Using these data from the comparative balance sheet of Sunta Fe Spice Company, perform horizontal analysis. (Round percentages to 0 decimal place, e.g. 17%.)
Increase or (Decrease)
December 31, 2017 December 31, 2016 Increase or (Decrease) Amount Percentage
Accounts receivable $ 375,000 $ 300,000 $ __________ ___________ %
Inventory 780,000 600,000 ____________ ___________ %
Total assets 3,220,000 2,800,000 __________ __________ %

Answers

Answer 1

Answer:

75000,25%;

18000, 30%.

420000, 15%.

Explanation:

From the question above we are given the following parameters Accounts receivable for year 2017 = $ 375,000,

Inventory for the year 2017 = 780,000 and the Total assets for the year 2017 = 3,220,000.

Accounts receivable for year 2016 = $ 300,000, inventory for the year 2016 = 600,000 and the Total assets for the year 2016 = 2,800,000.

Therefore, we have the following simple arithmetic(which is subtraction between the variables in the two years) to determine the solution to the question:

(375,000 - 300,000) = 75,000 = 25%(increase).

(780,000 - 600,000) = 180,000 = 30%(Increase).

(3,220,000 - 2,800,00) = 420,000 = 15%(increase).

Answer 2

Answer:

25%30%15%

Explanation:

Accounts receivables

December 31 2017 = $375000

December 31 2016 = $300000

difference = $75000 ( 25%)  { increase}

Inventory

December 31 2017 = 780000

December 31 2016 = 600000

difference = 180000 ( 30% ) { increase}

Total assets

December 31 2017 = 3220000

December 31 2016 = 2800000

difference = 420000 ( 15% ) { increase }


Related Questions

Marle Construction enters into a contract with a customer to build a warehouse for $950,000 on March 30, 2018 with a performance bonus of $50,000 if the building is completed by July 31, 2018. The bonus is reduced by $10,000 each week that completion is delayed. Marle commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability July 31, 2018 65% August 7, 2018 5% August 14, 2018 5% August 21, 2018 The transaction price for this transaction, based on the expected value approach, is:_______.
a. $950,000
b. $995,000
c. $685,000
d. $652,500

Answers

Answer:

b. $995,000

Explanation:

The computation of the transaction price based on the expected value approach is shown below:

The formula is

= (Building cost of warehouse + bonus) × probability percentage

Date                                 Calculation                              Amount

July 31, 2018         ($950,000+$50,000) × 0.65    $650,000

August 7, 2018 ($950,000+$40,000) × 0.25           $247,500

August 14, 2018 ($950,000+$30,000) × 0.05          $49,000

August 21, 2018 ($950,000+$20,000) × 0.05   $48,500

Total                                                                    $995,000  

Since the bonus is reduced $10,000 each week so $10,000 is deducted for every delayed week

A law firm received $1600 cash for legal services to be rendered in the future. The full amount was credited to the liability account Unearned Service Revenue. If the legal services have been rendered at the end of the accounting period and no adjusting entry is made, this would cause:

Answers

Answer and Explanation:

In the first situation, the journal entry is

Cash Dr $1,600

      To Unearned revenue $1,600

(Being the unearned revenue is recorded)

For this we debited the cash as it increased the assets and credited the unearned revenue as it also increased the liabilities

The adjusting entry is

Unearned Service Revenue XXXXX

          To Service Revenue XXXXX

(Being the adjusting entry is recorded)

If this entry is not recorded than it would leads to understated of revenue and overstated of liabilities

The common stock of Leaning Tower of Pita Inc., a restaurant chain, will generate payoffs to investors next year, which depend on the state of the economy, as follows: Dividend Stock Price Boom $ 10 $ 200 Normal economy 6 90 Recession 0 0 The company goes out of business if a recession hits. Assume for simplicity that the three possible states of the economy are equally likely. The stock is selling today for $80.
a. Calculate the rate of return to Leaning Tower of Pita shareholders for each economic state. (Negative amounts should be indicated by a minus sign. Enter your answers as a percent rounded to 2 decimal places.) Rate of return Boom Normal economy Recession a-2.
b. Calculate the expected rate of return and standard deviation of return to Leaning Tower of Pita shareholders. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected return Standard deviation

