Answer:
d) Differences in values.
The economists could disagree on whether the tax bill is good for the system based on their differing conceptions of fairness and economic efficiency. One could view the rise in after-tax income for high earners as beneficial to the economy, while the other may see it as exacerbating income inequality.
Explanation:The disagreement likely centers on the economists' different views of how a tax system should operate and ideas about societal fairness and economic efficiency. One economist may believe that the tax reform bill improves the system because it increases after-tax income for high earners, potentially bolstering consumer spending or capital investment. However, the other economist may argue that the tax reform bill makes the system less fair because it disproportionally benefits the top 5% of income earners, thereby exacerbating income inequality.
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Prepare a 2018 balance sheet for Rogers Corp. based on the following information: Cash $127,000; Patents and copyrights $660,000; Accounts payable $210,000; Accounts receivable - $115,000; Tangible net fixed assets - $1,610,000; Inventory $286,000; Notes payable $155,000; Accumulated retained earnings $1,368,000; Long-term debt $830,000. (Be sure to list the accounts in order of their liquidity. Do not round intermediate calculations.)
Answer:
Explanation:
The preparation of the balance sheet is presented below:
Rogers Corp
Balance sheet
Assets
Cash $127,000
Account receivable $115,000
Inventories $286,000
Tangible net fixed assets $1,610,000
Patents and copyrights $660,000
Total assets $2,798,000
Liabilities
Account payable $210,000
Notes payable $155,000
Long-term debt $830,000
Total liabilities $1,195,000
Common stock $235,000 (Balancing figure)
Accumulated retained earnings $1,368,000
Total liabilities and stockholder equity $2,798,000
The cash, account receivable and inventory are come under the current assets while the account payable and the notes payable are come under the current liabilities.
The 2018 balance sheet for Rogers Corp., lists current assets like cash, accounts receivable, and inventory, long-term assets, current liabilities, long-term debt, and shareholders' equity including retained earnings. Total assets should match the sum of liabilities and equity.
Rogers Corp. Balance Sheet for 2018:
To prepare the balance sheet for Rogers Corp. for the year 2018, we will list the assets in order of liquidity followed by liabilities, and equity. Assets include current assets such as cash, accounts receivable, and inventory, as well as long-term assets like net fixed assets and intangible assets like patents and copyrights. Liabilities include current liabilities and long-term liabilities like long-term debt. Lastly, we record the shareholders' equity section, which primarily consists of accumulated retained earnings.
Rogers Corp. Balance Sheet as of December 31, 2018
Current Assets:
Cash: $127,000
Accounts Receivable: $115,000
Inventory: $286,000
Non-Current Assets:
Tangible Net Fixed Assets: $1,610,000
Patents and Copyrights: $660,000
Total Assets: $2,798,000
Liabilities and Shareholders' Equity:
Current Liabilities:
Accounts Payable: $210,000
Notes Payable: $155,000
Long-Term Debt: $830,000
Total Liabilities: $1,195,000
Shareholders' Equity:
Accumulated Retained Earnings: $1,368,000
Total Shareholders' Equity: $1,368,000
Total Liabilities and Shareholders' Equity: $2,563,000
Note that total assets should equal the sum of total liabilities and shareholders' equity as per the accounting equation. However, there appears to be a discrepancy between total assets and the sum of liabilities and equity. It's important to reconcile this before finalizing the balance sheet.
Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 4,800 Salaries expense 1,900 Accounts payable 2,800 Retained earnings 4,200 Utilities expense 1,200 Supplies 13,200 Service revenue 8,700 Common stock 5,400 Required: Use only the appropriate accounts to prepare an income statement.
Answer:
Service revenue $8,700
Less: Expenses
Salaries expense $1,900
Utilities expense $1,200
Total expense (subtract from Service revenue ) -$3100
Net Income (Service revenue -Total expense) = $5,600
Explanation:
First Make the list of given quantities:
Cash=$4,800
Salaries expense=$1,900
Accounts payable=$2,800
Retained earnings=$4,200
Utilities expense=$1,200
Supplies=$13,200
Service revenue=$8,700
Common stock=$5,400
Income statement is as follow:
Only Service revenue and expenses are used to find the net income.
Service revenue $8,700
Less: Expenses
Salaries expense $1,900
Utilities expense $1,200
Total expense (subtract from Service revenue ) -$3100
Net Income (Service revenue -Total expense) = $5,600
On the last day of December 2013, Tom’s Trucks entered into a transaction that resulted in a receipt of $108,000 cash in advance related to services that will be provided during January 2013. During December of 2013, the company also performed $64,000 of services which were neither billed nor paid. Prior to December adjustments and before these two transactions were recorded, the company’s trial balance showed service revenue of $582,735 at December 31, 2013. There are no other prepaid services yet to be delivered, and during the month all outstanding accounts receivable from prior months were collected.
If Tom’s Trucks makes the appropriate adjusting entry, how much will service revenue will be reflected on the December 31, 2013 income statement?
If Tom’s Trucks makes the appropriate adjusting entry, how much will be reported on the December 31, 2013 balance sheet as unearned revenue?
If Tom’s Trucks makes the appropriate adjusting entry, how much will be reported on the December 31, 2013 balance sheet as accounts receivable?
