Answer:
Employer has identified your Interest.
Explanation:
During any course of negotiation, parties have two sets of interests to consider: personal interests and the interests of the other side (employer).
Interests are a party's underlying reasons, values or motivations. It explains why someone is trying to take a particular position.
From the question, an increase in salary by $3000 is needed to pay off student loan. This is the point of interest. The employer identifies this and offers to assume the loan at 0% interest rate instead.
What are the strengths and weaknesses of the Campbell Soup Company's marketing?
Answer:
For one - their social media presance for a large corporation is really lacking. A company as well known as Campbell should be current in social media, they have not posted to in over a month.
They rely to heavily on the fact that they are the oldest name in the soup business and I feel like they are a little lazy when it comes to their marketing with other compitors on their heels.
The VP of operations requests that ending inventory of 1-gallon containers on December 31, 2018, be 300 comma 000 units. If the production budget calls for Saphire to produce 1 comma 200 comma 000 1-gallon containers during 2018, what is the beginning inventory of 1-gallon containers on January 1, 2018?
Answer:
Hi, the information you have provided is missing information regarding the Budgeted Sales of 1-gallon containers During the year.
However, the following points are provided to help solve the problem.
The Beginning inventory of 1-gallon containers on January 1, 2018 can be determined using the missing figure approach.
Production Budget for the year end December 31, 2018
1-gallon containers
Budgeted Production 1,200,000
Less Budgeted Sales (amount missing) XXX
Less Budgeted Closing Stock (300,000)
Budgeted opening Stock XXX
On August 2, 2018, Wendy purchased a new office building for $3,800,000. On October 1, 2018, she began to rent out office space in the building. On July 15, 2022, Wendy sold the office building. If required, round your answers to the nearest dollar.
a. What MACRS convention applies to the new office building?
b. What is the life of the asset for MACRS?
c. Wendy's cost recovery deduction for 2018 is $_________ and for 2022 is ____________$ .
Answer:
a. Mild Month MACRS convention applies to the new office building
b. The life of the asset under MACRS is 39 years
c. The cost recovery deduction for 2018 is $20,330
The cost recovery deduction for 2022 is $52,776
Explanation:
a. According to the given data Mild Month MACRS convention is applicable here because real property is placed in service in the middle of the month in which acquired.
b. The life of the asset under MACRS is 39 years
c. cost recovery deduction for 2018= $3,800,000*0.535%
cost recovery deduction for 2018=$20,330
cost recovery deduction for 2022= $3,800,000*2.564%
cost recovery deduction for 2022= $52,776
Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted operations for the current year.
Commercial Residential
Revenues $300,000 $480,000
Direct materials costs $30,000 $50,000
Direct labor costs 100,000 300,000
Overhead costs 85,000 215,000 150,000 500,000
Operating income (loss) $85,000 $(20,000)
The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more profitable given that the installations of window coverings are less complex for residential customers. In addition, the residential client base resides in close proximity to the company office, so travel costs are not as expensive on a per client visit for residential customers. As a result, she has decided to take a closer look at the overhead costs assigned to the two product lines to determine whether a more accurate product costing model can be developed. Here are the three activity cost pools and related information she developed:
Activity Cost Pools Estimated Overhead Cost Drivers
Scheduling and travel $85,000 Hours of travel
Setup time 90,000 Number of setups
Supervision 60,000 Direct labor cost
Expected Use of Cost Drivers per Product
Commercial Residential
Scheduling and travel 750 500
Setup time 350 250
What should Peggy Kingman do?
Answer and Explanation:
The explanation is shown below:-
First we need to find out the activity based overhead rates
Activity Estimated overhead Basis Quantity Activity based
cost overhead rates
Travel
and Scheduling $85,000 Hours of 1,250 $68
travel (700 + 500)
Set up time $90,000 Number of 600 $150
setups (350 + 250)
Supervision $60,000 Direct labor $400,000 15%
cost ($100,000 + $300,000)
Now we need to find out the overhead cost assigned to commercial which is shown below:-
Activity Activity based Actual allocation of Overhead
overhead rates cost drivers assigned
Travel and
Scheduling $68 750 $51,000
Set up time $150 350 $52,500
Supervision 15% $100,000 $15,000
Total $118,500
For computing the overhead assigned we simply multiply the activity based overhead rate with actual allocation of cost drivers.
after this we need to find out the overhead cost assigned to residential which is shown below:-
Activity Activity based Actual allocation of Overhead
overhead rates cost drivers
Travel and
Scheduling $68 500 $34,000
Set up time $150 250 $37,500
Supervision 15% $300,000 $45,000
Total $116,500
For computing the overhead we simply multiply the activity based overhead rate with actual allocation of cost drivers.
