Answer:
Conversion costs= $95,000
Explanation:
Giving the following information:
Direct labor $40,000
Variable manufacturing overhead $25,000
Fixed manufacturing overhead $30,000
The conversion costs are the sum of direct labor and total manufacturing overhead.
Conversion costs= 40,000 + (25,000 + 30,000)
Conversion costs= $95,000
Open-ended questions are the best way to gain more information about a customer's needs and how you can help meet them during their visit. What questions below are good examples of open-ended questions? Select all that apply.
A. Can I help you with something today?
B. What are you looking for in your outdoor patio?
C. How are you?
D. What brings you in today?
Answer: The answer is given below
Explanation:
Open ended questions are the questions whereby their answers vary according to the person, and usually leads to a longer conversation.
Examples are:
•™Can I help you with something today?
• What are you looking for in your outdoor patio?
•. What brings you in today
Painter Corporation was organized by five individuals on January 1 of the current year. At the end of January of the current year, the following monthly financial data are available:Total revenues $ 299,000Total expenses (excluding income taxes) 192,000Income tax expense (all unpaid as of January 31) 33,200Cash balance, January 31 66,950Receivables from customers (all considered collectible) 33,200Merchandise inventory (by inventory count at cost) 95,700Payables to suppliers for merchandise purchased from them (will be paid during February current year) 27,350Common stock 94,700No dividends were declared or paid during January.Required1. Complete an Income Statement for Painter Corporation.2. Complete Painter Corporation's Balance Sheet.
Answer:
Painter Corporation
Income Statement
For the month ended January, 202x
Total revenues $299,000
Total expenses ($192,000)
EBIT $107,000
Income taxes ($33,200)
Net income $73,800
Painter Corporation
Balance Sheet
For the month ended January, 202x
Assets:
Cash $66,950
Accounts receivables $33,200
Merchandise inventory $95,700
Total assets $195,850
Liabilities:
Accounts payable $27,350
Stockholders' equity
Common stock $94,700
Retained earnings $73,800
Total stockholders' equity $168,500
Liabilities + stockholders' equity $195,850
Currently, the dividend-payout ratio (DIE) for the aggregate market is 60 percent, the required return (k) is 11 percent, and the expected growth rate for dividends (g) is 5 percent.
a. Compute the current earnings multiplier.
b. You expect the DIE payout ratio to decline to 50 percent, but you assume there will be no other changes. What will be the P/E? c. Starting with the initial conditions, you expect the dividend-payout ratio to be constant, the rate of inflation to increase by 3 percent, and the growth rate to increase by 2 percent. Compute the expected P/E.
d. Starting with the initial conditions, you expect the dividend-payout ratio to be constant, the rate of inflation to decline by 3 percent, and the growth rate to decline by 1 percent. Compute the expected PIE.
