If Mona honors Nat's payment on the note. Mona may demand payment on the note from Jake, Kim, or Lou after giving prompt notice to the appropriate persons.
A promissory note, also known as a note payable, is a legal document in which one party—the maker or issuer—promises in writing to pay another—the payee—a specific amount of money under particular terms and conditions, either at a specific future time or upon demand of the payee.
Since Jake, a maker and payer, is stated in the question, he would likely pay Kim before endorsing Lou.
In this case, the Mona should obtain money from the aforementioned three parties.
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Crane Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 46,000 timers, the company has calculated the following unit costs. Direct fixed costs include supervisory and clerical salaries and equipment depreciation. Direct materials $12 Direct labor 7 Variable manufacturing overhead 2 Direct fixed manufacturing overhead 9 (30% salaries, 70% depreciation) Allocated fixed manufacturing overhead 7 Total unit cost $37 Clifton Clocks has offered to provide the timer units to Crane at a price of $33 per unit. If Crane accepts the offer, the current timer unit supervisory and clerical staff will be laid off. (a1) Calculate the total relevant cost to make or buy the timer units. (Round answers to 0 decimal places, e.g. 5,250.) Make Buy Total relevant cost $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places
Answer:
Crane Water Co.
Total relevant cost to make or buy Make Buy
Direct materials $12
Direct labor 7
Variable manufacturing overhead 2
Direct fixed manufacturing overhead 6
Total relevant cost to make = $27 $33
Explanation:
a) Data and Calculations:
Annual production of timers = 46,000
Direct materials $12
Direct labor 7
Variable manufacturing overhead 2
Direct fixed manufacturing overhead 9
(30% salaries, 70% depreciation)
Allocated fixed manufacturing overhead 7
Total unit cost $37
Clifton Clocks offer price = $33
Total relevant cost to make or buy Make Buy
Direct materials $12
Direct labor 7
Variable manufacturing overhead 2
Direct fixed manufacturing overhead 6
Total relevant cost to make = $27 $33
b) Crane Water Co. will be in a better position if it continues to make the timer. It should not accept the offer from Clifton Clocks. The relevant cost to make is lower than the relevant cost to buy the timer from Clifton Clocks.
Kragan Clothing Company manufactures its own designed and labeled athletic wear and sells its products through catalog sales and retail outlets. While Kragan has for years used activity-based costing in its manufacturing activities, it has always used traditional costing in assigning its selling costs to its product lines. Selling costs have traditionally been assigned to Kraganâs product lines at a rate of 70% of direct materials costs. Its direct materials costs for the month of March for Kraganâs "high-intensity" line of athletic wear are $395,000. The company has decided to extend activity-based costing to its selling costs. Data relating to the "high-intensity" line of products for the month of March are as follows.
Activity Cost Pools Cost Drivers Overhead Rate Number of Cost Drivers Used per Activity
Sales commissions Dollar sales $0.05 per dollar sales $940,000
AdvertisingâTV Minutes $300 per minute 230
AdvertisingâInternet Column inches $10 per column inch 2,000
Catalogs Catalogs mailed $2.50 per catalog 62,400
Cost of catalog sales Catalog orders $1 per catalog order 8,750
Credit and collection Dollar sales $0.03 per dollar sales $940,000
Requied:
Compute the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March (1) using the traditional product costing system (direct materials cost is the cost driver), and (2) using activity-based costing.
Answer:
1. $276,500
2. $328,950
Explanation:
1. Computation for the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March using the traditional product costing system
Traditional product costing = $395,000 * 70%
Traditional product costing = $276,500
Therefore the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March using the traditional product costing system is $276,500
2. Computation for the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March using activity-based costing
Activity based costing :
Sales commissions ($940,000*$0.05) $47,000
Advertising - TV (230*$300) $69,000
Advertising - internet (2,000*$10) 20,000
Catalogs (62,400*$2.50) $156,000
Cost of catalog sales (8,750*$1) 8,750
Credit and collection ($940,000*$0.03) $28,200
Selling cost $328,950
Therefore the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March using activity-based costing is $328,950
The Crunchy Granola Company is a diversified food company that specializes in all natural foods. The company has three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y7, are as follows:
Cereal Division Snack Cake Division Retail Bakeries Division
Sales $25,000,000 $8,000,000 $9,750,000
Cost of goods sold 16,670,000 5,575,000 6,795,000
Operating expenses 7,330,000 1,945,000 2,272,500
Invested assets 10,000,000 4,000,000 6,500,000
The management of The Crunchy Granola Company is evaluating each division as a basis for planning a future expansion of operations.
Required:
1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges.
2. Using the DuPont formula for rate of return on investment, compute the profit margin, investment turnover, and rate of return on investment for each division.
3. If available funds permit the expansion of operations of only one division, which of the divisions would you recommend for expansion?
Answer:
charges.
2. Using the DuPont formula for rate of return on investment, compute the profit margin, investment turnover, and rate of return on investment for each division.
3. If available funds permit the expansion of operations of only one division, which of the divisions would you recommend for expansion?
The model of competitive markets relies on these three core assumptions:
1. There must be many buyers and sellers—a few players can't dominate the market.
2. Firms must produce an identical product—buyers must regard all sellers' products as equivalent.
3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry.
The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for this problem that a market cannot maintain competition in the long run without free entry.
Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.