Finally we need to find out the operating income or loss for the commercial and residual which is shown below:-
Particulars Commercial Residential
Sales revenue $300,000 $480,000
Less: Direct material cost $30,000 $50,000
Less: Direct labor cost $100,000 $300,000
Less: Overhead costs
assigned $118,500 $116,500
Operating income (loss) $51,500 $15,500
The Peggy Kingman should establish the cost to be assigned based on the product lines for overhead cost as the Peggy Kingman is more focused to the overhead cost which were based on the activity cost drivers. Moreover, it shows a profit earned on residential product line
Assuming that Tim is 75 years old at the end of 2019 and his marginal tax rate is 32 percent, what amount of his distribution will he have remaining after taxes if he receives only a distribution of $50,000 for 2019?
Answer:
$15,300
Explanation:
Solution
Recall that:
Suppose that Tim is 75 years old at the end of 2018
The marginal tax rate here is = 32%
The distribution = $50,000
Now,
What amount of distribution he get after taxes
At 75 years of age that is the age of the participant
Distribution period = 22.9
The Applicable percentage = 4.37%; this is gotten from the table attached below
Thus,
He implies that 2,000,000 * 4.37 %
=$87,400
The less amount received = $50,000
The balance is = $87,400 = $50,000
= $37,400
Tim needs to pay tax at 32%
= 50,000 * 32%
=$16,000
The pay penalty become s =37,400 * 50% = $18,700
The total amount for tax to be paid and the penalty is = $16000 + $18700= $34,700
The amount received by Tim after tax is = $50,000 - $34700 =$15,300
The amount Tim will receive after tax is $15,300
Note: Kindly find the complete question and table as part of the solution solved below
"Nelson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $100,000. The equipment will have an initial cost of $400,000 and have a 5-year life. If the salvage value of the equipment is estimated to be $75,000, what is the payback period
Answer:
4 years
Explanation:
Payback period calculates the amount of the time it takes for the amount invested in a project to be recovered from the cumulative cash flow.
Payback period = amount invested / annual cash flows
= $400,000 / $100,000 = 4 years
I hope my answer helps you
Using a method of trend projection, the monthly sales for Yazici Batteries, Inc., were as follows: Month Sales Feb 21 Jan 20 Mar 15 Apr 15 May 13 Jun 16 Jul 17 Aug 17Sept 20Oct 22 Nov 23 Dec 23The forecast for the next month (Jan) using the naive method =_____sales. The forecast for the next period Jan using a 3 month moving average approach =_____sales. The forecast for the next period Jan using a 6 month weighted average with weights of 0.10, 0.10, 0.10, 0.20, 0.20 and 0.30, where the heaviest weights are applied to the most recent month =_____sales. Using exponential smoothing with α = 0.35 and a september forecast of 20.00, hte forecast for the next period Jan =_____sales. Using a method of trend projection, the forecast for the next month Jan =_____sales. The method that can be used for making a forecast for the month of March is_____.
Answer:
the answer is C or b im not 100% sure
Vaughn Corporation has retained earnings of $706,100 at January 1, 2017. Net income during 2017 was $1,638,400, and cash dividends declared and paid during 2017 totaled $83,100. Prepare a retained earnings statement for the year ended December 31, 2017. Assume an error was discovered: land costing $89,100 (net of tax) was charged to maintenance and repairs expense in 2014. (List items that increase retained earnings first.)
Answer: Please see below for answer
Explanation: Retained earnings is the portion of net income accumulated in a company which can be used for future reinvestment purposes after the cumulative amount of dividends declared have been deducted.
Solution- Using items that increase retained earnings first before any deduction
Vaughn Corporation
Retained earnings statements
Ended December 31st, 2017.
