Answer: Absorption costing
Explanation:
Absorption costing believes that all costs that went into the production of a good or service should be absorbed by/ apportioned to those same goods and services regardless of if the costs are direct or indirect.
It works by first assigning the direct costs such as labor and material and then it apportions the indirect costs such as the variable and fixed manufacturing overhead costs. Absorption costing is the preferred costing method for presenting financial statements outside the company by both IFRS and U.S. GAAP.
The government of Egalitariania wants to favor firms and is considering implementing a maximum wage. Assume the maximum wage is both binding and less than the equilibrium wage. What happens to the employment of workers
Answer: It will increase
Explanation:
A maximum wage means that companies do not have to pay more than a certain wage limit. If this wage limit is less than the equilibrium wage, companies would be able to spend less on wages than they are normally supposed to.
Their cost will therefore reduce and they will be able to hire more workers with the money they would have spent to pay the workers the equilibrium wage thereby increasing the number of people employed in the country.
Zero Calories Company has 16,000 shares of cumulative preferred 1% stock, $40 par and 80,000 shares of $150 par common stock. The following amounts were distributed as dividends:
Year 1 $21,600
Year 2 4,000
Year 3 100,800
Determine the dividends per share for preferred and common stock for each year.
Why is it so crucial to ascertain correct/accurateWhy is it so crucial to ascertain correct/accurate market information in your market research market information in your market research prior to carrying out a feasibility study?
Answer:
It is important because it can help identify potential obstacles that may impede its operations and recognize the amount of funding it will need to get the business up and running.
Explanation:
It is very crucial to ascertain accurate market information in your market research before carrying out a feasibility study so as to help identify possible obstacles that would impeded the business and also to know the amount needed for funding.
Which of the following statements correctly describe properties of an economic model? Check all that apply.
A) An economic model requires a complex set of assumptions.
B) An economic theory can be expressed in the form “If X, then Y, all other things held constant.”
C) An economic model requires simplified assumptions.
D) The purpose of an economic model is to depict the real world as accurately as possible.
Answer:
A) An economic model requires a complex set of assumptions.
D) The purpose of an economic model is to depict the real world as accurately as possible.
Explanation:
The following statements that correctly describes properties of an economic model are:
A) An economic model requires a complex set of assumptions.
D) The purpose of an economic model is to depict the real world as accurately as possible.
An economic model requires a complex set of assumptions.The purpose of an economic model is to depict the real world as accurately as possible.
Are the properties of economic model.
What is Economics?Economics is a social science which base on how human needs are met or satisfied through the allocation of scarce resources .
What is an Economic Model?Economic model is a theoretical processes which consist of variables and how this set of logical variables relate within them.
Therefore,
An economic model requires a complex set of assumptions.The purpose of an economic model is to depict the real world as accurately as possible.Are the properties of economic model.
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The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state’s newest millionaire. By choosing the six winning numbers on last week’s state lottery, Mr. Ormsby won the week’s grand prize totaling $1.38 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $69,000 each. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: 1. If Mr. Ormsby can invest money at a 11% rate of return, what is the present value of his winnings?
Answer:
the present value of his winning is $549,447
Explanation:
The computation of the present value of his winning is shown below:
= Annual installment × PVIFA factor at 20 years for 11%
= $69,000 × 7.963
= $549,447
Hence, the present value of his winning is $549,447
The same should be considered and relevant
Determine whether each of the following accounting duties mainly involves financial accounting, managerial accounting, or tax accounting.