The government has granted a patent to a pharmaceutical company for an experimental AIDS drug. That company is the only firm permitted to sell the drug.
a. yes,meets all assumptions
B. no,no free entry
C. no, not many sellers
D. No, not an identical product
Answer:
B. No, no free entry
Explanation:
With a patent granted to one pharmaceutical company to produce and sell an experimental AIDs drug, all doors of free entry and exit have been locked against other pharmaceutical companies. This implies that one of the major ideals of a competitive market is violated. Without free entry and exit, there cannot be many sellers, and we cannot discuss about the possibility of firms producing identical products because there is only one drug.
Yukelson Company owns the building occupied by its administrative office. The office building was reflected in the accounts at the end of last year as follows:
a, Cost when acquired $412,500
b. Accumulated depreciation (based on straight-line depreciation, an estimated life of 50 years, and a $37,500 residual value) 60,000
During January of this year, on the basis of a careful study, management decided that the total estimated useful life should be changed to 30 years (instead of 50) and the residual value reduced to $22,500 (from $30,000). The depreciation method will not change.
Required:
1. Compute the annual depreciation expense prior to the change in estimates.
2. Compute the annual depreciation expense after the change in estimates.
3. What will be the net effect of changing estimates on the balance sheet, net income, and cash flows for the year?
Answer:
Yukelson Company
1. The annual depreciation expense prior to the change in estimates is:
= $7,500.
2. The annual depreciation expense after the change in estimates is:
= $13,000.
3. The net effect of changing estimates on the balance sheet, net income, and cash flows for the year:
Balance Sheet:
The accumulated depreciation will increase by $5,500, thus reducing the net book value of the building.
Net Income:
The net income will be reduced by $5,500.
Cash Flows:
No effect on cash flows because depreciation is not a cash flow item. The only adjustment will be when the net income is used to compute the cash flows.
Explanation:
a) Data and Calculations:
Cost Building = $412,500
Estimated residual value = $37,500
Estimated useful life = 50 years
Accumulated depreciation = $60,000
Depreciable amount = $375,000 ($412,500 - $37,500)
Annual depreciation expense = $7,500 ($375,000/50)
Revised residual value = $22,500
Revised useful life = 30 years
Depreciable amount = $390,000 ($412,500 - $22,500)
Annual depreciation expense = $13,000 ($390,000/30)
Bill Blumberg owns an auto parts business called Bill's Auto Parts. The following transactions took place during July of the current year.
July 5 Purchased merchandise on account from Wheeler Warehouse, $4,300.
8 Paid freight charge on merchandise purchased, $230.
12 Sold merchandise on account to Big Time Spoiler, $3,500. The merchandise
cost $2,500.
15 Received a credit memo from Wheeler Warehouse for merchandise, $670.
22 Issued a credit memo to Big Time Spoiler for merchandise returned, $820.
The cost of the merchandise is $550.
Required:
1. Journalize the above transactions in a general journal using the periodic inventory method.
2. Journalize the above transactions in a general journal using the perpetual inventory method.
Answer:
The solution to these question is defined in the attached file please find it.
Explanation:
Suppose the economy is experiencing a recession. The output gap is hovering at −7%, causing higher than normal unemployment. Using the Fed model, complete the following passages to compare and contrast how monetary policy and fiscal policy can impact the economy. a. The Federal Reserve can reduce the to stimulate greater output and employment. The federal government can increase to help ease the recession. b. If both monetary and fiscal policy are used, the MP curve will shift , and the IS curve will shift to the . Both shifts will increase , and t
Answer:
a. The Federal Reserve can reduce the interest rates to stimulate greater output and employment. The federal government can increase government spending to help ease the recession.
The Fed can reduce interest rates by engaging in expansionary monetary policy that would then make it easier to borrow funds for investment. The Federal government can also increase spending as this will put more money into the economy to help it start moving again.
b. If both monetary and fiscal policy are used, the MP curve will shift downward, and the IS curve will shift to the right. Both shifts will increase income.
If both monetary and fiscal policy are used, companies will start producing again and hiring more people which will shift the Marginal Productivity curve downward. The IS curve will also shift to the right and both to these are indicators of an increase in income.
Match each of the following example with the control method that is or should be used by entering the letter of the example in the answer space next to the correct control method.
a. Police work is changing. More and more police departments today are implementing community policing practices: working with the public to create a safer environment for all. For this reason, performance evaluations for police officers are starting to include criteria such as helpfulness and friendliness, which are measures of actions, not outcomes.
b. Sam writes for a living and loves it. He writes every dayâsometimes working on his blog, sometimes on a novel, but always putting something on paper. He learned about perseverance in his college success class, and now he sets aside four hours a day just for writing, regardless of what other activities he may have planned.
c. Lifeguards may seem to have an easy life, but the work is really very difficult. All lifeguards have to receive specialized training and be prepared to jump into action at a momentâs notice if an emergency arises. Professional lifeguards use a paramilitary structure (chief, captain, lieutenant, sergeant, and two levels of lifeguards) so that there is only one person giving orders in the event of an emergency.
d. Speed is the name of the game when you are picking applesâthe more you pick, the more you get paid. Gustavo receives $13 per box. He and his coworkers know that if they pick fewer than five boxes a day, they will be asked to leave the orchard.
1. Bureaucratic control
2. Behavior control
3. Output control
4. Normative control
Answer:
Control Examples Control Method
a. Behavior control
b. Output control
c. Bureaucratic control
d. Normative control
Explanation:
Control methods:
1. Bureaucratic control is a control method achieved through organizational structures and systems.
2. Behavior control: This is a control method that focuses on self-awareness rather than on organizational structures and systems.
