Answer:
Particulars Amount
Purchase price of equipment $79,400
Less: Depreciation expenses $39,700
Value of equipment $39,700
Particulars Amount
Sales price of equipment $31,200
Value of equipment $39,700
Section 1231 Ordinary loss -$8,500
Following is financial information for three ventures:
VENTURE XX VENTURE YY VENTURE ZZ
After-tax profit margins 5% 25% 15%
Asset turnover 2.0 times 3.0 times 1.0 times
a. Calculate the return on assets (ROA) for each firm.
b. Which venture is indicative of a strong entrepreneurial venture opportunity?
c. Which venture seems to be more of a commodity type business?
Answer:
a. The ROA:
Venture XX = After tax profit margin * Asset turnover = 5% * 2 = 10%
Venture YY = 25% * 3 = 75%
Venture ZZ = 15% * 1 = 15%
B) The strong entrepreneurial venture opportunity is Venture YY being havibg higher ROA at 75%.
C) The Venture ZZ seems to be more of a commodity-type business because the return on sales and asset turnover is moderate one.
Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example. (If an amount reduces the account balance then enter with negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000).)
Required:
a. Purchased $133 of supplies for cash.
b. Recorded an adjusting entry to record use of $31 of the above supplies.
c. Made sales of $1,297, all on account.
d. Received $865 from customers in payment of their accounts.
e. Purchased equipment for cash, $2,528.
f. Recorded depreciation of building for period used, $610.
Solution :
Required :
Items Cash Net Income
a). Supplies of $133 purchased for cash - $ 133 --
b). Recorded the adjustment entry so as to
record use the $31 for the above supplies -- $ 31
c). Made sales of the $ 1297 on account -- $ 1,297
d). $865 received from customers as payment
of accounts $ 865 --
e). $ 2,528 purchased the equipment for cash - $ 2, 528 --
f). Recorded the depreciation of the building
for the period use of $ 610 -- $ 610
Suppose that Harry drinks one cup of coffee with his preferred three packs of creamer every day for seven days. What is his utility for that week
Answer:
21
Explanation:
The computation of the utility for that week is as follows:
Given that
There are three packs
Also it is for seven days
u(x,y) = min(3x,y)
C = 1
x = 1
y = 3
So,
u = min(3,3)
= 3
For 7 days it would be
= 7 × 3
= 21
Hence, the utility for that week is 21
The ABC Lawn Company aims for a high number of clients that result in high profits. To meet its goal ABC markets its landscaping service vigorously because there are many lawn services and nurseries in the local community. As a sales-oriented company, ABC focuses on _______.
Answer:
Agressive trading technique
Explanation:
A Sales Orientation company is a company that capitalizes or dwell on selling its products and services rather than satisfying their customers wants or needs. Due to the fact that sales orientation business is bent on pushing their product out to the customer it use or employ aggressive techniques in its handling, and this will cost or involves intensive promotions and price- strategy.
Aggressive trading shoulders more risk and thereafter may be accepting a big loss.
tone Company produces carrying cases for CDs. It has compiled the following information for the month of June: Physical UnitsPercent Complete for ConversionBeginning work in process74,00060%Ending work in process94,00075Stone adds all materials at the beginning of its manufacturing process. During the month, it started 184,000 units. Using the FIFO method, reconcile the number of physical units.
Answer:
TOTAL 258,000
TOTAL 258,000
Explanation:
Calculation to reconcile the number of physical units Using the FIFO method
PHYSICAL UNITS
Beginning Inventory 74,000
Units Started 184,000
TOTAL 258,000
PHYSICAL UNITS
Units Completed 164,000
(258,000-94,000)
Ending Inventory 94,000
TOTAL 258,000
Therefore Using the FIFO method to reconcile the number of physical units will give us 258,000 and 258,000
Exercise 1-16 Cost Classifications for Decision Making [LO1-5] Warner Corporation purchased a machine 7 years ago for $383,000 when it launched product P50. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 300 machine costing $373,650 or by a new model 200 machine costing $342,000. Management has decided to buy the model 200 machine. It has less capacity than the model 300 machine, but its capacity is sufficient to continue making product P50. Management also considered, but rejected, the alternative of dropping product P50 and not replacing the old machine. If that were done, the $342,000 invested in the new machine could instead have been invested in a project that would have returned a total of $445,600. Required: 1. What is the total differential cost regarding the decision to buy the model 200 machine rather than the model 300 machine
Answer:
Missing word "2. What is the total sunk cost regarding the decision to buy the model 200 machine rather than the model 300 machine? 3. What is the total opportunity cost regarding the decision to invest in the model 200 machine?"