1. Consulting with treasurer on cash flows
2. Intemal auditing
3. Estate planning
4. External auditing
5. Tax consulting
6. Analyzing extema financial reports
7. Planning transactions to minimize taxes
8. Enforcing tax laws Financial accounting Tax accounting
Answer:
Explanation:
1. managerial
2, managerial
3. financial
4. financial
5. tax
6. financial
7. tax
8. tax
The classification of the following accounting duties related to financial accounting, managerial accounting, or tax accounting is as follows:
Consulted with the treasurer for the cash flows should be the managerial accounting as it is the management part.Internal auditing is managerial accounting.Estate planning is related to tax so it is a tax accounting.External auditing is classified as financial accounting.Tax consulting is related to tax so it is a tax accounting.External Financial reports should be analyzed so it is a financial accounting.For minimizing the taxes, tax accounting should be used.For enforcing the tax laws, tax accounting should be used.In this, the following transactions should be classfied.
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Spanolia LLC is estimating its WACC. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for 1,000 USD. The firm's marginal tax rate is 40 percent. What is the after-tax cost of debt? Answer in % terms to 2 decimal places w/o the % sign.
Answer:
Spanolia LLC
The after-tax cost of debt is:
= 7.20%.
Explanation:
a) Data and Calculations:
Coupon interest rate of bonds = 12%
Maturity period = 20 years
Selling price = $1,000
Firm's marginal tax rate = 40%
After-tax cost of debt = Coupon interest rate * (1 - tax rate)
= 12% * (1 - 0.4)
= 12% * 0.6
= 7.20%
b) Spanolia's after-tax cost of debt is derived by multiplying the cost of debt by the after-tax rate. The after-tax cost of debt represents the interest that Spanolia LLC pays on the bonds less the income tax savings that it gains because interest expenses are tax-deductible.
BK Books is an online book retailer that also has 10,000 "bricks and mortar" outlets worldwide. You are a risk-neutral manager within the CorporateFinance Division and are in dire need of a new financial analyst. You onlyinterview students from the top MBAprograms in your area. Thanks to yourscreening mechanisms and contacts, the students you interview ultimately dif-fer only with respect to the wage that they are willing to accept. About 5 per-cent of acceptable candidates are willing to accept a salary of $60,000, while95 percent demand a salary of $110,000. There are two phases to the inter-view process that every interviewee must go through. Phase 1 is the initialone-hour on-campus interview. All candidates interviewed in Phase 1 are alsoinvited to Phase 2 of the interview, which consists of a five-hour office visit.In all, you spend six hours interviewing each candidate and value this time at$750. In addition, it costs a total of $4,250 in travel expenses to interview each candidate. you are very impressed with the first interviewee completing both phases of bk books’s interviewing process, and she has indicated that her reservation salary is $110,000. should you make her an offer at that salary or continue the interviewing process? explain.
Answer: Therefore, we should make her an offer at that salary
Explanation:
Based on the information given in the question,
Lowest salary = $60,000
Highest salary = $110,000
Expected Benefit = 5% × ($110,000 - $60,000) = 5% × $50,000 = $2500
The cost of conducting another interview will be:
= cost of time + cost of travel
= $750 + $4250
= $5000
Since the cost of conducting the additional interview is more than the expected benefit, therefore the interviewee should be hired rather than continuing the interviewing process.
Therefore, we should make her an offer at that salary.
Camden Biotechnology began operations in September 2013. The following selected transactions relate to liabilities of the company for September 2013 through March 2014. Camden's fiscal year ends on December 31.Its financial statements are issued in April.2013a. On September 5, opened checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $15,000,000 at the bank's prime rate (10.5% at the time). The company will pay no commitment fees.b. On October 1, borrowed $12 million cash from Second Commercial Bank under the line of credit and issued a five-month promissory note. Interest at the prime rate of 10% was payable at maturity. Management planned to issue 10-year bonds in February to repay the note.c. Received $2,600 of refundable deposits in December for reusable containers used to transport and store chemical-based products.d. For the September-December period, sales on account totaled $4,100,000. The state sales tax rate is 3% and the local sales tax rate is 3%. (This is a summary journal entry for the many individual sales transactions for the period.)e. Recorded the adjusting entry for accrued interest.2014f. In February, issued $10 million of 10-year bonds at face value and paid the bank loan on the March 1 due date.g. Half of the storage containers covered by refundable deposits were returned in March. The remaining containers are expected to be returned during the next six months.Required:1. Prepare the appropriate journal entries for these transactions.2. Prepare the current and long-term liability sections of the December 31, 2013, balance sheet. Trade accounts payable on that date were $252,000.
