Answer:
The net profits are as follows:
Total Company = $647,200
Weedban = $161,605
Greengrow = $485,595
Explanation:
Note: See the attached excel for the contribution format income statement segmented by product lines.
In the attached excel file, the following formula is used:
Allocation of common fixed expenses to Weedban = (Units of Weedban / (Units of Weedban + Units of Greengrow)) * Common fixed expenses = (41,500 / (41,500 + 24,000) * $113,000 = $71,595
Allocation of common fixed expenses to Greengrow = (Units of Greengrow / (Units of Weedban + Units of Greengrow)) * Common fixed expenses = (24,000 / (41,500 + 24,000) * $113,000 = $41,405
From the attached excel file, the net profits are as follows:
Total Company = $647,200
Weedban = $161,605
Greengrow = $485,595
Fowler, Inc., just paid a dividend of $2.60 per share on its stock. The dividends are expected to grow at a constant rate of 5.75 percent per year, indefinitely. Assume investors require a return of 12 percent on this stock.
a. What is the current price?
b. What will the price be in four years and in sixteen years?
Answer:
a. Current price = $43.99
b. We have:
Price in four years = $52.03
Price in sixteen years = $101.76
Explanation:
a. What is the current price?
Using the Gordon Growth Model formula, we have:
Current price = (Dividend just paid * (100% + Dividend growth rate)) / (Rate of return – Dividend growth rate) = ($2.60 * (100% + 5.75%)) / (12% - 5.75%) = $43.99
b. What will the price be in four years and in sixteen years?
Using the Gordon Growth Model formula with an adjustment for number of years, we have:
Price in four years = (Dividend just paid * (100% + Dividend growth rate)^Number of years) / (Rate of return – Dividend growth rate) = ($2.60 * (100% + 5.75%)^4) / (12% - 5.75%) = $52.03
Price in sixteen years = (Dividend just paid * (100% + Dividend growth rate)^Number of years) / (Rate of return – Dividend growth rate) = ($2.60 * (100% + 5.75%)^16) / (12% - 5.75%) = $101.76
Suppose that a share of common stock is expected to pay a $3 dividend one year from now, and thereafter each annual dividend payment will increase by 4% over the prior payment. The effective annual interest rate is 12%. Find the modified duration of this share of stock.
Answer:
13
Explanation:
Modified duration of stock = (1 + Growth rate) / (Effective rate - Growth rate)
Modified duration of stock = (1 + 4%) / (12% - 4%)
Modified duration of stock = (1 + 0.04) / 0.08
Modified duration of stock = 1.04 / 0.08
Modified duration of stock = 13
So, the modified duration of this share of the stock is 13.
Following the law is:______. a. unimportant as a standard of business behavior b. the maximum standard of behavior we expect from business c. an unrealistic expectation for business behavior d. the minimum standard of behavior we expect from business
Answer:
b. the maximum standard of behavior we expect from business
Explanation:
In the laws of business, it is expected according to the law that as much possible, we accept the maximum standard of behavior from any businesses. While doing a business, we all have to follow the business ethics and always follows the laws of the businesses. The behavior of business should be of maximum standard and should comply with the rules and ethics with the related businesses.
Thus the correct option is (b).
MC Qu. 113 Kayak Company uses a job order costing... Kayak Company uses a job order costing system and allocates its overhead on the basis of direct labor costs. Kayak Company's production costs for the year were: direct labor, $35,000; direct materials, $55,000; and factory overhead applied $6,500. The overhead application rate was:
Answer:
$0.19 per direct labor hour
Explanation:
It is important to keep in mind the following :
Overhead application rate = Budgeted Overheads ÷ Budgeted Activity
also,
Applied Overheads = Overhead application rate x Actual Activity
Using the formula :
Applied Overheads = Overhead application rate x Actual Activity
hence,
Overhead application rate = Applied Overheads ÷ Actual Activity
therefore,
Overhead application rate = $6,500 ÷ $35,000
= $0.185 or $0.19 per direct labor hour
What happens to the price of a three-year annual coupon paying bond with an 8% coupon when interest rates change from 8% to 8.96%
Answer:
It would reduce to -24.3185
Explanation:
I solved this on paper and have added the solution as an attachment
At 8% rate of interest the price of this bond is 1000
At 8.96% rate of interest the calculated price of the coupon bond is 975.681
975.681-1000 = -24.3185
When the interest rate falls from 8% to 8.96%, the price of the bond reduces by -24.3185
Part 1
a) Well done! From 2007 Q4 to 2009 Q2, real GDP fell from $15,762 to $15,134.1, or by -3.58%.
b) That's right! The deflator rose from 93.15 to 94.84, or 182%. If you put 1.74%, that's an approximation.
