Using the perpetual inventory system, entries are : To adjust the allowance for doubtful accounts: Bad Debt Expense $10,145 Allowance for Doubtful Accounts $10,145.
Given the following transactions in Liang's Year 1 and Year 2 summarized transactions, record bad debts expense:
Year 1
Sold $1,345,434 of merchandise on credit (that had cost $975,000), terms n/30.
Wrote off $18,300 of uncollectible accounts receivable.
Received $669.200 cash in payment of accounts receivable.
In adjusting the accounts on December 31, the company estimated that 1.5% of accounts receivable would be uncollectible.
Year 2
Sold $1,525,634 of merchandise on credit (that had cost $1,250,000), terms n/30.
Wrote off $27,800 of uncollectible accounts receivable.
Received $1,204,600 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 1.5% of accounts receivable would be uncollectible.
First, calculate the amount of bad debts to be written off for both years:
For Year 1:
The total accounts receivable balance was $676,334. 1.5% of $676,334 = $10,145.01 (rounded to nearest dollar)
For Year 2: The total accounts receivable balance was
$870,234. 1.5% of $870,234 = $13,053.51 (rounded to nearest dollar)
Journal entries to record Liang's Year 1 summarized transactions and its year-end adjustments to record bad debts expense:
The following journal entries are needed:
For the credit sales:
Accounts Receivable $1,345,434
Sales Revenue $1,345,4342.
For the cost of sales:Cost of Goods Sold $975,000
Merchandise Inventory $975,0003.
For the receipt of cash:Cash $669,200
Accounts Receivable $669,2004.
To write off uncollectible accounts:
Allowance for Doubtful Accounts $18,300
Accounts Receivable $18,3005.
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a) What is the economic interpretation behind the aggregate demand curve? Why is it negatively sloped? If you consider point A=(π,Y)=(3, 6.5) and point B=(π,Y)=(5, 5.5), is monetary policy more expansionary in point A, in point B, or neither? Are you referring to the exogenous or to the endogenous stance of monetary policy?
(5 marks)
b) Suppose the economy is in equilibrium at the potential level of output, with inflation expectations equal to actual inflation, which equals 2%. A financial crisis hits the economy. Use the model to interpret what happens in the short run and in the long run if the central bank does not intervene exogenously with an expansionary monetary policy.
(8 marks)
c) According to the AD-AS model, what is more challenging for a central bank: to use active exogenous monetary policy to offset a financial shock, or to use active exogenous monetary policy to offset an exogenous increase in prices due to an oil price shock? Use the model to discuss each case separately. Can the central bank avoid a drop in output and a variation in the price level?
The central bank can influence economic outcomes through active exogenous monetary policy, offsetting a financial shock can be more challenging due to its broad and unpredictable effects on the economy, compared to offsetting an exogenous increase in prices resulting from an oil price shock.
a) The aggregate demand (AD) curve represents the relationship between the overall level of prices (inflation) and the total output (real GDP) demanded in an economy. It is negatively sloped due to three main factors: the wealth effect, the interest rate effect, and the international trade effect. As prices decrease, the purchasing power of households' wealth increases, leading to higher consumption spending and an increase in aggregate demand. Additionally, lower prices reduce the demand for money, leading to lower interest rates. This stimulates investment and consumption expenditure, further increasing aggregate demand. Lastly, as prices decrease, exports become relatively cheaper, and imports become relatively more expensive, resulting in an increase in net exports, which contributes to higher aggregate demand.
Comparing point A=(π,Y)=(3, 6.5) and point B=(π,Y)=(5, 5.5), we observe that point A has lower inflation (π) and higher output (Y) compared to point B. In this context, point A represents a more expansionary monetary policy stance than point B. A decrease in inflation indicates that the central bank has taken measures to reduce the money supply or increase interest rates, leading to a contractionary monetary policy stance. Conversely, an increase in inflation implies an expansionary monetary policy, where the central bank increases the money supply or lowers interest rates to stimulate economic activity. Therefore, point A reflects a more expansionary monetary policy stance compared to point B.
b) In the short run, if a financial crisis hits the economy and the central bank does not intervene exogenously with an expansionary monetary policy, several outcomes can be expected. Firstly, the crisis may lead to a decrease in confidence and a decline in investment and consumption spending, resulting in a decrease in aggregate demand. This can lead to a contractionary output gap and a potential recession. Secondly, the financial crisis may increase uncertainty, causing firms to reduce production and lay off workers, leading to higher unemployment. In the long run, without intervention, the economy may experience a persistent decrease in potential output if the crisis has a negative impact on productivity, investment, and innovation. The lack of expansionary monetary policy can prolong the recovery process and delay the return to potential output levels.
c) Using the AD-AS model, offsetting a financial shock through active exogenous monetary policy can be more challenging for a central bank compared to offsetting an exogenous increase in prices due to an oil price shock. In the case of a financial shock, the central bank faces difficulties due to the complex nature of the shock and its impact on various sectors of the economy. Financial shocks can disrupt the banking system, reduce credit availability, and increase uncertainty, which can lead to a decrease in investment and consumption. The central bank can try to mitigate the shock by implementing expansionary monetary policy measures to increase liquidity and encourage lending. However, the effectiveness of such measures can be limited if the crisis severely damages the financial intermediation process and confidence in the financial system.
On the other hand, when facing an exogenous increase in prices due to an oil price shock, the central bank can respond more directly. An oil price shock typically leads to higher input costs for firms, resulting in a decrease in aggregate supply. In response, the central bank can implement a contractionary monetary policy to reduce inflationary pressures. By increasing interest rates or reducing the money supply, the central bank aims to curb aggregate demand and reduce price pressures. While there may be some short-term trade-offs between output and inflation, the central bank has more control over the inflationary impact of an oil price shock compared to the complex dynamics of a financial shock.
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The Healthy Eating Food Company produces Soy Sausage and Tofu Chicken Nuggets to meet the dietary needs of college students. Soy Sausage will generate a profit of $9 and the Tofu Chicken Nuggets will produce $7 of profit. Each product must go through to procedures: assembly and packaging. The Soy Sausage requires 12 hours of assembly and 4 hours of packaging. The Tofu Chicken Nuggets require 4 hours of assembly and 8 hours of packaging. The assembly procedure has 120 work hours available and the packaging procedure has 80 work hours. Formulate a linear programming model to determine the product mix that will maximize profit for Healthy Eating Food Company. (Write out Constraints).
What is axis X1 axis intercept for the Packaging constraint?
Group of answer choices
10
15
20
5
if no units of Soy Sausage are assembled, the maximum number of units of Tofu Chicken Nuggets that can be packaged is 10.
the X1 axis intercept for the packaging constraint is 10.
To find the X1 axis intercept for the packaging constraint, we need to determine the maximum number of units of Tofu Chicken Nuggets that can be packaged if no units of Soy Sausage are assembled.
