Answer:
b) Forecasting
Explanation:
The skill set that is used to predict the aspects of the business in the future is what is known as forecasting.
In field of business or management, forecasting is also known as predicting. It is used to predict the developmental strides that the business would attain in the years to come.
Forecasting is very helpful because it helps to come up with strategies that would be useful to the business in the future.
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The amount of joint costs allocated to product DBB-1 using the sales value at split-off method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar): $2,213,640. $939,240. $216,870. $757,800. $447,120.
Answer:
$2,213,640
Explanation:
Calculation for the amount of joint costs allocated to product DBB-1 using the sales value at split-off method
First step is to calculate the total amount
DBB-1= 16,000 units *$25
DBB-1= 400,000
DBB-2= 24,000 units *$35
DBB-2= 840,000
DBB-2= 36,000 units *$55
DBB-2= 1,980,000
Total =3,220,000
(400,000+840,000+1,980,000)
Second step is to calculate the Weight for DBB-3
Weight for DBB-3= 1,980,000 / 3,220,000 Weight for DBB-3=61.49%
Now let calculate the Joint cost for DBB-3
Joint cost for DBB-3=$36,00,000*61.49%
Joint cost for DBB-3=$2,213,640
Therefore The amount of joint costs allocated to product DBB-1 using the sales value at split-off method is $2,213,640
The following inventory valuation errors have been discovered for Knox Corporation:
The 2015 year-end inventory was overstated by $23,000.
The 2016 year-end inventory was understated by $61,000.
The 2017 year-end inventory was understated by $17,000.
The reported income before taxes for Knox was:
Year: Income before Taxes:
2015 $138,000
2016 $254,000
2017 $168,000
Required:
Compute what income before taxes for 2015, 2016, and 2017 should have been after correcting for the errors.
Answer:
Corrected Income before taxes are $115,000 (2015), $315,000 (2016) and $185,000 (2017)
Explanation:
in the calculation of a company's income before tax, the Cost of Goods Sold (COGS) is done using the basic formulae by Adding Opening year inventory with Purchases and subtracting Ending year Inventory. In the case where Ending year inventory has been overstated, the COGS that has been calculated is understated which implies that the Income before tax has been overstated.
In the vice versa scenario, where Ending year inventory has been understated, the COGS that has been calculated is overstated which implies that the Income before tax has been understated. The calculation of the same is done below:
Year 2015
Income Before Tax (Previous) - Ending year Inventory = Income before Tax (Corrected)
138,000 - 23,000 = $115,000
Year 2016
Income Before Tax (Previous) + Ending year Inventory = Income before Tax (Corrected)
254,000 + 61,000 = $315,000
Year 2017
Income Before Tax (Previous) + Ending year Inventory = Income before Tax (Corrected)
168,000 + 17,000 = $185,000
Feb. 1 Paid $500 for rent of hangar space in February.Feb. 4 Received customer payment of $1,510 to ship several items to Philadelphia next month.Feb. 7 Flew cargo from Denver to Dallas; the customer paid in full ($1,410 cash).Feb. 10 Incurred and paid $1,500 in pilot wages for flying in February.Feb. 14 Paid $116 for an advertisement run in the local paper on February 14.Feb. 18 Flew cargo for two customers from Dallas to Albuquerque for $2,130; one customer paid $860 cash and the other asked to be billed $1,270.Feb. 25 Purchased on account $1,755 in supplies for future use on the planes.Required:Prepare accrual basis journal entries for each transaction.Calculate the company’s preliminary net income.Calculate the company’s net profit margin expressed as a percent.
Answer:
1. Feb-01
Dr Rent expense 500
Cr Cash 500
Feb-04
Dr Cash 1510
Cr Unearned freight revenue 1510
Feb-07
Dr Cash 1410
Cr Freight revenue 1410
Feb-10
Dr Wages and salaries expense 1500
Cr Cash 1500
Feb-14
Dr Advertisement expenses 116
Cr Cash 1165
Feb-18
Dr Cash 860
Cr Freight revenue 860
Dr Accounts receivable 2130
Cr Freight revenue 2130
Feb-25
Dr Supplies 1755
Cr Accounts payable 1755
2. $2,284
3. 51.90%
Explanation:
1. Preparation of accrual basis journal entries for each transaction
Feb-01
Dr Rent expense 500
Cr Cash 500
Feb-04
Dr Cash 1510
Cr Unearned freight revenue 1510
Feb-07
Dr Cash 1410
Cr Freight revenue 1410
Feb-10
Dr Wages and salaries expense 1500
Cr Cash 1500
Feb-14
Dr Advertisement expenses 116
Cr Cash 1165
Feb-18
Dr Cash 860
Cr Freight revenue 860
Dr Accounts receivable 2130
Cr Freight revenue 2130
Feb-25
Dr Supplies 1755
Cr Accounts payable 1755
2.Calculation for the company’s preliminary net income.
