Answer:
$40,000
Explanation:
Calculation to determine What amount of capital gain income will N recognize related to this distribution
Using this formula
N Capital gain income=N stock basis- M distribution
Let plug in the formula
N Capital gain income=$100,000-$60,000
N Capital gain income=$40,000
Therefore The amount of capital gain income that N will recognize related to this distribution is $40,000
Cusic Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $24,700, and the company expects to sell 1,640 per year. The company currently sells 1,990 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,660 units per year. The old board retails for $23,100. Variable costs are 53 percent of sales, depreciation on the equipment to produce the new board will be $1,035,000 per year, and fixed costs are $3,250,000 per year. If the tax rate is 24 percent, what is the annual OCF for the project
Answer: $9,524,922
Explanation:
The annual OCF of the project will be calculated as
= EBIT + Depreciation - taxes
First, we have to calculate the EBIT which will be:
= [ $24,700 x 1,640 - ( 1,990-1,660 x $23,100 ]
= $40,508,000 - (330 × $23100)
= $40,508,000 - $7,623,000
= $ 32,885,000
Variable cost will then be:
= $32,885,000 × 53%
= $32,885,000 x 0.53
= $ 17,429,050
Therefore, EBIT will be:
= $32,885,000 - $ 17,429,050 - Fixed cost - depreciation
= $32,885,000 - $ 17,429,050 - $3,250,000 - $1,035,000
= $11,170,950
Then, we calculate the value of tax which will be:
= $11,170,950 x 0.24
= $2,681,028
Therefore, OCF will be:
= EBIT + Depreciation - taxes
= $11,170,950 + $1,035,000 - $2,681,028
= $9,524,922
Park Place Company reported cost of goods sold of $140,000 for the year 2020. Park Place also reported the following amounts on its balance sheets. Jan. 1, 2020Dec. 31, 2020 Inventory$25,000$27,500 Accounts payable15,00014,500 What amount would be reported as cash paid to suppliers in the operating activities section of the statement of cash flows using the direct method
Answer:
the cash paid to supplier is $143,000
Explanation:
The computation of the cash paid to the supplier is given below;
Purchases = Ending inventory + cost of goods sold - beginning inventory
= $27,500 + $140,000 - $25,000
= $142,500
Now the Cash paid to supplier is
= Beginning account payable + purchases - ending account payable
= $15,000 + $142,500 - $14,500
= $143,000
hence the cash paid to supplier is $143,000
ABC Company rents its extra office space to XYZ Company for $600 per month. On November 1, 2020, ABC Company received $3,600 rent in advance from XYZ Company for the months of November 2020, December 2020, January 2021, February 2021, March 2021, and April 2021. The adjusting entry on December 31, 2020 (the end of the fiscal year) would include:
Answer:
Debit : Rent Paid in Advance $1,200
Credit : Rent Income $1,200
Explanation:
The adjusting entry on December 31, 2020 would include:
Debit : Rent Paid in Advance $1,200
Credit : Rent Income $1,200
The roles of money
Alex just graduated from college and is now in the market for a new car. He has saved up $4,000 for a down payment. He's deciding between a Super and a Duper. The Super is priced at $23,599, and the Duper is priced at $18,999. After agonizing over the decision, he decides to buy the Duper. He writes the dealership a check for $4,000 and takes out a loan for the remainder of the purchase price. Identify what role money plays in each of the following parts of the story. (Medium of exchange, unit of account, or store of value)
A. Sean writes a check for $4,000.
B. Sean can easily determine that the price of the Super is more than the price of the Duper.
C. Sean has saved $4,000 in his checking account.
Answer:
Medium of exchange
unit of account
store of value
Explanation:
Money is anything that is generally accepted as a means of payment for goods and services and for repayment of debt.
