Answer: See explanation
Explanation:
a. Total factory overhead = $1,000,000
Total direct labor hours = 50,000
Rate per hour = $1,000,000/50,000
= $20
Number of labor hours, product T = 20,000
Factory overhead = 20,000 × $20 = $400,000
Number of labor hours, product U = 30,000
Factory overhead = 30,000 × $20 = $600,000
b. Product T, factory overhead = $400000
Units = 900
Per unit factory overhead = $400,000/900
= 444.44
Product T, factory overhead = $600000
Units = 1100
Per unit factory overhead = $600,000/1100
= 545.46
c. Supervision = $700,000
Direct labor hours = 50000
Supervision rate per hour = $700000/50000
= $14
Set up labor = $300,000
Number of setup = 400
Supervision rate per hour = $300000/400
= $750
d. For product T:
Plant Supervision = 20,000 × 14 = 280,000
Set-up labor = 200 × 750 = 150,000
Total cost = 430,000
Number of unit = 900
Factory overhead per unit = 430,000/900 = 477.8
For product U:
Plant Supervision = 30,000 × 14 = 420,000
Set-up labor = 200 × 750 = 150,000
Total cost = 570,000
Number of unit = 1100
Factory overhead per unit = 570,000/1100 = 518.2
e. For the first part, the factory overhead is being divided using direct labor hours.
For the second part, the factory overhead is being aportioned using activity based costing.
Marin Company produces two software products (Cloud-X and Cloud-Y) in two separate departments (A and B). These products are highly regarded network maintenance programs. Cloud-X is used for small networks and Cloud-Y is used for large networks. Marin is known for the quality of its products and its ability to meet dates promised for software upgrades. Department A produces Cloud-X, and department B produces Cloud-Y. The production departments are supported by two support departments, systems design and programming services. The sources and uses of the support department time are summarized as follows:_______.
To Total
Department Department Labor
From Design Programming A B Hours
Design - 5,000 1,000 9,000 15,000
Programming 400 - 600 1,000 2,000
The costs in the two service departments are as follows:_______.
Design Programming
Labor and materials (all variable) $ 50,000 $ 36,000
Depreciation and other fixed costs 40,000 4,000
Total $ 90,000 $ 40,000
Required:1. Determine the total support costs allocated to each of the producing departments using (a) the direct method, (b) the step method (design department goes first), and (c) the reciprocal method? (Do not round intermediate calculations. Round your final answer to nearest whole dollar amount.)2. The company is considering outsourcing programming services to DDB Services Inc. for $52.00 per hour. Should Marin do this?Note: there's 2 requirements , please make sure you do both with explaination :)
Answer and Explanation:
Cost of Goods Manufactured for a Manufacturing Company The following information is available for Ethtridge Manufacturing Company for the month ending July 31:
Cost of direct materials used in production $1,150,000
Direct labor 966,000
Work in process inventory, July 1 316,400
Work in process inventory, July 31 355,500
Total factory overhead 490,500
Determine Ethtridge's cost of goods manufactured for the month ended July 31.
Ethtridge Manufacturing Company
Statement of Cost of Goods Manufactured
For the Month Ended July 31
Factory overhead 1,150,000
Manufacturing costs incurred during July Cost of direct materials used in production $1,150,000
Direct labor 966,000
Factory overhead 490,500
Total manufacturing costs incurred Work in process inventory, July 31
355,500 Total factory overhead 490,500
Determine Ethtridge's cost of goods manufactured for the month ended July 31
Ethtridge Manufacturing Company
Statement of Cost of Goods Manufactured
For the Month Ended July 31
Factory overhead 1,150,000
Manufacturing costs incurred during July Cost of direct materials used in production 1,150,000
Direct labor 966,000
Factory overhead 490,500
Total manufacturing costs incurred $ 2,606,500
Total manufacturing costs
Factory overhead -355,500
Cost of goods manufactured 2,567,400
Answer:
Ethtridge Manufacturing Company
Statement of Cost of Goods Manufactured
For the Month Ended July 31
Work in Process July 1 $316,400
Add: Cost of direct material used $1,150,000
in production
Direct labour $966,000
Total factory overhead $490,500
Total manufacturing costs incurred $2,606,500
Total manufacturing cost $2,922,900
Less: Work in process July 31 $355,500
Cost of goods manufactured $2,567,400
Plum Corporation began the month of May with $1,400,000 of current assets, a current ratio of 1.90:1, and an acid-test ratio of 1.70:1. During the month, it completed the following transactions (the company uses a perpetual inventory system).
May 2 Purchased $75,000 of merchandise inventory on credit.
8 Sold merchandise inventory that cost $55,000 for $150,000 cash.
10 Collected $26,000 cash on an account receivable.
15 Paid $29,500 cash to settle an account payable.
17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.
22 Declared a $1 per share cash dividend on its 69,000 shares of outstanding common stock.
26 Paid the dividend declared on May 22.
27 Borrowed $120,000 cash by giving the bank a 30-day, 10% note.
28 Borrowed $135,000 cash by signing a long-term secured note.
29 Used the $255,000 cash proceeds from the notes to buy new machinery.
Required
Prepare a table showing Plum's (1) current ratio, (2) acid-test ratio, and (3) working capital, after each transaction. Round ratios to two decimals.
Answer:
Plum Corporation
(1) current ratio = Current assets/current liabilities
(2) acid-test ratio = (Current asset -Inventory)/Current liabilities
(3) working capital = Current assets minus Current liabilities
(4) acid-test assets = quick assets
May 2 Purchased $75,000 of merchandise inventory on credit.
