Answer:
Wild Sun Airlines, Inc.
A. The income from operations for the two divisions does not accurately measure performance. It was not based on the level of activity carried out in each division of Wild Sun Airlines Inc.
B. WILD SUN AIRLINES INC. Corrected Divisional Income Statements For the Year Ended December 31, 2016:
1 Passenger Division Cargo Division
2 Revenues $3,045,000.00 $3,045,000.00
3 Operating expenses 2,425,000.00 2,748,000.00
4 Income from operations before
service department charges $620,000.00 $297,000.00
5 Less service department charges:
6 Training $150,400.00 $103,400.00
7 Flight scheduling 69,550.00 123,050.00
8 Reservations 302,400.00 0.00
9 Total service department charges $522,350.00 $226,450.00
10 Income from operations $97,650.00 $70,550.00)
Explanation:
a) Data and Calculations:
WILD SUN AIRLINES INC. Divisional Income Statements For the Year Ended December 31, 2016
1 Passenger Division Cargo Division
2 Revenues $3,045,000.00 $3,045,000.00
3 Operating expenses 2,425,000.00 2,748,000.00
4 Income from operations before
service department charges $620,000.00 $297,000.00
5 Less service department charges:
6 Training $126,900.00 $126,900.00
7 Flight scheduling 96,300.00 96,300.00
8 Reservations 151,200.00 151,200.00
9 Total service department charges $374,400.00 $374,400.00
10 Income from operations $245,600.00 $(77,400.00)
Additional Data:
Passenger Division Cargo Division Total
Number of personnel trained 320 220 540
Number of flights 650 1,150 1,800
Number of reservations requested 21,000 0 21,000
Activity-based costing rates:
Total Costs Total Activity Rate
6 Training $253,800.00 540 $470 per personnel
7 Flight scheduling 192,600.00 1,800 $107 per flight
8 Reservations 304,400.00 21,000 $14.495 per reservation
Costs Allocation:
Passenger Division Cargo Division Total
Training costs $150,400 ($470*320) $103,400 ($470*220) $253,800
Flight scheduling 69,550 ($107*650) 123,050 ($107*1,150) 192,600
Reservations 304,400 ($14.495 *21,000) 304,400
Total costs $750,800
Novak Corp.'s trial balance reported the following balances at the end of its first year: Cash $17080 Prepaid insurance 850 Accounts receivable 4270 Accounts payable 3420 Notes payable 5120 Common stock 6590 Dividends 850 Revenues 35380 Expenses 21350 What amount did Novak Corp.'s trial balance show as total credits
Answer:
Explanation:
Novak Corp.'s
Trail Balance
Debit ($) Credit ($)
Cash $17,080
Prepaid insurance $850
Accounts receivable $4,270
Accounts payable $3,420
Notes payable $5,120
Common stock $6,590
Dividends $850
Revenues $35,380
Expenses $21,350
Credit Total $50,510
Annalise received financial aid offers from two universities.
Financial Analysis for Option A
Costs per Year
Financial Aid Package per Year
Tuition & Fees
Scholarships & Grants
$10,000
$7,000
Room & Board
Work-Study
$11,500
$4,000
Financial Analysis for Option B
Costs per Year
Financial Aid Package per Year
Tuition & Fees
Scholarships & Grants
$28,000
$18,000
Room & Board
Work-Study
$9,000
$4,000
Which statement about the costs per year is true?
Option A will save her $4,500.
Option B will save her $7,000.
Option B will save her $11,000.
Option A will save her $15,500.
Answer:
Option A will save her $15,500.
Explanation:
Financial aid is the assistance given to students to cater to a college education. It excludes Scholarships and grants as these are not cost items by other forms of assistance.
Total for University Option A excluding scholarships and grants
Tuition & Fees $10,000
Room and Board $11,500
Work-Study $ 4,000
Total for A $25,500
For university option B
Tuition & Fees $28,000
Room & Board $ 9,000
Work-study $ 4,000
Total for B $41,000
Option B is more costly than A by :$41,000 - $25,500=$15,500.
Therefore, Option A saves $15,500
Answer:
Option A will save her $4,500.
