cholastic Tours is trying to decide which one of two tours it will introduce. The costs and revenues associated with each alternative are listed below: Eastern Tour Western Tour Projected revenue $ 11,000 $ 13,000 Variable costs 2,000 6,000 Fixed costs 3,000 3,000 Profit $ 6,000 $ 4,000 What are the incremental (differential) costs of the Western Tour

Answers

Answer 1

Answer:

Results are below.

Explanation:

Giving the following information:

Eastern Tour Western Tour

Projected revenue $ 11,000 $ 13,000

Variable costs 2,000 6,000

Fixed costs 3,000 3,000

Profit $ 6,000 $ 4,000

Western Tour provides a higher projected revenue ($2,000 higher), but also higher variable costs. The variable cost of Eastern Tour is $4,000 lower, making it the more profitable option, as fixed costs are equal.


Related Questions

At December 31 of the current year, Sunland Corporation had a number of items that were not reflected in its accounting records. Maintenance and repair costs of $900 were incurred but not paid. Utilities costing $370 were used but not paid, and use of a warehouse space worth $2,070 was provided to a tenant who had not been billed as of the end of the month. Record the required adjusting entries related to these events.

Answers

Answer:

Dr Maintenance and repair expense  $900

Cr Accrued expense   $900

Being entries to record maintenance and repair costs incurred

Utilities costing $370 were used but not paid

Dr Utilities expense  $900

Cr Accrued expense   $900

Being entries to record utilities used but unpaid for

use of a warehouse space worth $2,070 was provided to a tenant who had not been billed as of the end of the month

Dr Unbilled receivables    $2,070

Cr Rental Income       $2,070

Being entries to recognize income from warehouse space unbilled

Explanation:

When an expense is incurred but unpaid for, an accrual is recognized to capture the cost. For income earned but unbilled, unbilled receivable is recognized. This is based on the accrual concept.

Considering the transactions given

Maintenance and repair costs of $900 were incurred but not paid

Dr Maintenance and repair expense  $900

Cr Accrued expense   $900

Being entries to record maintenance and repair costs incurred

Utilities costing $370 were used but not paid

Dr Utilities expense  $900

Cr Accrued expense   $900

Being entries to record utilities used but unpaid for

use of a warehouse space worth $2,070 was provided to a tenant who had not been billed as of the end of the month

Dr Unbilled receivables    $2,070

Cr Rental Income       $2,070

Being entries to recognize income from warehouse space unbilled

How can camera footage help?

Answers

Answer:

camera footage are there not to invade a person's privacy but to protect the public by deterring criminal activity and by providing material evidence when a crime has been caught on film.

Explanation:

Crane Sporting Goods expects to have earnings per share of $6 in the coming year. Rather than reinvest these earnings and grow, the firm plans to pay out all of its earnings as a dividend. With these expectations of no growth, Crane's current share price is $60 and the cost of equity capital is 10%. Suppose Crane could cut its divident payout rate to 75% for the foreseeable future and use the retained earnings to open new stores. The return on investment in these stores is expected to be 12%. if we assume that the risk of these new investments is the same as the risk of its existing investments, then the firm's equity cost of capital is unchanged. What effect would this new policy have on Crane's stock price

Answers

Answer:

Stock price increases

Explanation:

We need to determine the stock price with the new policy

Stock price can be determined using the constant growth dividend model

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

growth rate = retention rate x Return on investment

Retention rate = 1 - payout ratio = 1 - 0.75 = 0.25

growth rate = 0.25 x 12 = 3%

Stock price = 6/(0.10 - 0.03) = $85.71

Under the new policy, stock price increases

Freemore Company has the following sales budget for the last six months of 2018: July $206,000 October $181,000 August 168,000 November 203,000 September 209,000 December 185,000 Sales are immediately due, however the cash collection of sales, historically, has been as follows: 55% of sales collected in the month of sale, 35% of sales collected in the month following the sale, 7% of sales collected in the second month following the sale, and 3% of sales are uncollectible. Cash collections for September are ________. $126,710 $199,930 $188,170 $173,750

Answers

Answer:

the cash collection for the September month is $188,170

Explanation:

The computation of the cash collection for the September month is given below:

= September collection  + August collection + July collection

= $209,000 ×0.55 + $168,000 × 0.35 + $206,000 × 0.07

= $114,950 + $58,800 + $14,420

= $188,170

hence, the cash collection for the September month is $188,170

Therefore the third option is correct

The argument advanced by Milton Friedman for adopting a monetary growth rule is that A. the growth rate of M1 has been unstable. B. a constant rate of growth in the money supply would eliminate the booms and recessions that make up the business cycle. C. active monetary policy potentially destabilizes the economy. D. the Fed can control the money​ supply, but not the level of interest rates.