Current Assets: $1,400,000 + $75,000 = $1,475,000
Current Liabilities: $737,000 + $75,000 = $812,000
Inventory: $147,000 +$75,000 = $222,000
(1) current ratio = $1,475,000/$812,000
= 1.82:1
(2) acid-test ratio = $1,475,000 - $222,000/$812,000
= 1.54:1
(3) working capital = Current Assets - Current Liabilities
= $1,475,000 - $812,000
= $663,000
May 8 Sold merchandise inventory that cost $55,000 for $150,000 cash.
Current Assets: $1,475,000 -55,000 + 150,000 = $1,570,000
Current Liabilities: $812,000
Inventory: $222,000 - 55,000 = $167,000
Quick Assets = $1,570,000 - 167,000 = $1,403,000
(1) current ratio = $1,570,000/$812,000
= 1.93
(2) acid-test ratio = $1,403,000/$812,000
= 1.73
(3) working capital = $1,570,000 - $812,000
= $758,000
May 10 Collected $26,000 cash on an account receivable.
Current Assets: $1,570,000 ($26,000 - $26,000) = $1,570,000
Current Liabilities: $812,000
Inventory: 167,000
Quick Assets = $1,570,000 - 167,000 = $1,403,000
(1) current ratio = $1,570,000/$812,000
= 1.93
(2) acid-test ratio = $1,403,000/$812,000
= 1.73
(3) working capital = $1,570,000 - $812,000
= $758,000
May 15 Paid $29,500 cash to settle an account payable.
Current Assets: $1,570,000 - $29,500 = $1,540,500
Current Liabilities: $812,000 - $29,500 = $782,500
Inventory: 167,000
Quick Assets = $1,540,500 - 167,000 = $1,373,500
(1) current ratio = $1,540,500/$782,500
= 1.97:1
(2) acid-test ratio = $1,373,500/$782,500
= 1.76:1
(3) working capital = $1,540,500 - $782,500
= $758,000
May 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.
Current Assets: $1,540,500 - $5,000 = $1,535,500
Current Liabilities: $782,500
Inventory: 167,000
Quick Assets = $1,535,500 - 167,000 = $1,368,500
(1) current ratio = $1,535,500/$782,500
= 1.96:1
(2) acid-test ratio = $1,535,500/$782,500
= $1.96:1
(3) working capital = $1,535,500 - $782,500
=$753,000
May 22 Declared a $1 per share cash dividend on its 69,000 shares of outstanding common stock.
Current Assets: $1,535,500
Current Liabilities: $782,500
Inventory: 167,000
Quick Assets = $1,535,500 - 167,000 = $1,368,500
(1) current ratio = $1,535,500/$782,500
= 1.96:1
(2) acid-test ratio = $1,535,500/$782,500
= $1.96:1
(3) working capital = $1,535,500 - $782,500
=$753,000
May 26 Paid the dividend declared on May 22.
Current Assets: $1,535,500 -$69,000 = $1,466,500
Current Liabilities: $782,500
Inventory: 167,000
Quick Assets = $1,466,500 - 167,000 = $1,299,500
(1) current ratio = $1,466,500/$782,500
= 1.87:1
(2) acid-test ratio = $1,299,500/$782,500
= 1.66:1
(3) working capital = $1,466,500 - $782,500
= $684,000
May 27 Borrowed $120,000 cash by giving the bank a 30-day, 10% note.
Current Assets: $1,466,500 + $120,000 = $1,586,500
Current Liabilities: $782,500 + $120,000 = $902,500
Inventory: 167,000
Quick Assets = $1,586,500 - 167,000 = $1,419,500
(1) current ratio = $1,586,500/$902,500
= 1.76
(2) acid-test ratio = $1,419,500/$902,500
= 1.57
(3) working capital = $1,586,500 - $902,500
= $684,000
May 28 Borrowed $135,000 cash by signing a long-term secured note.
Current Assets: $1,586,500 + $135,000= $1,721,500
Current Liabilities: $902,500
Inventory: 167,000
Quick Assets = $1,721,500 - 167,000 = $1,554,500
(1) current ratio = $1,721,500/$902,500
= 1.91:1
(2) acid-test ratio = $1,554,500/$902,500
= 1.72
(3) working capital = $1,721,500 - $902,500
= $819,000
May 29 Used the $255,000 cash proceeds from the notes to buy new machinery.
Current Assets: $1,721,500 - $255,000 = $1,466,500
Current Liabilities: $902,500
Inventory: 167,000
Quick Assets = $1,466,500 - 167,000 = $1,299,500
(1) current ratio = $1,466,500/$902,500
= 1.62:1
(2) acid-test ratio = $1,299,500/$902,500
= 1.44:1
(3) working capital = $1,466,500 - $902,500
= $564,000
Explanation:
a) Data and Calculations:
May 1, Current Assets = $1,400,000
Ratio of current assets to current liabilities = 1.90:1
Acid -test ratio = 1.70:1
Therefore, current liabilities = $1,400,000/1.9 = $737,000
Current Assets minus Inventory/$737,000 = 1.7
Therefore, current assets minus inventory = $737,000 * 1.7 = 1,253,000
Inventory = Current Assets - (Current assets -inventory)
= $1,400,000 - $1,253,000
= $147,000
Full Question attached
Answer and Explanation:
Find attached
When given one variable value, the value of other variables can be easily estimated. This applies to which type of graph? a. Line c. Scale b. Bar d. Both A and B
Answer: d.
Both A and B
Explanation: 100% EDGE
Answer:
d. both A and B
Explanation:
When given one variable value, the value of other variables can be easily estimated with a line and scale graph.
