Marcy wanted to buy Lucy's land and use it to breed small pigs to be kept as pets. Marcy told Lucy that having water on the property was very important. Lucy assured her that a spring ran through one corner of the property. Therefore, Marcy agreed to buy the farm. Although she did not ask Lucy anything about it, Marcy, who loved pigs, assumed that the neighbors would be pleased with the pigs being in the area. In a separate contract, Lucy also agreed to sell Marcy a used truck for $5,000. After the contract for the land sale was entered into, it was discovered that actually the spring did not run through the corner of Lucy's property. The area in which the spring ran actually belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy said, "That's not the truck!" It was discovered that Lucy, who had two trucks, thought that Marcy had bought the older truck when Marcy thought she had purchased the newer truck. Marcy was also surprised when she received a petition signed by all surrounding landowners objecting to the presence of the pigs and threatening to sue Marcy for nuisance. Which of the following would be the result if Marcy attempts to rescind the contract and recover damages only on the basis of the neighbors' objection to a pig farm?
1) Marcy may rescind the contract and recover damages because Lucy made an implied misrepresentation.
2) Marcy may rescind the contract, but she may not recover damages because the situation involved a mutual mistake.
3) Marcy may recover damages, but she may not rescind the contract because Lucy made an implied misrepresentation.
4) Marcy may not rescind the contract or recover damages because Marcy made a unilateral mistake.
5) Marcy may rescind the contract, but she may not recover damages because Marcy made a unilateral mistake.

Answers

Answer 1

Answer:

5. Marcy may rescind the contract , but she may not recover damages because the situation involved unilateral mistake.

Explanation:

In the given situation marcy could be able to rescind the contract but she could not claim for the damages as the given situation represent the unilateral mistake that means one party mistake. If the mistake is of both the parties than she is able to recover the damages

But in this case this would cant be happen

hence, the last option is correct


Related Questions

Use the information provided to answer the questions. Actual price paid per pound of material $14.50 Total standard pounds for units produced this period 12,400 Pounds of material used 13,350 Direct materials price variance favorable $3,337.50 All material purchased was used in production. Enter all amounts as positive numbers. A. What is the standard price for materials

Answers

Answer:

$14.75= standard price

Explanation:

Giving the following information:

Actual price paid per pound of material $14.50

Total standard pounds for units produced this period 12,400

Pounds of material used 13,350

Direct materials price variance favorable $3,337.50

To calculate the standard cost for materials, we need to use the following formula:

Direct material price variance= (standard price - actual price)*actual quantity

3,337.5 = (standard price - 14.5)*13,350

3,337.5 = 13,350standard price - 193,575

196,912.5 = 13,350standard price

$14.75= standard price

Problem 15-04A a-c (Video) Oriole Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Department D E K Manufacturing overhead $1,260,000 $1,625,000 $960,000 Direct labor costs $1,800,000 $1,375,000 $495,000 Direct labor hours 110,000 125,000 44,000 Machine hours 440,000 550,000 120,000 During January, the job cost sheets showed the following costs and production data. Department D E K Direct materials used $154,000 $138,600 $85,800 Direct labor costs $132,000 $121,000 $41,250 Manufacturing overhead incurred $108,900 $136,400 $86,900 Direct labor hours 8,800 12,100 3,850 Machine hours 37,400 49,500 10,390 Compute the predetermined overhead rate for each department

Answers

Answer and Explanation:

The computation of the predetermined overhead rate for each department is given below:

For department D

= Estimated manufacturing overhead ÷ direct labor cost

= $1,260,000 ÷ $1,800,000

= 70% of direct labor cost

For department E

= Estimated manufacturing overhead ÷ direct labor hours

= $1,625,000 ÷ 125,000

= $13 per direct labor hours

For department K

= Estimated manufacturing overhead ÷ machine hours

= $960,000 ÷ 120,000

= $8 per machine hours

Exercise 8-3 (Algo) Lump-sum purchase of plant assets LO C1 Rodriguez Company pays $389,610 for real estate with land, land improvements, and a building. Land is appraised at $247,500; land improvements are appraised at $55,000; and the building is appraised at $247,500. 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase.

Answers

Answer:

1.  Land  $175,324.50

   Land improvements $38,961

   Building  $175,324.50

2. Dr Land   $175,324.50

   Cr Cash   $175,324.50

   Being entries to recognize cost incurred in the purchase of Land

   Dr Land improvements   $38,961

   Cr Cash   $38,961

   Being entries to recognize cost incurred in the purchase of Land improvements

   Dr Building   $175,324.50

   Cr Cash   $175,324.50

   Being entries to recognize cost incurred in the purchase of Building

Explanation:

Using the appraisal method to apportion the cost of an asset to the components of the asset involves the consideration of the appraised cost of each individual item as a portion of the total cost of the asset.