Explanation:
On January 1, year 1, Olinto created a $650,000 trust that provided his mother with a lifetime income interest starting on January 1, year 1, with the remainder interest to go to his son. Olinto expressly retained the power to revoke both the income interest and the remainder interest at any time. Who is taxed on the trust's year 1 income
Answer:
c. Olinto
Explanation:
Multiple choice "a. Olinto's mother, b. Olinto's son, c. Olinto, d. The trust"
As the income tax rules mandate the liability to pay tax on trustees, the tax can be levied and recovered from a representative assesse i.e., the trustee who is Olinto. Olinto is a grantor and thus as per section 676, he must be taxed on the income generated through revocable trust.
The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are as follows: Standard Costs Direct materials 1,040 kilograms at $8.75 Actual Costs Direct materials 2,000 kilograms at $8.00 The direct materials price variance is a.$2,750 favorable b.$2,750 unfavorable c.$1,500 unfavorable d.$1,500 favorable
Answer:
$2,250 favorable
Explanation:
The direct material price variance is computed as;
= ( Standard price - Actual price ) × Actual quantity
Given that;
Standard price = $8.75
Actual price = $8
Actual quantity = 3,000 units
Direct material price variance
= ( $8.75 - $8 ) × 3,000
= ( $0.75 ) × 3,000
= $2,250 favorable
Williams Company computed its cost per equivalent unit for direct materials to be $2.70 and its cost per equivalent unit for conversion to be $3.42. A total of 212,000 units of product were completed and transferred out as finished goods during the month, and 30,000 of equivalent units remained unfinished at the end of the month. The amount that should be reported in Finished Goods Inventory is:
Answer:
$1,297,440
Explanation:
The first step is to calculate the cost of direct materials
= 212,000 × 2.70
= $572,400
The next step is to calculate the conversion
= 212,000 × 3.42
= $725,040
Therefore the amount that should be reported in the finished goods inventory can be calculated as follows
= $725,040 + $572,400
= $1,297,440
Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: If the company marks up its unit product costs by 40% then the selling price for a unit in Job T687 is closest to:
Answer:
a. $259.70
Explanation:
Note: The full question is attached as picture below
Predetermined overhead rate = 2 + (294300/32700)
Predetermined overhead rate = $11
Job T687 Total cost = Direct materials cost + Direct labor cost + Overhead applied
Job T687 Total cost = 545 + 1090 + (20*11)
Job T687 Total cost = 545 + 1090 + 220
Job T687 Total cost = 1855
Cost per unit = $1,855 / $10
Cost per unit = $185.5
Selling price per unit = Cost per unit + Mark-up price
Selling price per unit = $185.5 + $185.5*40%
Selling price per unit = $185.5 + $74.20
Selling price per unit = $259.70
Effective capital budgeting for general capital assets of a government requires: Intermediate and long-range capital improvement plans for general capital assets. Nonfinancial information on physical measures and service condition of capital assets of component units. Consideration of how proprietary fund capital projects will be financed. Information about the capital asset needs of a motor pool accounted for as an internal service fund.
Answer:
intermediate and long-range capital improvement plans for general capital assets
Explanation:
Capital budgeting in domain of finance
can be regarded as ways whereby the Value of potential investment project is been analysed and determined.The net present value can be known by finding the difference that exist between the cash flow present value and the present value of cash inflow. It should be noted that Effective capital budgeting for general capital assets of a government requires intermediate and long-range capital improvement plans for general capital assets
The information technology department is frustrated because they are constantly training one group on the same issue. The department manager reports it is the ________ to learn the system and not expect repetitive training. Group of answer choices
Answer:
users' responsibility.
Explanation:
Training is the process in which employers provides employees with specific, identifiable knowledge and skills for use in their present jobs.
Generally, organizations should ensure they continually train their employees in different areas (skills) so they don't lag behind and to close the gap between rapid technological innovation.
Also, an instructional design process can be defined as a strategic model which typically involves determining the needs of the employees (learners or trainees) for the development of learning goals, objectives, experiences and the design and organization of assessments in order to enhance the quality of information and instructions.
In this scenario, the information technology department is frustrated because they are constantly training one group on the same issue. The department manager reports it is the users' responsibility to learn the system and not expect repetitive training.
