Answer: c. inflow in the investing section
Explanation:
The cash flow statement is prepared in order to determine the ending cash balance which is done by considering the cash that's generated from various activities of the business.
Equipment is regarded as a long term asset, and therefore when it's sold for cash, it's being regarded as an indicator for investing activities section.
To select a strategy in a two-person, zero-sum game, Player A follows a ________ procedure and Player B follows a ________ procedure.
Answer:
None of these is correct
Explanation:
None of these is correct. The correct answer is that; it should be minimax
Good Note Company specializes in the repair of music equipment and is owned and operated by Robin Stahl. On November 30, 2016, the end of the current year, the accountant for Good Note Company prepared an unadjusted trial balance and an adjusted trial balance.Compare the unadjusted trial balance to the adjusted trial balance. Journalize the seven entries that adjusted the accounts at November 30. None of the accounts were affected by more than one adjusting entry. Refer to the Chart of Accounts for exact wording of account titles.Adjusted Trial BalanceGood Note CompanyADJUSTED TRIAL BALANCENovember 30, 2016 ACCOUNT TITLE DEBIT CREDIT1 Cash 38,250.002 Accounts Receivable 89,500.003 Supplies 2,400.004 Prepaid Insurance 3,850.00 5 Equipment 290,450.006 Accumulated Depreciation-Equipment 106,100.007 Automobiles 129,500.008 Accumulated Depreciation-Automobiles 62,050.009 Accounts Payable 26,130.0010 Salaries Payable 8,100.0011 Unearned Service Fees 9,000.0012 Common Stock 100,000.0013 Retained Earnings 224,020.0014 Dividends 75,000.0015 Service Fees Earned 742,800.0016 Salaries Expense 525,000.0017 Rent Expense 54,000.0018 Supplies Expense 8,850.0019 Depreciation Expense-Equipment 11,600.0020 Depreciation Expense-Automobiles 7,300.0021 Utilities Expense 14,100.0022 Taxes Expense 8,175.0023 Insurance Expense 10,400.0024 Miscellaneous Expense 9,825.0025 Totals 1,278,200.00 1,278,200.00Chart of AccountsCHART OF ACCOUNTSGood Note CompanyGeneral Ledger ASSETS11 Cash12 Accounts Receivable13 Supplies14 Prepaid Insurance16 Equipment17 Accumulated Depreciation-Equipment18 Automobiles19 Accumulated Depreciation-Automobiles LIABILITIES21 Accounts Payable22 Salaries Payable23 Unearned Service Fees EQUITY31 Common Stock32 Retained Earnings33 Dividends REVENUE41 Service Fees Earned EXPENSES51 Salaries Expense52 Rent Expense53 Supplies Expense54 Depreciation Expense-Equipment55 Depreciation Expense-Automobiles56 Utilities Expense57 Taxes Expense58 Insurance Expense59 Miscellaneous ExpenseJournalShaded cells have feedback.Compare the unadjusted trial balance to the adjusted trial balance. Journalize the seven entries that adjusted the accounts at November 30. None of the accounts were affected by more than one adjusting entry. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
Good Note Company
Journal Entries:
Debit 23 Unearned Service Fees $9,000
Credit 41 Service Fees Earned $9,000
To record earned fees.
Debit 51 Salaries Expense $8,100
Credit 22 Salaries Payable $8,100
To record accrued salaries.
Debit 53 Supplies Expense $8,850
Credit 13 Supplies $8,850
To record used supplies.
Debit 54 Depreciation Expense-Equipment 11,600
Credit 17 Accumulated Depreciation-Equipment $11,600
To record depreciation expense for the period.
Debit 55 Depreciation Expense-Automobiles 7,300
Credit 19 Accumulated Depreciation-Automobiles $7,300
To record depreciation expense for the period.
Debit 56 Utilities Expense $1,200
Credit 21 Accounts Payable $1,200
To record accrued utilities expense.
Debit 58 Insurance Expense $10,400
Credit 14 Prepaid Insurance $10,400
To record expired insurance.