1. Differential cost of buying model 200 machine = Cost of model 200 machine - Cost of model 300 machine
= $342,000 - $373,650
= -$31,650
We'll have a savings of $31,650 if model 200 is purchased rather than model 300
2. $383,000 (The Cost of existing machine). Note: $383,000 is a sunk cost since it has already been incurred.
3. Opportunity cost is the total return of the project if the money was invested elsewhere. The Opportunity cost of investing in model 200 machine is $445,600 (Returns from the alternate project)
Better Corp. completed the following transactions during Year 2:
a. Purchased land for $10,500 cash.
b. Acquired $36,000 cash from the issue of common stock.
c. Received $75,000 cash for providing services to customers.
d. Paid cash operating expenses of $40,900.
e. Borrowed $21,000 cash from the bank.
f. Paid a $10,500 cash dividend to the stockholders.
g. Determined that the market value of the land purchased in event 1 is $46,000.
Required:
a. Record the transactions In the approprlate general ledger accounts. Record the amounts of revenue, expense, and dividends In the Retalned Earnings column. Provide the appropriate titles for these accounts In the last column of the table.
b. As of December 31, 2018, determine the total amount of assets, lablities, and stockholders' equity and present this Information In the form of an accounting equation.
c. What is the amount of total assets, liabilities, and stockholders' equity as of January 1, 2019?
Answer:
Better Corp.
a. Journal Entries:
a. Debit Land $10,500
Credit Cash $10,500
To record the purchase of land.
b. Debit Cash $36,000
Credit Common Stock $36,000
To record the issuance of stock for cash.
c. Debit Cash $75,000
Credit Service Revenue $75,000
To record the receipt of cash for services provided.
d. Debit Operating expenses $40,900
Credit Cash $40,900
To record the payment of operating expenses.
e. Debit Cash $21,000
Credit Bank Loan $21,000
To record the borrowing of cash from the bank.
f. Debit Dividends $10,500
Credit Cash $10,500
To record the payment of cash dividend to stockholders.
g. N/A
a2. a. Assets (Land +$10,500 + Cash- $10,500) = Liabilities + Equity
b. Assets (Cash + $36,000) = Liabilities + Equity (Common Stock + $36,000)
c. Assets (Cash $36,000 + 75,000) = Liabilities + Equity (Common Stock $36,000 + Retained Earnings + $75,000) Service Revenue
d. Assets (Cash 111,000 - $40,900) = Liabilities + Equity (Common Stock $36,000 + Retained Earnings $75,000 = $40,900) Operating Expense
e. Assets (Cash $70,100 + $21,000) = Liabilities (Bank Loan + $21,000) + Equity (Common Stock $36,000 + Retained Earnings $34,100)
f. Assets (Cash $91,100 - $10,500) = Liabilities (Bank Loan + $21,000) + Equity (Common Stock $36,000 + Retained Earnings $34,100 - $10,500) Dividends
g. Assets (Cash $80,600) = Liabilities (Bank Loan + $21,000) + Equity (Common Stock $36,000 + Retained Earnings $23,600)
b. Total amount of assets, liabilities, and stockholders' equity as of December 31, 2018:
Total assets $80,600 = Liabilities $21,000 + Equity (Common Stock $36,000 + Retained Earnings $23,600)
c. The amount of total assets, liabilities, and stockholders' equity as of January 1, 2019:
Assets = $80,600
Liabilities = $21,000
Equity = $59,600
Explanation:
The accounting equation is Assets = Liabilities + Equity. It is the basis of the double-entry system of accounting. With this equation, every transaction is always recorded twice.
