Answer:
Kindly check the because my below submission is water tight
Explanation:
First and foremost, we need to determine the net income for both companies bearing in mind that the for firm A interest expense is 12% of debt capital whereas debt capital is 50% of total capital of $180,000 since the debt ratio(debt/total capital) of firm of Firm A is 50% and 0% for Firm NA
EBIT=$40,000
tax rate=35%
Firm A:
Debt capital=50%*$180,000=$90,000
Equity=50%*$180,000=$90,000
interest expense=$90,000*12%
interest expense=$10,800
Earnings before tax=$40,000-$10,800=$29,200
net income=earnings before-tax*(1-tax rate)
net income=$29,200*(1-35%)
net income=$18,980
return on equity=net income/equity
return on equity=$18,980/$90,000
return on equity=21.09%
Firm NA:
Equity=$180,000
debt=0%
EBIT=$40,000
no debt, no interest expense
net income=$40,000*(1-35%)
net income=$26,000
return on equity=$26,000/$180,000
return on equity=14.44%
ROEA - ROENA=21.09%-14.44%=6.65%
Distributing Cash Dividends to Preferred and Common Shareholders Dechow Company has outstanding 20,000 shares of $50 par value, 6% cumulative preferred stock, and 80,000 shares of $10 par value common stock. The company declares and pays cash dividends amounting to $160,000. a. If no arrearage on the preferred stock exists, how much in total dividends, and in dividends per share, is paid to each class of stock
Answer:
Preferred Stock = $60,000 and $3.00
Common Stock = $100,000 and $1.25
Explanation:
Dividends
Preferred Stock has preference when it comes to dividends payments. The remaining dividends are then paid to Common Stockholders.
Preferred Stock dividend = 20,000 x $50 x 6% = $60,000
Common Stock dividend = $160,000 - $60,000 = $100,000
Dividends per share
Preferred Stock dividend = $60,000 ÷ 20,000 shares = $3.00
Common Stock dividend = $100,000 ÷ 80,000 shares = $1.25
Dennis wants to determine if the discount rate really makes any difference in the net present value of a project. He feels that if a project is acceptable at one rate of return, it will be acceptable at all rates of return. To explain why his thinking is incorrect, you are creating an example to illustrate your point. The cash flows you are using are as follows: time zero is -$71,000, years 1 through 4 are $17,500 each, and years 5 and 6 are $22,500 each. What is net present value at a discount rate of 12 percent and 17 percent
Answer:
$6319,92
$-3959.52
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
Cash flow in year 0 = -$71,000
Cash flow in year 1 = $17,500
Cash flow in year 2 = $17,500
Cash flow in year 3 = $17,500
Cash flow in year 4 = $17,500
Cash flow in year 5 = $22,500
Cash flow in year 6 = $22,500
NPV when I is 12% = $6319,92
NPV when I is 17% = $-3959.52
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
Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on July 1 and operated at 100% of capacity during the first month. The following data summarize the results for July: 1 Sales (38,000 units) $9,500,000.00 2 Production costs (44,000 units): 3 Direct materials $4,400,000.00 4 Direct labor 1,760,000.00 5 Variable factory overhead 1,100,000.00 6 Fixed factory overhead 660,000.00 7,920,000.00 7 Selling and administrative expenses: 8 Variable selling and administrative expenses $1,170,000.00 9 Fixed selling and administrative expenses 200,000.00 1,370,000.00 Required: a. Prepare an income statement according to the absorption costing concept\.\* b. Prepare an income statement according to the variable costing concept\.\* c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)
Answer:
a.
income statement according to the absorption costing concept.
Sales $9,500,000.00
Less Cost of Sales ($6,840,000.00)
Gross Profit $2,660,000.00
Less Expenses
Variable selling and administrative expenses ($1,170,000.00)
Fixed selling and administrative expenses ($200,000.00)
Net Income $1,290,000.00
b.
income statement according to the variable costing concept
Sales $9,500,000.00
Less Cost of Sales ($6,270,000.00)
Contribution $3,230,000.00
Less Expenses
Fixed factory overhead ($660,000.00)
Variable selling and administrative expenses ($1,170,000.00)
Fixed selling and administrative expenses ($200,000.00)
Net Income $1,200,000.00
c.
