Answer:
1.Net Realizable value $530,500
2.$19,500
Explanation:
1. Calculation for Determining the net realizable value of accounts receivable after adjustment will be
Ending Account receivable $550,000- $19,500
Net Realizable value=$530,500
2. Calculation to determine the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance for Doubtful Accounts
The Allowance for Doubtful Accounts = $25,000
Using this formula
Bad debts expense = Ending Allowance for Doubtful Accounts - Beginning Allowance for Doubtful Accounts
Let plug in the formula
= 25,000 - 5,500
= $19,500
You purchased 290 shares of a particular stock at the beginning of the year at a price of $75.53. The stock paid a dividend of $1.05 per share, and the stock price at the end of the year was $82.04. What was your dollar return on this investment
Answer:
$2,132.40
Explanation:
Dollar return also known as Return on Investment (ROI) is the return realized on a investment over a period of time
The Formula is = (End value-Beginning value+Dividend) * Unit Purchased
Dollar return= (82.04 - 75.53 + 1.05) *290
Dollar return = 7.56 * 290
Dollar return = $2,132.40
Built-Tight is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for product costs for the quarter follow.
July August September
Budgeted sales $54,000 $70,000 $58,000
Budgeted cash payments for
Direct material 15,160 12,440 12,760
Direct labor 3,040 2,360 2,440
Factory overhead 19,200 15,800 16,200
Sales are 15% cash and 85% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $15,000 in cash: $44,000 in accounts receivable; $3,500 in accounts payable; and a $4,000 balance in loans payable. A minimum cash balance of $15,000 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($3,000 per month), and rent ($5,500 per month).
Required:
a. Prepare a cash receipts budget for July, August, and September.
b. Prepare a cash budget for each of the months of July, August, and September.
Answer:
Built-Tight
a) Cash Budget for July, August, and September:
July August September Total
Beginning balance $15,000 $16,900 $28,700 $15,000
Cash collections: 52,100 56,400 68,200 176,700
Cash Expenses:
Direct materials (15,160) (12,440) (12,760 ) (40,360)
Direct labor (3,040) (2,360) (2,440) (7,840)
Factory overhead (19,200) (15,800) (16,200) (51,200)
Operating expenses:
Sales Commission (5,400) (7,000) (5,800) (18,200)
Rent Expense (3,000) (3,000) (3,000) (9,000)
Accounts Payable (4,000) (4,000)
Interest expense (400) (400)
Loan repayment (4,000) (4,000)
Minimum Balance 15,000 15,000 15,000
Excess Cash $1,900 $13,700 $41,700 $56,700
Explanation:
a) Cash Collections:
July August September Total
Cash sales 15% $8,100 $10,500 $8,700 $27,300
85% a month after 44,000 45,900 59,500 149,400
Total collections $52,100 $56,400 $68,200 $176,700
b) It is assumed that the balance in accounts payable was paid in August when the company had enough balance to offset it. Any other assumption could have been made.
c) A cash budget shows the cash receipts and payments made during the budget period. As a budget, it shows the forecast for cash receipts and payments, which will help management to make decisions to avoid liquidity problems which can ruin a business. Management is able to plan ahead for the business' expenditures and investments. It also warns management to negotiate for loans to smoothen periods of cash shortages.
Mark expects the value of currency X to appreciate in the near future. Hence, he delays the collection of payments from foreign customers until the next month. Which tactic is Mark making use of to minimize the foreign exchange exposure
Answer:
Lag startegy
Explanation:
Mark is using Lag Strategy to minimize the foreign exchange exposure.
Lag Strategy refers to a situation of adding capacity only after the company is running at full capacity or beyond caused by an increase in demand. This strategy is conservative strategy. It reduces the risk of waste but then it could bring about a loss of possible customers.
