Answer: 11.1 times
Explanation:
Times Interest Ratio = Earnings before Interest and Tax/ Interest
Earnings before Interest and tax = Net Income + Interest + Tax
= 73,300 + 10,500 + 32,900
= $116,700
Times Interest ratio = 116,700/10,500
= 11.1 times
True or False: If the demand for notebooks is perfectly inelastic, an increase in the supply of notebooks only lowers the price of notebooks and does not affect the quantity produced and sold.
Answer:
True
Explanation:
It is similar to supply and demand principal. Hope I helped.
The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2016 and 2017.
December 31 2016 2017
Cash $51,935 $9,612
Accounts receivable 28,191 22,102
Office supplies 4,447 3,257
Office equipment 136,500 145,400
Trucks 53,418 62,418
Building 0 178, 072
Land 0 44,436
Accounts payable 74, 115 36,759
Note payable 0 122,508
Compute the 2017 year-end debt ratio for the business.
Answer:
34.22%
Explanation:
Debt ratio can be calculated by dividing the total liabilities with the total assets.
Calculation
Debt Ratio = Total liabilities / Total Assets
Debt Ratio = 159,267 / 465,297
Debt Ratio = 34.22%
Working
Cash 9,612
Accounts receivable 22,102
office supplies 3,257
office equipment 145,400
Trucks 62,418
Building 178,072
Land 44,436
total assets 465,297
Total liabilities
Accounts payable 36,759
Note payable 122,508
Total liabilities 159,267
Luthan Company uses a plantwide predetermined overhead rate of $22.10 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $265,200 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead cost of $269,000 and 10,900 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period.
Answer:
Allocated MOH= $240,890
Explanation:
Giving the following information:
Plantwide predetermined overhead rate of $22.10 per direct labor-hour.
The company incurred in 10,900 total direct labor-hours.
To calculate the allocated manufacturing overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 22.1*10,900
Allocated MOH= $240,890
Presented below is the basic accounting equation. Determine the missing amounts. Assets = Liabilities + Owner’s Equity
(a) $80,000 $59,000
(b) $ $47,000 $65,000
(c) $88,000 $ $54,000
Answer:
a. $21,000
b. $112,000
c. $34,000
Explanation:
Based on the placements of the $, i am assuming that the missing amount in :
a. is Owner’s Equity
b. Assets
c Liabilities
a. $80,000 = $59,000 + Owner’s Equity
Owner’s Equity = $80,000 - $59,000 = $21,000
b. Assets = $47,000 $65,000
Assets = $112,000
c. $88,000 = Liabilities + $54,000
Liabilities = $88,000 - $54,000 = $34,000
McDonald's would have conducted a(n) __________ to identify the strength of the breakfast menu and the potential revenue increase by extending its offerings to all-day.
Answer:
These are the options for the question:
Competitive AdvantageMarketing MyopiaSWOT AnalysisEnviromental ScanningAnd this is the correct answer:
Enviromental ScanningExplanation:
In order to identify the selling potential of a breakfast menu, by extending that menu to all-day, McDonalds would have to conduct an enviromental scanning, in which it would analyze several enviromental variables like: market size, customer profile, hours at which the product is sold the most.
After completing these analysis, McDonalds would have been able to determine if this strategy is appropriate or not.