Freight revenue 4400
(1410+860+2130)
Less Expenses 2116
(500+1500+116)
Preliminary Net income $2,284
Therefore the company’s preliminary net income will be $2,284
3. Calculation for the company’s net profit margin expressed as a percent
Net profit margin = 2,284/4,400
Net profit margin=0.5190*100
Net profit margin=51.90%
Therefore the company’s net profit margin expressed as a percent will be 51.90%
For this question, consider a manufacturer of wall calendars. A cost leadership strategy would be oriented around mass producing calendars. Responsiveness would be oriented around being flexible and changing designs/themes as the market changes and always having calendars available for sale (reliable response). A differentiation strategy would be through unique and customizable product design. This would also create a production that is like that of a craftsman rather than mass production where customers will be able to design and have produced a custom product. You are hiring personnel to work on the Wall Calendar Production Line. Your decision depends on the operations strategy. Match the appropriate decision with the strategy:
Differentiation
Cost Leadership
Responsiveness (flexible response)
A. Hire artists to create unique calendars.
B. Hire workers who will be cross trained, so they can be scheduled to do various positions.
C. Hire low skilled labor, like high school grads, to run machines for printing and cutting.
Answer:
Matching the appropriate decision with the appropriate strategy:
A. Hire artists to create unique calendars.
= Differentiation
B. Hire workers who will be cross trained, so they can be scheduled to do various positions.
= Responsiveness (flexible response)
C. Hire low skilled labor, like high school grads, to run machines for printing and cutting.
= Cost Leadership
Explanation:
A differentiation strategy aims to provide customers with unique, different, and distinct goods and services, unlike the competitors may offer in the marketplace. It increases competitive advantage.
A cost leadership strategy is employed to reduce production and product costs. It encourages mass production.
A responsiveness strategy is flexible. It tries to match the needs of customers with a company's production activities.
During 2020, Starnes Corporation developed a patent. Starnes incurred the following costs related to the development of the patent: tests to perfect the use of the patent for production processes, $9,600; research costs in the research laboratory, $33,600; and depreciation on equipment (that has alternative future uses) used in developing the patent, $6,400. In addition, in late December 2020, the company incurred legal fees for the patent registration, $11,200. The expected life of the patent is 20 years. On September 30, 2021, Starnes Corporation defended its patent in court after incurring legal fees of $4,800. The total estimated life of the patent at that time was adjusted to 15 years remaining from September 30, 2021.
Record journal entries for the following items.
a. Patent development and registration costs incurred in 2020.
b. Legal fees paid in 2021.
c. Amortization expense in 2021.
d. Amortization expense in 2022c. Amortization expense in 2021.
Answer:
a. Patent development and registration costs incurred in 2020.
Dr Patent 11,200 (only patent registration fees)
Dr Research and development expense 49,600
Cr Accumulated depreciation 6,400
Cr Cash 54,400
b. Legal fees paid in 2021.
Dr Patent 4,800
Cr Cash 4,800
c. Amortization expense in 2021.
Dr Amortization expense 607.50
Cr Patent 607.50
($11,200/20 x 9/12) + ($15,000/20 x 3/12) = $607.50
d. Amortization expense in 2022
Dr Amortization expense 750
Cr Patent 750
a. Patent development and registration costs incurred in 2020.
Dr Patent 11,200
Dr Research and development expense 49,600
Cr Accumulated depreciation 6,400
Cr Cash 54,400
b. Legal fees paid in 2021.
Dr Patent 4,800
Cr Cash 4,800
c. Amortization expense in 2021.
Dr Amortization expense 607.50
Cr Patent 607.50 ($11,200/20 x 9/12) + ($15,000/20 x 3/12)
d. Amortization expense in 2022
Dr Amortization expense 750
Cr Patent 750
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As an entrepreneur that prefers to work independently what is the best source of financing? Explainer answer
Answer:
Best source of financing are Personal Investment, Angels, Crowdfunding and Banks.