Adriana and Belen are partners who share income in the ratio of 3:2 and have capital balances of $50,000 and $90,000 at the time they decide to terminate the partnership. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $90,000. How much cash should be distributed to Adriana
Answer:
$54,000
Explanation:
First, we add the ratios together to determine the total parts:
3+2= 5
Next, we divide the cash balance of $90,000 by the total parts:
$90,000/5 = $18,000
To find the amount of cash distributed to Adriana we multiply by her ratio:
5*18,000 = $54,000.
the bookkeeper for Blue Spruce Equipment Repair made a number of errors in journalizing and posting, as described below. For each error: (a) Indicate whether the trial balance will balance. (b) If the trial balance will not balance, indicate the amount of the difference. (c) Indicate the trial balance column that will have the larger total.
Answer:
Note: The full question is attached as picture below
(a) (b) (c)
In Larger
Balance Difference column
1. No $725 Debit
2. Yes NA NA
3. Yes NA NA
4. No $225 Credit
5. Yes $684 NA
6. No $45 Credit
Golf World sold merchandise to Mulligans for $83,000, offering terms of 1/15, n/30. Mulligans paid for the merchandise within the discount period. Both companies use perpetual inventory systems.
a. Prepare journal entries in the accounting records of Golf World to account for this sale and the subsequent collection. Assume the original cost of the merchandise to Golf World had been $6,500.
b. Prepare journal entries in the accounting records of Mulligans to account for the purchase and subsequent payment. Mulligans records purchases of merchandise at net cost.
c. Assume that, because of a change in personnel. Mulligans failed to pay for this merchandise within the discount period. Prepare the journal entry in the accounting records of Mulligans to record payment after the discount period.
Answer and Explanation:
The journal entries are shown below:
a.
Account receivable Dr $83,000
To Sales $83,000
(Being sales is recorded on account)
Cost of goods sold Dr $6,500
To Inventory $6,500
(Being cost of the merchandise is recorded)
Cash $82,170
Sales discount $830 ($83,000 × 1%)
To Account receivable $83,000
(being cash received is recorded)
b.
Inventory Dr $82,170
To Account payable $82,170
(being inventory purchased on account)
Account payable Dr $82,170
To Cash $82,170
(being cash paid is recorded)
c.
Account payable $82,170
Lost on purchase discount $830
To Cash $83,000
(Being cash payment is recorded)
Which phrase best completes the diagram?
Effective Strategies for Managing Credit
?
Paying more than the minimum monthly payment
Replacing high-interest loans with low-interest loans
O A. Paying bills on time
B. Frequently filing for bankruptcy
C. Spending over credit limits
D. Avoiding all credit cards
Answer: mine is a bit different the question mark at the top is at the bottom for me but the answer on the top for me is paying bills on time
Explanation:
So I say A
The best phrase for Effective Strategies for Managing Credit is replacing high interest loans with low interest loans and paying bills on time.
What is credit?It is a process in which one party provides any sum of money or resources to the other party on the basis of trust. The latter pays the sum after some time on a given specific date.
Credit can be both interest bearing or non interest bearing.
What are effective strategies for managing credit?Regular credit checkStrict credit termsInvest in TrainingReplace high interest bearing loans with low interest bearing loansRegular payment of billsManaging credit scoreWhat is Interest?Interest is the type of amount which is paid when a sum of amount is given to someone as credit, to provide credit facility one receives some amount which is interest.
Hence option A is the correct answer,
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Following are selected accounts for Target Corporation. (a) Indicate whether each account appears on the balance sheet (B) or income statement (I). ($ millions)AmountClassification Sales$61,471Answer I Accumulated depreciation7,887Answer B Retained earnings12,761Answer B Depreciation expense1,659Answer I Net income2,849Answer I Property, plant
Answer:
Target Corporation
Accounts that appear on the balance or the income statement:
Balance Sheet:
Accumulated depreciation 7,887
Retained earnings 12,761
Property, plant
Income Statement:
Sales $61,471
Depreciation expense 1,659
Net income 2,849
Explanation:
The accounts that appear on the balance sheet of Target Corporation are permanent accounts, which are not closed to the income summary at the end of its financial period. These accounts are carried over to the next accounting period. They include assets, liabilities, and owners' equity. The accounts that appear on the income statement of Target Corporation are the temporary accounts, which are closed to the income summary at the end of the company's financial period. The accounts include revenue and expenses, which are compared to extract the net income or loss for the period.