The difference is due to fixed cost included in closing inventory under the absorption costing concept.
Explanation:
Production Cost - Absorption Costing
Direct materials $4,400,000.00
Direct labor $1,760,000.00
Variable factory overhead $1,100,000.00
Fixed factory overhead $660,000.00
Total $7,920,000.00
therefore,
Cost of Sales = 38,000 units/ 44,000 units x $7,920,000.00
= $6,840,000
Production Cost - Variable Costing
Direct materials $4,400,000.00
Direct labor $1,760,000.00
Variable factory overhead $1,100,000.00
Total $7,260,000.00
therefore,
Cost of Sales = 38,000 units/ 44,000 units x $7,260,000.00
= $6,270,000
a. Income Statement according to Absorption Costing Concept:
Sales: $9,500,000.00
Cost of Goods Sold:
Direct Materials: $4,400,000.00
Direct Labor: $1,760,000.00
Variable Factory Overhead: $1,100,000.00
Fixed Factory Overhead: $660,000.00
Total Manufacturing Costs: $7,920,000.00
Gross Profit: $1,580,000.00
Selling and Administrative Expenses:
Variable Selling and Administrative Expenses: $1,170,000.00
Fixed Selling and Administrative Expenses: $200,000.00
Total Selling and Administrative Expenses: $1,370,000.00
Operating Income: $210,000.00
b. Income Statement according to Variable Costing Concept:
Sales: $9,500,000.00
Variable Costs:
Direct Materials: $4,400,000.00
Direct Labor: $1,760,000.00
Variable Factory Overhead: $1,100,000.00
Variable Selling and Administrative Expenses: $1,170,000.00
Total Variable Costs: $8,430,000.00
Contribution Margin: $1,070,000.00
Fixed Costs:
Fixed Factory Overhead: $660,000.00
Fixed Selling and Administrative Expenses: $200,000.00
Total Fixed Costs: $860,000.00
Operating Income: $210,000.00
In absorption costing, fixed manufacturing overhead is treated as a product cost and is included in the cost of goods sold. This means that a portion of fixed overhead is allocated to each unit produced, resulting in higher inventory values and a higher cost of goods sold.
In variable costing, fixed manufacturing overhead is treated as a period cost and is not included in the cost of goods sold. It is instead expensed in the period incurred. This means that fixed overhead is only expensed when it is incurred and is not allocated to units in inventory.
Since the number of units produced (44,000 units) exceeded the number of units sold (38,000 units), the fixed overhead allocated to the 6,000 unsold units under absorption costing contributes to the difference in reported operating income between the two methods. In this case, the absorption costing method reports higher operating income due to the allocation of fixed overhead to units in inventory.
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Logan and Johnathan exchange land, and the exchange qualifies as like kind under § 1031. Because Logan's land (adjusted basis of $95,500) is worth $114,600 and Johnathan's land has a fair market value of $90,725, Johnathan also gives Logan cash of $23,875.
a. What is Logan's recognized gain?
b. Assume instead that Johnathan's land is worth $90,000 and he gives Logan $10,000 cash. Now what is Logan's recognized gain?
Answer:
A. $19,100 Recognized Gain or Fairmarket Value of ($23,875).
B.$19,100 Recognized Gain or Fairmarket Value of ($10,000).
Explanation:
a. Calculation to determine Logan's recognized gain
Based on the given information in a situation where Jonatha land is worth the amount of $90,725, which means Logan's RECOGNIZED GAIN will be $19,100, the lower of the REALIZED GAIN calculated as ($114,600 amount realized − $95,500 adjusted basis = $19,100) or the FAIRMARKET VALUE of the boot received of the amount of ($23,875).
b. Based on the information given assuming Johnathan and is been worth the Amount of $90,000 which therefore means that Logan's RECOGNIZED GAIN will be the amount of $19,100, the lower of the realized gain calculated as ($114,600 amount realized − $95,500 adjusted basis = $19,100) or the FAIRMARKET VALUE of the boot received OLog the amount of ($10,000).
In a statement of cash flows using the indirect method, an increase in the available-for-sale debt securities account due to an increase in the debt's fair value should be reported as: Group of answer choices A deduction from net income in determining cash flows from operating activities. Not reported. An investing activity. An addition to net income in determining cash flows from operating activities.