3. Output control makes Sam aware that he must write every day to earn a living.
4. Normative control is a control method that establishes values and beliefs that make team members to behave responsibly.
Matching each of the following example with the control method which was used would give us:
A. Behavior control B. Output control C. Bureaucratic control D. Normative control
According to the given question, we are asked to match the following examples with the control method which was used withe different scenarios.
As a result of this, we can see that the different control methods which were described were all meant to keep a certain person or groups of persons in check and prevent them from overstepping their boundaries and also to preserve order among functional members of the society.
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Budgeted amount: 0.5 machine hours per (MH) unit Variable overhead rate is $15 per MH Fixed overhead rate is $40 per MH Budgeted fixed overhead is $600,000 Actual amounts: Variable overhead incurred is $190,000 Fixed overhead incurred is $630,000 MH used is 11,000 Actual output is 20,000 units What is the Fixed Overhead Volume Variance
Answer:
Fixed overhead volume variance = $200,000 Favorable
Explanation:
The fixed overhead volume variance is the difference between the actual and budgeted production unit multiplied by the standard fixed production overhead cost per unit
Units
Budgeted units 15,000
Actual units 20,000
Variance 5,000
Fixed overhead rate per unit × $40
Fixed overhead volume variance $200,000
Bull'sEye sells gift cards redeemable for Bull'sEye products either in-store or online. During 2018, Bull'sEye sold $2,000,000 of gift cards, and $1,800,000 of the gift cards were redeemed for products. As of December 31, 2018, $150,000 of the remaining gift cards had passed the date at which Bull'sEye concludes that the cards will never be redeemed. How much gift card revenue should Bull'sEye recognize in 2018
Answer:
$1,950,000
Explanation:
Calculation to determine How much gift card revenue should Bull'sEye recognize in 2018
Gift cards redeemed $1,800,000
Add December 31, 2018 Remaining gift $150,000
Revenue Recognized $1,950,000
($1,800,000+$150,000)
Therefore How much gift card revenue should Bull'sEye recognize in 2018 is $1,950,000
The Tradition Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 2.4 percent per period. Based on the following information, what is the break-even price per unit that should be charged under the new credit policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Current Policy New Policy ?
Price per unit $ 93 ?
Cost per unit $ 44 $ 44
Unit sales per month 2,675 2,750
X Answer is complete but not entirely correct.
Break-even price $ 92.87 x
Answer: $93.86
Explanation:
The break even price simply refers to the price that's required to make a normal profit. From the information given, the break even price will be:
= [($93-$44) × 2675)/2750) + 44] × ( 1 + 2.3%)
= [$49 × 2675)/2750)+44] × (1+0.024)
= [(49 × 2675)/2750)+44] × 1.024
= [(131075/2750) + 44] × 1.024
= (47.66 + 44) × 1.024
= 91.66 × 1.024
= $93.86
Therefore, the break even price is $93.86
A researcher was interested in the relationship between the number of texts sent in a day and the number of e-mails sent in a day by employees at a certain company. Using 15 data values, a 90 percent confidence interval for the slope of a regression model was found to be (2.31, 3.47). The researcher claims that the interval would have been narrower with a different sample size if all other things remained the same. Which of the following sample sizes would make the researcher's claim NOT true?
A. 14
B. 16
C. 20
D. 30
E. 100
Answer:
A. 14
Explanation:
the researcher claims that the width of the interval would have been smaller if the sample had been different, and in this case different refers to larger. The original sample included only 15 people, so in order to increase the data sample, you must include more than 15 people. That is why 14 doesn't make sense.
Which of the following is not a way to accomplish an activity cost reduction? a.improve operations so that the activity-base usage per unit is reduced b.use lower-cost materials c.change the classification of employees doing an activity so as to decrease the activity rate d.none of the above
Answer:
b. use lower-cost materials
Explanation:
In Accounting, costing is the measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.
Production costs can be categorized as;
1. Variable costs: these are costs that usually change with respect to changes in the level of production or output. Examples are direct labor, maintenance of equipment or machines, raw materials costs etc.
2. Fixed costs: these are the costs which are not directly related to the level of production or not affected by the quantity of output in an organization. Examples are rent, depreciation, administrative cost, research and development costs, marketing costs etc.
Some of the ways to accomplish activity cost reduction are;
I. The operations of a business firm should be improved in order to make the activity-base usage per unit to be reduced.
II. The classification of employees doing an activity should be changed so as to decrease the activity rate.
Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid semiannually on June 30 and December 31.
Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $63,948 on January 1, 2015. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually on June 30 and December 31.
Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $76,860 on January 1, 2015. The market interest rate for bonds of similar risk and maturity is 6%. Interest is paid semiannually on June 30 and December 31.
All 3 question are need to find the first interest payment The only difference between 3 is the rate is one below, one higher, one are equal. No need to find the issuance bonds. Because I already had that one done.