Assume that the Best Buy store in Exercise 3 has a policy of ordering cell phones from the supplier in lots of 500. Weekly demand for cell phones at the store is normally distributed, with a mean of 300 and a standard deviation of 200. The supplier takes two weeks to supply an order. If the store manager is using a continuous review policy and targeting a fill rate of 99 percent, what safety inventory should the store carry
Answer:
Safety Stock = 932
Explanation:
The safety stock is determinate as follows:
f the desired service level is 99% When inventory reaches ROP, during the lead time 99% of the customers will receive the good while 1% of them will face stock-out.
Formula:
[tex]Pz \times \sqrt{lead-time} \times \sigma =\\P(99) \times \sqrt{2} \times 200 =[/tex]
We have 2 weeks lead-time the standard deviation is 200 while we want a service level of 99% (z= 0.99)
2.33 x √2 x 200 = 932
Safety Stock = 932
An example of an inventory accounting policy that should be disclosed in Summary of Significant Accounting Policies is the:_________ . a. amount of income resulting from the involuntary liquidation of LIFO b. major backlogs of inventory orders. c. method used for pricing inventory. d. division of inventory by raw materials, work-in-process, finished goods.
Answer:
Option C
Explanation:
The overview of important accounting rules is a portion of the end notes that accompanies the financial statements of an company, outlining the key policies that the finance department is following. The policy overview is prescribed by the accounting system in force (like the GAAP or IFRS).
The approach a corporation uses to assess the inventory expense (inventory valuation) affects the financial reports explicitly. Thus, it should be depicted in summary of accounting policies.
The one that exemplifies an inventory accounting policy would be:
C). method used for pricing inventory.
Inventory PolicyThe financial statement at the end of the accounting books exemplifies one of the significant rules of accounting.
This highlights the major policies to be followed by the company and its finance team.
The outline of policies acting are provided through this and hence, they will help in offering the method for pricing of inventory in the firm.
Thus, option C is the correct answer.
Learn more about "Inventory" here:
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The following items are taken from the financial statements of the Sage Service for the year ending December 31, 2020: Accounts payable $ 17800 Accounts receivable 11200 Accumulated depreciation – equipment 28000 Advertising expense 20800 Cash 15300 Owner’s capital (1/1/20) 42900 Owner’s drawings 13700 Depreciation expense 12300 Insurance expense 3100 Note payable, due 6/30/21 69700 Prepaid insurance (12-month policy) 6200 Rent expense 17000 Salaries and wages expense 32000 Service revenue 132800 Supplies 4000 Supplies expense 5800 Equipment 209300 What are total long-term liabilities at December 31, 2020?
Answer:
$0
Explanation:
The computation of the long term liabilities is shown below:
As we know that the long term liabilities are the liabilities which are due for the next months
In the given question, there is a note payable which is due on June 30, 2021 and we have to find the long term liabilities for Dec 31,2020 so it is made only 6 months but we required 12 months So the note payable is treated as a current liabilities
So, the amount should be $0 in this case
In the business world, the goal of preventive law is to increase profits by: Select one: a. imposing higher inheritance and income taxes on wealthy people. b. avoiding losses through fines and damage judgments. c. involving the client in the business-planning process. d. creating unenforceable contracts.
Answer:
The correct answer is option (b) avoiding losses through fines and damage judgments.
Explanation:
Solution
The aim of preventive law in business is to increase profit by avoiding loss. This is done because of fines and damage by some decisions, makes losses in business plans and preventive law is a legal principle which does not let legal matters involve in business goal.
The others are not the correct options because there is no such concern of imposing more income tax on rich people, even preventive law feature does not add of involving clients in business planning.
The last option is also not correct as preventive law is basically to prevent or avoid rather any creating any enforceable contracts.
Skysong Corporation has retained earnings of $691,300 at January 1, 2020. Net income during 2020 was $1,552,100, and cash dividends declared and paid during 2020 totaled $82,000. Prepare a retained earnings statement for the year ended December 31, 2020. Assume an error was discovered: land costing $88,390 (net of tax) was charged to maintenance and repairs expense in 2019. (List items that increase retained earnings first.)