Answer:
A. 10x
B.8.33x
C.8.57x
D.15x
Explanation:
a. Computation of current earnings multiplier
Using this formula
Current earnings multiplier=Dividend-payout ratio/(Required return-Expected growth rate for dividends)
Where,
Dividend-payout ratio(D/E)= 0.60
Required return (k) = 0.11
Expected growth rate for dividend (g)= 0.05
Let plug in the formula
Current Earning multiplier =0.60/(0.11−0.05)
Current Earning multiplier=0.60/0.06
Current Earning multiplier=10x
Therefore the Current Earning multiplier will be 10x
b. Calculation for the what will be the P/E
Using this formula
P/E=Expected decline D/E payout ratio /(Required return-Expected growth rate for dividends)
Where,
Expected decline D/E payout ratio=0.50
Required return (k) = 0.11
Expected growth rate for dividend (g)= 0.05
Let plug in the formula
P/E=0.50/(0.11-0.05)
P/E=0.50/0.60
P/E=8.33x
Therefore the P/E will be 8.33x
c. Computation for increase in expected P/E
Using this formula
Increase in Expected P/E=Dividend-payout ratio(D/E)/(Increase in rate of inflation - Increase in growth rate )
Let plug in the formula
Where,
Dividend-payout ratio(D/E)=0.60
Increase in rate of inflation =(0.11+0.03=0.14)
Increase in growth rate=(0.05+0.02=0.07)
Let plug in the formula
Increase in Expected P/E=0.60/[(0.11+0.03)-(0.05+0.02)]
Increase in Expected P/E=0.60/(0.14-0.07)
Increase in Expected P/E=0.60/0.07
Increase in Expected P/E=8.57x
Therefore the increase in expected P/E will be 8.57x
d .Computation for decline in the expected P/E
Using this formula
Decline in the expected P/E=Dividend-payout ratio(D/E)/(Decline in rate of inflation - Decline in growth rate )
Let plug in the formula
Where,
Dividend-payout ratio(D/E)=0.60
Decline in rate of inflation =(0.11-0.03=0.08)
Decline in growth rate=(0.05-0.01=0.04)
Let plug in the formula
Decline in the expected P/E=0.60/[(0.11-0.03) -(0.05-0.01)
Decline in the expected P/E=0.60/(0.08-0.04)
Decline in the expected P/E=0.60/0.04
Decline in the expected P/E=15x
Therefore the Decline in the expected P/E will be 15x.
A company's overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used.
Goods in Process Inventory Finished Goods Inventory
Beg. bal 100,800 Beg. bal 118,200
DM? 324,800 301,000
D.L?
O.H? F.G?
End Bal. 131.040 End Bal. 142,000
Factory Overhead
93,240 90,720
Answer:
Materials used during the period $ 113,120
Explanation:
The credit side of the Factory overhead is the applied overhead
Thus: 90,720 os 60% of labor: 90,720 / 0.6 = 151,200
Good in Process
Beginning Balance 100,800
Materials X
Labor 151,200
Overhead 90,720
Transferred-out (Y)
Ending Balance 131,040
Finished Goods
The debit of 324,800 represents the amount transferred out from Goods in Process. Having this, we can solve for direct materials
Beginning Balance 100,800
Materials X
Labor 151,200
Overhead 90,720
Transferred-out (324,800)
Ending Balance 131,040
material = 131,040 + 324,800 - 90,720 - 151,200 - 100,800 = 113,120
The Tamarisk Heritage Centre (a not-for-profit organization providing language and arts and crafts programs for children) received a lump-sum grant from the City of Moncton of $483,820 this year. The fixed costs of the Centre are expected to be $239,800. The average variable cost per child visit is expected to be $8.70, and the average fee collected per child visit is $3.80.What is the breakeven volume in patient visits? (Round answers to 0 decimal places, e.g. 5,125.)
Answer:
48,939 patients
Explanation:
Breakeven quantity = fixed cost / price – variable cost per unit
$239,800 / ( $8.70 - $3.80) = 48,939 patients
Price inflation:
a. is relatively unimportant to individuals
b. is considered to be acceptable in the nation's quest for high levels of employment
c. encourages investment by reducing the uncertainty about future returns
d. is almost always due to financing wars
e.none of the above
Answer: encourages investment by increasing the uncertainty about future returns
Explanation:
Price inflation is the increase in general price level which brings about reduction in the purchasing power of economic agent such as the individuals or firms at a particular period of time.
Price inflation is important to individuals as it affects their decision making and it reduces their spending ability. Causes of inflation are due to excess demand, rise in production cost, rise in money supply etc. Financing wars isn't the main cause of inflation.
It should be noted that inflation encourages investment by reducing the uncertainty about future returns. This is because since prices of goods have already shoot up, investors will be encouraged as they'll like to invest in such economy as there'll be tendency to make maximize profit.
Here I am again but am really in the mood;) Easy question: What hobby do you have?
Which of the following statements about tax rate structures is true? A. Regressive rate structures are illegal in the United States. B. A tax with a graduated rate structure must be either regressive or progressive. C. A proportionate rate structure is the only structure resulting in vertical equity. D. None of the above is true.