A Corporation sells a single product for $20 per unit. Last year, the company's sales revenue was $300,000 and its net operating income was $24,000. If fixed expenses totaled $96,000 for the year, the break-even point in unit sales was: A) 12,000 units B) 9,900 units C) 15,000 units D) 14,100 units
Answer:
A) 12,000 units
Explanation:
For computing the break even point in units sales first determine the variable cost which is shown below:
= Sales revenue - fixed expenses - net operating income
= $300,000 - $96,000 - $24,000
= $180,000
And, the variable cost per unit is
= $180,000 ÷ ($300,000 ÷ $20)
= $12
Now the break even point is
= Fixed cost ÷ Contribution margin per unit
= $96,000 ÷ ($20 - $12)
= 12,000 units
Danner Company expects to have a cash balance of $58,050 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows.Collections from customers: January $109,650, February $193,500.Payments for direct materials: January $64,500, February $96,750.Direct labor: January $38,700, February $58,050. Wages are paid in the month they are incurred.Manufacturing overhead: January $27,090, February $32,250. These costs include depreciation of $1,935 per month. All other overhead costs are paid as incurred.Selling and administrative expenses: January $19,350, February $25,800. These costs are exclusive of depreciation. They are paid as incurred.Sales of marketable securities in January are expected to realize $15,480 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $32,250. The company wants to maintain a minimum monthly cash balance of $25,800.Prepare a cash budget for January and February.
Answer:
January February
Beginning Cash Balance 58,050 35,475
Add: Receipts
Collections from Customers 109,650 193,500
Sale of Marketable Securities 15,480 0
Total Receipts 125,130 193,500
Total Available Cash 183,180 228,975
Less: Disbursements
Direct Materials 64,500 96,750
Direct Labour 38,700 58,050
Manufacturing Overhead 25,155 30,315
Selling and Administrative 19,350 25,800
Total Disbursements 147,705 210,915
Cash Balance 35,475 18,060
Financing
Add: Borrowings 0 7,740
Less: Repayments 0 0
Ending Cash Balance 35,475 25,800
The company wants to maintain a minimum monthly cash balance of $25,800 so in February they will have to borrow;
= 25,800 - 18,060
= $7,740
At the beginning of the current season on April 1, the ledger of Granite Hills Pro Shop showed Cash $ 3,360: inventory $ 3,500: and Common Stock $ 6,860. The following transactions were completed during April 2017.Apr. 5 Purchased golf bags, clubs, and balls on account from Arnie Co. $ 1,500, terms 3/10, n/60.7 Paid freight on Arnie purchase $ 80.9 Received credit from Arnie Co. for merchandise returned $700.10 Sold merchandise on account to members $1,420, terms n/30. The merchandise sold had a cost of $ 770.12 Purchased golf shoes, sweaters, and other accessories on account from Woods Sportswear $ 1,060, terms 2/10, n30.14 Paid Arnie Co. in full.17 Received a credit from Woods Sportswear for merchandise returned $60.20 Made sales on account to members $ 820, terms n/30. The cost of the merchandise sold was $550.21 Paid Woods Sportswear in full.27 Granted an allowance to members for clothing that did not fit properly $70.30 Received payments on account from members $1,370.1. Journalize the April transactions using a perpetual inventory system.2. Prepare an income statement through gross profit for the month of April 2017.
Answer:
Journal Entries
Date Account Titles & Explanation Debit Credit
Apr 5 Purchases $1,500
Accounts Payable $1,500
Apr 7 Freight-in $80
Cash $80
Apr 9 Accounts Payable $700
Purchase Returns and Allowances $700
Apr 10 Accounts receivable $1,420
Sales $1,420
Apr 10 Cost of goods sold $770
Inventory $770
Apr 12 Purchases $1,060
Accounts Payable $1,060
Apr 14 Accounts Payable $800
($1500-$700 )
Purchase Discounts $24
($800 * 3%)
Cash $776
Apr 17 Accounts Payable $60
Purchase Returns and Allowances $60
Apr 20 Accounts receivable $820
Sales $820
(To record credit sales)
Apr 20 Cost of goods sold $550
Inventory $550
Apr 21 Accounts Payable (1060-60) $1,000
Purchase Discounts $20
($1000 * 2%)
Cash $980
Apr 27 Sales Returns and Allowances $70
Accounts Receivable $70
Apr 30 Cash $1,370
Accounts Receivable $1,370
Effective versus nominal interest ratesBank A pays 8% interest compounded annually on deposits, while Bank B pays 7% compounded daily. Based on the EAR (or EFF%), which bank should you use?A. You would choose Bank A because its EAR is higher.B. You would choose Bank B because its EAR is higher.C. You would choose Bank A because its nominal interest rate is higher.D. You would choose Bank B because its nominal interest rate is higher.E. You are indifferent between the banks and your decision will be based upon which one offers you a gift for opening an account.Could your choice of banks be influenced by the fact that you might want to withdraw your funds during the year as opposed to at the end of the year? Assume that your funds must be left on deposit during an entire compounding period in order to receive any interest.A. If funds must be left on deposit until the end of the compounding period (1 year for Bank A and 1 day for Bank B), and you think there is a high probability that you will make a withdrawal during the year, then Bank A might be preferable.If funds must be left on deposit until the end of the compounding period (1 year for Bank A and 1 day for Bank B), and you have no intentions of making a withdrawal during the year, then Bank B might be preferable.B. If funds must be left on deposit until the end of the compounding period (1 day for Bank A and 1 year for Bank B), and you think there is a high probability that you will make a withdrawal during the year, then Bank B might be preferable.C. If funds must be left on deposit until the end of the compounding period (1 year for Bank A and 1 day for Bank B), and you think there is a high probability that you will make a withdrawal during the year, then Bank B might be preferable.D. If funds must be left on deposit until the end of the compounding period (1 day for Bank A and 1 year for Bank B), and you think there is a high probability that you will make a withdrawal during the year, then Bank A might be preferable.