Answer: Not reported.
Explanation:
The Indirect method includes Net income in its calculation but this would not include any increase in Available-For-Sale (AFS) debt securities as these fall under other comprehensive income in the balance sheet.
Most importantly, the indirect method of calculating the cash the company has is for calculating just that, the cash. This means that an increase in the AFS security due to its fair value increasing will bring in no additional cash to the company so it is not reported in the cash flow statement.
The Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 3,840 liters in beginning work in process inventory (30% complete). During the period 64,880 liters were completed. The ending work in process was 5,160 liters (70% completed). All inventories are costed by the first-in, first-out method. What is the total equivalent units for direct materials (using the FIFO method) if materials were added at the beginning of the process
Answer:
Total equivalent units of materials = 64,652
Explanation:
Equivalent units are useful to apportion cost between work in progress and completed units. They are notional whole units which represent incomplete work
Equivalent Units = Degree of work completed (%) × inventory units
Fully worked = 64,880- 3,840= 61,040
Items units workings Equivalent units
Opening inventory 3,840 3840× 70% = 2,688
Fully worked 61,040 61,040× 100 = 61,040
Closing WIP 5,160 5,160× 70% = 3,612
Total equivalent units of materials 64,652
Total equivalent units of materials =64,652
Jose Consulting paid $540 cash for utilities for the current month. Determine the general journal entry that Jose Consulting will make to record this transaction. Multiple Choice Utilities Expense 540 Cash 540 Cash 540 Utilities Expense 540 Cash 540 Accounts Payable 540 Utilities Expense 540 Accounts Payable 540 Prepaid Utilities 540 Accounts Payable 540
Answer: Utilities Expense 540 Cash 540
Explanation:
Journal entry simply refers to the recording of transactions in a company's books. It should be noted that every transaction entered in the general ledger begins with a journal entry.
With regards to the question, the journal entry will be:
Debit Utilities expense $540
Credit Cash $540
You should consider a person's a. Grade in the class b. Personality before asking them to join your study group. C. All of these d. None of these
All of these
Hope it will helps you!
Required information Exercise 10-11 Effects of Changes in Profits and Assets on Return on Investment (ROI) [LO10-1] Skip to question [The following information applies to the questions displayed below.]
Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company's Springfield Club reported the following results for the past year:
Sales $ 780,000
Net operating income $ 17,940
Average operating assets $ 100,000
The following questions are to be considered independently.
Assume that the manager of the club is able to reduce expenses by $3,120 without any change in sales or average operating assets.
What would be the club’s return on investment (ROI)? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
Fitness Fanatics
Springfield Club
The return on investment (ROI) = = 21.06%
Explanation:
a) Data and Calculations:
Sales $ 780,000
Net operating income $ 17,940
Average operating assets $ 100,000
1. Assume that the manager of the club is able to reduce expenses by $3,120 without any change in sales or average operating assets, the return on investment would be:
= Net operating income/Average operating assets * 100
= ($ 17,940 + $3,120)/$ 100,000 * 100
= 21.06%
b) The return on investment metric measures an entity's financial performance, using the annual returns and average operating assets or initial investment cost.
The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoys great popularity, and the company has ample orders to keep production going at its full capacity of 2,000 sets per year. Annual cost data at full capacity follow:
Direct labor $ 118,000
Advertising $ 50,000
Factory supervision $ 40,000
Property taxes, factory building $ 3,500
Sales commissions $ 80,000
Insurance, factory $ 2,500
Depreciation, administrative office equipment$4,000
Lease cost, factory equipment $ 12,000
Indirect materials, factory $ 6,000
Depreciation, factory building $ 10,000
Administrative office supplies (billing) $ 3,000
Administrative office salaries $ 60,000
Direct materials used (wood, bolts, etc.) $ 94,000
Utilities, factory $ 20,000
Required:
1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.)