Explanation:
a) Data and Calculations:
Good Note Company
UNADJUSTED TRIAL BALANCE
November 30, 2016
ACCOUNT TITLE DEBIT CREDIT
1 Cash 38,250
2 Accounts Receivable 89,500
3 Supplies 11,250
4 Prepaid Insurance 14,250
5 Equipment 290,450
6 Accumulated Depreciation-Equipment 94,500
7 Automobiles 129,500
8 Accumulated Depreciation-Automobiles 54,750
9 Accounts Payable 24,930
10 Salaries Payable
11 Unearned Service Fees 18,000
12 Common Stock 100,000
13 Retained Earnings 224,020
14 Dividends 75,000
15 Service Fees Earned 733,800
16 Salaries Expense 516,900
17 Rent Expense 54,000
18 Supplies Expense
19 Depreciation Expense-Equipment
20 Depreciation Expense-Automobiles
21 Utilities Expense 12,900
22 Taxes Expense 8,175
23 Insurance Expense
24 Miscellaneous Expense 9,825
25 Totals 1,250,000 1,250,000
Good Note Company
ADJUSTED TRIAL BALANCE
November 30, 2016
ACCOUNT TITLE DEBIT CREDIT
1 Cash 38,250
2 Accounts Receivable 89,500
3 Supplies 2,400
4 Prepaid Insurance 3,850
5 Equipment 290,450
6 Accumulated Depreciation-Equipment 106,100
7 Automobiles 129,500
8 Accumulated Depreciation-Automobiles 62,050
9 Accounts Payable 26,130
10 Salaries Payable 8,100
11 Unearned Service Fees 9,000
12 Common Stock 100,000
13 Retained Earnings 224,020
14 Dividends 75,000
15 Service Fees Earned 742,800
16 Salaries Expense 525,000
17 Rent Expense 54,000
18 Supplies Expense 8,850
19 Depreciation Expense-Equipment 11,600
20 Depreciation Expense-Automobiles 7,300
21 Utilities Expense 14,100
22 Taxes Expense 8,175
23 Insurance Expense 10,400
24 Miscellaneous Expense 9,825
25 Totals 1,278,200.00 1,278,200
Analysis of Adjustments:
23 Unearned Service Fees $9,000 41 Service Fees Earned $9,000
51 Salaries Expense $8,100 22 Salaries Payable $8,100
53 Supplies Expense $8,850 13 Supplies $8,850
54 Depreciation Expense-Equipment 11,600 17 Accumulated Depreciation-Equipment $11,600
55 Depreciation Expense-Automobiles 7,300 19 Accumulated Depreciation-Automobiles $7,300
56 Utilities Expense $1,200 21 Accounts Payable $1,200
58 Insurance Expense $10,400 14 Prepaid Insurance $10,400
Oliver's long-term care policy covers only services in a nursing facility and pays nothing for services provided at home or in the community. What kind of LTC policy does Oliver own?
Question options:
a. facility-challenged
b. substandard
c. tier 1
d. noncomprehensive
Answer:
d. noncomprehensive
Explanation:
Oliver has a noncomprehensive long term care(LTC). A non comprehensive long term care is policy that restricts services to the ones provided at a nursing facility, and so Oliver pays for the benefits of only the services of a nursing facility . It is different from a comprehensive long term care where services cover and can be provided at an adult day care, home, assisted living facilities, or at nursing facilities.
Oliver's policy which does not cover nursing facilities provided at home or in the community is known as a Non-comprehensive health insurance policy. So, the correct option is D.
A non-comprehensive policy is a type of policy that covers only expenses related to the health of the customer that are provided in the hospital in-house premises only.
It is to be noted that there are no nursing facility expenses reimbursed or paid to the policy holder in case of health issues faced, if any. There are several other types of policies which reimburse such expenses.In a non-comprehensive policy, the policy holder is entitled to receive health benefits of only core hospitalization and any other expenses like bedding, medications, out-house nursing facilities, etc.The premium to be paid on the non-comprehensive policy is less compared to a comprehensive policy as the benefits to be availed are also less and so the drill.Hence, the correct option is D that the non-comprehensive policy does not cover nursing facilities taken in-house or at the community.
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The cost of preferred stock
Preferred stock is a hybrid security, because it has some characteristics typical of debt and others typical of equity. The following table lists various characteristics of preferred stock. Determine which of these characteristics is consistent with debt and which is consistent with equity.