Answers

Answer:

C. active monetary policy potentially destabilizes the economy.

Explanation:

The debits to Work in Process—Assembly Department for May, together with data concerning production, are as follows: May 1, work in process: Materials cost, 3,000 units $ 8,000 Conversion costs, 3,000 units, 66.7% completed 6,000 Materials added during May, 10,000 units 30,000 Conversion costs during May 31,000 Goods finished during May, 11,500 units 0 May 31 work in process, 1,500 units, 50% completed 0 All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for May is a.$3.00 b.$2.92 c.$3.80 d.$2.31

Answers

Answer:

a.$3.00

Explanation:

The computation of the material cost per equivalent unit is shown below:

But before that equivalent units should be

= 3,000 ×0%+ (11,500 - 3,000) ×100% + 1,500 × 100%

= 0 + 8,500+ 1,500

= 10,000 units

Now the material cost per equivalent cost is

= $30,000 ÷ 10,000 units

= $3

Hence, the first option is correct

Question II - Tina Technology is looking to raise $85,000 worth of capital, and she is looking to raise that money through the internet and still fall under an SEC exemption. How should Tina go about raising that money? Due to the amount of capital she is looking to raise, will Tina be subject to any other special requirements?

Answers

Answer and Explanation:

In the given case Tina Technology could use the funding as crowd funding and also can claim exemption from SEC

The provisions are shown below:

The Guideline Crowdfunding could empowered the organizations that should be qualified can offer and sell the protections via crownfunding

The principles are

1. It needs all exchanges that are under Regulation Crowdfunding to arise occur via SEC i.e. enrolled delegation it should be merchant vendor or a financing entrance

2. Permission made to organization for raising a highest measure of $1,070,000 via contributions related to the crownfunding

3. Control the sum of individual specialist that can put total contributions related to the crownfunding

4. It needs the data exposure in order to file with the commission, financial specialist & the middle person for motivating the contribution

The protection that could be purchased in the crowdfunding exchange could not be exchange also the guidelines related to Crowdfunding contributions are based upon the troublemaker that have exclusion arrangement

Using the rule of 72 how many years will it take to double $5,000 earning 4 percent interest

Answers

The rule says that to find the number of years required to double your money at a given interest rate, you just divide the interest rate into 72. For example, if you want to know how long it will take to double your money at eight percent interest, divide 8 into 72 and get 9 years.

i HOPE IT'S HELP

Answer:

Explanation:

it’s 12 %

On January 1, 2021, Cori Ander Herbs granted restricted stock units (RSUs) representing 300,000 of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $12 per share on the grant date. At the date of grant, the company anticipated that 6% of the recipients would leave the firm prior to vesting. In 2022, 2% of the options are forfeited due to executive turnover. The company chooses the option not to estimate forfeitures. What amount should the company record as compensation expense for the year ended December 31, 2022

Answers

Answer: $1,152,000

Explanation:

Compensation Expense = [(No. of RSUs * Market Value per share) * Years elapsed / Total period] - Compensation expense already recorded

Year 1 - 2021

= [ ( 300,000 * 12) * 1/3] - 0

= $1,200,000

Year 2 - 2020

2% of the options have been forfeited so the RSUs left are:

= 300,000 * ( 1 - 2%)

= 294,000 RSUs

Compensation expense = [ (294,000 * 12) * 2/3] - 1,200,000

= $1,152,000

Assume the following: The standard price per pound is $2.00. The standard quantity of pounds allowed per unit of finished goods is 4 pounds. The actual quantity of materials purchased and used in production is 50,800 pounds. The actual purchase price per pound of materials was $2.20. The company produced 13,000 units of finished goods during the period. What is the materials price variance

Answers

Answer:

Direct material price variance =$10,160 unfavorable

Explanation:

Direct material price variance occurs when the actual quantity of materials are purchased at an actual price per unit higher or lower than the standard price.

Direct material price variance                                            $

50,800 pounds should have cost (50,800× $2)      =   101,600

but did cost                                      (50,800× $2.20) = 111,760

Direct material price variance                                         10,160  unfavorable

Direct material price variance =$10,160 unfavorable

The materials price variance is $10,160 Unfavorable.

The difference between the standard cost and actual cost for the purchased actual quantity of material is the direct material price variance

The formulae for the direct Materials price variance is (Standard price – Actual price) * Actual quantity purchased

Direct Materials price variance = ($2.00 per pound – $2.20per pound) * 50800 pounds

Direct Materials price variance = ($0.20 * 50,800 pounds) Unfavorable

Direct Materials price variance = $10,160 Unfavorable

See similar solution here

brainly.com/question/22851732

Mutual aid agreements

Answers

According to FEMA, “mutual aid agreements and assistance agreements are agreements between agencies, organizations, and jurisdictions that provide a mechanism to quickly obtain emergency assistance in the form of personnel, equipment, materials, and other associated services”

The Maryville Construction Company occupies 105,800 square feet for construction of mobile homes. There are two manufacturing departments, finishing and assembly, and four service departments labeled S1, S2, S3, and S4. Information relevant to Maryville is as follows: Allocation Department Area used S1 S2 S3 S4 Finishing Assembly S1 18,600 --- 0.20 0.10 --- 0.10 0.60 S2 5,050 --- --- 0.40 0.40 --- 0.20 S3 10,100 0.20 0.20 --- 0.30 0.20 0.10 S4 5,050 0.20 0.10 0.20 --- 0.30 0.20 Finishing 30,150 --- --- --- --- --- --- Assembly 36,850 --- --- --- --- --- --- Rent paid for the area used is $736,000. How much rent is allocable to the assembly department using the direct method of allocation

