asked general questions if the person is from human resources c. You will be asked specific questions that are job related if the person is the hiring manager d. You will be asked general questions if the person is the hiring manager e. You will sit down with the company representative and talk about the job.
Answer:
Correct Answer:
c. You will be asked specific questions that are job related if the person is the hiring manager
Explanation:
In job interview, when the job applicant reaches the stage of screening interview, it was expected that he or she should give their best in-order to get the job.
During the one-on-one interview, the applicant would be asked specific questions that are related to job such as his previous work experience, his expected contributions to the job when hired etc. This would help the hiring manager to decide if the applicant is the best candidate fit for the job.
If a firm favors a push strategy, using direct selling to educate potential consumers about the features of its products, what kind of products would it most likely sell
Answer:
industrial products
Explanation:
A company that does this and mostly favors a push strategy is usually selling industrial products. That is because a push strategy focuses on taking the product to the potential customer and showing them how it works as well as how it can benefit them, therefore pushing the product on them. Industrial Products are great for such a strategy since they require actual demonstration and can easily show the potential customer the actual value that the product can provide.
It is not possible to create a per unit MCS if you are given total revenue and selling price. True False
Answer:
True
Explanation:
A per unit MCS cannot be created if you are given total revenue and selling price because per unit MCS is created by dividing the given total revenue by the total units of products ( for revenue per unit of product )
And also dividing the total cost by the total units of products ( for cost per unit of product ) hence the absence of the number of products will make it impossible to create a per unit MCS.
The whole cost of sales of welfare's and commodities is called total revenue while the trading price is the price the purchaser spends on acquiring the goods and commodities.
Yes, the given statement is true.
To generate per unit MCS total income and sale price cannot serve as determinants.MCS is estimated by dividing the total income by the generation of total assemblies.Also, MCS is determined by dividing total cost by the total assemblies of products so that the cost per unit can be determined.Therefore without the quantity of production MCS cannot be determined.
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Knight Inventory Systems, Inc., has announced a rights offer. The company has announced that it will take three rights to buy a new share in the offering at a subscription price of $53. At the close of business the day before the ex-rights day, the company’s stock sells for $80 per share. The next morning, you notice that the stock sells for $65 per share and the rights sell for $2 each.
Required:
a. Are the stock and the rights correctly priced on the ex-rights day?
b. Describe a transaction in which you could use these prices to create an immediate profit.
Answer:
a. Are the stock and the rights correctly priced on the ex-rights day?
stock price at ex-right = [(3 x $80) + $53] / 4 = $73.25
cost of ex-right = $80 - $73.25 = $6.75
the rights are underpriced since they are sold at $2, and they should sell at $6.75
b. Describe a transaction in which you could use these prices to create an immediate profit.
You can purchase 3 rights at $6 and then pay subscription price ($53) and you would have an stock at $59. Your profit = $65 - $59 = $6 per stock.
At what phase should security planning begin in a conceptual and proposed "from the start" international acquisition program?
Answer:
Material Solution Analysis
Explanation:
This is a phase in which potential solutions are accessed and analyzed for an Initial Capabilities Document (ICD) and to meet the criteria for the next program of the MDA.
This planning stage of MSA is necessary to choose the best available technology that would meet the needs of a client.
Therefore, the phase that security planning begins in a conceptual and proposed "from the start" international acquisition program is Material Solution Analysis.
g how much money should be deposited today in account that earns 5% compounded interest quarterly so that it will accumulate to 7600 in 9 years
Answer:
Present value of 7600 in 9 years at 5% compounded quarterly = 4,859.51
Explanation:
You will need to invest $4,859.51 at the beginning to reach the future value of $7,600.00 in 9 years at 5% compounded quarterly.
Using an online financial calculator:
FV (Future Value) = $7,600
PV (Present Value) = $4,859.51
N (Number of Periods) = 36 quarters (9 x 4)
I/Y (Interest Rate) = 1.250% (5%/4)
PMT (Periodic Payment) = $0.00
Starting Investment = $4,859.51
Total Principal = $4,859.51
Total Interest = $2,740.49
The compound interest rate is divided into the number of quarters, which is 4 and the number of periods will become 9 x 4 = 36. Then the present value of $7,600 is determined using the PV table or an online calculator, as above.
The Cutting Department at Blanc Company had beginning work in process inventory of 4,000 units, transferred out 9,000 units, and had 2,000 units in ending work in process inventory. The number of units started into production by the Cutting Department during the month is
Answer:
The number of units started into production is 7,000.