Answer:
Explanation:
1. Service revenue (December 31, 2013) income statement = $582,735 + $64,000 = $646735
Company also performed $64,000 of services which were neither billed nor paid,adjusting entry:
Dr Accounts receivable 64000
Cr Service revenue 64000
2. Amount reported on the December 31, 2013 balance sheet as unearned revenue = $108,000
unearned revenue - revenue which has not been earned yet, but recorded in accounts
3. Amount reported on the December 31, 2013 balance sheet as accounts receivable = $64,000
Accounts receivable 64000
To service revenue 64000
The service revenue reflected on the December 31, 2013 income statement will be $64,000. The unearned revenue reported on the December 31, 2013 balance sheet will be $108,000. The accounts receivable reported on the December 31, 2013 balance sheet will be $64,000.
Explanation:To determine the amount of service revenue that will be reflected on the December 31, 2013 income statement, we need to consider the $108,000 cash received in advance and the $64,000 of services performed but not yet billed or paid. Since the $108,000 is for services that will be provided in January 2013, it should not be included in the December 2013 income statement. However, the $64,000 of services performed should be included. Therefore, the service revenue on the December 31, 2013 income statement will be $64,000.
To determine the amount of unearned revenue reported on the December 31, 2013 balance sheet, we need to consider the $108,000 cash received in advance. Since this cash is for services that will be provided in January 2013, it should be reported as unearned revenue on the December 31, 2013 balance sheet.
To determine the amount of accounts receivable reported on the December 31, 2013 balance sheet, we need to consider the $64,000 of services performed but not billed or paid. Since these services were performed in December 2013 and were not billed or paid yet, they should be reported as accounts receivable on the December 31, 2013 balance sheet.
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Suppose the price of eggs decreases from $5 per dozen to $4 per dozen. According to the law of –, we should expect the – to increase.
Answer:
Demand; Quantity Demanded
Explanation:
According to the law of demand,
Law states that there is a negative or inverse relationship between the price of the good and the quantity demanded for that good which means that an increase in the price of a good will result in a fall in quantity demanded for that good and a decrease in the price level of the good will result in an increase in the quantity demanded for that good.
In our case, the price of eggs falls from $5 per dozen to $4 per dozen then as a result there is an increase in the quantity demanded for the eggs.
Final answer:
The law of demand states that a decrease in the price of a good leads to an increase in the quantity demanded. When the price of eggs drops from $5 to $4 per dozen, the quantity demanded is expected to increase as consumers are more willing to purchase at the lower price.
Explanation:
According to the law of demand, when the price of a good decreases, the quantity of the good demanded increases. This principle is based on the tendency of consumers to purchase more of a good when its price is lower if all other factors remain constant. Therefore, when the price of eggs decreases from $5 per dozen to $4 per dozen, we should expect the quantity demanded to increase.
In economic terms, the decrease in the price of eggs leads to a movement along the demand curve to the right, indicating a higher quantity demanded. This concept is essential in understanding how markets reach equilibrium. When there is a price change, it affects both consumer behavior (demand) and producer behavior (supply), creating movements toward a new equilibrium if nothing else changes.
Using the coffee example, when the price of coffee is lowered to $2, the quantity demanded increases, but with the incentive for producers to produce lessening, a shortage or disequilibrium may occur. On the other hand, if the price of coffee increases to $7 per pound, the new equilibrium leads to a lower quantity demanded. In the case of the eggs, the lower price will likely lead to more eggs being demanded by consumers.
Yard Designs (YD) experienced the following events in 2018, its first year of operation: On October 1, 2018, YD collected $54,000 for consulting services it agreed to provide during the next 12 months. Adjusted the accounts to reflect the amount of consulting service revenue recognized in 2018. Required Based on this information alone: Record the events under an accounting equation. Prepare an income statement, balance sheet, and statement of cash flows for the 2018 accounting period. Ignoring all other future events, what is the amount of service revenue that would be recognized in 2019?
Answer:
Explanation:
2018 Financial Statement
Income Statement :
Amount of recognized revenue = 3/12 * $54,000
Cr Income statement $13,500
Dr Cash/ Bank Account $13,500
Balance Sheet :
Dr. Bank Account -$54,000
Cr Retained earning -$13,500
Cr Deferred Income -$40,500
Statement of Cash Flow :
Cr Operating income $13,500
Cr Increase in payable(deferred income) $40,500
Revenue to Recognize in 2019
Cr Income Statement $40,500
Dr. Deferred Income $40,500
Suppose you can afford to invest $1,000 each month into an account that pays 15% per year. How many years will you need to make this monthly investment for your account to be worth $2,000,000?
Answer:
Explanation:
Rate per period =15% = 15/12 monthly
Payment(PMT)=$1,000
Future amaount(FV)=$2,000,000
N(years)=?
If input this data into fin calculator, n= 262.27months=262.27/12years=21.86years
To make $2,000,000 from a monthly investment of $1,000 at an interest rate of 15% per year, you would need to invest for approximately 47 years.
Explanation:To find out how many years you need to make the monthly investment of $1,000 for your account to be worth $2,000,000, we can use the formula for compound interest. The formula is:
A = P(1+r)^n
Where A is the future value of the investment, P is the monthly investment amount, r is the annual interest rate, and n is the number of years. In this case, A is $2,000,000, P is $1,000, and r is 15% per year. We need to solve for n:
$2,000,000 = $1,000(1+0.15)^n
Dividing both sides of the equation by $1,000, we get:
2,000 = (1.15)^n
Now we need to solve for n. Taking the natural logarithm of both sides of the equation, we get:
n ≈ log(2,000) / log(1.15)
Using a scientific calculator, we find that n ≈ 47.077.
