Answer:
1. Adjusted net income = Ending inventory higher by amount * (1-Tax rate) = $70,000*(1-34%) = $70,000 * 66% = $46,200
Details Amount
Beginning retained earnings for the year 2017 $880,000
Add: Adjusted net income $46,200
Beginning adjusted retained earnings for year 2017 $926,200
2. Tax payable = Inventory * Tax rate = $70,000*34% = $23,800
Date Account Titles and Explanation Debit Credit
Inventory $70,000
Retained earnings $46,200
Tax payable $23,800
(To record adjustment of ending inventory)
In 2008, Betserai was a 10-year-old quintrillionaire living in Bulawayo, Zimbabwe. He was literally rolling in money. In fact, Betserai has so much money that he decided to make kites out of billion dollar bills instead of putting the money into the bank to earn interest. None of Betserai's friends bothered to save their money, either. Rupert was Betserai's American pen pal and heard of Betserai's story and was extremely confused. He was taught that Zimbabwe was one of the poorer countries in the world, or at the least substantially poorer than the United States. Which statement best explains this phenomenon?
A. A country's wealth is based on the amount of money in circulation.
B. Zimbabwe was in the midst of an incredible economic boom, substantially increasing the wealth of all its citizens.
C. Rapid rises in price levels made the Zimbabwean dollar near worthless in terms of purchasing power.
D. All of these statements could explain what happened in Zimbabwe in 2008.
Answer:
C. Rapid rises in price levels made the Zimbabwean dollar near worthless in terms of purchasing power.
Explanation:
As in the given situation it is mentioned that 10 year old boy has the bill of billion dollar this represented that the country really printed the bill of billion dollar. It means that the attempt is to be done in order to print a currenct note of higher denomination that also represent that the country would increased such level also at the same time a big amount is required to purchased the goods and services.
Also the high denomination values would not consist of actual value as they have purchasing power i.e. negligible
[The following information applies to the questions displayed below.] Laser Delivery Services, Inc. (LDS), was incorporated January 1. The following transactions occurred during the year: Received $27,000 cash from the company's founders in exchange for common stock. Purchased land for $9,000, signing a two-year note (ignore interest). Bought two used delivery trucks at the start of the year at a cost of $9,000 each; paid $2,000 cash and signed a note due in three years for $16,000 (ignore interest). Paid $800 cash to a truck repair shop for a new motor, which increased the cost of one of the trucks. Stockholder Jonah Lee paid $220,000 cash for a house for his personal use. Record the effects of each item using a journal entry.
Answer:
a.
Date Account Details Debit Credit
Cash $27,000
Common Stock $27,000
b.
Date Account Details Debit Credit
Land $9,000
Notes Payable $9,000
c.
Date Account Details Debit Credit
Vehicles $18,000
Cash $2,000
Notes Payable $16,000
d.
Date Account Details Debit Credit
Vehicles $800
Cash $800
e. This does not require a journal entry as it is a personal transaction.
The concept of demand is best described as the quantity of a good or a service that people will offer for sale at different possible prices. the additional satisfaction derived from a quantity of goods and services obtained when income increases. the total satisfaction that consuming a good provides people at different prices. the quantity of a good or service that consumers will substitute when the price of a good changes.
Answer:
the quantity of a good or a service that people are willing and able to purchase at different possible prices.