Thus, given that  Rodriguez Company pays $389,610 for real estate with land, land improvements, and a building

Appraised cost of

Land = $247,500

Land improvements = $55,000

Building = $247,500

Total appraised cost of the asset = $247,500 +$55,000 + $247,500

= $550,000

Allocated cost of;

Land = $247,500/$550,000 * $389,610

= $175,324.50

Land improvements = $55,000/$550,000 * $389,610

= $38,961.00

Building = $247,500/$550,000 * $389,610

= $175,324.50

Journal entries

Dr Land   $175,324.50

Cr Cash   $175,324.50

Being entries to recognize cost incurred in the purchase of Land

For journal entries, we debit each of the individual assets account and credit cash to recognize the cost incurred in the purchase of the asset.

If Argentina imposes a 20 percent tax on natural gas exports to be paid by suppliers. Other things equal, this causes the:
Select one:
a. supply of natural gas exports to shift to the right.
b. quantity of natural gas exports produced to increase.
c. demand for natural gas exports to shift to the right.
d. supply of natural gas exports to shift to the left.

Answers

Answer:

supply of natural gas exports to shift to the left.

Paul, a calendar year single taxpayer, has the following information for 2019 (not 2020): AGI State income taxes State sales tax Real estate taxes Gambling losses (gambling gains were $ 12,000) $ 175,000 13,500 3,000 18,900 6,800 Paul's allowable itemized deductions for 2019 are: a. $ 10,000 b. $ 16,800 C. $ 39,200 d. $ 42,200 e. None of these.

Answers

Answer:

C. $ 39,200

Explanation:

Calculation to determine what Paul's allowable itemized deductions for 2019 are

Using this formula

Itemized deduction = State income taxes + Real state taxes + Gambling losses

Let plug in the formula

Itemized deduction = $13,500 + $18,900+ $6,800

Itemized deduction =$39,200

Therefore Paul's allowable itemized deductions for 2019 are $39,200

Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $2,948,125. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:
Budgeted Production Volume Direct Labor Hours Per Unit
Flutes 2,000 units 2.0
Clarinets 1,500 3.0
Oboes 1,750 1.5
a. Determine the single plantwide overhead rate.
$ per direct labor hour
b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products, rounded to the nearest dollar.
Total Per Unit
Factory Overhead Cost Factory Overhead Cost
Flutes $ $
Clarinets
Oboes
Total $

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

Flutes= 2,000*2 = 4,000 hours

Clarinets= 1,500*3 = 4,500 hours

Oboes= 1,750*1.5 = 2,625 hours

Total direct labor hours = 11,125

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 2,948,125 / 11,125

Predetermined manufacturing overhead rate= $265 per direct labor hour

Now, we can allocate to each product:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Flutes= 4,000* 265= 1,060,000

Clarinets= 4,500*265= 1,192,500

Oboes= 2,625*265= 695,625

Unitary:

Flutes= 265*2= 530

Clarinets= 265*3= 795

Oboes= 265*1.5= 397.5

Suppose a firm has 35 million shares of common stock outstanding at a price of $15 per share. The firm also has 200,000 bonds outstanding with a current price of $905.4. The outstanding bonds have yield to maturity 9.4%. The firm's common stock beta is 1.5 and the corporate tax rate is 39%. The expected market return is 14% and the T-bill rate is 3%. What is the WACC for this firm

Answers

Answer:

16%

Explanation:

The computation of the WACC is given below:

But before that following calculation should be done

Cost of equity

= Risk free rate of return + beta × (market return - risk free rate)

= 3% + 1.5 × (14% - 3%)

= 19.5%

Market value of equity = 35 million shares ×$15 = $525 million

And, the market value of debt = 200,000 × $905.4 = $181.08 million

Now the WACC is

= cost of equity × weight of equity + cost of debt × (1 - tax rate) × weight of debt

= 19.5% × ($525 ÷ 525 + 181.08) + 9.4% × (1 - 0.39) × ($181.08 ÷  525 + 181.08)

= 19.5% ×0.744 + 5.734% × 0.256

= 15.975%

= 16%

Ray's Pizzeria is considering the addition of a 5th worker if this increases profit. Pizza sales increased from 300 per day to 360 per day when the 4th worker was added, indicating that the marginal product of the 4th worker was equal to blank1 - Numeric Answer Type your answer here Please type your answer to submit pizzas. If adding a 5th worker increases sales from 360 to 400, the marginal product of the fifth worker is blank2 - Numeric Answer Type your answer here pizzas.