Answer:
Skysong Corporation
Statement of Retained Earnings
Retained earnings balance January 1, 2020 $691,300
Add:
Adjustments to 2019 Income Statement $88,390
Net profits 2020 $1,552,100
Less:
Dividends declared and distributed ($82,000)
Retained earnings balance December 31, 2020 $2,249,790
Since the land purchase was recorded as maintenance expense by error, the 2019 income statement must be adjusted by adding that amount.
Handy Home sells windows and doors in the ratio of 8:2 (windows:doors).
The selling price of each window is $200 and of each door is $500.
The variable cost of a window is $125 and of a door is $350.
Fixed costs are $900,000.
Required:
Based on this information, determine:
a) selling price per composite unit,
b) variable costs per composite unit,
c) break-even point in composite units, and
d) number of units of each product that will be sold at the break-even point.
Answer:
A. selling price per composite unit,
Which of the following is NOT correct?Select one:a. Finance companies are not allowed to accept deposits.b. Finance companies are supervised by ASIC.c. Building societies are supervised by APRA.d. Credit unions are not allowed to accept deposits from retail investors.
Answer:
The correct answer is (a) Finance companies are not allowed to accept deposits.
Explanation:
Solution
The financial companies are permitted to accept the public deposits through the issue of bonds for a specified period pf time and in return they have to pay the market interest rate to the investors. while these companies are supervised by the Australian Securities and Investments Commission (ASIC).
The credit unions are the cooperative bank produced by the large corporations or the bankers to issue the credit to their members and representatives only.
An investment will pay $200 at the end the year, $250 at the end of the next year, $400 at the end of the third year, and $500 at the end of the 4th year. Other investments of equal risk earn 6%. How much is this investment worth today
Answer:
PV= $1,143.03
Explanation:
Giving the following information:
An investment will pay $200 at the end of the year, $250 at the end of the next year, $400 at the end of the third year, and $500 at the end of the 4th year. Other investments of equal risk earn 6%.
To calculate the present value, we need to use the following formula on each cash flow:
PV= FV/(1+i)^n
Cf1= 200/1.06= 188.68
Cf2= 250/1.06^2= 222.50
Cf3= 400/1.06^3= 335.85
Cf4= 500/1.06^4= 396
PV= $1,143.03
Duke Company's records show the following account balances at December 31, 2016:
Sales...................... $15,000,000
Cost of Goods Sold...$9,000,000
General and Administrative expenses... $1,000,000
Selling Expenses........ $500,000
Interest expense........... $700,000
Income tax expense has not yet been determined.
The following events also occurred during 2016. All transactions are material in amount.
1. $300,000 in restructuring costs were incurred in connection with plant closings.
2. Inventory costing $400,000 was written off as obsolete. Material losses of this type are considered to be unusual.
3. It was discovered that depreciation expense for 2015 was understated by $50,000 due to mathematical error.
4. The company experienced a foreign currency translation adjustment loss of $200,000 and had unrealized gains on investments of $180,000.
Required: Prepare a single, continuous multistep statement of comprehensive income for 2016. The company's effective tax rate on all items affecting comprehensive income is 40%. Each component of other comprehensive income should be displayed net of tax. Ignore EPS disclosures.
Answer:
a single, continuous multi-step statement of comprehensive income for 2016
Sales $15,000,000
Cost of Goods Sold ($ 9,400,000)
Gross Profit $5,600,000
Less Expenses
General and Administrative expenses. ($1,030,000)
Selling Expenses ($500,000)
Interest expense ($700,000)
Net Income before tax $3,370,000
Income tax expense at 40% ($ 1,348,000)
Net Income after tax $ 2,022,000
Explanation:
First make the adjustments that affect the Income Statement as follows :
Item 2. Obsolete Inventory
Cost of Goods Sold = $9,000,000 + $400,000 = $ 9,400,000
Reason : Correction of Costs of Sales that has been understated.
Item 3. Depreciation
General and Administrative expenses = $1,000,000 + $50,000 = $1,050,000
Reason : Correction of Depreciation Expenses that was understated.