Part 2. Good! In each of those quarters, real GDP was lower than in the previous quarter.
Part 3. You had the right idea, but you assumed that real GDP grow at 3% for only one year
By the end of 2009, the economy had recovered slightly; however, the economy was still smaller than it was two years prior. From 2007 to 2009, real GDP had fallen from $15,762 billion to $15,356 billion. How deep was the recession?
Suppose that the long-run growth trend of real GDP was 3% per year. If the economy had grown at 3% per year since 2007, there was a shortfall of_____billion at the end of 2009.
Answer: $1,365.91
Explanation:
Shortfall = Expected GDP - Actual GDP
Expected GDP in 2009 is based on the premise that the economy has grown by 3% since 2007.
Expected GDP in 2009 will therefore be;
= 15,762 * ( 1 + 3%)²
= $16,721.91
Shortfall = 16,721.91 - 15,356
= $1,365.91
Suppose that the inflation rate is 2% and the real terminal value of an investment is expected to be $82,500 in 4 years. Calculate the nominal terminal value of the investment at the end of year 4.
Answer: $89300.65
Explanation:
Based on the information given in the question, the nominal terminal value of the investment at the end of year 4 will be calculated thus:
Inflation rate = 2%
Real terminal value of investment = $82,500
Normal terminal value of investment will be:
= $82500 × (1+2%)⁴
= $82500 × (1 +0.02)⁴
= $82500 × 1.02⁴
= $89300.65
Garcia Corporation purchased a truck by issuing an $80,000, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck
Answer: See explanation
Explanation:
The journal entry to record the purchase of the truck will be:
Dr Trucks $54641
Dr Discount on Notes Payable $25359
Cr Notes Payable $80000
Note:
Face value of Note = $80000
× PV factor = 1/1.10⁴ = 0.68301
Present value of Face value of Note = $54641
The Cavendish Company is considering a project with an initial investment of $8 million that has an accounting rate of return of 25%. The project will generate an annual net cash flow of $1.75 million and annual net operating income of $2 million. What is the project's payback period?
Answer:
4 years and 2 months
Explanation:
The project's payback period is the length of time that the future cash flows take to equal the initial investment of the project.
Initial Investment = $8 million
Annual cash flows = $1.75 million
It will take 4 years and 2 months ($1 million /$8 million x 12) for annual cashflows to equal the Initial Investment of $8 million.
Plastic Products Ltd is a company business whole the country that produces and markets plastic cups, teaspoons, knives and forks for the catering industry. The company was established in 2010 in response to the changes taking place in the catering industry. The growth of the fast-food sector of the market was seen as an opportunity to provide disposable eating utensils which would save on human resources and allow the speedy provision of utensils for fast customer flow. In addition, Plastic Products has benefited from the growth in supermarkets, convenience stores and food processed manufacturers. The expansion of sales and outlets has led Mr. Long, the sales manager, to recommend to Mr. An, the general manager, that the present sales force should be increased. Mr. Long believes that the new recruits should have experience of selling fast-moving consumer goods since essentially that is what his products are. Mr. An believes that the new recruits should be familiar with plastic products since that is what they are selling. He favors recruiting from within the plastics industry, since such people are familiar with the supply, production and properties of plastic field.
Answer:
ooffffano yan bul bul ka ba!?
Globalization of Market is taking place because of ___________.
Which of the following entries could be considered as an adjusting entry? Group of answer choices Debit to Cash and Credit to Revenues Debit to Cash and Credit to Liabilities Credit to Cash and Debit to Expenses Debit to Expenses and Credit to Liabilities
Answer:
The entry that could be considered as an adjusting entry is:
Debit to Expenses and Credit to Liabilities
Explanation:
For example, to accrue salaries expenses in an accounting period when the cash payments have not been made, the Salaries Expenses account is debited with the amount of the unpaid salaries while the corresponding credit entry goes to the Salaries Payable account. Depreciation expense is also debited while the corresponding credit entry is made in the accumulated depreciation account.
