Answer:
Accounts Assets Liabilities Net income
a. Depreciation Expense -$200 -$200
b. Land / Cash -$9,000 + $12,000 + $3,000
c. Equipment/Lease Liability +$11,000 +$11,000
d. Cash /Lease Liability -$2,500 -$2,500
e. Cash /Trademark -$6,600 + $6,600
Amortization Expense -$165
f. & g. Cash /Equipment +$16,000 -$19,300 -$3,300
Explanation:
b. The land was sold with a gain of $3,000 ($12,000 - 9,000)
e. The trademark's amortization expense = $6,600/40 = $165 per year.
f and g. The Accounts involved are:
1. Cash +$16,000 for the sale.
2. Equipment has a debit balance of $44,000 and a credit balance of $23,400 plus Depreciation expense of $1,300. These give a net balance of $19,300. The equipment was sold for $16,000, recording a loss of $3,300.
3. Loss from sale of equipment = $3,300 as determined above.
Analyzing Unearned Revenue Disclosures
The following disclosures (excerpted) are from the August 28, 2016, annual report of Costco Wholesale Corporation.
Revenue Recognition: We generally recognize sales, net of estimated returns, at the time the member takes possession of merchandise or receives services. When we collect payment from customers prior to the transfer of ownership of merchandise or the performance of services, the amount recieved is generally recorded as deferred revenue on the consolidated balance sheets until the sales or service is completed. Membership fee revenue represents annual membership fees paid by our memberships. We account for membership fee revenue, net of estimated refunds, on a deferred basis, whereby revenue is recognized ratably over the one-year membership period.
Revenue
($ millions) August 28, 2016 August 30, 2015 August 31, 2014
Net Sales $116,073 $113,666 $110,212
Membership fees 2,646 2,533 2,428
Total revenue $118,719 $116,199 $112,640
Current Liabilities ($ millions) August 28, 2016 August 30, 2015
Accounts payable $7,612 $9,011
Current portion of long-term debt 1,100 1,283
Accrued salaries and benefits 2,629 2,468
Accured member rewards 869 813
Deferred membership fees 1,362 1,269
Other current liabilities 2,003 1,695
Total current liabilities $15,575 $16,539
(a) Which of the following statements best explains in layman terms how Costco accounts for the cash received for its membership fees?
Because Costco does not know how many of its members will continue to the end of the year, cash received from members is recorded as a liability and recognized as revenue only at year-end.
When it receives cash, the company records it as a current liability. Then, it recognizes revenue evenly over the year.
The company records revenue when the cash is received.
Because Costco has a refund policy, the company records revenue when the cash is received, less an allowance for expected membership terminations.
Mark 1.00 out of 1.00
(b) Use the balance sheet information on Costco's Deferred Membership Fees liability account and its income statement revenues related to Membership Fees earned during 2016 to compute the cash that Costco received during 2016 for membership fees.
Total cash received (in $ millions) = $Answer
(c) Use the financial statement effects template to show the effect of the cash Costco received during 2016 for membership fees and the recognition of membership fees revenue for 2016.
Use negative signs with answers, when appropriate.
Balance Sheet
Transaction ($ millions)
Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital
Receive cash in advance for membership fees Answer Answer Answer Answer Answer
Recognized membership fees earned Answer Answer Answer Answer Answer
Income Statement
Revenue - Expenses = Net Income
Answer Answer Answer
Answer Answer Answer
Feedback
You have correctly selected 15.
Partially correct
Marks for this submission: 15.00/18.00.
Answer:
(a) Which of the following statements best explains in layman terms how Costco accounts for the cash received for its membership fees?
When it receives cash, the company records it as a current liability. Then, it recognizes revenue evenly over the year.(b) Use the balance sheet information on Costco's Deferred Membership Fees liability account and its income statement revenues related to Membership Fees earned during 2016 to compute the cash that Costco received during 2016 for membership fees.
beginning membership fees + cash received - membership fee revenue = ending membership fee balance
$1,269 + cash received - $2,646 = $1,362
cash received = $1,362 + $2,646 - $1,269 = $2,739 million
(c) Use the financial statement effects template to show the effect of the cash Costco received during 2016 for membership fees and the recognition of membership fees revenue for 2016.
Use negative signs with answers, when appropriate.
Balance Sheet
Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital
Receive cash in advance for membership fees ⇒ $2,739 + na = $2,739 + na + na
Recognized membership fees earned ⇒ na + na = -$2,646 + na + $2,646
Income Statement
Revenue - Expenses = Net Income
na na na
$2,646 na $2,646
In an example, a local church is made up of people who are very different in their lifestyles and their stages of life. Mary is a 23-year-old single parent who earns the minimum wage. Jonathan is 60 years old, extremely wealthy, and works because he enjoys it. Jane is a 45-year-old lawyer who earns well and is well-respected in her profession. She is extremely career-oriented and is proud of her achievements. Which of the following do you think would motivate Jonathan the most?
a. safety
b. physiological
c. self-actualization
d. growth
e. esteem
Answer:
C) Self actualization
Explanation:
From the question, we are informed about example of alocal church is made up of people who are very different in their lifestyles and their stages of life, we are told if Mary who is is a 23-year-old single parent who earns the minimum wage. Jonathan is 60 years old, extremely wealthy, and works because he enjoys it. Jane is a 45-year-old lawyer who earns well and is well-respected in her profession. She is extremely career-oriented and is proud of her achievements.