Answer:
Cash (Dr.) $12,000,000
Short term notes payable (Cr.) $12,000,000
Cash (Dr.) $2,600
Liability of refundable (Cr.) $2,600
Interest Expense (Dr.) $250,000
Interest Payable (Cr.) $250,000
Accounts receivable (Dr.) $4,100,000
Sales Revenue (Cr.) $3,977,000
Sales Tax Payable (Cr.) $123,000
Cash (Dr.) $10,000,000
Bond Payable (Cr.) $10,000,000
Explanation:
Liability Schedule 2013,
Accounts Payable $252,000
Current Portion of notes payable $2,000,000
Interest Payable $250,000
Sales tax Payable $123,000
Liability for refundable deposit $2,600
Total Current Liability $2,627,600
Which one is not a main question when you evaluate earnings' quality?
a. Source of revenue and persistent of revenues
b. Gross profit relationship between earnings and the market price of the common stock
c. Debt to equity ratio and total amounts of liabilities.
Answer:
Debt to equity ratio and total amounts of liabilities
Explanation:
Permanent and Temporary components of Earnings
The Permanent components of earnings may continue into future. Example is the sales revenue from regular product lines may continue in the future.
Temporary components of earnings may not continue in the future. Example is the gains or losses from the sale of equipment
Quality of Earnings
This is simply defined as any substance of earnings and their sustainability into future accounting periods.
The Quality of Earnings is influence largely by:
1. Accounting Methods: this entails all methods/means are set up/designed to match revenue and expenses.
2. Accounting estimates: this is when users of financial statement need to be aware of the impact that accounting estimates have on income.
3. One time items: this covers if and when earnings increase/decrease because of a one time items,then that portion of earnings will be sustained in the future.
Components of Earnings quality
1. Proper revenue and expense recognition
2. Declining or stable operating expenses compared to sales
3. High and persistently improving gross margin/ sales ratio etc.
The debt to equity ratio and the total amount of liabilities of a company is not important in evaluating the earnings' quality.
Dixon Sales has four sales employees that receive weekly paychecks. Each earns $13 per hour and each has worked 40 hours in the pay period. Each employee pays 12% of gross in federal income tax, 3% in state income tax, 6.0% of gross in social security tax, 1.5% of gross in Medicare tax, and 0.5% in state disability insurance.
Required:
Journalize the recognition of the pay period ending January 19 that will be paid to the employees January 26.
Answer:
Jan. 19
Dr Sales Wages Expense $ 3,640.00
Cr Federal Income Tax Payable $ 436.80
Cr State Income Tax Payable $ 109.20
Cr Social Security Tax Payable $ 218.40
Cr Medicare Tax Payable $ 54.60
Cr State Disability Insurance $ 18.20
Cr Sales Wages Payable $ 2,802.80
Explanation:
Preparation of the journal for recognition of the pay period ending January 19 that will be paid to the employees January 26.
Jan. 19
Dr Sales Wages Expense $ 3,640.00 (7 *40 *13)
Cr Federal Income Tax Payable $ 436.80 (3,640 * 12%)
Cr State Income Tax Payable $ 109.20 (3,640 * 3%)
Cr Social Security Tax Payable $ 218.40 (3,640 * 6%)
Cr Medicare Tax Payable $ 54.60 (3,640* 1.5%)
Cr State Disability Insurance $ 18.20 (3,640 *0.5%)
Cr Sales Wages Payable $ 2,802.80
($3,640.00-$436.80-$109.20-$218.40-$54.60-$18.20)
Draw supply and demand graphs that estimate what will happen to demand, supply, and the equilibrium price of coffee if these events occur: Widely reported medical studies suggest that coffee drinkers are less likely to develop certain diseases.