Characteristics Debt Equity
Dividends are fixed
Usually has no specified maturity date
Consider the case of Tamin Enterprises:
At the present time, Tamin Enterprises does not have any preferred stock outstanding but is looking to include preferred stock in its capital structure in the future. Tamin has found some institutional investors that are willing to purchase its preferred stock issue provided that it pays a perpetual dividend of $11 per share. If the investors pay $97.95 per share for their investment, then Tamin's cost of preferred stock (rounded to four decimal places) will be:_____.
Answer:
Dividends are fixed ⇒ Debt
Preferred dividends are fixed much like the interest payments made on debt which makes this a characteristic of debt.
Usually have no specified maturity date ⇒ Equity
Equity does not have an expiration or maturity date and preferred shares share this same characteristic.
Cost of preferred stock.
The value of a Preferred stock is calculated by the formula:
Price = Dividend / Cost of preferred stock
97.95 = 11 / Cp
97.95 * Cp = 11
Cp = 11/ 97.95
= 11.23%
Jammer Company uses a weighted average perpetual inventory system and reports the following:
August 2 Purchase 24 units at $18.50 per unit. August 18 Purchase 26 units at $20.00 per unit. August 29 Sale 48 units. August 31 Purchase 29 units at $21.50 per unit.
What is the per-unit value of ending inventory on August 31? (Round your per unit answers to 2 decimal places.)
Answer: $21.36
Explanation:
Weighted average inventory system works by taking the average of the inventory prices on the different days.
Price on August 29 which is date of sale:
= {(Units purchased on August 2 * Unit cost on August 2) + ( Units purchased on August 18 * Unit cost on August 18)] / (Units purchased on August 2 + Units purchased on August 18)
= [ ( 24 * 18.50) + (26 * 20) ] / (24 + 26)
= $19.28 per unit
48 units were sold so the number of units left are:
= 24 + 26 - 48
= 2 units
Price on August 31
= [ (Units remaining on August 29 * Unit cost on August 29) + ( Units purchased on August 31 * Unit cost on August 31)] / (Units remaining on August 29 + Units purchased on August 31)
= [ (2 * 19.28) + (29 * 21.50) ] / ( 2 + 29)
= $21.36
Narcissistic leaders tend to have which of the following traits that are positively associated with both leader emergence and effectiveness?
A. Agreeableness and creativity.
B. Extraversion and openness to experience.
C. Openness to experience and agreeableness.
D. Agreeableness and extraversion.
E. Creativity and extraversion.
To urban-dwelling, educated tech-savvy consumers, when they use Zipcar, car-sharing service, instead of owning a car, they save money while reducing their carbon footprint. What is effective about this position statement?
Answer: It addresses all five key elements of an effective position statement.
Explanation:
In this scenario, the most effective thing about this position statement is that it addresses all the five key elements of an effective position statement.
The target market is identified, the category of customers which are the prospective customers is identified as well. The company's differentiators as well as the mission and vision is also in effect.
Capital budgeting is the process of planning and controlling investments in assets that are expected to produce cash flows for one year or less. This statement is:
Answer:
True
Explanation:
It is True that Capital budgeting is the process of planning and controlling investments in assets that are expected to produce cash flows for one year or less.
You are given the following data Stock A Expected return 8.00% Standard deviation 23.00% Stock B Expected return 7.50% Standard deviation 33.00% The correlation of Stock A and Stock B is 0.05. What is the variance of risky portfolio P with 43% in Stock A and the rest in Stock B
Answer:
Variance of risky portfolio P = 4.61%
Explanation:
WA = Weight of stock A = 43%, or 0.43
WB = Weight of stock B = 1 - 0.43 = 0.57
SA = Standard deviation of stock A = 23%, or 0.23
SB = Standard deviation of stock B = 33%, or 0.33
Cab = Correlation of Stock A and Stock B = 0.05
Therefore, we have:
Variance of risky portfolio P = (WA^2 * SA^2) + (WB^2 * SB^2) + (WA * SA * WB * SB * Cab) = (0.43^2 * 0.23^2) + (0.57^2 * 0.33^2) + (0.43 * 0.23 * 0.57 * 0.33 * 0.05) = 0.0461, or 4.61%
Assume that a hypothetical economy with an MPC of 0.75 is experiencing severe recession. Instructions: In part a, round your answers to 2 decimal places. Enter positive numbers. In part b, enter your answers as whole numbers. a. By how much would government spending have to rise to shift the aggregate demand curve rightward by $25 billion? $ billion. How large a tax cut would be needed to achieve the same increase in aggregate demand? $ billion. b. Determine one possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt (because it maintains a balanced budget, G = T).