Answers

Answer:

a) Boom = 162.50%

Normal =20.00%

Recession = - 100.00%

b) Expected return = 27.50%

Standard deviation = 107.30%

Explanation:

a) To find the rate of return for each economy state, let's use:

Rate of return = (Dividend +Stock price next year-stock price today)/stock price today

i) For Boom:

[tex] \frac{10 + 200 - 80}{80} = 1.625 [/tex] = 162.50%

ii) Normal:

[tex]\frac{6 + 90- 80}{80} = 0.2 [/tex] = 20.00%

iii) Recession :

[tex]\frac{0 + 0 - 80}{80} = - 1 [/tex] = -100%

b) To calculate the expected rate of return, let's use:

Expected return = Sum of expected return in different scenario / number of economy states

[tex] = \frac{162.5 + 20 - 100}{3} = 27.50[/tex]

Standard deviation:

To find the standard deviation, let's use:

Standard deviation = √[(sum of square of expected return in each scenario -average return)/n]

[tex] = \sqrt{\frac{(162.50-27.50)^2+(20-27.50)^2+(-100-27.50)^2}{3}} [/tex]

[tex] = \sqrt{\frac{(135)^2 + (-7.50)^2 + (-127.50)^2}{3}} [/tex]

[tex] = \sqrt{\frac{18225+56.25+16256.25}{3} [/tex]

= 107.30%

Standard deviation = 107.30%

(1) Reporting of Capital Assets. Are capital assets reported as a line-item in the government-wide statement of net position? Are nondepreciable capital assets reported on a separate line from depreciable capital assets, or are they separately reported in the notes to the financial statements? Do the notes include capital asset disclosures, such as those for the City and County of Denver shown in Illustration 5–2? Does the disclosure show beginning balances, increases and decreases, and ending balances for each major class of capital assets, as well as the same information for accumulated depreciation for each major class? Are these disclosures presented separately for the capital assets of governmental activities, business-type activities, and discretely presented component units? Do the notes specify capitalization thresholds for all capital assets, including infrastructure? Do the notes show the amounts of depreciation expense assigned to each major function or program for governmental activities at the government-wide level? Are the depreciation policies and estimated lives of major classes of depreciable assets disclosed? Do the notes include the entity’s policies regarding capitalization of collections of works of art and historical treasures? If collections are capitalized, are they depreciated?

Answers

Answer:

Principal resources are reported as a line-item within the management wide declaration of net situation. Non-depreciable principal resources are individually reported within the proceedings to the money declarations. The revealing expressions starting equilibriums, will increase and reduces, and finish stabilities for every main category of principal assets, yet because the same info for accrued devaluation for every key category. These revelations are given individually for the wealth assets of administrative actions, occupational sort actions, and unnoticeably given part units. The summaries stipulate capitalization inceptions for all principal assets, together with arrangement. The summaries display the quantities of devaluation expenditure assigned to every major operate or package for administrative actions at the government-wide flat. The decline strategies and calculable lives of main categories of depreciable resources are released. Summaries do reveal the strategies relating to capitalization of assortment of skills and historic materials if some. These collectibles aren't criticized however market price of those art effort is measured to reason gain/ injury at the year finish. Accounting strategies for possessions no inheritable underneath capita tenancy are obviously mere

Equipment with a book value of $78,000 and an original cost of $168,000 was sold at a loss of $31,000. Paid $106,000 cash for a new truck. Sold land costing $315,000 for $420,000 cash, yielding a gain of $105,000. Long-term investments in stock were sold for $90,000 cash, yielding a gain of $15,500. Use the above information to determine this company's cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)

Answers

Answer:

$451,000

Explanation:

The computation of cash flows from investing activities is shown below:-

Sale of equipment                                         $47,000

($78,000 - $31,000)

Purchase of new truck                                  ($106,000)

Sale of land                                                     $420,000

Sale of Long-term investments                      $90,000

Net cash provided by investing activities   $451,000

Therefore to reach the cash flows from investing activities we simply added the sale of equipment, sale of land, sale of long term investments and deduct the purchase of new truck.

CSUSM is a zero growth company. It currently has zero debt and its earnings before interest and taxes (EBIT) are $85,000. CSUSM 's current cost of equity is 11%, and its tax rate is 21%. The firm has 15,000 shares of common stock outstanding. Assume that CSUSM is considering changing from its original capital structure to a new capital structure with 39% debt and 61% equity. This results in a weighted average cost of capital equal to 8.7% and a new value of operations of $576,345. Assume CSUSM raises $165,000 in new debt and purchases T-bills to hold until it makes the stock repurchase. What is the stock price per share immediately after issuing the debt but prior to the repurchase?