Answer:
A. You would choose Bank A because its EAR is higher.
C) If funds must be left on deposit until the end of the compounding period (1 year for Bank A and 1 day for Bank B), and you think there is a high probability that you will make a withdrawal during the year, then Bank B might be preferable.
Explanation:
Effective interest rate(EFF%) or EAR=[ (1+r/n)^n -1]
r= nominal interest rate
n= number of compounding period per year.
For bank A we have 8%
%FF%)=[(1+0.08/1)^1 -1]
= 1.08-1
= 0.08×100
= 8%
For bank B we have 7%
EFF%)=[(1+0.07/365)^365 -1]
= 1.0725-1
= 0.0725×100
= 7.25%
You would choose Bank A because its EAR is higher. i.e bank A has 8% and bank B
7.25 respectively.
.Could your choice of banks be influenced by the fact that you might want to withdraw your funds during the year as opposed to at the end of the year?
Yes, it will , because bank B will bring interest every day, so it will be preferable, in the case that the funds is withdrawable during the year and that no interest will be generated.
because for bank A to earn interest you will need to leave the fund there for the whole year incase the fund will remain as deposit for the compounding period for interest sake.
Moreno Motors Inc. identifies that bikers are usually the first users of their newly launched products. The firm sends consultants to biker rallies to discover how bikers who use Moreno motorcycles modify them to extend their usage, as well as the desired benefits. Recent visits revealed that bikers were seeking items, such as bolt-on chrome products, horsepower performance enhancers, and improved braking systems in Moreno motorcycles. In this example, Moreno Motors Inc. is studying which of the following groups of customers?
a) lead users.
b) mainstream customers.
c) laggards.
d) captive customers.
e) spinners.
Answer:
a) lead users.
Explanation:
Lead users are very skilled and experienced users in certain products and this users know extensively about the product application and how this products can be modified to satisfy their needs.
Lead users find solutions to problems through the use of innovation thereby improving or changing parts of the products thereby they are significant evaluating products.
Which of the following statements about the operation of a C corporation is correct?
Park Corporation is planning to issue bonds with a face value of $710,000 and a coupon rate of 7.5 percent. The bonds mature in 8 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)
Required 1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Journal Entry
Issuance of bond
Dr. Cash $$669,387
Dr. Discount on Bond $40,613
Cr. Bond Payable $710,000
Explanation:
Price of the bond is the present value of all cash flows associated with bond.
Use following formula to calculate the issuance price f the bond
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
As per given data
Face Value = $710,000
Coupon payment = $710,000 x 7.5% x 6/12 = $26,625 semiannually
Number of periods = n = 8 years x 2 period per year = 16 period s
Market interest rate = 8.5% annually = 8.5% / 2 = 4.25% semiannually
PLacing values in the formula
Price of the Bond = $26,625 x [ ( 1 - ( 1 + 4.25% )^-16 ) / 4.25% ] + [ $710,000 / ( 1 + 4.25% )^16 ]
Price of the Bond = $304,598.24 + $364,788.66 = $669,386.90 = $669,387
Discount on the bond = $710,000- $669,387 = $40,613
The annual worth for years 1 through infinity of $50,000 now, $10,000 per year in years 1 through 15, and $20,000 per year in years 16 through infinity at 10% per year is closest to
Answer:
The annual worth of cash flow is $17,394
Explanation:
The computation is shown below:
Present value = F × (P|F,i,n) + A × (P|A,i,n)
= $50,000 + $10,000 × (P|A,10%,15) + ($20,000 ÷ 0.1) × (P|F,10%,15)
= $50,000 + $10,000 × 7.606 + ($20,000 ÷ 0.1) × 0.2394
= $173,940
Now
Annual Worth is
= P × (A|P,i,n)
= $173,940 × (A|P,10%,infinity)
= $173,940 × 0.1
= $17,394
Hence, the annual worth of cash flow is $17,394
Your parents are giving you $250 a month for 4 years while you are in college. At an interest rate of .57 percent per month, what are these payments worth to you when you first start college
Answer:
FV= $13,757.37
Explanation:
Giving the following information:
Monthly payment= $250
Interest rate= 0.0057
Number of periods= 4*12= 48
To calculate the future value, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= monthly payment
FV= {250*[(1.0057^48) - 1]} / 0.0057
FV= $13,757.37
g Jefferson & Sons purchase $5,000 of merchandise from the Claremont Company with terms of 3/10, n/30. How much discount is Jefferson & Sons entitled to take if it pays within the allowed discount period of 10 days
Answer:
Discount Received = $150
Explanation:
The terms of the purchase of inventory are 3/10, n/30 which means that Jefferson & Sons can avail a discount of 3% if they pay within the 10 days of purchase of merchandise and the total time allowed for payment for merchandise is 30 days.
If the payment is made within the discount period, Jefferson can avail a discount of,
Discount Received = 5000 * 3%
Discount Received = $150
The following is a condensed version of the comparative balance sheets for Tamarisk Corporation for the last two years at December 31.
2020 2019
Cash $ 354,000 $ 156,000
Accounts receivable 360,000 370,000
Investments 104,000 148,000
Equipment 596,000 480,000
Accumulated Depreciation-Equipment (212,000 ) (178,000 )
Current liabilities 268,000 302,000
Common stock 320,000 320,000
Retained earnings 614,000 354,000
Additional information:
Investments were sold at a loss of $20,000; no equipment was sold; cash dividends paid were $60,000; and net income was $320,000.