Answer:
Please find the required diagram in the attached image
Explanation:
Only a change in the price of a good leads to a movement along the demand curve of that good. Also, only a change in the price of the good would lead to an increase or decrease in the quantity demanded of that good.
Other factors other than the change in the price of the good would lead to a shift of the demand curve. Some of those factors include :
1. a change in consumers' expectation
2. a change in the taste of consumers
3. a change in income
As a result of the study, there would be an increase in the demand for coffee. This would shift the demand curve to the right. As a result, there would an increase in equilibrium price and quantity
If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be: Group of answer choices $9,160 $11,360 $1,960 $860 $1,100
Answer: $11,360
Explanation:
Budgeted cost of goods sold = Budgeted beginning inventory + Budgeted purchases - Budgeted ending inventory
10,260 = 8,300 + Budgeted purchases - 9,400
Budgeted purchases = 10,260 - 8,300 + 9,400
= $11,360
When the pressure for local responsiveness is strong and the pressure for coordination is weak for multinational corporations in an industry, the industry will tend to become:___________
A) global
B) consolidated
C) multidomestic
D) risky
E) indigenous
The SRT partnership agreement specifies that partnership net income be allocated as follows in the following order: Partner S Partner R Partner TSalary allowance $20,000 $25,000 $15,000Interest on avg. capital balance 10% 10% 10%Remainder 30% 30% 40%Average capital balances for the current year were $60,000 for S, $50,000 for R, and $40,000 for T.Refer to the information given. Assuming no restrictions and current year net income of $45,000, what amount should be allocated to each partner? Partner S Partner R Partner TA) $17,000 $21,000 $7,000B) ($9,000) ($9,000) ($12,000)C) $13,500 $13,500 $18,000D) $22,500 $22,500 $0
Solution :
Note 1
calculation of remaining income after distribution of salary and interest on capital.
Total Net Income $ 45,000
Less : Salary allowance $ 60,000
($20,000 + $25,000 + $15,00)
Less : Interest on capital $ 15,000
($ 6,000 + $ 5,000 + $ 4,000)
Remaining income / (loss) to be allocated $ 30,000
Since the remaining income is negative, i.e. it loss to the SR partnership, so such Loss will also be allocated to the partners. Since in a partnership, Partners are required to share profits as well as losses. Hence, such loss will be deducted from the other shares.
Scheduled of amount allocated to each partner
Partners S Partner R Partner T
a). Salary allowance allocated $ 20,000 $ 25,000 $ 15,000
b). Interest on average capital $ 6000 $ 5000 $ 4000
balance allocated.
c). Remaining income allocated $ 9000 $ 9000 $ 12,000
Total allocation (a + b - c) : $ 17,000 $ 21,000 $ 7,000
The resource-based view of competitive advantage states that for something to yield competitive advantage it must be ______.
Answer:
"Rare, hard to duplicate, as well as non-substitutable" is the correct response.