Let's start by setting up the packaging constraint. From the given information, we know that each unit of Tofu Chicken Nuggets requires 8 hours of packaging. The packaging procedure has a total of 80 work hours available.
To calculate the maximum number of units of Tofu Chicken Nuggets that can be packaged, we divide the total work hours available by the number of hours required to package one unit of Tofu Chicken Nuggets:
80 work hours / 8 hours per unit = 10 units of Tofu Chicken Nuggets.
Therefore, if no units of Soy Sausage are assembled, the maximum number of units of Tofu Chicken Nuggets that can be packaged is 10.
Hence, the X1 axis intercept for the packaging constraint is 10.
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Gullett Corporation had $26,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $75,000 of raw materials. The journal entry to record the purchase of raw materials would include a: Multiple Choice debit to Raw Materials of $101,000 credit to Raw Materials of $75,000 debit to Raw Materials of $75,000 credit to Raw Materials of $101,000
This entry increases the Raw Materials account and either increases the liability (Accounts Payable) or decreases the asset (Cash) depending on the method of payment.
The journal entry to record the purchase of raw materials would include a debit to Raw Materials for $75,000 and a credit to Accounts Payable or Cash for $75,000.
Here's a step-by-step explanation:
1. Identify the account being debited: Raw Materials. This account represents the cost of the materials purchased.
2. Determine the amount of the debit: $75,000. This amount reflects the total cost of the raw materials purchased during the month.
3. Identify the account being credited: Accounts Payable or Cash. If the materials were purchased on credit, the credit would be to Accounts Payable. If the materials were purchased with cash, the credit would be to Cash.
4. Determine the amount of the credit: $75,000. This amount represents the cost of the raw materials paid or owed.
The journal entry would look like this:
Raw Materials $75,000
Accounts Payable/Cash $75,000
This entry increases the Raw Materials account and either increases the liability (Accounts Payable) or decreases the asset (Cash) depending on the method of payment.
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The North American Industry Classification System (NAICS) is used to identify hundreds of manufacturing companies.True or false?
The North American Industry Classification System (NAICS) is used to identify hundreds of manufacturing companies which is false.
The North American Industry Classification System (NAICS) is not used specifically to identify manufacturing companies, but rather to classify and categorize businesses and industries based on their economic activities. NAICS is a widely used system in Canada, Mexico, and the United States to collect and analyze economic data and facilitate comparisons across industries. It provides a standardized framework for classifying establishments based on their primary economic activities, regardless of the sector they belong to, including manufacturing, retail, services, agriculture, and more.
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Mist, Inc. provides free meals in an employee cafeteria for its employees. The employee cafeteria budgeted $37 of variable expenses per employee fo the month of December, calculated using a budgeted a
Mist, Inc. provides free meals in an employee cafeteria for its employees. The employee cafeteria budgeted $37 of variable expenses per employee for the month of December, calculated using a budgeted amount of $60,000 for variable expenses. This implies that the firm has 1,620 employees ($60,000 divided by $37) for the month of December.
Based on the information provided in the question, the firm Mist Inc. has 1,620 employees for the month of December.
Variable expenses per employee = Total budgeted amount for variable expenses / Number of employees for the month of DecemberVariable expenses per employee = $60,000 / $37 per employeeVariable expenses per employee = 1,620Therefore, the firm Mist Inc. has 1,620 employees for the month of December.
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2. Suppose there are 10000 people in country X. In this country, 8000 people are currently working, and among them 3000 are underemployed. A total of 1500 people don't have a job, and of these, 800 people are discouraged to find one. The remaining 500 people are either in school or retired. What is the total labor force in this country? a. 7000 b. 8700 c. 9500 d. 10000
The correct answer is: b. 8700. The total labor force in the country is 8700.
The labor force in a country consists of the employed and unemployed individuals actively seeking employment. In this scenario:
Number of employed individuals: 8000
Number of unemployed individuals actively seeking employment: 1500 - 800 = 700
Total labor force = Number of employed + Number of unemployed actively seeking employment
Total labor force = 8000 + 700 = 8700
Therefore, the correct answer is:
b. 8700.
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Which of the following commodities would be most likely to be shipped on an air carrier? a) low-value finished goods b) high-value and time-sensitive goods raw materials and partially-finished goods O d) commodities in high volume
The commodity that would be most likely to be shipped on an air carrier is high-value and time-sensitive goods (option b).
Air carriers are often chosen to transport goods that are valuable and need to reach their destination quickly. This is because air transport offers fast delivery times compared to other modes of transportation, such as sea or road transport.
High-value goods include items like electronics, jewelry, and luxury items.
These goods are typically more expensive and require special handling to ensure their safety during transportation. Shipping them via air carrier allows for a quicker delivery time, reducing the risk of damage or theft.
Time-sensitive goods are items that have a strict deadline for delivery.
For example, perishable goods like fresh flowers or medical supplies that have a short shelf life and need to reach their destination promptly.
Air transport provides the fastest delivery times, ensuring that these time-sensitive goods can be delivered within the required timeframe.
To summarize, high-value and time-sensitive goods are the most likely commodities to be shipped on an air carrier. This is because air transport offers fast delivery times and is suitable for valuable items and time-sensitive goods that need to reach their destination quickly.
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On October 5, 2023, Diamond in the Concord Recruiting Group Inc.'s board of directors decided to dispose of the Blue Division. A formal plan was approved. Diamond derives approximately 75% of its income from its human resources management practice. The Blue Division gets contracts to perform human resources management on an outsourced basis. The board decided to dispose of the division because of unfavourable operating results. Net income for Diamond was $94,360 for the fiscal year ended December 31,2023 (after a charge for tax at 30% and after a writedown for the Blue assets). Income from operations of the Blue Division accounted for $5,460 (after tax) of this amount. Because of the unfavourable results and the extreme competition, the board believes that it cannot sell the business intact. Its final decision is to auction off the office equipment. The equipment is the division's only asset and has a carrying value of $27,000 at October 5,2023 . The board believes that proceeds from the sale will be approximately $4,000 after the auction expenses. Currently, the equipment's estimated fair value is $6,400. The Blue Division qualifies for treatment as a discontinued operation. Diamond prepares financial statements in accordance with ASPE. (a) Prepare a partial income statement for Diamond in the Concord Recruiting Group. The income statement should begin with income from continuing operations before income tax. Diamond in the Concord Recruiting Group Inc. Partial Income Statement For the Year Ended December 31, 2023 Income from Continuing Opel ∨ $ Income Tax Expense Income from Continuing Opeı ∨ Discontinued Operations Income from Operations of th ∨$ Loss from Impairment of Asse ∨ Net Income / (Loss) $
To prepare a partial income statement for Diamond in the Concord Recruiting Group Inc., we need to start with income from continuing operations before income tax.