Please and solve for thefirst interest payment with the steps that would be wonderful, thanks
Record bond issue and related semiannual interest (L04) Pretzelmania, Inc., issues 796, 10-year bonds with a face amount of $70,000 for $70,000 on January 1 2015. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid semiannually on June 30 and December 31 1. & 2. Record the bond issue and first interest payment on June 30, 2015. (If no entry is required for a transaction event, select "No journal entry required" in the first account field.) view transaction list view general journal Date General Journal Debit Credit January 01, 2015 Cash 70,000 Bonds payable 70,000 June 30, 2015 Interest expense Bonds payable Cash value: 3.33 points Brief Exercise 9-6 Record bond issue and related semiannual interest (L04) Pretzelmania, Inc., issues 796, 15-year bonds with a face amount of $70,000 for $63.948 on January 1 2015. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually on June 30 and December 31 1. & 2. Record the bond issue and first interest payment on June 30, 2015. (If no entry is required for a transaction event, select "No journal entry required" in the first account field.) view transaction list view general journal Date General Journal Debit Credit January 01, 2015 Cash 63,948 Bonds payable 63,948 June 30, 2015 Interest expense Bonds payable Cash value: 3.34 points Brief Exercise 9-7 Record bond issue and related semiannual interest (L04) Pretzelmania, Inc., issues 796, 15-year bonds with a face amount of $70,000 for $76.860 on January 1 2015. The market interest rate for bonds of similar risk and maturity is 6%. Interest is paid semiannually on June 30 and December 31 1. & 2. Record the bond issue and first interest payment on June 30, 2015. (lf no entry is required for a transaction event, select "No journal entry required" in the first account field.) view transaction list view general journal Date General Journal Debit Credit January 01, 2015 Cash 76,860 Bonds payable 76,860 June 30, 2015 Interest expense Bonds payable Cash
Answer:
Pretzelmania, Inc.
1. Records:
Debit Cash $70,000
Credit Bonds Liability $70,000
To record the issuance of 7% bonds at face value.
June 30:
Interest Expense $2,450
Cash payment for interest $2,450
To record the first interest expense and payment.
(No amortization of discounts or premiums)
December 31: (not required but showed for emphasis)
Debit Interest Expense $2,450
Credit Cash payment for interest $2,450
To record the second interest expense and payment.
(No amortization of discounts or premiums)
2. Records:
Debit Cash $63,948
Bonds Discounts $6,052
Bonds Liability $70,000
To record the issuance of 7% bonds at discounts.
June 20, 2015:
Debit Interest Expense $2,557.92
Credit Amortization of bonds discounts $107.92
Credit Cash payment for interest $2,450
To record the first interest expense and payment, including amortization of bonds discounts.
December 31, 2015: (not required but showed for emphasis)
Debit Interest Expense $2,562.24
Credit Amortization of bonds discounts $112.24
Credit Cash payment for interest $2,450
To record the second interest expense and payment, including amortization of bonds discounts.
3. Records:
Debit Cash $76,860
Credit Bonds Liability $70,000
Credit Bonds Premium $6,860
To record the issuance of 7% bonds at premium.
June 30, 2015:
Debit Interest Expense $2,305.80
Debit Amortization of bonds premium $144.20
Credit Cash payment for interest $2,450
To record the first interest expense and payment, including amortization of bonds premium.
December 31, 2015: (not required but showed for emphasis)
Debit Interest Expense $2,301.50
Debit Amortization of Bonds Premium $148.50
Credit Cash payment for interest $2,450
To record the second interest expense and payment, including amortization of bonds premium.
Explanation:
1. issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid semiannually on June 30 and December 31.
a) Data and Calculations:
Face value of bonds = $70,000
Issuance value = $70,000
Interest rate on bonds = 7%
Market interest rate = 7%
Period of bonds = 10 years
Payment period = semiannually
Issue date = January 1, 2021
June 30:
Semiannual interest rate = 3.5% (7%/2)
Interest Expense = $2,450 ($70,000 * 3.5%)
Cash payment for interest = $2,450
No amortization of discounts or premiums
December 31:
Semiannual interest rate = 3.5% (7%/2)
Interest Expense = $2,450 ($70,000 * 3.5%)
Cash payment for interest = $2,450
No amortization of discounts or premiums
2. Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $63,948 on January 1, 2015. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually on June 30 and December 31.
a) Data and Calculations:
Face value of bonds = $70,000
Issuance value = $63,948
Bonds discounts = $6,052 ($70,000 - $63,948)
Interest rate on bonds = 7%
Market interest rate = 8%
Period of bonds = 15 years
Payment period = semiannually
Issue date = January 1, 2015
June 30, 2015:
Semiannual interest rate = 3.5% (7%/2)
Interest Expense = $2,557.92 ($63,948 * 4%)
Amortization of bonds discounts = $107.92 ($2,557.92 - $2,450)
Cash payment for interest = $2,450 ($70,000 * 3.5%)
December 31, 2015:
Semiannual interest rate = 3.5% (7%/2)
Interest Expense = $2,562.24 (($63,948 + 107.92) * 4%)
Amortization of bonds discounts = $112.24 ($2,562.24 - $2,450)
Cash payment for interest = $2,450 ($70,000 * 3.5%)
3. Pretzelmania, Inc., issues 7%, 15-year bonds with a face amount of $70,000 for $76,860 on January 1, 2015. The market interest rate for bonds of similar risk and maturity is 6%. Interest is paid semiannually on June 30 and December 31.
a) Data and Calculations:
Face value of bonds = $70,000
Issuance value = $76,860
Bonds premium = $6,860 ($76,860 - $70,000)
Interest rate on bonds = 7%
Market interest rate = 6%
Period of bonds = 15 years
Payment period = semiannually
Issue date = January 1, 2015
June 30:
Semiannual interest rate = 3.5% (7%/2)
Cash payment for interest = $2,450 ($70,000 * 3.5%)
Interest Expense = $2,305.80 ($76,860 * 3%)
Amortization of bonds premium = $144.20 ($2,450 - $2,305.80)
December 31:
Semiannual interest rate = 3.5% (7%/2)
Cash payment for interest = $2,450 ($70,000 * 3.5%)
Interest Expense = $2,301.50 (($76,860 -144.20) * 3%)
Amortization of bonds premium = $148.50 ($2,450 - $2,301.50)
(Record bond issue and related semiannual interest)
Create a business decision based on the company where you work (can be any company), a small business you hope to own someday or just make something up - then identify, define and explain an incremental cost, opportunity cost and sunk cost. You will need to be somewhat creative in your response.