Answers

Answer:

$404,800

Explanation:

Calculation to determine How much rent is allocable to the assembly department using the direct method of allocation

Using this formula

Rent =Area used by Assembly department / Total Area used by Manufacturing Departments x Total Rent paid

Let plug in the formula

Rent =36,850/ (36,850+30,150) x $736,000

Rent=36,850/67,000*$738,000

Rent=0.55*$736,000

Rent= $404,800

Therefore How much rent is allocable to the assembly department using the direct method of allocation is $404,800

During 2019, Pepe Guardio purchases the following property for use in his calendar year-end manufacturing business:
Item Date Acquired Cost
Manufacturing equipment (7 year) June 2 $40,000
Office furniture September 15 $6,000
Office computer November 18 $2,000
Passenger automobile
(used 90 percent for business) May 31 $54,000
Warehouse June 23
Building $165,000
Land $135,000
Pepe uses the accelerated depreciation method under MACRS, if available, and does not make the election to expense or take a bonus depreciation. Use Form 4562 to report Pepe's depreciation expense for 2019.
Enter all amounts as positive numbers. If required, round to the nearest dollar. If an amount is zero, enter "0."

Answers

Answer:

Depreciation Expense for 2019 using form 4562

Basis For depreciation; Recovery Period ; Convention ; Method ; Depreciation deduction

2,000 ; 5 years ; HY ; 200 DB ; 400

40,000 ; 7 years ; HY ; 200 DB ; 6,573

Explanation:

Accelerated method of depreciation is used by businesses for accounting and income tax purposes. The depreciation is calculated in such a way that the depreciation expense is higher in early years and lower in later years. Pepe is also using this method to account for his business assets. The depreciation expense for computer equipment and manufacturing equipment's totals $6,973.

Product Pricing: Single Product
Sue Bee Honey is one of the largest processors of its product for the retail market. Assume that one of its plants has annual fixed costs totaling $12,000,000, of which $4,500,000 is for administrative and selling efforts. Sales are anticipated to be 800,000 cases a year. Variable costs for processing are $30 per case, and variable selling expenses are 25 percent of selling price. There are no variable administrative expenses. If the company desires a profit of $7,500,000, what is the selling price per case? Round answer to two decimal places.
$ 0 price per case

Answers

Answer: $72.50

Explanation:

Let the selling price per case be represented by x.

Based on the information you can in the question, we will have an equation as:

(80000 × x) = 12,000,000 + 7,500,000 + (800,000 × 30) + (0.25 × 800000x

800000x = 12,000,000 + 7,500,000

+ (800,000 × 30) + (0.25 × 800000x)

800000x = 43500000 + 200000x

Collect like terms

800000x - 200000x = 43,500,000

600,000x = 43500000

x = 43,500,000 / 600,000

x = 72.50

Selling price per case is $72.50

Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that follows. Assume that all current liabilities are non-interest-bearing liabilities and that no fixed assets were sold or disposed of during 2017. (Enter your answer in 1000s.) Monarch Textiles, Inc. ($ thousands) Income statement Selected balance sheet items 2017 2016 2017 Sales 1,580 Current assets 460 640 Cost of sales 860 Net fixed assets 164 328 Operating expenses 180 Current liabilities 280 360 Depreciation 82 Interest expense 50 Earnings before taxes 408.00 Tax 163.20 Net income 244.80

Answers

Answer:

See below

Explanation:

Computation of free cash flow for Monach textiles, 2017

EBIT = EBT + Interest expense EBIT

EBIT = $408 + $50

EBIT = $458

Tax rate = Tax / EBT

Tax rate = $163.20 / $408

Tax rate = 0.4 = 40%

Operating cash flow = EBIT × (1 - Tax rate) + Depreciation - Change in net working capital - Capital expenditure

= $458 × (1 - 0.4) + $82 - ($640 - $360) - ($460 - $280)

= $274.8 + $82 - $280 - $180

= $274.8 + $92 - $100

= $256.8

Budgeted Actual Sales volume 100 units 110 units Sales price $50 per unit $55 per unit Unit VC $30 per unit $33 per unit Input price for DL $10 per hour $12 per hour Input quantity per unit for DL 1.5 hours per unit 2 hours per unit Compute input efficiency variance for DL Group of answer choices $100 favorable $550 favorable $550 unfavorable 0.5 hours unfavorable $100 unfavorable

Answers

Answer:

Direct labor time (efficiency) variance= $550 unfavorable

Explanation:

Giving the following formula:

DL $10 per hour $12 per hour

Input quantity per unit for DL 1.5 hours per unit 2 hours per unit

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

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

Direct labor time (efficiency) variance= (110*1.5 - 110*2)*10

Direct labor time (efficiency) variance= $550 unfavorable

If you owned a trade secret, what methods would you employ to protect it?