Cute Camel Woodcraft Company's income statement reports data for its 1st year of operation. The Firm's CEO would like sales to increase by 25% next year. Cute Camel is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest & taxes (EBIT). The company's operating costs (excluding depreciation & amortization) remain at 65% of net sales, & its depreciation & amortization expenses remain constant from year to year. The company's tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBT). In year 2, Cute Camel expects to pay $300,000 & $1,824,525 of preferred & common stock dividends, respectively. Complete the Year 2 income statement data & then answer the questions that follow. Round each dollar value to the nearest whole dollar.Year 1 Year 2 (Forecasted)Net Sales $20,000,000 Less: operating costs, except depreciation & amortization 13,000,000 Less: depreciation & amortization expenses 800,000Operating Income (EBIT) $6,200,000 Less: interest expense 620,000Pre-Tax Income (EBT) 5,580,000 Less: taxes (40%) 2,232,000Earnings after taxes $3,348,000 Less: preferred stock dividends 300,000Earnings available to common shareholders 3,048,000 Less: common stock dividends 1,506,600Contribution to Retained Earnings $1,541,400 Given the results of the previous income statement calculations, complete the following statements:a. In year 2, if cute camel has 25,000 shares of preferred stock issued & outstanding, then each preferred share should expect to receive ($12, $30, $18 or $24) in annual dividends.b. If cute camel has 200,000 shares of common stock issued & outstanding, then the firm's earnings per share (EPS) is expected to change from ($31, $16.74, $27.90 or $15.24) in year 1 to ($33.79, $39.75, $18.77 or $20.27) in year 2.c. Cute camel's before interest, taxes, depreciation & amortization (EBITDA) value changed from ($9.5M, $7M, $19.2M or $8.4M) in year 1 to ($8.7M, $20M, $12M or $26M) in year 2.d. It is (CORRECT or INCORRECT) to say that cute camel's net inflows & outflows of cash at the end of years 1 & 2 are equal to the company's annual contribution to retained earnings, $1,541,400 & $1,929,975 respectively. This is because (ALL or ALL BUT ONE) of the item reported in the income statement involve payments & receipts of cash
Answer:
Cute Camel Woodcraft Company
1. Cute Camel Woodcraft Company
Forecasted Income Statement for Year 2:
Year 1 Year 2 (Forecasted)
Net Sales $20,000,000 $25,000,000
Less: operating costs, except
depreciation & amortization 13,000,000 16,250,000
Less: depreciation &
amortization expenses 800,000 800,000
Operating Income (EBIT) $6,200,000 $7,950,000
Less: interest expense 620,000 1,192,500
Pre-Tax Income (EBT) 5,580,000 6,757,500
Less: taxes (40%) 2,232,000 2,703,000
Earnings after taxes $3,348,000 $4,054,500
Less: preferred stock dividends 300,000 300,000
Earnings available to
common shareholders 3,048,000 3,754,500
Less: common stock dividends 1,506,600 1,824,525
Retained Earnings $1,541,400 $1,929,975
2a. With 25,000 shares of preferred stock issue and outstanding, then each preferred share should expect to receive $12 in annual dividends.
2b. With 200,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from $15.24 in year 1 to $18.77 in year 2.
2c. Cute camel's before interest, taxes, depreciation & amortization (EBITDA) value changed from $7M in year 1 to $8.7M in year 2.
2d. It is INCORRECT to say that cute camel's net inflows & outflows of cash at the end of years 1 & 2 are equal to the company's annual contribution to retained earnings, $1,541,400 & $1,929,975 respectively. This is because ALL BUT ONE of the item reported in the income statement involve payments & receipts of cash
Explanation:
a) Data and Calculations:
Year 1 Year 2 (Forecasted)
Net Sales $20,000,000 $25,000,000
Less: operating costs, except
depreciation & amortization 13,000,000 16,250,000
Less: depreciation &
amortization expenses 800,000 800,000
Operating Income (EBIT) $6,200,000 $7,950,000
Less: interest expense 620,000 1,192,500
Pre-Tax Income (EBT) 5,580,000 6,757,500
Less: taxes (40%) 2,232,000 2,703,000
Earnings after taxes $3,348,000 $4,054,500
Less: preferred stock dividends 300,000 300,000
Earnings available to
common shareholders 3,048,000 3,754,500
Less: common stock dividends 1,506,600 1,824,525
Retained Earnings $1,541,400 $1,929,975
Preferred Stockholders' Dividends per share
= $300,000/25,000 = $12
EPS (Earnings per share):
= Earnings available to common shareholders = $15.24 ($3,048,000/200,000) in year 1 and $18.77 ($3,754,500/200,000) in year 2.
