(Working with the balance​ sheet) The Caraway Seed Company grows heirloom tomatoes and sells their seeds. The heirloom tomato plants are preferred by many growers for their superior flavor. At the end of the most recent year the firm had current assets of $ 48 comma 800​, net fixed assets of $ 248 comma 800​, current liabilities of $ 28 comma 500​, and​ long-term debt of $ 98 comma 200. a. Calculate​ Caraway's stockholders' equity. b. What is the​ firm's net working​ capital? c. If​ Caraway's current liabilities consist of $ 18 comma 500 in accounts payable and $ 10 comma 000 in​ short-term debt​ (notes payable), what is the​ firm's net working​ capital? a. Calculate​ Caraway's stockholders' equity.

Answers

Answer 1

Answer:

A. $170,900

B. $20,300

C. $ 19,800

Explanation:

A. Accounting Equation ;

Assets = Equity + Liabilities

Therefore  Equity = Assets - Liabilities

Total Assets - Caraway Seed Company

Current assets                 $ 48,800​

Net fixed assets             $ 248,800

Total Assets                   $ 297,600

Total Liabilities - Caraway Seed Company

current liabilities   $ 28,500​

long-term debt     $ 98,200

Total                      $126,700

Equity = $ 297,600 -  $126,700 = $170,900

B. Net working​ capital = Current Assets - Current liabilities

                                 =  $ 48,800​ - $ 28,500​

                                 =  $20,300

C. Net working​ capital = Current Assets - Current liabilities

                                     = $ 48,800 - ( $18,500 + 10,500)

                                     = $ 19,800


Related Questions

Which of the following activities of the central bank do not constitute monetary​ policy? A. Monitoring key stock prices. B. Monitoring financial institutions. C. Controlling certain key interest rates. D. Indirectly controlling the money supply. The​ Fed's dual mandate includes maintaining ▼ low and predictable levels of inflation maximum and sustainable levels of money supply maximum and sustainable levels of unemployment . The Fed engages in different types of activities to achieve its dual mandate. In the following​ examples, identify the type of activity being carried out by the Fed. Example Activity The Fed transfers​ $1 million from Santander​ Bank's reserves​ (on deposit at the​ Fed) to Deutsche​ Bank's reserves when​ Alice, a customer of Deutsche​ Bank, goes to clear a check written to her by​ April, a customer of Santander Bank. ▼ Regulation Management of macroeconomic fluctuations Management of interbank transfers The Fed increases the quantity of bank reserves to stimulate the economy by increasing inflation and lowering unemployment. ▼ Management of interbank transfers Management of macroeconomic fluctuations Regulation The Fed fails Morgan Stanley in its stress test and orders the bank to improve its balance sheet by adding more capital. ▼ Regulation Management of interbank transfers Management of macroeconomic fluctuations Click to select your answer.

Answers

Answer: Please refer to Explanation

Explanation:

1. A. Monitoring key stock prices.

This does not fall under what the Central Bank does when Monetary Policy is implemented. Monetary Policy allows the government to influence interest rates, monitor financial institutions and indirectly control money supply.

2. Low and predictable levels of inflation.

Under the mandate of PRICE STABILITY, the Fed aims to ensure low and Predictable inflation in the long run to preserve the purchasing power of money.

3. Management of interbank transfers.

The Fed monitors and manages Interbank transfers to protect the financial system.

4. Management of Macroeconomic fluctuations.

- The Fed just embarked on monetary policy to correct the Economy. This was a Macro Economic function as it dealt with the entire economy as a whole.

5. Regulation

The Fed acts as the regulator of Banks and ensures that they follow certain practices and rules to ensure the safety of the banking system and the money belonging to the people who put it there.

The reported net incomes for the first 2 years of Sandra Gustafson Products, Inc., were as follows: 2014, $147,000; 2015, $185,000. Early in 2016, the following errors were discovered.

1. Depreciation of equipment for 2014 was overstated $17,000.
2. Depreciation of equipment for 2015 was understated $38,500.
3. December 31, 2014, inventory was understated $50,000.
4. December 31, 2015, inventory was overstated $16,200.

Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.)

Answers

Answer:

Debit 2016 Beginning retained earning for $37,700;

Credit Accumulated depreciation for $21,500, and

Credit Inventory for $16,200.

Explanation:

The entries will affect the 2016 beginning Retained earning except for the December 31, 2014 inventory which was understated by $50,000 which was a self correcting error at the end of 2015.  

Accumulated depreciation = Understatement of 2015 depreciation - Overstatement of 2014 depreciation = $38,500 - 17,000 = $21,500

The entries will affect the 2016 beginning retained earning as follows:

Details                                                         Dr ($)                  Cr ($)

Beginning retained earning                     37,700

Accumulated depreciation                                                21,500

Inventory - 2015 Overstatement                                       16,200

To correct the error discovered in the accounts.                             .