Cost Behavior
Selling or Administrative
Product Cost
Cost Item
Variable Fixed Cost Direct Indirect Direct labor$118,000$118,000Advertising50,00050,000Factory supervisionProperty taxes, factory buildingSales commissionsInsurance, factoryDepreciation, administrative office equipmentLease cost, factory equipmentIndirect materials, factoryDepreciation, factory buildingAdministrative office supplies (billing)Administrative office salariesDirect materials used (wood, bolts, etc.)Utilities, factoryTotal costs$118,000
2. Compute the average product cost of one patio set.
Average product cost per set = ????
3. Assume that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged?
Increase
Decrease
Remain unchanged
Answer:
1.COST BEHAVIOUR
Variable Fixed
$321,000 $182,000
SELLING OR ADMINISTRATIVE
Cost $197,000
PRODUCT COST
Direct Indirect
$212,000 $94,000
2. $153 per set
3. I would expect the average product cost per set to increase.
Explanation:
1. Calculation to Enter the dollar amount of each cost item under the appropriate headings
COST BEHAVIOUR
VARIABLE FIXED
Direct labor $118,000 $0
Advertising $0 $50,000
Factory supervision $0 $40,000
Property taxes, factory building$0 $3,500
Sales commissions$80,000 $0
Insurance, factory $0 $2,500
Depreciation, administrative office equipment$0 $4,000
Lease cost, factory equipment$0 $12,000
Indirect materials, factory $6,000 $0
Depreciation, factory building $0 $10,000
Administrative office supplies (billing) $3,000 $0
Administrative office salaries $0 $60,000
Direct materials used (wood, bolts, etc.)$94,000 $0
Utilities, factory $20,000 $0
TOTAL COSTS $321,000 $182,000
SELLING OR ADMINISTRATIVE
COST
Direct labor $0
Advertising $50,000
Factory supervision $0
Property taxes, factory building $0
Sales commissions $80,000
Insurance, factory $0
Depreciation, administrative office equipment $4,000
Lease cost, factory equipment $0
Indirect materials, factory $0
Depreciation, factory building $0
Administrative office supplies (billing) $3,000
Administrative office salaries$60,000
Direct materials used (wood, bolts, etc.) $0
Utilities, factory $0
TOTAL COSTS $197,000
PRODUCT COST
DIRECT INDIRECT
Direct labor $118,000 $0
Advertising $0 $0
Factory supervision $0 $40,000
Property taxes, factory building$0 $3,500
Sales commissions $0 $0
Insurance, factory $0 $2,500
Depreciation, administrative office equipment $0 $0
Lease cost, factory equipment$0 $12,000
Indirect materials, factory$0 $6,000
Depreciation, factory building $0 $10,000
Administrative office supplies (billing) $0 $0
Administrative office salaries $0 $0
Direct materials used (wood, bolts, etc.)$94,000 $0
Utilities, factory$0 $20,000
TOTAL COSTS $212,000 $94,000
Therefore the dollar amount of each cost item under the appropriate headings will be :
COST BEHAVIOUR
Variable Fixed
$321,000 $182,000
SELLING OR ADMINISTRATIVE
Cost $197,000
PRODUCT COST
Direct Indirect
$212,000 $94,000
2. Computation to determine the average product cost of one patio set.
Using this formula
Average product cost of one patio set =(Direct costs +Indirect costs)/Capacity set per year
Let plug in the formula
Average product cost of one patio set=($212,000+$94,000)/2,000 sets
Average product cost of one patio set =$306,000/2,000 sets
Average product cost of one patio set = $153 per set
Therefore The Average product cost of one patio set will be $153 per set
3. In a situation were the production drops I Would expect the average product cost per set to INCREASE, reason been that the fixed costs would extend over few units which will inturn cause the average cost per unit to increase.
Indirect: Computing cash flows from operation
Case X Case Y Case Z
Net income $7,200 $180,000 $129,600
Depreciation expense 54,000 14,400 43,200
Accounts receivable increase (decrease) 72,000 36,000 (7,200)
Inventory increase (decrease) (36,000) (18,000) 18,000
Accounts payable increase (decrease) 43,200 (39,600 ) 25,200
Accrued liabilities increase (decrease) (79,200 ) 21,600 (14,400)
For each of the above separate cases X, Y, and Z, compute cash flows from operations using the indirect method.