Explanation:
Assesses as well as interprets companies' financial capabilities as well as stresses capacities and knowledge throughout the formulation of strategy to provides provision tangible benefits, is considered as RBV.Inputs that always encourage employees to exercise their business might be viewed as significant commodities.You are calculating the volume quantity needed for material that will compact to 95% of its original undisturbed volume. You know that you will need to fill a void with a volume of 1,487 cubic yards. What is the volume of material needed from the borrow pit to equal this amount when fully compacted
Answer:
Volume = 1565.56 cubic yards
Explanation:
The computation of the volume of material required is shown below:
95% × volume = 1,487 cubic yards
Volume = 1565.56 cubic yards
Basically 95% of volume is equivalent to the 1487 cubic yards
So according to this we determined the volume
Hence, the same should be considered
Consider the market for purple potatoes below and assume that a price ceiling of $30 is imposed by the government. Calculate the deadweight loss:
Answer:
$5000
Explanation:
On December 31, 2020, Lipton, Inc. sold $3,000,000 (face value) of bonds. The bonds are dated December 31, 2020, pay interest annually on December 31, and will mature on December 31, 2020 The following schedule was prepared by the accountant for 2020 Annual Interest Period Interest to Interest be paid Expense Amortization Unamortized Amount $75,000 51.750 Bond Carrying Value $2,925,000 2,948,250 1 $240,000 $263,250 $23,250 On the basis of the above information, answer the following questions What is the stated interest rate for this bond issue? Stated interest rate SHOW LIST OF ACCOUNTS What is the market interest rate for this bond issun? Market interest rate 5 What is the market interest rate for this bond issue? Market interest rate % SHOW LIST OF ACCOUNTS What was the selling price of the bonds as a percentage of the face value? (Round answer to 1 decimal place, e.g. 52.7.) Selling price SHOW LIST OF ACCOUNTS tudy Prepare the journal entry to record the sale of the bond issue on December 31, 2020. (Credit account titles are autofnatically indented wh manually.) Debit Date Account Titles and Explanation Dec 31, 2020 Credit SHOW LIST OF ACCOUNTS Prepare the journal entry to record the payment of interest and amortization of discount on December 31, 2021. (Credit account titles an entered. Do not indent manually.) Account Titles and Explanation Debit Dec 31, 2021 Date Credit ly SHOW LIST OF ACCOUNTS
Answer:
Lipton, Inc.
1. Stated interest = Annual interest/Face value of bonds * 100
= $240,000/$3,000,000 * 100
= 8%
2. The market interest rate for this bond issue = Interest Expense/Price of issued bonds * 100
= $263,250/$2,925,000 * 100
= 9%
3. The selling price of the bonds as a percentage of the face value
= $2,925,000/$3,000,000 * 100
= 97,5%
4. Journal Entries:
Date Account Titles and Explanation Debit Credit
Dec 31, 2020 Cash $2,925,000
Bonds Discounts 75,000
Bonds Payable $3,000,000
To record the issuance of the bonds at a discount.
5. Journal Entries:
Date Account Titles and Explanation Debit Credit
Dec 31, 2021 Interest Expense $263,250
Amortization of bond discounts $23,250
Cash $240,000
To record the payment of interest and amortization of discount.
Explanation:
a) Data and Calculations:
December 31, 2020
Face value of issued bonds = $3,000,000
Interest payment = December 31 annually
Unamortized Amount = $75,000
Price of issued bonds = $2,925,000 ($3,000,000 - $75,000)
Discount on bonds = $75,000 ($3,000,000 - $2,925,000)
Schedule:
2020 Annual Interest Interest Expense Amortization Bond Carrying Value
$2,925,000
1 $240,000 $263,250 $23,250 2,948,250
1. Stated interest = Annual interest/Face value of bonds * 100
= $240,000/$3,000,000 * 100
= 8%
2. The market interest rate for this bond issue = Interest Expense/Price of issued bonds * 100
= $263,250/$2,925,000 * 100
= 9%
3. The selling price of the bonds as a percentage of the face value
= $2,925,000/$3,000,000 * 100
= 97,5%
Analysis:
December 31, 2020:
Cash $2,925,000 Bonds Discounts $75,000 Bonds Payable $3,000,000
December 31, 2021:
Interest Expense $263,250 Amortization of bond discounts $23,250 Cash $240,000
Reliability is how long an item or system will perform its function before it breaks. Good reliability will ______________________. Decrease logistics support requirements Increase life cycle sustainment costs Decrease system readiness Increase manpower waste
Answer:
Decrease logistics support requirements.
Explanation:
Decrease logistics support requirements is the correct answer because the increase in reliability decreases the requirement to correct the commodity or equipment. Therefore, the logistic support decreases which further decreases the manpower waste. Additionally, the good reliability shows that the product's quality is good and it will work efficiently for a longer time period. Thus, a good quality product requires less logistic support.
Reliability is a quality of being trustworthy and in performing constantly well. It result in measurement and calculations and tends to be more accurate.