Cute Camel's Earnings before interest, taxes, depreciation & amortization (EBITDA) for year 1 is $7M ($20M - $13M) while the year 2's is $8.75M ($25M - $16.25M).
The normal balance of an account: a. falls on the side where decreases are recorded. b. falls on the side where increases are recorded. c. cannot be computed in a manual accounting system. d. must be computed after every transaction.
The two types of package labeling in common usage today are:a. government-mandated and seller-controlledb. functional and persuasivec. motivational and requiredd. informational and persuasivee. promotional and nonpromotional
Answer: Informational and persuasive
Explanation:
Package labelling is simply the display of information regarding a product.
The two types of package labeling in common usage today are informational and persuasive. It should be noted that for persuasive labeling l, the focus is on the logo or on the promotional theme, while for the information labeling, it is done to enable the consumers make selections regarding product which they're satisfied with.
Contrast how a market system and a command economy try to cope with economic scarcity.
Explanation:
Note, a market system (capitalist economy) allows the forces of demand and supply to take place more freely than a command economy (monopolistic economy).
Thus, the market system will try to increase the production of the scarce commodities on its own, while the command economy will try to ensure anyone in the economy gets the limited commodity supply made available, especially to those who need it more.
The balanced scorecard method of control is designed to ______ incorporate with traditional measures of financial performance.
Answer:
Operational measures
Explanation:
balanced scorecard method in business are tools utilized by the management of an organization to control the activities going on in the organization, how their goals can be accomplished and others, it can be associated to strategic planning.
It should be noted that the balanced scorecard method of control is designed to operational measures incorporate with traditional measures of financial performance.
The following cost data pertain to the operations of Montgomery Department Stores, Inc., for the month of July.
Corporate legal office salaries $ 64,800
Apparel Department cost of sales—Evendale Store $ 101,500
Corporate headquarters building lease $ 75,600
Store manager’s salary—Evendale Store $ 15,000
Apparel Department sales commission—Evendale Store $ 8,450
Store utilities—Evendale Store $ 14,900
Apparel Department manager’s salary—Evendale Store $ 8,550
Central warehouse lease cost $ 20,900
Janitorial costs—Evendale Store $ 11,000
The Evendale Store is just one of many stores owned and operated by the company. The Apparel Department is one of many departments at the Evendale Store. The central warehouse serves all of the company’s stores.
Required:
A. What is the total amount of the costs listed above that are direct costs of the Apparel Department?
B. What is the total amount of the costs listed above that are direct costs of the Evendale Store?
C. What is the total amount of the Apparel Department’s direct costs that are also variable costs with respect to total departmental sales?
Answer:
Montgomery Department Stores, Inc.
