Answer:
1. Consider this case:
Short-term loans usually have a lower cost than long-term loans. Identify whether the preceding statement is true or false.
a. This statement is false and a disadvantage of short-term financing.
2. Identify the short-term financing source:
An obligation backed by collateral, often inventories or accounts receivable.
Explanation:
Some organizations regularly require short-term financing to ease uneven cash flows. It is also called working capital financing. Its duration is less than 12 months, unlike long-term financing that can last more than two years. Most of this financing is arranged with banks in the form of bank overdraft.
At Davide Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include:
WIP beginning (60% for conversion) 17,500 units
Units started 114,500 units
Units completed and transferred out 111,700 units
WIP ending (30% for conversion) 20,300 units
Beginning WIP direct materials $22,300
Beginning WIP conversion costs $19,700
Costs of materials added $370,000
Costs of conversion added $280,000
What is the total cost of units completed and transferred out?
Answer and Explanation:
For materials
Equivalent completed units = Completed units + WIP ending
= 111,700 + 20,300
= 132,000 units
Cost of materials = Beginning WIP + Cost of materials added
= 22,300 + 370,000
= $392,300
Cost of material per units = 392,300 ÷ 132,000
= $2.97197
For conversions
Equivalent completed units = Completed units + WIP ending
= 111,700 + 20,300 × 30%
= 117,790 units
Cost of Conversion = Beginning WIP + Cost of conversion added
= 19,700 + 280,000
= $299,700
Cost of conversion per units = 299,700 ÷ 117,790
= $2.54436
Total cost of units completed and transferred out
= 111,700 × (2.97197 + 2.54436)
= $616,174
After conducting research, you will need to generate ideas and organize the collected data. Simple organizational techniques will help provide structure and direction as you prepare to compose. To compose simple messages, you may need only to make a scratch list of your ideas before writing. Many messages, however, may require you to make an outline to organize your thoughts. Use the scratch list to answer the question that follows.
The Boston Hotel
a. High-end linens
b. 600-thread-count sheets
c. Coffee maker with selected teas
d. Imported beer
e. Fresh-squeezed juices
f. Affordability
g. Food and drink
h. Double-thick bath towels
i. Silk pillowcases
j. Raw silk curtains with gold embellishments
k. $100/night four-star rooms
l. Free snacks, shampoo, and conditioner
m. Free wireless Internet
Required:
What are the three major components in the preceding scratch list?
Answer:
The three major components in the preceding scratch list are High-End Linens, Affordability and Food & Drinks.
i. High-End Linens
List that falls under it includes 600-thread-count sheets, Double-thick bath towels, Silk pillowcases, Raw silk curtains with gold embellishments
ii. Affordability
List that falls under it includes $100/night four-star rooms, Free snacks, shampoo, and conditioner , Free wireless Internet
iii. Food and drink
List that falls under it includes Coffee maker with selected teas, Imported beer , Fresh-squeezed juices
Transactions for Buyer and SellerShore Co. sold merchandise to Blue Star Co. on account, $112,000, terms FOB shipping point, 2/10, n/30. The cost of the merchandise sold is $67,200. Shore Co. paid freight of $1,800.Journalize Shore Co.'s entry for the sale, purchase, and payment of amount due.Accounts Receivable-Blue Star Co. Sales Cost of Merchandise Sold Merchandise Inventory Common Stock Cash Cash Accounts Receivable-Blue Star Co. Journalize Blue Star Co.'s entry for the sale, purchase, and payment of amount due.Merchandise Inventory Accounts Payable-Shore Co. Accounts Payable-Shore Co. Cash
Answer:
The definition is defined in the clarification portion beneath, as per the particular circumstance.
Explanation:
Correct you're. FOB shipping comments mean that perhaps the shipping can be paid for by consumers. But perhaps the freight is paid by the seller in the question. It would reimburse the freight treated as income from the buyer. The credit including its buyer would be debited with either the deferred revenue sum of freight.Account Titles and Explanation Debit Credit
Receivable accounts -Blue Star Co. $1,800 -
Cash - $1,800
(To record freight paid)
Hussein got a call yesterday from First Bank, the company that issued his credit card inquiring about an $105.00 charge made in Buenos Aires, Argentina. Upon learning that Hussein was in Detroit and had not made this purchase, the bank quickly took steps to cancel the card and issue a new one. Given the circumstances that Hussein's credit card number had an illegal transaction, he may also want to:____________.