Respond to this question with 5-7 meaningful sentences (or more - this one could be more)
The correct answer to this open question is the following.
The business decision based on the company where you work would be this. To open a new small branch of the fast-food restaurant as a concession in the municipal stadium.
The incremental cost is the future costs as a result of this business decision. This means that we have to consider extra money on a monthly basis to pay for the rent of the concession booth at the Municipal stadium.
The opportunity cost is that instead of opening our branch in the new downtown mall, we decided to move with the stadium option. Having decided to be at the mall could have allowed us to have more clients on a daily basis, especially on weekends.
The sunk cost is a cost from the past, an historical cost that really is not important in the present time to make a decision. Maybe, just a reference to a case in the past. And that's it.
Here we can refer to a cost when we opened the first location of the restaurant, but it was five years ago. Those were different situations, necessities, and conditions.
why is having insurance important ?
Answer:
Explanation:
Because nothing is worth risking when you can have someone back you up. If something ever happens to you that you can't afford, insurance companies will have your back. If your house gets destroyed in a hurricane, you can recover the exact value of the house if you have insurance. However, if you don't have insurance, you bascially just lost your house. You can have insurance for many things such as car insurance, life insurance, health insurance.
Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just received your salary of $72,500, and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 5 percent of your annual salary in an account that will earn 9 percent per year. Your salary will increase at 3.7 percent per year throughout your career. How much money will you have on the date of your retirement 40 years from today?
Answer:
$1,924,410.40
Explanation:
Calculation to determine How much money will you have on the date of your retirement 40 years from today
First step is to calculate Next year’s salary
Next year’s salary = $72,500 (1 + ..037)
Next year’s salary = $75,182.50
Second step is to calculate Next year’s deposit
Next year’s deposit = $75,182.50(.05)
Next year’s deposit = $3,759.13
Third step is to find the Present Value (PV) using this formula
PV = C{[1 / (r– g)] – [1 / (r– g)] × [(1 + g) / (1 + r)]^t}
Let plug in the formula
PV = $3,759.13{[1 / (.09 – .037)] – [1 / (.09 – .037)] × [(1 + .037) / (1 + .09)]^40}
PV = $61,268.57
Now let find the Future value (FV) using this formula
FV = PV(1 + r)^t
Let plug in the formula
FV = $61,268.57(1 + .09)^40
FV = $1,924,410.40
Therefore How much money will you have on the date of your retirement 40 years from today is $1,924,410.40
Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $25,000. The estimated useful life was five years and the residual value was $3,000. Assume that the estimated productive life of the machine is 10,000 units.
Expected annual production was:
Year 1 2,000 units
Year 2 3,000 units
Year 3 2,000 units
Year 4 2,000 units
Year 5 1,000 units
1. Complete the cost column of a depreciation schedule for each of the alternative methods.
a. Straight-line
Income Statement Balance Sheet
Year Depreciation Expense Cost Accumulated Depreciation Book Value
At acquisition $25,000
1 $4,400 $25,000 $4,400 20,600
2 4,400 8,800 16,200
3 4,400 13,200 11,800
4 4,400 17,600 7,400
5 4,400 22,000 3,000
b. Units-of-production
Income Statement Balance Sheet
Year Depreciation Expense Cost Accumulated Depreciation Book Value
At acquisition $25,000
1 $4,400 $25,000 $4,400 20,600
2 6,600 11,000 14,000
3 4,400 15,400 9,600
4 4,400 19,800 5,200
5 2,200 22,000 3,000
c. Double-declining-balance
Income Statement Balance Sheet
Year Depreciation Expense Cost Accumulated Depreciation Book Value
At acquisition $25,000
1 $10,000 $25,000 $10,000 15,000
2 6,000 16,000 9,000
3 3,600 19,600 5,400
4 2,160 21,760 3,240
5 240 22,000 3,000
Answer:
a. Straight Line :
Year 1 $4,400
Year 2 $ 4,400
Year 3 $4,400
Year 4 $4,400
Year 5 $ 4,400
b. Units production :
Year 1 $5,000
Year 2 $7,500
Year 3 $5,000
Year 4 $5,000
Year 5 $2,500
c. Double declining :
Year 1 $12,500
Year 2 $6,250
Year 3 $3,125
Year 4 $1,562.5
Year 5 $781.25
Explanation:
a. Straight Line depreciation : ( Cost of asset - Salvage Value ) / Useful Life
Depreciation : ( 25,000 - 3,000 ) / 5 years = 4,400
b. Units of Production : ( Cost of Asset / Total Machine units ) * Usage per year
Year 1 : ( 25,000 / 10,000 ) * 2,000 = $5,000
Year 2 : ( 25,000 / 10,000 ) * 3,000 = $7,500
Year 3 : ( 25,000 / 10,000 ) * 2,000 = $5,000
Year 4 : ( 25,000 / 10,000 ) * 2,000 = $5,000
Year 5 : ( 25,000 / 10,000 ) * 1,000 = $2,500
c. Double declining Method : Cost * declining percentage
Year 1 : 25,000 * 50% = 12,500
Year 2 : 25,000 * 25% = 6,250
Year 3 : 25,000 * 12.5% = 3,125
Year 4 : 25,000 * 6.25% = 1,562.5
Year 5 : 25,000 * 3.125% = 781.25
Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $380,000, variable expenses of $205,000, and traceable fixed expenses of $45,000. During the same month, the West business segment had sales revenues of $1,050,000, variable expenses of $536,000, and traceable fixed expenses of $201,000. The common fixed expenses totaled $310,000 and were allocated as follows: $155,000 to the East business segment and $155,000 to the West business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the East business segment is:____________.