Answers

Answer:

60 pizzas

40 pizzas

Explanation:

Marginal product measures the change in output as a result of a change in input by one unit

Marginal product = change in output / change in input

Marginal product for the 4th worker

Change in output = 360 - 300 = 60 pizzas

Change in input = 4 - 3 = 1 worker

Marginal product = 60 / 1 = 60

Marginal product for the 5th worker

Change in output = 400 - 360 = 40 pizzas

Change in input = 5 - 4 = 1

Marginal product = 40 / 1 = 40

It can be seen that marginal product decreased from 60 to 40 when the 5th worker was added. This illustrates diminishing marginal returns.

The law of diminishing returns says as more units of a variable input is added to a fixed income of production, output might increase at a point but after some time total output would increase at a decreasing rate and marginal product would be decreasing.

Q 10.1: Sukui Electronics decided to expand their product line to include GPS trackers. They estimate that over the next 3 years this project will increase their net income by $1.7 million. To do this, they decided not to add a product line of deep sea diving watches. They estimate that over the next 3 years this project would have increased their net income by $800,000. This is an example of

Answers

Answer: opportunity cost of capital

Explanation:

The example in the question above is an opportunity cost of capital. Opportunity cost of capital simply refers to the potential loss that an individual makes because of making a choice at the expense of another one.

Here, the opportunity cost of capital is the $800000 that could have been made if they decided to add a product line of deep sea diving watches.

Cisco Systems Inc. reported the following in its income statement for the year ended July 30, 2016: Basic earnings per share of $2.13 and diluted earnings per share of $2.11. There were 5,053 million weighted average basic shares were outstanding during the year. What approximate net income, did the company report for 2016

Answers

Answer:

$10,762,890

Explanation:

Earnings per Share = Net Income attributable to Common Stock holders ÷ Weighted Average Number of Common Stocks

Now, since we have basic earnings per share we an use that to find net income. Net Income is Profit after tax and interest and only available in basic earnings per share calculation.

Net Income attributable to Common Stock holders = Earnings per Share x weighted average basic shares = ($2.13 x 5,053,000) = $10,762,890

Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2021. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2021 and 2022\.\* A consulting firm, engaged as actuary, recommends 6% as the appropriate discount rate. The service cost is $250,000 for 2021 and $380,000 for 2022. Year-end funding is $260,000 for 2021 and $270,000 for 2022. No assumptions or estimates were revised during 2021. * We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the estimate didn't change, that also was the actual rate in 2022. Required: Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022: (Enter your answers in thousands (i.e., 200,000 should be entered as 200).)

Answers

Answer:

Details                                                           Dec. 31, 2021      Dec. 31, 2022

1. Projected benefit obligation                                $250               $645

2. Plan assets                                                           $260              $556

3. Pension expense                                                 $250               $369

4. Net pension asset or net pension liability          $10*                $89**

Where:

* implies asset

*** implies liability

Note: The figure above are in thousands buy entered as required in the question (Enter your answers in thousands (i.e., 200,000 should be entered as 200).)

Explanation:

Note: See the attached excel file for the calculations Projected benefit obligation, Plan assets, Pension expense, and Net pension asset or net pension liability for December 31, 2021 and December 31, 2022 respectively.

What form do some schools, especially private schools, use in addition to the FAFSA to determine how to award aid? A) FAFSA II B) Core Residency Form C) CSS/Financial Aid PROFILE D) College Access Loan (CAL) Form

Answers

Answer:

C.) CSS/ Financial aid profile

Explanation:

I took the USA Test Prep quiz.

Early deadlines are imposed by many schools and universities that use the FAFSA to calculate financial aid. To decide how to distribute their own funds, certain institutions—mostly private colleges—use an additional form called the College Scholarship Service Profile, or CSS Profile. Therefore, choice (C) is the best one.

What is CSS Profile?

College students can apply for non-federal financial aid through the CSS Profile, also known as the College Scholarship Service Profile, an online application developed and administered by the College Board, a company based in the United States.

Its main purpose is to provide College Board member institutions with a thorough assessment of students and their families financially and family circumstances for use in determining their eligibility for organizational financial aid. Compared to the Free Application for Federal Student Aid, or FAFSA, it is more comprehensive.