Therefore, you would need to make the monthly investment for approximately 47 years for your account to be worth $2,000,000.
Burma has significant quantities of high quality ______, but corruption has prevented the income from these resources from benefiting the country as whole.
Answer:
precious gems
Explanation:
It is known as pigeon blood for its pure red color and without spots, has a value superior to diamond and has captivated the royal courts of the world for eight centuries. Miners in the Mogok Valley look for the coveted gemstone among tons of mud, working from dawn to dusk for a pay that, when it arrives, does not always do so in the form of money. "Heroine," says teaching his toothless mouth Mahn Win Maung, a miner who has been working in these quarries for two years. "Sometimes they pay in heroin."
The drug payment guarantees that the workers will return the next day to extract the rubies that finance the Burmese dictatorship, enslave thousands of workers and decorate the necks of the elite ladies in the salons of Tokyo, Milan or New York. The fate of pigeon blood could no longer contrast with its origin: poverty, AIDS, drugs and the state of semi-slavery turn the Ruby Valley, surrounded by the mountains of the border of the state of Shan, into a place taken from another time.
Ruby is a precious stone that appears in the nature of different sizes and shapes, so it offers a great possibility when carved.
Its hardness is only lower than that of the diamond which makes it one of the most resistant gemstones. In addition, as it does not have splits, it is very difficult to suffer breakages.
Ruby is a type of red corundum; those that are blue are known as sapphires, so we can actually deduce that rubies and sapphires are practically the same stones except for their color.
Burma has vast reserves of precious gemstones like rubies and jade, but widespread corruption funnels profits to military rulers, stifling economic development. These circumstances, along with a strong military grip on lucrative trades and China's economic support, render Burma one of Southeast Asia's poorest countries.
Burma has significant quantities of high quality precious gemstones such as rubies, sapphires, and jade. Despite the fact that rubies, in particular, could bring in substantial income—considering that Burma produces about 90 percent of the world's supply—corruption has prevented these riches from benefiting the country as a whole. Most notably, the profits from gem sales primarily go to Burma's military rulers, contributing to limited economic development for the population and deterring foreign investment.
Corruption on the governmental level, alongside mismanagement within the business sector, has made Burma one of the poorest countries in Southeast Asia. The country's main income-generating enterprises, including the gem trade and the lucrative drug trade from the opium-growing region of the northern Golden Triangle, are largely controlled by the military. This control has also led to an increase in opium production in recent years.
China has emerged as the main trading partner and supporter of Burma's military regime, supplying arms, infrastructure projects, and natural gas, further setting the stage for the continued authoritarian rule and stifled economic progress.
You deposit $1,000 in your bank account. (LO5-1) a. If the bank pays 4% simple interest, how much will you accumulate in your account after 10 years? b. How much will you accumulate if the bank pays compound interest?
Answer:
Simple interest - $1,400
Compound interest - $1,480.24
Explanation:
Simple interest is the interest earn only on he principal invested.
For example, with a rate of 10% simple interest, if I invest $10,000 for 2 years. Then my interest will be:
SI = 10,000 × 10% × 2 = $200
Accumulated amount can be calculated using this formula:
F.V = P + (P R × T)
FV = 10,000 + (10,000× 10% × 2)
= 10,200
Compound Interest: Under this arrangement, both the principal and interest would earn interest. Unlike the simple, any interest themselves would earn interest so far they are not withdrawn.
To compute compound interest
Year 1 = 10000 ×10% = 100
Year 2 = (10000×10%) + (100 ×10%) = 110
Total interest = 100 + 110 = 210
Note that the interest in year 2 is higher for compound interest than for simple interest.
Accumulated amount for compound interest is done as follows:
F.V = P × (1+r)^n
So lets apply this these concepts to our question:
a) Simple interest:
Accumulated amount(Future Value) :
F.V = P + (P × R × T)
F.V = $1000 + (1000 × 4% × 10)
= $1,400
b) Compound Interest
F.V = P × (1+r)^n
F.V = 1,000 × (1+0.04)^10
= $1480.24
After 10 years with a $1,000 deposit at 4% simple interest, you will have $1,400. With compound interest, you will accumulate $1,480.
Accumulate in your bank account after 10 years with a $1,000 deposit at 4% simple interest, you use the formula for simple interest: P = P₀+ (P₀ times r times t), where P is the future value of the investment/loan, including interest, P₀ is the principal amount (the initial amount of money), r is the annual interest rate (decimal), and t is the time the money is invested or borrowed for, in years. Applying the values, we find:
P = $1,000 + ($1,000 times 0.04 times 10) = $1,000 + $400 = $1,400. Therefore, after 10 years, you will have $1,400 in your account with simple interest.
For compound interest, we use a different formula: P = P₀ times (1 + r)ⁿ, where n is the number of times that interest is compounded per unit t. If the interest is compounded annually, we assume n to be the same as t. Using the same values but applying the compound interest formula:
P = $1,000 times (1 + 0.04)10 = $1,000 times 1.48 = $1,480. Thus, with compound interest, you will have $1,480 in your account after 10 years.
A company invested $400,000 in a technology that reduced the overall costs of production by reducing their cost per unit from $2 to $1.85. Later, a manager has an opportunity to outsource production to another company at a cost per unit of $1.75. If you are the from $2 to should consider the $400,000 as a sunk cost, not relevant to the decision. O b should reduce his effort by ignoring any new developments and letting the production run as it is. O c. should ignore the $400,000 fixed cost. O d. Both A & C
Option D, Both A & C
Explanation:
A company invested $400,000 in a technology that reduced the overall costs of production by reducing their cost per unit from $2 to $1.85 . Later, a manager has an opportunity to outsource production to another company at a cost per unit of $1.75 . If you are the manager, you should consider the $400,000 as a sunk cost, not relevant to the decision and should ignore the $400,000 fixed cost.