Answer:
D
Explanation:
Regressive tax system is a tax system where those that earn lower income pay more tax and those that earn higher income pay less tax.
A graduated income tax is also known as progressive tax
A proportionate tax taxes everyone the same regardless of the amount earned.
A progressive tax ensures vertical equity.
A progressive tax is a tax structure where those who earn higher income are taxed more and those that earn less pay less amount of tax.
Tell me about the first job you’ve ever had. What did you do to learn the ropes?
Answer:
Explanation: talked to my coworkers
Explain the importance of departmental income statement in an enterprise in which several separate departments function. Provide an example of a departmental income statement in which at least three shared indirect costs are divided according to three different appropriate allocation bases.
Answer with Explanation:
Following are the benefits of using departmental Income Statements:
Gives an understanding of where the company lacks efficiencyHelps in setting budgets and efficiency cuts so that the management of the department works hard to lower operational lead time and other efficiencies found in the operational activities. By setting the budgeted income statement for the department, the appraiser of the company performance is possible by using variance analysis method.The Departmental Income Statement also helps in appraising performance of each department which helps identifying which department requires upper level management attention.It is very useful when undergo financial analysis of departmental income statement which helps in identification of problematic areas, which are lowering profits and thus corrective actions can be taken to overcome these issues.It helps in allocating of jointly shared costs of non production overheads like Accounts Department Costs, Audit Department Costs, Electricity bills, etc. This helps in better appraisal of departments and identification of appropriate basis. In the above case the appropriate basis would be Income balances for accounts department, Income Balances For audit department cost and electricity units consumption of each department.The above benefits makes the department income statements important for the managerial use.
Sissac Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $470 per month plus $101 per job plus $24 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in May to be 12 jobs and 123 meals, but the actual activity was 9 jobs and 126 meals. The actual cost for catering supplies in May was $4,240. The spending variance for catering supplies in May would be closest to:
Answer:$163 which is favorable
Explanation:
Standard Cost per month is given as =Actual Quantity × Standard Rate
= Actual activity for number of jobs per month × Standard rate per job + Actual activity for meals× standard Rate per meal + Cost of Catering supplies
= 9 jobs×$101 per job + 126 meals × $24 per meal +$470
= $909 + $3,024 + $470 = $4,403
Also, Spending Variance = Actual cost of Catering in May- Standard cost of catering per month.
$4,240- $4,403= $163---- Favorable . This is because the actual cost for catering supplies is less than the Standard cost estimated.
A production possibilities frontier (PPF) is bowed outward as a result of:____.1) constant opportunity costs.2) increasing opportunity costs.3) decreasing opportunity costs.4) scarcity.5) choice.
Answer: 2) increasing opportunity costs
Explanation:
The Production Possibilities Frontier (PPF) measures how much of one good an economy would have to give up to be able to produce more of another good.
Resources in the economy are scarce so a trade-off needs to be made to determine how much resources would go into one good and how much into the other. This is why when more resources go to one good, less of the other is produced.
This is what the PPF shows. As we produce one more of one good, we produce less of the other good meaning the opportunity cost ( not producing the other good) of producing more of one good increases as we keep producing it.
Collection of a $1,000 Accounts Receivablle:_____________.
a. increases an asset $1,000; decreases an asset $1,000.
b. increases an asset $1,000; decreases a liability $1,000.
c. decreases a liability $1,000; increases stockholders' equity $1,000.
d. decreases an asset $1,000; decreases a liability $1,000.
Answer: a. increases an asset $1,000; decreases an asset $1,000.
Explanation: If an individual asset is increased, then it is possible there could be an equal decrease in another asset. Accounts receivable is the total monetary amount owed to a financial entity due to debts arising from sales on credit or on account. A collection of a $1,000 Accounts Receivable increases an asset $1,000; decreases an asset $1,000.
Money is a crucial component of any presidential campaign.