This ultimately implies that, once an employee has undergone a training sponsored by his or her employer, it is very important that he or she devotes more time to learning to perfection rather than being trained on the same skill over and over again.
If two identifiable markets differ with respect to their price elasticity of demand and resale is impossible, a firm with market power will Group of answer choices Set price equal to marginal cost in both markets. Set price so as to equate the elasticity of demand across markets. Set a higher price in the market that is more elastic. Set a lower price in the market that is more price elastic.
Answer: Set a lower price in the market that is more price elastic.
Explanation:
It would be in the best interest of the firm with market power to set a lower price if the market is more price elastic.
Price elasticity is the measure of how much quantity demanded changes in response to a change in price.
If the firm with market power sets a lower price in a market that is more price elastic, it can expect that the quantity demanded will increase more which can give a higher profit.
g The Ricardian equivalence states that if the government cuts taxes without changing current or future expenditure then: a) households will consume more because the marginal propensity to consume is positive b) households will save more because they will expect higher taxes in the future c) households will consume less because they will acquire the debt issued by the government d) households will save less because the tax multiplier is bigger than 1 e) both (a) and (d) f) both (b) and (c)
Answer:
b) households will save more because they will expect higher taxes in the future
Explanation:
The Ricardian Equivalence proposition is one of the pillars of classical economics, which sadly has proven to not work very well in the real world. According to classical economists, and their quantity theory of money plus the Ricardian Equivalence, recessions do not exist because it is impossible for them to exist. But in the real world, that is not true. Recessions exist, e.g. the US is in a recession since the first quarter of 2020 (even before the current health crisis). When real people lose their jobs or are afraid to lose their jobs, their spending habits change.
On the other hand, when real people get a tax refund or tax cut, they generally spend it, they will not save it to pay future taxes. That is why car sales increase during February after checks form the IRS are handed out.
Theoretically, classical economics is great. The problem is that we are human beings, and as such, our behavior cannot be controlled or determined by what we should or should not do. This is exactly why the velocity of money (quantitative theory of money) is not constant.
As of December 31, Frappe Company has a balance of $11,000 in accounts receivable. Of this amount, $1,100 is past due and the remainder is not yet due. Frappe has a credit balance of $105 in the Allowance for Doubtful Accounts. Frappe Company estimates its bad debt losses using the aging of receivables method, with estimated bad debt loss rates equal to 3% of accounts not yet due and 10% of past due accounts. How will the Bad Debt Expense account be included in the required adjusting journal entry at year-end
Answer:
Debit of $302
Explanation:
Provision required on AR past due = 1,100 * 10% = $110
Provision required on AR not yet due = (11,000-1,100) *3% = 9900 * 3% = $297
Total Allowance for Doubtful Accounts required = Provision required on AR past due + Provision required on AR not yet due
Total Allowance for Doubtful Accounts required = $110 + $297
Total Allowance for Doubtful Accounts required = $407
Existing Allowance for Doubtful Accounts = $105
Bad Debt Expense = Total Allowance for Doubtful Accounts required - Existing Allowance for Doubtful Accounts
Bad Debt Expense = $407 - $105
Bad Debt Expense = $302
So, Bad Debt Expense account will be included in the adjusting journal entry at year-end as Debit of $302
he Tattle Teller has a printing press sitting idly in its back room. The press has no market value to another printer because the machine utilizes old technology. The firm could get $250 for the press as scrap metal. The press is six years old and originally cost $148,000. The current book value is $2,570. The president of the firm is considering a new project and feels he can use this press for that project. What value, if any, should be assigned to the press as an initial cost of the new project
Answer: $250
Explanation:
The value that should be assigned to the press as an initial cost of the new project will simply be the relevant cost which has to.do with the opportunity cost that's what is forgone for something else to happen.
In this scenario, the value that should be assigned to the press as an initial cost of the new project will be $250 which is the value that the firm could get for the press as scrap metal.
python for data Science and al
Answer:
This is line 1
Explanation:
The function would read the first line of the file. To read all the lines, you need to make a for loop and then print every line in the file.
Hope this helps!
1.Make a list of at least 5 good topics for networking.
Answer:
Explanation:
Networking has so many subcategories and topics that can be discussed since there are a huge array of techniques, methods, technology, etc. Therefore I would say that 6 pretty good networking topics that would be great to discuss with other people or even create a presentation/essay on would be the following...