Retained Earnings as Reported on January 1st $706,100
Correction for Overstatement of expenses $89.100
Retained earnings as adjusted = $795,200
(Add) Net income/loss $1, 638,400
Net cash dividend (less) -$83, 100
Retained Earnings in December 31st 2017 $2,350,500
A mutual fund had NAV per share of $19.00 on January 1, 2016. On December 31 of the same year, the fund's NAV was $19.14. Income distributions were $0.57, and the fund had capital gain distributions of $1.12. Without considering taxes and transactions costs, what rate of return did an investor receive on the fund last year
Answer:
9.63%
Explanation:
Calculation of Mutual Fund rate of return that the investor receive on the fund last year
Using this formula
Rate=(Fund's NAV -NAV per share +Income distributions+ Capital gain distributions )
Let plug in the formula
Where:
Fund's NAV =$19.14
NAV per share=$19.00
Income distributions=.57
Capital gain distributions =1.12
Hence
Rate =($19.14 - 19.00 + .57 + 1.12) / $19.00
=1.83/$19.00
=0.0963×100
Rate = 9.63%
Therefore without considering taxes and transactions costs, the rate of return that the investor receive on the fund last year will be 9.63%
1. Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $130 Direct labor 110 Manufacturing support 125 Marketing costs 65 Fixed costs: Manufacturing support 175 Marketing costs 85 Total costs 690 Markup (50%) 345 Targeted selling price $1,035 What is the full cost of the product per unit
Answer:
Full cost per unit = $690
Explanation:
The full cost of a product is the sum of its variable cost per unit and its fixed cost per unit. Costing a product at its full cost ensures that all costs are recovered both variable cost and fixed cost
The full cost for Crandle's product would be:
$
Material 130
Labour 110
Manufacturing 125
Market 65
Variable cost 430
Fixed cost
Manufacturing 175
Marketing 85
Full cost per unit 690
Full cost per unit = $690
Lang Warehouses borrowed $287,610 from a bank and signed a note requiring 15 annual payments of $27,709 beginning one year from the date of the agreement. (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: Determine the interest rate implicit in this agreement
Answer:
The interest rate implicit in this agreement is 5%
Explanation:
A fix periodic payment made for a specific of time is known as annuity.
The 15 annual loan payment of $27,709 is an annuity payment and we will use the following formula to calculate the interest rate.
PV of annuity = P x annuity factor
Where
P = annual payments = $27,709
Placing values in the formula
$287,610 = $27,709 x annuity factor
Annuity factor = $287,610 / $27,709
Annuity factor = 10.37966
The annuity factor of 10.37966 for 15 years is for 5% interest rate.
Which of the following statements is incorrect? Group of answer choices Cost of goods available for sale will always be equal to or greater than cost of goods sold. Ending inventory exceeds beginning inventory when purchases are greater than cost of goods sold. Cost of goods sold exceeds purchases when ending inventory is less than beginning inventory. Ending inventory is greater than beginning inventory when purchases are less than cost of goods sold.
Answer:
Ending inventory is greater than beginning inventory when purchases are less than cost of goods sold.
Explanation:
Ending inventory is greater than beginning inventory when purchases are less than cost of goods sold is the wrong answer option
Ending inventory is the amount of inventory a company has in stock at the end of it's fiscal year. It is the beginning inventory plus net purchases minus cost of goods sold.
When the beginning inventory is greater than the ending inventory, then has been sold in the period than you bought.
Bonds payable-record issuance and premium amortization. Kaye Co. issued $1 million face amount of 11% 20-year bonds on April 1,2004. The bonds pay interest on an annual basis on March 31 each year.
Required:
a. Assume that market interest rates were slightly lower than 11% when the bonds were sold. Would the proceeds from the bond issue have been more than, less than, or equal to the face amount? Explain.
b. Independent of your answer to part a, assume that the proceeds were $1,080,000. Use the horizontal model (or write the journal entry) to show the effect of issuing the bonds.
c. Calculate the interest expense that Kaye Co. will show with respect to these bonds in its income statement for the fiscal year ended September 30, 2004, assuming that the premium of $80,000 is amortized on a straight-line basis.
Answer:
Cash proceeds would be higher than face amount.