Explanation:
Number of units started into production = Units transferred out + units of ending work in process - units of beginning work in process
= 9,000 + 2,000 - 4,000
= 7,000
Which of the following is a difference between global consistency and local adaptation? a. Unlike global consistency, local adaptation simplifies decisions. b. Unlike global consistency, a company following a policy of local adaptation modifies its standard operating procedures to adapt to differences in foreign customers, governments, and regulatory agencies. c. Unlike global consistency, a company following a policy of local adaptation follows the same rules and regulations across all its offices in different countries. d. Unlike global consistency, local adaptation is typically preferred by overseas managers who are charged with making the local business successful in other countries.
Answer:
b. Unlike global consistency, a company following a policy of local adaptation modifies its standard operating procedures to adapt to differences in foreign customers, governments, and regulatory agencies.
Explanation:
When a company wants to operate in different locations globally they can adopt 2 methods of operation.
The global consistency approach aims to maintain a uniform operational procedure across all countries where a company does business.
Local adaptation is when the company modifies it's standard operating procedures to fit local preferences, government policy, regulations, and politics.
Local adaptation tends to be more complex be side each location has its way of operating so there is no uniformity across global locations.
MAD’s target capital structure is 60 percent debt and 40 percent equity. The yield to maturity on the company’s new debt will be 10 percent. MAD’s beta is 1.7, the risk free rate is 4% and the required market return is 12%. If the company’s tax rate is 30 percent, then which of the projects will be accepted?
Answer: D) Projects A and C
Explanation:
The projects to be taken should have a higher IRR than the company's Weighted Average Cost of Capital.
Cost of Equity
= Risk free rate + beta( market return - risk free rate)
= 4% + 1.7 (12% - 4%)
= 17.6%
After tax cost of debt
= Yield ( 1 - tax rate)
= 10% * ( 1 - 30%)
= 7%
WACC = (Weight of debt * after tax cost of debt) + (weight of equity * cost of equity)
= (0.6 * 7% ) + ( 0.4 * 17.6%)
= 4.2% + 7.04%
= 11.24%
Projects A and C both have IRR higher than the company's WACC and so should be accepted.
Omega's policy is to have 30% of the following month's sales in inventory. On January 1, inventory equaled 8,000 units. February production in units is:
Answer: d. 36,000
Explanation:
February Production Units = Sales + Closing Inventory - Opening inventory
Closing Inventory
= 30% of following month's sales
= 30% * March sales
= 30% * 50,000
= 15,000
Opening Inventory February = Closing inventory for January
= 30% * February sales
= 30% * 30,000
= 9,000
February Production Units = Sales + Closing Inventory - Opening inventory
= 30,000 + 15,000 - 9,000
= 36,000
Consider the relative liquidity of the following assets:
Assets
1. The funds in a money market account
2. A $5 bill
3. A share in a publicly traded company
4. Your house
Select the assets in order of their liquidity, from most liquid to least liquid.
Most Liquid
Second-Most Liquid
Third-Most Liquid
Least Liquid
Answer:
Liquidity of an asset refers to how easily convertible the asset is to cash or so called liquid money.
Most Liquid - A $5 bill
This is already cash so it is the most liquid there is.
Second-Most Liquid - The funds in a money market account
Funds in a money market account are the second most liquid because most often they can simply be withdrawn from the fund. There might be limits on the number of withdrawals allowed though within a period.
Third-Most Liquid - A share in a publicly traded company
A share in a publicly trade company ranks here because to realize the cash, one would need to sell the share first.
Least Liquid - Your house
Your house will be the most difficult of these to liquidate as it will involve a much longer process to eventually get it sold and realize cash. The process will include but will not be limited to, advertising, hiring realtors, inspection etc.
"DEF Corporation, after many profitable years, declares a one-time special cash dividend of $5.00 per share. After the announcement, the stock is trading at $50 per share. Your customer holds 1 DEF Jan 55 Call. As of the ex date, the customer will have:"
Answer: B. 1 DEF Jan 50 Call
Explanation:
The Options Clearing Corporation (OCC) acting under its mandate of being an issuer and guarantor for options and futures contracts can alter options prices but does not do so for prices based on normal dividends as they are more regular and their effects are already accounted for in the price of the call.
When a company calls a one-time special cash dividend, this is new to the market which would not have incorporated it into the price of the call. The OCC will then adjust the price to account for this.
In this case it will do so by subtracting the dividend from the call;
= 55 - 5
= $50
The customer will then have 1 DEF Jan 50 Call .