Answer:
a-1. Amount of rise in government expenditure required = $6.25 billion
a-2. Tax multiplier = -3
b. The combination is as follows:
Increase in spending = $25 billion
increase in taxes = $25 billion
Explanation:
a-1. By how much would government spending have to rise to shift the aggregate demand curve rightward by $25 billion? $ billion.
Spending multiplier = 1 / (1 - MPC) = 1 / (1 - 0.75) = 4
Amount of rise in government expenditure required = Change in aggregate demand / Spending multiplier = $25 / 4 = $6.25 billion
a-2. How large a tax cut would be needed to achieve the same increase in aggregate demand? $ billion.
Tax multiplier = - MPC / (1 - MPC) = - 0.75 / (1 - 0.75) = -3
Amount of tax cut required = Change in aggregate demand / Tax multiplier = $25 / (-3) = $8.33 billion
b. Determine one possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt (because it maintains a balanced budget, G = T).
The amount is the amount of the balanced budget, which has a multiplier of one. This indicates that spending and taxes need be increased by $25 billion each to boost GDP by $125 billion. Therefore, the combination is as follows:
Increase in spending = $25 billion
increase in taxes = $25 billion
process which is followed to monitor the movement of stock in a company
Answer:
it known as stock control
Refer to Exhibit 4-3. Suppose that the government imposes a price ceiling at a price of $12. The result would be a ________________ of _____________ units of good Z.
Answer:
The correct option is c. shortage, 70. That is, the result would be a shortage of 70 units of good Z.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Exhibit 4-3
PRICE OF GOOD Z:
$10 // QD: 300 // QS: 160
$12 // QD: 250 // QS: 180
$14 // QD: 200 // QS: 200
$16 // QD: 150 // QS: 220
Refer to Exhibit 4-3. Suppose that the government imposes a price ceiling at a price of $12. The result would be a ________________ of _____________ units of good Z.
a. surplus, 70
b. surplus, 20
c. shortage, 70
d. shortage, 20
The explanation of the answers is now provided as follows:
A price ceiling can be described as a maximum price set by the government whereby it is illegal to sell the good above it. A price ceiling will cause a product shortage if it is set below the product's equilibrium price.
Equilibrium price is the price at which quantity demanded (QD) is equal to the quantity supplied (QS).
From Exhibit 4-3, QD is equal to QS is equal to 200 at the price of $14. This implies that the ceiling price of $12 imposed by the government is below the equilibrium price.
Based Exhibit 4-3. the units of shortage of goods Z at $12 can be calculated as follows:
Units of shortage of goods Z at the price of $12 = QD at the price of $12 – QS at the price of $12 = 250 - 180 = 70 units
Therefore, the correct option is c. shortage, 70. That is, the result would be a shortage of 70 units of good Z.
Classifying Liability-Related Accounts into Balance Sheet or Income Statement Indicate the proper financial statement classification (balance sheet or income statement) for each of the following liability-related accounts. Account Financial Statement a. Gain on Bond Retirement Answer Income statement b. Discount on Bonds Payable Answer Balance sheet c. Mortgage Notes Payable Answer Balance sheet d. Bonds Payable Answer Balance sheet e. Bond Interest Expense Answer Income statement f. Bond Interest Payable (due next period) Answer Balance sheet g. Premium on Bonds Payable Answer Balance sheet h. Loss on Bond Retirement Answer Income statement Check
Answer:
Income Statement:
Gains and expenses for the period go to the income statement so the accounts that go here include:
a. Gain on Bond Retirement
e. Bond Interest Expense
h. Loss on Bond Retirement
Balance sheet:
All liabilities go to the Balance sheet.
b. Discount on Bonds Payable
c. Mortgage Notes Payable
d. Bonds Payable
f. Bond Interest Payable (due next period)
g. Premium on Bonds Payable
what is the primary benefit people receive in exchange for paying premiums to an insurance company
Answer:
The insurance company will pay for covered expenses
With premium rates from insurance companies, the overall protection is much more guaranteed than a regular, and perhaps the insurance will cover more than regular insurance.