Explanation:
The demand concept would be refer to the various quantity amount in which the people are willing and able to buy at various prices so the demand concept deals with the goods or service quantity in which the purchaser would purchase at various prices that can be possible
Hence, the above represent the answer
wifty Company had these transactions pertaining to stock investments: Feb. 1 Purchased 1820 shares of Teal Mountain Company (10%) for $46410 cash. June 1 Received cash dividends of $2 per share on Teal Mountain stock. Oct. 1 Sold 1240 shares of Teal Mountain stock for $33480. The entry to record the receipt of the dividends on June 1 would include a
Answer:
Credit to Dividend Revenue for $3,640
Explanation:
Preparation of The entry to record the receipt of the dividends on June 1
Based on the information given if the company
on Feb. 1 made Purchased of 1820 shares of Teal Mountain Company in which on June 1 they Received a cash dividends of $2 per share on Teal Mountain stock which means that The entry to record the receipt of the dividends on June 1 a:Credit to Dividend Revenue for $3,640
Debit Cash$3,640
Credit Dividend revenue $3,640
(1820 shares*$2 per share)
Beta Alpha Psi, the accounting honorary fraternity, held a homecoming party. The fraternity expected attendance of 80 persons and prepared the following budget: Room rental .. $ 170 Food ....... 660 Entertainment .. 570 Decorations ... 210 Total ...... $1,610 After Beta Alpha Psi paid all the bills for the party, the total cost came to $1,885 or $275 over budget. Details are $170 for room rental; $875 for food; $570 for entertainment; and $270 for decorations. Ninety-six persons attended the party. 1. Prepare a performance report for the party that shows how actual costs differed from the budget. That is, include in your report the budgeted amounts, actual amounts, and variances. 2. Suppose the fraternity uses a management-by-exception rule. Which costs deserve further examination
Answer:
Beta Alpha Psi
1. Performance Report for the party:
Budget Actual Variance
Expected attendance (persons) 80 96 16
Room rental .. $ 170 $170 $0
Food ....... 660 875 $215 U
Entertainment .. 570 570 $0
Decorations ... 210 270 $60 U
Total ...... $1,610 $1,885 $275 U
2. The costs that deserve further examination are Food and Decorations. The party overspent on these items.
Explanation:
Since 96 persons attended the party, the food cost should have been = $792 ($660/80 * 96), which is the flexible budget cost. The cost of decorations should have remained $210 unless there were improper estimates of the items required for the decorations and the size of the party venue.
Tirri Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.50 Direct labor $ 3.85 Variable manufacturing overhead $ 1.55 Fixed manufacturing overhead $ 24,400 Sales commissions $ 1.05 Variable administrative expense $ 0.60 Fixed selling and administrative expense $ 8,800 If the selling price is $28.10 per unit, the contribution margin per unit sold is closest to:
Answer:
$13.55
Explanation:
The contribution margin per unit is computed as;
= Selling price - (Direct materials + Direct labor + Variable manufacturing overhead + Sales commission + Variable administrative expense)
= $28.10 - ($7.50 + $3.85 + $1.55 + $1.05 + $0.60)
= $28.10 - $14.55
= $13.55
Therefore , the contribution margin per unit is $13.55
Economists develop models to A. capture every detail of the real world. B. justify the assumptions they make about%E2%80%8B people's behavior. C. make their arguments more realistic. D. help us understand economic phenomena in the real world.
Answer:
D
Explanation:
An economic model is a caricature of reality. It allows users to observe, understand and predict economic phenomena. Economic models don't capture every detail of the real world
Examples of economic models include :
the production possibility frontierthe Keynesian IS/LM modelthe Mundell-Fleming model.The Production possibilities frontiers is a curve that shows the various combination of two goods a company can produce when all its resources are fully utilised.
The PPC is concave to the origin. This means that as more quantities of a product is produced, the fewer resources it has available to produce another good. As a result, less of the other product would be produced. So, the opportunity cost of producing a good increase as more and more of that good is produced.
All of the following are examples of managerial accounting activities except ________.
a. preparing external financial statements in compliance with GAAP.
b. deciding whether or not to use automation.
c. making equipment repair or replacement decisions.
d. measuring costs of production for each product produced
Answer:
a. preparing external financial statements in compliance with GAAP.
Explanation:
Managerial accounting also known as cost accounting is an accounting technique focused on identification, measurement, analyzing, interpretation, and communication of financial information to managers for better decisions making and pursuit of the organization's goals.
Managerial accounting information includes all of the following performance evaluations, for example budget-to-actual reports, cost reports and budgets except financial statements prepared in accordance with generally accepted accounting principles.
Hence, managerial accounting information is normally provided to managers whenever they need or require it because they are a part of the internal decision makers. Managerial accounting typically comprises of both non-monetary and monetary informations about an organization.
All of the following are examples of managerial accounting activities;
I. Deciding whether or not to use automation.
II. Making equipment repair or replacement decisions.
III. Measuring costs of production for each product produced.
In a market system, the allocation of scarce goods involves the consideration of multiple choice 1 what must be sacrificed in using a resource for its next-best use. identifying the possibility of professional advancement. the time required to pursue an economic activity. the dollar cost of any good or service.
Answer:
what must be sacrificed in using a resource for its next-best use
Explanation:
The market cost would be managed by the clients also it would remember the advantage that is best Also it is remembered in order to support the satisfaction to their own decisions.