Prepare a statement of cash flows for 2020 for Swifty Corporation. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
Cash Flow Statement
Cash flow from Operating Activities
Net Income $296,000
Adjustments
Depreciation $34,000
(212,000- 178,000)
Loss on sale of Investments $20,000
Decrease in Accounts Receivable $10,000
(370,000 - 360,000)
Decrease in Current Liabilities -$34,000
(268,000 - 302,000)
Total Adjustments $30,000
Cash from operating activities $326,000
Cash flow from Investing Activities
Purchase of Equipment -$116,000
(480,000 - 596,000)
Sale of Investment $24,000
(148,000 - 104,000 -20,000)
Cash used in investing activities -$92,000
Cash flow from Financing Activities
Issue of shares $-
Dividend Paid -$60,000
Cash from financing activities -$60,000
Net Increase in cash $ 174,000
Opening Balance of Cash $156,000
Closing Balance of Cash $330,000
On January 1, 2021, NFB Visual Aids issued $720,000 of its 20-year, 8% bonds. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. NFB Visual Aids records interest expense at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2021, the fair value of the bonds was $600,000 as determined by their market value in the over-the-counter market. General (risk-free) interest rates did not change during 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1-a. Determine the price of the bonds at January 1, 2021.
1-b to 4. Prepare the necessary Journal entries.
Answer and Explanation:
The computation of price of the bonds is shown below:-
Interest on Bond = Bond Face Value × Interest rate × 6 ÷ 12 months
= $720,000 × 8% × 6 ÷ 12
= $28,800
Present Value of interest payments = Interest on bond × PVAF(i%, n)
i = semi annual discounting rate = 10% × 6 ÷ 12
= 5%
n = number of semi annual periods
= 20 years × 2 periods
= 40 periods
Present Value of interest payments = $28,800 × PVAF(5%, 40)
= $28,800 × 17.15909
= $494,182
Present Value of Redemption Value = Redemption Value × PVF(5%, 40)
= $720,000 × 0.142046
= $102,273
Price of Bonds = $494,182 + $102,273
= $596,455
1-b The Journal entries are shown below:-
a. Cash Dr, 596,455
Discount on Bonds Payable Dr, $123,545
To Bonds Payable $720,000
(Being the issuance of bonds is recorded)
b. Interest Expense Dr, $29,823 (596,455 × 10% × 6 ÷ 12)
To Discount on Bonds Payable $1,023
To Cash $28,800 ($720,000 × 8% × 6 ÷ 12)
(Being the first interest payment is recorded)
c. Interest Expense Dr, $29,874 (($596,455 + $1,023) × 10% × 6 ÷ 12)
To Discount on Bonds Payable $1,074
To Cash Dr, $28,800
($720,000 × 8% × 6 ÷ 12)
(To record the second interest payment)
d. Unrealized Holding Loss Dr, 1,448
To Fair Value Adjustment $1,448
(Being adjust the bonds to their fair value is recorded)
Working Notes:
1) Bonds Payable Value after adjusting Discount
= $596,455+$1,023+$1,074
= $598,552
Fair Value of Bonds as on Dec 31 = $600,000
Fair Value adjustment amount is
= $600,000 - $598,552
= $1,448
You just deposited $3,000 in a bank account that pays a 4.0% nominal interest rate, compounded quarterly. If you also add another $5,000 to the account one year (4 quarters) from now and another $7,500 to the account two years (8 quarters) from now, how much will be in the account three years (12 quarters) from now
Answer:
Total FV= $16,599.29
Explanation:
We will calculate each investment separately, and then the total future value.
FV= PV*(1+i)^n
Deposit 1:
PV= 3,000
n= 12
i= 0.04/4= 0.01
FV= 3,000*(1.01^12)
FV= $3,380.48
Deposit 2:
PV= $5,000
n= 8
i= 0.01
FV= 5,000*(1.01^8)
FV= $5,414.28
Deposit 3:
FV= 7,500*(1.01^4)
FV= $7,804.53
Total FV= $16,599.29
Assume that you are part of the accounting team for Logan Digital. The company currently expects to sell 362 units for total revenue of $16,300 each month. Logan Digital estimates direct materials costs of $3,150, direct labor costs of $4,200, variable overhead costs of $2,100, and variable selling and administrative costs of $1,050. Fixed costs of $4,800 are also expected, which includes fixed overhead and selling and administrative costs. Using this information, complete the contribution margin income statement shown below.
Logan Digital is examining cost behavior patterns. Your recommendation is to first determine the break-even point in units. First, calculate the contribution margin (CM) per unit (rounded to the nearest dollar).
Next, complete the formula below to determine the break-even units.
Total Fixed Costs / Contribution Margin per Unit = Units
A profit-volume graph helps managers to visualize the relationship between profits and units sold. The data for Logan Digital has been used to construct the profit-volume graph below. The purple points (diamond symbols) plot the profit line. The operating loss is the shaded area bordered by the red points (cross symbols). The operating profit is the area bounded by the green points (triangle symbols). Graph the correct profit-value graph.
APPLY THE CONCEPTS: Effect of Changes to Sales Price, Variable Costs and Fixed Costs
Now consider each of the following scenarios for Logan Digital. Calculate the contribution margin (CM) per unit, rounded to nearest dollar, and the new break-even point in units, rounded to the nearest whole unit, for each scenario separately.
Scenario 1 Scenario 2 Scenario 3
Logan will dispose of a machine in the factory. The depreciation on that equipment is $500 per month. After some extensive market research, Logan has determined that a sales price increase of $2 per unit will not affect the sales volume and will be effective immediately. Logan has been experiencing quality problems with a materials supplier. Changing suppliers will improve the quality of the product but will cause direct materials costs to increase by $1 per unit.