Answers

Answer:

Check the explanation

Explanation:

Calculation of CSUSM 's New value of Operation :

For the purpose of Calculation of New Value of Operation we need to first calculate new WACC

Given :

Debt value ( Wd) = 30% or 0.30

Equity Value ( We)= 70% or 0.70

Cost of Debt ( Kd) =8%

New cost of equity (Ke) =12%

WACC =Kd(1-T) * Wd + Ke* We

WACC =[8%(1-0.40) * 0.30] + [12% * 0.70]

= [4.80% * 0.30 ] + [8.4 %]

= 1.44% + 8.4%

= 9.84 %

Given EBIT = $ 80,000

Tax rate = 40%

Currently the company has no growth. Therefore growth rate is 0 %

Value of New Operation =FCF / WACC

=EBIT (1-T) / WACC

=$80,000 (1-0.40)/ 9.84%

= $ 487,804.88

We learned in class that Starbucks uses its baristas as front line “brand ambassadors”. This is an example of ________________?

A.
top management not doing their jobs

B.
Inverted Organization Structure

C.
Management by Objectives MBO

D.
Giving uneducated employees too much responsibility

Answers

Answer:

Inverted Organization Structure

Explanation:

An Inverted Organization Structure is a structure where the employees are given more autonomy. Employees are given more prominent and important roles in the business.

I hope my answer helps you

Option B is correct because it is an example of inverted organization structure.

An Inverted Organization Structure is a organizational structure where employees are given more autonomy in their operation, that is, they are given more prominent and important roles in the company.

This type of structure is beneficial because the top hierarchy have lesser work and employee get more experience because of decision-makings.

In conclusion, the Option B is correct because it is an example of inverted organization structure

Read more about inverted organization structure

brainly.com/question/23840012

Prior to September 30, a company has never had any treasury stock transactions. A company repurchased 1,000 shares of its $2 par common stock on September 30 for $20 per share. On October 2, it reissued 400 of these shares at $21 per share. On October 12, it reissued the remaining 600 shares at $19 per share. The journal entry to record the reissuance of the shares on October 2 would be:

Answers

Answer: Please refer to Explanation

Explanation:

The following will be the journal entry on October 2nd

October 2

DR Cash $8,400

CR Treasury Stock $8,000

CR Additional Paid-in Capital $400

(To record reissuance of Treasury Stock)

Workings

Cash = 400 * 21

= $8,400

Treasury Stock = 400 * 20 (purchase price)

= $8,000

Additional Paid-in Capital = (21 - 20) * 400

= $400

Tom, Dan and Phil work indifferent teams at Springfield Automotive. Tom's team ensures that all the raw materials, machinery, tools and other production equipment are available for the employees around the clock. Any procurement needs have to be addressed to Tom, who also takes part in high-level decisions regarding the number of units to produced, exported and so on. Dan works as part of a team of eight members who concentrate the day-to-day productions; they also ensure that the quality checks are done and inspect each other's work. Phil is the operations manager, who works for 5 hours in the production department and then spends the rest of his time assisting management as an internal consultant on manufacturing issues. His input is crucial in improving the production process. Dan's contribution is toward the __________.

Answers

Answer: Work team

Explanation: Dan's contribution is towards the work team whereas Phil works in the parallel team while Tom is part of the management team. a work team which Dan is a member of is defined as a group of workers or employees with different set of skills that work together on a given task such as the day-to-day productions in a business, quality control and inspection, etc. Work teams are most efficient or useful where there is a frequent change in job content and employees with limited skills and a specific set of duties are unable to cope (work teams thus provide expert advice that will increase the ability of employees to participate in planning, problem-solving, and decision-making that are needed to complete a set of work and to better serve customers).