a. $205,000
b. $130,000
c. $(23,000)
d. $(20,000)
Answer:
b. $130,000
Explanation:
The contribution margin income statement is presented below
Particulars Total company East West
Sales $1,430,000 $380,000 $1,050,000
Less: variable expense -$741,000 -$205,000 -$536,000
Contribution margin $689,000 $175,000 $514,000
Less: fixed expense -$246,000 -$45,000 -$201,000
Segment margin $443,000 $130,000 $313,000
Less: common fixed expense $310,000
Operating income $133,000
List three pieces of criteria that economists use to determine if someone is employed
Answer:
The summary as per the given query is summarized below.
Explanation:
The criterion used by economists to decide whether the individual was working wasn’t employed.Employees hold down jobs for full as well as part-time pay where they already haven't a job and therefore are provisions of these terms for work even though they are unemployed.The labor force seems to be the number among all jobs working as well as unemployment.The balance sheet of Indian River Electronics Corporation as of December 31, 2020, included 11.75% bonds having a face amount of $91.5 million. The bonds had been issued in 2013 and had a remaining discount of $4.5 million at December 31, 2020. On January 1, 2021, Indian River Electronics called the bonds before their scheduled maturity at the call price of 102.
Required: Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
Answer:
January 1, 2021
Bonds Payable $91.5 million Dr
Loss on Redemption-Bonds Payable $6.33 million Dr
Discount on Bonds Payable $4.5 million Cr
Cash $93.33 million Cr
Explanation:
To calculate the loss on redemption of the bonds, we first need to calculate the value at which bonds have been redeemed. The bonds are redeemed at 102 which means they are redeemed at 102% of the face value.
Redemption amount = 91.5 million * 102% = 93.33 million
The bonds have a carrying value on redemption date of,
Carrying value = Face Value - Discount
Carrying value = 91.5 - 4.5 = $87 million
The loss on redemption of bonds is = 93.33 - 87 = $6.33 million
Ghost, Inc., has no debt outstanding and a total market value of $240,000. Earnings before interest and taxes, EBIT, are projected to be $32,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 15% higher. If there is a recession, then EBIT will be 30% lower. The company is considering a $80,000 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock. There are currently 15,000 shares outstanding. Ignore taxes for this problem.
a-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued.
a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession.
b-1. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization.
b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession.
a-1 Recession EPS $0.97
Normal EPS $1.39
Expansion EPS Z $1.59
a-2 Recession percentage
change in EPS -30.0
Expansion percentage
change in EPS 15.0
b-1 Recession EPS $1.09
Normal EPS 15.00
Expansion EPS
b-2 Recession percentage
change in EPSE -36.36
Expansion percentage
change in EPS 18.18
Answer:
a-1. We have:
Recession EPS = $1.49
Normal EPS = $2.13
Expansion EPS = $2.45
a-2. We have:
Recession percentage change in EPS = -30.00%
Expansion percentage change in EPS = 15.00%
b-1. We have:
Recession EPS = $1.12
Normal EPS = $1.76
Expansion EPS = $2.08
b-2. We have:
Recession percentage change in EPS = -36.36%
Expansion percentage change in EPS = 18.18%
Explanation:
Note: See the attached excel file for the calculations of the EPS and the percentage changes in EPS.
From the attached excel file, we have:
a-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued.
Recession EPS = $1.49
Normal EPS = $2.13
Expansion EPS = $2.45
a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession.
Recession percentage change in EPS = -30.00%
Expansion percentage change in EPS = 15.00%
b-1. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization.
Recession EPS = $1.12
Normal EPS = $1.76
Expansion EPS = $2.08
b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession.
Recession percentage change in EPS = -36.36%
Expansion percentage change in EPS = 18.18%
P3-uZ Company produces leather sandals. The company employs a standard costing system and has the following standards in order to produce one pair of sandals:
Standard quantity Standard price
Direct materials 2 leather strips ?? per strip
Direct Labor 2.5 hours $12 per hour
Variable overhead 2.5 hours ?? per hour
During May, P3-uz used 16,300 leather strips in the production of sandals. P3-uz had no beginning inventories of any type for May. At May 31, P3-uz had 600 leather strips remaining in its direct materials inventory.
P3-uz Company reported the following variances for May:
Direct material price variance $40,525 favorable
Direct labor rate variance $27,560 unfavorable
Total direct labor variance $37,240 favorable
Variable overhead spending variance $9,280 unfavorable
Variable overhead efficiency variance $60,480 favorable
Required:
Calculate P3-uz's direct material quantity variance for May.