In this case, self actualization would motivate Jonathan the most. This is because self actualization can be regarded as self fulfilment, it is when one fully realize his/her potential and gives appreciation, and here
Jonathan is 60 years old, and described as extremely wealthy, and works because he enjoys it. Hence self actualization is the best answer.
CAM charges for retail leases in a shopping mall must be calculated. The retail mall consists of a total area of 2.8 million square feet, of which 800,000 square feet has been leased to anchor tenants that have agreed to pay $2 per rentable square foot in CAM charges. In-line tenants occupy 1.3 million square feet, and the remainder is a common area, which the landlord believeswill require $8 per square foot to maintain and operate each year. If the owner is to cover total CAM charges, how much will in-line tenants have to pay per square foot?
Answer:
$3.08 per square foot
Explanation:
Calculation for how much will in-line tenants have to pay per square foot
First step is to find the common area
Common area = 2,800,000−800,000−1,300,000 Common area= 700,000
Second step is to find Common area operating costs
Common area operating costs = 700,000×8
Common area operating costs= $5.6 million
Third step is to find the Operating costs charged to in-line tenants
Operating costs charged to in-line tenants = 5,600,000−800,000×2
Operating costs charged to in-line tenants = 4,000,000
Last step is to calculate the In-line CAM charges using this formula
In-line CAM charges=Operating costs charged to in-line tenants -In-line tenants square feet
Let plug in the formula
In-line CAM charges = 4,000,000 ÷ 1,300,000
In-line CAM charges= $3.08
Therefore the amount that in-line tenants have to pay per square foot will be $3.08 per square foot.
In both the United States and France, the demand for haircuts is given by QD=300−10P . However, in the United States, the supply is given by QS=−300+20P , while in France, the supply is given by QS=−33.33+6.67P .
Required:
a. What are the equilibrium prices and quantities of haircuts in the two countries?
b. What are the new equilibrium prices and quantities of haircuts in the two countries?
Answer:
a. P = 20 and Q = 100 in the United States; and also P = 20 and Q = 100 in France.
b. P = 23.33 and Q = 166.70 in the United States; and P = 26 and Q = 140 in France.
Explanation:
Note: The part b of the requirement is not complete. The entire question is therefore represented with the complete pat b before answering the question as follows:
In both the United States and France, the demand for haircuts is given by QD=300−10P . However, in the United States, the supply is given by QS=−300+20P , while in France, the supply is given by QS=−33.33+6.67P .
Required:
a. What are the equilibrium prices and quantities of haircuts in the two countries?
b. Suppose that the demand for haircuts in both countries increases by 100 units at each price, so that the new demand is QD = 400 - 10P. What are the new equilibrium prices and quantities of haircuts in the two countries?
The explanation to the answers is now provided as follows:
a. What are the equilibrium prices and quantities of haircuts in the two countries?
In economics, an equilibrium occurs at point where the quantities demanded is equal to the quantities supplied.
Let Q denotes equilibrium quantity and P denotes equilibrium price, the equilibrium prices and quantities of haircuts in the two countries can therefore be calculated as follows:
In the United States
QD =300 − 10P
QS= −300 + 20P
Since at equilibrium, QD = QS, we can therefore solve for P by equating the two equations above as follows:
300 - 10P = −300 + 20P
300 + 300 = 20P + 10P
600 = 30P
P = 600 / 30
P = 20
To obtain equilibrium quantity, we substitute P = 20 into any QD and QS since at equilibrium QD = QS. Using QD, we have:
Q = 300 – 10(20)
Q = 300 – 200
Q = 100
Therefore, P = 20 and Q = 100 in the United States.
In France
QD = 300 − 10P
QS= −33.33 + 6.67P
Since at equilibrium, QD = QS, we can therefore solve for P by equating the two equations above as follows:
300 - 10P = −33.33 + 6.67P
300 + 33.33 = 6.67P + 10P
333.33 = 16.67P
P = 333.33 / 16.67
P = 20
To obtain equilibrium quantity, we substitute P = 20 into any QD and QS since at equilibrium QD = QS. Using QD, we have:
Q = 300 – 10(20)
Q = 300 – 200
Q = 100
Therefore, P = 20 and Q = 100 also in France.
b. Suppose that the demand for haircuts in both countries increases by 100 units at each price, so that the new demand is QD = 400 - 10P. What are the new equilibrium prices and quantities of haircuts in the two countries?
In the United States
QD = 400 − 10P
QS= −300 + 20P
Since at equilibrium, QD = QS, we can therefore solve for P by equating the two equations above as follows:
400 - 10P = −300 + 20P
400 + 300 = 20P + 10P
700 = 30P
P = 700 / 30
P = 23.33
To obtain equilibrium quantity, we substitute P = 20 into any QD and QS since at equilibrium QD = QS. Using QD, we have:
Q = 400 – 10(23.33)
Q = 400 – 233.30
Q = 166.70
Therefore, P = 23.33 and Q = 166.70 in the United States.