Where do campaign funds come from?
Answer:
donors and from the contestant's personal funds
Explanation:
Remember, a campaign (political campaign) is a carefully planned activity with the sole aim of influencing the majority of the citizens qualified in a particular election to vote for a specific candidate.
Thus, there are planned fundraising events in which donors (members of the public, and organizations) contribute financially towards a presidential campaign. Also, the contestant may use his own funds to finance his campaign.
Parent Co. invested $1,000,000 in Sub Co. for 25% of its outstanding stock. Sub Co. pays out 40% of net income in dividends each year.
Use the information in the following T-account for the investment in Sub to answer the following questions.
Investment in Sub Co.
1,000,000
110,000
44,000
A. How much was Parent Co.’s share of Sub Co.’s net income for the year?
Net income $Parent Co. invested $1,000,000 in Sub Co. for
B. How much was Parent Co.’s share of Sub Co.’s dividends for the year?
Dividends $
C. What was Sub Co.’s total net income for the year?
Total net income $
D. What was Sub Co.’s total dividends for the year?
Total Dividends $
Answer:
(A) $110,000
(B) $44,000
(C) $440,000
(D) $176,000
Explanation:
Parent corporation invested $1,000,000 in sub corpora tion for 25% of its outstanding stock
Sub corporation pays out 40% of net income of dividend each year
(A) Parent's Co's share of Sub's Co's net income for the year is $110,000
(B) Parent's Co's share of Sub's Co's share of dividend for the year is $44,000
(C) The total net income can be calculated as follows
= 110,000 ×100/25
= 11,000,000/25
= $440,000
(D) The total dividend for the year can be calculated as follows
= 440,000 ×40/100
= 440,000 × 0.4
= $176,000
Tetra Pak Ltd. is one of the leading business organization in packaging industry of Pakistan, and is currently assessing the commercial risk of its new project. The project which it currently want to peruse is introduction of new packaging material and system that is more of ecological and environmental friendly. This project would require Tetra Pak ltd. to establish new industrial plant in extension of the existing one, so to produce that new packaging material that could be sold to different industries for their packaging (such as beverages industry). Requirement: Assuming that you are part of project risk management team, how would you assess all of the key operating risk and revenue risk of the project (under commercial risk assessment and management)? As well as how would you assess which of the revenue risk management techniques would be appropriate for this project among offtake contracts, concession agreement, and hedging contract (provide rational for your choice for any one or mix approach for protecting organizational revenue).
Answer:
Poor implementation risk
Process risk
Equipment failure risk
Demand risk
Quality risk
Reputation risk
Explanation:
The new process implementation will require capital expense. There is high risk that the new packaging is not accepted by the customers. There can be quality check required to ensure that new packaging is not compromising quality of the product. There can be demand decline risk as the new packaging is rejected by the customers then the company can loose large amount of revenue. There will be heavy cost incurred for the extension of existing plant but if the implementation and management is poor then the new packaging will not be up to the mark and this may hit the brand reputation.
Zenith Consulting Co. has the following accounts in its ledger: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Retained Earnings; Dividends; Fees Earned; Rent Expense; Advertising Expense; Utilities Expense; Miscellaneous Expense.TransactionsMar. 1 Paid rent for the month, $4,000. 3 Paid advertising expense, $1,350. 5 Paid cash for supplies, $1,800. 6 Purchased office equipment on account, $11,500. 10 Received cash from customers on account, $8,600. 15 Paid creditor on account, $3,180. 27 Paid cash for miscellaneous expenses, $700. 30 Paid telephone bill for the month, $550. 31 Fees earned and billed to customers for the month, $37,200. 31 Paid electricity bill for the month, $830. 31 Paid dividends, $2,000.Journalize the preceding selected transactions for March 2018 in a two-column journal. CHART OF ACCOUNTS Zenith Consulting Co. General LedgerASSETS11 Cash12 Accounts Receivable13 Supplies14 Office EquipmentLIABILITIES21 Accounts PayableEQUITY31 Common Stock32 Retained Earnings33 Dividends
Answer:
Since there is not enough room here, I used an excel spreadsheet. I also assigned account numbers to fees earned account and expense accounts.