QUESTION 2 of 10: You're opening a chic new restaurant and have 15 tables which are all square and can seat 4 people. However, you can
combine two tables to seat 6 or 3 to seat 8. for example. You have reservations for parties of 2,6, 8, 8, and 10. Once the guests arrive they
stay for the night and each reservation expects their own private table. Can you accommodate everyone's reservation requests?
A)Yes
b) No
Answer:
A) Yes
Explanation:
15 x 4 = 60 person capacity
60 - 2 = 58
58 - 6 = 52
52 - 8 = 44
44 - 8 = 36
36 - 10 = 26 person capacity left
Yes, you can accommodate everyone's reservation requests.
Yes, you can accommodate everyone's reservation requests.
Organizing the information given in the statement we have:
15 tables which are all square and can seat 4 people.to seat 6 or 3 to seat 8.reservations for parties of 2,6, 8, 8, and 10. Making the booking calculations[tex]15 * 4 = 60 \\60 - 2 = 58\\58 - 6 = 52\\52 - 8 = 44\\44 - 8 = 36\\36 - 10 = 26[/tex]
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Meyers, Inc. presented the following data:
2024 Net income $2,500
Preferred stock:
10% cumulative, not convertible $3,000
Common stock:
1/1: 1,000 shares outstanding
9/1: 1,000 shares issued in a 2-for-1 stock split
10/1: 200 shares treasury stock acquired
11/1: 240 shares issued for cash
No preferred dividends were declared or paid in 2014, the first year of the company. The denominator to be used in Basic EPS is:_____.
a. 1.910.
b. 1,657.
c. 2,090.
d. 1,990.
Answer:
d. 1,990.
Explanation:
The computation of the denominator that should be used for determining the basic EPS is as follows:
Outstanding shares Oustanding months Equivalent units
2,000 (9 ÷ 12) 1,500
(1,000 × 2)
1,800 (1 ÷ 12) 150
(2,000 - 200)
$2,040 (2 ÷ 12) 340
(1,800 + 240)
Total shares 1,990
A company issued 8%, 15-year bonds with a face amount of $100 million. The market yield for bonds of similar risk and maturity is 6%. Interest is paid semiannually. At what price did the bonds sell
Answer:
$119.60 million
Explanation:
The bond price formula provided below is very useful in determining the amount of money received from the bond investors when the bond were issued:
Bond price=face value/(1+r)^n+semiannual coupon*(1-(1+r)^-n/r
face value=$100 million
r=semiannual yield=6%*6/12=3%
n=number of semiannual coupon payments in 15 years=15*2=30
semiannual coupon=face value*coupon rate*6/12=$100million*8%*6/12=$4 million
bond price=$100/(1+3%)^30+$4*(1-(1+3%)^-30/3%
bond price=$100/(1.03)^30+$4*(1-(1.03)^-30/0.03
bond price=$100/2.42726247+$4*(1-0.41198676)/0.03
bond price=$100/2.42726247+$4*0.58801324/0.03
bond price=$41.20+$ 78.40=$119.60 million
Wildhorse Co. began operations on January 2, 2020. It employs 13 people who work 8-hour days. Each employee earns 10 paid vacation days annually. Vacation days may be taken after January 10 of the year following the year in which they are earned. The average hourly wage rate was $18 in 2020 and $19.75 in 2021. The average vacation days used by each employee in 2021 was 9. Wildhorse Co. accrues the cost of compensated absences at rates of pay in effect when earned.
Required:
Prepare journal entries to record the transactions related to paid vacation days during 2020 and 2021.