In France
QD = 400 − 10P
QS= −33.33 + 6.67P
Since at equilibrium, QD = QS, we can therefore solve for P by equating the two equations above as follows:
400 - 10P = −33.33 + 6.67P
400 + 33.33 = 6.67P + 10P
433.33 = 16.67P
P = 433.33 / 16.67
P = 25.99 = 26
To obtain equilibrium quantity, we substitute P = 20 into any QD and QS since at equilibrium QD = QS. Using QD, we have:
Q = 400 – 10(26)
Q = 400 – 260
Q = 140
Therefore, P = 26 and Q = 140 in France.
Consider an economy described by the following equations:
Y=C+I+G
C=120+0.8×(Y−T)
I=500−50×r G=150
T=125
where Y is GDP, C is consumption, I is investment, G is government purchases, T is taxes, and r is the interest rate. If the economy were at full employment (that is, at the natural rate of output), GDP would be $2,850.
Identify the equation(s) each of the following statements describes.
a. It is a function of disposable income.
b. It depends on the interest rate.
The marginal propensity to consume in this economy is:____________ .
Suppose the central bank's policy is to adjust the money supply to maintain the interest rate at 3%, so r = 3. When the interest rate is 3%, GDP is __________$ .
GDP at an interest rate of 3% is the full-employment level.
a. True
b. False
Assuming no change in monetary policy, (a decrease, an increase) in government purchases by ____ would restore GDP to the full-employment level. (Note: Assume that such change in fiscal policy has no crowding-out effect.) Assuming no change in fiscal policy, (a decrease. an increase) in the interest rate by ___ would restore GDP to the full-employment level.
Answer:
Consumption c is a function of disposable income
Investment I is a function of interest rate
Marginal propensity to consume equals 0.8
If this 3, I = investment
= 500-(3*50)
= 500-150
= 350
We have Y= C+I+G
Y = 120+0.8(Y-125)+350+150
Y = 120+0.8Y-100+350+150
Y-0.8Y = 120-100+350+150
0.2Y = 520
Y = 520/0.2
Y = 2600
GDP and interest rate falls below full employment
If there is no change in monetary policy an increase in government purchases by 50dollars takes gdp back to full employment
If no change in fiscal policy when interest rate decreases by 1.4% God goes back to full employment.
Mathias Corporation manufactures and sells wire rakes. The rakes sell for $20 each. Information about the company's costs is as follows.
Variable manufacturing cost per unit $6
Variable selling and administrative cost per unit 2
Fixed manufacturing overhead per month $300,000
Fixed selling and administrative cost per month 600,000
Required:
a. Determine the company's monthly break-even point in units.
b. Determine the sales volume (in dollars) required for a monthly operating income of $1,200,000.
c. Compute the company’s margin of safety if its current monthly sales level is $2,500,000.
d. Estimate the amount by which monthly operating income will increase if the company anticipates a $100,000 increase in monthly sales volume.
Answer:
a. 75,000 units
b. $1,700,000
c. 0.40 or 40 %
d. $60,000
Explanation:
Break-even point is the level of activity where a firm neither makes a profit nor a loss.
Break-even point (units) = Fixed Costs ÷ Contribution per unit
Where,
Contribution per unit = Unit Selling Price less Variable Costs per unit
= $20 - $6 - $2
= $12.00
Therefore,
Break-even point (units) = ($300,000 + $600,000) ÷ $12.00
= 75,000 units
Sales (dollars) to reach target profit = (Fixed Costs + Target Profit) ÷ Contribution Margin Ratio
Where,
Contribution Margin Ratio = Contribution ÷ Sales
= $12.00 ÷ $20.00
= 0.60
Therefore,
Sales (dollars) to reach target profit = ($300,000 + $600,000 + 1,200,000) ÷ 0.60
= $1,700,000
Margin of Safety = (Sales level - Break-even Sales level) ÷ Sales level
= ($2,500,000 - $1,500,000) ÷ $2,500,000
= 0.40 or 40 %
Calculation of Incremental Monthly Operating Income
Incremental Sales $100,000
Less Incremental Variable Costs (5,000 × $8) ($40.000)
Incremental Contribution $60,000
Less Incremental Fixed Costs $0
Incremental Operating Income $60,000
Consider a simple example economy where there are two goods, coconuts and restaurant meals (coconut-based). There are two firms. A coconut producer collects and sells 10 million coconuts at $2.00 each. The firm pays $5 million in wages, $0.5 million in interest on an old loan, and $1.5 million in taxes to the government. We also know that 4 million coconuts are sold to the public for consumption, and 6 million coconuts are sold to the restaurant firm, which uses them to prepare meals. The restaurant sells $30 million in meals. The restaurant pays $4 million in wages and the government $3 million in taxes. The government supplies security and accounting services and employs only labor, and government workers are paid $5.5 million, collected in taxed by the government. Finally, consumers pay $1 million in taxes to the government in addition to the taxes paid by the two firms.