A) check his computer's firewall to make sure it's working.
B) cancel his account and eliminate credit cards from his life.
C) change his passwords and store them in a password manager.
D) diversify his spending habits by using one of several credit cards when making purchases.
Answer:
C) change his passwords and store them in a password manager.
Explanation:
Hussein, being a victim of cyber theft of money from his bank account, after having informed bank about the fraudulent transaction, should :-
Take further precautionary measures for modifying & safely saving other related crucial information, like passwords. So, he should change his passwords and store them in a password manager.
QUESTION 2 / 10
Which of the following is the BEST reason to use cash for making purchases?
A. Keeping track of how much you have spent is simple.
B. Splitting bills with friends is easier.
C. Getting more cash from an ATM machine is easy to do.
D. Knowing what you have spent your money on is
simple.
The best reason to use cash for making purchases is keeping track of how much you have spent is simple. Thus, option A is correct.
What is purchases?Purchasing is the process through which a company or organization acquires products or services in order to achieve its objectives. Although numerous organizations seek to establish standards in the purchasing process, practices can vary widely amongst firms.
Cash makes budgeting and sticking to it simpler. When you pay with cash that you've planned for purchases, it's easy to keep track of where your money is going. It's also eye-opening and keeps you grounded in terms of how much money is going out vs coming in from week to week or month to month.
The main incentive to utilize cash for purchases is that it is simple to keep account of the amount you have spent. As a result, option A is correct.
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An example of economies of scope is: Group of answer choices Google utilizing its information processing capabilities to provide data analysis services to other firms. The 200,000 unit production threshold for GM to make a profit on a car model. Decreasing per unit costs given increased unit production. Increasing per unit costs given increased unit production. None of the available answers.
Answer:
Google utilizing its information processing capabilities to provide data analysis services to other firms.
Explanation:
Many people confuse economies of scope with economies of scale. Economies of scope result when producing 2 or more different goods or services together is cheaper than producing them separately. While economies of scale refers to decreasing unit costs as the total output increases.
In the example above, Google already processes information for itself, and it is using that information to sell services to other companies. By producing both services together, the production costs lower.
Pooling has been used for a long time by businesses as a way to reduce risk. Imagine that years ago a small paint factory employed 200 people, each with an annual salary of $600/year. The factory owner knew from experience that 4 percent of workers were being injured each year, becoming unable to work. The factory owner decided to set up a fund to pay injured workers three months of salary to help their families and build good will with employees. The owner did not contribute to the injury fund. The workers themselves contributed a fixed amount each year to fund the plan. Answer the following questions (1 point each):_____.
1. How much did the owner need to collect from employees in total to fully fund the plan each year?
2. How much did each employee have to contribute each year to fully fund the plan?
3. What percentage of salary did each employee contribute to have an injury fund like this?
Answer:
1. Amount required to fund the plan = % of injured*Total employees* Annual salary
Amount required to fund the plan = 4%*200 people* $600
Amount required to fund the plan = $4800
2. Amount contributed by each employee = Amount required to fund the plan / Number of employees
Amount contributed by each employee = $4800/200
Amount contributed by each employee = $24
3. Percentage of salary = Amount contributed by each employee / Salary
Percentage of salary = 24/600
Percentage of salary = 0.04
Percentage of salary = 4%
Please complete the spreadsheet template:
Trans no. Transaction
1. Pamela Wong, the owner, opened a checking account for the business by depositing $48,000 of her personal funds.
2. Paid the monthly rent of $1,500.
3. Bought office furniture on account for $1,000.
4. Pamela Wong invested $3,000 of office equipment in the business.
5. Paid cash for a new computer for the business, $5,000.
6. Paid for an advertisement in the local newspaper, $200.
7. Completed graphic desktop publishing services for a client and sent a bill for $800.
8. Paid $700 on account for the office furniture bought earlier.
9. Received $500 on account from a client.
10. Pamela Wong withdrew $1,000 for personal use.
11. Received $400 cash for desktop publishing services completed for a client.
Answer:
I used an excel spreadsheet sine there is not enough room here.
Explanation:
Excel templates make it simpler to create a spreadsheet with a polished appearance by including all of the following, with the exception of Data.