Answer and Explanation:
The Journal entries are as follows:
On 2020,
Wages expense Dr. $18,720 (13 × 8 hrs × 10 days × $18)
To vacation wages payable $18,720
(being the wages expense is recorded)
On 2021
Wages expense Dr $1,638
Vacation wages payable $16,848 (13 × 8 hrs × 9 days × $18)
To Cash $18,486 (13 × 8 hrs × 9 days × $19.75)
(being cash paid is recorded)
Wages expense Dr. $20,540 (13 × 8 hrs × 10 days × $19.75)
To vacation wages payable $20,540
(being the wages expense is recorded)
Benjamin and Amelia Hopkins have been married since 2016.
Benjamin is a U.S. citizen with a valid Social Security number. Amelia is a resident alien with an Individual Taxpayer Identification Number (ITIN). They elect to file Married Filing Jointly.
Benjamin worked in 2020 and earned wages of $25,000. Amelia worked part-time and earned wages of $15,000.
They have two children: Harper, who is 9 years old, and Evelyn, who is 12 years old.
Both children were supported by their parents all year. Harper is a U.S. citizen and has a valid Social Security number. Evelyn is a resident alien and has an ITIN.
Benjamin, Amelia, Harper, and Evelyn lived together in the U.S. all year 7. Evelyn is a qualifying child for the child tax credit.
1. Which credit(s) can the Hopkins claim on their 2020 tax return?
a. Child tax credit for Harper
b. Credit for other dependents for Evelyn
c. Both a and b
d. Neither a norb
2. Are the Hopkins eligible to claim the earned income credit?
a. Yes, because Benjamin has a Social Security number.
b. Yes, because everyone has a taxpayer identification number.
c. No, because their income is too high.
d. No, because Amelia has an ITIN.
Answer:
1. c. Both a and b
2. a. Yes, because Benjamin has a Social Security number.
Explanation:
According to tax laws, you can claim a child tax credit for an American dependant below the age of 17 which qualifies Harper for it. Evelyn however qualifies for a Credit for other dependents as she is a resident alien and has an Individual Taxpayer Identification Number (ITIN).
Because Benjamin has a Social Security Number, the Hopkins are indeed eligible to claim an earned income credit. Married couples filling jointly can claim the credit if either of them are U.S. citizens with a valid Social Security number.
The cash account shows a balance of $85,000 before reconciliation. The bank statement does not include a deposit of $4,600 made on the last day of the month. The bank statement shows a collection by the bank of $1,880 and a customer's check for $640 was returned because it was NSF. A customer's check for $900 was recorded on the books as $1,080, and a check written for $158 was recorded as $194. The correct balance in the cash account was
Answer:
$86,024
Explanation:
The computation of the corrected balance in the cash account is as follows:
Unadjusted cash balance $85,000
Add: Collection by bank $1,880
Less: NSF Check -$640
Less: Error in recording customers check ($1,080 - $900) -$180
Add: Error in recording check ($194 - $158) -$36
Adjusted cash balance $86,024
Dell is undergoing a major expansion. The expansion will be financed by issuing new 15-year, $1,000 par, 9% annual coupon bonds. The market price of the bonds is $1,070 each. Dell's flotation expense on the new bonds will be $50 per bond. Dell's marginal tax rate is 35%. What is the pre-tax cost of debt for the newly-issued bonds
Answer:
8.76%
Explanation:
The computation of the pre-tax cost of debt is as follows:
Market price of the bond is
= $1,070 - $50
= $1,020
Coupon payment = Face value × Annual coupon rate
= $1,000 × 9%
= $90
Now YTM would be
Given that
NPER = 15
PMT = $90
PV = $1,020
FV = $1,000
The formula is given below:
=RATE(NPER;PMT;-PV;FV;TYPE)
After applying the above formula, the yield to maturity is 8.76%
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 ending taxes payable on the December 31, 20X1 balance sheet?
Answer:
the ending tax payable as on Dec 31,20X1 is $12,600
Explanation:
The computation of the ending tax payable as on Dec 31,20X1 is as follows:
Depreciation as per Tax = $100,000
Less : Depreciation as per Book = $40,000
Tax Base of deferred tax asset = $60,000
Tax Rate = 21%
So,
= $60,000 × 21%
= $12,600
Hence, the ending tax payable as on Dec 31,20X1 is $12,600
Which factor should be most important if you are considering purchasing a new video game?
the number of games available for purchase
the quality of the games produced by that manufacturer
the popularity of the video game with your friends
the other things you could do with your money
Answer:
The popularity of the video game with your friends
If u wanna play with ur friends u have to make sure they have it too
Answer:
D
Explanation:
With that thought in mind, you have to consider opportunity cost, and think about the other things you can do with your money. If you do want to buy a video game, then you should take into mind that A and B would be more important than C. But thinking about C is a good idea, if you like playing with your friends.