So in the case of the market system, the allocation of the scarcity goods would be based on the opportunity cost i.e. to be sacrificed for the next best usage
The Bradley Corporation produces a product with the following costs as of July 1, 20X1: Material $4 per unit Labor 4 per unit Overhead 2 per unit Beginning inventory at these costs on July 1 was 4,250 units. From July 1 to December 1, 20X1, Bradley Corporation produced 14,500 units. These units had a material cost of $2, labor of $4, and overhead of $2 per unit. Bradley uses LIFO inventory accounting. a. Assuming that Bradley Corporation sold 18,000 units during the last six months of the year at $13 each, what is its gross profit
Answer:
Gross profit $83,000
Explanation:
The computation of the gross profit is as follows:
Sales (18,000 units × $13) $234,000
Less: Material
(14,500 × $2) -$29,000
(18,000 - 14,500) × $4 -$14,000
Less; labor
(14,500 × $4) -$58,000
(18,000 - 14,500) × $4 -$14,000
Less: Overhead
(14,500 × $2) -$29,000
(18,000 - 14,500) × $2 -$7,000
Gross profit $83,000
1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $28,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.
Answer:
1. a. Allocated prices
First add the market values = 444,150 + 255,150 + 56,700 + 189,000 = $945,0
00
Building allocated price Land allocated price
= 444,150/ 945,000 * 830,000 = 255,150/945,000 * 830,000
= $390,100 = $224,100
Land improvement allocated price Four vehicles allocate price
= 56,700/945,000 * 830,000 = 189,000/945,000 * 830,000
= $49,800 = $166,000
b. Journal entry
Date Account Details Debit Credit
Jan. 1, 2017 Building $390,100
Land $224,100
Land improvement $49,800
Vehicles $166,000
Cash $830,000
2. Depreciation on building using straight-line method.
= (390,100 - 28,000) / 15
= $24,140
3. Depreciation on land improvements using double declining method.
First do straight line:
= 49,800/ 5 years
= $9,960
Straight line rate of depreciation = 9,960/49,800 = 20%
Double declining will be twice that rate = 40%
Depreciation = 40% * 49,800
= $19,920
Linda Davis is a divorced parent who maintains a home for a 13 year old daughter. Linda earns $65,000 per year from her job. She has itemized deductions of $14,000. She also pays $1,500 in student loan interest from a college loan. What is Linda's Adjusted Gross Income (AGI)
Answer:
$63,500
Explanation:
Calculation for What is Linda's Adjusted Gross Income (AGI)
Wages $65,000
Less Student Loan Interest ($1,500)
Adjusted Gross Income $63,500
($65,000-$1,500)
Therefore Linda's Adjusted Gross Income (AGI) will be $63,500
Which of the elements of this scenario represent a flow from a firm to a household? This could be a flow of dollars, inputs, or outputs. Check all that apply. The $250 Edison spends to purchase medical services from the Medical Clinic The mojito Hilary receives Hilary's labor The $200 per week Edison earns working for Little Havana
Answer:
1. The mojito Hilary receives
2. The $200 per week that Edison receives working for Little Havana
Explanation:
We are to pick the options that represents a flow from a firm to household.
There is a flow of labor from the household to the firm which results In a flow of goods or wages from the firm to the household.
1. The mojito that Hilary receives gives a flow of goods that is moving from the firm to the household.
2. The $200 per week that Edison is getting for working for Little Havana is a flow of money from the firm to edison for the services he renders at the firm. This here is a flow of money from the firm to the household
During the current year, Alpha sold inventory to Beta for $100,000. As of year end, Beta had resold only 60 percent of these intra-entity purchases. Alpha sells inventory to Beta at the same markup it uses for all of its customers. What is the total for consolidated cost of goods sold
Answer:
a. $173,000
Explanation:
Missing word "Alpha Company owns 80 percent of the voting stock of Beta Company. Alpha and Beta reported the following account information from their year-end separate financial records: Alpha Beta Inventory $95,000 $88,000 Sales Revenue 800,000 300,000 Cost of Goods Sold 600,000 180,000 During the current year, Alpha sold inventory to Beta for $100,000."