What is Excel Sheet ?To eliminate the necessity for the user to generate those designs from scratch, templates are made to specify the fundamental structure of each document that is repeated.
A template typically includes formatting and pre-defined formulas. However, it won't include any data as the template's goal is to have a consistent structure but allow for variable values so that it can respond appropriately to the data.
Formatting and pre-made formulas are frequently included in templates. Although the template aims to have a consistent structure and allow for variable values so that it can react appropriately to the data, it won't contain any data.
Any template will therefore include design but not data. We are able to make a new one, modify an existing template, or utilize the default template.
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# SPJ 5
Presented below is information for Headland Company.
1. Beginning-of-the-year Accounts Receivable balance was $21,400.
2. Net sales (all on account) for the year were $105,300. Headland does not offer cash discounts.
3. Collections on accounts receivable during the year were $81,300.
Required:
Compute Headland’s accounts receivable turnover and days to collect receivables for the year.
Answer and Explanation:
The computation is shown below:
For account receivable turnover ratio
Accounts Receivable Turnover is
= Sales ÷ Average Receivables
Beginning Accounts Receivable $21,400
Add: Sales $105,300
Less: Cash Receipts $81,300
Ending Accounts Receivable $45,400
Now
Accounts Receivable Turnover is
= $105,300 ÷ ($21,400 + $45,400) ÷ 2
= 3.15 times
Now days to sell is
= 365 ÷ 3.15 times
=116 days
Mountain Cycle specializes in making custom mountain bikes. The company founder, PJ Steffan, is having a hard time making the business profitable. Knowing that you have good business knowledge and solid financial sense, PJ has come to you for advice.
Project Focus PJ would like you to determine how many bikes Mountain Cycle needs to sell per year to break even (Profit =0). Solve using the followings.
Fixed cost equals $65,000
Variable cost equals $1,575
Unit Bike price equals $2,500
Answer and Explanation:
Break even point in units = Fixed Costs ÷ (Sales price per unit – Variable costs per unit)
Given fixed cost =$ 65000
Variable cost per unit =$1575
Selling price per unit =$2500
Break even point in units= $65000/$2500-1575
=$65000/925
=70.2703
= 70 units
Therefore it would take 70units of sale of products for the company to break-even that is not make loss or profit
Profit/loss =0
The following selected transactions were completed by Capers Company during October of the current year:
Oct. 1 Purchased merchandise from Sabol Imports Co., $15,458, terms FOB destination, n/30.
3 Purchased merchandise from Saxon Co., $9,650, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $200 was added to the invoice.
5 Purchased merchandise from Schnee Co., $13,550, terms FOB destination, 2/10, n/30.
6 Issued debit memo to Schnee Co. for merchandise with an invoice amount of $4,350 returned from purchase on July 5.
13 Paid Saxon Co. for invoice of July 3.
14 Paid Schnee Co. for invoice of July 5, less debit memo of July 6.
19 Purchased merchandise from Southmont Co., $27,270, terms FOB shipping point, n/eom.
19 Paid freight of $375 on July 19 purchase from Southmont Co.
20 Purchased merchandise from Stevens Co., $21,400, terms FOB destination, 1/10, n/30.
30 Paid Stevens Co. for invoice of July 20. 31 Paid Sabol Imports Co. for invoice of July 1.
31 Paid Southmont Co. for invoice of July 19.
Required:
Journalize the entries to record the transactions of Capers Company for October.
Answer:
Date Accounts title and explanations Debit$ Credit$
1-Oct Merchandise inventory 15458
Accounts payable - Sabol imports 15458
3-Oct Merchandise Inventory 9850
Accounts payable- Saxon Co. 9650
Cash account 200
4-Oct Merchandise Inventory 13550
Accounts payable- Schnee Co. 13550
6-Oct Accounts payable -Schnee Co 4350
Merchandise inventory 4350
13-Oct Accounts payable-Saxon Co 9650
Cash account 9457
Merchandise inventory 193
(9650*2%)
14-Oct Accounts payable-Schnee Co 9200
Cash account 9016
Merchandise inventory 184
(9200*2%)
19-Oct Merchandise inventory 27270
Accounts payable - Southmont Co 27270
19-Oct Merchandise inventory 375
Cash account 375
20-Oct Merchandise inventory 21400
Accounts payable -Stevens 21400
30-Oct Accounts payable-Stevens 21400
Cash account 21186
Merchandise inventory 214
(21400*1%)
31-Oct Accounts payable-Sabol imports 15458
Cash account 15458
31-Oct Accounts payable -Southmont Co 27270
Cash account 27270
10. ________________ is the extent to which employees have positive or negative feelings about various aspects of their work.