Functions of money
1. Medium of exchange : money can be used to exchange for goods and services. For example, by writing the check, he is exchanging money for a car
2. Unit of account : money can be used to value goods and services, For example, price was used to determine which was more expensive between the super and the duper
3. Store of value : money can retain its value over the long term, this it can be used as a store of value.
Each of two stocks, A and B, are expected to pay a dividend of $5 in the upcoming year. The expected growth rate of dividends is 10% for both stocks. You require a rate of return of 11% on stock A and a return of 20% on stock B. The intrinsic value of stock A
A. will be greater than the intrinsic value of stock B.
B. will be the same as the intrinsic value of stock B.
C. will be less than the intrinsic value of stock B.
D. cannot be calculated without knowing the market rate of return.
Answer:
a
Explanation:
Intrinsic value can be determined using the constant dividend growth model
according to the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = cost of equity
g = growth rate
Stock A = $5/ (0.11 - 0.1) = $500
Stock B = $5/ (0.2 - 0.1) = 50
Intrinsic value of A is greater than that of B
As part of its stock-based compensation package, International Electronics granted 24 million stock appreciation rights (SARs) to top officers on January 1, 2018. At exercise, holders of the SARs are entitled to receive stock equal in value to the excess of the market price at exercise over the share price at the date of grant. The SARs cannot be exercised until the end of 2021 (vesting date) and expire at the end of 2023. The $1 par common shares have a market price of $46 per share on the grant date. The fair value of the SARs, estimated by an appropriate option pricing model, is $3 per SAR at January 1, 2018. The fair value reestimated at December 31, 2018, 2019, 2020, 2021, and 2022, is $4, $3, $4, $2.50, and $3, respectively. All recipients are expected to remain employed through the vesting date.
Required:
1. Prepare the appropriate journal entry to record the award of SARs on January 1, 2018. Will the SARs be reported as debt or equity?
2. Prepare the appropriate journal entries pertaining to the SARs on December 31, 2018–December 31, 2021.
3. The SARs remain unexercised on December 31, 2022. Prepare the appropriate journal entry on that date.
4. The SARs are exercised on June 6, 2023, when the share price is $50. Prepare the appropriate journal entry(s) on that date.
Answer:
1. January 1, 2018
No Journal entry
The SARs will be reported as EQUITY
2. December 31, 2018
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
December 31, 2019
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
December 31, 2020
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
December 31, 2023
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
3. December 31, 2022
No Journal entry
4. June 6, 2023
Dr Paid in capital SAR plan $72,000,000
Cr Common stock $1,920,000
Cr Paid in capital in excess of Par $70,080,000
Explanation:
1. Preparation of the appropriate journal entry to record the award of SARs on January 1, 2018.
January 1, 2018
No Journal entry
Based on the information The SARs will be reported as EQUITY reason been that IE which full meaning is INTERNATIONAL ELECTRONICS
will tend to settle in shares of the INTERNATIONAL ELECTRONICS stock during exercise.
2. Preparation of the appropriate journal entries pertaining to the SARs on December 31, 2018–December 31, 2021.
December 31, 2018
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
(3*$24 million/4)
December 31, 2019
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
(3*$24 million/4)
December 31, 2020
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
(3*$24 million/4)
December 31, 2023
Dr Compensation expense $18,000,000
Cr Paid in capital SAR plan $18,000,000
(3*$24 million/4)
3. Preparation of the appropriate journal entry on that date.
December 31, 2022
No Journal entry
4. Preparation of the appropriate journal entry(s) on June 6, 2023
June 6, 2023
Dr Paid in capital SAR plan $72,000,000
(3*$24 million)
Cr Common stock $1,920,000
[($50-$46)*$24,0000/$50]
Cr Paid in capital in excess of Par $70,080,000
($72,000,000-$1,920,000)
A newly formed company purchases investments classified as available-for-sale securities at a cost of $13,000. At the end of the year, the market value of the securities was $11,000. The financial statements at the end of the year would show which of the following?