This means we will exclude the income and expenses related to the discontinued Blue Division.
What does it entail?First, let's calculate the income from continuing operations before income tax. We know that the net income for Diamond was $94,360 for the fiscal year ended December 31, 2023.
This net income already includes a charge for tax at 30% and a write down for the Blue Division assets.
So, the calculation would be as follows:
Net income - Tax expense - Loss from impairment of assets related to Blue Division = Income from continuing operations before income tax
$94,360 - (30% of $94,360) - $5,460 = Income from continuing operations before income tax
Now, let's move on to the discontinued operations. Since the Blue Division is being disposed of, we need to account for its impact separately.
The only asset of the Blue Division is the office equipment, with a carrying value of $27,000 at October 5, 2023.
The board believes that the proceeds from the sale of the equipment will be approximately $4,000 after auction expenses. However, the equipment's estimated fair value is $6,400.
To calculate the loss from the disposal of the Blue Division, we need to compare the carrying value of the equipment ($27,000) with the proceeds from the sale ($4,000). The difference between the two is the loss from the disposal.
Carrying value of equipment - Proceeds from sale = Loss from disposal of the Blue Division
$27,000 - $4,000 = Loss from disposal of the Blue Division
Now, we can prepare the partial income statement:
Diamond in the Concord Recruiting Group Inc. Partial Income Statement
For the Year Ended December 31, 2023
Income from Continuing Operations before Income Tax: [calculated value]
Income Tax Expense: [calculated value]
Income from Continuing Operations: [calculated value]
Discontinued Operations:
Income from Operations of the Blue Division: $5,460 (after tax)
Loss from Impairment of Blue Division Assets: [calculated value]
Loss from Disposal of the Blue Division: [calculated value]
Net Income / (Loss): [calculated value]
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Bond A has a coupon rate of 10.36 percent, a yield-to-maturity of 13.60 percent, and a face value of $1,000.00; matures in 8 years; and pays coupons annually with the next coupon expected in 1 year. What is (X+Y+Z) if X is the present value of any coupon payments expected to be made in 3 years from today, Y is the present value of any coupon payments expected to be made in 6 years from today, and Z is the present value of any coupon payments expected to be made in 9 years from today? An amount equal to or greater than $181.70 but less than $232.64 An amount equal to or greater than $135.31 but less than $153.99 An amount equal to or greater than $89.15 but less than $135.31 An amount less than $89.15 or a rate greater than $232.64 An amount equal to or greater than $153.99 but less than $181.70 Today, a bond has a coupon rate of 12.2%, par value of $1000, YTM of 9.70%, and semi-annual coupons with the next coupon due in 6 mon One year ago, the bond's price was $1,281.05 and the bond had 4 years until maturity. What is the current yield of the bond today? A rate equal to or greater than 11.39% but less than 11.59% A rate equal to or greater than 11.59% but less than 11.82% A rate equal to or greater than 11.30% but less than 11.39% A rate equal to or greater than 11.18% but less than 11.30% A rate less than 11.18% or a rate greater than 11.82%
To find the present value of the coupon payments expected to be made in 3, 6, and 9 years from today, we need to calculate the present value of each individual coupon payment and then sum them up.
Let's start with X, which represents the present value of the coupon payment expected to be made in 3 years. Since the bond pays annual coupons, this means we are looking for the present value of the fourth coupon payment. To calculate this, we can use the formula for present value of a single cash flow:
PV = C / (1 + r)^n
Where PV is the present value, C is the coupon payment, r is the yield-to-maturity, and n is the number of periods.
Using the given values, we have:
C = Coupon rate * Face value = 10.36% * $1,000 = $103.60
r = Yield-to-maturity = 13.60%
n = 3 years
Plugging these values into the formula, we get:
PV(X) = $103.60 / (1 + 0.136)^3
Now, we can follow the same process to calculate the present values of Y and Z. For Y, we use n = 6 years, and for Z, we use n = 9 years.
After calculating the present values for X, Y, and Z, we can sum them up to find the value of (X+Y+Z).
Once you have the sum, compare it to the given ranges to determine the correct answer.
Remember to show all your calculations to ensure a clear and concise answer.
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(X+Y+Z) is an amount equal to or greater than $207.44 but less than $232.64. The present value of coupon payments in 3 years (X) can be calculated using the formula:
X = Coupon payment / (1 + Yield-to-maturity)^Number of years.
In this case, the coupon payment is 10.36% of the face value, which is $1,000.
The yield-to-maturity is 13.60%, and the number of years is 3. Plugging in these values, we have X = $103.6 / (1 + 0.136)^3 = $76.56.
Similarly, we can calculate the present value of coupon payments in 6 years (Y) and 9 years (Z). Using the same formula, we get Y = $69.22 and Z = $61.66.
To find the sum (X+Y+Z), we simply add these values together: X + Y + Z = $76.56 + $69.22 + $61.66 = $207.44.
Therefore, (X+Y+Z) is an amount equal to or greater than $207.44 but less than $232.64.
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Compare India and Nepal using PESTEL.
India and Nepal can be compared using the PESTEL analysis framework. By examining the political, economic, sociocultural, technological, environmental, and legal factors of both countries, we gain insights into their similarities and differences in various aspects. It is important to consider these factors when analyzing and understanding the two countries.
India and Nepal can be compared using the PESTEL analysis framework. PESTEL stands for Political, Economic, Sociocultural, Technological, Environmental, and Legal factors. Let's examine each of these factors for both countries:
1. Political Factors:
- India: India is a federal parliamentary democratic republic with a multi-party system. It has a stable political system and is the world's largest democracy. However, it faces challenges such as corruption and bureaucratic inefficiencies.
- Nepal: Nepal is a federal democratic republic with a multi-party system. It has undergone significant political changes in recent years, transitioning from a monarchy to a republic. However, it also faces political challenges, including political instability and a history of civil unrest.
2. Economic Factors:
- India: India is one of the fastest-growing major economies in the world. It has a diverse economy, with sectors such as services, manufacturing, and agriculture contributing to its GDP. India faces challenges such as income inequality, poverty, and unemployment.
- Nepal: Nepal is a developing economy heavily reliant on agriculture and remittances. It faces challenges such as low per capita income, high poverty rates, and limited access to basic infrastructure. However, it has seen some economic growth in recent years.
3. Sociocultural Factors:
- India: India is a diverse country with a rich cultural heritage. It has a large population with various languages, religions, and social customs. India's society is influenced by traditions, caste system, and regional differences.
- Nepal: Nepal has a unique sociocultural identity with diverse ethnic groups and languages. It has a predominantly Hindu population but also has significant Buddhist and other religious communities. Nepali society is influenced by traditions, caste system, and close-knit communities.
4. Technological Factors:
- India: India has emerged as a global hub for information technology and software services. It has a well-established IT industry and a strong presence in areas like software development and business process outsourcing. India has also made advancements in space technology, biotechnology, and renewable energy.