You are given the following information about 2 accounts: Account 1 Time Account Value before transactions Deposit Withdrawal 0 100 0.25 110 X 0.75 120 3X 1 82 Account 2 Time Account Value before transactions Deposit Withdrawal 0 100 0.5 120 2X 1 140 You are also told that the dollar weighted return over the year on account 1 is i. If the time weighted return over the year on account 2 is also i, what are X and i

Answers

Answer:

Check the explanation

Explanation:

For account 1:

Dollar weighted investment = 100 for entire year + X for three fourth of the year - 3X for one fourth of the year = 100 + 3X/4 - 3X/4 = 100

Dollar return = Closing balance - opening balance - (Total deposit - total withdrawal) = 82 - 100 - (X - 3X) = 2X - 18

Hence, dollar weighted return = i = Dollar return / Dollar weighted investment = (2X - 18) / 100

Or, 100i = 2X - 18 Or, 50i = X - 9

For account 2:

Time weighted return: It has two components:

100 growing to 120 in 0.5 year

Immediately after deposit of 2X, the capital becomes 120 + 2X that grows to become 140 in the next 0.5 year

Hence time weighted return = 1 + i = 120 / 100 x 140 / (120 + 2X) = 168 / (120 + 2X) = 84 / (60 + X)

From the first equation, i = (X - 9) / 50

Hence, from second equation, 1 + i = 1 + (X - 9) / 50 = (41 + X) / 50 = 84 / (60 + X)

Hence, (60 + X).(41 + X) = 50 x 84

Hence, X2 + 101X + 2,460 = 4,200

Or, X2 + 101X - 1,740 = 0

It's a quadratic equation that can be factorized as:

(X - 15).(X + 116) = 0

Hence, X = 15

Hence, i = (X - 9) / 50 = (15 - 9) / 50 = 0.12 = 12%

Darrin’s Auto Northern Division is currently purchasing a part from an outside supplier. The company's Southern Division, which has no excess capacity, makes and sells this part for external customers at a variable cost of $15 and a selling price of $27. If Southern begins sales to Northern, it (1) will use the general transfer-pricing rule and (2) will be able to reduce variable cost on internal transfers by $3. On the basis of this information, Southern would establish a transfer price of:

Answers

Answer:

Transfer price = $24

Explanation:

As per the data given in the question,

The excess capacity of Company's Southern division is nill therefore for transferring the units the division will have to decrease its external sales.The Loss occurred due to reduction in external sales should be from inter divisional transfer price. Therefore,

Transfer price = variable cost + Loss of contribution

= ($15 - $3) + ($27 - $15)

= $24

Service Department Charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $64,560, and the Purchasing Department had expenses of $40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: ResidentialCommercialGovernment Contract Sales$2,000,000 $3,250,000 $2,900,000 Number of employees: Weekly payroll (52 weeks per year)400 250 150 Monthly payroll80 30 10 Number of purchase requisitions per year7,500 3,000 2,000 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.

Answers

Answer and Explanation:

The computation of the total amount of payroll checks and purchased requisitions processed per year is shown below:

Particulars       Residential        Commercial        Government Contract      Total

Number of payroll checks:

Weekly payroll  $20,800)         $13,000                  $7,800 $41,600

                           (400 × 52 weeks)   (250 × 52 weeks )   (150 × 52 weeks)

Monthly payroll    $960              $360                       $120           $1,440

                              (80 × 12)       (30 × 12)                      (10 × 12)

Total                      $21,760         $13,360                    $7,920          $43,040

Number of purchase requisitions per year 7,500 3,000 2,000 12,500

The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150000 was divided by normal capacity of 30000 direct labor hours, to arrive at the predetermined overhead rate of $5. Actual overhead for June was $9500 variable and $6050 fixed, and standard hours allowed for the product produced in June was 3000 hours. The total overhead variance is

Answers

Answer:

Total Overhead Variance= $500 unfavorable

Explanation:

The total overhead variance is the difference between actual overhead and the applied overhead.

Actual Overhead = Variable + Fixed= $9500 + $6050= $ 15,550

Budgeted Overhead for 30000 direct labor hours = $ 150,000

Applied Overhead for 3000 hours = 3000 *$5= $15000

Total Overhead Variance= Actual Overhead Less Applied Overhead

                                    = $15,500- $ 15000= $500 unfavorable

As actual is greater than applied it is unfavorable.

Answer:

$550 unfavorable.

Explanation:

Total actual overhead = $9,500 + $6,050 = $15,550

Total predetermined overhead = Predetermined overhead rate * Standard hours = $5 * 3,000 = $15,000

Total overhead variance = $15,550 - $15,000 = $550 unfavorable.

Note: It is unfavorable because total actual is greater than total predetermined overhead.