Productivity is difficult to measure because precise units of measure are available, quality is consistent, and exogenous variables don't change. True False
Answer:
False
Explanation:
All of the statements being made are False. Productivity is measured by stats. For example, in any given month a certain number of products are produced by a fixed number of employees, the next month the same value is calculated and compared with the previous month. This lets you know if productivity is increasing or decreasing. The quality of anything depends on the time and effort being implemented in making something, if this changes then so does the quality. Exogenous variables are simply variables that are not affected by other variables in a given environment, this does not mean that they cannot change. Even though they are independent they can still change. For example, the weather is an exogenous variable but it can still change from Raining to Sunny.
All sales are made on credit. Based on past experience, the company estimates 0.3% of net credit sales 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:
Missing word "A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts receivable $350,000 debit, Allowance for uncollectible accounts 650 debit, Net Sales 795,000 credit"
Net credit sales = $795,000
Bad debt expense = 0.3% * Net credit sales
Bad debt expense = $795,000 * 0.3%
Bad debt expense = $2,385
Adjusting entry
Date General Journal Debit Credit
Bad debt expense $2,385
Allowance for uncollectible accounts $2,385
(To record bad debt expense)
Fortuna Company is preparing its statement of cash flows. Cash disbursements during the year included:
Answer: $100,000
Explanation:
Financing activities are those that relate with how the company finances its operations and includes cashflows related to equity and long term liability.
The financing activities outflows here total:
= Payment of dividends to stockholders
= $100,000
The two other cashflows are considered investing activities.
On March 1, 2018, Lewis Services issued a 5% long-term notes payable for $25,000. It is payable over a 5-year term in $5,000 principal installments on March 1 of each year, beginning March 1, 2019. Which of the following entries needs to be made on March 1, 2018?
A. Long - Term Notes Payable 25,000
Accounts Payable 25,000
B. Long - Term Notes Payable 5,000
Cash 5,000
C. Cash 25,000
Long - Term Notes Payable 25,000
D. Current Portion of Long - Term Notes Payable 25,000
Long - Term Notes Payable 25,000
Answer:
C. Cash 25,000
Long - Term Notes Payable 25,000
Explanation:
Based on the information given we were told that on MARCH 1, 2018, the company issued a 5% long-term notes payable for the amount of $25,000 which therefore means that the appropriate journal entries that is needed to be made on March 1, 2018 will be:
March 1, 2018
Dr Cash $25,000
Cr Long term notes payable $25,000
A married couple with only one spouse currently working outside the home plans to retire in several years. An annuity that would be particularly suitable for saving for that retirement would be:_________
a. a straight life annuity on the life of the working spouse,
b. a straight life annuity on the life of the nonworking spouse,
c. a deferred joint and survivor annuity,
d. an immediate joint and survivor annuity.
Answer:
b i'm not sure but don't go by my answer please i don't want to get u wrong
Explanation:
Broker Bill has the exclusive listing for Terri’s home. Bill brought Terri an offer from Alexis, which Terri accepted. In order to expedite the transaction, Bill offered to handle the escrow if both Terri and Alexis agreed. Which statement is true?
Answer: Bill's offer is ethical and legal and he can accept compensation for handling the escrow.
Explanation:
An exclusive listing refers to the type of real estate listing agreement whereby a broker is chosen as the sole agent of the seller. It should be noted that the right to retain the property is held by the seller rand has no obligation to the broker.
Based on the information given, it can be infered that Bill's offer is ethical and legal and he can accept compensation for handling the escrow.
The Gear Division makes a part with the following characteristics:
Production capacity 25,000 units
Selling price to outside customers $ 18
Variable cost per unit $ 11
Fixed cost, total $ 100,000
Motor Division of the same company would like to purchase 10,000 units each period from the Gear Division. The Motor Division now purchases the part from an outside supplier at a price of $17 each. Suppose that the Gear Division is operating at capacity and can sell all of its output to outside customers. If the Gear Division sells the parts to Motor Division at $17 per unit, the company as a whole will be:
a. better off by $10,000 each period.
b. worse off by $20,000 each period.
c. worse off by $10,000 each period.
d. There will be no change in the status of the company as a whole.