Selected comparative financial statements of Korbin Company follow.
KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31, 2017, 2016, and 2015
2017 2016 2015
Sales $ 555,000 $ 340,000 $ 278,000
Cost of goods sold 283,500 212,500 153,900
Gross profit 271,500 127,500 124,100
Selling expenses 102,900 46,920 50,800
Administrative expenses 50,668 29,920 22,800
Total expenses 153,568 76,840 73,600
Income before taxes 117,932 50,660 50,500
Income taxes 40,800 10,370 15,670
Net income $ 77,132 $ 40,290 $ 34,830
Required:
a. Calculate the income statement data in common-size percents.

Answers

Answer and Explanation:

The computation is shown below:

Particulars          2015        %          2014          %            2013             %

Sales                 $555,000 100        $340,000  100       $278,000     100    Less

COGS               $283,500  51.08     $212,500  62.5  $153,900      55.36    Gross profit      $271,500  $48.92   $127,500   37.5    $124,100       44.64    Less:

Selling expenses $102,900 18.54   $46,920    13.8     $50,800       18.27    Administrative expenses $50,668 9.13  $29,920 8.8 $228,00        8.20

total expenses  $153,568   27.67     $76,480    22.49 $736,00       26.47   Income before tax $117,932 21.25    $50,660    14.9    $50,500      18.16    Income taxes     $40,800   7.35        $10,370     3.05   $15,670       5.64  

Net income        $77,132     13.90      $40,290    11.85  $34,830       12.53

For cost of goods sold percentage we simply divide the cost of goods sold by the sales and the same is applied for other items

Goodmark Company produces two types of birthday cards: scented and regular. Expected product data for the coming year are given below. Overhead costs are identified by activity.

Scented Cards Regular Cards Total
Units produced 20,000 200,000 -
Prime costs $160,000 $1,500,000 $1,660,000
Direct labor hours 20,000 160,000 180,000
Number of setups 60 40 100
Machine hours 10,000 80,000 90,000
Inspection hours 2,000 16,000 18,000
Number of moves 180 120 300

Overhead costs:
Setting up equipment $240,000
Moving materials 120,000
Machine 200,000
Inspecting products 160,000

Calculate the activity consumption ratios for Scented cards (round to two decimal places).
Setups:
Moving materials:
Machining:
Inspection:

Answers

Answer:

Setups: $ 144,000

Moving materials: $72000

Machining: $22,200

Inspection:  $17,777.78

Explanation:

Goodmark Company

                Scented Cards        Regular Cards             Total

Units produced 20,000             200,000 -

Prime costs    $160,000        $1,500,000               $1,660,000

Direct labor hours 20,000       160,000                     180,000

Number of setups 60                   40                                 100

Machine hours        10,000         80,000                      90,000

Inspection hours      2,000         16,000                         18,000

Number of moves      180             120                              300

First we find the rate by dividing the overhead costs with the corresponding cost driver as follows.

Overhead costs:                               Rate

Setting up equipment $240,000 = Setting up equipment / Number of setups=$240,000/100=2400

Moving materials 120,000   =   Moving materials/Number of moves

                                               120,000/300=400

Machine 200,000         =   Machining/Machine hours    

                                        =  200,000/ 90,000=2.222

Inspecting   160,000  =  Inspection/Inspection hours

                                        = 160,000/18000= 8.89

Now we find the overhead applied to the scented cards by multiplying the rate to the  corresponding overhead activity of the scented cards.

Activity                        Rate                Scented Cards

Setups:                        2400                   2400*60=$ 144,000

Moving materials:       400                    400*180= $72000

Machining:                    2.22                  2.22*10,000=$22,200

Inspection:                   8.89                  8.89*2000= $17,777.78

Evaluate the statement “Accounting is all about numbers.". Using the definition of accounting to justify your answer.​

Answers

Explanation:

Accounting is not all about numbers. For accounting is characterized as the entire process of recording financial transactions of an organization.

Some of the accounting activities are the summary and analysis of accounting information to economic entities, as well as communicating non-financial information such as those that can impact people and the environment.

On March​ 1, 2018, Everson Services issued a 5​% long−term notes payable for $25,000. It is payable over a 5−year term in $5,000 annual principal payments on March 1 of each year plus​ interest, beginning March​ 1, 2019. Each yearly installment will include both principal repayment of $5,000 and interest payment for the preceding one−year period. On March​ 1, 2019,​ ________. The accounting period ends on December 31.

Answers

Answer:

The description including its given problem is outlined in the following section on the explanation.

Explanation:

Everson resources or services released a 5% hard-term notes convertible for $25,000 on Mar 1, 2018. This is paid on March 1 of every year, starting on March 1, 2019, throughout a five-year term in $5,000 amount installments. This payment seems to have the consequence of:

Assets are through during the form of money, as extra money is earned whenever a note is given.Long-term assets are rising by $25,000 at either the time of requirement throughout the form of a large-term note paid. It is indeed a longer-term burden. $5,000 notice is shown as current assets throughout the income statement on Dec 31, 2018, while the resulting $20,000 notice would be shown as significant longer-term liabilities.