You recently purchased 1,300 shares of stock at a cost per share of $54.10. The initial margin requirement on this stock is 60% and the maintenance margin is 30%. The stock is currently valued at $42.30 a share. What is your current margin position?
Answer:
The current margin position is 48.84%.
Explanation:
This can be calculated as follows:
Margin loan = Number of shares purchased * Cost per share * (1 - Initial margin requirement) = 1,300 * $54.10 * (1 - 60%) = $28,132
Current value of stock = Number of shares purchased * Current price per share = 1,300 * $42.30 = $54,990
Current equity = Current value of stock - Margin loan = $54,990 - $28,132 = $26,858
Current margin position = Current equity / Current value of stock = $26,858 / $54,990 = 0.488416075650118, or 48.8416075650118%
Rounding to 2 decimal places, we have:
Current margin position = 48.84%
Therefore, the current margin position is 48.84%.
All other things the same, if a company uses long-term debt to purchase land to develop in the future, the company's return on total assets will decrease.
a) true
b) false
The company purchases land to broaden in the future. The companies' return on total assets will decrease. That is a false announcement.
What is long-term debt?Long-term period debt is debt that matures in a couple of years. Long-time period debt may be considered from two perspectives: monetary announcement reporting through the provider and monetary making an investment.
In monetary announcement reporting, agencies ought to report long-time period debt issuance and all of its related charge duties on their monetary statements.
On the other hand, making an investment in long-term period debt consists of placing cash into debt investments with maturities of a couple of years.
Long-term period debt is debt that matures in a couple of years. Entities select to pay off long-term debt with diverse considerations, more often than not, specializing in the time-frame for reimbursement and interest to be paid.
Investors spend money on long-time period debt for the blessings of hobby bills and keep in mind that the time to adulthood is a liquidity risk.
Overall, the lifetime obligations and valuations of long-term debt may be heavily influenced by marketplace fee changes and whether or not a long-term debt issuance has fixed or floating fee terms.
Organisation takes on debt to achieve instantaneous capital. For example, startup ventures require a broad budget to get off the ground.
This debt can take the shape of promissory notes and serve to pay for startup fees together with payroll, development, IP felony fees, equipment, and marketing.
Therefore, from the above statement, it's clear that alternative B, false, is the proper alternative.
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Alex is a salesperson who receives an annual salary of $18,000 paid semimonthly plus commissions of 5% of the retail price of each unit he sells which is paid on the final pay date of the month. During his first month of employment, he sold four units for a total of $1,000 and requested a 5% draw against his $15,000 monthly minimum sales, in accordance with his employment agreement. How much should Alex receive in his gross pay for the end of his first month
Answer:
the alex should received the gross pay of $1,550 for the end of his first month
Explanation:
The computation of the gross pay is as follows
Salary ($18,000 ÷ 12 months) $1,500
Add: Commission ($1,000 × 5%) $50
Gross pay $1,550
We simply added the salary and the commission to determine the gross pay
hence, the alex should received the gross pay of $1,550 for the end of his first month
Fran Bowen created the following budget: Budget Food $ 364 Clothing $ 164 Transportation 408 Personal expenses and recreation 307 Housing 994 She actually spent $331 for food, $416 for transportation, $1,046 for housing, $161 for clothing, and $259 for personal expenses and recreation. Calculate the variance for each of these categories, and indicate whether it was a deficit or surplus.