Hence, option (C) is the most accurate.

Learn more about CSS PROFILE, from:

brainly.com/question/2515214

#SPJ2

g You are looking for a dividend security to provide yourself with additional steady income. You have found a company with an expected dividend next year of $1.20. You have done an analysis on the company's past dividends and the dividend amount has increased at a constant rate of 3.4 percent for the last eight years and you have no expectation of a change in growth rate. If you require a 9 percent rate of return on your investments, what should you be willing to pay today for the stock

Answers

Answer: See explanation

Explanation:

The following information can be gotten from the question:

Expected dividend, D1 = $1.20

Required rate of return, r = 9%

Growth rate = 3.4%

Then, the formula to get the price will be:

= D1/(r-g)

= 1.2/(9%-3.4%)

= 1.2/5.6%

= $21.4

The amount to pay due the stock is less than $24.00

ABC's beginning inventory is $2,000 and its ending inventory is $1,000. The inventory turnover is 6 times. Cost of goods sold for the year must equal:

Answers

Answer:

$9000

Explanation:

Inventory turnover is an example of an activity ratio

Activity ratios calculate the efficiency of performing daily task of a firm

Inventory turnover = cost of goods sold / average inventory

Average inventory = (beginning inventory + ending inventory) / 2

($2000 + $1000) / 2 = $1500

6 = cost of goods sold / 1500

To determine cost of goods sold, multiply both sides of the equation by 1500

1500 x 6 = $9000 = cost of goods sold

Identify the term being described for each of the following: A - sequence of activities in a project. B - The longest time sequence of activities in a project C - Used when two activities have the same starting and finishing points. D - The difference in time length of any path and the critical path. E - The statistical distribution used to describe variability of an activity time. F - The statistical distribution used to describe path variability an activity by allocating additional resources.

Answers

Answer: See explanation

Explanation:

A - sequence of activities in a project. = A path

B - The longest time sequence of activities in a project = Critical path

C - Used when two activities have the same starting and finishing points. = Critical activity

D - The difference in time length of any path and the critical path. = The path slack

E - The statistical distribution used to describe variability of an activity time. = Beta distribution.

F - The statistical distribution used to describe path variability an activity by allocating additional resources. = Normal distribution

A machine that cost $400,000 has an estimated residual value of $40,000 and an estimated useful life of 20,000 machine hours. The company uses units-of-production depreciation and ran the machine 3,000 hours in year 1, 8,000 hours in year 2, and 6,000 hours in year 3.

Answers

Answer:

The depreciation expense for year 1 is $54,000, for year 2 is $144,000, and for year 3 is $108,000.

Explanation:

To calculate the depreciation expense using the units-of-production method, we need to determine the depreciation rate per machine hour.

Step 1: Calculate the depreciable cost.

Depreciable cost = Cost of the machine - Residual value

Depreciable cost = $400,000 - $40,000

Depreciable cost = $360,000

Step 2: Calculate the depreciation rate per machine hour.

Depreciation rate per machine hour = Depreciable cost / Estimated machine hours of useful life

Depreciation rate per machine hour = $360,000 / 20,000 machine hours

Depreciation rate per machine hour = $18

Step 3: Calculate the depreciation expense for each year.

Year 1: 3,000 machine hours

Depreciation expense = Depreciation rate per machine hour * Hours in year 1

Depreciation expense = $18 * 3,000

Depreciation expense = $54,000

Year 2: 8,000 machine hours

Depreciation expense = Depreciation rate per machine hour * Hours in year 2

Depreciation expense = $18 * 8,000

Depreciation expense = $144,000

Year 3: 6,000 machine hours

Depreciation expense = Depreciation rate per machine hour * Hours in year 3

Depreciation expense = $18 * 6,000

Depreciation expense = $108,000

Therefore, the depreciation expense for year 1 is $54,000, for year 2 is $144,000, and for year 3 is $108,000.

Hope this helps!

Prepare journal entries to record the following four separate issuances of stock.
1. A corporation issued 4,000 shares of $30 par value common stock for $144,000 cash.
2. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $39,000. The stock has a $2 per share stated value.
3. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $39,000. The stock has no stated value.
4. A corporation issued 1,000 shares of $50 par value preferred stock for $89,000 cash.