Item 4. Gains and Loses
General and Administrative expenses = $1,050,000
foreign currency translation loss = ($200,000)
unrealized gains on investments = $180,000
General and Administrative expenses = $1,030,000
Note : Item 1 is a Capital Expenditure.
A box of chocolate candy costs 28.80 Swiss francs in Switzerland and $20 in the United States. Assuming that purchasing power parity (PPP) holds, what is the current exchange rate
Answer: 1 U.S. dollar equals 1.44 Swiss francs
Explanation:
The Purchasing power parity (PPP) is used by economists or financial analysts to make comparison between the standards of living and the economic productivity that exist between countries.
From the question, we are told that a box of chocolate candy costs 28.80 Swiss francs in Switzerland and $20 in the United States. The current exchange rate will be:
1 U.S dollar = (28.80/20) Swiss Francs
1 U. S Dollar = 1.44 Swiss Francs
firm uses both labor and machines in production. Explain why an increase in the average wage rate causes both a movement along the demand curve and a shift of the demand curve. An increase in the average wage causes a movement
Answer:
The answer is explained below
Explanation:
When a firm increases the average wage rate, the firm would employ fewer workers causing a movement up along the demand curve and a shift to the left of the labor demand curve. As wage increase, the firm production will reduce because of a decrease in number of staffs, the causes the number of machines needed for production to reduce causing the marginal product of labor to shift to the left. The labor demand is further reduced, the firm then employ less labor at a higher wage.
important changes are occurring on your team as task agendas become clarified and members begin to understand one another personal styles. Attention is beginning to shift toward obstacles that may stand in the way of task accomplishment. Efforts are being made to find ways to meet team goals while also satisfying individual needs. Failure in this stage can be a lasting liability whereas success here can set a strong foundation for later team effectiveness. What stage of team development is your team in?
Answer:
Storming stage.
Explanation:
The storming stage usually begins with the appearance of conflicts between the different styles that each member of the team performs the work.
It is natural for each individual to have their own style of carrying out their tasks, and this is natural in a team with different people profiles, so if the style of a member working causes some type of unforeseen problem for the team, conflicts and frustrations can happen that will negatively impact the workflow and the achievement of objectives and goals.
The storming also happens for other reasons, such as position disputes, lack of information and direction of the functions of each team member, work overload, disagreements, resistance, etc.
Therefore, it is important that at this stage of team development, there is a leadership aimed at establishing direct communication with the members and aimed at correcting their behaviors without overcoming the personality of each member. It is also essential to have a review of the rules, individual check-ins and a culture based on integration and motivation, where each member feels equally important to the team's success.
During the year, RIT Corp. had sales of $565,600. Costs of goods sold, and depreciation expenses were $476,000, and $42,800, respectively. In addition, the company had an interest expense of $112,000 and a tax rate of 22 percent. What is the operating cash flow for the year
Answer:
Cash flows from Operating activities is $30800
Explanation:
The first thing that we will calculate is the Net Profit for the year thereafter we will calculate the operating cash flow for the year.
Step 1: Calculate is the Net Profit for the Year
Sales $5,65,600
Less: Cost of Goods Sold ($4,76,000)
Gross margin $89,600
Less: Admin and Selling expenses ($58800)
Less: Depreciation ($42,800)
Less: Interest expense ($112,000)
Net income before tax (124000)
Less: tax -
Net income after tax ($1,24,000)
Step 2: Now we will calculate the Cash flow from Operating activities
Net income after tax ($1,24,000)
Add: Depreciation $42,800
Add: Interest $1,12,000
Cash flow from Operating activities $30800
The effect is A. more likely if inflation is unanticipated because workers would not seek higher nominal wages. B. more likely if inflation is unanticipated because workers would seek higher nominal wages. C. less likely if inflation is unanticipated because workers would not seek higher nominal wages. D. less likely if inflation is unanticipated because workers would seek higher nominal wages.
Answer:
more likely if inflation is unanticipated because workers would not seek higher nominal wages.