Answer:
Fran Bowen
Budget Vs Actual, Variance and Status:
Budget Actual Variance Status
Food $ 364 $331 $33 Surplus
Clothing 164 161 3 Surplus
Transportation 408 416 -8 Deficit
Personal expenses and recreation 307 259 48 Surplus
Housing 994 1,046 -52 Deficit
Total $2,237 $2,213 $24 Surplus
Explanation:
a) Data and Calculations:
Budget Actual Variance Status
Food $ 364 $331 $33 Surplus
Clothing 164 161 3 Surplus
Transportation 408 416 -8 Deficit
Personal expenses and recreation 307 259 48 Surplus
Housing 994 1,046 -52 Deficit
Total $2,237 $2,213 $24 Surplus
b) The difference between the estimated budget cost and the actual cost spent on each item gives rise to either surplus or deficit. This surplus or deficit is described as the variance. It is surplus when the budgeted cost is greater than the actual cost spent. It is deficit when the budgeted cost is less than the actual cost spent.
Take-home pay is about 70% of gross pay. If your annual salary is $40,000
what is your annual take-home pay?
Answer:
$28,000
Explanation:
The annual salary is $40,000
Take home is 70% of $40,000
=70% x $40,000
=70/100 x $40,000
=0.7 x $40,000
=$28,000
Financial information related to the proprietorship of Ebony Interiors for February and March 2016 is as follows:
Accounts February 29, 2016 March 31, 2016
Accounts payable $329,000 $398,000
Accounts receivable 796,000 952,000
Cash 337,000 381,000
Justin Berk, capital ? ?
Supplies 33,000 34,000
Required:
1. Prepare balance sheets for Ebony Interiors as of February 29 and March 31, 2016. Refer to the lists of Accounts, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading.
2. Determine the amount of net income for March, assuming that the owner made no additional investments or withdrawals during the month.
3. Determine the amount of net income for March, assuming that the owner made no additional investments but withdrew $47,000 during the month.
Answer:
Ebony Interiors
1. Balance sheets for Ebony Interiors as of February 29 and March 31, 2016:
February 29 March 31, 2016
Cash $337,000 $381,000
Accounts receivable 796,000 952,000
Supplies 33,000 34,000
Total assets $1,166,000 $1,367,000
Accounts payable $329,000 $398,000
Justin Berk, capital 837,000 969,000
Total liabilities + equity $1,166,000 $1,367,000
2. The amount of net income for March, assuming that the owner made no additional investments or withdrawals during the month:
March 31 Capital = $969,000
February 28 Capital (837,000)
Net income $132,000
3. The amount of net income for March, assuming that the owner made no additional investments but withdrew $47,000 during the month:
March 31 Capital = $969,000
Drawings 47,000
February 28 Capital (837,000)
Net income $179,000
Explanation:
a) Data and Calculations:
Financial information for February and March 2016 is as follows:
Accounts payable $329,000 $398,000
Accounts receivable 796,000 952,000
Cash 337,000 381,000
Justin Berk, capital ? ?
Supplies 33,000 34,000
b) Net income can be determined by comparing the beginning capital (equity) with the ending capital balance (equity). This is because equity is equal to the common stock plus the retained earnings or adjusted net income. Personal withdrawals by the owner affect the ending equity, which includes the net income.
A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $2,000 per month for the next three years and then $1,000 per month for two years after that. If the bank is charging customers 9.75 percent APR, how much would it be willing to lend the business owner
Answer:
$78,443.29
Explanation:
we need to use the present value of an annuity formula:
the formula used to determine the present value factor of an annuity is:
present value annuity factor = [1 - 1/(1 + i)ⁿ ] / i
we must divide this into 2 parts:
the first part will deal with the $2,000 monthly payment
the second part deals with the $1,000 monthly payment
i = 9.75% / 12 = 0.8125%
n (first part) = 36
n (second part) = 24
the PV annuity factor for first part = [1 - 1/(1 + 0.8125%)³⁶ ] / 0.8125% = 31.1043
the PV annuity factor for first part = [1 - 1/(1 + 0.8125%)²⁴ ] / 0.8125% = 21.7251
loan = ($2,000 x 31.1043) + ($1,000 x 21.7251)//(1 + 0.8125%)³⁶ = $62,208.60 + $16,234.69 = $78,443.29
= [1 - 1/(1 + 0.0069942)240 ] / 0.0069942 = 116.135183
Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job M is closest to:
Answer:
Selling Price for Job M = $49,005
Explanation:
Note: This question is incomplete and lacks necessary data to solve. But I have found similar question on the internet and will be using its data to solve this question for the sake of understanding and concept.