Answers

Answer:

Item 1

Debit : Cash $144,000

Credit : Common Stock $120,000

Credit : Common Stock Paid in Excess of Par $24,000

Item 2

Debit : Cash $39,000

Credit : Common Stock $39,000

Item 3

Debit : Cash $39,000

Credit : Common Stock $39,000

Item 4

Debit : Cash $89,000

Credit : Preferred Stock $50,000

Credit : Preferred Stock paid in excess of par $39,000

Explanation:

Take a careful note on Par value Stocks and No Par Value Stocks. A reserve is created whenever Stocks are issued above their Par Value.

The Occupational Safety and Health Administration (OSHA) has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of fertilizer is 0.008. The cost of imposing a regulation that would ban the chemical is $31 million. If the value of a human life is equal to $8 million, how many people must the policy affect in order for the benefits to exceed the costs

Answers

Answer: More than 484 person

Explanation:

The expected benefit for one person will be:

= probability of death × value of life

= 0.008 × 8 million = 0.064 million

The number of people that the policy must the affect in order for the benefits to exceed the costs will be:

= 31 million / 0.064 million

= 484.755

Therefore, the people should be more than 484 persons to exceed costs

8. The interactions between those who ____
and those
who______
drive the market in a capitalist economy.

Answers

Answer:

The interactions between those who sell and those who buy drive the market in a capitalist economy.

Explanation:

Stoltenberg Co. had the following information for the month of June: Work in process beginning inventory, June 12,300units Units transferred in16,900units Work in process ending inventory, June 304,300units Beginning work-in-process inventory is 30 percent complete as to conversion. Ending work-in-process inventory is 50 percent complete as to conversion. Materials are added at the end of the process. How many units were started and completed in June

Answers

Answer:

the number of units started and completed in June is 24,900 units

Explanation:

The computation of the number of units started and completed in June is shown below;

= Opening work in process inventory + transferred units - ending work in process units

= 12,300 units + 16,900 units - 4,300 units

= 24,900 units

hence, the  number of units started and completed in June is 24,900 units

Jazz Corporation receives management consulting services from its 90 percent owned subsidiary, Laker Inc. During 20X7, Jazz paid Laker $70,000 for its services. Laker's labor cost and other associated costs for the employees providing services to Jazz totaled $30,000 in 20X7. Jazz reported $330,000 of income from its own separate operations for 20X7, and Laker reported net income of $85,000. Based on the preceding information, what amount of income should be reported as consolidated income on the 20X7 Consolidated Financial Statements

Answers

Answer:

the amount of income that should be reported is $415,000

Explanation:

The computation of the amount of income that should be reported is shown below:

= Jazz separate operations income + laker net income

= $330,000 + $85,000

= $415,000

hence, the amount of income that should be reported is $415,000

Simply used the above formula to determine the consolidated income

Mountain High Ice Cream Company transferred $79,000 of accounts receivable to the Prudential Bank. The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $6,900) less a 3% fee (3% of the total factored amount).

Required:
Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.

Answers

Answer:

Debit Cash for $68,730; Debit Receivable from factor for $6,900; Debit Loss on sale of receivables for $3,370; and Credit Accounts receivable $79,000.

Explanation:

Factored amount = $79,000

Cash = Factored amount * (100% - Percentage of he factored amount retained - Rate of fee = $79,000 * (100% - 10% - 3%) = $68,730

Receivable from factor = $6,900

Loss on sale of receivables =  Factored amount - Cash - Receivable from factor = $79,000 - $68,730 - $6,900 = $3,370

The journal entry will therefore look as follows:

Details                                        Debit ($)               Credit ($)          

Cash                                            68,730

Receivable from factor                6,900

Loss on sale of receivables         3,370

  Accounts receivable                                              79,000

(To record factoring of accounts receivable.)                              

Whispering Winds Corp. had the following transactions. 1. Sold land (cost $7,200) for $9,000. 2. Issued common stock at par for $22,900. 3. Recorded depreciation on buildings for $16,600. 4. Paid salaries of $7,000. 5. Issued 1,100 shares of $1 par value common stock for equipment worth $9,200. 6. Sold equipment (cost $14,400, accumulated depreciation $10,080) for $1,728. (a) For each transaction above, prepare the journal entry.