Therefore, the Journal will be:

Title of accounts and explanation              Debit                     Credit

Cash                                                              25,000                       -

Long-term payable of notes                             -                        25,000

Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month: Direct materials $ 72,000 Direct labor $ 36,500 Variable manufacturing overhead $ 16,200 Fixed manufacturing overhead 28,900 Total manufacturing overhead $ 45,100 Variable selling expense $ 12,600 Fixed selling expense 19,200 Total selling expense $ 31,800 Variable administrative expense $ 4,300 Fixed administrative expense 25,600 Total administrative expense $ 29,900 Required: 1. With respect to cost classifications for preparing financial statements: a. What is the total product cost

Answers

Answer:

Product cost= $153,600

Explanation:

Giving the following information:

Direct materials $ 72,000

Direct labor $ 36,500

Variable manufacturing overhead $16,200

Fixed manufacturing overhead 28,900

Total manufacturing overhead $ 45,100

The product cost is the sum of direct material, direct labor, and total manufacturing overhead.

Product cost= 72,000 + 36,500 + 45,100

Product cost= $153,600

Suppose the interest rate is 4.3 %. a. Having $ 400 today is equivalent to having what amount in one​ year? b. Having $ 400 in one year is equivalent to having what amount​ today? c. Which would you​ prefer, $ 400 today or $ 400 in one​ year? Does your answer depend on when you need the​ money? Why or why​ not? a. Having $ 400 today is equivalent to having what amount in one​ year?

Answers

Answer: a. $417.2. b. $383.51. c. $400 today.

Explanation:

a. Present value = $400

Interest rate = 4.3%

Future value= PV(1+r)^n

= 400(1+0.043)^1

= 400(1.043)

= $417.2

b. FV = $400

PV = Unknown

Interest = 4.3%

Future value= PV(1+r)^n

400 = PV(1+0.043)^1

400 = PV(1.043)

PV = 400/1.043

PV = $383.51

c. I'll prefer $400 today.

My answer does not depend on me needing money presently, I can actually invest the $400 today and get more value when it's a year. I'll have made more than $400.

How long do foodbourne illnesses last

Answers

Answer:

5-7 days

Explanation:

Immune-comprised individuals may experience a more serious illness. Severe diarrhea (often bloody diarrhea), abdominal cramps, and vomiting. Usually little or no fever. Can begin 2 to 8 days, but usually 3-4 days after consumption of contaminated food or water and last about 5 to 7 days depending on severity.

Answer:

about a week

Explanation:

Can begin 2 to 8 days, but usually 3-4 days after consumption of contaminated food or water and last about 5 to 7 days depending on severity.

On April 1, 2017, Pharoah Company issued $990,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. Prepare journal entries to record the following. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) (a) The issuance of the bonds. (b) The payment of interest on July 1. (c) The accrual of interest on December 31.

Answers

Answer:

(a)

April 1, 2017

Dr. Cash                $990,000

Cr. Bond Payable $990,000

(b)

July 1, 2017

Dr. Interest Expense $59,400

Cr. Cash                     $59,400

(c)

December 31, 2017

Dr. Interest Expense                 $59,400

Cr. Interest on Bond Payable   $59,400

Explanation:

Bond issued is a liability as company receives cash against the issuance of bond which will be repaid on a specific time.

Interest is calculated using Face value and coupon ate of the bond. As the interest is being paid semiannually, so interest expense will be as follow after each 6 months.

Interest Expense = $990,000 x 12% x 6/12 = $59,400

As the payment of the loan will be made on January 1, So on December 31 at the year end interest expense accrual is recorded according to the accrual concept of accounting. A liability of Interest on Bond Payable is arose and it will be paid on January 1.

Frederick Company has two service departments (Cafeteria Services & Maintenance). Frederick has two production departments (Assembly Department & Packaging Department.) Frederick uses a step allocation method where Cafeteria Services is allocated to all departments and Maintenance Services is allocated to the production departments. All allocations are based on total employees. Cafeteria Services has costs of $255,000 and Maintenance has costs of $175,000 before any allocations. What amount of Maintenance total cost is allocated to the Packaging Department? (round to closest whole dollar) Employees are: Cafeteria Services 4 Maintenance 5 Assembly Department 10 Packaging Department 10

Answers

Answer:

The Total allocation of maintenance cost of packaging department is $87,500

Explanation:

According to the given data we have the following:

The Total Maintenance cost is $175,000 before allocation.