Answers

Answer:

You would restrict access to the information,advise new employees and you would have an agreement with employees abd business partners.

Exercise 8-9 Petty cash fund with an overage LO P2 EcoMart establishes a $1,050 petty cash fund on May 2. On May 30, the fund shows $326 in cash along with receipts for the following expenditures: transportation-in, $120; postage expenses, $369; and miscellaneous expenses, $240. The petty cashier could not account for a $5 overage in the fund. The company uses the perpetual system in accounting for merchandise inventory. Prepare the (1) May 2 entry to establish the fund, (2) May 30 entry to reimburse the fund [Hint: Credit Cash Over and Short for $5 and credit Cash for $724], and (3) June 1 entry to increase the fund to $1,200.

Answers

Answer:

1. May 2

Petty cash $1,050

Cash $1,050

2.May 30

Dr Merchandise inventory $120

Dr Postage Expense $369

Dr Miscellaneous expenses $240

Cr Cash over and short $5

Cr Cash $724

3. June 1

Petty Cash $150

Cash $150

Explanation:

1. Preparation of the May 2 entry to establish the funds

May 2

Petty cash $1,050

Cash $1,050

(Being to establish the funds)

2. Preparation of May 30 entry to reimburse the fund

May 30

Dr Merchandise inventory $120

Dr Postage Expense $369

Dr Miscellaneous expenses $240

Cr Cash over and short $5

Cr Cash $724

($120+$369+$240-$5)

(Being to reimburse the fund )

3. Preparation of June 1 entry to increase the fund to $1,200.

June 1

Petty Cash $150

Cash $150

($1,200-$1,050)

(Being to increase the fund)

Jervis sells $3,000 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 4% factoring fee. What entry should Jervis make to record the transaction? Multiple Choice Debit Cash $2,880; debit Factoring Fee Expense $120; credit Accounts Receivable $3,000 Debit Accounts Receivable $2,880; debit Factoring Fee Expense $120; credit Cash $3,000. Debit Cash $3,000; credit Factoring Fee Expense $120; credit Accounts Receivable $3,000 Debit Cash $2,880; credit Accounts Receivable $2,880 Debit Accounts Receivable $3,000; credit Factoring Fee Expense $120; credit Cash $2,880

Answers

Answer: Debit Cash $2,880; debit Factoring Fee Expense $120; credit Accounts Receivable $3,000

Explanation:

Based on the information given, cash will be debited in the amount of:

= (100% - 4%) × $3000

= 96% × $3000

= 0.96 × $3000

= $2880

There'll also be a debit in the factoring fee in the amount of:

= 4% × $3000

= 0.04 × $3000

= $120

There'll be a credit in account receivable by $3000.

Therefore, the journal entry will be:

Debit Cash $2880

Debit Factoring fee = $120

Credit Account receivable = $3000

Problem 8-27A (Static) Computing standard cost and analyzing variances LO 8-5, 8-6 Spiro Company manufactures molded candles that are finished by hand. The company developed the following standards for a new line of drip candles. Amount of direct materials per candle 1.6 pounds Price of direct materials per pound $ 1.50 Quantity of labor per unit 1 hour Price of direct labor per hour $ 20 /hour Total budgeted fixed overhead $ 390,000 During Year 2, Spiro planned to produce 30,000 drip candles. Production lagged behind expectations, and it actually produced only 24,000 drip candles. At year-end, direct materials purchased and used amounted to 40,000 pounds at a unit price of $1.35 per pound. Direct labor costs were actually $18.75 per hour and 26,400 actual hours were worked to produce the drip candles. Overhead for the year actually amounted to $330,000. Overhead is applied to products using a predetermined overhead rate based on estimated units.

Answers

This question asks us to:

a. Determine the standard cost per candle for direct products, direct labor, and overhead.

b. Calculate the total standard cost of one drip candle.

c. Determine the direct materials, direct labor, and overhead actual costs per candle.

d. The total actual cost of each candle

Answer:

Explanation:

a.

Cost                          Computation      Standard cost per unit

Direct material    [tex]\$1.50 \times 1.6[/tex]                     2.4

Direct Labor        [tex]\$20 \times 1[/tex]                           20

Overhead           [tex]\dfrac{\$390,000}{30000}[/tex]                        13

b.

To find the total average standard cost for 1 drip candle

The total standard cost per dip candle = $(2.4+20+13)

=$35.40

c. The actual cost per candle for direct materials, direct labor, and overhead can be computed as:

Cost                          Computation          Standard cost per unit

Direct material    [tex](\dfrac{40000}{24000}\times 1.35)[/tex]                           2.25

Direct Labor         [tex]\dfrac{26400}{24000} \times 18.75[/tex]                          20.63

Overhead            [tex]\dfrac{\$330,000}{24000}[/tex]                                    13.75

d. The total actual cost per candle = $(2.25 + 20.63 + 13.75)

= $36.63

During the month of September, the following transactions occurred. The applicable sales tax rate is 6%.
Sept. 2 Sold merchandise on account to Sam Larson, $1,400, plus sales tax.
7 Sold merchandise on account to David Mitchell, $1,900, plus sales tax.
12 Issued credit memorandum to Sam Larson for $689, including sales tax of $39.
22 Sold merchandise on account to Matt Feustal, $500, plus sales tax.
28 Sold merchandise on account to Ana Cardona, $850, plus sales tax.
Enter the transactions in the general journal.