Answers

Answer and Explanation:

The journal entries are shown below:

1 Cash $9,000  

         To  Land $7,200

         To Gain on Disposal $1,800

(Being the land is sold is recorded)

2 Cash $22,900

             To Common Stock $22,900

(being the issuance of the common stock is recorded)

3 Depreciation Expense $16,600

        To Accumulated Depreciation -  Buildings  $16,600

(being depreciation expense is recorded)

4 Salaries and Wages Expense $7,000

        To   Cash $7,000

(being salary paid is recorded)

5 Equipment $9,200

     To Common Stock $1,100

     To Paid in capital in excess of par-Common stock $8,100

(Being the common stock issued for the equipment)

6 Cash $1,728

  Accumulated Depreciation-Equipment $10,080

   Loss on Disposal $2,592

                 To Equipment $14,400

(being equipment sold is recorded)

What would you expect to happen to the mix between internal financing (where companies use their own funds such as retained earnings) and external financing (where companies obtain funds through financial markets) for new investment projects in a country that experiences a large increase in financial market uncertainty

Answers

Answer:

With the large increase in financial market uncertainty, the mix between internal financing and external financing for new investment projects will tether towards internal sources of funding.

Explanation:

This means that the larger proportion of finance for new investment projects must come from internal sources rather than external sources.  The companies will, therefore, experience much more pressure to generate and retain sufficient profits than it would have experienced otherwise.  While this looks like the best way to go, the possibility of success depends on the chunk of the internally-generated funds that the companies already have.

Langley Clinics, Inc., buys $400,000 in medical supplies each year (at gross prices) from its major supplier, Consolidated Supplies, which offers Langley terms of 2.5/10, net 45. Currently, Langley is paying the supplier the full amount due on day 45, but it is considering taking the discount, paying on day 10, and replacing the costly trade credit with a bank loan that has a 10 percent annual cost.

Required:
a. What is the amount of free trade credit that langley obtains from Consolidated Services?(assume 360 days per year throughout this problem)
b. What is the amount of costly trade credit?
c. What is the approximate annual cost of the costly trade credit?
d. Should Langley replace its trade credit with the bank loan? explain your answer.
e. If the bank loan is used, how much of the trade credit should be replaced?

Answers

Answer:

Explanation:

a. What is the amount of free trade credit that langley obtains from Consolidated Services?

Since there's a 2.5% discount, amount paid will be:

= $400000 - (2.5% × $400000)

= $400000 - $10000

= $390000

The amount of free trade credit that langley obtains from Consolidated Services since payment was made within 10 days will be:

= ($390000/360) × 10

= $1083 × 10

= $10833

b. What is the amount of costly trade credit?

Assuming Langley pays by day 45, the increase in its accounts payable will be:

= 45 x $1,083

= $48,735

Therefore, the amount of costly trade credit will be:

= Total trade credit – Free trade credit = $48,735 – $10,833

= $37,902

c. What is the approximate annual cost of the costly trade credit?

The percentage cost will be:

= 10000 / 37902

= 26.38%

d. Should Langley replace its trade credit with the bank loan?

Langley should replace the trade credit with a bank loan if it can get a bank loan that's can less than 26.38%, then the trade credit of $37902 should be replaced.

e. If the bank loan is used, how much of the trade credit should be replaced?

Only the trade credit of $37902 should be replaced.

Renata Corporation purchased equipment in 2018 for $244,800 and has taken $110,160 of regular MACRS depreciation. Renata Corporation sells the equipment in 2020 for $146,880. What is the amount and character of Renata's gain or loss? Renata Corporation has a gain of $fill in the blank 1 of which $fill in the blank 2 is treated as ordinary income due to § 1245 recapture

Answers

Answer and Explanation:

The computation of the amount and the character of the renata gain or loss is shown below;

purchased equipment in 2018 $244,800

regular MACRS depreciation taken -$110,160

WDV as per MACRS method $134,640

Less: Sell the equipment  -$146,880

loss on sale of equipment -$12,240

There is a loss and that would be short term capital loss

In 3 sentences. Why are open-ended questions helpful when landing a sale? (this is for customer service)

Answers

Answer:

By using open-ended questions, participants are able to express and articulate opinions that may be extreme, unusual, or simply ones that the researcher did not think about when creating the survey. This often provides researchers rich, relevant data for their studies

Explanation:

(hope this helps)

An asset falling under the MACRS five-year class was purchased three years ago for $200,000 (its original depreciation basis). Calculate the cash flows if the asset is sold now at a) $60,000 and b) $80,000. Assume the applicable tax rate is 40 percent.

Answers

Answer:

(a) The cash flows is $59,040.

(b) The cash flows is $71,040.