Total employees of in Production Department is=  10 Assembly + 10 Packaging= 20

Hence, Total maintenance cost per employee = $175,000 / 20

Total maintenance cost per employee =$8,750

                                                       

Therefore, the Total allocation of maintenance cost of packaging department= Total maintenance cost per employee× Employees Packaging Department

Total allocation of maintenance cost of packaging department=$ 8,750 X 10 employees= $87,500

Allegheny Company ended Year 1 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $68,000 and $3,450, respectively. During Year 2, Allegheny wrote off $6,300 of Uncollectible Accounts. Using the percent of receivables method, Allegheny estimates that the ending Allowance for Doubtful Accounts balance should be $5,400. What amount will Allegheny report as Uncollectible Accounts Expense on its Year 2 income statement

Answers

Answer:

$8,250

Explanation:

Relevant data provided for compute the Uncollectible Accounts Expense is here below:-

Amount written off = $6,300

Closing balance = $5,400

Opening balance = $3,450

The computation of Uncollectible Accounts Expense is shown below:-

Uncollectible Accounts Expense = Amount written off + Closing balance - Opening balance

= $6,300 + $5,400 - $3,450

= $11,700 - $3,450

= $8,250

Therefore for computing the Uncollectible Accounts Expense we simply applied the above formula.

Suppose that the standard deviation of monthly changes in the price of commodity A is $2. The standard deviation of monthly changes in a futures price for a contract on commodity B (which is similar to commodity A) is $3. The correlation between the futures price and the commodity price is 0.9. What hedge ratio should be used when hedging a one month exposure to the price of commodity A

Answers

Answer:

0.6

Explanation:

Correlation r = 0.9,

Standard deviation of monthly change in price of commodity A, σA = 2,

Standard deviation of monthly change in price of commodity B, σB = 3

The hedge ratio will be calculated using the formula

Hedge ratio=r×σA÷σB

Hedge ratio=0.9×2÷3

Hedge ratio = 0.6

Therefore, the hedge ratio used when hedging a one month exposure to the price of commodity A is 0.6.

Select a publicly traded firm of your choice that enjoys a large shareholder base. What challenges may this firm have encountered (or is likely to encounter) in terms of (a) incorporating ethics into financial management practices, and (b) maintaining/sustaining ethical practices in the face of internal or external (market) pressures? Frame your response relative to the financial manager's fiduciary duty to maximize shareholder's wealth.

Answers

Answer: The answer is provided below

Explanation:

The publicly traded firm of my choice is Amazon.

a. Amazon would in its initial phase have encountered challenges as a result of the inculcating of financial management practises. At the beginning, the founders and the employees may not be willing to disclose all the profits on their books of accounts.

Also, the use of debt might not be taken as a healthy sign at the beginning. The preparation of statement of position might not be taken seriously and the internal control mechanisms will have been challenging to put up and also keep accountability.

b. It would have been really difficult for managers to sustain best practises during pressures. Also, stakeholders due to their personal goals might not allow finance manager to independently work. The pressure to exhibit certain level of sales or profit may also be there.

Furthermore, the lagging or leading of expenses might be done to show

lesser or higher profit. A materially price sensitive information might not be disclosed or reported. Finally, the extent of any loss might also not be reported as a result of internal pressures.

Check all true statements regarding CMBS:

a.CMBS have less exposure to prepayment risk than RMBS

b.Loans in a CMBS deal are recourse loans The multifamily/apartment CRE sector never uses CMBS for financing as it relies on RMBS

c.CMBS are the main source of financing for commercial real estate loans

d.The number of commercial mortgages in a CMBS deal are usually lower than the number of residential mortgage in a RMBS deal

Answers

Answer: A and D only

Explanation:

CMBS Loan are also referred to as a Conduit Loan, this is a type of real estate loan usually commercial, which is secured by a first-position mortgage on a commercial property. These loans are usually packaged, and sold by a Conduit Lender, commercial banks, investment banks, and syndicates of banks.

Loans in a CMBS are always bigger so they are less in a CMBS deal. Sometimes it’s onlyone loan in a Single Asset (SA) CMBS deal

Prepayments are discouraged in CMBS through defeasance,prepayment penalties or yield maintenance fees.

Answer:

a.CMBS have less exposure to prepayment risk than RMBS

d. The number of commercial mortgages in a CMBS deal are usually lower than the number of residential mortgage in a RMBS deal

Explanation:

Commercial Mortgage-Backed Securities (CMBS) as the name implies are mortgage backed securities that are secured with commercial mortgages while Residential Mortgage-Backed Securities (RMBS) are mortgage backed securities secured by residential property.

a) CMBS are based on mortgages which usually have a fixed term contract in place meaning that prepayment is less of a thing with CMBS than with RMBS so the former does indeed have a less exposure to prepayment risk than the latter.

d) This is indeed true because both packages have to look appealing to investors but can only use different amounts to reach the minimum threshold. This is because Commercial Mortgages pay more than Residential Mortgages so more RMBS have to be pulled together to form an attractive investment as opposed to CMBS. This is why the number in CMBS are usually less than that of RMBS.

Maritime Sail Makers manufactures sails for sailboats. The company has the capacity to produce 37 comma 000 sails per year and is currently producing and selling 25 comma 000 sails per year. The following information relates to current​ production: Sales price per unit $ 185 Variable costs per​ unit: Manufacturing $ 60 Selling and administrative $ 20 Total fixed​ costs: Manufacturing $ 700 comma 000 Selling and administrative $ 250 comma 000 If a special pricing order is accepted for 5 comma 700 sails at a sales price of $ 160 per​ unit, fixed costs remain​ unchanged, and there are no variable selling and administrative costs for this​ order, what is the change in operating​ income?