Required:
a. Compute GDP for this simple economy using the product approach.
b. Compute GDP for this simple economy using the expenditure approach.
c. Compute GDP for this simple economy using the income approach.
Answer:
1) GDP using product Approach ; Market value of all goods and services produced
= Coconut + Restaurant meal
= 10 million*$2 + ($30 million - $6 million*$2) as 6 million coconuts are sold to restaurant as raw materials so to avoid double counting.
= $20 million + $30 million - $12 million
= $38 million
2) Expenditure Approach : Consumption + Investment + Government Expenditure + Net Exports
= $4 million * $2 + $30 million + $5.5 million
= $8 million + $30 million + $5.5 million
= $43.5 million
3) Income Approach : Wages + Rent + Interest + Profit
= $5 million + $0.5 million + $1.5 million +$3 million + $4 million + $1 million
= $15 million
Producers of snack foods (such as candy bars or potato chips) are most likely to use a(n) _____________ distribution strategy for their products.
Answer:
A.intensive
Explanation:
Products such as chocolate bars and chips fit the classification of non-durable consumer goods, that is, those that are produced for immediate consumption.
Its characteristics involve meeting the needs of the final consumer periodically, generally they are low-cost products that need quick replacement to meet the high demand for these non-durable products.
Therefore, the best strategy for the distribution of non-durable products is the intensive strategy, making it available in different places with easy access to the consumer and with high replacement.
1. Accrual accounting is used by the vast majority of companies. *
O
True
O False
Answer:
True
Explanation:
The accrual accounting system is one of the two methods of reporting or recording income and expenses. The other way is the cash system.
In the accrual method, income and expenses are accounted for when they were earned or incurred regardless of whether money changed hands. Sales are reported when goods are delivered, and the invoice is issued even if the customer has not paid.
The accrual system is the standard method of operating for many businesses, big and small. The accrual method matches revenue and income with the time of their respective economic events. The general accounting principles recommend the accrual accounting system for both the private and public sectors.
Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 18% of sales. The income statement for the year ending December 31, 2014, is as follows.
BONITA BEAUTY CORPORATION
Income Statement For the Year Ended December 31, 2014
Sales $75,000,000
Cost of goods sold
Variable $31,500,000
Fixed 8,610,000 40,110,000
Gross margin $34,890,000
Selling and marketing expenses
Commissions $13,500,000
Fixed costs 10,260,000 23,760,000
Operating income $11,130,000
The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 8% and incur additional fixed costs of $7,500,000.
Under the current policy of using a network of sales agents, calculate the Bonita Beauty Corporation
Answer:
the question is incomplete, so I looked for the requirements of similar questions:
A. Calculate the company’s break-even point in sales dollars for the year 2014 if it hires its own sales force to replace the network of agents.
B. Calculate the degree of operating leverage at sales of $75,000,000 if (1) Bonita Beauty uses sales agents, and (2) Bonita Beauty employs its own sales staff.
a) total sales = $75,000,000
variable costs:
COGS $31,500,000
commissions $6,000,000
total variable costs = $37,500,000
contribution margin ratio = $37,500,000 / $75,000,000 = 0.5
total fixed costs = $8,610,000 + $10,260,000 + $7,500,000 = $26,370,000
break even point in $ = $26,370,000 / 0.5 = $52,740,000
b) one of the formulas that we can use to calculate the degree of operating leverage is:
operating leverage = fixed costs / total costs
1) total costs using sales agents = $63,870,000
total fixed costs = $8,610,000 + $10,260,000 = $18,870,000
degree of operating leverage = $18,870,000 / $63,870,000 = 29.54%
2) total costs employing its own sales staff = $6,000,000 + $31,500,000 + $26,370,000 = $63,870,000
total fixed costs = $26,370,000
degree of operating leverage = $26,370,000 / $63,870,000 = 41.29%
Pharoah Inc. has decided to raise additional capital by issuing $173,000 facevalue of bonds with a coupon rate of 6%. In discussions with investment bankers, it was determined that to help the sale of thebonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bondswithout the warrants is considered to be $155,700, and the value of the warrants in the market is $20,760. The bonds sold in the market at issuance for $174,600.
A. What entry should be made at the time of the issuance of the bonds and warrants?
B. Prepare the entry if the warrants were non-detachable.
Answer:
a. Debit Credit
Cash $174,600
Discount on bond payable $18,941
Bonds Payable $173,000
Paid -in Capital - Stock Warrants $20,541
Workings
Market value of Bonds 155,700
Market value of Warrants 20,760
Total market value 176,460
Value assigned to Bonds = 174,600 / 176,460 * 155,700 = 154,059
Value assigned to Warrants = 174,600 / 176,460 *20,760 = 20,541
b. Debit Credit
Cash $174,600
Discount receivable $1,600
Bonds Payable $173,000
3. Identify TWO possible suitable sources of external finance Chris could consider, if the local bank
manager refuses to give him a loan for purchasing a new van for his business. (10 marks)
Please help
Answer:
Hire Purchase
Loans from friends
Explanation:
Hire purchase
A hire purchase (HP) , is also called an installment plan, it is is an financing contract whereby a customer agrees to acquire an asset by paying an initial deposit and repays the balance of the price plus interest on installment bases over a period of time .