- Nepal: Nepal is in the early stages of technological development. It faces challenges in terms of limited access to technology and infrastructure, particularly in rural areas. However, efforts are being made to improve connectivity and expand access to technology.
5. Environmental Factors:
- India: India faces significant environmental challenges, including air and water pollution, deforestation, and climate change. It is one of the world's largest greenhouse gas emitters and has been working towards sustainable development and conservation of natural resources.
- Nepal: Nepal is known for its rich biodiversity and natural beauty. It faces environmental challenges such as deforestation, soil erosion, and climate change impacts. However, Nepal has been taking steps to promote sustainable tourism and conservation of its natural resources.
6. Legal Factors:
- India: India has a complex legal system influenced by British common law. It has a constitution that guarantees fundamental rights and provides for an independent judiciary. India also has laws and regulations governing areas such as business, labor, and intellectual property rights.
- Nepal: Nepal has a legal system influenced by Hindu and British law. It has a constitution that guarantees fundamental rights and provides for an independent judiciary. Nepal also has laws and regulations governing areas such as business, labor, and intellectual property rights.
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1. determine the value of k so the function, f, is continuous at x = 9. give the solution along with your supporting work. f(x) = k √ x, 0 ≤ x < 9 x k, 9 ≤ x ≤ 10
To determine the value of k so that the function f is continuous at x = 9, we can use the continuity condition of the function that states that the limit of the function at x=9 should exist and should be equal to the value of the function at x=9.
If the limit exists but it is not equal to the value of the function at x=9, the function is not continuous at x=9.Mathematically, we can write this as: lim [tex]x → 9− f(x) = lim x → 9+ f(x) = f(9)[/tex]. Now, let's calculate these limits:
[tex]lim x → 9− f(x) = lim x → 9− k √x[/tex]
= [tex]k √9 = 3klim x → 9+ f(x)[/tex]
[tex]= lim x → 9+ k = k And f(9) = 9k.[/tex]
So, from the continuity condition, we have: 3k = k f(9) = 9k. From these equations, we can solve for k as follows:3k = kk = 0 (Dividing both sides by k). Therefore, the value of k so that the function f is continuous at x = 9 is 0. Hence, f(x) = 0 for [tex]9 ≤ x ≤ 10. For 0 ≤ x < 9, f(x) = k √x.[/tex]
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Suppose that a policy maker knows there are currently 1,000 cars purchased each year in the city. In order to build a new park next year, which will cost $500,000, the policy maker decides to impose a tax of $500 on each car purchased. Which of the following scenarios is most likely to occur?
The $500 tax is a sunk cost and thus will be ignored by people making car purchases.
The $500 tax will disincentivize car purchases, and fewer than $500,000 will be raised.
The $500 tax will have no effect on car purchases, and the $500,000 will be raised.
Knowing the purpose of the $500 tax, more people will be incentivized to make car purchases, and the park will be funded.
if the policy maker can keep the car sales the same, the park will still be funded with $500,000.
Suppose that a policy maker knows there are currently 1,000 cars purchased each year in the city. In order to build a new park next year, which will cost $500,000, the policy maker decides to impose a tax of $500 on each car purchased.
The scenario most likely to occur is: The $500 tax will have no effect on car purchases, and the $500,000 will be raised.
How will the imposition of a tax affect consumer behavior?
The imposition of a tax on consumer goods will have an effect on consumer behavior. It will make the goods less attractive and increase their cost, and people will have to make adjustments to their budgets to accommodate this extra cost. A consumer would purchase less of the product in response to a price increase.
What is the most likely scenario to occur?
If the policy maker imposes a $500 tax on each car purchased, the most likely scenario to occur is that the $500 tax will have no effect on car purchases, and the $500,000 will be raised.
As a result, consumers will continue to purchase the same number of cars, despite the added cost. So, if the policy maker can keep the car sales the same, the park will still be funded with $500,000.
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On July 1, Alfred Herron established Herron Commercial Appraisal Services, a firm that provides expert commercial appraisals a represents clients in commercial appraisal hearings TRANSACTIONS 1. The owner invested $95,500 in cash to begin the business, 2. Paid $19.450 in cash for the purchase of equipment. 3. Purchased additional equipment for $13,800 on credit 4. Paid $11,500 in cash to creditors 5. The owner made an additional investment of $28,500 in cash, 6. Performed services for $7.900 in cash 7. Performed services for $5,700 on account 8. Paid $3,700 for rent expense. 9. Received $3,200 in cash from credit clients. 10. Paid $6.160 in cash for office supplies, 11. The owner withdrew $8.700 in cash for personal expenses, Record in equation form the changes that occur in assets, liabilities, and owner's equity for the above transactions Analyze: What is the ending balance of cash after all transactions have been recorded? Complete this question by entering your answers in the tabs below. Accounting Equation Transactions Record in equation form the changes that occur in assets. liabilities, and owner's equity for the above transactions. (Enter decreases to balances with a minus sign.) 1. 2 3 4 6 6. & 9 10 Analyze 11 Totals Cash 595.500 (10,450) (11,500). 28.500 7.000- (3,700) 3.200- (6,160) + (8.700) 05.500 Accounts Receivable Answer is complete but not entirely correct. Assets S 2.500 + + + 5.700. (3.200)+ + D Supplies . 6.100 + + T 1. + 1+ + 6.100+ 1+ Equipment 19.450- 13.800- 33.250 M = - - Liabilities + Accounts Payable $ Analyze > 4 2.300 . 13.000. (11,500)+ + . + . + 4 Owner's Equity Owner's Capital $ 95,500 28,500 7.900 5,700 (3.700) (8.700) 125.200 On July 1, Alfred Herron established Herron Commercial Appraisal Services, a firm that provides expert commercial appraisals a represents clients in commercial appraisal hearings. TRANSACTIONS 1. The owner invested $95.500 in cash to begin the business. 2. Paid $19.450 in cash for the purchase of equipment. 3. Purchased additional equipment for $13.800 on credit. 4. Paid $11,500 in cash to creditors. 5. The owner made an additional investment of $28,500 in cash. 6. Performed services for $7.900 in cash. 7. Performed services for $5.700 on account. 8. Pald $3,700 for rent expense. 9. Received $3,200 in cash from credit clients. 10. Paid $6.160 in cash for office supplies. 11. The owner withdrew $8.700 in cash for personal expenses. Record in equation form the changes that occur in assets, llabilities, and owner's equity for the above transactions. Analyze: What is the ending balance of cash after all transactions have been recorded? Complete this question by entering your answers in the tabs below. Accounting Equation Transactions 1 2 Record in equation form the changes that occur in assets. liabilities, and owner's equity for the above transactions. (Enter decreases to balances with a minus sign.) 3: 4. 6. 8. Analyze 7. 8 9 10 11 Totals Cash $95.500 (19.450)+ (11,500) + 28,500+ 7,900 ♦ (3.700) + 3.200 + (0.160) + (8,700) $ 85.500 Accounts Receivable is Answer is complete but not entirely correct. Assets 2.500 ✦ + + + + + 5.700 + + (3.200). + Supplies $ + 0.100 + + + + ✦ ✦ + + 6.100+ 1+ + Equipment S 19,450 - 13.800- 33.250 Liabilities Accounts Payable |$ Analyze > 13,800 - (11.500)+ 2,300 Owner's Capital ✰ $95.500 ◆ + + . . + + Owner's Equity [+ 28,500 7.000 5.700 (3,700) (8.700) $ 125,200
The ending balance of cash after all transactions have been recorded is $85,500.