Answers

Answer:

Sept. 2

Dr Accounts Receivable-Sam Larson 1484

Cr Sales 1400

Cr Sales Tax Payable 84

Sept. 7

Dr Accounts Receivable-David Mitchell 2014

Cr Sales 1900

Cr Sales Tax Payable 114

Sept. 12

Dr Sales Returns and Allowances 650

Dr Sales Tax Payable 39

Cr Accounts Receivable-Sam Larson 689

Sept. 22

Dr Accounts Receivable-Matt Feustal 530

Cr Sales 500

Cr Sales Tax Payable 30

Sept. 28

Dr Accounts Receivable-Ana Cardona 901

Cr Sales 850

Cr Sales Tax Payable 51

Explanation:

Preparation of the general journal entries

Sept. 2

Dr Accounts Receivable-Sam Larson 1484

(1400+84)

Cr Sales 1400

Cr Sales Tax Payable 84

(1400*6%)

Sept. 7

Dr Accounts Receivable-David Mitchell 2014

(1900+114)

Cr Sales 1900

Cr Sales Tax Payable 114

(1900*6%)

Sept. 12

Dr Sales Returns and Allowances 650

(689-39)

Dr Sales Tax Payable 39

Cr Accounts Receivable-Sam Larson 689

Sept. 22

Dr Accounts Receivable-Matt Feustal 530

(500+30)

Cr Sales 500

Cr Sales Tax Payable 30

(500*6%)

Sept. 28

Dr Accounts Receivable-Ana Cardona 901

(850+51)

Cr Sales 850

Cr Sales Tax Payable 51

(850*6%)

Bonita Equipment Co. closes its books regularly on December 31, but at the end of 2020 it held its cash book open so that a more favorable balance sheet could be prepared for credit purposes. Cash receipts and disbursements for the first 10 days of January were recorded as December transactions. The information is given below.
1. January cash receipts recorded in the December cash book consisting of:
Cash sales $28,000
Collections on account, for which $360 of cash discounts were given 17,640
$45,640
2. January cash disbursements recorded in the December check
register liquidated accounts $22,450
Discounts taken 250
3. The ledger has not been closed for 2017.
4. The amount shown as inventory was determined by physical count on December 31, 2017.
The company uses the periodic method of inventory.
Instructions
(A) Prepare any entries you consider necessary to correct Francis’s accounts at December 31.
(B) To what extent was Francis Equipment Co. able to show a more favorable balance sheet at December 31 by holding its cash book open? Assume that the balance sheet that was prepared by the company showed the following amounts:
Debit Credit
Cash $39,000
Accounts receivable 42,000
Inventory 67,000
Accounts payable $45,000
Other current liabilities 14,200

Answers

Answer:

Bonita Equipment Co.

A. Entries to correct Bonita's accounts at December 31:

Debit Sales revenue $28,000

Credit Cash $28,000

To reverse the cash sales of January recorded in December.

Debit Accounts Receivable $18,000

Credit Cash $17,640

Credit Cash Discounts $360

To reverse the cash receipts of January recorded in December.

Debit Cash $22,450

Debit Cash Discounts $250

Credit Accounts Payable $22,700

To reverse the cash payment of January recorded in December.

B. To some extent, Bonita was able to show a more favorable balance sheet at December 31 by holding its cash book open.  This becomes more pronounced when the working capital elements of the balance sheet are analyzed with ratios.

For example, the current and quick ratios before the above adjustments shows 2.4 and 1.4 respectively.  After the adjustments, the current and quick ratios reduced to 1.74 and 0.92 respectively.

Explanation:

a) Data and Analysis:

Cash Sales $28,000

Collections on account $17,640

Total $45,640

Cash Discounts on collections = $360

Total collections on account $18,000

Cash Disbursements:

Check for payment on account = $22,450

Discounts $250

Total disbursement $22,700

Sales revenue $28,000

Cash $28,000

Accounts Receivable $18,000

Cash $17,640

Cash Discounts $360

Cash $22,450

Cash Discounts $250

Accounts Payable $22,700

                             Before Adjustments  After Adjustments

                                   Debit     Credit    Debit     Credit

Cash                        $39,000                 $15,450($39,000 - $28,000 - $18,000 + $22,450)

Accounts receivable 42,000                  60,000 ($42,000 + $18,000)

Inventory                   67,000                   67,000

Accounts payable                  $45,000                 $67,450 ($45,000 + $22,450)

Other current liabilities             14,200                   14,200

Total                     $148,000  $59,200 $142,450 $81,650

Working capital ratios:

 Before Adjustments                            After Adjustments

Current ratio = $148,000/$59,200      $142,450/$81,650

=                                2.5                             1.74

Quick ratio = $81,000/$59,200            $75,450/$81,650

=                                1.4                              0.92

At the end of June, the Marquess Company factored $200,000 in accounts receivable with Homemark Finance. Homemark immediately remitted to Marquess cash equal to 90% of the factored amount. Factor will remit the excess to Marquess, an the remaining receivables has the estimated fair value of $15,000. The transfer is made without recourse. Homemark charges a fee of 3% of receivables factored. What amount of loss on sale of receivables would Marquess record in June?
a. $6,000.
b. $4.500.
c. $1,500.
d. $0.