Loans from friends
These are loans received from friends which are mostly interest free
Company XYZ closed at $ per share with a P/E ratio of . Answer the following questions. a. How much were earnings per share? b. Does the stock seem overpriced, underpriced, or about right given that the historical P/E ratio is 12-14?
Answer:
Hello your question is incomplete below is the complete question
Company XYZ closed at $53.02 per share with a P/E ratio of 14.02 .
Answer :
A) $3.79
B) underpriced
Explanation:
Given data:
Closing price ( price per share ) = $53.02
P/E ratio = 14.02
A ) How much earnings per share
Earnings per share = price per share / (P/E) ratio
= 53.02 / 14.02 = $3.79
B) To check if the stock is overpriced, underpriced or about right
i) At P/E ratio = 12
Earnings per share = 53.02 / 12 = $4.43
Earning yield = ( earning per share / market value ) * 100
= ( 4.43 / 53.02 ) * 100 = 8.33%
ii) At P/E ratio = 13
Earnings per share = 53.02 / 13 = $4.09
Earning Yield = ( earning per share / market value ) * 100
= (4.09 / 53.02 ) * 100 = 7.69%
iii) At P/E ratio = 14
Earnings per share = 53.02 / 14 = $ 3.8
Earnings yield = ( earning per share / market value ) * 100
= ( 3.8 / 53.02 ) * 100 = 7.14%
The average of the earning yield given P/E ratio is 12-14
= ( 8.33 + 7.69 + 7.14 ) % / 3 = 7.72%
while The earning yield given P/E ratio is 14.02
= ( earning per share / market value ) * 100
= ( 3.79 / 53.02 ) * 100 = 7.12%
Therefore the stock is underpriced
20. The consumer price index was 120 in 2013 and 126 in 2014. The nominal interest rate during this period was 8 percent. What was the real interest rate during this period? A) 3 percent B) 2 percent C) 3.3 percent D) 5.2 percent E) 12.8 percent
Answer: 3%
Explanation:
To calculate the real interest rate, it should be noted that the inflation rate is needed and this can be calculated using the consumer price index as:
= [(126-120)/120] × 100
= 6/120 × 100
= 5%
Real interest rate will now be:
= Nominal Rate - Inflation Rate
= 8% - 5%
= 3%
Eastern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018.
Other information:
Lease term 5 years
Annual payments $79,000 on January 1 each year
Life of asset 5 years
Implicit interest rate 7%
PV, annuity due, 5 periods, 7% 4.3872
PV, ordinary annuity, 5 periods, 7% 4,1002
Hi-Tech's cost of the equipment $346,589 There is no expected residual value.
Required:
Prepare appropriate journal entries for Hi-Tech Leasing for 2018 and 2019. Assume a December 31 year-end.
Answer:
January 1, 2018
Dr Lease receivable 395,000
Cr Unearned interest revenue 48,411
Cr Equipment inventory 346,589
Dr Cash 79,000
Cr Lease receivable 79,000
December 31, 2018
Dr Unearned interest revenue 18,731
Cr Interest revenue 18,731
January 2019
Dr cash 79,000
Cr lease receivable 79,000
December 31 2019
Dr Unearned interest revenue 14,512
Cr Interest revenue 14,512
Explanation:
Preparation of Journal entries for Hi-Tech Leasing for 2018 and 2019.
January 1, 2018
Dr Lease receivable 395,000
($79,000 x 5)
Cr Unearned interest revenue 48,411
(395,000-346,589)
Cr Equipment inventory 346,589
Dr Cash 79,000
Cr Lease receivable 79,000
December 31, 2018
Dr Unearned interest revenue 18,731
[($346,589- $79,000) x 7%]
Cr Interest revenue 18,731
January 2019
Dr cash 79,000
Cr lease receivable 79,000
December 31 2019
Dr Unearned interest revenue 14,512
[($346,589- $79,000-$60,269) x 7%]
(79,000-18,731=60,269)
Cr Interest revenue 14,512
Theresa works as a Risk Management Specialist for an investment corporation. Which best describes her educational pathway?
A. an associate’s degree, then a bachelor’s degree
B. a master’s degree, then vocational school
C. vocational school, then an associate’s degree
D. a bachelor’s degree, then a master’s degree
Answer:
The answer is b
Explanation:
i'm doing the unit test right now
Answer:
I feel that the correct answers is D because to become a Risk Management Specialist you must have a bachelors in business and most likely a master.
Explanation:
Air conditioning for a college dormitory will cost $2.1 million to install and $170,000 per year to operate at current prices. The system should last 19 years. The real cost of capital is 9%, and the college pays no taxes. What is the equivalent annual cost
Answer:
$404,634
Explanation:
the formula that we can use to calculate equivalent annual costs is:
EAC = asset price x {discount rate / [1 - (1 + discount rate)⁻ⁿ]} + annual maintenance costs
EAC = $2,100,000 x {0.09 / [1 - (1.09)⁻¹⁹]} + $170,000
EAC = $2,100,000 x {0.09 / [1 - (1.09)⁻¹⁹]} + $170,000 = $234,634 + $170,000 = $404,634
EAC is basically the cost of using an asset during its lifetime. We are determining the cost per year, assuming that they are all equal.