Answers

Answer:

Increase in operating income  = $456,000

Explanation:

According to the scenario, computation of the given data are as follow:-

                 Operating Income Statement

Particular                             Existing         New order       Total  

Current selling                     25,000             5,700             30,700

Selling price per unit                $185                    $160  

Manufacturing variable cost per unit $60            $60  

Selling and administrative variable cost per unit $20  $20  

Contribution margin per unit(CMPU)= $105     $80  

(sale price - variable cost)

Contribution margin                 $2,625,000   $456,000 $3,081,000

(sale units × CMPU)

Manufacturing fixed cost         $700,000   $700,000

Selling and administrative fixed cost $250,000  $250,000

Net operating income                $1,675,000  $2,131,000

So, Difference in net income are as follows:

Increase in operating income = $2,131,000 - $1,675,000

= $456,000

A bakery buys sugar from a big distributor to use in baking cakes. Typically, they use 3663 bags of sugar in a year. The price of sugar is typically $14 per bag. The cost to the bakery for placing an order is $26, and the annual carrying cost is $17 per bag. The distributor has offered the bakery the following volume discount schedule: Order Size Discount rate on the original price 1--449 0 percent 450--799 5 percent more than 800 10 percent We are trying to find how many bags of sugar should the store order, whenever they place a new order of sugar.Assume 364 days a year and 52 weeks a year. IMPORTANT: Note, the discounts off of original price are reported. You need to calculate the actual prices. Keep two decimal places in your calculations.If we ignore the discounts, how many bags of sugar should we order

Answers

I have no idea sorry

Journalize the following transactions assuming the perpetual inventory system:
July 3 Sold merchandise on account for $3,750 terms.
The cost of the goods sold was $2,000. July 5 Issued credit memo for $1,050 for merchandise returned from sale on July 3. The cost of the merchandise returned was $610. July 12 Received check for the amount due for sale on July 3 less return on July 5. July 17 Sold merchandise for $7,000 plus 6% sales tax to cash customers. The cost of the goods sold was $3,830.

Answers

Answer:

General Journal

Perpetual Inventory system

Date              Particulars                          Debit             Credit

July 3            Account Receivable        $3,750

                                                  Sales                         $3,750

Sold merchandise on account for $3,750 terms.

                        Cost of Goods Sold      $ 2000

                                 Merchandise Inventory            $2000

The cost of the goods sold was $2,000.

July 5         Sales Returns             $1,050

                                     Account Receivable         $1,050

Issued credit memo for $1,050 for merchandise returned from sale on July 3.

         

              Merchandise Inventory            $610

                                           Cost of Goods Sold      $ 610

The cost of the merchandise returned was $610.

July 12              Bank (cash)                  $2700

                                Account Receivable                 $2700

Received check for the amount due for sale on July 3 less return on July 5. ($3,750-  $1,050 )=$2700

July 17                      Cash                  $ 7420

                                        Sales                              $ 7420

Sold merchandise for $7,000 plus 6% sales tax to cash customers. As sales tax is added to the sales  a combined entry is made . ( 6%* 7000= $ 420)

                       Cost of Goods Sold      $ 3830

                                 Merchandise Inventory            $3830

The cost of the goods sold was $3,830.

Answer:

Please see the Journal entries below.

Explanation:

July 3

Debit: Accounts Receivables $3,750

Debit: Cost of Goods Sold $2,000

         Credit: Sales Revenue $3,750

         Credit: Inventory $2,000

To record sales on Account.

July 5:

Debit: Sales Revenue $1,050

Debit: Inventory $610

         Credit: Cost of Goods Sold $610

         Credit: Accounts Receivables $1,050

To record credit memo.

July 12

Debit: Cash ($3,750 - $1,050) $2,700

         Credit: Accounts Receivables $2,700

To record payment of sales.

July 17

Debit: Accounts Receivables $7,420

Debit: Cost of Goods Sold $3,830

         Credit: Sales Revenue $7,000

         Credit: Sales Tax Payable $420

         Credit: Inventory $3,830

To record sales and cost of goods sold.