Bond issuance:
Dr cash $1,080,000
Cr bonds payable $1,000,000
Cr premium on bonds payable($1,080,000-$1,000,000) $80,000
$57,400
Explanation:
If the market interest rate were slightly lower than 11% coupon rate,the cash proceeds from the bonds would be higher than face amount as a lower market rate is used as a discount rate in calculating the present value,in other words,the lower the discount rate,the higher the present value as further shown below.
Assume market rate is 10.5%
cash proceeds=-pv(rate,nper,pmt,fv)
rate is 10.5%
nper is 20 years
pmt =$1,000,000*11%=$110,000
fv is $1000,000
=-pv(10.5%,20,110000,1000000)=$1,041,154.54
amortization(annually)=$80,000/20=$4000
Amortization for six months=$4,000*6/12=$2,000
coupon=$1,080,000*11%*6/12=$ 59,400.00
Interest expense=coupon -premium amortization=$ 59,400.00-$2,000.00=$57,400
What is the company’s financial position? Please refer to the income statement and balance sheet for the Exceptional Service Grading Company available here. Using the learning resources provided in the Reading Assignment, perform a financial ratio analysis of the company using the following ratios: • Gross profit margin • Current ratio • Debt ratio
Answer:
Gross profit margin requires revenue and gross profit of the company.
Current ratio = 1.386 x
Debt ratio = 0.123 x
Explanation:
Gross profit margin requires revenue and gross profit of the company which is provided in the question but it can be calculated using this formula ; Total revenue / gross profit . where Gross profit = Revenue - cost of goods sold
Current ratio is calculated using the formula ; current assets/ current liabilities lets assume the left column is for the most recent year then current ratio = 4612200/3325950 = 1.386x
Debt ratio is calculated using the formula ; total debts/total assets lets assume once more that the left column is the most recent year. note; total debts = long term + current notes payable = 454800 + 277550
therefore debt ratio = 732350 / 5957800 = 0.123x
attached is the income statement and balance sheet
The following transactions occurred during the month of June 2018 for the Stridewell Corporation. The company owns and operates a retail shoe store
1. Issued 115,000 shares of common stock in exchange for $575,000 cash.
2. Purchased furniture and fixtures at a cost of $95,000. $38,000 was paid in cash and a note payable was signed for the balance owed
3. Purchased inventory on account at a cost of $230,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $391,000. The cost of the goods sold was $195,500
5. Paid $5,000 in rent on the store building for the month of June
6. Paid $2,640 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2018
7. Paid $166,175 on account for the merchandise purchased in 3
8. Collected $78,200 from customers on account.
9. Paid shareholders a cash dividend of $5,750
10. Recorded depreciation expense of $1,900 for the month on the furniture and fixtures
11. Recorded the amount of prepaid insurance that expired for the month.
Required
Prepare journal entries to record each of the transactions and events listed above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 01 Cash 575,000 Common stock 575,000
Answer:
See the journal entries below.
Explanation:
Tr. General Journal Dr ($) Cr ($)
1. Cash 575,000
Common stock 575,000
(To record common stock issued for cash.)
2. Furniture and fixtures 95,000
Cash 38,000
Note payable 57,000
(To record purchase of furniture and fixtures.)
3. Merchandise inventory 230,000
Account payable 230,00
(To record inventory purchased on account.)
4a. Account receivable 391,000
Sales 391,00
(To record credit sales).
4b. Cost of goods sold 195,500
Merchandise inventory 195,000
(To record cost of inventory sold.)
5. Rent expenses 5,000
Cash 5,000
(To record interest paid for June.)
6. Prepaid insurance 2,640
Cash 2,640
(To record prepaid insurance.)
7. Account payable 166,175
Cash 166,175
(To record payment for merchandise inventory bought on account.)
8. Cash 78,200
Account receivable 78,200
(To record cash received from customer.)
9. Dividend paid 5,750
Cash 5,750
(To record cash dividend paid.)
10. Depreciation expenses 1,900
Accumulated Dep. - F $ F 1,900
(To record record depreciation expenses for Furniture & F.)
11. Insurance expenses (2,640 / 12) 220
Prepaid insurance 220
(To record insurance expenses for the month.)
Kuzma Foods, Inc. has budgeted sales for June and July at $ 680 comma 000 and $ 765 comma 000, respectively. Sales are 85% credit, of which 70% is collected in the month of sale and 30% is collected in the following month. What is the budgeted Accounts Receivable balance on July 31?