Investing activities on the statement of cash flows generate cash inflows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the company’s owners such as selling or repurchasing shares of common stocks and paying dividends.
A. True
B. False
Answer: False
Explanation:
The cash flow from investing activities is a cash flow section that shows cash generated or the cash that is spent which relates to activities involving investment and this include buying physical assets, the investments in securities, or sale of assets or securities.
Therefore, the above analysis I the question is wrong.
Drake Manufacturing makes a variety of products, including lawn mowers. 's Lawn Mower Division can use a component, K32, manufactured by 's Electrical Division. The market price for K32 is per unit. The variable cost per unit for K32 in the Electrical Division is $11, while the absorption cost per unit is $12. The divisions at use a negotiated price strategy to set transfer prices between divisions. The Electrical Division has excess capacity. What is the lowest acceptable transfer price to the Electrical Division? What is the highest acceptable transfer price that the Lawn Mower Division would pay?
1. ______the lowest acceptable transfer price to the Electrical Division.
a. $14, the difference between the variable cost and market price.
b. $11, the variable cost.
c. $12, the absorption cost.
d. $25, the market price.
2. ______is the highest acceptable transfer price that the Lawn Mower Division would pay.
a. $14, the difference between the variable cost and market price.b. $11, the variable cost. c. $12, the absorption cost.d. $25, the market price.
Answer:
b. $11, the variable cost.d. $25, the market price.Explanation:
1. The Electrical Division has excess capacity so supplying the Lawn Mower Division can be done and they will still be able to sell to outside customers. They should therefore only charge the variable cost to make component K32 which is $11 as they are in the same company.
2. The highest acceptable transfer price that the Lawn Mower division would pay is the market price of $25. At a price higher than this, it would make no sense to source the component from the Electrical division because the Lawn Mower division could simply source it from the market and save on costs.
the frequency of deposits of federal income taxes withheld and social security and medicare taxes is
Answer: A) amount of the tax liability.
Explanation:
Federal taxes like income taxes withheld and social security and Medicare taxes are mandated to be paid by the IRS depending on the amount of tax liability that is owed.
For 2020 for instance, if in a company's tax lookback period it owed $50,000 or less than $50,000 in tax liability, the company should be a monthly depositor. If however, the company owed more than $50,000 then it is to be a semi-weekly depositor.
Answer:
✓ amount of the tax liability.
Explanation:
The frequency of deposits of federal income taxes withheld and social security and Medicare taxes is most dependent on the:
Farmers and ranchers are considered to be part of the ________ which is the subdivision of the food industry that produces agricultural commodities.
Answer: producers sector
Explanation:
Farmers, rancher, and so on are part of the producers sector of the food industry where they engage in the production of raw food, fiber, and other agricultural products or commodities. In the case of farmers, they work the land and/or keep livestock, especially on the farm. Ranchers operate large plots of land for raising cattle, sheep or other livestock.
other major sectors of the food industry would include: -Farm Service , Processors , and Marketers.
Product differentiation and advertising are profitable ventures only when:
the market is monopolistic
both revenues and costs increase
they do not affect entry barriers
the gain in total revenue outweighs the extra cost
the market is oligopolistic
Answer:
Product differentiation and advertising are profitable ventures only when:
the gain in total revenue outweighs the extra cost
Explanation:
When Company XYZ differentiates its product from competitors' through trademarks and other differentiating factors and embarks on advertising, it must watch out for cost overrun. The undertaking for the product differentiation and advertising should be able to generate more revenue than the costs. This will make Company XYZ determine that its differentiation and advertising make economic meaning by producing positive NPV.
Product differentiation as well as advertising can be considered as profitable ventures in a case whereby D: the gain in total revenue outweighs the extra cost.
Product differentiation can be regarded as activity that us been carried out by producer so that his product/service stand out to target audience. Advitisement on the other hand helps in promoting the goods/services .However, they a profitable ventures when the extra cost in production is less than the gain.Therefore, option D is correct.
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Which of the following is TRUE regarding a dead weight loss.
a) It refers to the loss producers incur when operating with excess capacity.
b) It is only a feature of perfectly competitive markets.
c) It only occurs when a product sells at below equilibrium price.
d) It never arises in markets where producers have market power.
Answer:
I'm pretty sure the answer is A
Assuming that the firm is maximizing profits, the marginal cost of the last unit produced equals:________
Price Quantity Total cost
10 10 80
9 20 100
8 30 130
7 40 170
6 50 230
5 60 300
4 70 380
a. $4
b. $40
c. $5
d. $50
e. $6
Answer: b. $40
Explanation:
A firm maximises its profits where Marginal Revenue equals marginal cost.