Running Co. had an equity investment where it owned less than 20% of an investee, and therefore Running Co. was not able to exercise significant influence. Information about the investment is below: 20X1 20X2 Investment cost 170,000 170,000 Fair value 181,400 155,000 Total unrealized gain (loss) 11,400 (15,000) The company sold the investment during 20X3 for the below price: Sales price 192,400 What is the gain (loss) recorded in the income statement in the year of sale, in 20X3

Answers

Answer:

Gain or Loss to be reocrded in Financial Statement: 151600 - 155000= 3400 loss to be booked as Fair value recorded in the books as in year ended 20X2 is 155000.

Wicker Rockers, Inc. is planning to offer a defined contribution plan for its employees. The company would like to incorporate a "cliff" vesting schedule for the employer contributions into the plan. What is the minimum vesting period the company can choose for a "cliff" vesting schedule

Answers

Answer:3 years

Explanation:

Cliff vesting is when an employee of a company becomes fully vested on a specified date rather than the employee becoming partially vested in increasing amounts over extended period. Cliff Vesting is a process whereby the employees are entitled to full benefits from their firm’s pension policies and qualified retirement plans on a given date.

Upon the completion of the cliff period, employees receive full benefits. The Pension Protection Act of 2006 deduced a three-year cliff vesting schedule for the designated defined-contribution plans which includes 401Ks.

Donovan company incurred the following costs while producing 2000 units: Direct Materials, $15 per unit; direct labor, $5 per unit; variable manufacturing overhead, $12 per unit; variable selling and administrative costs, $14, per unit; total fixed overhead costs, $20,000; total fixed selling and administrative costs, $10,000. There are no beginning inventories.

What is the unit productive cost using absorption costing?

a. $32 per unit

b. $42 per unit

c. $52 per unit

d. $61 per unit

What is the unit product cost using variable costing?

a. $32 per unit

b. $44 per unit

c. $46 per unit

d. $61 per unit

What is the operating income using absorption costing if 1800 units are sold for $100 each?

a. $104,400

b. $96,000

c. $79,200

d. $69,200

What is the operating income using variable costing if 1900 units are sold for $100 each?

a. $57,400

b. $72,600

c. $80,200

d. $102,600

*Formulas or explanations with each part of the problem.

Answers

Answer:

1. b. $42 per unit

2. a. $32 per unit

3. d. $69,200

4. b $72,600

Explanation:

1 and 2 The computation of unit productive cost using absorption costing and unit product cost using variable costing is shown below:-

                                     Absorption        Variable

Direct material                   $15                   $15

Direct labor                         $5                    $5

Variable manufacturing

overhead                             $12                  $12

Fixed manufacturing

overhead                              $10        

($20,000 ÷ 2000)  

Product cost                        $42                $32

Therefore for computing the product cost of absorption and variable cost we simply added direct material, direct labor, variable manufacturing overhead and fixed overhead rate

3. The computation of the unit product cost using variable costing is shown below:-

Sales                                          $180,000

Cost of goods manufactured   ($756,00)

(1800 × $42)

Difference                                   $104,400

Variable and selling

administrative                             ($25,200)

(1800 × $14)

Gross profit                                  $79,200

Fixed selling and administrative

expenses                                     ($10,000)

Net operating income                $69,200

So, for computing the net operating income we simply deduct the Fixed selling and administrative expenses from gross profit.

4. The computation of operating income using variable costing is shown below:-

Sales                                               $190,000

(1,900 × $100)

Variable cost of goods

manufactured                                   $60,800

(1,900 × $32)

Gross contribution margin                $129,200

Variable and selling administrative   ($26,600)

(1900 × $14)

Net contribution margin                     $102,600

Fixed cost                                           ($30,000)

Operating income                              $72,600

Therefore for computing the operating income using variable costing we simply deduct the fixed cost from net contribution margin.

On April 1, a company purchased two units of inventory, A and B. The cost of unit A was $640, and the cost of unit B was $550. On April 30, the company had not sold the inventory. The net realizable value of unit A was now $660 while the net realizable value of unit B was $480. The adjustment associated with the lower of cost and net realizable value on April 30 will be:

Answers

Answer: b

Explanation:

The selling price of imported olive oil is $20 per case. Your cost is 15 Euros per case, and the exchange rate is currently 1.25, so it takes 1.25 Euros to buy $1. Your largest customer has ordered 15,000 cases of olive oil. How much is the pretax profit for this transaction?