Explanation:
There are many sources of funding available for the entrepreneur to avail when wanting to work independently. These are mentioned below:
Personal Investment
The first best source is funding it yourself if you have any savings or might be working in an organisation and have just received a handsome bonus that you might be able to invest in. One of the main advantage of this type of financing is that it sends a positive image to the external financiers, that the person wanting to work as an entrepreneur is willing to take risks.
Angels
These are experienced entrepreneurs who have some additional income and are willing to invest in new or small organisations. Sometimes the investment through an angel starts at low level investment and is then taken to a higher amount after some confidence has been built on the entrepreneur's business growth.
Crowdfunding
This type of method for financing is preformed via online where one person provides an investment opportunity to large group of people to invest in small amounts to meet the entrepreneur's needs. This can be either in form of loan or donations.
Bank Financing
Another good source for funding, however, in comparison to the above mentioned financing sources this type is more risk averse. This means that banks intend to provide financing to companies/businesses with low risk profiles. However, it does not conclude that they might not be willing to provide the required financing.
Thompson Refrigerators Inc. needs to prepare pro forma financial statements for the next fiscal year. To do so, the company must forecast its total overhead cost. The actual machine hours and total overhead cost are presented below for the past six months. Month Total Overhead Machine Hours Jan. $8,258 2,134 Feb. 8,006 2,045 Mar. 8,387 2,276 Apr. 8,832 2,743 May 8,921 2,834 June 7,841 2,034 Using the high-low method, total monthly fixed overhead cost is calculated to be:
Answer:
$5,095.10
Explanation:
The computation of the total monthly fixed overhead cost using the high-low method is given below:
But before that the variable cost per unit is
Variable cost per unit is
= [Total cost at highest level - Total cost at lowest level] ÷ [Highest level - Lowest level]
= ($8,921 - $7,841) ÷ (2,834 - 2,034)
= $1.35
Now
The total fixed cost for the month is
= $8921 - (1.35 × 2,834)
= $5,095.10
The next three questions use the below information. Company A started business on January 1, 20X1, and bought the following piece of equipment. Cost of asset $150,000 Useful life 3 Tax rate 21% 20X1 estimated tax payment 1,800 Depreciation for book and tax purposes is as follows: Book Tax 20X1 40,000 100,000 20X2 40,000 20,000 20X3 40,000 0 20X1 income statement information: Sales 638,000 Expenses (does not include depreciation expense and tax expense) 510,000 What is net income for 20X1?
Answer:
$69,520
Explanation:
"Note: Let assume salvage value is $3,000"
Company A
Income Statement
For the year 20X1
Sales $638,000
Expenses $510,000
Depreciation $40,000 [(150,000-30,000)/3}
Income before tax $88,000
Income tax at 21% $18,480
Net Income $69,520
Equipment with a book value of $83,500 and an original cost of $162,000 was sold at a loss of $32,000. Paid $106,000 cash for a new truck. Sold land costing $320,000 for $400,000 cash, yielding a gain of $80,000. Long-term investments in stock were sold for $91,400 cash, yielding a gain of $16,250. Use the above information to determine cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
Net cash flow from investing activities $417,400
Explanation:
The computation of cash flow from investing activity is given below:
Cash flow from investing activities
Add: Equipment sold ($83,500 - $32,000) $51,500
(Book value - loss )
Less : Acquisition of new truck -$106,000
Add : Land sold $400,000
Add : Long term investment sold $91,400
Net cash flow from investing activities $417,400
Four different corporations, Amber, Blue, Coral, and Daffodil, show the same balance sheet data at at the beginning and end of a year. These data, exclusive of the amount of stockholders' equity, arere summarized as follows:
Total Assets Total Liabilities
Beginning of the year $1,220,000 $990,000
End of the year 1,730,000 1,150,000
On the basis of the preceding data and the following additional information for the year, determine the net income (or loss) of each company for the year. (First determine the amount of increase or decrease in stockholders' equity during the year).
Amber: No additional common stock was issued and no dividends were paid.
Blue: No additional common stock was issued, but dividends of $60,000 were paid.
Coral: Additional common stock of $140,000 was issued, but no dividends were paid.
Daffodil: Additional common stock of $140,000 was issued and dividends of $60,000 were paid.