Full question attached
Answer and Explanation:
Please find attached
Analyze the impact of transactions on the accounting equation (LO2-2)
Below are the external transactions for Shockers Incorporated.
1. Issue common stock in exchange for cash.
2. Purchase equipment by signing a note payable.
3. Provide services to customers on account.
4. Pay rent for the current month.
5. Pay insurance for the current month.
6. Collect cash from customers on account.
Assets = Liabillities + Stockholder's Equilty
1. Increase = No effect + Increase
2.
3.
4.
5.
6.
Required: Analyze each transaction. Under each category in the accounting equation, indicate whether the transaction increases, decreases, or has no effect. The first item is provided as an example.
Answer:
2. Increase = Increase + No effect
3. Increase = No effect + Increase
4. Decrease = No effect + Decrease
5. Decrease = No effect + Decrease
6. No effect = No effect + No effect
Explanation:
2. Purchase equipment by signing a note payable.
The double entry to record the purchase of equipment on credit will be as under:
Dr Equipment-Asset XX
Cr Note Payables-Liabilities XX
Hence the Asset will increase and the liabilities will also increase
2. Increase = Increase + No effect
3. Provide services to customers on account.
The double entry to record the provision of services to customers on account will be as under:
Dr Accounts Receivables-Asset XX
Cr Revenue -Stockholder's Equilty XX
Hence the Assets and Stockholder's Equilty of the company will be increased.
3. Increase = No effect + Increase
4. Pay rent for the current month.
The double entry would be:
Dr Rent Expense -Stockholder's Equilty XX
Cr Cash account - Assets XX
Both Assets account and Stockholder's Equilty will be decreased.
4. Decrease = No effect + Decrease
5. Pay insurance for the current month.
The double entry would be as under:
Dr Insurance Expense -Stockholder's Equilty XX
Cr Cash account - Assets XX
Both Assets account and Stockholder's Equilty will be decreased.
5. Decrease = No effect + Decrease
6. Collect cash from customers on account.
The double entry would be as under:
Dr Cash -Assets XX
Cr Accounts Receivables - Assets XX
The net difference is zero hence there will be no difference.
6. No effect = No effect + No effect
In this exercise, decisions will be made in ethically ambiguous situations and then analyzed. As in the real world, all the background information on each situation will not be available, and assumptions will need to be made.It is recommended that the exercise be completed before reading the following mat e rial, and then revisited after you have completed the chapter.Name:Date:Part ISTEP 1Make decisions in the following situations. You will not have all the background information about each situation; instead you should make whatever assumptions you feel you would make if you were actually confronted with the decision choices described. Select the decision choice that most closely represents the decision you feel you would make personally. You should choose decision choices even though you can envision other creative solutions that were not included in the exercise.Situation 1. You are taking a very difficult chemistry course, which you must pass to maintain your scholarship and to avoid damaging your application for graduate school. Chemistry is not your strong suit, and because of a just-below-failing average in the course, you must receive a grade of 90 or better in the final examination, which is 2 days away. A janitor who is aware of your plight informs you that he found the master copy of the chemistry final in a trash barrel and saved it. He will make it available to you for a price, which is high, but which you could afford. What would you do?(a) I would tell the janitor thanks, but no thanks.(b) I would report the janitor to the proper officials.(c) I would buy the examination and keep it to myself.(d) I would not buy the examination myself, but I would let some of my friends, who are also flunking the course, know that it is available.
Situation 2. You have been working on some complex analytical data for 2 days now. It seems that each time you think you have them completed, your boss shows up with a new assumption or another "what if" question. If you only had a copy of a new software program for your personal computer, you could plug in the new assumptions and revise the estimates with ease.Then a colleague offers to let you make a copy of some software that is copyrighted. What would you do?(a) I would readily accept my friend’s generous offer and make a copy of the software.(b) I would decline to copy it and plug away manually on the numbers.(c) I would decide to go buy a copy of the software myself for $300 and hope I would be reimbursed by the company in a month or two.(d) I would request another extension on an already overdue project date.Situation 3. Your small manufacturing company is in serious financial difficulty. A large order of your products is ready to be delivered to a key customer, when you discover that the product is simply not right. It will not meet all performance specifications, will cause problems for your customer, and will require rework in the field; but this, you know, will not become evident until after the customer has received and paid for the order. If you do not ship the order and receive the payment as expected, your business may be forced into bankruptcy. And if you delay the shipment or inform the customer of these problems, you may lose the order and also go bankrupt. What would you do?(a) I would not ship the order and place my firm in voluntary bankruptcy.(b) I would inform the customer and declare voluntary bankruptcy.
(c) I would ship the order and inform the customer after I received payment.(d) I would ship the order and not inform the customer.
Answer and Explanation:
Situation 1: a) I would tell the janitor thanks, but no thanks. It would be wrong to cheat in the exam.
Situation 2:(c) I would decide to go buy a copy of the software myself for $300 and hope I would be reimbursed by the company in a month or two. Getting a copy of the software for the price would guarantee that are no copyright infringement problems which would affect the company and my job as well. Management would be happy at my dedication as I am willing to go an extra mile for the company and would likely reimburse me for expenses
situation 3: (b) I would inform the customer and declare voluntary bankruptcy. It is important that I inform the customer and let him know why the shipment didn't go through. Customers appreciate honesty and trustworthiness of sellers. He may be willing to help the company not declare bankruptcy by ordering anyways. However it is more important to not cheat the customer than it is for business to go bankrupt.