Percentage of profits Alpha charge to other customers = ($800,000 - $600,000) / $800,000 = 25% of sales
Stock held at year end by beta from the purchases made from Alpha = $100,000 * 40% =$40,000
Profit involved in stock held by beta from the purchases made from Alpha = $40,000 * 25% = $10,000
So, Value of stock of Beta = $88,000 - $10,000 = $78,000
Hence, Total for consolidated inventory = $95,000 + $78,000 = $173,000
Consider Pacific Energy Company and U.S. Bluechips, Inc., both of which reported earnings of $967,000. Without new projects, both firms will continue to generate earnings of $967,000 in perpetuity. Assume that all earnings are paid as dividends and that both firms require a return of 13%.
A. What is the current PE ratio for each company?
B. Pacific Energy Company has a new project that will generate additional earnings of $117,000 each year in perpetuity. Calculate the new PE ratio of the company.
C. Atlantic Energy has a new project that will increase earnings by $217,000 in perpetuity. Calculate the new PE ratio of the firm.
Answer and Explanation:
The computation is shown below:
a. Current PE ratio is
For Pacific energy company
= Price ÷ Earnings
= ($967,000 ÷ 0.13) ÷ ($967,000)
= 7.69 times
For U.S Bluechips
= Price ÷ Earnings
= ($967,000 ÷ 0.13) ÷ ($967,000)
= 7.69 times
b. The new PE ratio is
= Price ÷ Earnings
= (($967,000 + $117,000) ÷ 0.13) ÷ ($967,000)
= 8.62 times
c. The new PE ratio is
= Price ÷ Earnings
= (($967,000 + $217,000) ÷ 0.13) ÷ ($967,000)
= 9.42 times
At Medallion Industries, variable cost per unit is budgeted to be $8.00 and fixed cost per unit is budgeted to be $5.00 in a period when 4,000 units are produced. What is the expected total cost of the units produced at Medallion, if instead, production is actually 5,100 units
Answer:
Total cost= $60,800
Explanation:
Giving the following information:
For 4,000 units:
Unitary variable cost= $8
Unitary fixed cost= $5
First, we need to calculate the total fixed cost:
Total fixed cost= 5*4,000= $20,000
Now, we can determine the total cost for 5,100 units:
Total cost= 5,100*8 + 20,000
Total cost= $60,800
Parks Corporation is considering an investment proposal in which a working capital investment of $10,000 would be required. The investment would provide cash inflows of $2,000 per year for six years. The working capital would be released for use elsewhere when the project is completed. If the company's discount rate is 10%, the investment's net present value is closest to (Ignore income taxes.): Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.
Answer:
$4,355.26
Explanation:
The net present value is the present value of future cash flows expected from the project minus the initial investment outlay
initial investment outlay=working capital investment = -$10,000
Years 1-5 cash inflow=$2,000
Year 6 cash inflow=normal cash inflows+release of working capital
Year 6 cash inflow=$2,000+$10,000=$12,000
the present value of a future cash flow=cash flow/(1+r)^n
n is 1 for year cash inflow 2 for year 2 cash inflow, 3 for year 3 cash inflow and so on
NPV=-$10,000+$2,000/(1+10%)^1+$2,000/(1+10%)^2+$2,000/(1+10%)^3+$2,000/(1+10%)^4+$2,000/(1+10%)^5+$12,000/(1+10%)^6
NPV=$4,355.26
homeworklib Assume the following for White Top Inc. for the current fiscal year. White Top applies overhead on the basis of units produced. Budgeted overhead $ 200,000 Actual overhead $ 222,000 Actual labor hours 15,000 Actual number of units sold 43,000 Underapplied overhead $ 20,000 Budgeted production (units) 50,000 Required: How many units were produced in the current fiscal year
Answer:
50,500 Units
Explanation:
The computation of the number of units produced is shown below:
Overhead rate is
= $200,000 ÷ 50,000 units
= $4 per unit
The Actual overhead is $222,000
So,
Under applied overhead is $20,000
Now
Applied overhead is
= $222,000 - $20,000
= $202,000
And, finally
Actual unit produced is
= $202000 ÷ 4
= 50,500 Units
Suppose the statutory incidence were instead on the consumers. Calculate the new equilibrium price and quantity in the market. In that case, the dollar portion of the $0.75/drink tax that is borne by consumers is $ . The dollar portion of the $0.75/drink that that is borne by producers is $ .
Answer:
The new equilibrium price is $6.43 and the quantity is 374.28
The tax borne by consumers is 0.72
The tax borne by producers is 0.03
Explanation:
The old equilibrium price of the bubble tea was $5.71 while the new price of the bubble tea is $6.43. The new price includes the tax effect which is paid by the consumers. The difference in the two equilibrium prices is the tax which is borne by consumers.
Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $555,000, variable manufacturing overhead of $2.10 per machine-hour, and 74,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed:
Number of units in the job 20
Total machine hours 80
Direct materials $500
Direct labor cost $2,160
The amount of overhead applied to job A496 is closes to____.
A) $1,256.
B) $632.
C) $944.
D) $312.
Answer:
Allocated MOH= $768
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (555,000/74,000) + 2.1
Predetermined manufacturing overhead rate= $9.6 per machine hour
Now, we can allocate overhead to Job A496:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 9.6*80
Allocated MOH= $768
The chart below gives prices and output information for the country of Utopia. Use this information to calculate real and nominal GDP for both years. Use 2001 as the base year.
Year 2000 2001
Price Quantity Price Quantity
Ice Cream $7.00 600 $3.00 400
Blue Jeans $70.00 20 $20.00 90
Laptops $300.00 5 $300.00 5
2000 nominal GDP = $_________
2001 nominal GDP = $_________
2000 real GDP = $_________
2001 real GDP = $_________
Answer and Explanation:
The computation is shown below:
As we know that
Nominal GDP = Sum of (Present Year Price × Present Year Quantity)
And,
Real GDP = Sum of (Base Year Price × Present Year Quantity)
Now
(a) Nominal GDP, 2000 is
= $[(7 × 600) + (70 × 20) + (300 × 5)]
= $4,200 + $1,400 + $1,500
= $7,100
(b) Nominal GDP, 2001 is
= $[(3 × 400) + (20 × 90) + (300 × 5)]
= ($1,200 + $1,800 + $1,500)
= $4,500
(c) Real GDP, 2000 is
= $[(3 × 600) + (20 × 20) + (300 × 5)]
= $1,800 + $400 + 1,500
= $3,700
(d) Real GDP, 2001 is
= $[(3 × 400) + (20 × 90) + (300 × 5)]
= $1,200 + $1,800 + $1,500
= $4,500
Universal Manufacturing uses a weighted-average process-costing system. All materials are introduced at the start of manufacturing, and conversion costs are incurred evenly throughout the process. The company's beginning and ending work-in-process inventories totaled 10,000 units and 15,000 units, respectively, with the latter units being 2/3 complete at the end of the period. Universal started 30,000 units into production and completed 25,000 units. Manufacturing costs follow.
Beginning work in process: Materials, $60,000; conversion cost, $150,000
Current costs: Materials, $180,000; conversion cost, $480,000
Universal's equivalent-unit cost for conversion cost is:____.
a. $4.50.
b. $6.00.
c. $8.00.
d. $9.60.
e. some other amount.
Answer: b. $6.00
Explanation:
Equivalent Cost Per Unit = Total Material Cost/Materials Equivalent Units
Materials Equivalent Units
= Opening inventory + Units completed + Ending inventory
= 10,000 + 25,000 + 5,000
= 40,000 units
Equivalent cost per unit = (Beginning WIP Materials + Current costs) / Materials EUP
= (60,000 + 180,000) / 40,000
= $6.00
Note: Ending materials inventory = Units started - Units completed
In its income statement for the year ended December 31, 2017, Darren Company reported the
following condensed data.
Salaries and wages expense $465,000 Loss on disposal of plant assets $83,500
Cost of goods sold 987,000 Sales revenue 2,210,000
Interest expense 71,000 Income tax expense 25,000
Interest revenue 65,000 Sales discounts 160,000
Depreciation expense 310,000 Utilities expense 110,000
Instructions
(a) Prepare a multi-step income statement.
(b) Calculate the profit margin and gross profit rate.
(c ) In 2016, Darren had a profit margin of 5%. Is the decline in 2017 a cause for concern?
(Ignore income tax effects.)
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a) DARREN COMPANY
Income Statement
For the Year Ended December 31, 2017
Sales
Sales revenue $2,210,000
Less: Sales discounts $160,000
Net Sales $2,050,000
Cost of goods sold $987,000
Gross profit $1,063,000
Operating expenses
Salaries and wages expense $465,000
Depreciation expense $310,000
Utilities expense $110,000
Total operating expenses $885,000
Income from operations $178,000
Other revenues and gains
Interest revenue $65,000
Other expenses and losses
Loss on disposal of plant assets 83,500
Interest expense 71,000 154,500
Income before income taxes 88,500
Income tax expense 25,000 28%
Net income $63,500
(b) Profit margin
Net income $63,500
Net Sales 2,050,000
3.10%
Gross profit rate
Gross profit $1,063,000
Net sales $2,050,000
51.9%
After you have completed E5-8 , consider the following additional question.