Answer:
Amber
Change in stockholders' equity = $580,000 - $230,000 = $350,000
No additional shares issued, so net income = $350,000
Blue
Change in stockholders' equity = $580,000 - $230,000 = $350,000
No additional shares issued, but dividends paid for $60,000, so net income = $410,000
Coral
Change in stockholders' equity = $580,000 - $230,000 = $350,000
Additional shares issued for $140,000, so net income = $210,000
Daffodil
Change in stockholders' equity = $580,000 - $230,000 = $350,000
Additional shares issued for $140,000, dividends paid for $60,000, so net income = $270,000
The accounts in the ledger of Hickory Furniture Company as of December 31, 2019, are listed in alphabetical order as follows. All accounts have normal balances. The balance of the cash account has been intentionally omitted.
Accounts Payable $42,770
Accounts Receivable 116,900
Cash ?
Elaine Wells, Capital 75,000
Elaine Wells, Drawing 24,000
Fees Earned 745,230
Insurance Expense 3,600
Land 50,000
Miscellaneous Expense 9,500
Notes Payable 50,000
Prepaid Insurance 21,600
Rent Expense 48,000
Supplies 4,275
Supplies Expense 6,255
Unearned Rent 12,000
Utilities Expense 26,850
Wages Expense 580,700
Prepare an unadjusted trial balance.
Answer:
Hickory Furniture Company
Unadjusted Trial Balance
As of December 31, 2019
Accounts Title Debit Credit
Accounts Payable $42,770
Accounts Receivable $116,900
Cash 33,320
Elaine Wells, Capital 75,000
Elaine Wells, Drawing 24,000
Fees Earned 745,230
Insurance Expense 3,600
Land 50,000
Miscellaneous Expense 9,500
Notes Payable 50,000
Prepaid Insurance 21,600
Rent Expense 48,000
Supplies 4,275
Supplies Expense 6,255
Unearned Rent 12,000
Utilities Expense 26,850
Wages Expense 580,700
Totals $925,000 $925,000
Explanation:
a) Data and Calculations:
Accounts Title Debit Credit
Accounts Payable $42,770
Accounts Receivable $116,900
Cash ?
Elaine Wells, Capital 75,000
Elaine Wells, Drawing 24,000
Fees Earned 745,230
Insurance Expense 3,600
Land 50,000
Miscellaneous Expense 9,500
Notes Payable 50,000
Prepaid Insurance 21,600
Rent Expense 48,000
Supplies 4,275
Supplies Expense 6,255
Unearned Rent 12,000
Utilities Expense 26,850
Wages Expense 580,700
Totals $891,680 $925,000
Cash = $925,000 - $891,680 = $33,320
b) The unadjusted Trial Balance lists the general ledger account balances of Hickory Furniture Company before the adjustment of accounts. It is the first trial balance that is prepared.
A company uses a perpetual inventory system. The company began its fiscal year with inventory of $998,000. Purchases of merchandise on account during the year totaled $3,124,089. Merchandise costing $3,456,980 was sold on account for $6,909,879. Prepare the journal entries to record these transactions.
Answer:
Date Account Titles and Explanation Debit Credit
Inventory $3,124,089
Account payable $3,124,089
(To record purchase of merchandise inventory)
Account receivables $6,909,879
Sales revenues $6,909,879
(To record sales on account)
Cost of goods sold $3,456,980
Inventory $3,456,980
(To record the cost of sales)
Cost of Units Transferred Out and Ending Work in Process The costs per equivalent unit of direct materials and conversion in the Filling Department of Eve Cosmetics Company are $0.95 and $2.90, respectively. The equivalent units to be assigned costs are as follows: Equivalent Units Direct Materials Conversion Inventory in process, beginning of period 0 5,000 Started and completed during the period 63,000 63,000 Transferred out of Filling (completed) 63,000 68,000 Inventory in process, end of period 4,000 1,200 Total units to be assigned costs 67,000 69,200 The beginning work in process inventory had a cost of $3,250. Determine the cost of completed and transferred-out production and the ending work in process inventory. If required, round to the nearest dollar.
Answer:
Cost of completed and transferred-out production = $260,300Cost of Ending inventory = $7,280Explanation:
Costs per equivalent unit of direct materials and conversion are $0.95 and $2.90, respectively.