Sunk cost is the cost which is already incurred in past and does not have any significance in decision making.
A sunk cost is already incurred in the fields of economy and business decision-making and can not be recovered. Sunk costs are contrasted with future costs, which can be avoided if measures are taken.
The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.Balance Sheet (Millions of $)Assets 2010Cash and securities $1,290Accounts receivable 9,890Inventories 13,760Total current assets $24,940Net plant and equipment $18,060Total assets $43,000Liabilities and EquityAccounts payable $8,170Notes payable 6,020Accruals 4,730Total current liabilities $18,920Long-term bonds $8,815Total debt $27,735Common stock $5,805Retained earnings 9,460Total common equity $15,265Total liabilities and equity $43,000Income Statement (Millions of $) 2010Net sales $51,600Operating costs except depreciation 48,246Depreciation 903Earnings bef interest and taxes (EBIT) $2,451Less interest 927Earnings before taxes (EBT) $1,524Taxes 533Net income $990Other data:Shares outstanding (millions) 500.00Common dividends (millions of $) $346.67Int rate on notes payable & L-T bonds 6.25%Federal plus state income tax rate 35%Year-end stock price $23.7a. What is the firm's BEP?b. What is the firm's profit margin?c. What is the firm's operating margin?d. What is the firm's dividends per share?e. What is the firm's EPS?f. What is the firm's P/E ratio?g. What is the firm's book value per share?h. What is the firm's market-to-book ratio?i. What is the firm's equity multiplier?
Answer:
(a) 0.057
(b) 0.0192
(c) 0.0475
(d) 0.69334
(e) $1.98
(f) 11.97
(g) $30.53
(h) 0.7763
(i) 2.82
Explanation:
(a) BEP = EBIT ÷ Total Assets
= $2,451 ÷ $43,000
= 0.057
(b) Profit Margin = Net Profit ÷ Sales
= $990 ÷ $51,600
= 0.0192
(c) Operating Margin = Operating Profit ÷ Sales
= $2,451 ÷ $51,600
= 0.0475
(d) Dividends per share:
= Dividend paid to Shareholders ÷ Number of shares outstanding
= $346.67 ÷ $500
= 0.69334
(e) EPS:
= Net Income available to Shareholders ÷ Number of shares outstanding
= $990 ÷ $500
= $1.98
(f) P/E ratio = Market price per share ÷ EPS
= $23.7 ÷ 1.98
= 11.97
(g) Book value per share = Shareholders Equity ÷ Shares outstanding
= $15,265 ÷ $500
= $30.53
(h) Market-to-book ratio = Market Value per share ÷ Book value per share
= $23.7 ÷ $30.53
= 0.7763
(i) Equity Multiplier = Total Assets ÷ Shareholders Equity
= $43,000 ÷ $15,265
= 2.82
Oak Creek Furniture Factory (OCFF), a custom furniture manufacturer, uses job order costing to track the cost of each customer order. On March 1, OCFF had two jobs in process with the following costs: Workin Process Balance on 3/1Job 33 $ 6,000Job 34 3,600$ 9,600Source documents revealed the following during March: Materials Requisitions Forms Labor TimeTickets Status of Job at Month-EndJob 33 $ 2,800 $ 5,900 Completed and soldJob 34 2,300 4,000 Completed, but not soldJob 35 3,600 3,800 In processIndirect 800 2,000 $ 9,500 $ 15,700 The company applies overhead to products at a rate of 55 percent of direct labor cost.Required:Prepare journal entries to record the materials requisitions, labor costs, and applied overhead. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)1Record the issuance of raw materials to production.2Record Oak Creek Furniture Factory’s payroll costs. Assume the direct labor is owed but not paid.3Record the application of manufacturing overhead to production.
The cost of manufacturing each product is calculated using the job order technique of pricing.
The journal entries are provided in the image attached below:
This costing method is typically used when the producer has to determine the cost of performing a specific task while producing a number of items that differ from one another. Direct labor, direct supplies, and manufacturing overhead are all included in the task costing process.
The profitability of a job can be ascertained via job order costing. It aids the business in estimating the cost of the materials, labor, and overhead that will be incurred when carrying out that specific job.
Effective job order costing enables businesses to provide quotations that are affordable enough to be appealing to customers while maintaining a profit margin.
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Final answer:
To prepare the journal entries for Oak Creek Furniture Factory (OCFF), you need to record the materials requisitions, labor costs and applied overhead. The journal entries are provided with detailed explanations.
Explanation:
To prepare the journal entries for Oak Creek Furniture Factory (OCFF), we need to record the materials requisitions, labor costs and applied overhead. Here are the journal entries:
Issuance of raw materials to production:
Debit Work in Process - Job 34 for $3,600 (materials requisitioned for Job 34)
Credit Raw Materials Inventory for $3,600 (cost of raw materials used for Job 34)
Record payroll costs:
Debit Work in Process - Job 34 for $2,300 (labor costs for Job 34)
Debit Manufacturing Overhead for $800 (indirect labor costs)
Credit Wages Payable for $2,300 (amount owed for direct labor)
Credit Accrued Payroll for $800 (amount owed for indirect labor)
Application of manufacturing overhead to production:
Debit Manufacturing Overhead for $4,180 (55% of direct labor cost for Job 34)
Credit Work in Process - Job 34 for $4,180 (applied overhead to Job 34)
Kate Company uses a perpetual inventory system.