Answer:
$195,075
Explanation:
The computation of the budgeted account receivable balance as on July 31 is shown below:
= July budgeted sales × credit sales percentage × following month percentage
= $765,000 × 85% × 30%
= $195,075
We simply multiplied the July budgeted sales with the credit sales percentage and the following month percentage so that the budgeted account receivable balance could come
Suppose you win the lottery and have two options: A. Take $1 million now. B. Take $1.2 million to be paid out as 300,000 now and then $300,000 a year for 3 years. Which is the better deal? Assume that the interest rate is 10%. Please show your work. (4 point)
Answer:
A. Take $1 million now.
Explanation:
A. If we take $1 million now the present value of the money is $1 million.
B. If we choose to take $1.2 million paid out over 3 years then present value will at 10% will be;
$300,000 + $300,000 / 1.2 + $300,000/ 1.44 + $300,000 / 1.728
$300,000 + $250,000 + $208,000+ $173,611 = $931,944
The present value of option B is less than present value of option A. We should select option A and take $1 million now.
An investor wishes to buy a new issue of U.S. Government agency bonds. You recommend that the customer purchase Federal Home Loan Bank bonds with a 20 year maturity. An investor who purchases the new issue of Federal Home Loan Bank bonds can expect to pay:
Answer:
The answer is Par
Explanation:
An investor who purchases the new issue can expect to pay Part.
The agency appoints a selling group that sells new issues of agency securities.This selling group is usually made of large banks and broker-dealers. They sell the issue at par to the public. From what was made from the sale, the agency then pays the selling group a selling concession. In contrast, direct U.S. Government obligations are sold through auction
On December 31, a Company held the following short-term available-for-sale securities. The Company had no short-term investments prior to the current period. Prepare the December 31 year-end adjusting entry to record the fair value adjustment for these debt securities.
Answer:
1a. Unrealized amount 850
1b.Dr Unrealized holding loss-AFS 850
Cr Fair value adjustment 850
Explanation:
1a. Computation for fair value adjustment
Available for sale securities Cost -Fair value =Unrealized amount
Nintendo Co notes 44450-48900=4450
Atlantic Bonds 49000-47000=-2000
Kelogg Co notes25000-23200=-1800
Mcdonals Corp bonds46300-44800= -1500
Total 164750-163900= -850
1b. The Adjusting Journal entry
Dr Unrealized holding loss-AFS 850
Cr Fair value adjustment 850
(To record adjusting entry)
A small business produces a single product and reports the following data: Sales price $ 8.50 per unit Variable cost $ 5.30 per unit Fixed cost $ 21 comma 000 per month Volume 10 comma 000 units per month The company believes that the volume will go up to 13 comma 000 units if the company reduces its sales price to $ 7.25. How would this change affect operating income?
Answer:
If the current price is reduced from $8.50 to $7.25 per unit, operating income will decrease by $6,650 (from $11,000 to $4,350). This happens because variable costs will increase dramatically while total revenue will only increase a little.
Explanation:
current revenue = $8.50 x 10,000 = $85,000
- variable costs = $5.30 x 10,000 = ($53,000)
- fixed costs = ($21,000)
operating income = $11,000
alternative price = $7.25 x 13,000 = $94,250
- variable costs = $5.30 x 13,000 = ($68,900)
- fixed costs = ($21,000)
operating income = $4,350
Walkers World Company gathered the following information for 2019:
Total sales revenue (65% on credit) $432,000
Cost of goods sold 231,000
Sales returns and allowances (on credit) 44,000
Accounts receivable at end of 2019 ($30,000
increase during 2019) 100,000
Allowance for doubtful accounts:
Beginning of 2019 5,000
End of 2019 7,000
Merchandise inventory at end of 2019 ($10,000
decrease during 2019) 28,000
Assume 365 days in the year.
Calculate each of the following ratios.