Answer:
A. Job satisfaction
Explanation:
Job satisfaction can be influenced by a number of significant factors. There may be motivation or lack of motivation according to the working conditions, such as job perception, management, organizational culture, reward system, etc.
There needs to be active management to analyze what are the main factors that affect job satisfaction in an organization, so that there is greater motivation, productivity, positive business climate, ethical behaviors, etc.
Jim wants to start his own business and needs $10,000 for working capital. He applies for a business loan at FirstBank. The banker tells Jim that the Bank will make the loan if Jim's father will personally guarantee repayment of the loan. Jim assures the banker that his father will do this. The banker calls Jim's father to confirm that he will guarantee Jim's $10,000 loan. Jim's father says: "Sure thing, I'd do anything for that boy." The bank makes the loan to Jim. Jim's new business is not successful and Jim is unable to repay the loan. Jim has no money. Jim's father has buckets of money. The bank sues Jim's father to recover the unpaid amount of the loan plus interest plus attorneys' fees and costs of collecting the debt.
Which of the following is true?
A. Jim's father can make a strong argument that he is not liable to pay his son's debt because the Bank did not have him sign a written guaranty agreement.
B.The oral agreement to guaranty the loan is not enforceable because it is contrary to public policy.
C.Jim’s father is liable to pay his son’s debt because the Bank partially performed under the loan agreement.
D.If it can be proven in a court of law that Jim's father orally agreed to guarantee the loan, Jim's father will be held liable for the repayment of the loanbecause 'a deal is a deal'.
Answer:
A.
Explanation:
From the different options provided, in this scenario the one that is true is that Jim's father can make a strong argument that he is not liable to pay his son's debt because the Bank did not have him sign a written guaranty agreement. In order for the bank to properly hold Jim and his father to the agreement they needed to create a contract and have Jim's father sign and agree to the contract in person. Since the bank failed to do so, then Jim's father can fight the lawsuit. Agreement over the phone is not proper procedure and would not hold up in court due to the bank not being able to properly verify who the individual on the other side of the phone call truly was or if he was really Jim's Father.
FlanCrest Enterprises is a mid-sized auto supply company that manufactures electronic components for cars. It has approximately 200 employees, with about 150 working on the production line. Its primary customer is Widespread Motors, a large international auto manufacturer. Widespread Motors primarily sells their cars based on price, aiming to make the prices as low as possible in any particular market segment. The cars may not have as many features, but still operate and cost less than those of their competitors. FlanCrest, under the direction of Widespread, has been asked to reduce the price of its electronic components for the next order due to competitive pressure in the market for Widespread's best-selling car. To cut its prices and keep its biggest customer, FlanCrest announces that they will be eliminating the popular community college tuition reimbursement program and eliminating all overtime for production workers.
Which of the below choices most accurately describes the new HR strategy at FlanCrest Enterprises?
a. Commitment, because they are demonstrating commitment to the development of their workforce
b. Control, because they are attempting to control employees within the workplace
c. Commitment, because they are demonstrating commitment to their key customers
d. Control, because they are attempting to minimize labor costs
Answer: d. Control, because they are attempting to minimize labor costs
Explanation:
By trying to reduce labor costs, FlanCrest is engaging in a Control HR Strategy that will see them control the costs being expended on human resources.
This case shows how Controling activities such as cost cutting can be done to keep customers because if FlanCrest did not do what they did, they might have lost Widespread Motors as customers.