Answers

Answer:

a. $6,000

Explanation:

Calculation to determine What amount of loss on sale of receivables would Marquess record in June

Using this formula

Loss on sale of receivables=Accounts receivable factored *Fee percentage of receivables factored

Let plug in the formula

Loss on sale of receivables =$200,000 × 3%

Loss on sale of receivables = $6,000

Therefore the amount of loss on sale of receivables that Marquess would record in June is $6,000

At year-end, Chief Company has a balance of $10,000 in accounts receivable of which $1,000 is more than 30 days overdue. Chief has a credit balance of $100 in the allowance for doubtful accounts before any year-end adjustments. Using the aging of accounts receivable method, Chief estimates that 1% of current accounts and 10% of accounts over thirty days are uncollectible. What is the amount of bad debt expense

Answers

Answer:

$90

Explanation:

Total accounts receivable = $10,000

Overdue accounts (30 days) = $1,000

Current account = Total accounts receivable -  Overdue accounts (30 days) = $10,000 - $1,000 = $9,000

Bad debt expense = Accounts receivable x Percentage estimated as uncollectible - Existing credit balance in accounts receivable

Bad debt expense = ($9,000 * 1%) + ($1,000 * 10%) - $100

Bad debt expense = $90 + $100 - $100

Bad debt expense = $90

Which of the following is false regarding a section 83(b) election? Multiple Choice The election must be made within 30 days of the grant date. The election is an important tax-planning tool if the stock is expected to increase in value. The election freezes the value of the employee's compensation as of the grant date. If an employee leaves before the vesting date, any loss is limited to $3,000.

Answers

Answer:

D) If an employee leaves before the vesting date, any loss is limited to $3,000.

Explanation:

The 83(b) election can be regarded as

provision made under the Internal Revenue Code, which provide an option for an employee as well as startup founder to pay their taxes on the total fair market value of restricted stock within the granting time. 83(b) election can as well be applied to equity which is subjected to vesting, and Internal Revenue Service will be alerted so the body can tax the elector for the ownership at granting time instead of time of stock vesting.

It should be noted that in section 83(b) election

✓The election freezes the value of the employee's compensation as of the grant date.

✓The election must be made within 30 days of the grant date.

✓ The election is an important tax-planning tool if the stock is expected to increase in value.

Selected financial data for Quick Sell, Inc., a retail store, appear as follows.
Year 2 Year 1
Sales (all on account) $ 750,000 $ 610,000
Cost of goods sold 495,000 408,000
Average inventory during the year 110,000 102,000
Average receivables during the year 150,000 100,000
a-1. Compute the gross profit percentage for both years. (Round your percentage answers to the nearest whole number. i.e. 0.1234 as 12%.)
a-2. Compute the inventory turnover for both years. (Round your answers to 1 decimal place.)
a-3. Compute the accounts receivable turnover for both years. (Round your answers to 1 decimal place.)
b. Which of the following show a positive or negative trend?
Year 1 Year 2
Gross profit percentage % %
Inventory turnover times times
Accounts receivable turnover times times
Trend
Gross profit rate
Inventory turnover
Accounts receivable turnover
Growth in net sales

Answers

Answer:

a-1

Year 2 34%

Year 1 33%

a-2

Year 2 4.5

Year 1 4.0

a-3

Year 2 5.0

Year 1 6.1

b. Year 2

Explanation:

a-1. Computation for the gross profit percentage for both years using this formula

Gross profit percentage = Gross profit / Sales

Let plug in the formula

Year 2 =( $ 750,000-495,000)/$ 750,000 = 34%

Year 1 = ($ 610,000-$408,000)/$ 610,000 = 33%

a-2. Computation for the inventory turnover for both years using this formula

Inventory turnover = Cost of goods sold / Average inventory during the year

Let plug in the formula

Year 2 = 495,000 /110,000 = 4.5

Year 1 = 408,000/102,000= 4.0

a-3. Computation for the accounts receivable turnover for both years using this formula

Accounts receivable turnover = Sales (on account) / Average receivables during the year

Let plug in the formula

Year 2 = $ 750,000 /150,000 = 5.0

Year 1 = $ 610,000 /100,000 = 6.1

b. Based on the above calculation Year 2 show a positive trend.

Waterway Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms.

a. Shamrock Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms. 1. Shamrock Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $469. The standalone selling price of the tablet is $230 (the cost to Shamrock Company is $157). Shamrock Company sells the Internet access service independently for an upfront payment of $292. On January 2, 2017, Shamrock Company signed 100 contracts, receiving a total of $46,900 in cash.

b. Shamrock Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $574. Shamrock Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $145. Shamrock Company signed 220 contracts for Shamrock Bundle B on July 1, 2017, receiving a total of $126,280 in cash.