Cost of completed and transferred-out production:
Units Transferred out of Filling (completed):
Direct materials = 63,000
Conversion = 68,000
= Cost of completed and transferred materials + cost of conversion and transferred + beginning inventory
= (63,000 * 0.95) + (68,000 * 2.90) + 3,250
= 59,850 + 197,200 + 3,250
= $260,300
Cost of Ending inventory:
Inventory in process, end of period
Direct materials = 4,000
Conversion = 1,200
= (4,000 * 0.95) + (1,200 * 2.90)
= $7,280
MM Proposition I with corporate taxes states that:
I. capital structure can affect firm value by an amount that is equal to the present value of the interest tax shield;
II. by raising the debt-to-equity ratio, the firm can lower its taxes and thereby increase its total value;
III. firm value is maximized by using an all-equity capital structure
a. I only
b. II only
c. III only
d. I and II
Answer:
d.) I and II
Explanation:
The first proposition can be regarded as proposition that gives a clam that capital structure of a company has no impact on the value. The value of a company is been known as present value of future cash flows when it's calculated, then it cannot be affected by capital structure. It should be noted that MM Proposition I with corporate taxes states that capital structure can affect firm value by an amount that is equal to the present value of the interest tax shield.
Alexa and Maya, married and filing joint income tax returns, derive their entire income from the operation of their retail candy shop. Their 2019 adjusted gross income was $50,000. They itemize their deductions on Schedule-A for 2019. The following unreimbursed cash expenditures were among those made by them during 2019: State income tax $1,200 Self-employment tax $7,650 What amount should they deduct for taxes on Schedule-A for 2019
Answer:
Alexa and Maya
The amount that they should deduct for taxes on Schedule A for 2019 is:
= $5,025.
Explanation:
a) Data and Calculations:
Adjusted gross income = $50,000
State income tax = $1,200
Self-employment tax = $7,650
Amount they should deduct for taxes on Schedule A for 2019:
State income tax = $1,200
50% of Self-employment tax = $3,825 ($7,650 * 50%)
Total = $5,025
b) Taxpayers who itemize deductions on their federal income tax returns can deduct 50% of self-employment tax and 100% of state and local real estate and personal property taxes, as well as either income taxes or general sales taxes. Note that state and local taxes have been deductible since the inception of the federal income tax in 1913.
Aimee is a salaried nonexempt employee who earns an annual salary of $56,000 for a 43-hour workweek, paid biweekly. The employer pays overtime for any hours worked in excess of 43 per week. During a pay period, she worked 95 hours. She has requested that she take compensatory time in lieu of paid overtime. How much compensatory time should she receive, assuming that her firm approves the compensatory time
Answer:
the compensatory time that would be received is 13.5 hours
Explanation:
The computation of the compensatory time that would be received is as follows:
Actual hours worked 95
Less: Regular working hours 86 (43 hours × 2)
Overtime hours worked 9
Now
Compensatory time 13.5 (9 hours × 1.5)
Hence, the compensatory time that would be received is 13.5 hours
An investor found the following in an annual report: "The financial statements, in our opinion, present fairly the financial position, operating results, and cash flows, in conformity with accounting principles generally accepted in the United States." In which section of the annual report did the investor find this?
Answer:
Report of the Independent Accountants
Explanation:
From the question we are informed about An investor who found the following in an annual report: "The financial statements, in our opinion, present fairly the financial position, operating results, and cash flows, in conformity with accounting principles generally accepted in the United States." The section which the annual report was fond by the investor is Report of the Independent Accountants. Independent Accountant's Report can be regarded as a report that encompass broad spectrum of work that has been carried out through an accountant of an independent firms. And this is usually carried for
charitable as well as commercial organisations in public as well as private sector.
The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $10.50 per hour. When activity jumped to 24,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $9.75. On the basis of this information, the company's fixed maintenance costs were:
Answer:
Total fixed cost element = $90000
Explanation:
To calculate the fixed maintenance cost, first we will use the high-low method to calculate the element of average variable maintenance cost per machine hour in the average total maintenance cost.
The value of highest activity = 24000 * 9.75 = $234000
The value of lowest activity = 20000 * 10.5 = $210000
Average VC per MH = (234000 - 210000) / (24000 - 20000)
Average VC per MH = $6 per machine hour
Total Average variable cost (24000 MH) = 6 * 24000 = $144000
Total fixed cost element = 234000 - 144000 = $90000
L. Lyons started a business, called Lyons Share, by investing $4,000 for stock. Illustrate how to record the transaction in Lyons Share's T-accounts by completing the following sentence. The Cash account would be blank input field 1_(debited/credited) on the blank input field 2(left/right) side of the T-account and the Common Stock account would be blank input field 3(debited/credited) on the blank input field 4 (left/right) side of the T-account. (Enter one word per blank.)
Answer:
Dr Cash Account (Left side)
Cr Common stock (Credit side)
Explanation:
Preparation of entry to Illustrate how to record the transaction in Lyons Share's T-accounts
Based on the information given how to record the transaction in Lyons Share's T-accounts will be :
The CASH ACCCOUNT would be DEBITED on the LEFT SIDE of the T-account reason been that debit side is often on the left hand side and Secondly the amount of 4,000 was the cash that was Invested for stock which is why cash Account will be debited.