Thus there is a decrease in logistics support requirements. When the system function before it breaks. Good reliability will always support the system.Hence the option A is correct.
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Suppose you buy 30 of the September corn futures contracts at the last price of the day. One month from now, the futures price of this contract is 464.5, and you close out your position. Calculate your dollar profit on this investment
Full question attached
Answer and Explanation:
If you buy 30 of the September corn futures contract at the closing price of 472.00(refer to the chart in picture attached)
Your total buying value = 30×472.250=14167.5
Since one month from now the corn futures contract is 464.5
Total value of your corn futures now= 30×464.5= 13935
Profit/loss=13935-14167.5= -232.5
Therefore you make a loss of $232.5
An FI purchases at par value a $100,000 Treasury bond paying 10 percent interest with a 7.5 year duration. If interest rates rise by 4 percent, calculate the bond's new value. Recall that Treasury bonds pay interest semiannually. Use the modified duration valuation equation.
Answer:
The bond's new value is $70,000
Explanation:
First calculate the percentage change in the value of the bond
Duration = Percentage change in price / Percentage change in yield
Percentage change in price = Duration x Percentage change in yield
where
Duration = 7.5 years
Percentage change in yield = 4%
Percentage change in price = ?
Placing value sin the formula
Percentage change in price = 7.5 x 4%
Percentage change in price = 0.30
Percentage change in price = 30%
As we know that the value of the bond and the yield rate are inversely proportional to each other, If the yield rate increases the value of the bond decreases due to the discounting factor used in the valuation o the bond.
Hence, the value of the bond is calculated as follow
Value of the bond = Par value of the bond x ( 1 - per centage of change in the price of the bond
Value of the bond = $100,000 x ( 1 - 30% )
Value of the bond = $100,000 x 0.70
Value of the bond = $70,000
Net income was $35,000. Issued common stock for $64,000 cash. Paid cash dividend of $14,600. Paid $50,000 cash to settle a note payable at its $50,000 maturity value. Paid $12,000 cash to acquire its treasury stock. Purchased equipment for $39,000 cash. Use the above information to determine cash flows from financing activities. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
- $76,600
Explanation:
cash flows from financing activities - $76,600
Suppose there is a simple one good economy that only produces spinning rims. In 2015, the economy was able to produce 1 million sets of spinning rims at an amazing price of $500 per set. In 2016, the economy was able to produce 1 million sets of spinning rims at a price of $1,000 per set. By what amount did real GDP increase between 2015 and 2016 in the simple one good economy
Answer: 0
Explanation:
Firstly, we will calculate the nominal value in 2015 which will be:
= $500 x 1 million
= $500 million
The nominal value in 2016 will be:
= $1000 x 1 million
= $1 billion
Real GDP will be the price of the base year multiplied by the quantity of the current year which will be:
= $500 million x 1 million sets
= $500 million
Therefore, the increase in real GDP is zero.
What is the effective annual cost of skipping the discount and paying at the end of the net period for the following credit terms: 6/10, net 70
Answer:
APR = 38.829%
APY = 45.70%
Explanation:
Missing word "Calculate the APR and the APY."
Discount % = 6%
Total period = 70
Discount period = 10
i. APR = (Discount% / [100% - Discount%]) * (365 / [Total period - Discount period])
APR = [6% / 100%-6%] * [365 / 70 - 10]
APR = 6%/94% * 365/60
APR = 0.06382979 * 6.083333
APR = 0.38829787
APR = 38.83%
ii. APY = (1 + [Discount% / {100% - Discount%}])^(365/[Total period - Discount period]) - 1
APY = [1 + [6%/ / 100%-6%]^(365/70-10) - 1
APY = {1 + 0.06382979]^6.083333 - 1
APY = 1.06382979^6.083333 - 1
APY = 1.45704250704 - 1
APY = 0.45704250704
APY = 45.70%
Exercise 4-7 Recording sales, purchases, shipping, and returns—buyer and seller LO P1, P2 Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $30,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $20,100. Sydney pays $400 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $1,300 of the $30,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $871. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. (Both Sydney and Troy use a perpetual inventory system and the gross method.) 1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions. 2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
Answer:
Sydney Retailing (buyer) and Troy Wholesalers (seller)
Journal Entries:
For the Buyer (Sydney):
May 11 Debit Inventory $30,000
Credit Accounts Payable $30,000
To record the purchase of goods on account with invoice dated May 11, terms 3/10, n/90, FOB shipping point.