A. Direct costs of the Apparel Department:
Cost of sales—Evendale Store $ 101,500
Sales commission—Evendale Store $ 8,450
Manager’s salary—Evendale Store $ 8,550
Total direct costs $118,500
B. Direct costs of the Evendale Store:
Apparel Department cost of sales—Evendale Store $ 101,500
Store manager’s salary—Evendale Store $ 15,000
Apparel Department sales commission—Evendale Store $ 8,450
Store utilities—Evendale Store $ 14,900
Apparel Department manager’s salary—Evendale Store $ 8,550
Janitorial costs—Evendale Store $ 11,000
Total direct costs $159,400
C. Apparel Department's variable direct costs:
Cost of sales—Evendale Store $ 101,500
Sales commission—Evendale Store $ 8,450
Total variable direct costs $109,950
Explanation:
Corporate legal office salaries $ 64,800
Corporate headquarters building lease $ 75,600
Central warehouse lease cost $ 20,900
Apparel Department cost of sales—Evendale Store $ 101,500
Store manager’s salary—Evendale Store $ 15,000
Apparel Department sales commission—Evendale Store $ 8,450
Store utilities—Evendale Store $ 14,900
Apparel Department manager’s salary—Evendale Store $ 8,550
Janitorial costs—Evendale Store $ 11,000
The Lucido Company’s 2026 Net Income is $170. Balance Sheets are given: 12/31/2 12/31/26Cash $40 $35Accounts Receivable 100 88Machine 400 540Acc Depr. 150 250 -160 380Totals Assets $390 $503Dividends Payable $2 $0Common Stock 310 348Treasury Stock (22) (30)Retained Earnings 100 185Total Liability and O/E $390 $503Lucido sold a machine for $122 in 2026. Cost was $200; book value was $120.Net Cash Used for Investing is:___________.a. $218b. $340c. $122d. $220e. $462
Answer:
a.$218
Explanation:
Net cash used for investing activities can be calculated by taking the sum of cash inflows and outflows. As Lucido company sold the asset for $200 that will be an inflow for the company and as the machine value at the end of 2026 is $540 that means the company has purchased new machinery after selling the old one.
Cash flow from investing activities
Sale of machine $122
Purchase of machine ($540 -$200) -$340
Net cash used for investing activities -$218
A lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000 per year. If the first payment is made immediately, what is this grand prize really worth
Answer:
The grand prize is really worth $8,930,211.23
Explanation:
The working is as attached.
If net sales is 110 and asset turnover is 1.1 what is the net income is:_______.a. 10b. 110c. .8d. Unable to tell from data given
Answer:
The answer is D.
Explanation:
Asset turnover ratio is:.
Net sales(revenue) / Total asset
Asset turnover = 1.1
Net sales = $110
Total assets = 110/1.1
= $100.
And we are looking for net income, from the given data, it is being seen that data given cannot be used to calculate net income i.e we are unable to tell from the available data in the question.
John Bryant Optical Dispensary completed the following transactions during the latter part of March:Mar. 15 Purchased office supplies on account, $4,200 28 Paid $1,800 on account. Requirements. Mar. 28 Accounts Payable 1,000 Cash 1,800 Paid cash on account. The following T-accounts have been opened for you: Cash Accounts PayableBal $21,000Office SuppliesRequirements
1. Journalize the transactions of Roland Foster Optical Dispensary. Include an explanation with each journal entry.
2. Open the following accounts (use T-account format): Cash (Beginning Balance of $21,000), Office Supplies, and Accounts Payable. Post the journal entries from Requirement 1 to the accounts, and compute the balance in each account.
Answer:
1. Journal Entry
Date Account and Explanation Debit Credit
March 15 Office supplies $4,200
Accounts Payable $4,200
(To record purchase of office supplies on account)
March 28 Account Payable $1,800
Cash $1,800
2. Cash
Debit Amount Credit Amount
Balance $21,000 $1,800 March 28
Balance $19,200
Office Supplies
Debit Amount Credit Amount
March 15 $4,200 - -
Balance $4,200
Account Payable
Debit Amount Credit Amount
March 28 $1,800 March 15 $4,200
Balance $2,400
A car owner found that her monthly cost of driving her car depends on the number of miles she drives. She calculates that if she drives 320 miles per month, her monthly cost is $270. If she drives 400 miles per month, her monthly cost is $297. Assume that the monthly cost, C, of driving the car is a linear function of the number of miles, d, she drives in a month.
The formula for the monthly cost, C, of driving the car as a function of the number of miles, d, she drives in a month, is
Develop the output indices of the Nouveau Cattle Slaughtering Plant (base year 2007).
Year Pounds of Cattle Slaughtered Output Index
2009 180,000
2010 250,000
2011 200,000
Answer and Explanation:
The development of output indices for the plant is presented below:
For Base Year 2007
Index with output 100000 (Presumed) 100
For Output index 2009
(180000 ÷ 100000) × 100 180
For Output index 2010
(250,000 ÷ 100,000) × 100 250
For Output index 2011
(200,000 ÷ 100,000) × 101 200
In this way, it should be developed
Bonita Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020.