COMMON STOCK account would be CREDITED on the RIGHT SIDE of the T-account reason been that the amount of 4,000 was Invested for stock which is why comm stock account will be credited.
Therefore entry to Illustrate how to record the transaction in Lyons Share's T-accounts will be:
Dr Cash Account (Left side)
Cr Common stock (Credit side)
One current answer to the historical struggle within management to balance the things of production and the humanity of production is social business, including the use of social media. Please indicate if the social media benefits listed below aid a thing of production or the humanity of production. Social media benefit Thing of production Humanity of production Improve efficiency Facilitate collaboration
Answer:
Humanity of production
Explanation:
predetermined overhead rate includes: Multiple Choice estimated total manufacturing overhead cost in the numerator. only the fixed portion of the estimated manufacturing overhead cost in the numerator. only the variable portion of the estimated manufacturing overhead cost in the numerator. estimated total manufacturing overhead cost in the denominator.
Answer:
estimated total manufacturing overhead cost in the numerator.
Explanation:
Predetermined overhead rate is calculated to apply manufacturing overhead to products. It is usually calculated before production begins. Using estimated overhead cost and the estimated allocation base
The formula is:
Predetermined over head rate = (estimated total manufacturing overhead cost) ÷ (estimated total amount of the allocation base)
The allocation base are the units that are considered in calculating predetermined overhead rate. For example labour hours can be used, machine hours, and direct materials
Following are transactions for Valdez Services, a company owned by Brina Valdez. Brina Valdez invested $27,300 cash in the company in exchange for common stock. The company provided services to a client and immediately received $840 cash. The company received $13,700 cash from a client in advance for services to be provided next year. The company received $2,100 cash from a client in partial payment of accounts receivable. 1. Prepare general journal entries for the above transactions of Valdez Services. 2. Listed below are three reasons why a transaction would not yield a revenue. Match each of the reasons to the transaction it properly describes.
Answer:
No General Journal Debit Credit
1. Cash $27,300
Capital, Brina Valdez $27,300
(To record investment)
2. Cash $840
Service revenue $840
(To record service revenue)
3. Cash $13,700
Unearned service revenue $13,700
(To record unearned service revenue)
4 Cash $2,100
Accounts receivable $2,100
(To record cash collection from accounts receivable)
2.
An analysis of the company's insurance policies provided the following facts.
Policy Date of Purchase Months of Coverage Cost
A April 1, 2017 24 $10,824
B April 1, 2018 36 9,576
C August 1, 2019 12 8,424
The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost. (Year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.)
Required:
So what would my adjusting journal entry be?
Answer:
Adjusting Journal in the year of payment:
December, 2017: Policy A
Debit Insurance Expense $4,059
Credit Prepaid Insurance $4,059
To record the insurance expense for the year (9 months).
December, 2018: Policy A and B
Policy A:
Debit Insurance Expense $5,412
Credit Prepaid Insurance $5,412
To record insurance expense for the year, 12 months.
Policy B:
Debit Insurance Expense $2,394
Credit Prepaid Insurance $2,394
To record insurance expense for the year, 9 months.
December, 2019:
Policy A:
Debit Insurance Expense $1,353
Credit Prepaid Insurance $1,353
To record insurance expense for the year, 3 months.
Policy B:
Debit Insurance Expense $3,192
Credit Prepaid Insurance $3,192
To record insurance expense for the year, 12 months.
Policy C:
Debit Insurance Expense $3,510
Credit Prepaid Insurance $3,510
To record insurance expense for the year, 5 months.
Explanation:
a) Data and Calculations:
Policy Date of Purchase Months of Cost Monthly
Coverage Cost
A April 1, 2017 24 $10,824 $451 ($10,824/24)
B April 1, 2018 36 9,576 $266 ($9,576/36)
C August 1, 2019 12 8,424 $702 ($8,424/12)
b) The insurance expenses recorded under the three policies have been determined using the monthly rates. In each year, the months covered are taken into consideration when computing the insurance expense for the year. In this way, only the expenses incurred for the period are accounted for, in accordance with the accrual concept of accounting.
Two different suppliers are competing to supply a particular part for a new Boeing airliner. The Japanese supplier charges J(n) dollars for n parts whereas the Italian supplier charges I(n) dollars for n parts. (a) Which supplier should be used to supply a large number of parts if
Answer:
Italian Supplier will be chosen to supply a Large number of parts.