Would you rather be a juvenile prosecutor or defense attorney? Explain your decision.
Answer:
a defense attorney instead
Explanation:
From a financial standpoint, a defense attorney would more likely make more money than a juvenile prosecutor because a defense attorney could charge up more for certain cases than been a juvenile prosecutor who wants to ensure someone is convicted.
Also, in terms of purpose, I do feel a defense lawyer could make more impact socially by defending his or her clients.
The goal of the consumer in a market economy is to use his or her limited income to buy:________.A) The greatest number of goods and services possible.B) The goods and services that maximize profits for bussiness.C) The combination of goods and services which maximize their utility given a limited budget.D) Those goods and services with the lowest prices.
Answer:
C) The combination of goods and services which maximize their utility given a limited budget.
Explanation:
The goal of every consumer is to maximise utility. utility maximisation is the highest form of satisfaction a consumer can derive from consuming goods and services.
Utility is the total satisfaction derived from consuming goods and services.
Human wants are unlimited and the resources available to them are limited. So, consumers have to choose the combination of goods within their limited budget that would maximise utility
In order for the economy to be strong, individuals must a. produce goods and pay workers b. provide labor and pay workers c. produce goods and buy goods d. provide labor and buy goods. PLEASE HURRY
d. Provide labor and buy goods
EconomyAn economy is a domain that includes the production, distribution, and trading of products and services, as well as the consumption of those goods and services by various agents. It is defined broadly as "a social domain emphasizing the activities, discourses, and material expressions linked with the creation, use, and management of finite resources."Individuals must d. provide labor and purchase things in order for the economy to be robust.For more information:
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Answer: D
Explanation: E2020
You have just made your first $5,900 contribution to your retirement account. Assume you earn a return of 11 percent per year and make no additional contributions. What will your account be worth when you retire in 36 years? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) Future value $ What if you wait 10 years before contributing? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) Future value $
Answer:
$252,626.70
$88,971.20
Explanation:
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
Value in 36 years :
$5,900 (1.11)^36 = $252,626.70
Value in 26 (36 -10) years :
$5,900 (1.11)^26 =$88,971.20
Is Darby doing anything wrong? If so, what? What ethics traps is she facing?
Answer:
Hello your question is incomplete attached below is a screenshot of the question
Answer: i) Darby is doing something wrong
ii) Ethic traps are : Money and Rationalization
Explanation:
Darby is doing something wrong because she is taking the benefits of H associates company for personal purposes. and this totally unethical behavior been exhibited by Darby
The ethics trap faced by Darby are :
Money ; Money is the most influential trap that makes employees engage in most unethical activities because Human beings want more money always
Rationalization : Darby is using the company's facilities for personal use because she feels that her usage of the facilities for personal use won't affect the company negatively
A manager of a taco stand is interested in advertising to get more lunch time customers, but doesn’t know how much time it takes to process a single customer. The amount of time it takes to process a single customer will help the manager determine the maximum amount of customers they can process in the lunch hour. On average during lunch hour there are 12 people in line to approach the window. 4 people per minute leave the taco stand after receiving their food.
Fill in the blanks below.
I =________
R =_______
On average how long do customers wait in line? Calculate you answer in minutes. (Enter the value only. Do not enter text.)
Answer:
R = 4 customers per minute
I = 12 customers in line
average time (T) = 3 minutes per customer
Explanation:
if we follow Little's Law and its assumptions: L = λW
L = average number of clients in line = 12λ = arrival or departure rate = 4 per minuteW = average waiting timeW = L / λ
average waiting time = average number of clients in line / average number of clients arriving (or departing) = 12 / 4 = 3 minutes
Little's Law can also be written as I = RT
I = L
R = λ
In JIT manufacturing, each operation produces
A) only what is necessary for the succeeding operations.