Explanation:
Here is the full question:
The effect of the sudden unanticipated spurt of inflation:
A. less likely if inflation is unanticipated because workers would not seek higher nominal wages.
B. less likely if inflation is unanticipated because workers would seek higher nominal wages.
C. more likely if inflation is unanticipated because workers would seek higher nominal wages.
D. more likely if inflation is unanticipated because workers would not seek higher nominal wages.
Inflation is a presistent rise in general price level.
Workers compensate for expected inflation by asking for an increase in nominal wages.
Nominal wages = real wages + inflation
If there's an unanticipated rise in inflation, workers would be at a disadvantage because their wages would most likely not reflect this unexpected rise in inflation.
I hope my answer helps you
Answer: A. more likely if inflation is unanticipated because workers would not seek higher nominal wages.
Explanation:
An Unanticipated Spurt in Inflation could lead to rapid Economic growth and this effect is more likely if it was unanticipated because workers would not seek higher nominal wages.
This is because if the workers do not expect prices to rise and hence do not negotiate better wages, the cost of Production for producers will remain the same even though profitability has increased due to the higher prices.
The producers will therefore produce more goods to take advantage of the situation which will further aid Economic growth.
Your company rents computers to local businesses and schools. You have 1,600 computers with a book value of $163,000. As a result of changing technology, your computers are more difficult to rent so you must drastically reduce your rental price, which causes a decrease in estimated future cash flows. The fair value of the computers is estimated to be $123,500 because of their outdated technology. Your company should report an asset impairment loss of:
Answer:
Your company should report an asset impairment loss of : $39,500
Explanation:
Impairment loss is recognized when the Carrying Amount of an Asset exceed its Recoverable Amount.
Carrying Amount
Carrying Amount is the Cost of Asset less its Accumulated Depreciation
Carrying Asset of Computers = $163,000
Recoverable Amount
Recoverable Amount is the Higher of :
Value in Use of Asset orFair Value less Cost to Sale the AssetIn this case the Recoverable amount is $123,500
Analysis for impairment loss
Carrying Amount : $163,000 > Recoverable Amount : $123,500,
Thus we have an impairment situation.
Impairment loss is $39,500 ($163,000 - $123,500)
A company needs $8 million in new capital for expanded composites manufacturing. It is offering small-denomination corporate bonds at a deep discount price of $800 for a 4% $1000 face value bond that matures in 20 years and pays the dividend semiannually. Find the nominal and effective annual rates, compounded semiannually, that this company is paying per investor
Answer:
nominal interest rate = 4% annual
effective interest rate = 5.56% annual
Explanation:
the bond's nominal rate is basically the coupon rate
to calculate the bond's effective interest rate we must calculate its yield to maturity:
YTM = [coupon + [(face value - present value) / n]} / [(face value + present value) / 2]
coupon = $1,000 x 4% x 1/2 = $20FV = $1,000PV = $800n = 40YTM = [20 + [(1,000 - 800) / 40]} / [(1,000 + 800) / 2]
YTM = 25 / 900 = 2.777 semiannual ⇒ 5.56% annual
Coronado Industries acquired a tract of land containing an extractable natural resource. Coronado is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource. Geological surveys estimate that the recoverable reserves will be 2560000 tons, and that the land will have a value of $1080000 after restoration. Relevant cost information follows: Land $7420000 Estimated restoration costs 1480000 If Coronado maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material
Answer:
Depletion expenses per cost is $3.06
Explanation:
Geological surveys estimate that the recoverable reserves will be $2,560,000 tons, and that the land will have a value of $1,080,000 after restoration
The cost of the Land is $7,420,000 and the Estimated restoration costs is $1,480,000.
Therefore we will calculate the total cost.