The adjusted trial balance of Dawson Company contained the following information. Assume the tax rate is 33%:
Debit Credit
Sales revenue $425,000
Sales returns and allowances $ 20,000
Sales discounts 5,000
Cost of goods sold 300,000
Operating expenses 61,000
Interest revenue 2,000
Interest expense 1,000
Compute the gross profit. rate(%)
Answer:
29.41%
Explanation:
Particulars Amount
Sales Revenue $425,000
Less: Cost of goods sold $300,000
Gross profit $125,000
Gross Profit rate(%) also known as gross profit margin percentage is calculated by (Revenue - Cost of goods sold)/Revenue
Gross profit margin percentage = $425,000 - $300,000 / $425,000
Gross profit margin percentage = $125,000 / $425,000
Gross profit margin percentage = 0.29412
Gross profit margin percentage = 29.41%
Joy is looking into many different career choices. She is leaning toward the Information Technology cluster. Why
would this be a better career choice than some of the other options she was looking into?
O IT jobs are projected to increase fourteen percent between 2010 and 2020.
O IT jobs are projected to increase twenty-two percent between 2010 and 2020.
O IT jobs are projected to increase thirty-five percent between 2010 and 2020.
O IT jobs are projected to increase forty-seven percent between 2010 and 2020.
Answer:
B
Explanation:
Because I took the unit test review on edge and got it right
Answer:
bbbbbbbbbbbbbbbbbbbbbbbbb
Explanation:
Tandy Company was issued a charter by the state of Indiana on January 15 of this year. The charter authorized the following:
Common stock, $6 par value, 120,000 shares authorized
Preferred stock, 11 percent, par value $13 per share, 5,000 shares authorized
During the year, the following transactions took place in the order presented:
a. Sold and issued 21,900 shares of common stock at $26 cash per share.
b. Sold and issued 2,800 shares of preferred stock at $30 cash per share.
c. At the end of the year, the accounts showed net income of $41,600. No dividends were declared.
Required:
Prepare the stockholders’ equity section of the balance sheet at the end of the year.
Answer and Explanation:
The preparation of the stockholder equity section is presented below:
Tandy Company
Balance Sheet (Partial)
Stockholders Equity :
Contributed Capital :
Common stock (21,900 shares × $6) $131,400
Preferred stock (5,000 shares × $13) $65,000
Additional Paid in Capital - Common stock (21,900 shares × $20) $438,000
Additional Paid in Capital - Preferred stock (5,000 shares × $17) $85,000
Total Contributed Capital $719,400
Add: Retained Earnings $41,600
Total Stockholders Equity $761,000
Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $42,000. The estimated useful life was five years and the residual value was $5,000. Assume that the estimated productive life of the machine is 20,000 units. Expected annual production was year 1, 4,500 units; year 2, 5,500 units; year 3, 4,500 units; year 4, 4,500 units; and year 5, 1,000 units.
Required: Complete a depreciation schedule for each of the alternative methods.
a. Straight-line.
b. Units-of-production.
c. Double-declining-balance.
Which method will result in the highest net income in year 2
Answer:
Depreciation schedule for :
Straight-line Units-of-production Double-declining-balance
Year 1 $ 7,400 $8,325 $16,800
Year 2 $ 7,400 $10,175 $10,080
Year 3 $ 7,400 $8,325 $6,048
Year 4 $ 7,400 $8,325 $3,629
Year 5 $ 7,400 $1,850 $2,177
Straight Line Method will result in the highest Net Income. This is because it provides for the lowest charge of depreciation expense
Explanation:
Straight-line
Straight line method charges the same amount of depreciation (fixed on cost) over the useful life of an asset.
Depreciation Charge = (Cost - Residual Value) ÷ Estimated Useful Life
= ($42,000 - $5,000) ÷ 5
= $ 7,400
Annual Straight line Depreciation Charge
Year 1 = $ 7,400
Year 2 = $ 7,400
Year 3 = $ 7,400
Year 4 = $ 7,400
Year 5 = $ 7,400
Units of Production
Depreciation Charge = (Cost - Residual Value) / Total Expected Production × Period`s Production
Therefore,
Depreciation Charge = Rate of depreciation × Period`s Production
then,
Rate of depreciation = ($42,000 - $5,000) / 20,000 units
= $1.85 per unit of production
Annual Units of Production Deprecation Charge
Year 1 = 4,500 units × $1.85 = $8,325
Year 2 = 5,500 units × $1.85 = $10,175
Year 3 = 4,500 units × $1.85 = $8,325
Year 4 = 4,500 units × $1.85 = $8,325
Year 5 = 1,000 units × $1.85 = $1,850
Double-declining-balance.
Depreciation Expense = 2 × SLDP × BVSLDP
Where,
SLDP = 100 ÷ Number of useful life
= 100 ÷ 5
= 20 %
Annual Double-declining-balance Expense
Year 1 = 2 × 20% × $42,000
= $16,800
Year 2 = 2 × 20% × ($42,000 - $16,800)
= $10,080
Year 3 = 2 × 20% × ($42,000 - $16,800 - $10,080)
= $6,048
Year 4 = 2 × 20% × ($42,000 - $16,800 - $10,080 - $6,048)
= $3,629
Year 5 = 2 × 20% × ($42,000 - $16,800 - $10,080 - $6,048- $3,629)
= $2,177
Executive compensation packages often tie performance to bonus and incentive awards, supplemental retirement packages, perquisites, and severance pay, in order to encourage the management team to align their performance with organizational goals. In an attempt to minimize agency problems in a company (potential conflict of interest between the company's managers and shareholders), attractive compensation packages are created to retain and encourage managers. In the best interest of shareholders, compensation packages should be structured in a way such that managers have an incentive to maximize the___________ value of the company’s stock price.