For each transaction,
1. Analyze the transaction using the accounting equation.
2. Record the transaction in journal entry form
3. Post the entry using T-accounts to represent ledger accounts.
Use the following (partial) chart of accounts—account numbers in parentheses: Cash (101); Accounts Receivable (106); Office Supplies (124); Trucks (153); Equipment (167); Accounts Payable (201); Unearned Landscaping Revenue (236); D. Tyler, Capital (301); D. Tyler, Withdrawals (302); Landscaping Revenue (403); Wages Expense (601), and Landscaping Expense (696).
a. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $7,000 in cash along with equipment having a $3,000 value.
b. On May 21, Elegant Lawns purchases office supplies on credit for $500.
c. On May 25, Elegant Lawns receives $4,000 cash for performing landscaping services.
d. On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.
Answer:
1) I used an excel spreadsheet
2) a. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $7,000 in cash along with equipment having a $3,000 value.
Dr Cash 7,000
Dr Equipment 3,000
Cr DeShawn Tyler, capital 10,000
b. On May 21, Elegant Lawns purchases office supplies on credit for $500.
Dr Office supplies 500
Cr Accounts payable 500
c. On May 25, Elegant Lawns receives $4,000 cash for performing landscaping services.
Dr Cash 4,000
Cr Landscaping Revenue 4,000
d. On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.
Dr Cash 1,000
Cr Unearned Landscaping Revenue 1,000
3)
Cash (101)
debit credit
7,000
4,000
1,000
12,000
Office Supplies (124)
debit credit
500
Equipment (167)
debit credit
3,000
Accounts Payable (201)
debit credit
500
Unearned Landscaping Revenue (236)
debit credit
1,000
D. Tyler, Capital (301)
debit credit
10,000
Landscaping Revenue (403)
debit credit
4,000
Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $139,107.
Related Information:
Lease term 2 years (8 quarterly periods)
Quarterly rental payments $18,000 at the beginning of each period
Economic life of asset 2 years
Fair value of asset $139,107
Implicit interest rate 4% (Also lessee’s incremental borrowing rate)
Required:
Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2019. Edison’s fiscal year ends December 31.
Answer:
Amortization table
Opening liability Installments Interest Principal payment Closing liability
139,108 18000 1211 16788.92498 122,319
122,319 18000 1043 16956.81423 105,362
105,362 18000 873 17126.38238 88,235
88,235 18000 702 17297.6462 70,938
70,938 18000 529 17470.62266 53,467
53,467 18000 354 17645.32889 35,822
35,822 18000 178 17821.78218 18,000
18,000 18000 0 0 0
You pay your neighbor $100 in exchange for the used washing machine she is selling. Your neighbor puts that $100 into her pocket and takes her family out to the movies and a nice dinner at the end of the week. She still has $20 left after this outing and decides to put the remaining $20 into her savings account. This is an example of:
Answer:savings
Explanation:saves the rest of the money where she can reuse it
The following income statement items appeared on the adjusted trial balance of Foxworthy Corporation for the year ended December 31, 2021 ($ in 000s): sales revenue, $22,600; cost of goods sold, $14,650; selling expense, $2,330; general and administrative expense, $1,230; dividend revenue from investments, $230; interest expense, $330. Income taxes have not yet been accrued. The company’s income tax rate is 25% on all items of income or loss. These revenue and expense items appear in the company’s income statement every year. The company’s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2021 ($ in 000s). All transactions are material in amount.
1. Investments were sold during the year at a loss of $300. Foxworthy also had unrealized losses of $200 for the year on investments.
2. One of the company’s factories was closed during the year. Restructuring costs incurred were $2,000.
3. During the year, Foxworthy completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP regarding discontinued operations. The division had incurred operating income of $800 in 2016 prior to the sale, and its assets were sold at a
loss of $1,800.
4. Foreign currency translation gains for the year totaled $600.
Required:
Prepare Foxworthy's single, continuous statement of comprehensive income for 2021, including basic earnings per share disclosures. Two million shares of common stock were outstanding throughout the year.
Question attached
Answer and Explanation:
Please find attached
The current portion of long-term debt should
a. be paid immediately
b.not be separated from the long-term portion of debt
c. be reclassified as a current liability
d. be classified as a long-term liability
The current portion of long-term debt should be classified as a long-term liability. Thus, option (d) is correct.
What is debt?
The phrase “debt” refers to the money that one can borrow. Debt is the cash raised by issuing bonds or debentures.
A company's ability to pay off a long-term debt's current component within a year is represented by this number. So, a sum of this magnitude that is due in the next 12 months shouldn't be listed as a long-term liability.
Therefore, option (d) is correct.