Amortized cost $50,900
Fair value 41,800
Expected credit losses 12,500
Required:
a. What is the amount of the credit loss that Bonita should report on this available-for-sale security at December 31, 2020?
b. Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020.
c. Assume that the fair value of the available-for-sale security is $54,800 at December 31, 2020, instead of $41,800. What is the amount of the credit loss that Bonita should report at December 31, 2020?
d. Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.
Answer:
a. What is the amount of the credit loss that Bonita should report on this available-for-sale security at December 31, 2020?
since available for sale securities must be reported at fair value, any difference between the amortized cost and the security's fair value should be reported under other comprehensive income.
in this case, since the amortized cost is lower than the fair value, a loss must be reported = $50,900 - $41,800 = $9,100
b. Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020.
Dr Loss on AFS securities 9,100
Cr AFS securities investment 9,100
c. Assume that the fair value of the available-for-sale security is $54,800 at December 31, 2020, instead of $41,800. What is the amount of the credit loss that Bonita should report at December 31, 2020?
since the amortized value is lower than the fair value, a gain must be reported under other comprehensive income.
gain = $54,800 - $50,900 = $3,900
d. Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.
Dr AFS securities investment 3,900
Cr Gain on AFS securities 3,900
A researcher submits a study to the IRB that proposes to evaluate a new
after-school on-line tutoring program for middle school students in a local
school district examining the effect on student grades. She proposes to
perform this assessment at the school that her children attend, because she
is familiar with the school district. Students may use either their personal
smartphone or computer to participate in the program. This study might be
determined to be violating which principle of the Belmont Report
Answer:
Justice
Explanation:
The Belmont Report has the full name Ethical Principles and Guidelines for Protection of Human Subjects of Research, Report of the National Commission for the Protection of Human Subjects of Biological and Behavioural Research.
The report outlines the ethical guidelines for involving humans in a research. There are 3 primary considerations:
- Respect for persons and getting their consent. Researcher must be transparent to the participants.
- Beneficence is the philosophy of doing no harm. Risks are minimised for participants of the research.
- Justice ensure that all participants recieve equal costs and benefits and the procedure is non exploitative.
In the given scenario where Students may use either their personal smartphone or computer to participate in the program.
The type of device used by the students may not give them the full benefit of the research. For example a computer may give a better experience than a smartphone.
Also some may not use a smart phone or computer. This violates the principle of Justice.
To remedy this the researcher can provide a device for all students to use during the programme.
Based on the information given, the study might be determined to be violating the justice principle.
The Belmont Report are the ethical principles put in place to protect the people that take part in research. .The report outlines the ethical guidelines for involving humans in a research. The 3 main considerations in the Belmont Report include beneficence, respect for the person that participates in the research, and justice which ensures that every participants are treated fairly.In this case, the justice principle is violated. This is because all the schools were not treated equally as the researcher wanted to do the assessment at the school that her children attend.Also, the students should have been given the same phone or computer rather than using their personal gadgets.In conclusion, the justice principle is violated.
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An increase in the expected rate of inflation will:______a. the real rate of interest.b. the nominal rate of interest.c. both the real and the nominal rates of interest.d. neither of the above, unless the increase in inflation is anticipated.e. the real rate of interest only if the inflation is unanticipated.
Answer:
B
Explanation:
Inflation is a persistent rise in general price levels
Real rate of interest is interest rate adjusted for inflation.
Nominal rate of interest is real interest rate added with the real rate of interest
Nominal Interest Rate = Real rate of interest + inflation rate
If inflation is expected, it would be incorporated into the nominal rate of interest.