Total Asset cost=$7,420,000 +$1,480,000
Total Asset cost=$8,900,000
The depletion expenses of Coronado Industries is:
Depletion expenses per cost= (Asset cost - Residual value) / Number of unit of depletion
Depletion expenses per cost = ($8,900,000 - $1,080,000) / $2,560,000
Depletion expenses per cost = 7820000/2560000
Depletion expenses per cost = 3.0546875
Depletion expenses per cost = $3.06
Computing Cost of Manufactured and Sold Goods
Compute the cost of goods manufactured and cost of goods sold for Strike Marine Company for the most recent year using the amounts described below. Assume that raw materials inventory contains only direct materials.
Beginning of End of End of
Year Year Year
Raw materials inventory
$25,000
$28,000
Insurance on plant
$9,000
Work in process inventory
$50,000
$35,000
Depreciation plant building and equipment
$13,000
Finished goods inventory
$18,000
$25,000
Repairs and maintenance
$4,000
Purchases of direct materials
$78,000
Marketing expenses
$77,000
Direct labor
$82,000
General and administrative expenses
$29,000
Indirect labor
$15,000
Answer:
Cost of Goods Manufactured $ 213,000
Cost of Goods Sold $ 206,000
Explanation:
If we add and subtract the following amounts in the correct order we get the Cost of Goods Manufactured and Sold Statement .
Strike Marine Company
Cost of Goods Manufactured and Sold Statement
Raw materials inventory Beginning $25,000
Add Purchases of direct materials $78,000
Less Raw materials inventory Ending $28,000
Direct Materials Used $ 75000
Direct labor $82,000
Manufacturing Overheads $ 41,000
Insurance on plant $9,000
Depreciation plant building and equipment $13,000
Indirect labor $15,000
Repairs and maintenance $4,000
Total Manufacturing Costs 198,000
Add Work in process inventory Beginning $50,000
Cost of Goods Available for Manufacture $ 248,000
Less Work in process inventory Ending $35,000
Cost of Goods Manufactured $ 213,000
Add Finished goods inventory Beginning $18,000
Cost of Goods Available for Sale 231,000
Less Finished goods inventory Ending $25,000
Cost of Goods Sold $ 206,000
The Manufacturing Overheads includes all the indirect expenses related to the manufacture of the product such as the indirect labor , the insurance and depreciation of plant and also the repairs.
The following are operating expense and included in the income statement not in the Cost of Goods Manufactured and Sold Statement. These relate to marketing and selling department.
Marketing expenses $77,000
General and administrative expenses $29,000
sadik inch's bonds currently sell for $1,300 and have a par value of $1,000. They pay a $105 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call
Answer:
5.31%
Explanation:
For computing the yield to call we need to use the RATE formula i.e shown in the attachment below:
Given that,
Present value = $1,300
Future value or Face value = $1,100
PMT = 105
NPER = 5 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after applying the above formula, the yield to call is 5.31%
Athena Company provides employee health insurance that costs $15,400 per month. In addition, the company contributes an amount equal to 4% of the employees' $154,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a:
Answer:
The entry to record accrued benefits would be a Debit to Employee Benefits Expense of $21,560
Explanation:
In order to calculate The entry to record the accrued benefits for the month we would have to calculate the following formula:
Accrued Benefits= Health Insurance Cost+ (Gross Salary × Percentage Contributable)
Accrued Benefits=$15,400+($154,000×4%)
Accrued Benefits=$15,400+$6,160
Accrued Benefits=$21,560
The entry to record accrued benefits would be a Debit to Employee Benefits Expense of $21,560
Customer A. Smith owed Stonebridge Electronics $325. On April 27, 2016, Stonebridge determined this account receivable to be uncollectible and written off the account. The company uses the direct write-off method. On July 15, 2016, Stonebridge received a check for $325 from the customer. How should the July 15, 2016 transaction be recorded
Answer:
A Journal was prepared for the receivable bad debt of a customer that owned stone bridge Electronics which us shown below
Explanation:
Solution
The first step to take in this case is to Nationalize the transaction to be recorded for the month of July 15, 2016.