Answer:
CASE X CASE Y CASE Z
NET INCOME $7,200 $180,000 $129,600
ADJUSTMENT TO RECONCILE
NET INCOME TO NET CASH
DEPRECIATION $54,000 $14,400 $43,200
CHANGES IN ASSET & LIABILITIES
ACCOUNT RECEIVABLES $72,000 $36,000 ($7,200)
INVENTORY ($36,000) ($18,000) $18,000
ACCOUNT PAYABLE $43,200 ($39,600) $25,200
ACCRUED LIABILITY ($79,200) $21,600 ($14,400)
NET CASH PROVIDED BY $61,200 $194,400 $194,400
OPERATING ACTIVITY
Which of the following is not one of the three types of business arrangements in the United
States?
A. sole proprietorship
B. partnership
C. corporation
D. sole partnership
Answer:
a
Explanation:
The 1255 people residing in the state of Oz want their yellow brick road repaved. It could be repaved with standard asphalt for a cost of $163403 or with shimmering gold asphalt for $8623195. The senator that represents Oz in the national legislature argues that the yellow brick road is a national treasure and a tourist attraction. As such, the senator argues that the nation of 4363963 people should pay for the repaving. Round your answer to two decimals for all of the following questions.
What is the cost per person if the national government pays for gold asphalt?
$ ________ /person
What is the cost per person if the state of Oz pays for gold asphalt?
$ ________/person
What is the cost per person if the state of Oz pays for standard asphalt?
$________/person
Which asphalt will likely be chosen if the residents of Oz?
a. gold asphalt
b. standard asphalt
Which asphalt will likely be chosen if the national bear the cost of repaving?
government bears the cost of repaving?
a. gold asphalt
b. standard asphalt
Answer:
Part 1
Option b, Standard Asphalt as it will cost less per person as compared to the Gold Asphalt.
Part 2
Option B, Standard Asphalt as it will cost less per person as compared to the Gold Asphalt
Explanation:
Given
Total Population of the nation = 4363963
Total population of the state of OZ = 1255
The cost per person if the national government pays for gold asphalt = $8623195/4363963 = 1.976 dollars per person
The cost per person if the state of Oz pays for gold asphalt =
$ 8623195/1255= $6871 per person
The cost per person if the state of Oz pays for standard asphalt =
$163403/1255 = $130 per person
Part 1
Option b, Standard Asphalt as it will cost less per person as compared to the Gold Asphalt.
Part 2
Option B, Standard Asphalt as it will cost less per person as compared to the Gold Asphalt
the objective section of a resume should consist of no more than:
A. One to two sentences
B. One page
C. A half-page
D. One paragraph
Answer:A
Explanation:
A p e x
Answer:
A. One to two sentences
Explanation:
You dont want whomever is reading your resume to think that you are full of yourself.
palmer corp is considering the purchase of new equipment the cost savings from the equipment would result in the annual increase income after tax of 133500 the equipment will have an initial cost of 534000 and have a 7 year life is the salvage value estimated to be 9000 what is estimated to be the payback period
Answer:
Payback period= 4 years
Explanation:
The payback period is the estimated length of time in years it takes
the net cash inflow from a project to equate the net cash the initial cost.
Where a project is expected to generate a series of equal annual net cash inflow, the payback period can be calculated as:
The initial invest /Net cash inflow per year
So the payback period for project X
= $534,000/133,500
= 4 years
Payback period= 4 years
Define your seven weakness and seven strengths with reason
Answer:
weakness
1 i am very sensitive because small things make me feel very bad
2 i cannot say no to anyone because i care about people thought
3 i cannot control my anger i have anger issue
4 i am very extra kind to everyone so many people takes advantage
5 i keep expecting many things from people and result make me sad
6 i cant be angry for a long time it is very easy for making me happy
7 i dont want to share my close person with other
Although the Fed has very strong influence over the money supply, it does not have complete control a.Because the Fed has no idea how much reserves will change when it buys or sells securities. b.Because of unpredictable changes in the public's desire to hold cash or borrow and banks' desires to hold reserves or lend. c.Because of unpredictable changes in reserve requirements. d.Because the FOMC meets only twice a year.
Answer: b. Because of unpredictable changes in the public's desire to hold cash or borrow and banks' desires to hold reserves or lend.
Explanation:
The Fed is able to embark on monetary policy that influences the entire country - and the world to some extent - because they have very strong influence over the money supply of the US$.