Explanation:
Note: This question is incomplete and lacks necessary data to solve. However I have found the missing part of this question and will be using that to solve for the sake of understanding and concept.
Data Missing:
Which supplier should be used to supply a large number of parts if:
Lim (n--> infinity) [tex]\frac{J(n)}{I(n)} = 0?[/tex] Now, this condition was missing in the question, now we can solve this question.
Solution:
Here, we can see that, the limit of function is approaching to infinity, which indicates (n--> infinity) we want to make larger number of parts. So, we also know that Limit value of this function = 0.
It means that, numerator must be smallest and the denominator must be largest to get the value = 0. And, here denominator = I(n) means Italian Supplier.
Otherwise, if we put larger values of numerator then, it is not possible to get the value of 0.
So, if we choose Italian supplier for a large number of parts, then the value of the Limit Function will be zero for it is approaching infinity.
Hence,
Italian Supplier will be chosen to supply a Large number of parts.
Martha is a regional supervisor who earns a base salary of $34,400 per year plus a 1% commission on all service contracts that she sells to existing customers. The company pays salaries on a semi monthly basis and contract commissions on a quarterly basis. As of September 30, Martha had made $38,200 in contract sales for the third quarter. What will be her gross pay on her next pay date
Answer:
Martha gross pay on her next pay date is $1,815.33.
Explanation:
This can be calculated as follows:
Number of semi months in a year = 24
Semi monthly salary = Salary per year / Number of semi months in a year = $34,400 / 24 = $1,433.33
Commission from contract sales for the third quarter = Contract sales for the third quarter * Commission percentage = $38,200 * 1% = $382
Martha gross pay on her next pay date = Semi monthly salary + Commission from contract sales for the third quarter = $1,433.33 + $382 = $1,815.33
Therefore, Martha gross pay on her next pay date is $1,815.33.
Michael won the Powerball jackpot of 57 million dollars. He has two options to collect the cash: (a) 30-year annuities (first payment one year from today) which future value equates the jackpot amount given that the prevailing interest rate is 8% per year; (b) a single payment now, corresponding to the present value of those 30-year annuities. Michael has big plans, hence he prefers option (b). Assuming that there are no taxes, how much money will he be able to collect now
Answer:
$5,664,627.53
Explanation:
future value of the annuity = $57 million
interest rate = 8%
number of periods = 30
FV annuity factor, 8%, 30 periods = 113.283
annual payment = future value / FV annuity factor= $57,000,000 / 113.283 = $503,164.64
the present value of an annuity = annual payments x PV annuity factor
PV annuity factor, 30 periods, 8% = 11.258
present value of the annuity = $503,164.64 x 11.258 = $5,664,627.53
The following selected information was extracted from the 20x1 accounting records of Lone Oak Products:
Raw material purchases $175,000
Direct labor 254,000
Indirect labor 109,000
Selling and administrative salaries 133,000
Building depreciation* 80,000
Other selling and administrative expenses 195,000
Other factory costs 344,000
Sales revenue ($130 per unit) 1,495,000
Seventy-five percent of the company's building was devoted to production activities; the remaining 25 percent was used for selling and administrative functions.
Inventory data:
January 1 December 31
Raw material $15,800 $18,200
Work in process 35,700 62,100
Finished goods 111,100 97,900
The January 1 and December 31 finished-goods inventory consisted of 1,350 units and 1,190 units, respectively.
Required:
a. Calculate Lone Oak's manufacturing overhead for the year.
b. Calculate Lone Oak's cost of goods manufactured.
c. Compute the company's cost of goods sold.
d. Determine net income for 20x1, assuming a 30% income tax rate.
e. Determine the number of completed units manufactured during the year.
Answer:
a. $513,000
b. $913,200
c. $926,400
d. $344,100
e. 11,340 units
Explanation:
a. manufacturing overhead for the year.
Manufacturing Overhead = indirect manufacturing costs
therefore,
Manufacturing Overhead = $109,000 (Indirect labor) + $80,000 x 75 % (Building depreciation) + $344,000 (Other factory costs)
= $513,000
b. cost of goods manufactured.
Cost of Goods Manufactured = Beginning Work In Process + Manufacturing Costs for the Period - Ending Work In Process
= $35,700 + ($15,800 + $175,000 - $18,200) + $254,000 + $513,000 - $62,100
= $913,200
c. cost of goods sold.