Explanation:

From the  Modified Accelerated Cost Recovery System (MACRS) Tables, the depreciation rates for the first 3 years for an asset falling under the MACRS five-year class are 20%, 32% and 19.2%. Therefore, we have:

Accumulated depreciation rate = 20% + 32% + 19.2% = 71.20%

Accumulated depreciation = Cost of the asset * Accumulated depreciation rate =  $200,000 * 71.20% = $142,400

Net book value of the asset = Cost of the asset - Accumulated depreciation = $200,000 - $142,400 = $57,600

We can now proceed as follows:

(a) Calculate the cash flows if the asset is sold now at $60,000

Capital gains = Sales proceeds - Net book value = $60,000 - $57,600 = $2,400

Capital gains tax = Capital gains * Tax rate = $2,400 * 40% = $960

Net sales proceeds = Sales proceeds - Capital gains tax = $60,000 - $960 = $59,040

Therefore, the cash flows is $59,040 net sales proceeds.

(b) Calculate the cash flows if the asset is sold now at $80,000

Capital gains = Sales proceeds - Net book value = $80,000 - $57,600 = $22,400

Capital gains tax = Capital gains * Tax rate = $22,400 * 40% = $8,960

Net sales proceeds = Sales proceeds - Capital gains tax = $80,000 - $8,960 = $71,040

Therefore, the cash flows is $71,040 net sales proceeds.

The cash flows is $59,040 and $71,040 when asset are sold at $60,000 and $80,000.

What is MACRS depreciation?

MACRS stands for modified accelerated cost recovery system is the depreciation system in the U.S. where the cost of the asset is recovered in a specific period through deduction.

Given:

Asset=$200,000

The depreciation rate for 5 year asset are:20%, 32%, 19.2%, 11.52%, 11.52% and 5.76%

Accumulated  depreciation  for 3 years=20% + 32% + 19.2% = 71.20%

=asset cost X  depreciation rate for 3 years

=$200,000 X 71.20% = $142,400

Net Book value=Asset Cost  - Accumulated depreciation

=$200,000 - $142,400

= $57,600

(a)Cash flows if assets sold at $60,000

Capital gains = Sales - Net book value

=$60,000 - $57,600

= $2,400

Capital gains tax = Capital gains X Tax rate

= $2,400 * 40% = $960

Net sales proceeds = Sales proceeds - Capital gains tax

= $60,000 - $960 = $59,040

(b)Cash flows if assets sold at $80,000

Capital gains = Sales - Net book value

= $80,000 - $57,600

= $22,400

Capital gains tax = Capital gains X Tax rate

= $22,400 * 40% = $8,960

Net sales proceeds = Sales proceeds - Capital gains tax

= $80,000 - $8,960 = $71,040

Therefore the above calculation aptly gives the solution.

Learn more about  MACRS depreciation here:

https://brainly.com/question/14451358

Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following

Machine A could be purchased for $69,000. It will last 10 years with annual maintenance costs of $2,200 per year. After 10 years the machine can be sold for $7,245.
Machine B could be purchased for $57,500. It also will last 10 years and will require maintenance costs of $8,800 in year three, $11,000 in year six, and $13,200 in year eight. After 10 years, the machine will have no salvage value.

Required:
Assume an interest rate of 8% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year. Calculate the present value of Machine A & Machine B. Which machine Esquire should purchase?

Answers

Answer:

Esquire should purchase Machine B

Explanation:

Below is the calculation of the present values of Machine A & Machine B.

Machine A             Period    Amount    Present Value Factor   Present Value

Purchase Cost            0         ($69,000)                  1                        ($69,000)

Maintenance Cost    1 - 10      ($2,200)                 6.71008               ($14,762)

Salvage Value             10         $7,245                  0.46319                $3,356

Present Value of A                                                                              ($80,406)

Machine B            Period    Amount     Present Value Factor   Present Value

Purchase Cost            0         ($57,500)                  1                        ($57,500)

Maintenance Cost

Year 3                          3         ($8,800)               0.79383                ($6,986)

Year 6                          6         ($11,000)              0.63017                 ($6.932)

Year 8                          8         ($13,200)             0.54027                 ($7,132)

Present Value of B                                                                            ($78,550)

Note the Following:

The Net Present Value of B is lower than the Value of Machine A. So, Machine B should be opted.For the Present Value Factor of Machine A's Maintenance Cost, the 10 year annuity value of 8% was calculated.Machine B has no salvage value after the 10th year period.