B) all that it can to offset fixed costs.
C) a fixed percentage in excess of orders to ensure adequate quality stock.
D) all that it can in order to build inventories.
Answer:
A) only what is necessary for the succeeding operations.
Explanation:
JIT manufacturing is a system in which it focused to reduced the time with respect to the producton system and the feedback time arises from the suppliers and from the customer
It is to be developed for meeting out the demand not for the any kind of surplus or the advance requirement
Therefore in the given case, the option A is correct as it shows the necessity to be used for the coming operations
Which of the following best describes the primary role of auditors in financial reporting? A. Consultants that are hired by company management to advise on key matters related to competition, product pricing, employee retention, and financial reporting strategies. B. Key employees of the company that actively participate on the management team in strategic planning, product development, and financial reporting. C. Government employees assigned by local officials to ensure accurate financial reporting and operational integrity by the company. D. Independent party hired by management to express a professional opinion of the extent to which the company's financial reporting is in compliance with generally accepted accounting principles
Answer:
D. Independent party hired by management to express a professional opinion of the extent to which the company’s financial reporting is in compliance with generally accepted accounting principles.
Explanation:
I just finish my quiz on it.
'Auditors' are the 'individuals who conduct an independent review and examination of system records and activities in order to test the adequacy of the effectiveness of data security and processes.'
The statement that most adequately displays the central role of auditors in the 'financial reporting' would be:
D). "Independent party hired by management to express a professional opinion of the extent to which the company's financial reporting is in compliance with generally accepted accounting principles."
The responsibilities of an auditor include:
Review and monitoring of the financial records to prevent any discrepancy. Ensure that the organization follows all the standard principles and policies. Prevent it from any kind of fraud or risk. Assist in saving costs. Ensure the operations are being run effectively. Preparation of reports and data charts etc.Thus, option D correctly goes with the above-stated duties that he/she is an individual who looks after that the company is in proper alliance with the set principles.
Learn more about 'Financial Reporting' here:
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During its 1st month of business, Noodlecake's cash increased by receiving $5,000 from issuing common stock to its owners, borrowing $2,000 from bank, and collecting $3,000 from its customers. Its cash decreased by paying $2,000 to its enmployees and suppliers and $3,000 for the purchase of equipment. On its statement of cash flows, Cash Provided by Operating Activities equals $______ Cash from Investing Activities equals $________ Cash from Financing Activities equals $_______ Be sure to use and the Change in Cash equals $_______ parentheses around the amount if it is a cash outflow, e.g. $(1,000)
Answer:
Noodlecake
On its statement of cash flows, Cash Provided by Operating Activities equals $__1,000____ Cash from Investing Activities equals $__(3,000)______ Cash from Financing Activities equals $_7,000______ and the Change in Cash equals $_5,000______ Be sure to use parentheses around the amount if it is a cash outflow, e.g. $(1,000)
Explanation:
a) Data and Calculations:
Financing activities:
Common stock $5,000
Bank loan 2,000
Net cash $7,000
Operating activities:
Cash from customer $3,000
Cash to employees (2,000)
Net cash $1,000
Investing activities:
Equipment ($3,000)
Net cash from cash flows = $5,000
The net cash from cash flows or the change in cash flows is the summation of the changes in the operating, investing, and financing activities of Noodlecake during the period under review. It shows by how much the cash has increased or decreased when compared to the beginning balance, which can be zero as in this case.
The time after your pitch deck presentation should be used for______.a. questions and answers.b. presenting other business ideas you have.c. giving participation gifts.d. you should leave once you have finished your pitch deck presentation
Answer:
a. questions and answers
Explanation:
A pitch deck is a presentation that is related for starting up your business so that the coming investors should know about your business. It involves various slides that help each and everyone to understand your business idea
It is a short summary that demonstrates the idea of your business, the vision of your startup
Now the time that is to be left after pitch deck presentation is generally to be used for questions and answering and the same is to be considered
Hence, the correct option is a.