Debit Freight-in $400
Credit Cash $400
To record the freight-in expense.
May 12 Debit Accounts Payable $1,300
Credit Inventory $1,300
To record the return of goods to Troy.
May 20 Debit Accounts Payable $28,700
Credit Cash $27,839
Credit Cash Discounts $861
To record the payment on account, including discounts.
For the seller (Troy Wholesalers):
May 11 Debit Accounts Receivable $30,000
Credit Sales Revenue $30,000
To record the sale of goods on credit with invoice dated May 11, terms 3/10, n/90, FOB shipping point.
Debit Cost of goods sold $20,100
Credit Inventory $20,100
To record the cost of goods sold.
May 12 Debit Sales Returns $1,300
Credit Accounts Receivable $1,300
To record the sales returns on account.
Debit Inventory $871
Credit Cost of goods sold $871
To record the cost of goods returned.
May 20 Debit Cash $27,839
Debit Cash Discounts $861
Credit Accounts Receivable $28,700
To record the receipt of cash on account, including discounts.
Explanation:
a) Data and Analysis:
For the Buyer (Sydney):
May 11 Inventory $30,000 Accounts Payable $30,000
with invoice dated May 11, terms 3/10, n/90, FOB shipping point.
Freight-in $400 Cash $400
May 12 Accounts Payable $1,300 Inventory $1,300
May 20 Accounts Payable $28,700 Cash $27,839 Cash Discounts $861
For the seller (Troy Wholesalers):
May 11 Accounts Receivable $30,000 Sales Revenue $30,000
with invoice dated May 11, terms 3/10, n/90, FOB shipping point.
Cost of goods sold $20,100 Inventory $20,100
May 12 Sales Returns $1,300 Accounts Receivable $1,300
Inventory $871 Cost of goods sold $871
May 20 Cash $27,839 Cash Discounts $861 Accounts Receivable $28,700
The Dow Theory describes stock prices as moving in trends analogous to the movement of water. Which of the following statements is nottrue?
A. Major trends resemble tides.
B. Intermediate trends resemble waves.
C. Short-run movements are like ripples.
D. Waves are the most important.
E. None of the above (that is, all are true statements)
Answer:
D.Waves are the most important I think sorry if I'm wrong
Explanation:
Hope this helped! :)
The demand for aloe vera hand lotion, one of numerous products manufactured by Smooth Skin Care Products Inc., has dropped sharply because of recent competition from a similar product. The company's chemists are currently completing tests of various new formulas, and it is anticipated that the manufacture of a superior product can be started on December 1, one month in the future. No changes will be needed in the present production facilities to manufacture the new product because only the mixture of the various materials will be changed.
The controller has been asked by the president of the company for advice on whether to continue production during November or to suspend the manufacture of aloe vera hand lotion until December 1. The controller has assembled the following pertinent data:
Sales (400,000 units) $32,000,000
Cost of goods sold 28,330,000
Gross profit $3,670,000
Selling and administrative expenses 4,270,000
Loss from operations ($600,000)
The production costs and selling and administrative expenses, based on production of 400,000 units in October, are as follows:
Direct materials $15per unit
Direct labor 17per unit
Variable manufacturing cost 35per unit
Variable selling and administrative expenses 10 per unit
Fixed manufacturing cost $1,530,000 for October
Fixed selling and administrative expenses 270,000 for October
Sales for November are expected to drop about 20% below those of the preceding month. No significant changes are anticipated in the fixed costs or variable costs per unit. No extra costs will be incurred in discontinuing operations in the portion of the plant associated with aloe vera hand lotion. The inventory of aloe vera hand lotion at the beginning and end of November is expected to be inconsequential.