A department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of July, there was no beginning work in process; 39000 units were completed and transferred out; and there were 19000 units in the ending work in process that were 30% complete. During July, $87000 materials costs and $89400 conversion costs were charged to the department. The unit production costs for materials and conversion costs for July were:_________
Materials Conversion Costs
$2.77 $1.55
$2.04 $1.50
$3.09 $2.27
$1.60 $1.50
Answer:
Unit Production Cost for Materials = $1.5 per unit
Unit Production Cost for Conversion cost = $2 per unit
Explanation:
Materials Conversion
Beginning WIP 0 0
Started and Completed 39,000 39,000
Ending WIP (19,000*30%) 19,000 5,700
Equivalent Units 58,000 44,700
Cost Incurred $87,000 $89,400
Unit Production Cost for Materials = Cost / Equivalent units
Unit Production Cost for Materials = $87,000 / 58,000
Unit Production Cost for Materials = $1.5 per unit
Unit Production Cost for Conversion cost = Cost / Equivalent units
Unit Production Cost for Conversion cost = $89,400 / 44,700
Unit Production Cost for Conversion cost = $2 per unit
Suppose there is a policy debate over whether the United States should impose trade restrictions on imported ball bearings:________.
Domestic producers of ball bearings send a lobbyist to the U.S. government to request that the government impose trade restrictions on imports of ball bearings. The lobbyist claims that the U.S. ball-bearing industry is new and cannot currently compete with foreign firms. However, if trade restrictions were temporarily imposed on ball bearings, the domestic ball-bearing industry could mature and adjust and would eventually be able to compete in the world market.
Which of the following justifications is the lobbyist using to argue for the trade restriction on ball bearings?
A. Infant-industry argument
B. Saving-domestic-jobs argument
C. Using-protection-as-a-bargaining-chip argument
D. National-security argument
E. Unfair-competition argument
Answer:
Infant-industry argument
Explanation:
Here is a paraphrased version of the lobbyist's claim and it is from here that we get our answer.
"He claims that this industry in question is new and currently cannot compete with foreign industry".
What this tells us is that this industry in question is an infant industry. An infant industry is a new industry yet to be past it's developmental stage and which cannot be compete yet with other established industries.
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Three explorers are getting kidnapped by an evil tribe deep in the jungle, and their life now depends on their ability to correctly answer the following challenge the evil tribe's chief has for them. The explorers are tied to three trees facing each other and are presented with the chief's 5 wives: 3 brunettes, and 2 blondes. The three explorers are now blindfolded, and the chief picks three of his five wives to stand behind the trees the explorers are tied to, one behind each tree. The remaining two wives disappear from view. Then the blindfolds come off, and each explorer is able to see the two wives that are standing behind his two colleagues, but not the one behind himself. Each explorer now has up to 10 minutes time to think, after which each has to correctly answer what hair color the wife has that is standing behind him, or lose his life. When you, as one of the three explorers, gain your sight after the blindfold comes off, you see two brunettes standing behind your two colleagues. And now your life depends on figuring out who is behind you: a blonde or a brunette?
Answer:
Brunette
Explanation:
Originally there were 3 brunettes and 2 blondes. If once you are able to see, you realize that 2 brunettes are standing behind your friends, that means that behind you there could be one of two blondes or the remaining brunette.
The possibility of the wife behind you being a blonde is 2/3 or 67%, while the chance of her being brunette is only 33%. But this question is not about probability, instead it is about game strategy. I would bet that the wife behind me is a brunette.
Imagine that the two women that you saw were blondes, then you would immediately say brunette. Even if you only saw one blonde wife, your obvious choice would be brunette. This applies to all 3 friends and the chief is gambling against you all 3. He will not give any of you any type of advantage.
The possibility of the wife behind you being a blonde is 2/3 or 67%, while the prospect of her being brunette is barely 33%. But this question isn't about probability, instead, it's about game strategy. I'd bet that the wife behind me could be a brunette.
BrunetteOriginally there have been 3 brunettes and a pair of blondes. If once you're ready to see, you realize that 2 brunettes are standing behind your friends, which means that behind you there may be one in every of two blondes or the remaining brunette. Imagine that the 2 women that you just saw were blondes, then you'd immediately say brunette. Even if you simply saw one blonde wife, your obvious choice would be brunette. So this applies to all or any 3 friends and also the chief is gambling against you all 3. Then He won't give any of you any variety of advantages.
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Bali Inc. reported $605,800 net income before tax on this year’s financial statements prepared in accordance with GAAP. The corporation’s records reveal the following information.
• Depreciation expense per books was $53,000, and MACRS depreciation was $27,400.
• Bali sold business equipment for $100,000 cash. The original cost of the equipment was $125,000. Book accumulated depreciation through date of sale was $48,000, and MACRS accumulated depreciation through date of sale was $63,000.