QoS ImplementationIP vs ATMSAN vs NASPeer-to-Peer or Base Stations?Ad-Hoc vs InfrastructureEverything over IP
You purchased eight TJH call option contracts with a strike price of $37.50 when the option quote was $.55. The option expires today when the value of TJH stock is $37.10. Ignoring trading costs and taxes, what is your total profit on your investment
Answer:
-$4.40
Explanation:
Buyer of Call payoff = Max(S-K,0)
Buyer of Call payoff = Max(37.1-37.5,0)
Buyer of Call payoff = $0
Buyer of Call profit = Call payoff-premium
Buyer of Call profit = 0 - 0.55
Buyer of Call profit = -$0.55
So, for 8 options, Loss = 8*-$0.55 = -$4.40
So therefore, the total profit/loss on eight call option is -$4.40
a stock has a beta of 1.5 and an expected return of 16.35%. What is the risk free rate if the markert rate of return is 12.5%
Answer:
4.8%
Explanation:
Calculation for the risk free rate if the market rate of return is 12.5%
Using this formula
Expected rate of return = Risk free rate + Beta( Market rate -Risk-free rate)
Let plug in the formula
0.1635 =Risk-free rate of return + 1.5(0.125 -Risk free rate of return)
0.1635 =Risk-free rate of return + 0.1875 - 1.5(Risk-free rate of return)
0.1635 - 0.1875 =Risk-free rate of return - 1.5Risk-free rate of return
−0.024 = - (1-0.5 Risk-free rate of return)
−0.024 = - 0.5 Risk-free rate of return
Risk-free rate of return =0.024 / 0.5
Risk-free rate of return = 0.048
Risk-free rate of return = 0.048 * 100%
Risk-free rate of return = 4.8%
Therefore the risk free rate if the market rate of return is 12.5% is 4.8%
If a check correctly written and paid by the bank for $236 is incorrectly recorded in the company's books for $263, how should this error be treated on the bank reconciliation
Answer: Difference is added to book balance
Explanation:
The error overstated the amount of money that the business paid by check which means that it understated the bank balance of the company.
The difference between the amounts should therefore be added to the book balance to reconcile it to the bank balance;
= 263 - 236
= $27
$27 will be added to the book balance.
A company issues $16200000, 5.8%, 20-year bonds to yield 6% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are $15825541. Using effective-interest amortization, how much interest expense will be recognized in 2020?
Answer:
The amount of interest expense which will be recognized in 2020 is $949,681.45.
Explanation:
The following are given in the question:
Bond value = $16200000
Bond interest rate = 5.8%
Proceed from bond = $15825541
Yield rate = 6%
The amount of interest expense which will be recognized in 2020 can now be calculated as follows:
Interest expense for January 1, 2020 to June 30, 2020 = Proceed from bond * Yield rate * (6 / 12) = $15825541 * 6% * (6 / 12) = $474,766.23
Discount amortized during first 6 months = Interest expense for January 1, 2020 to June 30, 2020 - (Bond value * Bond interest rate * (6 / 12)) = $474,766.23 - ($16200000 * 5.8% * (6 / 12)) = $474,766.23 - 469,800 = $4,966.23
Interest expense for July 1, 2020 to December 31, 2020 = (Proceed from bond + Discount amortized during first 6 months) * Yield rate * (6 / 12) = ($15825541 + $4,966.23) * 6% * (6 / 12) = $474,915.22
Interest expense to be recognized in 2020 = Interest expense for January 1, 2020 to June 30, 2020 + Interest expense for July 1, 2020 to December 31, 2020 = $474,766.23 + $474,915.22 = $949,681.45
Therefore, the amount of interest expense which will be recognized in 2020 is $949,681.45.
What investment per quarter does Luisa need to make at the end of each quarter into her savings account over 8 quarters to reach her vacation goal of $10,000 if she is getting a 24% APR on her account?