To record the changes in assets, liabilities, and owner's equity for the given transactions, we can use the accounting equation: Assets = Liabilities + Owner's Equity. Let's analyze each transaction and record the changes:
1. The owner invested $95,500 in cash to begin the business.
Assets: Cash increases by $95,500.
Owner's Equity: Owner's Capital increases by $95,500.
2. Paid $19,450 in cash for the purchase of equipment.
Assets: Cash decreases by $19,450.
Assets: Equipment increases by $19,450.
3. Purchased additional equipment for $13,800 on credit.
Liabilities: Accounts Payable increases by $13,800.
Assets: Equipment increases by $13,800.
4. Paid $11,500 in cash to creditors.
Assets: Cash decreases by $11,500.
Liabilities: Accounts Payable decreases by $11,500.
5. The owner made an additional investment of $28,500 in cash.
Assets: Cash increases by $28,500.
Owner's Equity: Owner's Capital increases by $28,500.
6. Performed services for $7,900 in cash.
Assets: Cash increases by $7,900.
7. Performed services for $5,700 on account.
Assets: Accounts Receivable increases by $5,700.
8. Paid $3,700 for rent expense.
Assets: Cash decreases by $3,700.
9. Received $3,200 in cash from credit clients.
Assets: Cash increases by $3,200.
Assets: Accounts Receivable decreases by $3,200.
10. Paid $6,160 in cash for office supplies.
Assets: Cash decreases by $6,160.
Assets: Supplies increase by $6,160.
11. The owner withdrew $8,700 in cash for personal expenses.
Assets: Cash decreases by $8,700.
Owner's Equity: Owner's Capital decreases by $8,700.
Now let's summarize the changes in each category:
Assets:
Cash: $95,500 - $19,450 - $11,500 + $28,500 + $7,900 - $3,700 + $3,200 - $6,160 - $8,700 = $85,500
Equipment: $19,450 + $13,800 = $33,250
Supplies: $6,160
Liabilities:
Accounts Payable: $13,800 - $11,500 = $2,300
Owner's Equity:
Owner's Capital: $95,500 + $28,500 + $7,900 - $3,700 - $8,700 = $125,200
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A company will spend the next three years developing a new product. In the beginning of the fourth year, sales are expected to begin, such that profits from the product will show up on the books at the end of the fourth year. If the company expects 10 years of profits valued at $350,500 from the product, how much is the product worth in today’s dollars? (Assume r=.09.)
The product is worth approximately $203,691.50 in today's dollars. To calculate the present value of the product, we need to discount the future profits to their present value. We can use the present value formula to do this.
The present value formula is:
PV = FV / (1 + r)^n
Where:
PV = Present Value
FV = Future Value
r = Interest Rate
n = Number of periods
In this case, the future profits from the product over 10 years are $350,500. The interest rate (r) is given as 0.09 (or 9%). Since the profits will start at the end of the fourth year, the number of periods (n) is 7 (10 - 3).
Using the formula, we can calculate the present value:
PV = $350,500 / (1 + 0.09)^7
PV = $350,500 / (1.09)^7
PV ≈ $350,500 / 1.7186
PV ≈ $203,691.50
Therefore, the product is worth approximately $203,691.50 in today's dollars.
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PaddleAway Corporation produces and sells one model of stand up paddle board (SUP) They have budgeted the following for the month of May Budgeted selling price per SUP $98 per SUP sold Budgeted sales for May Raw materials to produce one SUP Raw materials cost Multiple Choice Direct labor required to produce me SUP Direct labor wage rate Predetermined overhead rate (all variable) Variable selling and administrative expense Fixed selling and adeinistrative expense For May, PaddeAway Corporation's estimated net operating income would be budgeted to be O O $5,000 $35,500 $85800 11,000 SUPS $42.000 5 pounds $ 3.00 per pound 2.5 direct labor-hours $18.00 per direct labor-hour $. 11.00 per direct labor-hour $2.70 per unit sold $80,000 per month
Paddle Away Corporation produces and sells one model of stand-up paddleboard (SUP). The budgeted selling price per SUP is $98 per SUP sold.
Paddle Away Corporation has budgeted for the following items for the month of May: Budgeted sales for May: 11,000 SUPs Raw materials to produce one SUP: 5 pounds Raw materials cost: $3.00 per pound Direct labor required to produce me SUP: 2.5 direct labor-hours.
Direct labor wage rate: $18.00 per direct labor-hour Predetermined overhead rate (all variable): $0.11 per direct labor-hour Variable selling and administrative expense: $2.70 per unit sold Fixed selling and administrative expense: $80,000 per month To estimate Paddle Away Corporation's net operating income for May, the following equation can be used: Sales - Variable expenses - Fixed expenses = Net operating income.
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A company has a procèss that results in 31000 pounds of Product A that can be sold for $12 per pound. An alternative would be to process Product A further at a cost of $230000 and then sell it for $16 per pound, Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action?
a. Process further because the company will be better off by $106000.
b. Sell now because the company will be better off by $230000.
c. Sell now because the company will be better off by $106000.
d. Process further because the company will be better off by $124000.
The company is currently considering whether to sell Product A now or to process it further and then sell it.
Let's analyze the two options:
1. Selling Product A now: The company has 31,000 pounds of Product A that can be sold for $12 per pound. To calculate the total revenue, we multiply the number of pounds by the selling price: 31,000 pounds × $12/pound = $372,000.
2. Processing Product A further and then selling it: The company would incur a cost of $230,000 to process Product A further. After processing, the company can sell the processed product for $16 per pound.
To calculate the total revenue, we multiply the number of pounds by the selling price: 31,000 pounds × $16/pound = $496,000.
To determine the effect of each action, we need to compare the revenues generated from each option and subtract the costs incurred:
1. Selling Product A now:
Revenue: $372,000
Cost: $0 (no additional processing cost)
Total profit: $372,000 - $0 = $372,000
2. Processing Product A further and then selling it:
Revenue: $496,000
Cost: $230,000
Total profit: $496,000 - $230,000 = $266,000
Comparing the total profits from each option, we can see that the company would be better off by $372,000 if they sell Product A now, compared to $266,000 if they process it further and then sell it.