Answer:
Effect on income= -10,000
Explanation:
Giving the following information:
Production capacity 25,000 units
Selling price to outside customers $ 18
Variable cost per unit $ 11
Fixed cost, total $ 100,000
First, we need to calculate the unitary total production cost:
Total unitary cost= (100,000/25,000) + 11
Total unitary cost= $15
The company can sell all of its production to outside customers and gain $3 from the sale. But, by selling to the Motor Division, it gains $2.
Now, the effect on income:
Effect on income= increase in income by not buying the part - decrease in sales revenue for not selling to outside customers
Effect on income= 10,000*2 - 10,000*3
Effect on income= 20,000 - 30,000
Effect on income= -10,000
What is the amount of the risk premium on a U.S. Treasury bill if the risk-free rate is 2.8 percent and the market rate of return is 8.35 percent
Answer:
5.55%
Explanation:
risk premium = market rate of return - risk free rate
8.35 - 2.8 = 5.55
MC Qu. 111 A company has an overhead application... A company has an overhead application rate of 124% of direct labor costs. How much overhead would be allocated to a job if it required total labor costing $23,000
Answer:
$28,520
Explanation:
Calculation to determine How much overhead would be allocated to a job if it required total labor costing $23,000
Using this formula
Overhead=Total Labor Cost x Overhead Application Rate
Let plug in the formula
Overhead=$23,000 x 1.24
Overhead= $28,520
Therefore How much overhead would be allocated to a job if it required total labor costing $23,000 will be $28,520
Howard Inc. had prepaid rent of $79,000 and $88,000 at the end of Year 1 and Year 2, respectively. During Year 2, Howard recorded $244,000 in rent expense in its income statement. Cash outflows for rent in Year 2 were:
Answer:
the Cash outflows for rent in Year 2 is $253,000
Explanation:
The computation of the Cash outflows for rent in Year 2 is shown below:
Prepaid rent at year 2 $88,000
Add: rent expense $244,000
Less: prepaid rent in year 1 -$79,000
Cash outflows for rent in year 2 $253,000
Hence, the Cash outflows for rent in Year 2 is $253,000
Swifty Corporation purchased a truck at the beginning of 2020 for $109600. The truck is estimated to have a salvage value of $4100 and a useful life of 123000 miles. It was driven 18000 miles in 2020 and 26000 miles in 2021. What is the depreciation expense for 2020?
a. $37752
b. $22308
c. $16639
d. $15444
Answer:
Annual depreciation= $15,444
Explanation:
Giving the following information:
Purchase price= $109,600
Salvage value= $4,100
Useful life= 123,000
Miles driven 2020= 18,000
To calculate the depreciation expense, we will use the units-of-production method:
Annual depreciation= [(original cost - salvage value)/useful life of production in miles]*miles drive
Annual depreciation= [(109,600 - 4,100)/123,000]*18,000
Annual depreciation= 0.858*18,000
Annual depreciation= $15,444
How much would you have had to invest now in an account paying 8% / year to to have $20,000 in 21 years
Answer:
PV= $3,978.115
Explanation:
Giving the following information:
Interest rate (i)= 8% = 0.08
Future value (FV)= $20,000
Number of periods (n)= 21 years
To calculate the lump-sum to be invested today, we need to use the following formula:
PV= FV / (1 + i)^n
PV= 20,000 / (1.08^21)
PV= $3,978.115
A student borrows $95,000 for business school at 4.5% stated annual interest with monthly repayment over 9 years. Consider this as a loan with no payments or interest during school so that the problem structure is equivalent to a standard loan received one period before the first payment. Suppose that to better match expected student salary growth over time, the loan is structured as a growing annuity with each monthly payment growing by 0.3% compared to the previous monthly payment. How much is the first monthly payment
Answer:
$918.70 or $900
Explanation:
The computation of the first monthly payment is given below:
Interest rate per Month is
= Annual Rate ÷ 12
= 4.50% ÷ 12
= 0.375%
Now
Present Value of Growing Annuity = First payment × (1 - ((1 + Growth Rate) ÷ (1 + Interest Rate))^Periods) × 1 ÷ (Interest Rate - Growth Rate)
95000 = First payment × (1 - ((1 + 0.30%) ÷ (1 + 0.375%))^108) × 1 ÷ (0.375% - 0.30%)
95000 = First payment × (1 - 0.999252^108) × 1 ÷ (0.075%)
95000 = First payment × (1 - 0.92244) × 1 ÷ (0.075%)
95000 = First payment × 103.4067
First payment = $918.70 or $900
Sansa, Cercei, and Tyrion have just finished their team's project and are waiting for their supervisor's feedback. Cercei has been mostly unengaged and quiet ever since the project started. While this was not her best work, neither was her work bad. Her mood would be categorized as Group of answer choices deactivated. negative activated. intense negative. intense positive. positive activated.