A. Receivable turnover ratio.
B. Average age of receivables.
C. Inventory turnover ratio.
D. Average number of days' supply in inventory
Answer:
A. Receivable turnover ratio. = 4.57 times
B. Average age of receivables. 94.07 days
C. Inventory turnover ratio. 7 times
D. Average number of days' supply in inventory = 633 days
Explanation:
Net Sales $ 388,000
Sales revenue (65% on credit) $432,000
Less Sales returns and allowances (on credit) 44,000
Average Accounts Receivable = Accounts Rec (beg) Accounts Rec (end)/2
= 70,000+ 100,000/2= $85,000
A. Receivable turnover ratio.
Receivable turnover ratio= Net Sales / Average Accounts Receivable
= 388,000/ 85,000= 4.5647= 4.565= 4.57 times
A high turnover ratio is favorable because the accounts receivable are quickly collected.
B. Average age of receivables.
Average age of receivables= Accounts receivable *365/ Sales
= 100,000* 365/388,000= 365,000,00/388,000= 94.07 days
Accounts receivable will be collected in 94 days.
C. Inventory turnover ratio.
Inventory turnover ratio= Cost Of Goods Sold/ Average Inventory
= 231,000/38,000+ 28,000/2
= 231,000/33,000= 7 times
A company with a high turnover requires a smaller investment in inventory than one producing the same sales with a lower turn over.
D. Average number of days' supply in inventory
Average number of days' supply in inventory= Cost of Goods Sold/ 365
= 231,000 /365= 632.89
More Inventory will be needed in 633 days
Walkers World Company gathered the following information for 2019:
Total sales revenue (65% on credit) $432,000
Cost of goods sold 231,000
Sales returns and allowances (on credit) 44,000
Accounts receivable at end of 2019 ($30,000
increase during 2019) 100,000
Allowance for doubtful accounts:
Beginning of 2019 5,000
End of 2019 7,000
Merchandise inventory at end of 2019 ($10,000
decrease during 2019) 28,000
Assume 365 days in the year.
Calculate each of the following ratios.
A. Receivable turnover ratio.
B. Average age of receivables.
C. Inventory turnover ratio.
D. Average number of days' supply in inventory
Which of the following is a macro factor underlying the trend toward greater globalization?A. increase in diversity in consumer tastes and preferencesB. increase in nationalization of private organizationsC. dramatic developments in information processing and other technologiesD. rise of communism across the globeE. increase in trade regulations across the globe
Answer:
The correct answer is Option C (dramatic developments in information processing and other technologies)
Explanation:
Globalization caused by several factors, example are improved markets, transportation, policies and cultures, improved technology, can be explained as the process by which different parts of the world are connected due to the spread of ideas, people, technology, goods. Types of globalization are: Economic globalization, political globalization, and cultural globalization.
Factors underlying the trend toward greater globalization are micro level (individual) and macro level (society). Macro factors include, barriers to distribution of good and services among countries, and technological change, which is very important as it greatly affects globalization.
Dramatic developments in information processing and other technologies makes it easier to communicate and share information in order to conduct business internationally, and do other greater things too.
A couple owns a life insurance policy with a Children’s Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
1. Medical exam and parental medical history
2. Medical exam
3. Proof of insurability is not required
4. Her parent's federal income tax receipts
Answer:
3. Proof of insurability is not required
Explanation:
Proof of insurability is not required because if a children's term rider is attached to a life insurance policy, then children are protected or covered by this insurance till they reach a particular age, which happens to be the maximum age stated in the policy. From that age they can convert their insurance coverage to a permanent
life insurance policy without having to issue proof of insurability as it would not be required because a child rider locks in future insurability. The can child rider can be purchased with an individual life insurance policy.
Listed below are a few events and transactions of Kodax Company.
Jan. 2 Purchased 92,000 shares of Grecco Co. common stock for $526,000 cash. Grecco has 276,000 shares of common stock outstanding, and its activities will be significantly influenced by Kodax.
Sept. 1 Grecco declared and paid a cash dividend of $1.50 per share.
Dec. 31 Grecco announced that net income for the year is $507,900. Year 2
June 1 Grecco declared and paid a cash dividend of $3.80 per share.
Dec. 31 Grecco announced that net income for the year is $735,400.
Dec. 31 Kodax sold 13,000 shares of Grecco for $96,500 cash.
Required:
Prepare journal to record the above transactions and events of kodax Company.