A JOURNAL ENTRY FOR RECEIVABLE BAD DEBT OF $325
Particulars Debit Credit
July 15, 2016 Cash Account $325
To Bad Debt Expense $325
Note: The cash and bad debt expense are both recorded on credit and debit side of the Journal
Momber's Flooring Company
2011 2012
Cash 500 800
Accounts receivable 1,400 1,200
Inventory 3,900 4,400
Net fixed assets 8,200 8,200
Land 1,000 2,000
Total Assets 15,000 16,600
Notes payable 1,000 600
Accounts payable 3,000 2,000
Accruals 500 900
Long-term debt 3,600 5,400
Common Stock 2,500 2,200
Retained earnings 4,400 5,500
Total Liabilities and Equity 15,000 16,600
Given the Balance Sheets for Momber's Flooring Company above for the years ending December 31, 2011 and 2012, find Net Cash Flows from Operating Activities for 2012 assuming the following income statement data:
Net income (2012)= $3,382 and Depreciation (2012) = $810
Round your answer as a whole number and record without a dollar sign and without commas. For example, record $3,204.854 as 3205. To show a negative cash flow (i.e., a net cash outflow), place a negative sign before your answer with no space between the negative sign and the number. Thus, record negative 5,432 as -5432.
Answer:
Net Cash Flows from Operating Activities for 2012 will be $2,082
Explanation:
Prepare the Cash flow from Operating Activities Section to determine the Net Cash Flows from Operating Activities.
Cash flow from Operating Activities :
Net income 3,382
Adjustment for Non-Cash items :
Depreciation 810
Adjustment for Changes in Working Capital items :
Decrease in Accounts Receivables 200
Increase in Inventory -500
Decrease in Notes payable -400
Decrease in Accounts payable -1,000
Increase in Accruals 400
Net Cash Flows from Operating Activities 2,082
Conclusion :
Net Cash Flows from Operating Activities for 2012 will be $2,082
Stylist Services Co. offers its services to individuals desiring to improve their personal images. After the accounts have been adjusted at July 31, the end of the fiscal year, the following balances were taken from the ledger of Stylist Services Co.: Marlena Fenton, Capital $880,000 Marlena Fenton, Drawing 11,000 Fees Earned 520,400 Wages Expense 488,000 Rent Expense 65,000 Supplies Expense 11,200 Miscellaneous Expense 13,900 Required: Journalize the two entries required to close the accounts. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
Date General Journal Debit ($) Credit ($)
July 31 Fees Earned 520,400
Wages Expense 488,000
Rent Expense 65,000
Supplies Expense 11,200
Miscellaneous Expense 13,900
Marlena Fenton, Capital (57,700)
(To close Revenue and Expense accounts)
July 31 Marlena Fenton, Capital 11,000
Marlena Fenton, Drawing 11,000
Explanation:
Marlena Fenton, Capital = $880,000
Marlena Fenton, Drawing = $11,000
Fees Earned = $520,400
Wages Expense = $488,000
Rent Expense = $65,000
Supplies Expense = $11,200
Miscellaneous Expense = $13,900
Marlena Fenton, Capital = $520,400 -($488,000 + $65,000 + $11,200 + $13,900) = ($ 57,700)
Phineas is an agent assigned to scout out professional players for a football team. One player he brings in has a drug problem, which Phineas knows about but does not disclose to the hiring team. If the player is selected, which of the following is true?
1. Phineas has not breached a duty to his principal.
2. Phineas has breached his duty of accounting only.
3. Phineas has breached more than one of his duties.
4. Phineas has breached his duty of notification only.
Answer:
3. Phineas has breached more than one of his duties.
Explanation:
According to the given situation, Phineas is an agent appointed to a football team to scout out professional players. One player he brings in has a drug addiction that Phineas truly understands but does not reveal to the recruiting team.
Here Phineas is breached more than one of his duties as he has the duty to inform the hiring team or the information should be got by the third party or by any other source but he is not revealing the information to the hiring team
So, the correct option is Phineas has breached more than one of his duties.
Match the following terms with their definitions.