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31. Which one is not the barriers of Enterpreneurship:
(A) Lack of technical skills
(B) Political instability
(C) Technical knowledge
(D) Time pressure and distractions
Answer:
d
Explanation:
I think so, I'm not sure
Bristo Corporation has sales of 1,750 units at $40 per unit. Variable expenses are 30% of the selling price. If total fixed expenses are $39,000, the degree of operating leverage is:
Answer:
1,750=$40=1,750×40=70-30÷100×39,000=58,3
Explanation:
is total cost of production can be fixed cost +variable cost
Answer:
degree of operating leverage= 4.9
Explanation:
To calculate the degree of operating leverage, we need to use the following formula:
degree of operating leverage= Total contribution margin / operating income
Total Contribution margin= 1,750*(40*0.7)= $49,000
Operating income= 49,000 - 39,000= $10,000
degree of operating leverage= 49,000/10,000
degree of operating leverage= 4.9
Suppose that France and Austria both produce rye and wine. France's opportunity cost of producing a bottle of wine is 4 bushels of rye while Austria's opportunity cost of producing a bottle of wine is 10 bushels of rye. By comparing the opportunity cost of producing wine in the two countries, you can tell that __________ has a comparative advantage in the production of wine and __________has a comparative advantage in the production of rye.
Suppose that France and Austria consider trading wine and rye with each other. France can gain from specialization and trade as long as it receives more than __________of rye for each bottle of wine it exports to Austria. Similarly, Austria can gain from trade as long as it receives more than __________of wine for each bushel of rye it exports to France.
Based on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of rye) would allow both Austria and France to gain from trade?
a. 7 bushels of rye per bottle of wine
b. 4 bushels of rye per bottle of wine
c. 1 bushel of rye per bottle of wine
d. 11 bushels of rye per bottle of wine
Answer:
France has comparative advantage in production of wine
Austria has comparative advantage in production of rye.
4 bushels of rye for each bottle of wine
1 bottle of wine for each bushel.
b. 4 bushel of rye per bottle of wine.
Explanation:
France has comparative advantage in producing wine as it has opportunity cost of 4 bushels per bottle of wine. Austria has comparative advantage in producing bushels as it has opportunity cost of 10 bushels per bottle of wine. The both countries can gain advantage if they agree for 4 bushels per wine.
The accounts in the ledger of Dependable Delivery Service contain the following balances on July 31, 2022.
Accounts Receivable $11,400
Prepaid Insurance $1,800
Accounts Payable 7,400
Maintenance and Repairs Expense 1,200
Cash 15,940
Service Revenue 15,500
Equipment 59,360
Dividends 800
Utilities Expense 950
Common Stock 40,000
Insurance Expense 600
Salaries and Wages Expense 8,400
Notes Payable, due 2024 31,450
Salaries and Wages Payable 900
Retained Earnings (July 1, 2022) 5,200
Required:
Prepare classified balance sheet for July 31, 2022.
Answer:
Dependable Delivery Service
Classified balance sheet as at July 31, 2022
Non Current Assets
Equipment $59,360
Total Non Current Assets $59,360
Current Assets
Accounts Receivable $11,400
Prepaid Insurance $1,800
Cash $15,940
Total Current Assets $29,140
Total Assets $88,500
Equity and Liabilities
Equity
Common Stock $40,000
Retained Earnings $8,750
Total Equity $48,750
Liabilities
Non Current Liabilities
Notes Payable, due 2024 $31,450
Total Non Current Liabilities $31,450
Current Liabilities
Accounts Payable $7,400
Salaries and Wages Payable $900
Total Non-Current Liabilities $8,300
Total Liabilities $39,750
Total Equity and Liabilities $88,500
Explanation:
Its very important to calculate the Retained Earnings Balance at the end of July 2020.
To do this, we need to first calculate the Net Income for the period as follows :
Income Statement for the year ended July 31, 2022
Service Revenue 15,500
Less Expenses :
Maintenance and Repairs Expense 1,200
Utilities Expense 950
Insurance Expense 600
Salaries and Wages Expense 8,400 (11,150)
Net Income/(loss) 4,350
Then, calculate the Retained Earnings Balance as follows :
Retained Earnings Calculation
Beginning Balance 5,200
Add Net Income during the period 4,350
Less Dividends (800)
Ending Balance 8,750
The adjusted trial balance of Gary Cooper Co. as of December 31, 2014, contains the following.
GARY COOPER CO.
ADJUSTED TRIAL BALANCE
DECEMBER 31, 2020
Debit Credit
Cash $20,892
Accounts Receivable 8,340
Prepaid Rent 3,700
Equipment 19,470
Accumulated Depreciation-
Equipment $6,315
Notes Payable 7,120
Accounts Payable 6,892
Common Stock 21,420
Retained Earnings 12,730
Dividends 4,420
Service Revenue 13,010
Salaries and Wages Expense 8,260
Rent Expense 2,154
Depreciation Expense 251
Interest Expense 189
Interest Payable 189
$67,676 $67,676
Instructions:
(a) Prepare an income statement.
(b) Prepare a statement of retained earnings.
(c) Prepare a classified balance sheet.
Answer: See attachment
Explanation:
An income statement is sometimes referred to as the profit and loss account. It should be noted that it shows the revenue and the expenses that are incurred by a particular company for a certain year.
With regards to the questions above, check the attachments for the solution.