Required:
a. Prepare any journal entries to record the revenue arrangement for Headland Bundle A on January 2, 2017, and December 31, 2017.
b. Prepare any journal entries to record the revenue arrangement for Headland Bundle B on July 1, 2017, and December 31, 2017.

Answers

Answer:

Waterway or Shamrock Company

Journal Entries:

Bundle A:

Debit Cash $46,900

Credit Tablet Revenue $20,665

Credit Annual Internet Access Revenue $8,745

Credit Deferred Revenue: Internet Access $17,490

To record revenue from Bundle A.

Debit Cost of Sale of Tablets $15,700

Credit Tablet Inventory $15,700

To record the cost of tablets sold.

Bundle B:

Debit Cash $126,280

Credit Tablet Revenue $43,545

Credit Annual Tablet Service Plan $9,151

Credit Annual Internet Access Revenue $18,428

Credit Deferred Revenue: Service Plan $18,300

Credit Deferred Revenue: Internet Access $36,856

To record revenue from Bundle B.

Debit Cost of Sale of Tablets $34,540

Credit Tablet Inventory $34,540

To record the cost of tablets sold.

Explanation:

a) Data and Calculations:

Bundle A contract = $469

Tablet standalone selling price = $230 (Total = $23,000 ($230 * 100)

Cost of tablet = $157 (Total costs of 100 tablets = $15,700)

Internet access service standalone selling price = $292 (Total = $29,200)

Total standalone selling price per bundle = $522 (Total = $52,200)

Contracts signed = 100

Revenue received = $46,900

Revenue from Tablet = $23,000/$52,200 * $46,900 = $20,665

Revenue from Internet Access = $29,200/$52,200 * $46,900 = $26,235

Annual interest access = $8,745 ($26,235/3)

Bundle B contract = $574

Tablet standalone selling price = $230 (Total = $50,640 ($230 * 220)

Cost of tablet = $157 (Total costs = $34,540 ($257 * 220)

3-year Tablet Service Plan standalone selling price = $145 (Total = $31,900 ($145 * 220)

Internet access service standalone selling price = $292 (Total = $64,240 ($292 * 220)

Total standalone selling price per bundle = $667 (Total = $146,740 ($667 * 220)

Contracts signed = 220

Revenue received = $126,200

Revenue from Tablet = $50,600/$146,740 * $126,280 = $43,545

Revenue from 3-year Tablet Service Plan = $31,900/$146,740 * $126,280 = $27,452

Annual revenue = $9,151 ($27,452/3)

Revenue from Internet Access = $64,240/$146,740 * $126,280 = $55,283

Annual revenue from internet access = $18,428 ($55,283/3)

what is meant by price discrimination and why is it important to monopolies?

Answers

Answer:

A discriminating monopoly is a single entity that charges different prices—typically, those that are not associated with the cost to provide the product or service—for its products or services for different consumers. Non-discriminating monopolies, on the other hand, do not engage in such a practice.

Roth Inc. experienced the following transactions for Year 1, its first year of operations: Issued common stock for $80,000 cash. Purchased $240,000 of merchandise on account. Sold merchandise that cost $154,000 for $306,000 on account. Collected $252,000 cash from accounts receivable. Paid $225,000 on accounts payable. Paid $54,000 of salaries expense for the year. Paid other operating expenses of $43,000. Roth adjusted the accounts using the following information from an accounts receivable aging schedule:______.
Number of Days Past Due Amount Percent Likely to Be Uncollectible Allowance Balance
Current $ 32,400 0.01
0−30 13,500 0.05
31−60 2,700 0.10
61−90 2,700 0.20
Over 90 days 2,700 0.50
a. Record the above transactions in general journal form and post to T-accounts.
b. Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Roth Inc. for Year 1.

Answers

Answer:

Roth Inc.

a. General Journal     Debit      Credit

1.  Cash                  $80,000

Common stock                      $80,000

To record issuance of common stock for cash.

2. Inventory         $240,000

Accounts payable               $240,000

To record the purchase of goods on account.

3. Cost of goods sold $154,000

Inventory                                $154,000

To record the cost of goods sold.

3. Accounts receivable $306,000

Sales revenue                          $306,000

To record the sale of goods on account.

4. Cash                   $252,000

Accounts receivable                   $252,000

To record the receipt of cash on account.

5. Accounts payable $225,000

Cash                                           $225,000

To record the payment of cash on account.

6. Salaries expense $54,000

Cash                                             $54,000

To record the payment of salaries.

7. Operating expenses $43,000

Cash                                            $43,000

To record the payment of other operating expenses.

8. Bad Debts Expense $3,159

Allowance for Doubtful Accounts $3,159

To record bad debts expense for the year.