Answer:
Direct material quantity variance for May = (16,300 - (2 * Actual number of sandals produced in May)) * 9.84
Explanation:
Note: This question is not complete as total cost of leather strips purchased and direct labor are both omitted. The complete question is therefore provided before answering the question as follows:
P3-uZ Company produces leather sandals. The company employs a standard costing system and has the following standards in order to produce one pair of sandals:
Standard quantity Standard price
Direct materials 2 leather strips ?? per strip
Direct Labor 2.5 hours $12 per hour
Variable overhead 2.5 hours ?? per hour
During May, P3-uz purchased leather strips at a total cost of $124,250 and had direct labor totaling $154,760. During May, P3-uz used 16,300 leather strips in the production of sandals. P3-uz had no beginning inventories of any type for May. At May 31, P3-uz had 600 leather strips remaining in its direct materials inventory.
P3-uz Company reported the following variances for May:
Direct material price variance $40,525 favorable
Direct labor rate variance $27,560 unfavorable
Total direct labor variance $37,240 favorable
Variable overhead spending variance $9,280 unfavorable
Variable overhead efficiency variance $60,480 favorable
Required:
Calculate P3-uz's direct material quantity variance for May.
The explanation of the answer is now given as follows:
Actual total quantity = Number of strips of leather used in production = 16,300
Number of strips of leather purchased = Actual total quantity + Number of leather strips remaining in its direct materials inventory = 16,300 + 600 = 16,900
Actual price per strips = Total cost of leather strips purchased / Number of strips of leather purchased = $124,250 / 16,900 = $7.35
Direct material price variance = (Standard price – Actual price) * Actual quantity ................... (1)
Substituting the relevant values into equation (1) and solve for Standard price, we have:
$40,525 = (Standard price - 7.35) * 16,300
$40,525 = (Standard price * 16,300) - (7.35 * 16300)
(Standard price * 16,300) = $40,525 + (7.35 * 16300)
Standard price = ($40,525 + (7.35 * 16300)) / 16,300
Standard price = $9.84
Therefore, we have:
Direct material quantity variance for May = (Actual total quantity - (Standard quantity * Actual number sandals produced)) * Standard price ................. (2)
Substituting the relevant values into equation (2) and solve for Standard price, we have:
Direct material quantity variance for May = (16,300 - (2 * Actual number of sandals produced in May)) * 9.84 ............... (3)
Therefore, equation (3) gives the Direct material quantity variance for May since the question is silent on the Actual number of sandals produced produced in May.
Clampett, Incorporated, has been an S corporation since its inception. On July 15, 2021, Clampett, Incorporated, distributed $42,500 to J.D. His basis in his Clampett, Incorporated, stock on January 1, 2021, was $36,000. For 2021, J.D. was allocated $11,800 of ordinary income from Clampett, Incorporated, and no separately stated items. How much capital gain does J.D. recognize related to Clampett, Incorporated, in 2021
Answer:
See bellw
Explanation:
Income of J.D related to Clampett = Ordinary income + Capital gain
Given that
Basis distribution = $42,500
Basis stock = $36,000
Ordinary = $11,800
But Capital gain = Basis distribution - (Basis stock + Ordinary income
= $42,500 - ($36,000 + $11,800)
= $42,500 - $47,800
= - $5,300
Therefore, J.D income related to Clampett
= Ordinary income + Capital gain
= $11,800 - $5,300
= $6,500
Calculate (a) the accounts receivable period, (b) accounts payable period, (c) inventory period, and (d) cash cycle for the following firm. (Use 365 days a year. Do not round intermediate calculations. Round your answers to 1 decimal place.) Income Statement Data: Sales $ 5,000 Cost of goods sold 4,200 Balance Sheet Data: Inventory $ 550 Accounts receivable 110 Accounts payable 270
Answer:
a. Accounts receivable period:
= Accounts receivable turnover ratio * 365 days
= (Average accounts receivable / Sales) * 365
= (110 / 5,000) * 365
= 8.0 days
b. Accounts Payable period:
= Accounts payable turnover ratio * 365
= (Average accounts payable / Cost of goods sold) * 365
= (270 / 4,200) * 365
= 23.5 days
c. Inventory period:
= Inventory turnover ratio * 365
= (Average inventory / Cost of goods sold) * 365
= (550 / 4,200) * 365
= 47.8 days
d. Cash cycle:
= Inventory period + Accounts receivables period - Accounts payable period
= 47.8 + 8 - 23.5
= 32.3 days
The CHS Company has provided the following information: Accounts receivable written-off as uncollectible during the year amounted to $12,500. The accounts receivable balance at the beginning of the year was $250,000. The accounts receivable balance at the end of the year was $310,000. The allowance for doubtful accounts balance at the beginning of the year was $15,000. The allowance for doubtful accounts balance at the end of the year after the recording of bad debt expense was $13,900. Credit sales during the year totaled $950,000. How much was CHS Company's bad debt expense
Answer:
$11,400
Explanation:
Calculation to determine CHS Company's bad debt expense
Using this formula
Bad debt expense =Bad debt expense -(Allowance for doubtful accounts balance at the beginning of the year -Accounts receivable written-off as uncollectible during the year )
Let plug in the formula
Bad debt expense=$13,900-( $15,000-$12,500)
Bad debt expense=$13,900-$2,500
Bad debt expense=$11,400
Therefore CHS Company's bad debt expense is $11,400