A benefit that people receive in exchange for paying premiums is that insurance company B.will pay for covered expenses.
What is insurance?The insurance can be regarded as a process of insuring one's property or life in case of danger or any future problems.
The insurance company pays you or someone you choose if something bad happens to you. If you have no insurance and an accident happens, you may be responsible for all related costs.
Therefore, option B is correct because, when people pay their premiums, the company will be available to covered expenses.
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Identify the simplifying assumptions usually made in net present value analysis.
a. AlI cash flows Other than the initial investment occur at the end of periods.
b. All cash flows generated by the investment project are immediately reinvested at a rate of return greater than the discount rate.
c. All cash flows generated by the investment project are immediately reinvested at a rate Of return equal to the discount rate,
d. All cash flows occur at the beginning of the periods,
e. The time value of money is ignored when evaluating investment proposals under the net present value analysis.
Answer:
a
c
Explanation:
net present value analysis is a capital budgeting method
It is used to analyse the profitability of an investment
Contrary to popular opinion, CEOs of major U.S. companies come from a wide variety of private universities and state universities, not just a handful of well-publicized MBA programs. What does this fact tell you about sources of power and organizational politics
Answer: Power is earned
Explanation:
The fact that so many influential CEOs come from such a wide array of universities shows that they had to work to get to where they are today and were not simply handed positions because of the university they came from.
It shows that if one wants to succeed in business, their alma mater does not matter. They could be from an Ivy league college or from a state college in Mississippi, what matters is their determination to work hard and gain a good track record that will take them all the way to the top.
Market efficiency is probably the most controversial concept in finance. Even recent winners of the Nobel Prize in Economics come down on opposite sides of the issue. Nonetheless, it is important for you to grapple with this idea. It has very important practical implications for investment decisions, including (especially) for your personal investment decision. In particular, should you pursue active or passive strategies
Answer:
Active strategies should be pursued when the market is more volatile, with larger fluctuations over a shorter period of time, that require a more active management of a portfolio, in order to take advantage of fast changing positions in different assets, and also in order to avoid possible losses due to staying in particular positions for too long.
Passive strategies is more long-term focused, and should be pursued when the economy is more stable. Passive strategies should be analyzed carefully before execution because once the passive investment is made, the idea is to keep the position for a long period of time instead of buying and selling constantly as in a active strategy.
On November 1, Alan Company signed a 120-day, 12% note payable, with a face value of $10,800. What is the maturity value of the note on March 1? (Use 360 days a year.)
a) $11,016
b) $10,800
c) $11,088
d) $11,232
e) $10,944
Answer: $11232
Explanation:
The maturity value of the note on March 1 will be calculated as thus:
Face value = $10800
Interest on note = $10800 × 12% × 120/360 = $432
Maturity value will now be:
= Face value + Interest on note
= $10800 + $432
= $11232
The following revenue and expense account balances were taken from the ledger of Acorn Health Services Co. after the accounts had been adjusted on January 31, 20Y7, the end of the fiscal year:
Depreciation Expense $10,000
Insurance Expense 9,000
Miscellaneous Expense 8,150
Rent Expense 60,000
Service Revenue 634,900
Supplies Expense 4,100
Utilities Expense 44,700
Wages Expense 548,200
Requierd:
Prepare an income statement.
Answer and Explanation:
The preparation of the income statement is presented below:
Service revenue $634,900
Less:
Depreciation Expense $10,000
Insurance Expense 9,000
Miscellaneous Expense 8,150
Rent Expense 60,000
Supplies Expense 4,100
Utilities Expense 44,700
Wages Expense 548,200
Net loss -$49,250
In eight years, when he is discharged from the Air Force, Steve wants to buy a $30,000 power boat. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: What lump-sum amount must Steve invest now to have the $30,000 at the end of eight years if he can invest money at:
Answer:
The correct answer is:
(1) $15,054
(2) $12,990
Explanation:
The required table is not given in the question. Please find below the attachment of the table.