Answers

Answer:

$120,000

Explanation:

According to the question, the selling price (S.P) i.e. amount to be sold, of one imported olive oil case is $20 while the cost price (C.P) i.e. amount it was purchased, is €15

Looking at the currencies of both prices, they are different. To make the currencies the same, we need to convert euros (€) to dollars ($).

Based on the exchange rate of €1.25 to $1 given in the question;

€15 will be 15/1.25 = $12.

Therefore, the C.P is $12 and the S.P is $20

A customer ordered 15,000 cases of olive oil. This means that the;

1) The cost price (C.P) will be $12 × 15,000 = $180,000

2) The selling price will be $20 × 15,000 = $300,000

In order to obtain the pretax profit, we subtract the cost price (C.P) from the selling price (S.P). That is, $300,000 - $180,000 = $120,000

Red Co. acquired 100% of Green, Inc. on January 1, 2017. On that date, Green had land with a book value of $42,000 and a fair value of $52,000. Also, on the date of acquisition, Green had a building with a book value of $200,000 and a fair value of $390,000. Green had equipment with a book value of $350,000 and a fair value of $280,000. The building had a 10-year remaining useful life and the equipment had a 5-year remaining useful life. In Red’s December 31, 2017 consolidated worksheet, what total amount of excess fair over book value amortization expense adjustments should Red recognize resulting from its 100% acquisition of Green?

Answers

Answer:

$5,000

Explanation:

The computation of total amount of excess fair over book value amortization expense adjustments to be recognized by red is shown below:-

Excess of fair value over book value =  Land fair value - Land book value

= $52,000 -$42,000

= -$10,000

Here land is not amortized

Excess of fair value over book value = Building fair value - Building book value

= $390,000 - $200,000

= $190,000

Excess fair value over book value amortization expense adjustments to be recognized by red = Excess of fair value over book value of building ÷ Number of Years

= $190,000 ÷ 10

= $19,000

Excess of fair value over book value = Equipment fair value - Equipment book value

= $280,000 - $350,000

= ($70,000)

Excess fair value over book value amortization expense adjustments to be recognized by red for equipment = Excess of fair value over book value of equipment ÷ Number of Years

= ($70,000) ÷ 5

= ($14,000)

Total amount of excess fair over book value amortization expense adjustments to be recognized by red

= $19,000 - $14,000

= $5,000

The pretax financial income (or loss) figures for Whispering Company are as follows. 2015 $164,000 2016 275,000 2017 86,000 2018 (164,000 ) 2019 (390,000 ) 2020 113,000 2021 98,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 25% tax rate for 2015 and 2016 and a 20% tax rate for the remaining years. Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carryforwards. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)

Answers

Answer and Explanation:

The journal entries are shown below:

On 2017

Income Tax Expense $17,200 ($86,000 × 20%)

   To Income Tax Payable $17,200

(Being the income tax expense is recorded)

On 2018

Income Tax Refund Receivable $32,800 ($164,000 × 20%)

    To Income tax refund due to loss carry back $32,800

(Being the refund receivable is recorded)

On 2019

Income Tax Return Receivable  $17,200  ($86,000 × 20%)

          To Income tax refund $17,200

(Being the refund receivable is recorded)

Deferred Tax Asset $60,800 [(390,000 - $86,000) × 20%]

    To income tax refund $60,800

(Being the refund receivable is recorded)

On 2020

Income Tax Expense $22,600 ($113,000 × 20%)

      To Deferred Tax Asset $22,600

(Being the income tax expense is recorded)

On 2021

Income Tax Expense $19,600 ($98,000 × 20%)

      To Deferred Tax Asset $19,600

(Being the income tax expense is recorded)

A company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $16 and takes two machine hours to make and Product B has a unit contribution margin of $30 and takes three machine hours to make. If there are 5,000 machine hours available to manufacture a product, income will be:

a. $10,000 more if Product A is made.
b. $10,000 less if Product B is made.
c. $10,000 less if Product A is made.
d. the same if either product is made.

Answers

Answer:

Product B has a net income of $10,000 superior to Product A.

The correct answer is C.

Explanation:

Giving the following information:

Product A:

Unitary contribution margin= $16

Machine-hours required= 2

Product B:

Unitary contribution margin= $30

Machine-hours required= 3

First, we will calculate the total income of both products.