Record the journal entries for the following transactions:
a. On July 16, Kate sold $1,200 of merchandise with terms of 2/10, n/30. The cost of the merchandise was $720.
b. On July 19, the customer returned $200 of the merchandise from (a). The cost of the merchandise was $120.
c. On July 22, the customer paid the entire balance due to Kate.
Answer:
The journal entries are as follows:
(a) On July 16,
Account receivable A/c Dr. $1,200
To sales revenue $1,200
(To record Sales)
Cost of goods sold A/c Dr. $720
To Inventory $720
(To record cost of goods sold)
(b) On July 19,
Sales return and allowance a/c Dr. $200
To Account receivable $200
(To record sales return)
Inventory A/c Dr. $120
To Cost of goods sold $120
(To record cost of goods return)
(c) On July 22,
Cash (1,000 × 98%) A/c Dr. $980
Sales discount A/c Dr. $20
To Account receivable $1,000
(To record amount received)
Final answer:
A detailed explanation of recording journal entries for sales, returns, and customer payment in a perpetual inventory system for Kate Company.
Explanation:
Journal Entries for Kate Company:
July 16: Debit Accounts Receivable $1,200, Credit Sales $1,200. Debit Cost of Goods Sold $720, Credit Inventory $720.July 19: Debit Sales Returns and Allowances $200, Credit Accounts Receivable $200. Debit Inventory $120, Credit Cost of Goods Sold $120.July 22: Debit Cash $1,176 ($1,200 - $24 discount), Credit Accounts Receivable $1,200, Debit Sales Discount $24.When determining how much help is needed to write the business plan an entrepreneur should conduct a self-assessment.
In this self-assessment which skill set would not be considered?
Select one:
a. product design
b. organizing
c. venture capital
d. people management
Answer:
The correct answer is letter "C": venture capital.
Explanation:
While determining a business plan individually, managers must portrait all the situations in which the business will be handled, since the beginning until the company is up and running. Managers must consider what product or service will be offered, what the production process will be and how it is going to be organized. Besides, what kind of labor hand will be necessary according to the business. If accurate, the business plan will be put into practice.
The process of investing itself is not necessary at this stage, so the venture capital is not going to be needed yet when only making the business plan.
Company utilizes the LIFO retail inventory method. Its cost-to-retail percentage is 60% based on beginning inventory and 64% based on current-period purchases. The company determined that during the current period a new layer was added with retail value of $50,000. The new layer at cost should be_________.
Answer:
new layer at cost = $32000
Explanation:
given data
cost-to-retail percentage
beginning inventory = 60%
current period purchases = $50,000
retail value = $50,000
solution
we get her new layer at cost that should be here as
new layer at cost = retail value × current period purchases ......................1
put here value ans we will get
new layer at cost = $50,000 × 64%
new layer at cost = $32000
Year 1 Year 2 Amounts billed to clients for services rendered $ 182,000 $ 232,000 Cash collected from clients 154,000 184,000 Cash disbursements Salaries paid to employees for services rendered during the year 84,000 94,000 Utilities 27,000 34,000 Purchase of insurance policy 58,200 0 In addition, you learn that the company incurred utility costs of $32,000 in year 1, that there were no liabilities at the end of year 2, no anticipated bad debts on receivables, and that the insurance policy covers a three-year period.
Required:
1. & 3. Calculate the net operating cash flow for years 1 and 2 and determine the amount of receivables from clients that the company would show in its year 1 and year 2 balance sheets prepared according to the accrual accounting model.
2. Prepare an income statement for each year according to the accrual accounting model.
Answer:
Explanation:
Year 1:
Cash collected from clients $154,000
Salaries paid to employees for services rendered during the year $27,000
Utilities $84,000
Purchase of insurance policy $58,200
So, in order to find net cash flow, $(154000-27000-84000-58200)=-15200
Year 2:
Cash collected from clients $184,000
Salaries paid 34000
Utilities paid 94000
Insurance paid is 0
So, net cash flow $184000-$(34000+94000)=$56000
Year1 paid 27000 in salaries, accrued =32000
So still 5000 has to be paid in year 2
Year 2 paid 34000 ⇒ so accrued is 29000
Insurance accrued for each year is 58200/3=19400
Income statement for year 1 and 2
year1 year2
Revenue:
Income from services 182000 232000
Expense
Salary 84000 94000
Utilities 32000 29000
Insurance 19400 19400
Net income 46600 89600
Answer:
i. operating income for year 1 = -$15200 and year 2 = $56000
ii. income statement for year 1 =$47000 and year 2 = $89600
Explanation:
operating income shows the financial performance of a business or company. it is the difference between total operating income and total operating expenses. Base on the financial information above, the operating income for year 1 and year 2 can be calculated as:
OPERATING INCOME FOR YEAR 1 AND YEAR 2
year 1 year 2
$ $
Revenue(cash received from clients 154000 184000
less operating expenses:
salaries paid 84000 94000
utilities 27000 34000
purchased insurance policy 58200 0
net operating income -15200 56000
ii. INCOME STATEMENT FOR YEAR 1 AND YEAR 2
year 1 year 2
$ $
Revenue from service 182000 232000
less total expenses:
salaries 84000 94000
utilities 32000 29000
insurance 19400 19400
net income 46600 89600
NOTE: utility cost incurred in year 1 was $32000 but utility actually paid for in year 1 is $27000 which means there is an accrued utility of $5000. in income statement, the 5000 accrued utilities is added to year 1 utilities of 27000 to make up the 32000 and this 5000 accrued utilities is deducted from year 2 utilities of 34000 to arrive the 29000 used in income statements.