For example, if the nominal rate of interest is 9% and expected inflation is 2%. Nominal interest rate would become 11% (9% + 2%)
Columbia Products produced and sold 900 units of the company's only product in March. You have collected the following information from the accounting records
Sales price (per unit)
Manufacturing costs $ 448
Fixed overhead 50,400
Direct labor (per unit) 35
Direct materials (per unit) 112
Variable overhead (per unit) 70 (for the month)
Marketing and administrative costs
Fixed costs (for the month) 67,500
Variable costs (per unit) 14
Required:
Compute the following:____
1. Variable manufacturing cost per unit $217
2. Full cost per unit
3. Variable cost per unit
4. Full absorption cost per unit.
5. Prime cost per unit.
6, Conversion cost per unit.
7. Profit margin per unit
8. Contribution margin per unit
9. Gross margin per unit
Answer:
Results are below.
Explanation:
Giving the following information:
Units produced and sold= 900
Sales price (per unit) $448
Manufacturing costs:
Fixed overhead 50,400
Direct labor (per unit) 35
Direct materials (per unit) 112
Variable overhead (per unit) 70 (for the month)
Marketing and administrative costs:
Fixed costs (for the month) 67,500
Variable costs (per unit) 14
a. Variable manufacturing cost= 35 + 112 + 70= $217
b. Total cost:
Total variable cost= (217 + 14)*900= 207,900
Total fixed cost= 50,400 + 67,500= 117,900
Total cost= $325,800
Total cost per unit= 325,800/900= $362
c. Total variable cost= 217 + 14= $231
d. The absorption costing method includes all costs related to production, both fixed and variable.
Absorption cost= 217 + (50,400/900)= $273
e. Prime cost= direct material + direct labor
Prime cost= 112 + 35= $147
f. Conversion cost= direct labor + unitary variable overhead
Conversion cost= 35 + 70= $105
g. Profit margin= selling price - total unitary cost
Profit margin= 448 - 362= $86
h. Contribution margin per unit= selling price - total unitary variable cost
Contribution margin per unit= 448 - 231= $217
j. Gross margin per unit= Selling price - absorption cost per unit
Gross margin per unit= 448 - 273= $175
primary reason for holding inventory
Consumer packaged goods companies thrive in the marketplace in part by creating new products that meet the needs of its target markets. Hormel Foods has introduced several new ready-to-eat, quick meal, or snack options designed to be eaten on-the-go. In addition, these products satisfy hunger cravings, taste good, and help meet daily requirements for protein servings. Hormel Foods is most likely pursuing a _______ orientation as a marketing management philosophy.
Answer: market
Explanation:
Channel members should be evaluated using all of the following criteria EXCEPT which one? A) economic factorsB) control issuesC) adaptability criteriaD) channel leadershipE) none of the above
Answer:
D) channel leadership
Explanation:
Channel members are the members that involved in the process of receiving the products and services to the end users.
Here, there are two categorizations of channels
1. Business to business (B2B): It deals between the businesses i.e. product or service sale from one business to other business
2. Business to consumer (B2C): It deals between the business and the consumer here the business is selling their products to the end users
Now it can be evaluated by economic factors, adaptability, control issues but not with the channel leadership as it involves the leadership
Therefore the correct option is D.
6. Prepare a summary of the implications of capital structure theory that can be presented to Tom Moore. What insights can capital structure theory provide managers regarding the factors which influence their firm’s optimal capital structures?
Answer:
Capital Structure is a combination of all the long term which includes both debt and equity financing. The capital structure theories helps the treasury department of the company to find an optimum capital structure (Mixture of debt and capital) that gives the lowest weighted average cost of capital and this lowest WACC, gives highest value of the company.
Mathematically,
Value of the Company = Future net cash flows / Lowest WACC
The factors that affect WACC can be understood if we have a glance on its formula:
WACC = (Ke * E /(E + D)) + (Kd * D /(E + D)* (1 - Tax))
The reduction in WACC is largely due to increase in the debt because it gives tax benefits and this lowers the WACC.