T-accounts:

Cash

Account Titles               Debit        Credit

Common stock            $80,000

Accounts receivable $252,000

Accounts payable                      $225,000

Salaries expense                            54,000

Operating expenses                      43,000

Balance                                           10,000

Accounts receivable

Account Titles               Debit        Credit

Sales revenue        $306,000

Cash                                             $252,000

Balance                                             54,000

Inventory

Account Titles               Debit        Credit

Accounts payable     $240,000

Cost of goods sold                   $154,000

Balance                                         86,000  

Accounts payable

Account Titles               Debit        Credit

Inventory                                     $240,000

Cash                        $225,000

Balance                         15,000

Common stock

Account Titles               Debit        Credit

Cash                                             $80,000

Sales revenue

Account Titles               Debit        Credit

Accounts receivable                 $306,000

Cost of goods sold

Account Titles               Debit        Credit

Inventory                  $154,000

Salaries expense

Account Titles               Debit        Credit

Cash                         $54,000

Operating expenses

Account Titles               Debit        Credit

Cash                         $43,000

Bad Debts Expense

Account Titles               Debit        Credit

Allowance for

Doubtful Accounts     $3,159

Allowance for Doubtful Accounts

Account Titles               Debit        Credit

Bad Debts Expense                      $3,159

b. Income Statement for the year 1 ended December 31:

Sales revenue                         $306,000

Cost of goods sold                    154,000

Gross profit                             $152,000

Expenses:

Salaries expense     54,000

Operating expense 43,000

Bad debts expense   3,159    $100,159

Net operating income              $51,841

Statement of changes in stockholders' equity:

Common Stock         $80,000

Net operating income  51,841

Total Equity               $131,841

Balance Sheet as of December 31:

Assets:

Cash                                         $10,000

Accounts receivable 54,000

Allowance for

doubtful accounts      3,159     50,841

Inventory                                  86,000

Total assets                           $146,841

Liabilities and Equity:

Accounts payable                  $15,000

Equity                                     $131,841

Total liabilities and equity    $146,841

Statement of Cash Flows for the year 1 ended December 31:

Operating activities:

Net operating income              $51,841

Add non-cash expense               3,159

Working-capital:

Accounts receivable               -54,000

Inventory                                 -86,000

Accounts payable                    15,000

Net operating cash flow      $(70,000)

Financing activities:

Common stock                     $80,000

Net cash flows                      $10,000

Reconciliation:

Ending cash balance            $10,000

Beginning cash balance        0

Increase in net cash flows   $10,000

Explanation:

a) Data and Transaction Analysis:

1. Cash $80,000 Common stock $80,000

2. Inventory $240,000 Accounts payable $240,000

3. Cost of goods sold $154,000 Inventory $154,000

3. Accounts receivable $306,000 Sales revenue $306,000

4. Cash $252,000 Accounts receivable $252,000

5. Accounts payable $225,000 Cash $225,000

6. Salaries expense $54,000 Cash $54,000

7. Operating expenses $43,000 Cash $43,000

8. Bad Debts Expense $3,159 Allowance for Doubtful Accounts $3,159

Aging of Accounts Receivable:

Number of Days   Amount    Percent Likely to    Allowance

    Past Due                            Be Uncollectible      Balance

Current              $ 32,400                  0.01                 $324

0−30                      13,500                  0.05                  675

31−60                      2,700                  0.10                   270

61−90                      2,700                  0.20                  540

Over 90 days         2,700                  0.50                1,350

Total                  $54,000                                        $3,159

Trial balance

Cash                         $10,000

Accounts receivable 54,000

Allowance for doubtful accounts $3,159

Inventory                   86,000

Accounts payable                         15,000

Common stock                            80,000

Sales revenue                           306,000

Cost of goods sold 154,000

Salaries expense     54,000

Operating expense 43,000

Bad debts expense   3,159

Totals                   $404,159  $404,159

iRobot Company is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 14 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $487,000, annual operating costs of $29,000, and a 6-year life. Machine B costs $315,000, has annual operating costs of $51,200, and a 4-year life. The firm currently pays no taxes. Which machine should be purchased and why

Answers

Answer:

Machine A should be purchased because it has a lower equivalent annual cost . Hence, it is cheaper.

Explanation:

Equivalent Annual cost is the Present Value of the total cost over the investment period divided by the appropriate annuity factor.

Step 1 : Equivalent Annual cost of Machine A

PV of cash flows

PV of purchase cost = 487,000

PV of annual operating  cost of $29,000

= 29,000× (1-(1+0.14)^(-6))/0.14

= 112,771.35

Total PV = 487,000 + 112,771.35= 599,771.35

Equivalent annual cost = 599,771.35 /3.889

Equivalent annual cost =  154,235.70

Step 2: Equivalent Annual cost of Machine B

PV of purchase cost = 315,000

PV of annual operating  cost of $51,200

= 51,200× (1-(1+0.14)^(-4))/0.14

= 149,182.07

Total PV = 315,000+ 149,182.07

=  464,182.07  

Equivalent annual cost =  464,182.07/2.9137

Equivalent annual cost =   159,309.51

Step 3: Compare equivalent Annual cost

Comparing the two equivalent costs, we conclude that Machine A should be purchased because it has a lower equivalent annual cost and therefore it is cheaper.

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