Carson Morris worked two separate jobs for Horwath Company during the week. Job A consisted of 36 hours at $16.00 per hour; Job B entailed 14 hours at $17.50 per hour.
Determine his gross pay for that week if the employer uses the average rate basis for the overtime pay
Answer:
$903.10
Explanation:
Carson's average rate basis for the week is given by the weighted average of each rate by the number of hours worked:
[tex]R = \frac{16.00*36+17.50*14}{36+14}\\R=\$16.42[/tex]
When considering overtime pay, every hour worked over 40 weekly hours must be paid at a rate of 1.5 the normal rate. Since he worked 50 total hours, he should get 10 hours of overtime. His gross pay for that week is:
[tex]P=40*16.42+(1.5*10*16.42)\\P=\$903.10[/tex]
Carson's gross pay for that week is $903.10.
It is easier to implement, back up, and recover keys in a:
a. Centralized infrastructure
b. Decentralized infrastructure
c. Hybrid infrastructure
d. Peer-to-peer infrastructure
Answer:
a. Centralized infrastructure
Explanation:
The advantage of using a centralized infrastructure for key generation it is easier to implement, back up, and recover keys
A product that is very labor intensive assembled at Boyds Aero Structure in Memphis has an average labor cost of $20/hr.
Overhead expenses are charged at 100% of labor at this company
Time for the very first unit is 10 hours
Time for the fourth unit is 8.1 hours
The learning curve percentage for this operation is
A. 90%
B. 85%
C. 90%
D. 95%
Answer:
correct answer for learning curve percentage is A. 90%
Explanation:
given data
average labor cost = $20/hr
Time 1st unit = 10 hours
Time 4th unit = 8.1 hours
solution
we apply here formula for learning curve that is
Time (x) units = Time 1st unit × [tex]x^{\frac{ln\ leaning\ rate }{ln\ 2}}[/tex]
so
time 4th unit = Hours 1st unit × [tex]4^{\frac{ln\ leaning\ rate }{ln\ 2}}[/tex]
8.1 = 10 × [tex]4^{\frac{ln\ leaning\ rate }{ln\ 2}}[/tex]
ln 0.81 = [tex]{\frac{ln\ leaning\ rate }{ln\ 2}}[/tex] × ln 4
solve it we get
learning rate = 90%
so correct answer is A. 90%
The learning curve percentage for this operation is approximately 9.16%.
The learning curve percentage for a specific operation represents the rate at which the labor hours required to produce a unit decrease as more units are produced. The learning curve is typically expressed as a percentage reduction in labor hours per unit. In this case, we have two data points:
1. Time for the very first unit is 10 hours.
2. Time for the fourth unit is 8.1 hours.
We can use these data points to calculate the learning curve percentage using the following formula:
Learning Curve Percentage = 100 - (Log(Time for n) / Log(Time for 1)) * 100
Where:
- Time for n is the time required for the nth unit.
- Time for 1 is the time required for the first unit.
In our case:
- Time for the fourth unit (Time for n) is 8.1 hours.
- Time for the very first unit (Time for 1) is 10 hours.
Let's calculate the learning curve percentage:
Learning Curve Percentage = 100 - (Log(8.1) / Log(10)) * 100
Learning Curve Percentage ≈ 100 - (0.9084 / 1) * 100
Learning Curve Percentage ≈ 100 - 90.84
Learning Curve Percentage ≈ 9.16%
So, the learning curve percentage for this operation is approximately 9.16%. Therefore, none of the options A, B, C, or D provided in the question is correct. The correct learning curve percentage is approximately 9.16%.
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Explain how productivity, economic growth, and future standards of living are influenced by investment in factories, machinery, new
technology, and the health, education, and training of people.
Answer:
There is a direct relation of the productivity, economic growth, and future standards of living with the investment in factories, machinery, new technology, and the health, education, and training of people.
Explanation:
Relation with the investment in factories, machinery, new technologyIf there is larger investment in factories, machinery and new technology (fixed assets investing) then there will be more production which will require more labour. With more production, there will be more consumption thereby. The profits of the enterprises will increase and hence more taxes will be paid to the government, labour income in the economy will rise and hence there will be more consumption thereby. More taxes to the government will imply more public spending by the government.
So, saying all of that productivity, economic growth, and future standards of living will be in a much better place with the increase in fixed assets investing and vice-versa.
2. Relation with the investment in health, education, and training of people
With the increased investment in health, education and training, people would be able to work more and better. Thereby, implying higher incomes and productivity leading to more economic growth and ultimately better future standards of living.
What is the most important difference between a corporation and all other organizational forms?
Answer:
Separate legal entity and taxation process
Explanation:
In a corporation, unlike in other forms of business, the owners and business are treated separately under the law. This principle is referred to as separate legal entity concept.
So for any contracts or deals entered into by a corporation, the owners cannot be held personally liable or asked to make good the losses incurred due to entering into those contracts unless of course if owners acted with mala fide intentions to earn personal profits. In short, owners personal assets cannot be taken away.