Product A= 16*(5,000/2)= $40,000

Product B= 30*(5,000/3)= $50,000

Product B has a net income of $10,000 superior to Product A.

Which of the following is true of a stock dividend? Multiple Choice It is a liability on the balance sheet. The decision to declare a stock dividend resides with the shareholders. Transfers a portion of equity from retained earnings to a cash reserve account. Does not affect total equity, but transfer amounts between the components of equity. Reduces a corporation's assets and stockholders' equity.

Answers

Answer:

Yes it is true that a stock dividend does not affect total equity.

Explanation:

A stock dividend is a non cash payment given to shareholders. Instead of cash, additional shares that is equivalent to the earnings that accrue is given to shareholders.

While this may increase the number of shares held, it does not affect total equity.

One of the benefits of stock dividends tax exemption and retained equity which translates to additional investment.

However, the additional; shares created could dilute the share prices.

Consider the oil-producing countries of A, B, and C. Each has a marginal cost of zero. World demand is given by Q = 1430 - P. Suppose the three countries form a cartel, and that none of them has an incentive to deviate from the cartel. By how many units lower is the total output of oil under the cartel relative to the Cournot solution?

Answers

Answer: 357.50

Explanation:

Under Cournot model that has three firms, each firm produces at

q = (1430 – 0)/((3+1)×1)

= 1430/4

= 357.5 units

Total output = 357.5 × 3

= 1072.5 units

Under cartel, the marginal revenue equals to the marginal cost.

MR = MC = 0

1430 – 2Q = 0

Q = 1430/2

Q = 715 units

Difference= 1072.5 units - 715 units

= 357.5 units

Hence the units are 357.50 units lower in cartel compared to Cournot.

Selected information from Arbon Corporation's accounting records and financial statements for 2021 is as follows ($ in millions): Cash paid to acquire machinery $ 36 Reacquired Arbon common stock 50 Proceeds from sale of land 90 Gain from the sale of land 52 Investment revenue received 66 Cash paid to acquire office equipment 80 In its statement of cash flows, Arbon should report net cash outflows from investing activities of:

Answers

Answer:

Arbon should report net cash outflows from investing activities of: ($26)

Explanation:

Arbon Corporation

Statement of cash flows (extract)

Purchase of machinery                                  ($36)

Proceeds from sale of land                               90

Cash paid to acquire office equipment          (80)

Net cash outflows from investing activities  ($26)

Therefore, Arbon should report net cash outflows from investing activities of ($26).

Note that reacquired stock affects the financing section of the cash flows, while gain on sale of land and investment revenue received affect the operating section of the cash flows.

Misty and John formed the MJ Partnership. Misty contributed $50,000 of cash in exchange for her 50% interest in the partnership capital and profits. During the first year of partnership operations, the following events occurred: the partnership had a net taxable income of $20,000; Misty received a distribution of $12,000 cash from the partnership; and Misty had a 50% share in the partnership's $60,000 of recourse liabilities on the last day of the partnership year. Misty's adjusted basis for her partnership interest at year end is:

Answers

Answer:

$78,000

Explanation:

The computation of interest at year end is shown below:-

Interest at year end = Cash contribution + Income of partnership + Share of partnership liabilities - Cash from the partnership

= $50,000 + $20,000 × 50% + $60,000 × 50% - $12,000

= $90,000 + $10,000 + $30,000 - $12,000

= $78,000

Therefore for computing the partnership interest at year end we simply applied the above formula by considering all the items given in the question

Tiki Corporation had net income of $120,000 during the year. Depreciation expense was $6,000. The following information is available: Held- to-Maturity Bonds purchased25,000increase Common Stock issued70,000increase Accounts Receivable10,000decrease Accounts Payable15,000increase Gain on sale of AFS Investment5,000increase What amount should Tiki report as net cash provided by operating activities in its statement of cash flows for the year

Answers

Answer:

Tiki should report $101,000 as net cash provided by operating activities in its statement of cash flows for the year.