To arrive at the lowest WACC, Tom Moore will consider all of the following factors:
Future Net Cash Flows: If the company is earning more than before then this will increase the value of the company because debt terms and conditions would be bargained at a better position and all this is possible if stable cash flow position has been achieved by the company. This means that the debt would be raised at a cheaper rate that will also lower WACC and increase Future Net cash flows.Debt to Equity ratio: This factor helps in determining how much the company must borrow in order to gain the maximum benefit of the debt. On the other hand, the finance raising cost of debt will also increase which means raising finance will become difficult.Matching Concept: The finance required must be matched with the time duration it is necessary. This means that the long term investments must be financed with long term finance and short term needs must be financed by short term finance. This will help the company to lower its cost paying commitments to lenders and investors.Other Factors: These are the factors that affects the management of Capital structure which includes market conditions, tax rate, credit rating, industry related risk, economy future projection, etc, all these factors have minute impact on the fund raising and are an obstacle to achieve optimal capital structure.Forten Company, a merchandiser, recently completed its calendar-year 2015 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s income statement and balance sheets follow.
FORTEN COMPANY
Comparative Balance Sheets
December 31, 2015 and 2014
2015 2014
Assets
Cash $ 49,800 $73,500
Accounts receivable 65,810 50,625
Inventory 275,656 251,800
Prepaid expenses 1,250 1,875
Total current assets 392,516 377,800
Equipment 157,500 108,000
Accum. depreciation—Equipment (36,625) (46,000)
Total assets $ 513,391 $439,800
Liabilities and Equity
Accounts payable $ 53,141 $114,675
Short-term notes payable 10,000 6,000
Total current liabilities 63,141 120,675
Long-term notes payable 65,000 48,750
Total liabilities 128,141 169,425
Equity
Common stock, $5 par value 162,750 150,250
Paid-in capital in excess of 37,500 0
par, common stock
Retained earnings 185,000 120,125
Total liabilities and equity $ 513,391 $439,800
FORTEN COMPANY
Income Statement
For Year Ended December 31, 2015
Sales $ 582,500
Cost of goods sold 285,000
Gross profit 297,500
Operating expenses
Depreciation expense $ 20,750
Other expenses 132,400 153,150
Other gains (losses)
Loss on sale of equipment (5,125)
Income before taxes 139,225
Income taxes expense 24,250
Net income $ 114,975
Additional Information on Year 2015 Transactions
a. The loss on the cash sale of equipment was $5,125 (details in b).
b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash.
c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance.
d. Borrowed $4,000 cash by signing a short-term note payable.
e. Paid $50,125 cash to reduce the long-term notes payable.
f. Issued 2,500 shares of common stock for $20 cash per share.
g. Declared and paid cash dividends of $50,100.
Required:
1. Prepare a complete statement of cash flows; report its operating activities using the indirect method.
Answer:
Cash flow Statement for the year ended 31 December 2015
Cash Flow from Operating Activities
Net income before Interest and tax $ 139,225
Non -Cash items :
Loss on Sale of Equipment ($46,875 - $30,125 - $11,625) $5,125
Depreciation expense $ 20,750
Changes In Working Capital :
Increase in Short term note payable $4,000
Increase in Accounts receivable ($15,185)
Increase in Inventory ($23,856)
Decrease in Prepaid expenses $625
Decrease in Accounts payable ($61,534)
Income taxes expense ($24,250)
Net Cash Flow from Operating Activities $44,900
Cash Flow from Investing Activities
Purchase of Equipment ($30,000)
Proceeds from Sale of Equipment $11,625
Net Cash Flow from Investing Activities ($18,375)
Cash Flow from Financing Activities
Dividend Paid ($50,100)
Issued Shares ( 2,500 × $20) $50,000
Repayment of Notes Payable ($50,125)
Net Cash Flow from Investing Activities ($50225)
Movement in Cash and Cash Equivalents during the year ($23,700)
Cash and Cash Equivalents at Beginning of the Year $73,500
Cash and Cash Equivalents at the End of the Year $ 49,800
Explanation:
The Indirect method reconciles the Operating Profit during the year to Cash flows from Operating Activity by adjusting for the following items, (1) Non-cash items previously added or deducted from Operating Profit and (2) Changes in Working Capital items
Productivity is not important in economics.A. TrueB. False
Answer: True
Explanation: In my opinion I think its true , there is a difference between productivity as a whole country and the norm of an individual alone for productivity
If you send a personal email from a work computer, does the company have the right to view that message?