Data concerning Wislocki Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 180 100 % Variable expenses 36 20 % Contribution margin $ 144 80 % Fixed expenses are $1,044,000 per month. The company is currently selling 9,000 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $14 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $110,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 400 units. What should be the overall effect on the company's monthly net operating income of this change
Answer:
$36,000 increase
Explanation:
The computation of the overall effect on the company's monthly net operating income of this change is shown below:
Particulars Current Proposed
Unit sales 9,000 units 9,400 units
Sales $1,620,000 $1,692,000
(9,000 units × $180) (9,400 units × $180)
less: variable cost -$324,000 -$470,000
(9,000 units × $36) (9,400 units × $50)
Contribution margin $1,296,000 $1,222,000
Less: fixed cost -$1,044,000 -$934,000
Net operating income $252,000 $288,000
Hence, there is an increase in net operating income by
= $288,000 - $252,000
= $36,000
Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 3,250 client-visits, but its actual level of activity was 3,160 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: Fixed element per month Variable element per client-visit Revenue - $ 39.10 Personnel expenses $ 35,100 $ 10.30 Medical supplies 1,100 7.10 Occupancy expenses 8,100 1.10 Administrative expenses 5,100 0.20 Total expenses $ 49,400 $ 18.70 The activity variance for net operating income in July would be closest to:
Answer:
$1,836 unfavorable
Explanation:
The computation of the activity variance for net operating income in July is shown below:
net income is
= $39.10 - $18.70
= $20.40
And, the difference in activity is
= 3,250 - 3,160
= 90
Now the activity variance for net operating income is
= $20.40 × $90
= $1,836 unfavorable
FedEx is the world's largest express transportation company. In addition to the world's largest fleet of all-cargo aircraft, the company has more than 650 aircraft and 58.000 vehicles and trailers that pick up and deliver packages. Assume that FedEx sold a delivery truck that had been used in the business for three years. The records of the company reflected the following:
Delivery truck cost $35,000
Accumulated depreciation $23,000
Required:
1. Give the journal entry for the disposal of the truck, assuming that the truck sold for
a. $12,000 cash
b. $12.400 cash
c. $11,500 cash
2. Based on the three preceding situations, explain the effects of the disposal of an asset.
Answer:
1-a. Debit Cash for $12,000; Debit Accumulated depreciation - Truck for $23,000; and Credit Equipment - Truck for $35,000.
1-b. Debit Cash for $12,400; Debit Accumulated depreciation - Truck for $23,000; Credit Gain on sale of equipment for $400; and Credit Equipment - Truck for $35,000.
1-c. Debit Cash for $11,500; Debit Accumulated depreciation - Truck for $23,000; Debit Loss on sale of equipment for $500; and Credit Equipment - Truck for $35,000.
2-a. The disposal the asset (Delivery truck) for $12,000 cash results into neither gain nor loss.
2-b. The disposal the asset (Delivery truck) for $12,400 cash results into a gain of $400.
2-b. The disposal the asset (Delivery truck) for $11,500 cash results into a loss of $500.
Explanation:
1-a. Give the journal entry for the disposal of the truck, assuming that the truck sold for $12,000 cash.
Gain or loss on the disposal of delivery truck = Cash - (Delivery truck cost - Accumulated depreciation) = $12,000 - ($35,000 - $23,000) = $12,000 - $12,000 = $0
Therefore, the journal entries will look as follows:
Particulars Debit ($) Credit ($)
Cash 12,000
Accumulated depreciation - Truck 23,000
Equipment - Truck 35,000
(To record the disposal of delivery truck.)
1-b. Give the journal entry for the disposal of the truck, assuming that the truck sold for $12,400 cash.
Gain or loss on the disposal of delivery truck = Cash - (Delivery truck cost - Accumulated depreciation) = $12,400 - ($35,000 - $23,000) = $12,400 - $12,000 = $400 gain
Therefore, the journal entries will look as follows:
Particulars Debit ($) Credit ($)
Cash 12,400
Accumulated depreciation - Truck 23,000
Gain on sale of equipment 400
Equipment - Truck 35,000
(To record the disposal of delivery truck.)
1-c. Give the journal entry for the disposal of the truck, assuming that the truck sold for $11,500 cash.
Gain or loss on the disposal of delivery truck = Cash - (Delivery truck cost - Accumulated depreciation) = $11,500 - ($35,000 - $23,000) = $11,500 - $12,000 = $500 loss
Therefore, the journal entries will look as follows:
Particulars Debit ($) Credit ($)
Cash 11,500
Accumulated depreciation - Truck 23,000
Loss on sale of equipment 500
Equipment - Truck 35,000
(To record the disposal of delivery truck.)
2. Based on the three preceding situations, explain the effects of the disposal of an asset.
2-a. The disposal the asset (Delivery truck) for $12,000 cash results into neither gain nor loss.
2-b. The disposal the asset (Delivery truck) for $12,400 cash results into a gain of $400.
2-b. The disposal the asset (Delivery truck) for $11,500 cash results into a loss of $500.
On March 1, Imhoff Co. began construction of a small building. Payments of $202,539 were made monthly for several months. The payments begin on the first day of March. The building was completed and ready for occupancy on the first day of June. In determining the amount of interest cost to be capitalized, the weighted-average accumulated expenditures are
Answer:
$101,269.5
Explanation:
Calculation to determine the weighted-average accumulated expenditures
Weighted-average accumulated expenditures=$202,539* (3/12 + 2/12 + 1/12)
Weighted-average accumulated expenditures=$202,539*0.5
Weighted-average accumulated expenditures=$101,269.5
Therefore In determining the amount of interest cost to be capitalized, the weighted-average accumulated expenditures are $101,269.5