Answer:
Jan. 2
Investment in Associate $526,000 (debit)
Cash $526,000 (credit)
Sept. 1
Cash $138,000 (debit)
Dividend Received $138,000 (credit)
June 1
Cash $349,600 (debit)
Dividend Received $349,600 (credit)
Dec. 31
Cash $96,500 (debit)
Investment in Associate $96,500 (credit)
Explanation:
When Kodax Company purchased 92,000 shares of Grecco Co she had significant influence (more than 20% of shareholding in Grecco Co). We call this an Investment in an Associate.
The Investment in Associate is a Financial Asset to the Holder (Kodax Company) and an Equity Element to the Investee (Grecco Co) and should be recorded appropriately as above.
Problem 15-12 Below is a list of prices for zero-coupon bonds of various maturities. Maturity (Years) Price of $1,000 Par Bond (Zero-Coupon) 1 $ 974.85 2 882.39 3 847.70 a. A 5.6% coupon $1,000 par bond pays an annual coupon and will mature in 3 years. What should the yield to maturity on the bond be? (Round your answer to 2 decimal places.) b. If at the end of the first year the yield curve flattens out at 6.5%, what will be the 1-year holding-period return on the coupon bond? (Round your answer to 2 decimal places.)
Answer:
a. 5.63%
b. 5.72%
Explanation:
to calculate YTM of zero coupon bonds:
YTM = [(face value / market value)¹/ⁿ] - 1
YTM₁ = [(1,000 / 974.85)¹/ⁿ] - 1 = 2.58%YTM₂ = [(1,000 / 882.39)¹/ⁿ] - 1 = 6.46%YTM₃ = [(1,000 / 847.70)¹/ⁿ] - 1 = 5.66%a. A 5.6% coupon $1,000 par bond pays an annual coupon and will mature in 3 years. What should the yield to maturity on the bond be?
the bond's current market price:
$1,000 / 1.0566³ = $847.75$56/1.0258 + 56/1.0646² + 56/1.0566³ = $54.59 + $49.41 + $47.47 = $151.47current market price = $999.22YTM = [C + (FV - PV)/n] / [(FV + PV)/2] = [56 + (1,000 - 999.22)/3] / [(1,000 + 999.22)/2] = (56 + 0.26) / 999.61 = 5.63%
b. If at the end of the first year the yield curve flattens out at 6.5%, what will be the 1-year holding-period return on the coupon bond?
the bond's current market price:
$1,000 / 1.065³ = $827.85$56/1.0258 + 56/1.065² + 56/1.065³ = $54.59 + $49.37 + $46.36 = $150.32current market price = $978.17you invest $978.17 in purchasing the bond and you receive a coupon of $56, holding period return = $56 / $978.17 = 5.72%
Slavin Corporation manufactures two products, Alpha and Delta. Each product requires time on a single machine. The machine has a monthly capacity of 500 hours. Total market demand for the two products is limited to 150 units (each) monthly. Slavin is currently producing 110 Alphas and 110 Deltas each month. Cost and machine-usage data for the two products is shown in the following spreadsheet, which Slavin managers use for planning purposes:
Alpha Delta Total
Price $120 $150
Less variable costs per unit
Material 20 35
Labor 26 37
Overhead 14 14
Contribution margin per unit $60 $64
Fixed costs
Manufacturing $8,000
Marketing and administrative 5,000
$13,000
Machine hours per unit 2.0 2.5
Machine hours used 495
Machine hours available 500
Quantity produced 110 110
Maximum demand 150 150
Profit $640
Required:
a. How many Alphas and Deltas should the company produce each month to maximize monthly profit?
b. If the company produces at the level found in requirement (a), how much will monthly profit increase over the current production schedule?
Answer:
a. How many Alphas and Deltas should the company produce each month to maximize monthly profit?
150 Alphas80 Deltasb. If the company produces at the level found in requirement (a), how much will monthly profit increase over the current production schedule?
$480 increase (or 75% increase)Explanation:
Alpha Delta
Price $120 $150
Variable costs per unit :
Material $20 $35 Labor $26 $37 Overhead $14 $14Contribution margin per unit $60 $64
Fixed costs :
Manufacturing $8,000 Marketing and administrative $5,000 total $13,000Machine hours per unit 2.0 2.5
Machine hours used 495
Machine hours available 500
Quantity produced 110 110
Maximum demand 150 150
Profit $640
Contribution margin per machine hour:
$30 $25.60
this means you should produce as many Alphas as possible = 150. Production of 150 Alphas will consume 300 machine hours and the remaining 200 hours can be used to produce 80 Deltas.