Exercise 4-20 (Algo) Statement of cash flows; indirect method [LO4-8] Presented below is the 2021 income statement and comparative balance sheet information for Tiger Enterprises. TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2021 ($ in thousands) Sales revenue $ 15,500 Operating expenses: Cost of goods sold $ 5,100 Depreciation expense 410 Insurance expense 950 General and administrative expense 3,500 Total operating expenses 9,960 Income before income taxes 5,540 Income tax expense (2,216 ) Net income $ 3,324 Balance Sheet Information ($ in thousands) Dec. 31,2021 Dec. 31, 2020 Assets: Cash $ 640 $ 370 Accounts receivable 835 1,000 Inventory 825 770 Prepaid insurance 140 40 Equipment 3,300 2,650 Less: Accumulated depreciation (1,180 ) (770 ) Total assets $ 4,560 $ 4,060 Liabilities and Shareholders' Equity: Accounts payable $ 385 $ 530 Accrued liabilities (for general & administrative expense) 385 570 Income taxes payable 365 320 Notes payable (due 12/31/2022) 1,100 800 Common stock 1,120 970 Retained earnings 1,205 870 Total liabilities and shareholders' equity $ 4,560 $ 4,060 Required: Prepare Tiger’s statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments). (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)

Answers

Answer and Explanation:

The preparation of the cash flow statement is presented below:        

                                TIGER ENTERPRISES

                                  Cash flow statement

Cash flow from operating activities

Net income $3,324

Adjustment made

Add: Depreciation expenses $410

Add: Decrease in account receivable $165 ($835 - $1,000)

Less: Increase in inventory -$55($825 - $770)

Less: Increase in prepaid insurance -$100 ($140 - $40)

Less: Decrease in account payable -$145 ($385 - $530)

Less: Decrease in accrued liabilities -$185 ($385 - $570)

Add: Increase in income taxes payable $45 ($365 - $320)

Net cash provided by operating activities  $3,459

Cash flow from investing activities  

Purchase of equipment -$650 ($3,300 - $2,650)

Net cash used by investing activities -$650

Cash flow from financing activities

Issuance of the note payable $300 ($1,100 - $800)

Issuance of the common stock $150 ($1,120 - $970)

Dividend paid -$2,989 ($870 + $3,324 - $1,205)

Net cash used by financing activities -$2,539

Increase in cash $270

Add: Beginning cash balance $370

Ending cash balance $670

The items which shown in a positive sign reflects the cash inflow and the items which shown in a negative sign reflects the cash outflow ,

All of the following are correct statements about transfers between divisions located in countries with different tax rates except that

A. differences in tax rates across countries complicate the determination of the appro-priate transfer price
B. a decreasing number of transfers are between divisions located in different countries
C. companies must pay income tax in the country where income is generated
D. many companies prefer to report more income in countries with low tax rates.

Answers

I think it’s A .................

All of the following are correct statements about transfers between divisions located in countries with different tax rates except that the companies must pay income tax in the country where income is generated. Thus option (C) is correct.

What is tax?

Taxes are mandatory contributions levied on individuals or corporations by a government entity—whether local, regional, or national.

Tax revenues finance government activities, including public works and services such as roads and schools, or programs such as Social Security and Medicare.

In economics, taxes fall on whoever pays the burden of the tax, whether this is the entity being taxed, such as a business, or the end consumers of the business’s goods.

From an accounting perspective, there are various taxes to consider, including payroll taxes, federal and state income taxes, and sales taxes.

Learn more about tax here:

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Stone Company changed its method of pricing inventories from FIFO to LIFO. What type of accounting change does this represent? A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be restated. A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported. A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be presented as previously reported. A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be restated.

Answers

Answer:

A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported.

Explanation:

Since the accounting method is being changed from FIFO to LIFO, any adjusting of prior year balances would be impractical. If the change is from LIFO to FIFO, then it makes more sense to adjust prior year balances. By impractical, it means that any changes would be too difficult and expensive to determine, and the value of the change  is insignificant (materiality principle).

Generally US GAAP rules require that changes from FIFO to LIFO be disclosed in the footnotes only.

A bidding firm, A, is worth $27,000 as a stand-alone entity. A target firm, B, is worth $12,000 as a stand-alone entity, but $18,000 if it is acquired and integrated with Firm A. Several other firms are interested in acquiring Firm B, and Firm B is also worth $18,000 if it is acquired by these other firms. If A acquired B, would this acquisition create value? If yes, how much? How much of this value would the equity holders of A receive? How much would the equity holders of B receive?

Answers

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

Firm A’s worth as a stand-alone entity = $27,000

Firm B’s worth as a stand-alone entity = $12,000

But if Firm A acquired Firm B it’s increase worth of Firm B at $18000.

Firm A is acquired Firm B, this acquisition create value of

= $18,000 - $12000

= $6000.

With this acquisition equity holders of Firms received $18,000 which is $6,000 more than Firm B stand alone.

On January 1, 2021, Legion Company sold $250,000 of 6% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $163,976, priced to yield 12%. Legion records interest at the effective rate. Legion should report bond interest expense for the six months ended June 30, 2021, in the amount of: (Round your answer to the nearest dollar amount.)

Answers

Answer:

The bond interest expense to be shown in profit or loss as t 30 June 2021

$9,838.56

Explanation:

The bond interest expense is the actual finance cost of using the funds made available by bondholders while the coupon payment is the portion of the finance cost paid to them periodically.