1. Internal control
2. Control procedures
3. Firewalls
4. Encryption
5. Environment
6. Information system
7. Separation of duties
8. Collusion
9. Documents
10. Audits
11. Operational efficiency
12. Risk assessment
13. Sarbanes-Oxley Act
a. Two or more people working together to overcome internal controls.
b. Part of internal control that ensures resources are not wasted.
c. Requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports.
d. Should be prenumbered to prevent theft and inefficiency
e. Limits access to a local network.
f. Example: The person who opens the bank statement should not also be the person who is reconciling cash.
g. Identification of uncertainties that may arise due to a company's products, services or operations.
h. Examination of a company's financial statements and accounting system by a trained accounting professional.
i. Without a sufficient one of these, information cannot properly be gathered and summarized.
j. The organizational plan and all related measures that safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate and reliable accounting data.
k. Component of internal control that helps ensure business goals are achieved.
l. Rearranges data by a mathematical process-
m. To establish an effective one, a company's CEO and top managers must behave honorably to set a good example for employees.
Answer:
1. Internal control - The organizational plan and all related measures that safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate and reliable accounting data. (J)
2. Control procedures - Component of internal control that helps ensure business goals are achieved. (K)
3. Firewalls - Limits access to a local network. (E)
4. Encryption - Rearranges data by a mathematical process. (I)
5. Environment - To establish one a company, CEO and top managers must behave honorably to set a good example for employees. (M)
6. Information system - Without a sufficient one of these information cannot properly be gathered and summarized. (I)
7. Separation of duties - Example: The person who opens the bank statement should not also be the person who is reconciling cash. (F)
8. Collusion - Two or more people working together to overcome internal controls. (A)
9. Documents - Should be pre-numbered to prevent theft and inefficiency (D)
10. Audits - Examination of a company's financial statements and accounting system by a trained accounting professional. (H)
11. Operational efficiency - Part of internal control that ensures resources are not wasted (B)
12. Risk assessment - Identification of uncertainties that may arise due to a company's products services or operations . (G)
13. Sarbanes-Oxley Act - Requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports. (C)
A company purchases a piece of equipment on January 1, 2021, for $70,000 and the equipment has an expected useful life of five years. Its residual value is estimated to be $10,000. Assuming the company uses the straight-line depreciation method, what should be the balance in accumulated depreciation for the equipment as of December 31, 2023 (three years later)
Answer:
$36,000
Explanation:
Calculation for the balance in accumulated depreciation for the equipment as of December 31, 2023 will be:
Using this formula
(Equipment - Estimated residual value)÷ Expected useful life
Let plug in the formula
($70,000 − $10,000) / 5 years
$60,000/5
= $12,000 depreciation per year.
Calculation for the Accumulated depreciation will be:
Depreciation per year× Number of years
= $12,000 × 3 years
= $36,000.
Therefore the balance in accumulated depreciation for the equipment as of December 31, 2023 will be: $36,000
A production department's output for the most recent month consisted of 16,500 units completed and transferred to the next stage of production and 16,500 units in ending Work in Process inventory. The units in ending Work in Process inventory were 60% complete with respect to both direct materials and conversion costs. There were 2,300 units in beginning Work in Process inventory, and they were 80% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.
Answer:
The equivalent units of production for the month, assuming the company uses the weighted average method is 26,400 units.
Explanation:
The equivalent units of production for the month when the company uses the weighted average method is the addition of the units completed and transferred to next stage and degree of completion of the units in ending Work in Process inventory.
This can therefore be calculated as follows:
Equivalent units of production for the month = Units completed and transferred to next stage + Units in ending Work in Process inventory
Since,
Units completed and transferred to next stage = 16,500 units
Units in ending Work in Process inventory = 16,500 * 60% complete = 9,900 units
Therefore, we have:
Equivalent units of production for the month = 16,500 + 9,900 = 26,400 units
Therefore, the equivalent units of production for the month, assuming the company uses the weighted average method is 26,400 units.