Marginal revenue is the additional revenue gained by selling one more unit of production.
At 40 units, the marginal revenue is equal to;
= Total revenue at 40 units - total revenue at 30 units
= ( 7 * 40) - ( 8 * 30)
= 280 - 240
= $40
At 40 units the marginal cost is;
= total cost at 40 units - total cost at 30 units
= 170 - 130
= $40
MR=MC which is $40.
TB MC Qu. 8-187 The Charade Corporation is preparing its ... The Charade Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $5 per direct labor-hour; the budgeted fixed manufacturing overhead is $95,000 per month, of which $17,000 is factory depreciation. If the budgeted direct labor time for November is 9,000 hours, then the total budgeted manufacturing overhead for November is:
Answer:
Allocated MOH= 140,000
Explanation:
Giving the following information:
The budgeted variable manufacturing overhead is $5 per direct labor-hour
The budgeted fixed manufacturing overhead is $95,000 per mont
The budgeted direct labor time for November is 9,000 hours
To allocate overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= (5*9,000) + 95,000
Allocated MOH= 140,000
Valley Company’s adjusted trial balance on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expense—selling space, store supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative.
Debit Credit
Merchandise inventory (ending) $43,500
Other (noninventory) assets 174,000
Total liabilities $50,243
Common stock 58,556
Retained earnings 83,482
Dividends 8,000
Sales 297,540
Sales discounts 4,552
Sales returns and allowances 19,638
Cost of goods sold 114,570
Sales salaries expense 40,763
Rent expense—Selling space 13,984
Store supplies expense 3,570
Advertising expense 25,291
Office salaries expense 37,193
Rent expense—Office space 3,570
Office supplies expense 1,190
Totals $ 489,821 $489,821
Beginning merchandise inventory was $35,105. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.
Invoice cost of merchandise purchases $127,890
Purchases discounts received 2,686
Purchases returns and allowances 6,139
Costs of transportation-in 3,900
Required:
1. Compute the company’s net sales for the year.
2. Compute the company’s total cost of merchandise purchased for the year.
3. Prepare a multiple-step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses.
4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.
Answer:
1. Net sales = $273,350
2. Total cost of merchandise purchased = $122,965
3. Gross profit = $158,780; and Net Income = $33,219
4. Net Income = $33,219
Explanation:
Note: The data in the question are merged. They are therefore sorted before answering the question. See the attached pdf file for the sorted question.
The explantion to the answers are now provided as follows:
1. Compute the company’s net sales for the year.
Note: See the attached excel file for the net sales computation.
2. Compute the company’s total cost of merchandise purchased for the year.
Note: See the attached excel file for total cost of merchandise purchased computation.
3. Prepare a multiple-step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses.
Note: See the attached excel file the multiple-step income statement.
A multi-step income statement is a detailed income statement that presents net sales, cost of goods sold, gross profit, expenses and overall net profit or loss of a company for a particular accounting period.
4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.
Note: See the attached excel file the single-step income statement.
A single step income statement is a less detailed income statement that only present all expenses including cost of goods sold in one column without breaking down expenses into categories of net sales, cost of goods sold, gross profit, expenses and overall net profit or loss of a company for a particular accounting period.
Which of the following is true regarding the trial balance? Select all that apply. The trial balance includes all of the accounts needed to create the balance sheet and the income statement.
Complete Question:
Which of the following is true regarding the trial balance? Select all that apply.
a) The trial balance includes all of the accounts needed to create the balance sheet and the income statement.
b) The trial balance is much less detailed than the balance sheet and income statement.
c) The accounting principle of materiality says that the information on the trial balance can be combined and simplified into more general reporting items.
d) The accounting principle of money measurement says that the information on the trial balance can be combined and simplified into more general reporting items.
e) The trial balance shows only nominal accounts.
Answer:
a) The trial balance includes all of the accounts needed to create the balance sheet and the income statement.
Explanation:
Company XYZ's trial balance summarizes all the general ledger account balances with the assets and expenses on the debit side and the liabilities, equity, and income on the credit side. It is extracted from the general ledger for all accounts that do not have equal debit and credit sides. It is one of the ways to ensure that proper double entry system of bookkeeping has been followed. That the two sides are in balance does not mean that the trial balance or the general ledger from which it is prepared is error-free. It simply means that the two sides agree in total. XYZ can prepare the trial balance at any time, not necessarily at the end of the period.