Interest expense=bonds cash proceeds*yield to maturity*6/12

bonds cash proceeds is $163,976

yield to maturity is 12%

interest expense=$163,976*12%*6/12=$9,838.56  

Answer:

$9,838.56  

Explanation:

Interest Expense using effective interest rate method can determined by multiplying the carrying value of the bond and yield rate of the bond because the bonds issued on the discount has different interest expense than the interest payment made to bond holder.

As the interest is paid semiannually the interest expense will be calculated for only 6 months.

Interest expense=Cash proceeds on issuance of bond x YTM x 6/12

As per given data

Cash proceeds are $163,976

YTM is 12%

Interest expense=$163,976 x 12% x 6/12=$9,838.56  

During the month of June, Whispering Boutique recorded cash sales of $302,810 and credit sales of $130,219, both of which include the 7% sales tax that must be remitted to the state by July 15. Prepare the adjusting entry that should be recorded to fairly present the June 30 financial statements.

Answers

Answer and Explanation:

The Journal entry is shown below:-

1. Sales revenue Dr, $28,656      ($121,700 + $287,673) × 7%

                To Sales tax payable $28,656

(Being sales tax payable is recorded)

Here we debited the sales revenue as it decreased the revenue while we credited the sales tax payable as  it increased the liabilities so that the proper posting could be done

Working note

Credit sales = $130,219 × 100 ÷ 107

= $121,700

Cash sales = $302,810 × 100 ÷ 107

= $287,673

A division is considering the acquisition of a new asset that will cost $2,950,000 and have a cash flow of $740,000 per year for each of the four years of its life. Depreciation is computed on a straight-line basis with no salvage value. Ignore taxes. Required: a. & b. What is the ROI for each year of the asset's life if the division uses beginning-of-year asset balances and net book value for the computation? What is the residual income each year if the cost of capital is 8 percent?

Answers

Answer and Explanation:

The computation of ROI for each year of the asset's life and residual income each year is shown below:-

Year            Investment base              ROI                   Residual income

1                   $2,950,000                       8%                  -$233,500

2                  $2,212,500                          11%                 -$233,500

3                   $1,475,000                          17%                  -$115,500

4                   $737,500                             34%                 -$56,500

ROI = Net income ÷ Total investment × 100

Net Income = Cash flow - Depreciation

Residual income = Net income - (Investment × Cost of capital)

Depreciation = Investment base ÷ 4 years

The return on investment and the residual income can be find out by using the excel spreadsheet. Kindly find it in the attachment

Elgin Battery Manufacturers had sales of $1,000,000 in 2009 and their cost of goods sold represented 70 percent of sales. Selling and administrative expenses were 10 percent of sales. Depreciation expense was $100,000 and interest expense for the year was $10,000. The firm's tax rate is 30 percent. What is the dollar amount of taxes paid

Answers

Answer:

$27,000

Explanation:

The dollar amount of taxes paid is the earnings before tax multiplied by the tax rate.

The earnings before tax=sales-costs of sale-selling and administrative expenses-depreciation expense-interest expense

sales is $1,000,000

costs of sales=$1000,000*70%=$700,000

selling and administrative expenses=10%*$1,000,000=$100,000

depreciation expense=$100,000

interest expense=$10,000

earnings before tax=$1,000,000-$700,000-$100,000-$100,000-$10,000=$90,000

taxes paid=$90000 *30%=$27,000

The classical dichotomy and the neutrality of money

The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction.

Maria spends all of her money on paperback novels and beignets. In 2011 she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a beignet was $3.00.

Which of the following give the nominal value of a variable?

1-The price of a beignet is $3.00 in 2011.

2-Maria's wage is $27.00 per hour in 2011.

3-The price of a beignet is 0.33 paperback novels in 2011.

Which of the following give the real value of a variable?

1-The price of a paperback novel is 3 beignets in 2011.

2-Maria's wage is 9 beignets per hour in 2011.

3-The price of a paperback novel is $9.00 in 2011.

Suppose that the Fed sharply increases the money supply between 2011 and 2016. In 2016, Maria's wage has risen to $54.00 per hour. The price of a paperback novel is $18.00 and the price of a beignet is $6.00.

In 2016, the relative price of a paperback novel is _________

Between 2011 and 2016, the nominal value of Maria's wage (increases/decreases/remains the same) and the real value of her wage ____________

Monetary neutrality is the proposition that a change in the money supply ________ nominal variables and ______ real variables.

Answers

Answer:

1. Relative price = $3

2. Increases

3. affects , not affect

Explanation:

As per the data given in the question,

1) The relative price of a paperback novel in 2016 = Maria,s wage ÷ Price of a paperback novel

= $54÷$18

= $3

2) Between 2011 and 2016, the nominal value increases and the real value of Maria's wage remains the same.

3)Monetary neutrality is proposition that the change in the money supply affects the nominal variables but it does not affect the real variables.

If a firm has retained earnings of $2.7 million, a common shares account of $4.7 million, and additional paid-in capital of $9.4 million, how would these accounts change in response to a 10 percent stock dividend? Assume market value of equity is equal to book value of equity.