Given:
Future value,
= $30,000
If discounting rate is 9%, the present value will be:
= [tex]Future \ value\times PV \ factor(9 \ percent, 8 \ years)[/tex]
= [tex]30000\times (\frac{1}{1.09} )^8[/tex]
= [tex]30000\times 0.5018[/tex]
= [tex]15,054[/tex] ($)
If discounting rate is 11%, the present value will be:
= [tex]Future \ value\times PV \ factor(11 \ percent, 8 \ years)[/tex]
= [tex]30000\times (\frac{1}{1.11} )^6[/tex]
= [tex]30000\times 0.433[/tex]
= [tex]12,990[/tex] ($)
The quantity demanded for money is higher in Japan than in the United States because: telecommunications and information technology is more advanced in the United States than in Japan. Japanese interest rates are higher than those in the United States. Japanese interest rates are lower than those in the United States. Japanese consumers use credit cards more than people in the United States.
Answer:
Japanese interest rates are lower than those in the United States.
Explanation:
The demand for money (the decision to hold money) is inversely related to interest rate. if interest rate is high, individuals would prefer to hold bonds and the demand for money would fall. if interest rate is low, individuals would prefer to hold money.
the opportunity cost of holding money is what would have been earned if money was invested. if interest rate is low, individuals would prefer to hold more money because the amount that would be earned if money was invested in bonds would be low, so the opportunity cost of holding money would be low
If the demand for money is higher in Japan than in the United States, it is because interest rates are lower in Japan
Ideally, a profit oriented firm desires to denominate bonds in a currency that: ________.
a. Exhibits a low interest rate and is expected to depreciate.
b. Exhibits a high interest rate and is expected to depreciate.
c. Exhibits a low interest rate and is expected to appreciate.
d. Exhibits a high interest rate and is expected to appreciate.
Answer: exhibits a low interest rate and is expected to depreciate.
Explanation:
Bonds are the debt securities which are issued by the governments or corporations, and usually have a lower risk and reward than stocks.
A profit oriented firm desires to denominate bonds in a currency that exhibits a low interest rate and is expected to depreciate.
The weekly total cost of baking pies at Tasty Tortes is given by TC = 0.01 Q 1.5. Tasty’s marginal cost of producing 10,000 pies a week is:
Answer: $1.50
Explanation:
TC = 0.01Q⁰.⁵
You get marginal cost when you differentiate the total cost.
MC = dTC / dQ
= 1.5 * 0.01 * Q¹.⁵ ⁻ ¹
= 0.015 * Q⁰.⁵
When Q is 10,000, the marginal cost is:
= 0.015 * 10,000⁰.⁵
= $1.50
In 2019, Teller Company sold 3,000 units at $600 each. Variable expenses were $420 per unit, and fixed expenses were $270,000. The same selling price, variable expenses, and fixed expenses are expected for 2020. What is Teller’s break-even point in units for 2020? g
Answer:
Break-even point in units= 1,500
Explanation:
Giving the following information:
Selling price= $600
Unitary variable cost= $420
Fixed cost= $270,000
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 270,000 / (600 - 420)
Break-even point in units= 1,500
A company wants to have $20,000 at the end of a ten-year period by investing a single sum now. How much needs to be invested in order to have the desired sum in ten years, if the money can be invested at 12%? (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.
Answer:
$6,439.56
Explanation:
The computation is shown below:
As we know that
Future value = Present Value × Future Value Interest Factor
where,
Future value interest factor = ( 1 + r )^10
= ( 1.12 )^10
= 3.1058
Now
Present value of the future sum is
= $20,000 ÷ 3.1058
= $6,439.56
The adjusted trial balance for Cowboy Company follows: Cowboy Company Adjusted Trial Balance December 31, 2020 ACCOUNT NAMEDEBITCREDIT Cash 156,750 Accounts Receivable 4,500 Prepaid Rent 7,800 Building 145,000 Accumulated Depreciation - Building 65,000 Accounts Payable 5,500 Salaries Payable 1,300 Interest Payable 2,000 Unearned Revenue 24,000 Notes Payable 60,000 Cowboy, Capital 98,000 Cowboy, Withdrawals 22,000 Fees Earned 156,000 Wages Expense 35,000 Rent Expense 20,100 Supplies Expense 7,800 Utilities Expense 3,600 Depreciation Expense 9,000 Interest Expense 250 Totals411,800411,800 Prepare the closing journal entries
Answer:
Cowboy Company
Closing Entries:
Debit Fees Earned 156,000
Credit Income Summary 156,000
To close the revenue account to the income summary.