Required:
Prepare an estimated income statement in absorption costing form for November for aloe vera hand lotion, assuming that production continues during the month.
Answer:
Estimated loss from operations for aloe vera hand lotion in November = -$534,000.
Explanation:
The following calculations are done first:
Direct materials per unit = $15
Direct labor per unit = $17
Variable manufacturing cost per unit = $35
Fixed manufacturing cost per unit = Fixed manufacturing cost for October / Number of units in October = $1,530,000 / 400,000 = $3.825
Cost of goods sold per unit = Product cost per unit = Direct materials per unit + Direct labor per unit + Variable manufacturing cost per unit + Fixed manufacturing cost per unit = $15 + $17 + $35 + $3.825 = $70.825
Also, we have:
Expected sales in unit for November = Sales in unit for October * (100% - Expected percentage drop in sales) = 400,000 * (100% - 20%) = 320,00 units
Selling price per unit = Sales in October / Units sold in October = $32,000,000 / 400,000 = $80
Variable selling and administrative expenses per unit = $10
Fixed selling and administrative expenses for October = $270,000
Based on the above calculations, an estimated income statement in absorption costing form for November for aloe vera hand lotion can be prepared as follows:
Smooth Skin Care Products Inc.
Estimated Income Statement for Aloe Vera Hand Lotion
(Absorption Costing)
For November
Particulars $
Sales Revenue ($80 * 320,000) 25,600,000
Cost of good sold ($70.825 * 320,000) (22,664,000)
Gross profit 2,936,000
Selling and administrative expenses:
Variable ($10 * 320,000) (3,200,000)
Fixed (270,000)
Loss from operations (534,000)
Therefore, we have:
Estimated loss from operations for aloe vera hand lotion in November = -$534,000
Actual indirect materials costs$11,800 $6,700 Actual indirect labor costs 55,600 45,900 Other overhead costs 16,000 49,900 Overhead applied 91,400 96,700 Storm Concert Promotions Determine whether overhead is overapplied or underapplied. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold. Valle Home Builders Determine whether overhead is overapplied or underapplied. Prepare the journal entry to allocate (close) overapplied or underapplied overhead to Cost of Goods Sold.
Answer:
See below
Explanation:
1. Actual costs = $11,800(indirect material + $55,600(indirect labor) + $16,000(other overhead costs) = $83,400(actual cost)
$91,400(overhead applied) - $83,400(actual cost) = Overhead applied is greater than the actual cost which means that overhead was over applied by $8,000
2. Debit: Manufacturing overhead $8,000
______ Credit: Cost of goods sold $8,000
3. Actual costs = $6,700(indirect material) + $45,900(indirect labor) + $49,900(other overhead costs) = $102,500
$96,700(overhead applied) - $102,000(actual costs) = Overhead applied is less than the actual costs which means that overhead was under applied by $5,800
4. Debit : Cost of goods sold $5,800
_______ Credit: Manufacturing overhead $5,800
Accounts receivable $ 18,000 Long-term notes payable $ 21,000 Accounts payable 11,000 Office supplies 2,800 Buildings 45,000 Prepaid insurance 3,560 Cash 7,000 Unearned services revenue 3,000 Compute Chavez Company's current ratio using the above information.
Answer: 2.24
Explanation:
Current ratio = Current Assets / Current liabilities
Current assets = Accounts receivable + Office supplies + Prepaid insurance + Cash
= 18,000 + 2,800 + 3,560 + 7,000
= $31,360
Current liabilities:
= Accounts payable + Unearned service revenue
= 11,000 + 3,000
= $14,000
Current ratio = 31,360 / 14,000
= 2.24