Secondly, the taxation slab applicable to corporations is also different in the sense corporations pay taxes on dividend paid. Secondly, when such dividend forms part of the revenue of shareholders, tax is again paid on that dividend income, this time by the shareholder. So in a way, shareholders get taxed twice, since in the first case, the company paying dividend recovers the tax on dividend paid from shareholders. This is referred to double taxation.
The key difference is limited liability in corporations, protecting shareholders from personal debt risks. Corporations also facilitate capital raising and have perpetual existence, distinguishing them from other organizational forms.
The most important difference between a corporation and other organizational forms is limited liability. In a corporation, shareholders are not personally liable for the company's debts; their financial risk is limited to their investment in shares.
This contrasts with sole proprietorships and partnerships, where owners may be personally liable for business debts, putting their personal assets at risk. Additionally, corporations can raise capital more easily through the issuance of stock, which allows for potential growth and expansion.
Corporations also have perpetual existence, meaning they can continue indefinitely, regardless of changes in ownership. These features make corporations an attractive option for many entrepreneurs, offering a unique balance of risk and opportunity compared to other organizational structures.
Suppose you bought 200 shares of stock at an initial price of $52 per share. The stock paid a dividend of $0.44 per share during the following year, and the share price at the end of the year was $36. What is the percentage capital gains yield
Answer:
We can find the capital gains yield from the following formula:
Capital Gains Yield = Increase or decrease in the share price divided by Original cost of the shares when purchased
By putting values
Capital Gains Yield = ($52 - $36)/$52 = -30.7%
Explanation:
We can see that there is a decrease in the share price and this is also evident form the capital gains yield formula.
9. Assume that you just won $35 million in the Florida lottery, and hence the state will pay you 20 annual payments of $1.75 million each beginning immediately. If the rate of return on securities of similar risk to the lottery earning (e.g, the rate on 20 year US Treasury bonds) is 6 percent, what is the present value of your winning
The present value of your $35 million lottery winnings, paid out over 20 years with a 6% annual rate of return, is approximately $20.91 million.
Explanation:The question is asking for the present value of your $35 million lottery winnings given a 6% annual return on investment, which will be paid out in 20 annual payments of $1.75 million each. The formula we're going to use is the formula for the present value of an annuity: PV = PMT * [(1-(1+r)^-n)/r]. In this case, PMT equals $1.75 million, r represents the return rate which is 0.06, and n is the number of years, which is 20.
Let's plug these values into the formula: PV = 1.75 * [(1 - (1+0.06)^-20) / 0.06]. After calculating, we find that the present value of this annuity is approximately $20.91 million.
This means that if you were to invest an amount of $20.91 million in securities with a similar risk profile as the lottery, at an interest rate of 6%, you would receive the same amount of money over the 20 year period as your lottery winnings.
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The following chart describes opportunities and challenges in the external environments that surround businesses. Which of the following statements best characterize and fit in the empty cells?
Answer:
Identity theft is a challenge in the technological environment of businesses, while the desire for green living presents opportunities for new businesses in the global environment.
Explanation:
Database present cannot be a challenge in the context of the global environment. Therefore, it is incorrect.
E-commerce, by no means, is a costly technology. It is a cost-effective technology. Therefore, it is also incorrect.
Identify theft is a challenge but war and terrorism cannot satisfy the global environment. So, it is wrong.
Identify theft is a challenge while green living presents opportunities for new businesses in the global environment. Therefore, it is the correct option.
An Investment has the following cash flow series where interest is 8 percent.
End of Year---> 0,1,3,4,5,6,7,8
Cash Flow--> $300, $300, $600, -$500, -$300, $0, $800, $700, $600
A) Determine the present worth of the series.
B) Determine the future worth of the series at the end of year 8.
C) Find the worth of the series at the end of year 2.
Please show work. Not a chart from excell.
Answer:
Present value: 1711.49
At the end of year two: 1,273.92
At the end of the 8th year: 3167.86
Explanation:
We will use the value of present value of a lump sum on each cash flow, then add them all together for the present value.
Example for 6th Year
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 800.00
time 6.00
rate 0.08000
[tex]\frac{800}{(1 + 0.08)^{6} } = PV[/tex]
PV 504.1357
Year // Cashflow // Discounted cash flow
0 300 300
1 300 277.78
2 600 514.40
3 -500 -396.92
4 -300 -220.51
5 0 0
6 800 504.14
7 700 408.44
8 600 324.16
1711.49
For future value, we will adjust using the future value of a lump sum:
Again, using the 6th year as example:
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 800.00
time 2.00 (it capitalize trought 7th and 8th years)
rate 0.08000
[tex]800 \: (1+ 0.08)^{2} = Amount[/tex]
Amount 933.12
Year // Cashflow // Future value
0 300 555.28
1 300 514.15
2 600 952.12
3 -500 -734.66
4 -300 -408.15
5 0 0
6 800 933.12
7 700 756
8 600 600
3167.86
At the end of 2nd year:
Year // Cashflow // Future value
0 300 349.92
1 300 324
2 600 600
Total 1,273.92
The present worth, future worth, and end of year 2 worth of the cash flow series are calculated by using time value of money principles such as discounting and compounding, utilizing the relevant interest rate to adjust cash flows to the desired year.