This influence is not absolute however because as the old adage goes, "you can lead a horse to water but you can't make him drink". In other words, the Fed can relax(impose) restrictions to make money more(less) available but they cannot force people to borrow(hold) that money.
They can't force banks either to either hold reserves or lend money out because banks are free to impose their own reserve limits on top of those of the Fed.
Suppose you can only invest in the stock markets of two countries: US and China. The US has an expected return of 5.0% and a standard deviation of 15.0%. China has an expected return of 7.0% and a standard deviation of 22.0%. The correlation between the returns in the two markets is 0.3. The risk-free rate is 3.0%. What is the maximum Sharpe ratio you can obtain (rounded to the nearest 0.001)
Answer:
The maximum Sharpe ratio you can obtain is 0.182.
Explanation:
Sharpe ratio = (Stock's expected return - Risk-free rate) / Standard Deviation …………… (1)
Therefore, we have:
Sharpe ratio of the US stock market = (5.0% - 3.0%) / 15.0% = 0.133
Sharpe ratio of China stock market = (7.0% - 3.0%) / 22.0% = 0.182
Since you can only invest in the stock markets of US and China, and the Sharpe ratio of China stock market of 0.182 is greater than the Sharpe ratio of the stock market of 0.133, this implies that the maximum Sharpe ratio you can obtain is 0.182.
Selma Inc. is comparing several alternative capital budgeting projects as shown below.
Projects A B C
Initial Investment $40,000 $60,000 $80,000
Present value of cash inflows $60,000 $55,000 $100,000
Using the profitability index, rank the projects, starting with the most attractive.
Answer:
A
C
B
Explanation:
1.5
0.9
The unadjusted trial balance at year-end for a company that uses the percent of receivables method to determine its bad debts expense, reports the following selected amounts: Accounts receivable $ 431,000 Debit Allowance for Doubtful Accounts 1,390 Debit Net Sales 2,240,000 Credit All sales are made on credit. Based on past experience, the company estimates 2.5% of ending account receivable to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense
Answer:
Bad Debts Expense $9,385 & Allowance for Doubtful Accounts $9,385
Explanation:
Bad debt expense = ($431,000 *2.5%) - $1,390
Bad debt expense = $10,775 - $1,390
Bad debt expense = $9,385
Adjusted Entry
Debit - Bad Debts Expense $9,385
Credit - Allowance for Doubtful Accounts $9,385
A company's flexible budget for 22,000 units of production showed per unit contribution margin of $3.50 and fixed costs, $38,600. The operating income expected if the company produces and sells 28,000 units is:
Answer:
$59,400
Explanation:
Operating income = Contribution - Fixed Costs
therefore,
At the activity of 28,000 units results will be :
Contribution (28,000 units x $3.50) $98,000
Less Fixed Costs ($38,600)
Operating Income $59,400
Thus,
The operating income expected if the company produces and sells 28,000 units is $59,400
On January 1, 2021, Pine Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Pine to make annual payments of $800,000 at the beginning of each year for five years beginning on January 1, 2021 with the title passing to Pine at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Pine uses the straight- line method of depreciation for all of its fixed assets. Pine accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $3,335,888 at an effective interest rate of 10%. In 2021, Pine should record interest expense of:______.