A. No loss on the income statement Available-for-sale investments of $11,000 and an unrealized loss of $2,000 in stockholders' equity on the balance sheet
B. No loss on the income statement Available-for-sale investments of $13,000 on the balance sheet
C. Income Statement loss of $2,000 Available-for-sale investments of $13,000 on the balance sheet
D. Loss of $2,000 on the income statement Temporary investments of $11,000 on the balance sheet
Answer: A. No loss on the income statement Available-for-sale investments of $11,000 and an unrealized loss of $2,000 in stockholders' equity on the balance sheet.
Explanation:
Available-For-Sale (AFS) securities are not to have their gains or losses reflected in the income statement. They are to be reflected in the Other Comprehensive Income (OCI) section of the Stockholders Equity.
If there is a loss, the AFS security is written down by the loss amount which is then transferred to the OCI section of equity as an unrealized loss. It will reduce the OCI which would reduce the stockholders equity.
In this case therefore, AFS would go to $11,000 and OCI would record an unrealized loss of $2,000.
Select the correct answer.
At the end of the year, Clean123 Inc. has a service revenue of $193,750, an accounts payable of $500, a notes payable of $ 17,800, a salaries
expense of $26,900, and a rent expense of $14,640. What is Clean123 Inc.'s net income?
ОА.
$134,410
OB.
$152,210
OC. $161,310
OD. $166,850
Reset
Next
Answer: $152,210
Explanation:
The net income is the income that remains after the expenses has been deducted from the revenue.
Clean123 Inc.'s net income will be calculated as:
Service revenue = $193,750
Less: Salaries expense = $26,900
Less: rent expense = $14,640.
Net income = $152,210
Therefore, the net income is $152210
Darrell is a clothier whose company, 24-7 Activewear, has separate product lines for men, women, and children. He has grouped his organization into different departments such as production, marketing, and finance. Most of the employees report to two managers a departmental head and a divisional head. Darrell encourages lower-level managers to make important decisions in order to promote quick and effective decision making.
It can be inferred that Darrell's firm utilizes the ________ approach to departmentalization.
a. geographical
b. product
c. vertical
d. matrix
e. conglomerate
Answer:
d. matrix
Explanation:
In the matrix organization structure, here the employees would have the multiple line for reporting and also they perform various kinds of roles. In this, the resources are used effectively and also it builds the motivation between the employees due to this the employee could show their skills in various fields also it improves the decision making
Therefore as per the given situation, the option d is correct
Indiana Co. began a construction project in 2021 with a contract price of $162 million to be received when the project is completed in 2023. During 2021, Indiana incurred $40 million of costs and estimates an additional $84 million of costs to complete the project. Indiana recognizes revenue over time and for this project recognizes revenue over time according to the percentage of the project that has been completed.
Suppose that, in 2022, Indiana incurred additional costs of $65 million and estimated an additional $52 million in costs to complete the project. Indiana (Do not round your percentage calculated):
A) Recognized $8.91 million gross profit on the project in 2022.
B) Recognized $11.91 million gross profit on the project in 2022.
C) Recognized $3.00 million loss on the project in 2022.
D) Recognized $8.91 million loss on the project in 2022.
Answer:
D) Recognized $8.91 million loss on the project in 2022.
Explanation:
The computation is shown below:
For Year 2021:
Percentage of work completed in the year 2021 is
= $40 ÷ ($40 + $84)× 100
= $40 ÷ $124 × 100
= 32.26%
Profit on the contract is
= Contract price - Already incurred cost - Expected cost
= $162 - $40 - $84
= $38
Profit to be recognized in the year 2016 is
= profit × percentage of completion
= $38 × 32.26%
= $12.256
For Year 2022:
Percentage of work completed in the year 2017 is
= ($40 + $65) ÷ ($40 + $65 + $52)
= $105 ÷ $157 × 100
= 66.88%
Profit on the contract is
= Contract price - Already incurred cost - Expected cost
= $162 - $40 - $65 - $52
= $5
Profit that should be recognized till the year 2017 is
= profit × percentage of completion
= $5 × 66.88%
= $3.344
Profit to be recognized in the year 2017 is
= $3.344 - $12.256
= 8.91 million loss
Tamarisk, Inc. is authorized to issue 2,250,000 shares of $1 par value common stock. During 2020, the company has the following stock transactions.