Answers

Answer:

Change in retained earnings = $1.02 million (Decrease)

Change in common shares account = $5.17 million (Increase)

Change in additional paid-in capital = $10.61 million (Increase)

Explanation:

Given:

Retained earnings = $2.7 million

Common shares account = $4.7 million

Additional paid-in capital = $9.4 million

Stock dividend = 10%

Find:

Changes in account.

Computation:

1. Change in retained earnings

Change in retained earnings = Retained earnings - (Retained earnings - Common shares account - Additional paid-in capital)Stock dividend

Change in retained earnings = $2.7 million - ($2.7 million - $4.7 million - $9.4 million)10%

Change in retained earnings = $2.7 million - 1.68 million

Change in retained earnings = $1.02 million (Decrease)

2. Change in common shares account

Change in common shares account = Common shares account (1+Stock dividend)

Change in common shares account = $4.7 million (1+10%)

Change in common shares account = $5.17 million (Increase)

3. Change in additional paid-in capital

Change in additional paid-in capital = Additional paid-in capital + (Additional paid-in capital + Retained earnings)Stock dividend

Change in additional paid-in capital = $9.4 million + ($9.4 million + $2.7 million)10%

Change in additional paid-in capital = $9.4 million + 1.21 million

Change in additional paid-in capital = $10.61 million (Increase)

ImpressMe Products embosses notebooks with school and corporate logos. Last year, the company’s direct labor payroll totaled $352,100 for 50,300 direct labor hours. The standard wage rate is $6.75 per direct labor hour. Calculate ImpressMe’s direct labor rate variance. (Round answer to 0 decimal places, e.g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

Answers

Answer:

Direct labor rate variance= $12,575 unfavorable

Explanation:

Giving the following information:

Last year, the company’s direct labor payroll totaled $352,100 for 50,300 direct labor hours. The standard wage rate is $6.75 per direct labor hour.

To calculate the direct labor rate variance, we need to use the following formula:

Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity

Actual rate= 352,100/50,300= $7 per hour

Direct labor rate variance= (6.75 - 7)*50,300

Direct labor rate variance= $12,575 unfavorable

Alpine Thrills Ski Company recently expanded its manufacturing capacity. The firm will now be able to produce up to 32,000 pairs of cross-country skis of either the mountaineering model or the touring model. The sales department assures management that it can sell between 26,000 and 30,000 units of either product this year. Because the models are very similar, the company will produce only one of the two models.

The following information was compiled by the accounting department.

Model
Mountaineering Touring
Selling price per unit $ 149.00 $ 137.00
Variable costs per unit 87.70 87.70
Fixed costs will total $622,400 if the mountaineering model is produced but will be only $526,200 if the touring model is produced. Alpine Thrills Ski Company is subject to a 50 percent income tax rate.

Required:

Compute the contribution-margin ratio for the touring model. (Round your final answer to 2 decimal places.)

If Alpine Thrills Ski Company desires an after-tax net income of $41,620, how many pairs of touring skis will the company have to sell? (Do not round intermediate calculations. Round your final answer to the nearest whole unit.)

How much would the variable cost per unit of the touring model have to change before it had the same break-even point in units as the mountaineering model? (Round your intermediate calculations and final answer to 2 decimal places.)

Suppose the variable cost per unit of touring skis decreases by 15 percent, and the total fixed cost of touring skis increases by 15 percent. Compute the new break-even point. (Do not round intermediate calculations. Round your final answer up to nearest whole unit.)

Answers

Answer:

35.98%

12,362 pairs

$2.53

9,688 pairs

Explanation:

As per the data given in the question,

1)

As we know that

Contribution margin ratio = (Contribution margin per unit) ÷ (Selling price per unit) × 100

where,

Contribution margin per unit = Selling price per unit - variable cost per unit\

So,

Selling price = $137.00

Variable cost = $87.70

Contribution Margin = $137.00 - $87.70 = $49.30

Contribution margin ratio = $49.30 ÷ $137.00

= 35.98%

2)

Net Income after tax = $41,620

Income Before tax = $41,620 ÷ 50%

= $83,240

Now Pairs of touring skis will be sold by company = (Income before tax + fixed cost) ÷ Contribution Margin

= ($83,240 + $526,200) ÷ $49.30

= 12,362 pairs

3)

Break-even of mountaineering model

= Fixed cost ÷ (Selling price per unit - variable cost per unit)

= $622,400  ÷ ($149 - $87.70)

= $10,153

Now Let Variable cost be Y

$10,153 = $526,200 ÷ ($137 - Y)

Y = $85.17

Therefore, Variable cost per unit decreased by

= ($87.70 - $85.17)

= $2.53

4)

New Fixed cost

= Fixed cost × increased percentage

= $526,200 × 1.15

= $605,130

New variable cost per unit

= $87.70 × 0.85

= $74.54

New Break-even point = New Fixed cost ÷ Contribution Margin

= $605,130 ÷ ($137-$74.54)

= 9,688 pairs

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