Answer:
Cercei's mood would be categorized as:
negative activated.
Explanation:
Moods do not last longer than emotions. Like Cercei's that unengaged and quiet mood during the project duration, it starts and ends within some period of time. However, a person's mood can be described as either negative or positive. Since Cercei's mood was negative from the commencement of the project to its ending, one can conclude that she activated her negative mood during the period.
Jillian Diaz receives a regular salary of $1,500 a month and is entitled to overtime pay at the rate of one and one-half times the regular hourly rate for any time worked in excess of 40 hours per week. Diaz's overtime pay rate is a.$6.92. b.$1,800. c.$12.98. d.$276.92.
Answer: $14.07
Explanation:
The regular salary of $1,500 is based on a 40-hour week.
The rate per hour assuming 4 weeks is:
= 1,500 / (40 * 4)
= $9.38
Overtime rates are one and one-half times the regular hourly rate:
= 9.38 * 1¹/₂
= $14.07
Duerr company makes a $67,000, 90-day, 10% cash loan to Ryan Co. The maturity value of the loan is: (Use 360 days a year.)
Answer:
the maturity value of the loan is $68,675
Explanation:
The maturity value of the loan is shown below:
= Loan amount + interest charged
= $67,000 + ($67,000 × 10% × 90 days ÷ 360 days)
= $67,000 + $1,675
= $68,675
hence, the maturity value of the loan is $68,675
Under the accrual basis of accounting, many of the account balance in the ledger at the end of the accounting period are reported in the financial statement without change. Some accounts require updating, though. When preparing financial statements, the economic life of the business is divided into time periods. The matching principle states that:___________.
1. A purchase made by a business is matched with the actual cost of the item
2. The accounting records and reports are matched with objective evidence
3. The transactions of a business are matched with the transactions of hs owner, creditors and other bussiness
4. The expenses incurred during a period are matched with the reverse that those expenses generated.
Answer: 4. The expenses incurred during a period are matched with the revenues that those expenses generated.
Explanation:
The accrual basis of accounting works by matching accounting transactions to the period that they occur in. For instance, if revenue is sold in year 1 but the cash for it is only received in year 2, the revenue will be recorded for year 1.
The matching principle falls under the accrual basis and matches the expenses in a period to the revenue that the expenses generated in that same period. This is why the expenses in the income statement are only those that occurred in the current period and expenses for future periods are put in the balance sheet.
On January 1, 2019, Caswell Company signs a 10-year cancelable (at the option of either party) agreement to lease a storage building from Wake Company. The following information pertains to this lease agreement:
1. The agreement requires rental payments of $100,000 at the beginning of each year.
2. The cost and fair value of the building on January 1, 2019, is $2 million. The storage building has not been specialized for Caswell.
3. The building has an estimated economic life of 50 years, with no residual value. Caswell depreciates similar buildings according to the straight-line method.
4. The lease does not contain a renewable option clause. At the termination of the lease, the building reverts to the lessor.
5. Caswell’s incremental borrowing rate is 14% per year. Wake set the annual rental to ensure a 16% rate of return (the loss in service value anticipated for the term of the lease). Caswell knows the implicit interest rate.
6. Executory costs of $7,000 annually, related to taxes on the property, are paid by Caswell directly to the taxing authority on Dec. 31 of each year.
Required:
1. Determine what type of lease this is for the lessee.
2.
Prepare appropriate journal entries on the lessee’s books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2019 and 2020.
Question not attempted.
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Record the payments and expenses related to this lease on December 31 for 2020.
Question not attempted.
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