Midland Petroleum is holding a stockholders’ meeting next month. Ms. Ramsey is the president of the company and has the support of the existing board of directors. All 12 members of the board are up for reelection. Mr. Clark is a dissident stockholder. He controls proxies for 42,001 shares. Ms. Ramsey and her friends on the board control 52,001 shares. Other stockholders, whose loyalties are unknown, will be voting the remaining 24,998 shares. The company uses cumulative voting.
Required:
a. How many directors can Mr. Clark be sure of electing?
b. How many can Ms Rmasey be sure of electing
c. How many votes could clark have if he had all the uncommitted votes
d. Does that give him control?
e. If nine directors were to be elected, and Ms. Ramsey and her friends had 70,001 shares and Mr. Clark had 48,001 shares plus half the uncommitted votes, how many directors could Mr. Clark elect?
Answer:
Midland Petroleum
a. Mr. Clark can be sure of electing = 4 directors
b. Ms Ramsey can be sure of electing = 5 directors
c. If Mr. Clark had all the uncommitted votes, he can elect = 7 directors
d. With 7 directors, he has control.
e. Mr. Clark can elect (60,50/143,000 * 9) = 4 directors.
Explanation:
Board members = 12
Mr. Clark control = 42,001 shares or 35.295%
Ms. Ramsey control = 52,001 shares or 43.698%
Undecided shareholders = 24,998 shares or 21.01%
Total shareholding = 119,000 shares or 100%
Mr. Clark can elect = 35.295% of directors = 4
Ms. Ramsey can elect = 43.698% of directors = 5
Other shareholders can elect = 21.01% of directors = 3
New shareholding:
Ms. Ramsey and friends = 70,001 shares
Mr. Clark and half uncommitted votes = 60,500 (48,001 + 12,499)
Half of the other uncommitted votes = 12,499
Total votes = 143,000
Mr. Clark can elect (60,50/143,000 * 9) = 4 directors.
Consider each of the transactions below. All of the expenditures were made in cash.
a. The Edison Company spent $16,000 during the year for experimental purposes in connection with the development of a new product.
b. In April, the Marshall Company lost a patent infringement suit and paid the plaintiff $9,500.
c. In March, the Cleanway Laundromat bought equipment. Cleanway paid $10,000 down and signed a noninterest-bearing note requiring the payment of $20,000 in nine months. The cash price for this equipment was $27,000.
d. On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $32,000.
e. The Mayer Company, plaintiff, paid $16,000 in legal fees in November, in connection with a successful infringement suit on its patent.
f. The Johnson Company traded its old equipment for new equipment. The new equipment has a fair value of $11,200. The old equipment had an original cost of $9,400 and a book value of $4,200 at the time of the trade. Johnson also paid cash of $8,800 as part of the trade. The exchange has commercial substance.
Required:
Prepare journal entries to record each of the above transactions.
Answer: See attachment
Explanation:
The journals entry shows the transactions that Edison Company has undertaken. The transactions are shows both the debit and credit balances.
The attachments for the question have been attached for further analysis.
You are in the business of producing and selling snow shovels, and you need to determine how many shovels should be produced during each of the next four quarters to meet the following demands: 11,000 shovels in quarter 1; 48,000 shovels in quarter 2; 64,000 shovels in quarter 3; and 15,000 shovels in quarter 4.
Due to labor limitations, at most 65,000 shovels can be produced in any one quarter at a cost of $5/shovel. Additionally, a fixed cost of $30,000 must be paid for any quarter in which shovels are produced. You may assume that any shovels produced during a quarter can be used to satisfy demand for that quarter. At the end of the quarter, a holding cost of $0.50 per shovel in inventory is incurred. Currently, you have no shovels in inventory.
Required:
Formulate an integer-linear program to determine a production schedule that minimizes the sum of production and inventory costs over the next four quarters.
Answer:
Quarter Production
Q1 11000
Q2 62000
Q3 65000
Q4 0
This will generate lower production and inventory cost as it savesthe fixed cost of 30,000 if we produce in the fourth quarter.
Explanation:
First, we construct the formula for the relevant cost:
Holding Cost: $0.50 per shovel
$0.50 x 2 x (Q2-48,000) + $0.50 x (Q1-11,000) = Holding Cost Q2
$0.50 x 1 x (Q3-64,000) = Holding Cost Q3
First, the restrictions:
P1 P2 P3 P4 are Integer
P1 < 65,000
P2 < 65,000
P3 < 65,000
P4 < 65,000
Then, we have the inventory formulas:
I1 = P1 - S1
I2 = P2 + I1 -S2
I3 = P3 + I2 - S3
I4 = P4 + I3 - S4
The holding cost
H1 = I1 x 0.50
H2 = I2 x 0.50
H3 = I3 x 0.50
H4 = I4 x 0.50
The fixed cost
if P1> 0 then FC1 = 30,000
if P2> 0 then FC2 = 30,000
if P3> 0 then FC3 = 30,000
if P4> 0 then FC4 = 30,000
And last,the total cost:
FC1 + H1 +FC2 + H2 +FC3 + H3 +FC4 + H4 = Total Cost
This is the formula we want to minimize
We place this into excel solver and get the answer: