A new manufacturing machine is expected to cost $278,000, have an eight-year life, and a $30,000 salvage value. The machine will yield an annual incremental after-tax income of $35,000 after deducting the straight-line depreciation. Compute the accounting rate of return for the investment.

Answer:

22.7 %

Explanation:

Accounting rate of return = Average Profits / Average Investments × 100

Where,

Average Profit = Sum of Profits ÷ Number of Years

                        = $35,000

and

Average Investment = (Initial Investment + Salvage Value) ÷ 2

                                  = ($278,000 + $30,000) ÷ 2

                                  = $154,000

Therefore,

Accounting rate of return = $35,000 ÷ $154,000

                                          = 22.7 %

Joint Cost Allocation—Net Realizable Value Method Nature's Garden Inc. produces wood chips, wood pulp, and mulch. These products are produced through harvesting trees and sending the logs through a wood chipper machine. One batch of logs produces 20,304 cubic yards of wood chips, 14,100 cubic yards of mulch, and 9,024 cubic yards of wood pulp. The joint production process costs a total of $32,000 per batch. After the split-off point, wood chips are immediately sold for $25 per cubic yard while wood pulp and mulch are processed further. The market value of the wood pulp and mulch at the split-off point is estimated to be $22 and $24 per cubic yard, respectively. The additional production process of the wood pulp costs $5 per cubic yard, after which it is sold for $30 per cubic yard. The additional production process of the mulch costs $4 per cubic yard, after which it is sold for $32 per cubic yard.
Allocate the joint costs of production to each product using the net realizable value method.
Joint Product Allocation
Wood chips $
Wood pulp
Mulch
Totals $
Support department cost allocation—comparison
Becker Tabletops has two support departments ( Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows:
Support Department Cost Driver
Janitorial Department Square footage to be serviced
Cafeteria Department Number of employees
Janitorial
Department Cafeteria
Department Cutting
Department Assembly
Department
Department costs $310,000 $169,000 $1,504,000 $680,000
Square feet 50 5,000 1,000 4,000
Number of employees 10 3 30 10
Allocated the support department costs to the production departments using the direct method below.
Cutting
Department Assembly
Department
Janitorial Department cost allocation $62,000 $248,000
Cafeteria Department cost allocation $126,750 $42,250
Allocated the support department costs to the production departments using the reciprocal services method below.
Cutting
Department Assembly
Department
Janitorial Department cost allocation $38,200 $152,800
Cafeteria Department cost allocation $216,000 $72,000
Allocated the support department costs to the production departments and Cafeteria Department using the sequential method below.
Cafeteria
Department Cutting
Department Assembly
Department
Janitorial Department cost allocation $155,000 $31,000 $124,000
Cafeteria Department cost allocation $243,000 $81,000
Compare the total support department costs allocated to each production department under each cost allocation method.
a. Which production department is allocated the most support department costs under the direct method?
Cost
$
b. Which production department is allocated the most support department costs under the sequential method?
Cost
$
c. Which production department is allocated the most support department costs under the reciprocal services method?
Cost
$
Support Department Cost Allocation—Direct Method
Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 18 and 72 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows:
Maintenance Department $8,000
Janitorial Department 5,000
Cutting Department 56,000
Pruning Department 12,000
Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production departments.
Cutting
Department Pruning
Department
Production departmentsʼ total costs $ $

What are the advantages and disadvantages of making small, frequent purchases from just a few suppliers?

Question 3

A situation where the level of output scale and average costs are all rising is called

Imagine that you are holding 5,800 shares of stock, currently selling at $65 per share. You are ready to sell the shares but would prefer to put off the sale until next year due to tax reasons. If you continue to hold the shares until January, however, you face the risk that the stock will drop in value before year-end. You decide to use a collar to limit downside risk without laying out a good deal of additional funds. January call options with a strike price of $70 are selling at $5, and January puts with a strike price of $60 are selling at $6. What will be the value of your portfolio in January (net of the proceeds from the options) if the stock price ends up at $51, $65, $71

You are considering how to invest part of your retirement savings.You have decided to put $400,000 into three​ stocks: 61% of the money in GoldFinger​ (currently $28​/share), 24% of the money in Moosehead​ (currently $73​/share), and the remainder in Venture Associates​ (currently $9​/share). Suppose GoldFinger stock goes up to $43​/share, Moosehead stock drops to $67​/share, and Venture Associates stock drops to $6 per share. a. What is the new value of the​ portfolio? b. What return did the portfolio​ earn? c. If you​ don't buy or sell any shares after the price​ change, what are your new portfolio​ weights?

All three of the $5000 billion GDP figures (Production, Income and Spending) are in ____________ dollars.

Iverson Company purchased a delivery truck for $45,000 on January 1, 2018. The truck was assigned an estimated useful life of 5 years and has a residual value of $10,000. Compute depreciation expense using the double-declining-balance method for the years 2018 and 2019.

ere are simplified financial statements for Watervan Corporation:



INCOME STATEMENT
(Figures in $ millions)
Net sales $
888.00

Cost of goods sold
748.00

Depreciation
38.00

Earnings before interest and taxes (EBIT) $
102.00

Interest expense
19.00

Income before tax $
83.00

Taxes
17.43

Net income $
65.57



BALANCE SHEET
(Figures in $ millions)
End of Year Start of Year
Assets
Current assets $
376

$
326


Long-term assets
272


229


Total assets $
648

$
555


Liabilities and shareholders’ equity
Current liabilities $
201

$
164


Long-term debt
115


128


Shareholders’ equity
332


263


Total liabilities and shareholders’ equity $
648

$
555




The company’s cost of capital is 8.5%.


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b. What is the company’s return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

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Joni Hyde Inc. has the following amounts reported in its general ledger at the end of the current year.
Organization costs $24,000
Trademarks 15,000
Discount on bonds payable 35,000
Deposits with advertising agency
for ads to promote goodwill of company 10,000
Excess of cost over fair value of net
identifiable assets of acquired subsidiary 75,000
Cost of equipment acquired for research
and development projects; the equipment
has an alternative future use 90,000
Costs of developing a secret formula for a
product that is expected to be marketed for
at least 20 years 80,000
On the basis of this information, compute the total amount to be reported by Hyde for intangible assets on its balance sheet at year-end. Equipment has alternative future use.

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a. $237,416.b. $71,550.c. $184,622.d. $162,113.

Rocky Mountain Bottling Company produces a soft drink that is sold for a dollar. At production and sales of 1,000,000 units, the company pays $700,000 in production costs, half of which are fixed costs. At that volume, general, selling, and administrative costs amount to $320,000, of which $70,000 are fixed costs. What is the amount of contribution margin per unit

At the end of May, the unadjusted trial balance of Barker Industries included the following accounts:
Debit Credit
Sales (75% represent credit sales) $400,000
Accounts Receivable $240,000
Allowance For Doubtful Accounts 1,800
Barker Industries uses the percentage of sales approach in estimating uncollectible accounts. The uncollectible accounts expense is estimated to be 3% of credit sales The net realizable value of Barker's accounts receivable in the May 31 balance sheet is:_____.
a. $250,800.b. $229,200.c. $236,400.d. $226,200.

Westbank Real Estate, Inc. owns 10 acres of forested land. Westbank wants the land cleared in order to build houses. Westbank emails a signed electronic memorandum to a representative of Hardell Lumber Co. offering to sell the mature trees and rich topsoil to Hardell for lumber and agricultural purposes. The electronic memorandum includes the parties' typed names, the consideration, the price, and a description of the property, lumber, and soil. Hardell replies via email to Westbank that it accepts Westbank's terms, electronically signs the memorandum, and will start removing the trees and soil next month. Before Hardell can begin clearing the land, Westbank changes its mind, wants to keep the land forested, and prevents Hardell from accessing the property claiming no contract has been formed.
2. Does the electronic agreement for the sale of trees and soil fall under the statute of frauds? (YES / NO)
3. Under which category? (CONTRACTS INVOLVING LAND/ CONTRACTS THAT BY THEIR TERMS CANNOT BE PREFORMED IN LESS THAN A YEAR AFTER THE DATE OF AGREEMENT/ A PROMISE TO ANSWER FOR A DEBT OF ANOTHER/ A PROMISE MADE IN CONSIDERATION OF MARRIAGE/ CONTRACTS FOR THE SALE OF GOODS OVER $500)
4. An electronic memorandum (DOES/ DOES NOT) satisfy the writing requirements for the Statute of Frauds.
5. Land is considered to be (REAL PROPERTY/ PERSONAL PROPERTY)
6. The definition of land includes (NO/ SOME/ ALL) physical objects that are permanently attached to the property.
7. Examples of physical objects that constitute land for purposes of the statute of frauds include (BUILDINGS/ FENCES/ TREES/ SOIL/ ALL OF THESE)
8. A written or electronic memorandum evidencing a contract will suffice provided that the writing is signed by (THE PERSON WHO IS ENFORCING THE CONTRACT/ THE PERSON AGAINST WHOM THE CONTRACT IS BEING ENFORCED)
9. Who signed the e-mails? (WESTBANK REAL ESTATE/ HARDELL LUMBER/ BOTH PARTIES)
10. What type of signature must be on an e-mail in order to enforce an electronic record? (A TYPED NAME/ AN OFFICIAL SIGNATURE/ A NOTARIZED SIGNATURE/ AN ENCRYPTED SIGNATURE)
11. Does the electronic memorandum have the parties' typed names? (YES/ NO)
12. Does the electronic memorandum describe the property involved?(YES/ NO)
13. Is it likely a court would find that the electronic memorandum satisfied the statue of frauds? (YES/ NO)
14. As a result, Hardell (WILL/ WILL NOT) likely be able to enforce the contract against Westbank.

If Tonya purchased 200 decorative pillows at $12 each and sold 75 of the pillows for $20 each, what is the cost of goods sold

On September 15, 2021, Oliver's Mortuary received a $7,200, nine-month note bearing interest at an annual rate of 8% from the estate of Jay Hendrix for services rendered. Oliver's has a December 31 year-end. What adjusting entry will the company record on December 31, 2021

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a. Debit Cash for $10,000 and credit Notes Payable for $10,000.
b. Debit Notes Receivable for $10,700 and credit Cash for $10,700.
c. Debit Notes Receivable for $10,000 and credit Cash for $10,000.
d. Debit Cash for $10,700 and credit Accounts Receivable for $10,700.

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2. Would your answer change if your fuel supplier limited the amount of fuel that you could purchase from him at the wholesale price? Explain.

Your boss wants to purchase a graphics design application to be distributed to approximately 40 users in the company. Although the vendor says the application has broad OS support, your boss wants to be sure it will work on the five different OSs running on the company’s user workstations. He wants you to verify compatibility by using evaluation copies of the software without disrupting users or their computers. You have the installation disks for all five OSs your company uses, but you don’t have a lot of computers available to install the OSs. a. What’s your plan?

The transactions listed below are typical of those involving New Books Inc. and Readers’ Corner. New Books is a wholesale merchandiser and Readers’ Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers’ Corner are made with terms 3/10, n/30, and that the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August 31.
a. New Books sold merchandise to Readers’ Corner at a selling price of $625,000. The merchandise had cost New Books $445,000.
b. Two days later, Readers’ Corner complained to New Books that some of the merchandise differed from what Readers’ Corner had ordered. New Books agreed to give an allowance of $11,000 to Readers’ Corner.
c. Just three days later, Readers’ Corner paid New Books, which settled all amounts owed.
Required:
1. Indicate the effect (direction and amount) of each transaction on the Inventory balance of Readers' Corner. (Enter all amounts as positive values.)
2. Prepare the journal entries that Readers’ Corner would record and show any computations. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)