Jan. 15 Issued 880,000 shares of stock at $7 per share.
Sept. 5 Purchased 28,000 shares of common stock for the treasury at $8 per share.
Dec. 6 Declared a $0.50 per share dividend to stockholders of record on December 20, payable January 3, 2021.
Journalize the transactions for Tamarisk, Inc.
Answer:
Date Account Titles and Explanation Debit$ Credit$
Jan.15 Cash (880,000*$7) 6,160,000
Common Stock , $1 Par value 880,000
Paid in capital in excess of par value 5,280,000
Sept.5 Treasury Stock 224,000
Cash (28,000*8) 224,000
Dec.6 Retained earnings 440,000
Cash Dividend Payable 440,000
(880,000*0.50)
Darnell and Eleanor are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of barley and alfalfa each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of the land and alfalfa on the rest.
Barley Alfalfa
Darnell 40 8
Eleanor 28 7
_____________ has an absolute advantage in the production of barley, and _____________ has an absolute advantage in the production of alfalfa. Darnell's opportunity cost of producing 1 bushel of alfalfa is _____________ bushels of barley, whereas Eleanor's opportunity cost of producing 1 bushel of alfalfa is_____________bushels of barley. Because Darnell has a _____________ opportunity cost of producing alfalfa than Eleanor, _____________ has a comparative advantage in the production of alfalfa, and _____________ has a comparative advantage in the production of barley.
Answer:
Darnell
Darnell
5
4
higher
eleanor
Darnell
Explanation:
A person has comparative advantage in production if it produces at a lower opportunity cost when compared to other people.
A person has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other people
Darnell produces more quantities of Barley and Alfafa when compared to Eleanor. Darnell has a comparative advantage in the production of both commodities
Darnell's opportunity cost of producing 1 bushel of alfalfa = Barley produced / alfalfa produced = 40 / 8 = 5
Eleanor's opportunity cost of producing 1 bushel of alfalfa = 28 /7 = 4
Eleanor has a lower opportunity cost in producing alfalfa, thus she has a comparative advantage in producing alfalfa and Darnel has a comparative advantage in the production of barley
A process plant making 5000 kg/day of a product selling for $1.75/kg has annual variable pro- duction costs of $2 million at 100 percent capacity and fixed costs of $700,000. What is the fixed cost per kilogram at the breakeven point? If the selling price of the product is increased by 10 percent, what is the dollar increase in net profit at full capacity if the income tax rate is 35 percent of gross earnings?
Answer:
a. Breakeven point = Fixed cost / Contribution margin
Contribution margin = Selling price - Variable costs per unit
Variable cost per unit = 2,000,000 / (5,000 * 365 days)
= $1.10
Contribution margin = 1.75 - 1.10
= $0.65
Breakeven point = 700,000 / 0.65
= 1,076,923 kg
Fixed cost per kilogram at those units is:
= 700,000 / 1,076,923
= $0.65
_________________________________________________________
b. Net profit at original prices:
= (Contribution margin * units produced) - Fixed costs
= (0.65 * 5,000 * 365) - 700,000
= $486,250
Less taxes:
= 486,250 * (1 - 35%)
= $316,062.50
Net profit after price increase:
New selling price = 1.75 * 1.1
= $1.93
Net profit = ((Selling price - Variable cost) * units sold) - fixed cost
= ( (1.93 - 1.10) * 5,000 * 365) - 700,000
= $814,750
After tax:
= 814,750 * (1 - 35%)
= $529,587.50
Dollar increase:
= 529,587.50 - 316,062.50
= $213,525
Santana Company exchanged equipment used in its manufacturing operations plus $2,000 in cash for similar equipment used in the operations of Delaware Company. The following information pertains to the exchange.
Santana Co. | Delaware Co.