• Bali sold investment land to Coroda, a corporation owned by the same person that owns Bali. The amount realized on sale was $115,000, and Bali’s basis in the land was $40,000.
• Bali sold marketable securities to its sole shareholder. The amount realized on sale was $51,450, and Bali’s basis in the securities was $75,000. Compute ZEJ’s taxable income.
Answer:
$669,950
Explanation:
Computation of taxable income
Bali’s net book income before tax$605,800 Excess of book over tax depreciation25,600
Book gain on equipment sale$(23,000)
(53,000-27,400)
Tax gain on equipment sale38,000 15,000
(23,000-38,000=15,000)
Nondeductible loss on sale to related party 23,550
(75,000-51,450)
Taxable income$669,950
(605,800+25,600+15,000+23,550)
Therefore the taxable income will be $669,950
The environmental protection agency of a county would like to preserve a piece of land as a wilderness area. The current owner has offered to lease the land to the county for 20 years in return for a lump-sum payment of $1.1 million, which would be paid at the beginning of the 20-year period. The agency has estimated that the land would generate $110,000 per year in benefits to hunters, bird watchers, and hikers. Assume that the lease price represents the social opportunity cost of the land and that the appropriate real discount rate is 4 percent.
a. Assuming that the yearly benefits, which are measured in real dollars, accrue at the end of each of the 20 years, calculate the net benefits of leasing the land. Should the environmental protection agency pay for this piece of land?
b. Some analysts in the agency argue that the annual real benefits are likely to grow at a rate of 2 percent per year due to increasing population and county income. Recalculate the net benefits assuming that they are correct. Should the environmental protection agency pay for this piece of land?
Answer: Check explanation
Explanation:
a. For this scenario, it should be noted that the net benefits for the land lease will be equal to the present value of the benefits that are generated. This will be the annual benefit multiplied by the present value of annuity factor. This will be:
= $110,000 x 13.59
= $1,494,900
From the calculation, we can see that the lease price is less than the present value calculated, this implies that the transaction will incur a profit and should be undertaken.
b. For the growing annuity here, the calculation will be:
= [$110,000/(4% - 2%)] x [1 - [(1 + 2%)/(1 + 4%)]²⁰]
= [$110,000/2%] × [1 - (1 + 0.02)/(1 + 0.04)²⁰]
= $5,500,000 x 0.321833005
= $1,770,081.53
The environmental agency should pay for the piece of land as the present value calculated is higher.
Note that the present value of the annuity factor for 20 years at 4% = 13.59
Organizations are often divided into units or departments. Which of these is NOT a common way to organize a company?
Group of answer choices
By function
By product
By employee compensation
By customer
Answer: By employee compensation
Explanation:
In an organization, it should be noted that an organization can be grouped based on the roles performed e.g in an organization, you can find he employees that are related to accounting of the company in the account department, employees involved in sales in the sales department etc.
Employee can also be grouped based on the product sold or based on customers but employees can't be grouped based on employee compensation. Employee compensation is the compensation that an employee gets for working for a particular company.
Skidmore Music Company had the following transactions in March:
a. Sold instruments to customers for $16, 700, received $10, 700 in cash and the rest on account. The cost of the instruments was $7, 100.
b. Purchased $4, 900 of new instruments inventory; paid $1, 700 in cash and owed the rest on account.
c. Paid $720 in wages for the month.
d. Received $3, 100 from customers as deposits on orders of new instruments to be sold to the customers in April.
e. Received a $280 bill for March utilities that will be paid in April.
Required:
Complete the following statements:
1. Cash basis Income Statement
2. Accrual basis Income Statement
Answer: Check attachment
Explanation:
A cash basis income statement is simply referred to as an income statement which contains revenues and expenditures for the company whereby cash has either being received or paid by the company.
For accrual basis income statement, revenue and expenditures are recorded when they're either earned or made.
Check the attachment for more analysis.
The following inventory valuation errors have been discovered for Knox Corporation:
The 2015 year-end inventory was overstated by $23,000
The 2016 year-end inventory was understated by $61,000
The 2017 year-end inventory was understated by $17,000
The reported income before taxes for Knox was:
Year: Income before Taxes:
2015 $138,000
2016 $254,000
2017 $168,000
Required:
Compute what income before taxes for 2015, 2016, and 2017 should have been after correcting for the errors.