Nicole’s Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $16,000. The estimated useful life was five years and the residual value was $1,000. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,400 hours; year 2, 2,300 hours; year 3, 2,200 hours; year 4, 2,100 hours; and year 5, 1,000 hours.
Required:
1. Complete a depreciation schedule for each of the alternative methods.
A. Straight-line.
B. Units-of-production.
C. Double-declining-balance.
2. Assume NGS sold the hydrotherapy tub system for $3,000 at the end of year 3. Prepare the journal entry to account for the disposal of this asset under the three different methods.
1) Record the disposal of the hydrotherapy tub system for $3,000 in year 3 assuming depreciation was calculated using the straight line method.
2) Record the disposal of the hydrotherapy tub system for $3,000 in year 3 assuming depreciation was calculated using the units-of-production method.
3) Record the disposal of hydrotherapy tub system for $3,000 in year 3 assuming depreciation was calculated using the double-declining method.

Answers

Answer:

Nicole's Getaway Spa (NGS)

1. Depreciation Schedules:

A. Straight-line method:

Year       Depreciation    Book Value   Accumulated   Net Book Value

                Expense            of asset      Depreciation

Year 1        $3,000            $16,000            $3,000             $13,000

Year 2         3,000              16,000               6,000               10,000

Year 3         3,000              16,000               9,000                7,000

Year 4         3,000              16,000             12,000                4,000

Year 5         3,000              16,000             15,000                1,000

B. Units-of-production method:

Year       Depreciation    Book Value   Accumulated   Net Book Value

                Expense            of asset      Depreciation

Year 1        $3,600            $16,000             $3,600              $12,400

Year 2         3,450               16,000               7,050                  8,950

Year 3         3,300               16,000             10,350                  5,650

Year 4         3,150                16,000             13,500                  2,500

Year 5        1,500                16,000             15,000                   1,000

C. Double-declining-balance method:

Year       Depreciation    Book Value   Accumulated   Net Book Value

                Expense            of asset      Depreciation

Year 1        $6,400            $16,000             $6,400              $9,600

Year 2         3,840               16,000              10,240                 5,760

Year 3         2,304               16,000              12,544                 3,456

Year 4          1,382               16,000              13,926                 2,074

Year 5         1,074                16,000             15,000                  1,000

2. Sale of machine for $3,000 at the end of year 3:

Journal Entry of disposal:

1) Straight-line method:

Debit Cash $3,000

Credit Sale of Equipment $3,000

To record the disposal of the equipment.

Debit Sale of Equipment $16,000

Credit Equipment $16,000

To transfer equipment to sale of equipment.

Debit Accumulated Depreciation $9,000

Credit Sale of Equipment $9,000

To close accumulated depreciation.

Debit Income Summary $4,000

Credit Sale of Equipment $4,000

To record the loss from sale of equipment.

2) Units-of-production method:

Debit Cash $3,000

Credit Sale of Equipment $3,000

To record the disposal of the equipment.

Debit Sale of Equipment $16,000

Credit Equipment $16,000

To transfer equipment to sale of equipment.

Debit Accumulated Depreciation $10,350

Credit Sale of Equipment $10,350

To close accumulated depreciation.

Debit Income Summary $2,650

Credit Sale of Equipment $2,650

To record the loss from sale of equipment.

3) Double-declining method:

Debit Cash $3,000

Credit Sale of Equipment $3,000

To record the disposal of the equipment.

Debit Sale of Equipment $16,000

Credit Equipment $16,000

To transfer equipment to sale of equipment.

Debit Accumulated Depreciation $12,544

Credit Sale of Equipment $12,544

To close accumulated depreciation.

Debit Income Summary $456

Credit Sale of Equipment $456

To record the loss from sale of equipment.

Explanation:

a) Data and Calculations:

Cost of machine =     $16,000

Residual value =             1,000

Depreciable amount $15,000

Estimated useful life = 5 years

Annual depreciation expense/rate:

A. Straight-line method = $3,000 ($15,000/5)

B. Unit of production method = $1.50 per unit ($15,000/10,000)

Year 1 = $3,600 (2,400 * $1.50)

Year 2 = $3,450 (2,300 * $1.50)

Year 3 = $3,300 (2,200 * $1.50)

Year 4 = $3,150 (2,100 * $1.50)

Year 5 = $1,500 (1,000 * $1.50)

C. Double-declining balance method:

Straight-line method rate = 20% (100/5)

Double-declining rate = 40% (20% * 2)

Year 1 = $6,400 ($16,000 * 40%) Balance $9,600

Year 2 = $3,840 ($9,600 * 40%) Balance $5,760

Year 3 = $2,304 ($5,760 * 40%) Balance $3,456

Year 4 = $1,382 ($3,456 * 40%) Balance $2,074

Year 5 = $1,074 ($2,078 - $1,000) Balance $1,000

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