Cost of Goods Sold = Beginning Finished Goods + Cost of Goods Manufactured - Ending Finished Goods
= $111,100 + $913,200 - $97,900
= $926,400
d. net income for 20x1, assuming a 30% income tax rate.
Net Income = Gross Profit (Sales - Cost of Goods Sold) - Expenses
= $1,495,000 - $133,000 - $195,000 - ($80,000 x 25%)
= $1,147,000
Income tax = 1,147,000 x 30%
= $344,100
therefore,
Net Income = $1,147,000 - $344,100 = $802,900
e. number of completed units manufactured during the year.
First Calculate Number of Units Sold
Number of Units Sold = 1,495,000 ÷ $130 = 11,500 units
Units manufactured = Units Sold + Ending Finished Inventory - Beginning Finished Inventory
= 11,500 + 1,190 - 1,350
= 11,340 units
Determine the taxable amount of social security benefits for the following situations. If an amount is zero, enter "$0".
a. Erwin and Eleanor are married and file a joint tax return. They have adjusted gross income of $36,000, no tax-exempt interest, and $12,400 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
b. Assume Erwin and Eleanor have adjusted gross income of $12,000, no tax-exempt interest, and $16,000 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
c. Assume Erwin and Eleanor have adjusted gross income of $85,000, no tax-exempt interest, and $15,000 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
Answer:
a. Erwin and Eleanor are married and file a joint tax return. They have adjusted gross income of $36,000, no tax-exempt interest, and $12,400 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
Since their income is between $32,000 to $44,000, they have to pay income for 50% of their social security benefits = $12,400 x 50% = $6,200b. Assume Erwin and Eleanor have adjusted gross income of $12,000, no tax-exempt interest, and $16,000 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
Since their income is below $32,000, their social security benefits will not be taxed.c. Assume Erwin and Eleanor have adjusted gross income of $85,000, no tax-exempt interest, and $15,000 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
Since their income is higher than $44,000, they have to pay income for 85% of their social security benefits = $15,000 x 85% = $12,750
b. Which of the following combinations of fishing lures and duck decoys is unobtainable to Mountain Mack in one week's worth of carving? multiple choice 1 10 fishing lures and 40 duck decoys 20 fishing lures and 10 duck decoys 40 fishing lures and 0 duck decoys 16 fishing lures and 30 duck decoys c. Which of the following combinations of fishing lures and duck decoys is an efficient combination? multiple choice 2 16 fishing lures and 30 duck decoys 10 fishing lures and 40 duck decoys 50 fishing lures and 0 duck decoys 20 fishing lures and 10 duck decoys
Question Completion:
Production Possibilities Frontiers
Duck decoys Fishing lures
0 120
6 100
12 80
18 60
24 40
30 20
36 0
Answer:
Mountain Mach
Production Possibilities Frontiers:
1. The combinations of fishing lures and duck decoys that is unobtainable to Mountain Mach is:
10 fishing lures and 40 duck decoys
2. The combinations of fishing lures and duck decoys that is an efficient combination for Mountain Mach is:
16 fishing lures and 30 duck decoys
Explanation:
Mountain Mack's Production Possibilities Frontier (PPF) is a graphical illustration of the production possibilities of carving duck decoys and fishing lures with fixed resources. The PPF indicates the information about the tradeoff between devoting resources to carving duck decoys versus carving fishing lures. It shows that there is an opportunity cost if Mountain Mack chooses to produce more duck decoys than fishing lures and vice versa. With PPF, Mountain Mack is able to make efficient decisions by determining the best combination of goods and allocating resources accordingly.
The essential characteristics of financial statement fraud are: The misstatement is material and intentional and the users of the financial statements are investors in publicly traded companies. This misstatement is material and intentional and the preparers of the financial statements have a fiduciary obligation to the organization. The misstatement is material and intentional and the preparers of the financial statements fail to report the misstatement to the SEC or other applicable authority. The misstatement is material and intentional and the users of the financial statements have been misled.
Answer:
The misstatement is material and intentional and the users of the financial statements have been misled.
Explanation:
Financial statement fraud is defined as the intentional misstatement or ommision of information on the financial statement that is aimed at deceiving users of financial statement.
When a fraud is perpetrated the act is an intentional attempt to misrepresent a situation to illegally gain something that is not legally yours.
For example financial statement fraud can be done to obtain a loan or inflate the price of company shares.
Usually profits, assets, and revenue are overstated. While liabilities, expenses, and losses are understated