Debit Income Summary 75,750
Credit:
Wages Expense 35,000
Rent Expense 20,100
Supplies Expense 7,800
Utilities Expense 3,600
Depreciation Expense 9,000
Interest Expense 250
To close the expenses to the income summary.
Debit Net Income 80,250
Credit Cowboy, Capital 80,250
To close the income summary to the Capital account.
Explanation:
a) Data and Calculations:
Cowboy Company
Adjusted Trial Balance
December 31, 2020
ACCOUNT NAME DEBIT CREDIT
Cash 156,750
Accounts Receivable 4,500
Prepaid Rent 7,800
Building 145,000
Accumulated Depreciation - Building 65,000
Accounts Payable 5,500
Salaries Payable 1,300
Interest Payable 2,000
Unearned Revenue 24,000
Notes Payable 60,000
Cowboy, Capital 98,000
Cowboy, Withdrawals 22,000
Fees Earned 156,000
Wages Expense 35,000
Rent Expense 20,100
Supplies Expense 7,800
Utilities Expense 3,600
Depreciation Expense 9,000
Interest Expense 250
Totals 411,800 411,800
On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 6%. The contract calls for four rent payments of $14,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $98,000 and were expected to have a useful life of seven years with no residual value. Both firms record amortization and depreciation semiannually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease. 2. Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease.
Answer:
Nath-Langstrom Services, Inc.
And
ComputerWorld Leasing
1. Journal entries by Nath-Langstrom Services for the first year of the lease:
Jan. 1, 2021:
Debit Right of Use Asset $52,039.38
Credit Lease Liability $52,039.38
To record the Right of Use Asset.
June 30, 2021:
Debit Interest Expense $1,561.18
Debit Lease Liability $12,438.82
Credit Cash $14,000
To record the semiannual payment of the lease liability.
Debit Lease Amortization Expense $13,010
Credit Accumulated Amortization $13,010
To record amortize the Right of Use Asset.
December 31, 2021:
Debit Interest Expense $1,188.02
Debit Lease Liability $12,811.98
Credit Cash $14,000
To record the semiannual payment of the lease liability.
Debit Lease Amortization Expense $13,010
Credit Accumulated Amortization $13,010
To amortize the Right of Use Asset.
2. Journal Entries by ComputerWorld Leasing for the first year of the lease:
Jan. 1. 2021:
Debit Lease Receivable $52,039.38
Credit Leased Assets $52,039.38
To record the lease receivable.
June 30, 2021:
Debit Cash $14,000
Credit Interest Income $1,561.18
Credit Lease Receivable $12,438.82
To record the receipt of the first lease payment.
Debit Depreciation Expense $7,000
Credit Accumulated Depreciation $7,000
To depreciate the leased asset.
December 31, 2021:
Debit Cash $14,000
Credit Interest Income $1,188.02
Credit Lease Receivable $12,811.98
To record the receipt of lease payment.
Debit Depreciation Expense $7,000
Credit Accumulated Depreciation $7,000
To depreciation the leased asset.