Answer:
Income +/- inventory adjustment
2015: 138,000 - 23,000 = 115,000
2016: 254,000 + 61,000 = 315,000
2017: 168,000 + 17,000 = 185,000
Explanation:
Inventory Identity:
Beginning + Purchases = Ending + COGS
As the mistake is on the right side it compensates by the other component which is COGS
When the inventory is overstated this means COGS is understated.
We didn't record the cost of good sold thefore our gross profit is higher making the net income higher.
When the inventory is understated this means COGS is overstated.
We record more cost of goods sold thefore our gross profit is lower making the net income fewer as well.
Farr Corp. purchased a new delivery van on January 1, 2020 and chose to use the double declining balance depreciation method. The van cost $48,000 with an estimated life of five years and a $12,000 salvage value. After the year end adjustment, how much accumulated depreciation would be recorded on the van at December 31, 2021
Answer:
$30,720
Explanation:
First, we will calculate the depreciation for 2020.
Depreciation for 2020 = ($48,000 cost - 0) × 40%
= $19,200
Depreciation for 2021 = ($48,000 cost - $19,200 depreciation 2020) × 40%
= $11,520
Accumulated depreciation at the end of 2021
= $11,520 + $19,200
= $30,720
The value of $30,720 will be recorded as accumulated depreciation on the value of the van at December 31, 2021.
• Note, the asset's annual depreciation will be 20% of the depreciation cost since its useful life is 5. It will however be 40% since we are using the double declining balance method.
Seneff Corporation uses the following activity rates from its activity-based costing system to assign overhead costs to products.
Activity Cost Pools Activity Rate
Setting up batches $38.50 per batch
Processing Customer orders $86.62 per customer order
Assembling products $7.33 per assembly hour
Data concerning the two products appear below:
Product V91 Product V21
Number of batches 83 27
Number of customer orders 74 7
Number of assembly hours 702 321
Required:
How much overhead cost was assigned to product V91 using the activity-based costing system?
Answer:
Total allocated overhead= $14,751.04
Explanation:
Giving the following information:
Activity Cost Pools Activity Rate
Setting up batches $38.50 per batch
Processing Customer orders $86.62 per customer order
Assembling products $7.33 per assembly hour
Data concerning the two products appear below:
Product V91
Number of batches 83
Number of customer orders 74
Number of assembly hours 702
To allocate overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Setting up= 38.5*83= 3,195.5
Processing= 86.62*74= 6,409.88
Assembling products= 7.33*702= 5,145.66
Total allocated overhead= $14,751.04
Big Wave Marine Products had sales revenue of $850,000 for the year-ended December 31, 2017. The units sold were covered by a two-year warranty and Big Wave began 2017 with a warranty liability balance of $11,600. Big Wave's management team estimated that the units sold in 2017 would result in future warranty claims in the amount of 4% of sales revenue and during 2017. Big Wave spent $34,800 servicing customer warranty claims.
Write down the that Big Wave will record in 2017 for warranty expense.
Answer:
$34,000
Explanation:
the journal entry to record the warranty expense would be:
Dr Warranty expense 34,000
Cr Warranty liability 34,000
The warranty liability account covers products sold during the current and previous year (until the 2 year warranty period is over). It is a permanent liability account that changes over time, while the warranty expense account is a temporary account and is recorded when the goods are sold.
After visiting several automobile dealerships, Richard selects the used car he wants. He likes its $10,000 price, but financing through the dealer is no bargain. He has $2,000 cash for a down payment, so he needs an $8,000 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $8,000 for a period of four years at an add-on interest rate of 11 percent. What is the total interest on Richard’s loan? What is the total cost of the car? What is the monthly payment? What is the annual percentage rate (APR)?