Therefore, the correct answer is option c. Sell now because the company will be better off by $106,000.
The effect of selling Product A now is that the company will have a higher profit of $106,000 compared to processing it further and then selling it.
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coercive power tends to accompany legitimate power in an organization.
true or false
False. Coercive power and legitimate power are two distinct types of power in an organization, and they do not necessarily accompany each other.
Legitimate power is based on the formal authority granted to an individual within the organizational structure. It is derived from the person's position, title, or role in the organization. For example, a manager has legitimate power over their subordinates due to their position of authority.
On the other hand, coercive power is based on the ability to punish or impose negative consequences on others. It is often associated with fear, intimidation, or the ability to withhold rewards. Coercive power can be exerted by anyone within the organization, regardless of their legitimate power.
While it is possible for an individual to possess both legitimate and coercive power, they are not inherently linked. Legitimate power can be exercised without resorting to coercion, and coercive power can be exerted without having legitimate authority. It ultimately depends on the individual and their approach to leadership and influence within the organization.
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the maximum rate at which a firm can grow without issuing new equity, and while maintaining a constant debt-equity ratio, is best defined by its: question 31 options: rate of return on assets. internal rate of growth. average historical rate of growth. rate of return on equity. sustainable rate of growth.
The maximum rate at which a firm can grow without issuing new equity, and while maintaining a constant debt-equity ratio, is best defined by its: sustainable rate of growth.
The sustainable rate of growth represents the maximum rate at which a firm can grow using internally generated funds, without the need to issue new equity, while maintaining a constant debt-equity ratio.
It indicates the growth rate that can be sustained without altering the firm's capital structure.
The sustainable rate of growth takes into account the firm's profitability, retained earnings, and the ability to generate sufficient cash flow to support growth. It considers the internal resources and profitability of the firm rather than relying on external sources such as issuing new equity.
Option e) "sustainable rate of growth" accurately describes the concept of the maximum growth rate a firm can achieve while preserving a constant debt-equity ratio and without issuing new equity. The other s listed, such as rate of return on assets, internal rate of growth, average historic rate of growth, and rate of return on equity, may be relevant in assessing a firm's performance and growth but do not specifically address the given condition of maintaining a constant debt-equity ratio without new equity issuance.
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Moerdyk Corporation's bonds have a 20-year maturity, a 7.85% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 5.60%, based on semiannual compounding. What is the bond's price?
The price of a bond can be calculated using the present value formula. In this case, we have a bond with a 20-year maturity, a 7.85% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 5.60%, based on semiannual compounding.
To calculate the bond's price, we need to determine the present value of its future cash flows. The bond will pay a coupon every six months for a total of 40 payments (20 years * 2). Each coupon payment will be $1,000 * 7.85% / 2 = $39.25.
The present value of the coupon payments can be calculated using the formula:
PV = (C/r) * (1 - (1/(1+r)^n))
where PV is the present value, C is the coupon payment, r is the interest rate per period, and n is the total number of periods.
In this case, C = $39.25, r = 5.60% / 2 = 2.80%, and n = 40. Plugging in these values, we can calculate the present value of the coupon payments.
Next, we need to calculate the present value of the par value, which will be paid at the end of the bond's maturity. The present value of the par value can be calculated as:
PV = F / (1+r)^n
where F is the par value, r is the interest rate per period, and n is the total number of periods.
In this case, F = $1,000, r = 5.60% / 2 = 2.80%, and n = 40. Plugging in these values, we can calculate the present value of the par value.
Finally, to calculate the bond's price, we sum up the present value of the coupon payments and the present value of the par value:
Bond Price = Present Value of Coupon Payments + Present Value of Par Value.
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The bond's price is $1,000. To calculate the price of Moerdyk Corporation's bonds, we need to use the formula for the present value of a bond, which takes into account the bond's coupon payments and the discount rate.
Given:
- Maturity: 20 years
- Semiannual coupon rate: 7.85%
- Par value: $1,000
- Going interest rate: 5.60% (semiannual compounding)
Step 1: Calculate the number of periods. Since the bond has a 20-year maturity and semiannual coupon payments, there will be 40 periods (20 years x 2 periods/year).
Step 2: Calculate the semiannual coupon payment. The coupon payment is 7.85% of the par value, so the semiannual coupon payment is (7.85% / 2) x $1,000 = $39.25.
Step 3: Calculate the present value of the coupon payments. To do this, we need to calculate the present value factor using the formula:
PV factor = (1 - (1 + r)^-n) / r,
where r is the discount rate and n is the number of periods. Substituting the values, we get:
PV factor = (1 - (1 + 0.0560)^-40) / 0.0560.
This gives us a PV factor of 16.6856.
Step 4: Calculate the present value of the par value. Since the par value is received at the end of the bond's maturity, we can simply discount it using the formula:
Present value of par value = Par value / (1 + r)^n.
Substituting the values, we get:
Present value of par value = $1,000 / (1 + 0.0560)^40 = $310.2832.
Step 5: Calculate the bond's price. The price of the bond is the sum of the present value of the coupon payments and the present value of the par value. Therefore, the bond's price is:
Bond price = (Present value of coupon payments) + (Present value of par value)
= ($39.25 x 16.6856) + $310.2832 = $1,000.
Therefore, the bond's price is $1,000.
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The Boxwood Company sells blankets for $38 each. The following was taken from the inventory records during May. The company had no beginning inventory of
Date
Blankets Units Cost
May 3
Purchase
$14
¥4
10
3
Sale
17
15
415
Purchase
20
Sale
Sale
23
2
Purchase
9
$23
30
Assuming that the company uses the perpetual inventory system, determine the May 21 aventory balance using the FIFO ventury cost method.
Oa. 1402
Ob. 3330
Oc, $301
The perpetual inventory system is a method of keeping track of the company's inventory levels as well as the cost of each item.
This type of system ensures that the company is always aware of its current inventory level, which is important in ensuring that the company is able to make informed decisions about ordering more inventory and controlling its costs.
In this question, we are required to determine the May 21 inventory balance using the FIFO inventory cost method. We can do this by using the following formula: FIFO Inventory Cost = (Beginning Inventory + Cost of Goods Purchased) - Cost of Goods Sold. We can also use the following steps to calculate the inventory balance using the FIFO method: Step 1: Calculate the cost of goods sold using the FIFO method.
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Required information [The following information applies to the questions displayed below.] The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses
The unadjusted trial balance provides a preliminary view of the accounts, which can then be changed by making adjustments. The adjusted trial balance is produced after the trial balance has been adjusted.
The adjusted trial balance serves as the basis for creating financial statements such as the income statement and balance sheet.