Answer:
c. $1,010.36
Explanation:
Options " ) $1,610.36 2) $522.93 3) $1,010.36 4) $110.02"
Future value = Pmt * ((1+r)^n - 1) / r
Pmt = FV / ((1+r)^n - 1) / r
Size of the deposit = 10,000 / ((1.06^8) - 1) / 0.06
Size of the deposit = 10,000 / (1.59384807453 - 1) / 0.06
Size of the deposit = 10,000 / (0.59384807453/0.06)
Size of the deposit = 10,000 / 9.897467908833333
Size of the deposit = 1010.359426482723
Size of the deposit = $1,010.36
Amy and Hobbes are married and file a joint return. Their three children are 7, 9, and 18 years old. Their modified AGI is $58,000, and their tax liability on Form 1040, line 12a, is $3,647. They have no other tax credits for the tax year. What is the amount of their child tax credit/credit for other dependents on Form 1040, line 13a
Answer:
The amount of their child tax credit is $4,000 ($2,000 for each qualifying child).
Explanation:
a) Data and Calculations:
Modified AGI = $58,000
Tax liability = $3,647
Dependent children = 3 (aged 7, 9, and 18)
Qualifying children for child tax credit = 2 (aged 7 and 9)
Child tax credit = $2,000 x 2 = $4,000
Refundable tax credit = $1,4000 x 2 = $2,800
This means that Amy and Hobbes will pay tax of $847 ($3,647 - $2,800).
b) However, they can only be refunded $2,800 ($1,400 for each qualifying child). According to the IRS records, starting with the 2018 tax year until the end of 2025, the new $2,000-per-qualifying-dependent-child credit makes $1,400 of the Child Tax Credit refundable.
21. Mcclam, Inc., is considering the purchase of a machine that would cost $100,000 and would last for 9 years. At the end of 9 years, the machine would have a salvage value of $23,000. The machine would reduce labor and other costs by $19,000 per year. Additional working capital of $2,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 13% on all investment projects. The net present value of the proposed project is closest to:
Answer:
The correct option is A. $3,833
Explanation:
Note: This question is not complete has the options are omitted. The complete question is therefore provided before answering the question as follows:
Mcclam, Inc., is considering the purchase of a machine that would cost $100,000 and would last for 9 years. At the end of 9 years, the machine would have a salvage value of $23,000. The machine would reduce labor and other costs by $19,000 per year. Additional working capital of $2,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 13% on all investment projects. The net present value of the proposed project is closest to:
A. $3,833
B. $5,167
C. -$2,492
D. $11,514
The explanation of the answer is now given as follows:
Given:
Machine cost = $100,000
Additional working capital = $2,000
Salvage value = $23,000
A = Annual cost saving = $19,000
r = minimum pretax return = 13%, or 0.13
n = number of useful years of the machine = 9
The net present value of the proposed project is now calculated using the following steps:
Step 1: Calculation of the total cost
TC = Total cost = Machine cost + Additional working capital = $100,000 + $2,000 = $102,000
Step 2: Calculation of the present value of the annual cost saving
The present value of the annual cost saving can be calculated using the formula for calculating the present value of an ordinary annuity as follows:
PVACS = A * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PVACS = Present value of annual cost saving = ?
A = Annual cost saving = $19,000
r = Minimum pretax return = 13%, or 0.13
n = number of useful years of the machine = 9
Substituting the values into equation (1), we have:
PVACS = $19,000 * ((1 - (1 / (1 + 0.13))^9) / 0.13)
PVACS = $19,000 * 5.13165512782676
PVACS = $97,501.45
Step 3: Calculation of the present value of the salvage value and the recovered working capital
This can be calculated using the present value formula as follows:
PVSW = SW / (1 + r)^n ……………………….. (2)
Where;
PVSW = present value of the salvage value and the recovered working capital = ?
SW = salvage value and the recovered working capital = $23,000 + $2,000 = $25,000
r = Minimum pretax return = 13%, or 0.13
n = number of useful years of the machine = 9
Substituting the values into equation (2), we have:
PVSW = $25,000 / (1 + 0.13)^9
PVSW = $25,000 / 3.00404193798427
PVSW = $8,322.12
Step 4: Calculation of the net present value of the proposed project
This can be calculated as follows:
NPV = PVACS + PVSV - TC ……………………………. (3)
Where;
NPV = net present value of the proposed project = ?