a. 333,589
b. 253,589
c. 466,411
d. 546,411
Answer:
b. 253,589
Explanation:
According to the scenario, computation of the given data are as follows,
Present value of lease payment = $3,335,888
Payment in 2021 = $800,000
Interest rate = 10%
So, we can calculate the interest expense by using following formula,
Interest expense = (Present value of lease payment - Payment in 2021 ) × interest rate
Interest expense = ($3,335,888 - $800,000) × 10%
= $2,535,888 × 10%
= $253,588.8 or $253,589
In 2021, Pine should record interest expense of $253,589
Twix Dots Skor
Net income $4,200 $106,000 $76,800
Depreciation expense 31,600 8,400 25,600
Accounts receivable increase (decrease) 42,200 21,000 (4,200 )
Inventory increase (decrease) (21,200 ) (10,600 ) 10,600
Accounts payable increase (decrease) 25,400 (23,400 ) 14,800
Accrued liabilities increase (decrease) (46,600 ) 12,800 (8,400 )
Required:
For each separate company, compute cash flows from operations using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Twix, Dots, and Skor
Twix Dots Skor
Net income $4,200 $106,000 $76,800
Depreciation expense 31,600 8,400 25,600
Accounts receivable increase (decrease) 42,200 21,000 (4,200 )
Inventory increase (decrease) (21,200 ) (10,600 ) 10,600
Accounts payable increase (decrease) 25,400 (23,400 ) 14,800
Accrued liabilities increase (decrease) (46,600 ) 12,800 (8,400 )
Cash flows from operations ($6,400) $93,400 $102,400
Explanation:
a) Data and Calculations:
Twix Dots Skor
Net income $4,200 $106,000 $76,800
Depreciation expense 31,600 8,400 25,600
Accounts receivable increase (decrease) 42,200 21,000 (4,200 )
Inventory increase (decrease) (21,200 ) (10,600 ) 10,600
Accounts payable increase (decrease) 25,400 (23,400 ) 14,800
Accrued liabilities increase (decrease) (46,600 ) 12,800 (8,400 )
b) Depreciation is added back to the net income. Increases in current assets are cash outflows, reducing cash flows, while decreases are cash inflows, increasing cash flows. On the other hand, increases in current liabilities are cash inflows, increasing cash flows, while decreases are cash outflows, reducing cash flows.
what's the meaning of GDP?
what's the meaning of GDP?
It means Gross domestic product.
Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.
Gross domestic product tracks the health of a country's economy. It represents the value of all goods and services produced over a specific time period within a country's borders. ... Investors can use GDP to make investments decisions—a bad economy means lower earnings and lower stock prices.
Identify the statement below that is true regarding the Allowance for Doubtful Accounts account. Multiple Choice The account has a normal credit balance and is reported on the balance sheet. The account has a normal debit balance and is reported on the balance sheet. The account has a normal credit balance and is reported on the income statement. The account has a normal debit balance and is reported on the income statement.
Answer: The account has a normal credit balance and is reported on the balance sheet.
Explanation:
The allowance for doubtful accounts refers to the amount of account receivable that the company believes will not be paid by the customers. It is referred to as the bad debt reserve as well.
The allowance for doubtful accounts reduces the accounts receivable. It also has a normal credit balance and is reported on the balance sheet.
Liam works at an IT firm. He finds that the activities carried out by his team are very complex and struggles to complete his tasks on time. He learns that some of his team members are also facing the same issue. Even though there is clarity of the target among the team members, the team struggles to efficiently carry out its task. Which of the following should the team do in order to ensure the completion of the tasks?
It should change the output and retain the workforce.
It should use informal communication to carry out its tasks.
It should standardize the work activities through flowcharts.
It should conduct an in-house training program to bring employees up to speed.
Team-based organizational structures are usually organic and highly decentralized.
True
False
Answer:
It should conduct an in-house training program to bring employees up to speed.
true
Explanation:
An inhouse training would be appropriate to help team members overcome their struggles with the complexity of the tasks. the training would provide more clarification on the tasks to be carried out. this would have the effect of making the task look less complex. Even though there is clarity on the target, there is no clarity on the steps to take to reach the target. Thus, a training is needed.
Team-based organizational structures is when the employees of an organisation are divided into teams. these teams work separately but they work towards a common goal . The structure is usually decentralised. Decisions are made within teams instead of decisions been made by one central body.
Advantages of Team-based organizational structures
communication between employees are faster and more effectiveit increases teamwork Problems are resolved fasterDisadvantages of Team-based organizational structures
it might be difficult to identify employees with low performance as they might be able to hide behind their teamsCharacteristics of an organic organisation includes :
few levels of management,decentralized decision-making, a short chain of command.these are characteristics of a team based organisational structure
Baymont Corporation purchased inventory on account on March 3, 2017, for a gross price of $50,000. The company purchased additional inventory on account on March 10, 2017, for a gross price of $140,000. Baymont Corporation paid for the frst purchase on April 25, 2017, and for the second purchase on March 20, 2017. The company prepares monthly adjusting journal entries and uses the perpetual inventory method. Prepare journal entries for each transaction.