Data Missing:
Estimated Total Machine Hours for Molding = 9000
Estimated Total Machine Hours for Customizing = 3600
Total = 9000 + 3600 = 12,600
Estimated Total Fixed manufacturing overhead cost for Molding = 36000
Estimated Total Fixed manufacturing overhead cost for Customizing = 13,320
Total = 36000 + 13320 = 49320
Estimated variable Manufacturing overhead cost per MH for Molding = 2.50
Estimated variable Manufacturing overhead cost per MH for Customization = 3.00
Data For JOB M:
Direct materials = $9,900
Direct labor Cost = $10,300
Molding Machine-hours = 1300
Customizing Machine Hours = 600
Required:
We are asked to calculate the selling price for Job M:
Solution:
Direct materials = $9,900
Direct labor Cost = $10,300
Variable manufacturing overhead For Molding:
(Estimated variable Manufacturing overhead cost per MH for Molding 2.50 x Molding Machine-hours = 1300)
Molding = 2.50 x 1300
Molding = 3,250
Similarly,
Variable manufacturing overhead For Customizing:
(Estimated variable Manufacturing overhead cost per MH for Customization = 3.00 x Customizing Machine Hours = 600)
Customizing = 3.00 x 600
Customizing = 1800
Now, we need to find Fixed manufacturing overhead for both molding and customizing:
For Molding:
First we need to find the cost per machine hour for molding:
Molding Cost per machine hour = (Estimated Total Fixed manufacturing overhead cost for Molding = 36000 / Estimated Total Machine Hours for Molding = 9000)'
Molding Cost per machine hour = 36000/9000
Molding Cost per machine hour = $4 per machine hour
So,
Fixed manufacturing overhead for Molding:
Molding = Molding Cost per machine hour x Molding Machine-hours = 1300
Molding = 4 x 1300
Molding = 5200
Similarly,
For Customizing:
Customizing Cost per machine hour = 13320/3600
Customizing Cost per machine hour = $3.70 per machine hour
Fixed manufacturing overhead for Customizing:
Customizing = Customizing Cost per machine hour x Customizing Machine Hours
Customizing = $3.70 x 600
Customizing = 2220
Now, we need to find the total cost for Job M:
Total Cost = Direct materials + Direct labor Cost + Variable manufacturing overhead For Molding + Variable manufacturing overhead For Customizing + Fixed manufacturing overhead for Molding + Fixed manufacturing overhead for Customizing
Total Cost = $9,900 + $10,300 + 3,250 + 1800 + 5200 + 2220
Total Cost = $32,670
Now, we need to find the Selling price for Job M, for which we need to add the markup into the total cost.
Markup percentage = 50%
So,
Markup = Markup% x Total Cost
Markup = 0.50 x 32,670
Markup = $16,335
Selling Price = Markup + Total Cost
Selling Price for Job M = $16,335 + $32,670
Hence,
Selling Price for Job M = $49,005
Your friend remarks that longer movies are a better deal than shorter movies because the ticket price is the same in both cases. Therefore, the longer movie provides more benefit for the same cost as a shorter movie. Which of the following is the best argument against your friend's claim that longer movies provide more benefit than shorter movies?
Based on the:
a. opportunity cost principle, the length of the movie does not matter as long as watching a movie is the best way to spend your time compared to other alternatives.
b. cost-benefit principle, the benefits of a longer movie exceed the costs when compared to a shorter movie.
c. marginal principle, you should only continue to watch an additional movie if it is shorter than the first movie.
d. interdependence principle, longer movies are affected by the market for shorter movies.
Answer:
a. opportunity cost principle, the length of the movie does not matter as long as watching a movie is the best way to spend your time compared to other alternatives.
Explanation:
In the given case since it is mentioned that longer movies would be more better as compared with the shorter movies also the price for the both would be the same so here the opportunity cost principle is applied i.e. the movie length is not relevant here as it is considered to spend your time by watching a movie
So the first option is correct