Explanation:
a) Data and Calculations:
Annual interest rate = 6%
Semiannual rental payment = $14,000
Period of lease = 2 years
Number of lease payments = 4
Cost of computers to ComputerWorld = $98,000
Estimated useful life of computers = 7 years
Residual value = $0
N (# of periods) 4
I/Y (Interest per year) 6
PMT (Periodic Payment) 14000
FV (Future Value) 0
Results
PV = $52,039.38
Sum of all periodic payments $56,000.00
Total Interest $3,960.62
Schedule
Period PV PMT Interest FV
1 $52,039.38 $14,000.00 $1,561.18 $39,600.56
2 $39,600.56 $14,000.00 $1,188.02 $26,788.58
Year #1 end
3 $26,788.58 $14,000.00 $803.66 $13,592.23
4 $13,592.23 $14,000.00 $407.77 $0.00
We must take into account the provisions of the lease contract and the relevant accounting guidelines for operating leases in order to create the journal entries for Nath-Langstrom Services, Inc. (the lessee) and ComputerWorld Leasing (the lessor) for the first year of the lease.
Given
Cost = $98,000
semiannually = $7,000 = $14,000/ 2
Required to pass Journal entries in the books of Nath-Langstrom Services, Inc. and ComputerWorld Leasing
1. Journal entries recorded by Nath-Langstrom Services, Inc.:
On January 1, 2021 (lease inception):
Lease Right-of-Use Asset $98,000
Lease Liability $98,000
On June 30, 2021 (first semiannual payment):
Lease Liability $7,000
Cash $7,000
On December 31, 2021 (second semiannual payment):
Lease Liability $7,000
Cash $7,000
2. Journal entries recorded by ComputerWorld Leasing (the lessor):
On January 1, 2021 (lease inception):
Lease Receivable $98,000
Equipment $98,000
On June 30, 2021 (first semiannual payment):
Cash $7,000
Lease Receivable $7,000
On December 31, 2021 (second semiannual payment):
Cash $7,000
Lease Receivable $7,000
Therefore, the following are the required journal entries in the books of Nath-Langstrom Services, Inc. and ComputerWorld Leasing.
Learn more about journal entries here:
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Two athletes of equal ability are competing for a prize of $10,000. Each is deciding whether to take a dangerous performance-enhancing drug. If one athlete takes the drug, and the other does not, the one who takes the drug wins the prize. If both or neither take the drug, they tie and split the prize. Taking the drug imposes health risks that are equivalent to a loss of X dollars
Required:
a. Draw a $2 payoff matrix describing the decisions the athletes face.
b. For what X is taking the drug the Nash equilibrium?
c. Does making the drug safer (that is, lowering X) make the athletes better or worse off? Explain.
Answer:
a) attached below.
b) for $x < $5000 will cause taking the drug to be part of the Nash equilibrium
c) will make the athletes feel better because the value their payoff will increase
Explanation:
a) 2 * 2 payoff matrix describing the decision faced by the athletes
attached below
when both players take the drug the payoff for each player = $5000 - x
when neither player takes the drug the payoff for each player = $5000
When only one player takes the drug his payoff = $10000 - x
b) If we consider the value of $x to be involved in the Nash equilibrium then
; $5000 - $x > 0 becomes the best response
hence for $x < $5000 will cause taking the drug to be part of the Nash equilibrium
c) Lowering the negative effect of the drug ( i.e. when the value of x is reduced )
will make the athletes feel better because the value their payoff will increase
When companies use automated production processes, they tend to condense the three manufacturing costs into two categories. These categories are: direct and indirect materials. direct costs and indirect materials. indirect materials and conversion costs. direct materials and conversion costs.
Answer:
direct materials and conversion costs.
Explanation:
When companies use automated production processes, they tend to condense the three manufacturing costs into two categories which are direct materials and conversion costs.
This is because Automation does conversion on the Direct Materials which are visible and can be traced to product being manufactured.
Stock Rit Rmt ai Beta
A 10.6 15Â Â Â 0 0.8
Z Â 9.8 8 0 1.1
Rit = return for stock i during period t
Rmt = return for the aggregate market during period t
What is the abnormal rate of return for Stock Z during period t using only the aggregate market return (ignore differential systematic risk)?
a. 3.40
b. 4.40
c. 1.80
d. -4.40
E.
-1.70
Answer:
1.8 option c
Explanation:
this question has a very simple solution
the following definitions
Rit = return for stock i during period t
Rmt = return for the aggregate market during period t
The abnormal rate of return for stock z is = Rit - Rmt
Rit = 9.8
Rmt = 8
9.8 - 8 = 1.8
therefore the abnormal rte of return for stock z is = 1.8, which is option c