PVACS = Present value of annual cost saving = $97,501.45
PVSW = present value of the salvage value and the recovered working capital = $8,322.12
TC = Total cost = Machine cost + Additional working capital = $100,000 + $2,000 = $102,000
Substituting the values into equation (3), we have:
NPV = $97,501.45 + $8,322.12 - $102,000
NPV = $3,824
From the options in the question, the calculated NPV of $3,823.57 is close to option A. $3,833. Therefore, the net present value of the proposed project is closest to $3,833.
Mary's team is located in different countries. Because of the time zone differences, it is difficult for the team to meet all together so their meetings are conducted ________. Group of answer choices when Mary can meet because she is the leader asynchronously the end of the project is reached at the same time synchronously
Answer: asynchronously
Explanation:
Mary's team is located in different countries. Because of the time zone differences, it is difficult for the team to meet all together so their meetings are conducted asynchronously.
We should note that while synchronous means for something to happen at the same time, asynchronous means something that doesn't happen same time.
Because of the time zone differences, the meeting will be conducted asynchronous as the participants that are involved can meet at their own pace uwng their time.
Asynchronously
Countries around the world have different time zone. For instance, the time zone for countries around Asia is different from those countries in Africa.
It therefore means that while synchronous means something to happen at the same time , asynchronous means something that doesn't happen same time.
Due to the difference in time zone, the meeting will be conducted asynchronous so that the team that are involved can meet at the time it falls in their own country.
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Compare and contrast the protection to intellectual property provided by trade secrets relative to that provided by patents. What important defense is available to defendants in trade secret cases that is not available to patent infringement defendants?
Answer:
1. Protection to trade secrets and patents:
a. Trade secrets are protected indefinitely. Generally, patents are granted for a maximum of 20 years.
b. The owner of a trade secret does not need to pay annual fee to defend the secret. A patent holder is required to pay an annual fee, in order to make the patent enforceable.
2. Important defense for defendants in trade secret cases that is not available to patent infringement defendants:
The defendant in a trade secret case will cite that the secret is still commercially valuable. But a patent holder cannot cite this because the patent is granted for a maximum of 20 years to stop stifling innovation.
Explanation:
Both trade secrets and patents are intellectual property rights which confer on their owners the exclusive use of their intellectual property. The major differences are in the duration and the defense of the rights. Patents, unlike trade secrets, do not last forever. Patents, again unlike trade secrets, must be defended periodically through the payment of fees.
cba corp is worth 15 million as a standalone firm. abc corp has offered 350000 shares valued at 50 each to acquire cba. after the annoucmen, however, the price of abc shares falls to 45. what is the cost of the merger
Answer:
$.75 million
Explanation:
Calculation for what is the cost of the merger
Cost of merger= $350,000 ×$45 - ($15 million)
Cost of merger= $15.75 - $15 million
Cost of merger= $.75 million
Therefore the cost of the merger will be $.75 million
Lightsey Natural Dying Corporation measures its activity in terms of skeins of yarn dyed. Last month, the budgeted level of activity was 14,800 skeins and the actual level of activity was 15,100 skeins. The company's owner budgets for dye costs, a variable cost, at $0.51 per skein. The actual dye cost last month was $8,660. What would have been the spending variance (purchase price variance) for dye costs
Answer:
Direct material price variance= $966.4 unfavorable
Explanation:
Giving the following information:
Actual level of activity was 15,100 skeins.
Standard cost= $0.51 per skein.
The actual dye cost last month was $8,660.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Actual price= 8,660 / 15,100= $0.574
Direct material price variance= (0.51 - 0.574)*15,100
Direct material price variance= $966.4 unfavorable
Pedro borrowed $250,000 to purchase a machine costing $300,000. He later borrowed an additional $25,000 using the machine as collateral. Both notes are nonrecourse. Eight years later, the machine has an adjusted basis of zero and two outstanding note balances of $140,000 and $15,000. Pedro sells the machine subject to the two liabilities for $45,000. What is his realized gain or loss
Answer:
Pedro
Pedro's realized gain is $45,000.