1. Assume that cost of goods changed to $1,015,000 and that the income tax rate is 28%.
What impact does this change have on the multi-step income statement and the
profitability ratios?
Answer:
Part a
Darren Company
Multi-step income statement
Sales
Sales revenue $2,210,000
Less: Sales discounts ($160,000)
Net Sales $2,050,000
Cost of goods sold ($987,000)
Gross profit $1,063,000
Operating expenses
Salaries and wages expense $465,000
Depreciation expense $310,000
Utilities expense $110,000
Total operating expenses ($885,000)
Income from operations $178,000
Other revenues and gains
Interest revenue ($65,000)
Other expenses and losses
Loss on disposal of plant assets $83,500
Interest expense $71,000 ($89,500)
Income before income taxes $88,500
Income tax expense 25,000 28% ($25,000)
Net income $63,500
Part b
Darren Company
Profit margin = 3.10 % and gross profit rate = 51.85 %
Part c
Change in profit margin : The Profit Margin has fallen from 5% to 3.10 % in 2017 by 2.10% . The cause of this decline is a concern and must be investigated. The Profit margin rate measure the success with respect of earnings on sales thus more investigations must be done on what caused the earnings to decline in 2017.
Part 1
Cost of Goods Sold has increased by $28,000 ($1,015,000 -$987,000). Income tax rate has not changed.
a. Impact of the change on multi-step income statement
The items of Gross Profit and Income from Operations will decline by $28,000.
b. Impact of the change on profitability ratios
The Profit ratios will decline. Profit margin will be 1.73 %. Gross Profit margin will be 50.49 %
Explanation:
Multiple Step Income Statement shows separately the Operating Income and the Net Income. Operating Income being Income derived from Primary Activities of the Company whilst the Net Income includes the Secondary Activities of the Company such as Income taxes or Sale of assets.
Other Workings :
Profit margin = Net Income / Net Sales x 100
= $63,500 / $2,050,000 x 100
= 3.10 %
Gross Profit rate = Gross Profit / Net Sales x 100
= $1,063,000 / $2,050,000 x 100
=51.85 %
The Total Revenue and Net Earnings are shown individually on the Several Stage Financial Statements. Operating income comes from the company's main activities, whereas net earnings come from the industry's support functions, such as taxable income and divestments.
The income statement has been attached below.
Part. B.
Darren Company
Profit margin = 3.10 % and gross profit rate = 51.85 %
Part. C.
Profitability has dropped by 2.10 percent from 5 percent to 3.10 percent in the year 2017. The basis for this drop is a point of anxiety that needs to be questioned.
Because the gross margin rate evaluates achievement in terms of income on selling, more analysis into what prompted the profitability to drop in 2017 is required.
Part 1
Cost of Goods Sold has boost up by $28,000 ($1,015,000 -$987,000).
The income tax rate has not changed.
a. Impact of the change on the multi-step income statement
The items of Gross Profit and Income from Operations will reduce by $28,000.
b. Impact of the change on profitability ratios
The Profit ratios will decline.
The profit margin will be 1.73 %.
The Gross Profit margin will be 50.49 %
Working Notes:
Profit margin = [tex]\frac{ \text{Net Income}}{ \text{Net Sales}} \times 100[/tex]
= [tex]\frac{ \$63,500}{ \$2,050,000}\times 100[/tex]
= 3.10 %
Gross Profit rate = [tex]\frac{\text{Gross Profit}}{\text{Net Sales}} \times 100[/tex]
= [tex]\frac{ \$1,063,000 }{ \$2,050,000}\times 100[/tex]
=51.85 %
To know more about the calculation of the income statement and the profits, refer to the link below:
https://brainly.com/question/16501306
Mario Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional board game or as an interactive DVD, but not both. Consider the following cash flows of the two mutually exclusive projects for Mario Brothers. Assume the discount rate for Mario Brothers is 10 percent.
a. What is the payback period for each project?
b. What is the NPV for each project?
c. What is the IRR for each project?