Explanation:The subject of the question is the calculation of the present and future worth of a cash flow series. The financial concept of time value of money is used, which involves discounting future cash flow to the present or compounding it to the future. The formula to calculate present worth is PV = FV / (1 + r)n, where PV is the present value, FV is the future value, r is the interest rate, and n is the number of years. Similarly, to calculate future worth, the formula is FV = PV * (1 + r)n.
A) The present worth of the series is calculated interesting each cash flow back to year zero, summing them up.
B) The future worth is calculated by compounding each cash flow to the end of year 8, then summing them.
C) The worth of the series at the end of year 2 is calculated by discounting cash flows after year 2 back to year 2, and compounding cash flows before year 2 up to year 2, then summing.
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Vang Corp.'s stock price at the end of last year was $38 and its earnings per share for the year were $2.30. What was its P/E ratio? Select the correct answer. a. 16.52 b. 16.82 c. 15.92 d. 16.22 e. 15.62
Answer:
a. 16.52
Explanation:
The P/E ration is the ratio of an entity's share price to the earnings per share. It is a measure used to measure the accuracy of the valuation of one company's share with another.
Given;
Share price = $38
Earnings per share = $2.30
P/E ratio = share price/earnings per share
= $38/$2.30
= 16.52
Option a.
West Corp. issued 25-year bonds two years ago at a coupon rate of 5.3 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
4.93%
Explanation:
We use the Rate formula shown in the spreadsheet for this question
The time period is represented in the NPER.
Provided that,
Present value = $1,000 × 105% = $1,050
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 5.3% ÷ 2 = $26.5
NPER = 25 years - 2 years = 23 years × 2 = 46 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this, the yield to maturity is 4.93%
Final answer:
To calculate the Yield to Maturity (YTM) of 25-year bonds issued by West Corp. with a coupon rate of 5.3%, and currently selling for 105% of par value, the process involves equating the bond's future cash flows to its current price through an iterative method, typically using financial calculators or software due to the complexity of the formula.
Explanation:
The question asks to calculate the Yield to Maturity (YTM) for West Corp.'s 25-year bonds, issued two years ago with a semiannual coupon rate of 5.3%, which currently sells for 105% of par value. To solve this, we'll need to conceptualize the bond's cash flows:
Coupon payments: These are semiannual and calculated as (5.3% of $1000) / 2 = $26.50 per period.Maturity value: The bond will pay $1000 at maturity.Current Bond Price: 105% of par value means the bond sells for $1050 now.Remaining periods: Since the bond was issued 2 years ago and it's a 25-year bond, there are 23 years left, or 46 periods (since payments are semiannual).To find the YTM, we need to input these figures into a financial calculator or an appropriate financial formula for YTM, which is typically solved through an iterative process or using financial software as it involves finding the interest rate that equates the present value of payments received from the bond to the current price of the bond.
Given the constraints of providing a step-by-step detailed solution without intermediate calculations or use of financial calculator outputs, it's key to understand the YTM conceptually as the interest rate that makes the net present value (NPV) of all bond's cash flows (both coupon payments and the repayment of the par value at maturity) equal to the bond's current price.
Measuring a company's business transactions and communicating those measurements for decision-making purposes in the form of financial statements are two key functions of financial accounting. The full set of procedures used to accomplish both of these key functions is called the:
Answer:
Accounting cycle.
Explanation:
The accounting cycle can be defined as the process that an organization identifies, analyzes and records its accounting events.
This process occurs from the moment a financial transaction is carried out, and is concluded as soon as a certain transaction is included in the company's financial statements.
Every financial statement of a company must present some characteristics, they must be based on compliance and precision, for this there is a set of rules called the accounting cycle.
From a material perspective, which of the following contribute most to overall product cycle time?MRO WIP Finished SelectionsRaw
Answer: it's
B- WIP
E- RAW
Abby received requests from three families to babysit a toddler for four hours on Friday night. She can only babysit for one of the three families. The Fleming family offered her $20, the Gilbert family offered her $30, and the Lewis family offered her $40. If Abby chooses to babysit for the Lewis family her opportunity cost of this decision is:a. $50.b. $30.c. $20.d. $40.
Answer:
The correct answer is letter "B": $30.
Explanation:
Opportunity cost is the return of an option taken over the return of the option forgone. It represents what is obtained with the choice taken in terms of the choice dismissed. Opportunity cost is also defined as the best next alternative left behind after choosing another.
In Abby's case, she chose to babysit The Lewis' toddler who will pay her $40. The best next alternative was The Gilbert's who offered $30. Thus, those $30 represent Abby's opportunity cost of babysitting The Lewis' child.
Jessie is considering breaking up with Taylor. Taylor is becoming withdrawn and sullen, and their relationship is deteriorating. When her friends encourage her to make the break, Jessie replies, "Taylor's a lot of work right now—more than I'm getting out of the relationship. But we've been together for five years, and we have a lot of really good history. It'd be a shame to throw those good years away. I'm just going to have to stick it out." What type of analysis is Jessie likely using to arrive at her decision? Group of answer choices Market analysis. Value analysis. Marginal analysis. Cost-benefit analysis.
Answer:
The correct answer is letter "C": Cost-benefit analysis.
Explanation:
The cost-benefit analysis is a method used to make business and economic-based decisions. The cost-benefit analysis can be used to judge a single option or compare two or more options to select the optimal alternative. The cost-benefit analysis consists of estimating all the costs of a particular decision then comparing them to the estimated benefit of that decision.
Jessie is using the cost-benefit analysis because she is determining the cost of what she could lose in front of the benefit of what she still could get with her relationship with Taylor based on what they have already experienced.