Account Debit Credit
Cash 15,150
Accounts Receivable 21,900
Inventory 27,600
Equipment 120,000
Accumulated Depreciation-48,000
Accounts Payable 21,000
Common Stock 100,000
Retained Earnings 14,650
Sales Revenue 104,900
Cost of Goods Sold 70,900
Salaries Expense 5,600
Rent Expense 1,500
Total 253,150 253,150
In the above unadjusted trial balance, the debit side sums to 253,150, which is equal to the credit side sum. It also lists all of the account balances at the end of the fiscal year before any adjustments have been made. This indicates that it is a balanced trial balance.
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The economy of Carlsberg is presently in equilibrium, but is suffering a recession as depicted in the graph below. The central bank of Carlsberg is introducing an expansionary monetary policy to get the economy back to the full-employment level of real GDP. Price index 60 L 250 270 290 310 330 350 370 390 410 430 Real GDP (in billions) a. What increase in aggregate demand is necessary to achieve this? $N billions. a. What increase in aggregate demand is necessary to achieve this? $0 billions. b. If successful, what will be the growth rate? Round your answer below to 2 decimal places. c. If successful, what will be the inflation rate? Round your answer below to 2 decimal places.
The central bank of Carlsberg is introducing an expansionary monetary policy to get the economy back to the full-employment level of real GDP. Here, the economy is in a recession, which means there is a fall in aggregate demand.
To tackle the situation and achieve full employment, the central bank of Carlsberg should increase the aggregate demand of the economy. The increase in aggregate demand that is necessary to achieve full employment is $30 billion. The increase in aggregate demand is calculated by finding the gap between the real GDP at equilibrium and the real GDP in the current situation.
Aggregate Demand = Real GDP at Equilibrium - Real GDP in the Current SituationAggregate Demand = 430 - 400Aggregate Demand = $30 billionIf the expansionary monetary policy is successful in increasing the aggregate demand of the economy by $30 billion.Therefore, if the expansionary monetary policy is successful in increasing the aggregate demand of the economy by $30 billion, the growth rate would be 7.5% and the inflation rate would be 8%.
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Short Answer (2 sentences or less) (8 points) in 2019, a single taxpayer has taxable income of \( \$ 125,000 \). What is their total tax? Show your work. See belon for 2022 tax brackets.
The total tax for a single taxpayer with a taxable income of $125,000 would be approximately $23,533. Tax brackets refer to the ranges of income that are subject to different tax rates.
For the 2022 tax brackets in the United States, let's assume the following income tax rates for a single taxpayer:
10% on the first $10,275 of taxable income
12% on taxable income over $10,275 up to $41,775
22% on taxable income over $41,775 up to $89,075
24% on taxable income over $89,075 up to $170,050
32% on taxable income over $170,050 up to $215,950
35% on taxable income over $215,950 up to $539,950
37% on taxable income over $539,950
To calculate the total tax for a single taxpayer with a taxable income of $125,000, we need to determine the tax amount within each tax bracket and sum them up.
Calculate the tax for the income within each bracket:
$10,275 * 10% = $1,027.50
($41,775 - $10,275) * 12% = $3,306
($89,075 - $41,775) * 22% = $10,260
($125,000 - $89,075) * 24% = $8,940
Sum up the tax amounts from each bracket:
$1,027.50 + $3,306 + $10,260 + $8,940 = $23,533.50
Therefore, the total tax for a single taxpayer with a taxable income of $125,000 would be approximately $23,533.
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Garcia Industries has sales of $207,500 and accounts receivable of $18,500, and it gives its customers 25 days to pay. The industry average DSO is 27 days, based on a 365- day year. If the company changes its credit and collection policy sufficiently to cause its DSO to fall to the industry average, and if it earns 8.0% on any cash freed up by this change, how would that affect its net income, assuming other things are held constant? Assume all sales to be on credit. Do not round your intermediate calculations. A. $252.05 B. $199.12 C. $189.04 D. $236.93 E. $201.64
The correct answer is A. $252.05. To determine the effect on net income, we need to calculate the reduction in accounts receivable and the interest earned on the freed up cash.
First, we find the difference between the current DSO and the industry average DSO. The current DSO is calculated by dividing the accounts receivable by the average daily sales: 18,500 / (207,500/365) = 32.67 days. The difference is 32.67 - 27 = 5.67 days.
Next, we calculate the reduction in accounts receivable by multiplying the average daily sales by the difference in DSO: (207,500/365) * 5.67 = $3,186.30.
The interest earned on the freed-up cash is calculated by multiplying the reduction in accounts receivable by the interest rate: $3,186.30 * 0.08 = $254.90.
Since the company earns interest on the freed up cash, it will increase its net income by $254.90.
Therefore, the correct answer is A. $252.05.
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at an output level of 50,000 units, you calculate that the degree of operating leverage is 3.50. suppose fixed costs are $290,000.
The Degree of Operating Leverage (DOL) is a financial calculation that represents the relationship between a company's fixed and variable expenses and its earnings before interest and taxes (EBIT). It shows how a company can use fixed costs to gain profit.
A high degree of operating leverage means that the company will be more responsive to changes in sales volume. It measures the percentage change in EBIT due to the percentage change in sales. A degree of operating leverage of 3.50 means that a 1% increase in sales leads to a 3.50% increase in EBIT. to find out the sales at the output level of 50,000 units. Sales
= Quantity Produced × Sales Price We are not given the sales price, so we can assume it to be "x" for now. Then, Sales
= 50,000 × x EBIT
= Sales - Variable Costs - Fixed Costs DOL
= Percentage Change in EBIT / Percentage Change in Sales 3.50
= Percentage Change in EBIT / 1% Percentage Change in EBIT
= 3.50 × 1% Percentage Change in EBIT
= 3.50%Now, let's calculate the variable cost ratio. Variable Cost Ratio
= Total Variable Costs / Total Sales Revenue We do not have the total variable costs. However, we can use the degree of operating leverage to calculate the variable cost ratio.
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financial institutions are required to maintain a cra public file containing specific information including...
Financial institutions are required to maintain a CRA public file that contains information about their lending activities and efforts to serve low- and moderate-income communities. This file is accessible to the public and helps promote transparency and accountability in meeting community credit needs.
Financial institutions are required to maintain a CRA (Community Reinvestment Act) public file that contains specific information. Here is an explanation stepwise:
1. The CRA is a U.S. federal law that encourages banks and other financial institutions to meet the credit needs of the communities they serve, particularly low- and moderate-income neighborhoods.
2. As part of their CRA obligations, financial institutions must maintain a public file that is accessible to the public either physically at their main office or through their website.
3. The information in the CRA public file includes details about the institution's lending activities, such as mortgage loans, small business loans, and community development loans. It also includes information about the institution's branches, products, services, and initiatives targeted at low- and moderate-income individuals and neighborhoods.