Equipment (cost) $28,000 | $18,000
Accumulated depreciation 9,000 | 10,000
Fair value of equipment 14,000 | 16,000
Cash given up 2,000
Please indicate whether an account is an asset (A), liability (L), or equity (E) for journal entries, adjusting entries, and closing entries.
Prepare the journal entries to record the exchange on the book of Santana Co. and Delaware Co. Assume that the exchange lacks commercial substance.
Solution :
We know that the exchange takes place when the FMV receive is equal to the FMV given up.
Where the FMV = fair market value
The commercial substance means the future cash flows exchange.
The non monetary exchange refers to the cash which is less than 25% of the fair value exchange.
The journal entries for the Santana Corp. when the exchange lack the commercial substance are reported as :
Transaction Debit ($) Credit ($)
Asset(new) 11,000
Accumulated depreciation(old) 9,000
Asset (old) 28,000
Cash 2000
The journal entries for Delaware Corp. when the exchange lacks the commercial substance.
Transaction Debit ($) Credit ($)
Asset(new) 16,000
Accumulated depreciation (old) 10,000
Loss 2500
Assets (old) 28,000
A firm has an average loan outstanding of $75,000,000 on a $100,000,000 line of credit. There is a commitment fee of 0.25% on the unused portion of the line, and the interest rate on the borrowed funds is LIBOR 175 basis points. LIBOR is 3.0%. What is the effective annual borrowing rate on the line of credit
Answer:
2.44%
Explanation:
Average outstanding loan = $75,000,000
Total line of credit = $100,000,000
Unused portion = $25,000,000 ($100,000,000-$75,000,000)
Commitment fee = 0.25%
Interest rate = 3.175% (3+0.175%)
Commitment fee = Unused portion*Commitment fee rate
Commitment fee = $25,000,000*0.0025
Commitment fee = $62,500
Interest = Average outstanding balance*Interest rate
Interest = $75,000,000*0.03175
Interest = $2,381,250
Total borrowing cost = Commitment fee + Interest
Total borrowing cost = $62,500 + $2,381,250
Total borrowing cost = $2,443,750
Effective borrowing rate = Total borrowing cost / Credit limit
Effective borrowing rate = $2,443,750/$100,000,000
Effective borrowing rate = 0.0244375
Effective borrowing rate = 2.44%
Onini, Inc. produces one product with two production levels: 20,000 units and 80,000 units. At each production level, Onini's per-unit costs for Costs A, B, and C are:
Cost A (per unit) Cost B (per unit) Cost C (per unit)
Production = 20,000 $12.00 $15.00
$20.00
Production = 80,000 $12.00 $11.25
$5.00
What type of cost is each?
A. Cost A is variable, Cost B is mixed, and Cost C is fixed.
B. Cost A is fixed, Cost B is variable, and Cost C is mixed
C. Cost A s variable, Cost B is fixed, and Cost C is mixed.
D. Cost A is fixed, Cost B is mixed, and Cost C is variable.
Answer:
A
Explanation:
Fixed costs are costs that do not vary with output. e,g, rent, mortgage payments
If production is zero or if production is a million, Mortgage payments do not change - it remains the same no matter the level of output.
Hourly wage costs and payments for production inputs are variable costs
Total fixed cost = 20,000 x 20 = 400,000
80,000 x 5 = 400,000
c is fixed cost
Variable costs are costs that vary with production
If a producer decides not to produce any output, there would be no need to hire labour and thus no need to pay hourly wages.
Variable cost is constant per unit produced. Thus A, is variable cost
Mixed cost is cost that combines fixed cost and variable cost
Would you rather be able to scream as loud as you want in your house without getting in trouble or would you rather be able to break stuff in anger without getting punished?
I would pick scream as loud as I want in my house without getting punished because I never get to scream.