Monthly profit:
[(150 x $60) + (80 x $64)] - 13,000 = $9,000 + $5,120 - $13,000 = $1,120, which represents a $480 increase (or 75% increase)
2. What does an interest inventory measure?
A. The skills you have
B. Your ability to learn
C. The things you like to do
D. The things you do extremely well
Interest inventory measures the skills u have
The Work-in-Process inventory account of a manufacturing firm shows a balance of $3,980 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of $660 and $460 for materials, and charges of $560 and $740 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of:
Answer:
Predetermine overhead rate as a percentage of direct labor cost is 120%
Explanation:
To calculate the predetermined overhead rate, we first need to determine the total overheads under the balance of $3980 for two jobs.
The total cost of both jobs which are uncompleted equals,
Total cost both jobs = (660 + 560) + (460 + 740)
Total cost both jobs = 1220 + 1200 = $2420
Thus, the overhead cost involved in both jobs is,
Total Overhead cost = 3980 - 2420 = $1560
This total overhead of $1560 has been absorbed on the basis of a predetermine overhead rate based on the direct labor cost. The total direct labor cost involved under both uncompleted jobs is,
Total direct labor cost both jobs = 560 +740 = $1300
So, the predetermined overhead rate is,
Overhead rate = Total overheads / total direct labor cost
Overhead rate = 1560 / 1300
Overhead rate = $1.2 per $1 of direct labor cost
Expressed as a percentage of direct labor cost, it is:
% Overhead rate = 1560 / 1300 * 100 = 120% of direct labor cost
Because transit tends to be congested in this country, many people prefer to shop in their local neighborhoods. They tend to go to stores several times a week to get what they need rather than making one big trip less frequently. Since the culture of this company is very network oriented, shoppers expect a trip to the store to involve significant interaction with store employees. Shoppers are also used to good deals and haggling for better prices. A U.S. store opens in this country and exhibits the following characteristics. Which of these characteristics will be problematic for the success of the store?
A) A few large flagship stores located in big cities
B) Product experts on the floor to answer customers' questions
C) Store locations easy to access via public transit
D) High-end pricing
E) Products available individually rather than in bulk
Answer: A few large flagship stores located in big cities; High-end pricing( Option A and D)
Explanation:
Because the people in this country usually shop close to their home, it would not be wise for a business to opt for few large flagship stores rather than a larger number of the smaller stores.
It would also be unwise for such business to sell mainly high-end products because the shoppers are used to good deals and haggling. Such company would be smart, to sell the products individually, because bulk purchases would make little sense for people that make frequent trips to the store.
Also, in a country with a congested transportation, an easy-to-access store locations will be important and having product experts on the floor who answers the questions of customers’ would appeal to network-oriented local culture.
Zimmerman Company's annual accounting year ends on December 31. It is December 31, 2014, and all of the 2014 entries
except the following adjusting entries have been made:
a. On September 1, 2014, Zimmerman collected six months' rent of $8,400 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,400.
b. On October 1, 2014, the company borrowed $18,000 from a local bank and signed a 12 percent note for that amount. The principal and interest are payable on the maturity date, September 30, 2015.
c. Depreciation of $2,500 must be recognized on a service truck purchased on July 1, 2014, at a cost of $15,000.
d. Cash of $3,000 was collected on November 1, 2014, for services to be rendered evenly over the next year beginning on November 1, 2014. Unearned Service Revenue was credited when the cash was received.
e. On November 1, 2014, Zimmerman paid a one-year premium for property insurance, 9,000, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount.
f. The company earned service revenue of $4,000 on a special job that was completed December 29, 2014. Collection will be made during January 2015. No entry has been recorded.
g. At December 31, 2014, wages earned by employees totaled $14,000. The employees will be paid on the next payroll date, January 15, 2015.
h. On December 31, 2014, the company estimated it owed $500 for 2014 property taxes on land. The tax will be paid when the bill is received in January 2015.
Required:
1`. Indicate whether each transaction relates to a deferred revenue, deferred expense, accrued revenue, or accrued
expense.
2. Give the adjusting entry required for each transaction at December 31, 2014.
Answer:
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