Explanation:

Tiki Corporation

Statement of cash flows (extract)

Net income                                                 $120,000

Add: Depreciation expense                            6,000

Less: Increase Accounts Receivable           (10,000)

Less: Decrease in Accounts Payable          (15,000)

Net cash flows from operating activities   $101,000

Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $69, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6 percent, and sells for 94 percent of par. The second issue has a face value of $55 million, a coupon rate of 5 percent, and sells for 106 percent of par. The first issue matures in 24 years, the second in 9 years.Suppose the most recent dividend was $4.25 and the dividend growth rate is 4.4 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 25 percent. What is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answers

Answer:

10.83%

Explanation:

The simplest way to determine the if we use the Gordon growth model for determining the company's stock price:

stock price = [dividend x (1 + growth rate)] / (WACC - growth rate)

dividend = $4.25g = 4.4%stock price = $69

WACC - g = [dividend x (1 + g] / price

WACC = {[dividend x (1 + g] / price} + g

WACC = {[$4.25 x (1 + 4.4%] / $69} + 4.4% = 0.1083 or 10.83%

In preparation for developing its statement of cash flows for the year just ended, D-Rose Distributors collected the following information: ($ in millions) Purchase of treasury bills (considered a cash equivalent) 6.7 Sale of preferred stock 150.7 Gain on sale of land 4.7 Proceeds from sale of land 25.7 Issuance of bonds payable for cash 140.7 Purchase of equipment for cash 30.7 Purchase of GE stock 35.7 Declaration of cash dividends 134.7 Payment of cash dividends declared in previous year 130.7 Purchase of treasury stock 120.7 Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million) 110.7 Required: 1. Prepare the investing activities section of D-Rose's statement of cash flows. 2. Prepare the financing activities section of D-Rose's statement of cash flows.

Answers

Answer and Explanation:

1. The preparation of the investing activities is presented below:

Cash flow from investing activities

Proceeds from sale of land $25.7

Purchase of equipment for cash -$30.7

Purchase of GE stock -$35.7

Net cash used by investing activities  -$40.7

2. The preparation of the financing activities is presented below:

Cash flow from financing activities

Sale of preferred stock 150.7

Issuance of bonds payable for cash 140.7

Payment of cash dividends declared in previous year -130

Purchase of treasury stock -120

Payment for the early extinguishment of long-term notes (carrying (book) value: $100 million) -110.7

Net cash used by financing activities  -$69.3

The minus sign shows the cash outflow and the positives sign shows the cash inflow

A company's income statement showed the following: net income, $117,000; depreciation expense, $31,500; and gain on sale of plant assets, $5,500. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,700; merchandise inventory increased $19,500; prepaid expenses increased $6,500; accounts payable increased $3,700. Calculate the net cash provided or used by operating activities. Multiple Choice $143,400. $141,400. $148,200. $130,400. $169,400.

Answers

Answer:

$130,400

Explanation:

The computation of net cash provided or used by operating activities is shown below:-

Net cash provided or used by operating activities

Net income                                   $117,000

Depreciation expense                  $31,500

Gain on sale of plant assets           ($5,500)

Accounts receivable decreased     $9,700

Increase inventory                           ($19,500)

Prepaid expenses increased          ($6,500)

Increase account payable                $3,700

Net cash flow from

operating activities                          $130,400

Therefore the Net cash flow from operating activities is $130,400

Enviro Company issues 8%, 10-year bonds with a par value of $300,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 1/2. The straight-line method is used to allocate interest expense. 1. Using the implied selling price of 87 ½, what are the issuer's cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What is the amount of bond interest expense recorded on the first interest payment date?

Answers

Answer:

1. Issuer's cash is $262,500

2. Total amount of bond interest is $277,500

3. The amount of bond interest expense is $13,875.

Explanation:

1. Issuer's cash = Face Value × Selling Price

Issuer's cash  = $300,000 × 87.50%

Issuer's cash  = $262,500

2. Discount on bond = $300,000 × 12.5% = $37,500

Interest on bond = $300,000 × 8% = $24,000

Period of bonds= 10 years

Total amount of bond interest = Discount on Bond + (Interest on Bond  × period)

Total amount of bond interest = $37,500 + ($24,000  × 10)

Total amount of bond interest = $277,500

3. Discount on bond = $300,000 × 12.5% = $37,500

Interest on bond = $300,000 × 8% = $24,000

Period = 0.5 years

The amount of bond interest expense = (Discount of Bond ÷ 20) + Interest

The amount of bond interest expense = ($37,500 ÷ 20) + ($24,000 × 0.5)

The amount of bond interest expense = $1,875 + $12,000

The amount of bond interest expense = $13,875.

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