Vision Tech is a software company based out of San Francisco. Its stockholders are mostly individual investors and there is relatively little institutional ownership. If several pension and mutual funds were to take large positions In Vision Tech's stock, would direct shareholder intervention be more or less likely to motivate the firm's management?
a. Less likely
b. More likely
A company is considering two mutually exclusive expansion plans. Plan A requires a $40 million expenditure on a large-scale integrated plant that would provide expected cash flows of $6.39 million per year for 20 years. Plan B requires a $13 million expenditure to build a somewhat less efficient, more labor-intensive plant with an expected cash flow of $2.91 million per year for 20 years. The firm's WACC is 9%.Calculate each project's NPV. Round your answers to two decimal places. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55.Plan A $ millionPlan B $ millionCalculate each project's IRR. Round your answer to two decimal places.Plan A %Plan B %Graph the NPV profiles for Plan A and Plan B and approximate the crossover rate to the nearest percent.Calculate the crossover rate where the two projects' NPVs are equal. Round your answer to the nearest hundredth.%
Answer:
Project A:
initial outlay -$40 million
cash flows $6.39 million for 20 years
PV of cash flows = $6,390,000 x 9.1285 (PV annuity factor, 9%, 20 periods) = $58,331,115
NPV = -$40,000,000 + $58,331,115 = $18,331,115 ≈ $18.33 million
IRR = 15%
Project B:
initial outlay -$13 million
cash flows $2.91 million for 20 years
PV of cash flows = $2,910,000 x 9.1285 (PV annuity factor, 9%, 20 periods) = $26,563,935
NPV = -$13,000,000 + $26,563,935 = $13,563,935 ≈ $13.56 million
IRR = 22%
Crossover rate = 11.4%
I solved the cross over rate the following way:
project A project B difference
-40 -13 -27
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
6,39 2,91 3,48
Using a financial calculator or excel spreadsheet, find the IRR of the difference and that is the crossover rate (discount rate at which both projects have the same NPV).
At the end of fiscal year 2018, Haley Legal Services and Delicious Doughnuts reported these adapted amounts on their balance sheets (all amounts in millions except for par value per share): EEB (Click the icon to view the balance sheet data.) Assume each company issued its stock in a single transaction. Journalize each company's issuance of its stock, using its actual account titles. Explanations are not required. (Enter amounts in millions. Record debits first, then credits. Exclude explanations from any journal entries.) Begin by joumalizing the Haley Legal Services common stock issuance.
Journal EntryData Table Accounts Debit Credit Milions Haley Legal Services Common stock, $0.01 par value, 2,400 shares issued S Additional paid-in capital 24 17,500 Delicious Doughnuts:
Common stock, no par value, 66 shares issued S 294
Answer:
Journal entry by Haley Legal services
Accounts title Debit Credit
Cash ($ 24 + 17500) $17,524
Common Stock $24
Additional Paid in Capital in excess of Par - Common Stock $17,500
Journal entry for Delicioy DOUGHNUT
Accounts title Debit Credit
Cash $294
Common Stock - nopar $294
Explanation:
Journal entry by Haley Legal services
Accounts title Debit Credit
Cash ($ 24 + 17500) $17,524
Common Stock $24
Additional Paid in Capital in excess of Par - Common Stock $17,500
Journal entry for Delicioy DOUGHNUT
Accounts title Debit Credit
Cash $294
Common Stock - nopar $294
The journal entry by Haley Legal services and Journal entry by Delicioy DOUGHNUT should be shown below.
Journal entry:by Haley Legal services
Accounts title Debit Credit
Cash ($ 24 + 17500) $17,524
Common Stock $24
Additional Paid in Capital in excess of Par - Common Stock $17,500
By Delicioy DOUGHNUT
Accounts title Debit Credit
Cash $294
Common Stock - nopar $294
Learn more about journal entry here: https://brainly.com/question/24345471
Which option enables you to keep the last grammatical change?
Answer:
Undo Option
Explanation:
The Accept option enables you to keep the last grammatical change in Microsoft Word.
A $3.6 million state lottery pays $15,000 at the beginning of each month for 20 years. How much money must the state actually have in hand to set up the payments for this prize if money is worth 5.8%, compounded monthly
Answer:
Present Value= $2,128,538.66
Explanation:
Giving the following information:
Cash flow= $15,000
Number of periods= 20*12= 240
Interest rate= 0.058/12= 0.00483
First, we need to calculate the future value of the monthly payments:
FV= {A*[(1+i)^n-1]}/i
A= monthly deposit
FV={15,000*[(1.00483^240) - 1]} / 0.00483
FV= $6,765,529.2
Now, the present value:
PV= FV/(1+i)^n
PV= 6,765,529.2 / 1.00483^240
PV= $2,128,538.66
At the end of each month, a company pays its employees. Payroll information below is for January, the first month of the fiscal year. Assume that none of the employees exceeds the Federal unemployment tax maximum salary of $7,000 in January. Salaries $ 1,000,000 Federal and state income taxes withheld 170,000 Federal unemployment tax rate 0.80 % State unemployment tax rate (after FUTA deduction) 5.40 % Social Security (FICA) tax rate 7.65 %
Required:
Record salaries expense and payroll tax expense for the January pay period.
Answer:
January 31, 202x, wages expense
Dr Wages expense 1,000,000
Cr Federal income taxes withheld payable 170,000
Cr FICA taxes withheld payable 76,500
Cr Cash 246,500
Taxes are generally paid the next month, that is why they are recorded as payable. This applies to both withheld taxes and payroll taxes.
January 31, 202x, payroll expense
Dr FICA taxes expense 76,500
Dr FUTA taxes expense 8,000
Dr SUTA taxes expense 54,000
Cr FICA taxes payable 76,500
Cr FUTA taxes payable 8,000
Cr SUTA taxes payable 54,000