Buffalo BBQ Restaurant is trying to become more efficient in training its chefs. It is experimenting with two training programs aimed at this objective. Both programs have basic and advanced training modules. The restaurant has provided the following data regarding the two programs after two weeks of implementation:
Training Program A Training Program B
New chef # 1 2 3 4 5 6 7 8 9 10
Hours of basic training 22 24 28 21 23 25 24 29 31 28
Hours of advanced training 8 7 8 10 11 4 3 0 1 2
Number of chef mistakes 12 13 15 14 14 7 6 8 5 6
a. Compute the following performance metrics for each program:
(1) Average hours of employee training per chef, rounded to one decimal place.
(2) Average number of mistakes per chef, rounded to one decimal place.
b. Which program should the restaurant implement moving forward?
Answer: See explanation
Explanation:
(1) Average hours of employee training per chef.
Program A:
Hours of basic training = 22 + 24 + 28 + 21 + 23 = 118
Hours of advanced training = 8 + 7 + 8 + 10 + 11 = 44
Total hours of training = 118 + 44 = 162
Number of chefs in A = 5
Average hours of employee training per chef in A = 162/5 = 32.4
Average hours of employee training per chef for Program B
Hours of basic training = 25 + 24 + 29 + 31 + 28 = 137
Hours of advanced training = 4 + 3 + 0 + 1 + 2 = 10
Total hours of training = 137 + 10 = 147
Number of chefs in B = 5
Average hours of employee training per chef in B = 147/5 = 29.4
(2) Average number of mistakes per chef for Program A:
Number of chefs mistake = 12 + 13 + 15 + 14 + 14 = 68
Number of chefs = 5
Average number of mistakes per chef for Program A: = 68/5 = 13.6
Average number of mistakes per chef for Program B
Number of chefs mistake = 7 + 6 + 8 + 5 + 6 = 32
Number of chefs = 5
Average number of mistakes per chef for Program B: = 32/5 = 6.4
b. Which program should the restaurant implement moving forward?
The restaurant should Implement program B because less training is required and less mistakes are made.
Roberto has received various gifts over the years and has decided to dispose of the following assets he received as gifts:
What is the recognized gain or loss from the following transactions, assuming that no gift tax was paid when the gifts were made.
If an answer is zero, select "neither a gain nor a loss" and enter "0" as the amount.
a. In 1981, he received land worth $32,000. The donor's adjusted basis was $35,000. Roberto sells the land for $95,000 in 2018.
(neither a gain or a loss/ a gain/ a loss) of $__________ is recognized.
b. In 1986, he received stock in Gold Company. The donor's adjusted basis was $19,000. The fair market value on the date of the gift was $34,000. Roberto sells the stock for $40,000 in 2018.
(neither a gain or a loss/ a gain/ a loss) of $__________ is recognized.
c. In 1992, he received land worth $15,000. The donor's adjusted basis was $20,000. Roberto sells the land for $9,000 in 2018.
(neither a gain or a loss/ a gain/ a loss) of $__________ is recognized.
d. In 2013, he received stock worth $30,000. The donor's adjusted basis was $42,000. Roberto sells the stock for $38,000 in 2018.
(neither a gain or a loss/ a gain/ a loss) of $__________ is recognized.
Answer: See explanation
Explanation:
a. The recognized gain or loss from the transaction will be:
= Amount realized - Adjusted basis
= $95000 - $35000
= $60000
Gain of $60000 will be recognized
b. The recognized gain or loss from the transaction will be:
= Amount realized - Adjusted basis
= $40000 - $19000
= $21000
Gain of $21000 is recognized
c. The recognized gain or loss from the transaction will be:
= Amount realized - Adjusted basis
= $9000 - $15000
= -$6000
Loss of $6000 is recognized
d. In this case, no gain or loss will be recognized.
Fosters Manufacturing Co. warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $280,000 for January. On February 7, a customer received warranty repairs requiring $180 of parts and $105 of labor.a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. b. Journalize the entry to record the warranty work provided in February.
Answer:
Explanation:
a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty.
Debit: Product Warranty expense Account = $280,000 × 4% = $11200
Credit Product Warranty payable = $11200
b. Journalize the entry to record the warranty work provided in February.