Explanation:
a) Data and Calculations:
Cost of equipment = $250,000
Adjusted basis of equipment after eight years = $0
Proceeds from sale of equipment = $45,000
Realized gain = Sales proceeds minus adjusted basis
= $45,000 - $0
= $45,000
b) Pedro's realized gain is the gain he earned by selling the equipment at a price higher than the original purchase price's adjusted basis. Since the equipment is sold at a higher than its adjusted basis, Pedro has achieved a realized gain of $45,000, which increases his current assets. The outstanding note balances of $140,000 and $15,000 remain liabilities to be settled in the future. They do not form part of the basis for calculating the realized gain or loss.
g Which of the following statements is CORRECT? a. Since the money is readily available, the after-tax cost of reinvested earnings (not newly issued stock) is usually much lower than the after-tax cost of debt. b. If a company's tax rate increases but the YTM on its noncallable bonds remains the same, the after-tax cost of its debt will fall. c. All else equal, an increase in a company's stock price will increase its marginal cost of new common equity, re. d. All else equal, an increase in a company's stock price will increase its marginal cost of reinvested earnings (not newly issued stock), rs.
Answer:
b. If a company's tax rate increases but the YTM on its noncallable bonds remains the same, the after-tax cost of its debt will fall.
Explanation:
As we know that the cost of debt could be determined by applying the RATE formula in the excel
And, the following tax cost of debt is
= Cost of debt × (1 - tax tate)
In this case , the before the cost of debt or cost of debt remains constant but the tax rate is rising so automatically the following tax cost of debt would decrease
hence, the option b is correct
Objectives of AllocationSamantha and Rashida are planning a trip to Padre Island, Texas, during spring break. Members of the varsity volleyball team, they are looking forward to four days of beach volleyball and parasailing. They will drive Samantha's car and estimate that they will pay the following costs during the trip:Motel (4 nights at $145) $ 580Food (each) 150Gas in total 120Parasailing and equipment rental (each) 125They have reservations at the SeaScape Motel, which charges $115 per night for a single, $145 per night for a double, and an additional $10 per night if a rollaway $580 155 132 added to a double room. but thinks that four days of partying and relaxing on the beach would be a great way to unwind from the Samantha's little sister, Kallie, wants to go along. S rigors of school. She figures he isn't into sports that she could ride with Samantha and Rashida and share their room Required: 1. Using incremental costs only, what would it cost Kallie to accompany Samantha and Rashida? 2. Using the benefits-received method, what would it cost Kallie to go on the trip? If required, round your intermediate calculations and final answer to the nearest cent.
Answer:
Increase in Motel cost = $10 per night for additional bed * 4 day = $10 * 4 = $40
Additional food cost = $150
Therefore, total cost of including Kallie for the trip is $40 + $150 = $190
1. Incremental Analysis
Without K With K Incremental cost
Motel cost $580 $620 $40
Food $300 $450 $150
Gas in total $120 $120 -
Total Incremental cost $1,000 $1,190 $190
It would cost $190 for Kallie to accompany along
2. Cost to Kallie using benefits received method
Particulars Amount
Motel ($580 + 40)/3 $206.67
Food $150
Gas ($120/3) $40
Total $396.67
Thus, cost to Kallie using benefits received method would be $396.67.
A company's Inventory balance at the end of the year was $203,300 and $217,000 at at the beginning of the year. Its Accounts Payable balance at the end of the year was $101,000 and $95,300 at the beginning of the year, and its cost of goods sold for the year was $737,000. The company's total amount of cash payments for merchandise during the year equals:
Answer:
The answer is $745,000
Explanation:
Inventory: Closing balance - opening balance
$203,300 - $217,000
=$13,700$13,700
Inventory increased by $13,700
For accounts payable
$101,000 - $95,300
$5,700
Accounts payable increased by $5,700
Amount of cash paid is
Cost of goods sold + increase in inventory - increase in accounts payable
$737,000 + $13,700 - $5,700
=$745,000
Shelton, Inc., has sales of $20 million, total assets of $18.2 million, and total debt of $9.1 million. Assume the profit margin is 9 percent. What is the company's net income
Answer:
$1,800,000
Explanation:
Shelton incorporation has sales of $20,000,000
Total assets is $18.2 million
Total debt is $9.1 million
Profit margin is 9%
Therefore the company net income can be calculated as follows.
= sales × profit margin
= 20,000,000 × 9/100
= 20,000,000 × 0.09
= 1,800,000
Hence the company net income us $1,800,000