The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions:
Restin Inc. Los Angeles Division Bay Area Division Central Valley Division
Revenues $750,000 $200,000 $235,000 $325,000
Variable operating expenses 410,000 110,000 120,000 180,000
Controllable fixed expenses 210,000 65,000 75,000 70,000
Noncontrollable fixed expenses 60,000 15,000 20,000 25,000
In addition, the company incurred common fixed costs of $18,000.
The profit margin controllable by the Central Valley segment manager is:
a. $32,000
b. $44,000
c. $50,000
d. $75,000
e. $145,000
Answer:
d. $75,000
Explanation:
total Los Angeles Bay Area Central Valley
Revenues $750,000 $200,000 $235,000 $325,000
Variable exp. $410,000 $110,000 $120,000 $180,000
Controllable $210,000 $65,000 $75,000 $70,000
fixed expenses
controllable $130,000 $25,000 $40,000 $75,000
profit margin
Noncontrollable fixed expenses and common fixed expenses are not included in the calculation of individual controllable profit margin.
Almaden Hardware Store sells two product categories, tools and paint products. Information pertaining to its 2021 year-end inventory is as follows:
Inventory,by Product Category Quantity Per Unit Cost Net Realizable Value
Tools:
Hammers 120 $5.50 $6.00
Saws 250 10.50 9.50
Screwdrivers 350 2.50 3.10
Paint products:
1-gallon cans 550 6.50 5.50
Paint brushes 120 4.50 5.00
Required:
1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) individual products, (b) product categories, and (c) total inventory.
2. Assuming inventory write-downs are common for Almaden, record any necessary year-end adjustment amount for each of the LCNRV applications in requirement 1.
Answer:
Product category units cost NRV year-end inventory
Tools:
Hammers 120 $5.50 $6.00 $660Saws 250 $10.50 $9.50 $2,375Screwdrivers 350 $2.50 $3.10 $875Paint products:
1-gallon cans 550 $6.50 $5.50 $3,025 Paint brushes 120 $4.50 $5.00 $5401) carrying value of year-end inventory:
Tools:
Hammers $660 Saws $2,375 Screwdrivers $875sub-total $3,910Paint products:
1-gallon cans $3,025Paint brushes $540sub-total $3,565Total $7,475
2) adjustment to tools:
Dr Cost of goods sold 250
Cr Inventory: tools 250
adjustment to paint products:
Dr Cost of goods sold 550
Cr Inventory: paint products 550
or total adjustment to inventory account:
Dr Cost of goods sold 800
Cr Inventory 800
Inventory is the part of current assets held by the business organization to perform their business operations. The inventory is the working current asset as it keeps on moving with the sale of goods. There are various methods to determine the value of inventory such as FIFO, LIFO, and many more.
1. The carrying value of the inventory at year-end is $7,475
It is computed in the image attached below.
2. The journal entries for the adjustment amount of the year-end for each LCNRV is attached in the image below:
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Old Time Savings Bank pays 3% interest on its savings accounts. If you deposit $1,800 in the bank and leave it there. Required:a. How much interest will you earn in the first year? b. How much interest will you earn in the second year? c. How much interest will you earn in the tenth year?
Answer and Explanation:
The computation of the interest in the following years are shown below:
a. For the first year
= Deposits made in the bank × (1 + interest rate) - deposits made in bank
= $1,800 × (1 + 3%) - $1,800
= $54
b. For the second year
= Deposits made in the bank × (1 + interest rate)^ - deposits made in bank × (1 + interest rate)
= $1,800 × (1 + 3%)^ - $1,800 × (1 + 3%)
= $55.62
c. For the tenth year
= Deposits made in the bank × (1 + interest rate)^n - deposits made in bank × (1 + interest rate)^n
= $1,800 × (1 + 3%)^10 - $1800 × (1 + 3%)^9
= $70.46