Answer:
Yes.
Explanation:
A company has the right to view the email messages sent from the computer of the company but only if the sender has used the official email i.d to send a personal email. In simple terms, if the sender has logged in his personal email i.d in the work computer of the company then the company has no right to view the message but if the mail is sent through the email i.d of the company then only the company has the right. The email i.d that the company provides to its employees is meant for official works and thus the company also has access to the employee's i.d and right to view any message sent through the official email i.d.
A team of analysts at Amazon is researching the viability of producing a smart watch. How might they estimate potential demand for their smart watch?A. Consider the four-step process that many companies follow to estimate the market demand curve for their product. a. survey customersb. plot the demand curvec. scale up the quantities demanded by the survey respondentsd. add up the total quantity demanded by the customers at each price pointB. Select two factors that the analysts want to keep in mind to create the most accurate demand estimates.a. cost of inputs to productionb. information about climate changec. existing competition in the marketd. consumer demographic information
Answer:
1. Estimating demand.
Survey customersAdd up the total quantity demanded by the customers at each price pointScale up the quantities demanded by the survey respondents.Plot the demand curveIn order to estimate the market demand for the smart watch, the analysts can use a sample of the population. From the sample they can survey some customers. The results of the survey will give them an idea of the demand which they can then add up to find the total quantity demanded.
They should then scale up the quantities to enable them apply it to the wider population. Using this information they can then plot market demand.
2. Two important factors
c. existing competition in the market - The competition in the market will let them know how much potential market share they have and how much they can charge based on the amount that the competitors are charging. d. consumer demographic information - by analysing demographic information, the analysts can better ascertain the demand for their products based on important demographic data such as income status.The existing competition in the markets and the consumer demographic information. Thus the options C and D are correct.
What is the market demand curve ?The curve is the summation of the individuals demand curves and shows the quantity demand of the good for all individuals the varying prices.
For estimating the demand the four steps include, the survey customer, adding the total quantity demanded by the customers at each price point, then scale up the quantities that are demanded by the survey respondents, and; last plot the demand curve.
Find out more information about the team of analysts.
brainly.com/question/26396953.
When comparing contracts in common law and civil law systems, it can be said that:________ a. contracts drafted under a civil law system tend to be more specific than those drafted under a civil law system. b. resolving contract disputes tends to be less adversarial in common law systems than in civil law systems. c. civil law systems allow for judges to interpret a contract dispute, but this feature is absent in common law systems. d. contracts drafted under a common law system tend to be longer than those drafted under a civil law system. e. it is more expensive to draw up contracts in a civil law system than in a common law system
Answer:
d. contracts drafted under a common law system tend to be longer than those drafted under a civil law system.
Explanation:
Common law can be defined as a set of unwritten laws which are primarily based on precedent court decisions, tribunal decisions and customs and are usually employed in similar court judgments and rulings that cannot be determined by existing statutes.
On the other hand, civil law can be defined as a set of law which regulates private or personal matters such as family matters, marriage, property, contracts etc.
When comparing contracts in common law and civil law systems, it can be said that contracts drafted under a common law system tend to be longer than those drafted under a civil law system because the drafters of contracts under civil law are able to rely on codified and standard default rules.