Debit Product warranty payable Account $285
Credit Supplies account $180
Credit Wages payable account $105
Your friend Harold is trying to decide whether to buy or lease his next vehicle. He has gathered information about each option but is not sure how to compare the alternatives. Purchasing a new vehicle will cost $28,500, and Harold expects to spend about $700 per year in maintenance costs. He would keep the vehicle for five years and estimates that the salvage value will be $11,300. Alternatively, Harold could lease the same vehicle for five years at a cost of $3,705 per year, including maintenance. Assume a discount rate of 10 percent.
Requirement:
1. Calculate the net present value of Harold’s options. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign. Round your final answers to 2 decimal places.
2. Advise Harold about which option he should choose.
Lease Option
Purchase Option
Answer:
$-24,137.14
$-14,044.86
He should choose the lease option
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Purchase option
Cash flow in year 0 = $-28,500
Cash flow in year 1 - 4 = -700
Cash flow in year 2 = 11,300 - 700 = 10,600
I = 10%
NPV= -24,137.14
Lease option
Cash flow in year 1 - 5 = 3705
I = 10%
NPV= -14,044.86
the lease option is less expensive and should be chosen
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Question 1(Multiple Choice Worth 10 points)
(04.04 LC)
Which is a possible effect of identity theft?
Increased mental stress
O Increased purchasing power
Decreased loan balances
Decreased debt to credit load
Answer:
Option A, Increased mental stress
Explanation:
Increased mental stress is one of the possible effect of identity theft.
It can cause following negative impacts on the mental and physical health of an individual
a) It causes sleep disturbance
b) Physical symptoms such as aches and pains, heart palpitations, sweating and stomach issues arises
c) Post stress disorder
d) Anxiety
Hence, option A is correct
Answer:
Option A, Increased mental stress
Explanation:
took the test
A study by the Environmental Protection Agency looked at the costs and benefits of the Clean Air Act from 1970 to 1990. This study found that a middle-range estimate of health and other benefits of cleaner air were valued at $22 trillion. This amount was about __________________ than the costs of reducing pollution, which was around $500 billion, in the same period.
Answer: d. 44 times higher
Explanation:
The benefits of cleaner air was $22 trillion and the cost of reducing pollution was $500 billion.
The number of times that you would have to multiply this cost of reducing pollution to get to the benefits of cleaner air is:
= 22 trillion / 500 billion
= 22,000 billion / 500 billion
= 44 times higher
Mar. 2 Issued 5,000 shares of $6 par value common stock to attorneys in payment of a bill for $35,600 for services performed in helping the company to incorporate.
June 12 Issued 61,900 shares of $6 par value common stock for cash of $440,900.
July 11 Issued 2,075 shares of $120 par value preferred stock for cash at $140 per share.
Nov. 28 Purchased 1,600 shares of treasury stock for $82,500.
Required:
Journalize all the transactions.
Answer:
Mar. 2
Debit : Attorney Expense $35,600
Credit : Common Stock (5,000 shares x $6) $30,000
Credit : Paid In Excess of Par $5,600
June 12
Debit : Cash $440,900
Credit : Common Stock (61,900 shares x $6) $371,400
Credit : Paid In Excess of Par $69,500
July 11
Debit : Cash (2,075 shares x $140) $290,500
Credit : Preferred Stock (2,075 shares x $120) $249,000
Credit : Paid in excess of par (2,075 shares x $20) $ 41,500
Nov. 28
Debit : Treasury Stock $82,500
Credit : Cash $82,500
Explanation:
With par value shares, we have a reserve called Paid in excess of par. This reserve serves to accommodate all payments made above the par values of shares issued.