Answer:
Baymont Corporation
Journal Entries:
March 3, 2017: Debit Inventory $50,000
Credit Accounts payable $50,000
To record the purchase of goods on account.
March 10, 2017: Debit Inventory $140,000
Credit Accounts payable $140,000
To record the purchase of goods on account.
March 20, 2017: Debit Accounts payable $140,000
Credit Cash $140,000
To record the payment for goods purchased on account.
April 25, 2017: Debit Accounts payable $50,000
Credit Cash $50,000
To record the payment for goods purchased on account.
Explanation:
a) Data and Analysis:
March 3, 2017: Inventory $50,000 Accounts payable $50,000
March 10, 2017: Inventory $140,000 Accounts payable $140,000
March 20, 2017: Accounts payable $140,000 Cash $140,000
April 25, 2017: Accounts payable $50,000 Cash $50,000
Neumann Corporation issues convertible preferred stock that is mandatorily redeemable five years from the date of issuance. During the last two years that the preferred shares are outstanding, investors may convert each one share of preferred stock to two shares of common stock. Prior to conversion or redemption, the preferred shares should be classified on the balance sheet as:
Answer:
Equity
Explanation:
The preferred shares should be classified on the balance sheet as equity. Equity is the residue after Liabilities are deducted from the Assets. They also represents owners investments in the company.
The preferred shares should be recorded as equity on the balance sheet. After Liabilities are subtracted from Assets, Equity is the remaining amount. They also symbolize the company's investments by its owners.
About Equity:
The worth of a company's own shares is referred to as equity. This is most commonly used in the context of a company's balance sheet, and its valuation is determined by a precise computation. More exactly, equity is a company's total, liquid value less any outstanding loans or liabilities. Understanding what this term signifies is critical to comprehending a company's finances.
For more information about equity refer to the link:
https://brainly.com/question/13278063
Part U67 is used in one of Broce Corporation's products. The company's Accounting Department reports the following costs of producing the 15,400 units of the part that are needed every year.
Per Unit
Direct materials $2.30
Direct labor $3.30
Variable overhead $6.10
Supervisor's salary $6.60
Depreciation of special equipment $7.70
Allocated general overhead $4.80
An outside supplier has offered to make the part and sell it to the company for $27.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $21,400 of these allocated general overhead costs would be avoided.
Required:
a. Prepare a report that shows the financial impact of buying part U67 from the supplier rather than continuing to make it inside the company.
b. Which alternative should the company choose?
Answer:
Broce Corporation
a. The Financial Impact of Buying Part U67 is as follows:
Differential Analysis:
Cost of buying from supplier = $415,800 (15,400 * $27)
Avoidable cost of making = 303,220
Differential cost for buying = $112,500
b. The company should choose to continue to produce the part internally.
Explanation:
a) Data and Calculations:
Production units for the year = 15,400
Per Unit Costs:
Direct materials $2.30
Direct labor $3.30
Variable overhead $6.10
Total variable costs $11.70
Supervisor's salary $6.60
Depreciation of special equipment $7.70
Allocated general overhead $4.80
Total fixed costs $19.10
Total costs $30.80
Outside supplier's offer per unit = $27
Avoidable costs:
Direct materials $2.30
Direct labor $3.30
Variable overhead $6.10
Supervisor's salary $6.60
Total avoidable variable costs $18.30 * 15,400 = $281,820
General overhead costs 21,400
Total avoidable costs = $303,220
Differential Analysis:
Cost of buying from supplier = $415,800 (15,400 * $27)
Avoidable cost of making = 303,220
Differential cost for buying = $112,500
Second-degree price discrimination: Multiple Choice results in transfer pricing. None of the answers are correct. is the practice of posting a discrete schedule of declining prices for different ranges of quantities. eliminates the problem of double marginalization.
Answer:
is the practice of posting a discrete schedule of declining prices for different ranges of quantities
Explanation:
In the case of the second degree price discrimination, the firm should chares the different kinds of the prices as per the quantity demanded i.e. if the large quantities are ordered so it should be charged at the less price and if the small quantities are ordered so it should be charged at the high prices. The motive behind this is to motivate the bulk sales that means when the buyer purchased the products in bulk so he will get the high discounts
Therefore the third option is correct