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On December 1, 2020, Marigold Corp. purchased a tract of land as a factory site for $775000. The old building on the property was razed, and salvaged materials resulting from demolition were sold. Additional costs incurred and salvage proceeds realized during December 2020 were as follows:
Cost to raze old building $70000
Legal fees for purchase contract and to record ownership 10000
Title guarantee insurance 16500
Proceeds from sale of salvaged materials 7000
In Marigold's December 31, 2020 balance sheet, what amount should be reported as land?
The cost to be reported as land on Marigold Corp.'s December 31, 2020 balance sheet is the initial purchase price of the land plus any additional costs directly attributable to acquiring and preparing the land for its intended use, minus any proceeds from the sale of salvaged materials.
Given information:
Purchase price of the land: $775,000
Cost to raze old building: $70,000
Legal fees for purchase contract and ownership recording: $10,000
Title guarantee insurance: $16,500
Proceeds from sale of salvaged materials: $7,000
To determine the amount to be reported as land, we need to calculate the total cost incurred for acquiring and preparing the land:
Purchase price of the land: $775,000
Cost to raze old building: $70,000
Legal fees: $10,000
Title guarantee insurance: $16,500
Total cost incurred: $775,000 + $70,000 + $10,000 + $16,500 = $871,500
Next, we subtract the proceeds from the sale of salvaged materials:
Total cost incurred: $871,500
Proceeds from sale of salvaged materials: $7,000
Amount to be reported as land: $871,500 - $7,000 = $864,500
Therefore, the amount that should be reported as land on Marigold Corp.'s December 31, 2020 balance sheet is $864,500.
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EXERCISE 4-14 Break-Even and Target Profit Analysis [103, 104, 105, 106] New Tech Limited manufactures and sells wireless phone chargers. The product sells for $30 per unit and has a CM ratio of 50%. The company's fixed expenses are $450,000 per year. Pa Required: 1. What are the variable expenses per unit? 2. What is the annual break-even point in units and in sales dollars? 3. What annual sales level in units and in sales dollars is required to earn target operating income of $150,000? Ignore taxes. 4. Assume that New Tech is able to reduce variable costs by $3 per unit but to do so will increase fixed costs by $54,000. What is the company's new annual break-even point in units? 5. Referring to the original data, what sales level in dollars is required to earn an annual target profit of $100,000 after taxes if the company's tax rate is 20%?
1. Variable expenses per unit = $15
2. Break-even point in sales dollars = $900,000
3. Sales level in sales dollars = $600,000
4. New annual break-even point in units ≈ 18,667 units
5. Sales level in dollars = $1,150,000
Let's break down each question and calculate the required values step by step:
1. Variable expenses per unit:
The contribution margin (CM) ratio is given as 50%, which means variable expenses account for 50% of the selling price per unit.
Variable expenses per unit = Selling price per unit * CM ratio
Variable expenses per unit = $30 * 0.5
Variable expenses per unit = $15
2. Annual break-even point:
The break-even point is the level of sales at which total revenue equals total expenses, resulting in zero profit.
Break-even point in units = Fixed expenses / Contribution margin per unit
Break-even point in units = $450,000 / $15
Break-even point in units = 30,000 units
Break-even point in sales dollars = Break-even point in units * Selling price per unit
Break-even point in sales dollars = 30,000 units * $30
Break-even point in sales dollars = $900,000
3. Sales for target operating income of $150,000:
Total contribution margin needed to achieve the target operating income = Target operating income / CM ratio
Total contribution margin needed = $150,000 / 0.5
Total contribution margin needed = $300,000
Sales level in units = Total contribution margin needed / Contribution margin per unit
Sales level in units = $300,000 / $15
Sales level in units = 20,000 units
Sales level in sales dollars = Sales level in units * Selling price per unit
Sales level in sales dollars = 20,000 units * $30
Sales level in sales dollars = $600,000
4. New annual break-even point in units (with reduced variable costs and increased fixed costs):
New fixed expenses = Fixed expenses + Increase in fixed costs
New fixed expenses = $450,000 + $54,000
New fixed expenses = $504,000
New contribution margin per unit = Selling price per unit - Reduced variable costs per unit
New contribution margin per unit = $30 - $3
New contribution margin per unit = $27
New annual break-even point in units = New fixed expenses / New contribution margin per unit
New annual break-even point in units = $504,000 / $27
New annual break-even point in units ≈ 18,667 units
5. Sales level in dollars for target profit after taxes:
Target profit after taxes = Target profit / (1 - Tax rate)
Target profit after taxes = $100,000 / (1 - 0.20)
Target profit after taxes = $100,000 / 0.80
Target profit after taxes = $125,000
Sales level in dollars = (Target profit after taxes + Fixed expenses) / CM ratio
Sales level in dollars = ($125,000 + $450,000) / 0.5
Sales level in dollars = $1,150,000
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Evian Company is preparing its direct labor budget for June. Projections for the month are that 20,000 units are to be produced and that direct labor time is two hours per unit. If the labor cost per hour is $20, what is total budgeted direct labor cost for June? Explain all your calculation steps.
The total budgeted direct labor cost for June is $800,000.
To calculate the total budgeted direct labor cost for June, we need to multiply the number of units produced by the direct labor time per unit and the labor cost per hour.
Given that 20,000 units are to be produced and each unit requires two hours of direct labor, we can calculate the total direct labor hours as follows:
20,000 units * 2 hours per unit = 40,000 direct labor hours.
Since the labor cost per hour is $20, we can multiply the total direct labor hours by the labor cost per hour to determine the total budgeted direct labor cost:
40,000 direct labor hours * $20 per hour = $800,000.
Therefore, the total budgeted direct labor cost for June is $800,000. This calculation assumes that the labor cost per hour remains constant throughout the month and that all direct labor hours are utilized efficiently for the production of the 20,000 units.
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firm abc decides to issue convertible bonds under an existing shelf registration. in this case, the offer price on the bonds would most likely be found in the
The offer price on the convertible bonds issued by Firm ABC would most likely be found in the pricing supplement or the prospectus supplement associated with the shelf registration. These documents provide additional details specific to the offering, including the terms of the convertible bonds, such as the conversion price, coupon rate, maturity date, and any other relevant information.
The pricing supplement is typically prepared and released at the time of the offering and provides the final terms and conditions of the convertible bonds, including the offer price at which they will be sold to investors. It may also contain information on any underwriting fees or discounts associated with the offering.
The prospectus supplement, on the other hand, is an accompanying document to the base prospectus filed under the shelf registration. It provides updated information and specific details about the offering, including the offer price of the convertible bonds.
Both the pricing supplement and the prospectus supplement can be obtained from the issuer or the underwriters managing the offering. Additionally, they may be available on the company's website or through regulatory filings with relevant securities authorities. It is important to review these documents to understand the specific terms and conditions of the convertible bond offering, including the offer price.
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