Answer:
1.61
1.82
NPV A = $433.58 IRR =26.3%
NPV B 719.80 IRR 22.7%
Explanation:
Here are the cash flows used in answering this question :
ear Cash Flows-Traditional Board Game (A) Cash Flows-Interactive DVD (A)
0 $(1,600.00) $(3,500.00)
1 $770.00 $2,150.00
2 $1,350.00 $1,650.00
3 $290.00 $1,200.00
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows.
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
A partial listing of costs incurred at Gilhooly Corporation during September appears below: Direct materials $183,000 Utilities, factory $9,000 Administrative salaries $90,000 Indirect labor $25,000 Sales commissions $33,000 Depreciation of production equipment $25,000 Depreciation of administrative equipment $32,000 Direct labor $124,000 Advertising $148,000 The total of the manufacturing overhead costs listed above for September is: Group of answer choices $669,000 $366,000 $34,000 $59,000
Answer:
Manufacturing overhead= $59,000
Explanation:
Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured. We need to identify the indirect costs incurred in production. It includes the depreciation of factory equipment.
Manufacturing overhead= Utilities, factory + Indirect labor + Depreciation of production equipment
Manufacturing overhead= 9,000 + 25,000 + 25,000
Manufacturing overhead= $59,000
High Desert Pottery works makes a variety of pottery products that it sells to retailers. The company uses a job-order costing system in which departmental predetermined overhead rates are used to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Molding Department is based on machine-hours, and the rate in the Painting Department is based on direct labor- hours. At the beginning Of the year, the company provided the following estimates:
Direct labor-hours 36,500 50,100
Machine-hours 87,000 32,000
Fixed manufacturing overhead cost $174,000 $445,890
Variable manufacturing overhead per machine-hour $3.20 -
Variable manufacturing overhead per direct labor-hour - $5.20
Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning the job:
Department
Molding Painting
Direct labor-hours 76 132
Machine-hours 350 66
Direct materials $938 $1,220
Direct labor cost $720 $1,020
Required:
a. Compute the predetermined overhead rates used in the Molding Department and the Painting Department.
b. Compute the total overhead cost applied to Job 205.
c. What would be the total manufacturing cost recorded for Job 205?
d. If the job contained 22 units, what would be the unit product cost?
Answer:
Results are below.
Explanation:
First, we need to calculate the predetermined overhead rate for each department:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Molding:
Predetermined manufacturing overhead rate= (174,000/87,000) + 3.2
Predetermined manufacturing overhead rate= $5.2 per machine hour
Painting:
Predetermined manufacturing overhead rate= 445,890/50,100 + 5.2
Predetermined manufacturing overhead rate= $14.1
Now, we can allocate overhead to Job 205:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 5.2*350 + 14.1*132
Allocated MOH= $3,681.2
Finally, the unitary cost of Job 205:
Total cost= (938 + 1,220) + (720 + 1,020) + 3,681.2
Total cost= $7,579
Unitary cost= 7,579/22
Unitary cost= $344.51
Rafael transfers the following assets to Crane Corporation in exchange for all of its stock.
Note: Assume that neither Rafael nor Crane plans to make any special tax elections at the time of incorporation.
Assets Rafael's Adjusted Basis Fair Market Value
Inventory $60,000 $100,000
Equipment 150,000 105,000
Shelving 80,000 65,000
Note: If an amount is zero, enter "0". Do not round any division.
a. Rafael's realized _________________ is $ _________________ . Of this amount, $ _________________ is recognized.
b. Assuming no election is made, Rafael's basis in the stock is $ _________________ .
c. Crane's basis is $ _________________ for inventory, $ _________________ for equipment, and $ _________________ for shelving.
d. If Rafael plans to hold his stock for a substantial period of time, he and Crane may elect to allow Crane _________________ a carryover basis in the assets received. Its basis in the assets would also change to $ _________________ for inventory, $ _________________ for equipment, and $ _________________ for shelving.
Answer:
Im doing the answer in the comments!!
Explanation:
Sumner sold equipment that it uses in its business for $31,200. Sumner bought the equipment a few years ago for $79,400 and has claimed $39,700 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss
Answer:
Particulars Amount
Purchase price of equipment $79,400
Less: Depreciation expenses $39,700
Value of equipment $39,700
Particulars Amount
Sales price of equipment $31,200
Value of equipment $39,700
Section 1231 Ordinary loss -$8,500
How large is my target market?
What type of hazard could occur by wearing jewelry while preparing food
Answer:
it can fall into the food