Answer:
A. $3,520
B. $13,520
C. $240 monthly
D. 21.55%
Explanation:
A. Calculation for the total interest
Using this formula
Interest = (Principal) (Rate) (Time)
Let plug in the formula
Interest = (8000)(.11)(4)
Interest = $3,520
B. Calculation for the total cost of the car
Using this formula
Total Cost = Down Payment + Principal amount Borrowed + Interest amount
Let plug in the formula
Total Cost = $2,000 + $8,000 + $3,520
Total Cost = $13,520
C. Calculation for the monthly payment
Using this formula
Monthly Payment = (Principal amount Borrowed + Total interest amount ) / Total number of payments
Monthly Payment = ($8,000 + $3,520) / 48
Monthly Payment=$11,520/48
Monthly Payment=$240 monthly
Note 4-year * 12 months will give us 48months
D. Calculation for the annual percentage rate (APR) using this formula
APR= (2 × n × I) / [P × (N + 1)]
Let plug in the formula
APR = (2 × 12 × $3,520) / [$8,000 × (48+1)]
APR =$84,480/$8,000×49
APR=$84,480/$392,000
APR=0.2155×100
APR= 21.55%
Deal Leasing leased equipment to Hand Company on January 1, 2021. The leased equipment's book value is $420,000 with no estimated residual value at the end of its useful life. The remaining useful life of the leased equipment is 15 years. The lease payments were calculated to provide the lessor a 10% return. Ten annual lease payments of $60,000 are due at the beginning of each year beginning January 1, 2021. Both companies use the straight-line method in depreciation/amortization their assets.
Answer:
The requirements are missing, so I looked for a similar question. This is a financial lease since the PV of the lease payments represents 97% of the asset's value.
January 1, 2021, equipment leased from Deal leasing
Dr Right of use asset 405,541.20
Cr Lease liability 405,541.20
the right of use asset = PV of lease payments = $60,000 x 6.75902 (PV annuity due, 10%, 10 periods) = $405,541.20
January 1, 2021, first lease payment
Dr Lease liability 60,000
Cr Cash 60,000
December 31, 2021, depreciation expense on leased asset
Dr Depreciation expense 40,554.12
Cr Accumulated depreciation 40,554.12
depreciation expense = $405,541.20 / 10 = $40,554.12
December 31, 2021, interest expense on asset lease
Dr Interest expense 34,554.12
Cr Interest payable 34,554.12
interest expense = ($405,541.20 - $60,000) x 10% = $34,554.12
On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $25,000 on each December 31 beginning on December 31, 2021, and a lump-sum payment of $150,000 on December 31, 2025. A 10% interest rate properly reflects the time value of money in this situation.
Required:
Calculate the amount at which Barrett should record the note payable and corresponding merchandise purchased on January 1, 2021.
Answer:
$187,908
Explanation:
Hint : Use time of Value techniques to calculate the price (today) : January 1, 2021.
Pmt = ($25,000)
n = 5
Fv = ($150,000)
i = 10 %
P/yr = 1
Pv = ?
Using a Financial Calculator, the price (today) that is the PV will be $187,907.87 or $187,908.
Thus the amount at which Barrett should record the note payable and corresponding merchandise purchased on January 1, 2021 will be $187,908.
Who was the first missionary to arrive in Africa?
Answer:
David Livingstone in 1840.
Hope this helps ; ) Enjoy your day!
Presented below is information from Headland Computers Incorporated.
July 1 Sold $22,600 of computers to Robertson Company with terms 3/15, n/60. Headland uses the gross method to record cash discounts. Headland estimates allowances of $1,334 will be honored on these sales.
10 Headland received payment from Robertson for the full amount owed from the July transactions.
17 Sold $256,100 in computers and peripherals to The Clark Store with terms of 2/10, n/30.
30 The Clark Store paid Headland for its purchase of July 17.
Answer:
July 1
Dr Accounts receivable $22,600
Cr Cash $22,600
Dr Sales returns and allowances $1,334
Cr Allowances for Sales returns and allowances $1,334
July 10
Dr Cash $21,922
Dr Sales Discount $678
Cr Accounts Receivable $22,600
July 17
Dr Accounts receivable $256,100
Cr Sales revenue $256,100
July 30
Dr Cash $256,100
Cr Accounts receivable $256,100
Explanation:
Preparation of Journal entry
July 1
Dr Accounts receivable $22,600
Cr Cash $22,600
Dr Sales returns and allowances $1,334
Cr Allowances for Sales returns and allowances $1,334
July 10
Dr Cash $21,922
(97%×$22,600)
Dr Sales Discount $678
(3%×$22,600)
Cr Accounts Receivable $22,600
($21,922+$678)
July 17
Dr Accounts receivable $256,100
Cr Sales revenue $256,100
July 30
Dr Cash $256,100
Cr Accounts receivable $256,100