Under the good neighbor rule, a buyer of consumer goods, who gives value and does not have
actual or constructive knowledge of the security interest, acquires clear title if there has been no filing
a. True
b. False
For many years, college costs (including tuition, fees, and room and board) increases have been higher than the inflation rate, averaging 5% to 8% per year. According to the College Board's Trends in College Pricing, the average total costs at present in dollars is $19,500 for students attending in-state four-year public colleges and universities and $41,000 for students at four-year private colleges and universities. Assume an additional $5,000 per year for textbooks, supplies, transportation, and other expenses.
Using a 7% per year inflation rate, how much can a sophomore high-school student expect to spend on in-state tuition, fees, and room and board for the freshman year (3 years from now) at a four-year public university?
A sophomore high-school student is expected to spend $ for the freshman year.
Answer: $23,888
Explanation:
The cost today for a freshman at a public university is $19,500.
Inflation is at 7% a year and the period is 3 years from now. It is best to use a future value formula:
= Fees * ( 1 + rate) ^ number of years
= 19,500 * ( 1 + 7%)³
= 19,500 * 1.225043
= $23,888
The rate established at the beginning of a period that uses estimated overhead and an allocation factor such as estimated direct labor, and that is used to assign overhead cost to jobs, is the: Multiple Choice Predetermined overhead rate. Overhead variance rate. Estimated labor cost rate. Chargeable overhead rate. Miscellaneous overhead rate.
Answer:
Predetermined overhead rate
Explanation:
The predetermined overhead rate is the rate that is computed by taking the estimated manufacturing overhead and the same would be divided by allocation factor that could be estimated direct labor, estimated direct hours, etc in order to assign the overhead cost
So according to the given situation, the first option is correct i.e. predetermined overhead rate
What is an example of goods?
O a hotel room
O a good haircut
O a car wash
O a hard cover book
Answer:
Hotel Room
Explanation:
a
An example of goods in the case is a hard cover book.
What is a goods?Most time, this are often tangible product that are felt and seen, unlike the service which are rendered and often intangible product
An example of service includes a hotel room, a good haircut and a car wash.
Therefore, the Option D is correct.
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Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations and sales activities for June. The journal entry to record June sales is:
Direct materials used $ 88,000
Direct labor used $ 161,800
Predetermined overhead rate (based on direct labor) 140 %
Goods transferred to finished goods $ 445,000
Cost of goods sold $ 457,000
Credit sales $ 833,400
A. Debit Accounts Receivable $833,400; credit Cost of Goods Sold $833,400.
B. Debit Accounts Receivable $833,400; credit Sales $376,400; credit Finished Goods Inventory $457,000.
C. Debit Cost of Goods Sold $457,000; credit Sales $457,000.
D. Debit Finished Goods Inventory $457,000; debit Sales $833,400; credit Accounts Receivable $833,400; credit Cost of Goods Sold $457,000.
E. Debit Accounts Receivable $833,400; credit Sales $833,400; debit Cost of Goods Sold $457,000; credit Finished Goods Inventory $457,000.
Answer:
E. Debit Accounts Receivable $833,400; credit Sales $833,400; debit Cost of Goods Sold $457,000; credit Finished Goods Inventory $457,000.
Explanation:
Based on the information given we were told that the Cost of goods sold was the amount of $ 457,000 while the Credit sales was the amount of $ 833,400 which means that the appropiate journal entry to record June sales is:
Debit Accounts Receivable $833,400
Credit Sales $833,400
(To record sales)
Debit Cost of Goods Sold $457,000
Credit Finished Goods Inventory $457,000
(To record sales)
On October 1, 2020, Adams Company paid $4,800 for a one-year insurance policy with the insurance coverage beginning on that date. On December 31, 2020, Adams needs to make adjusting entries to reflect the part of insurance that it has consumed. How will this adjusting entry affect the company's current ratio on December 31 2020
Answer:
Decrease the Current ratio
Explanation:
Current Ratio = Current Assets ÷ Current Liabilities
When the insurance is consumed, the assets in prepaid insurance decreases. So (three) 3 months insurance of $1,200 was consumed. Resulting in an expense of $1,200 and a decrease in assets of $1,200. Overall effect is a decrease in current ratio