Answer:
Aug 1 Dr Inventory $8,000
Cr Accounts Payable - Aaron $8,000
Aug 5 Dr Accounts Receivable - Baird Corp $5,600
Cr Sales $5,600
Aug 5 Dr Cost of Good Sold $4,000
Cr Inventory $4,000
Aug 8 Dr Inventory $7,000
Cr Accounts Payable - Walter Corporation $7,000
Aug 9 Dr Freight - Out $210
Cr Cash $210
Aug 10 Dr Sales Return and Allowance $1,000
Cr Accounts Receivable - Baird Corp $1,000
Aug 10 Dr Inventory $500
Cr Cost of Good Sold $500
Aug 12 Dr Accounts Payable - Walter Corporation $700
Cr Inventory $700
Aug 14 Dr Accounts Payable - Aaron $500
Cr Cash $500
Aug 15 Dr Cash $4,508
[(100%-2%)×$4,600]
Dr Discount on Sales $92
[($5,600-$1,000) x2%]
Cr Accounts Receivable - Baird Corp $4,600
($5,600-$1,000)
Aug 18 Dr Accounts Payable - Walter Corporation $6,300
($7,000-$700)
Cr Discount on Purchase $63
[($7,000-$700) x1%]
Cr Cash $6,237
[(100%-1%)×$6,300]
Aug 19 Dr Accounts Receivable - Tux Co $4,800
Cr Sales $4,800
Aug 19 Dr Cost of Good Sold $2,400
Cr Inventory $2,400
Aug 22 Dr Sales Return and Allowance $800
Cr Accounts Receivable - Tux Co $800
Aug 29 Dr Cash $4,000
Cr Accounts Receivable - Tux Co $4,000
($4,800-$800)
Aug 30 Dr Accounts Payable - Aaron $7,500
Cr Cash $7,500
($8,000-$500)
Explanation:
Preparation of Journal entries
Aug 1 Dr Inventory $8,000
Cr Accounts Payable - Aaron $8,000
(To record purchase of inventory)
Aug 5 Dr Accounts Receivable - Baird Corp $5,600
Cr Sales $5,600
(To record sale of merchandise)
Aug 5 Dr Cost of Good Sold $4,000
Cr Inventory $4,000
(To record cost of good sold)
Aug 8 Dr Inventory $7,000
Cr Accounts Payable - Walter Corporation $7,000
(To record purchase of inventory)
Aug 9 Dr Freight - Out $210
Cr Cash $210
(To record freight outward expense)
Aug 10 Dr Sales Return and Allowance $1,000
Cr Accounts Receivable - Baird Corp $1,000
(To record sales return)
Aug 10 Dr Inventory $500
Cr Cost of Good Sold $500
(To record restore the inventory )
Aug 12 Dr Accounts Payable - Walter Corporation $700
Cr Inventory $700
(To record price reduction)
Aug 14 Dr Accounts Payable - Aaron $500
Cr Cash $500
(To record payment of freight charges on behalf of Aaron)
Aug 15 Dr Cash $4,508
[(100%-2%)×$4,600]
Dr Discount on Sales $92
[($5,600-$1,000) x2%]
Cr Accounts Receivable - Baird Corp $4,600
($5,600-$1,000)
(To record amount received from Baird Corp)
Aug 18 Dr Accounts Payable - Walter Corporation $6,300
($7,000-$700)
Cr Discount on Purchase $63
[($7,000-$700) x1%]
Cr Cash $6,237
[(100%-1%)×$6,300]
(To record payment made to Walter Corporation)
Aug 19 Dr Accounts Receivable - Tux Co $4,800
Cr Sales $4,800
(To record sale of merchandise)
Aug 19 Dr Cost of Good Sold $2,400
Cr Inventory $2,400
(To record cost of good sold)
Aug 22 Dr Sales Return and Allowance $800
Cr Accounts Receivable - Tux Co $800
(To record price reduction for sales made to Tux Co)
Aug 29 Dr Cash $4,000
Cr Accounts Receivable - Tux Co $4,000
($4,800-$800)
(To record payment received from Tux Co)
Aug 30 Dr Accounts Payable - Aaron $7,500
Cr Cash $7,500
($8,000-$500)
(To record payment made to Aaron)
Question 3
A situation where the level of output scale and average costs are all rising is called
Answer: Decreasing return to scale
Explanation:
Decreasing return to scale is a situation where the level of output, scale and average costs are all rising.
Decreasing return to scale happens when there's a rise in inputs that are involved in production process such as labour and capital which brings about a increase in output as well even though it's lesser.
At the end of May, the unadjusted trial balance of Barker Industries included the following accounts:
Debit Credit
Sales (75% represent credit sales) $400,000
Accounts Receivable $240,000
Allowance For Doubtful Accounts 1,800
Barker Industries uses the percentage of sales approach in estimating uncollectible accounts. The uncollectible accounts expense is estimated to be 3% of credit sales The net realizable value of Barker's accounts receivable in the May 31 balance sheet is:_____.
a. $250,800.b. $229,200.c. $236,400.d. $226,200.
Answer:
b. $229,200
Explanation:
Computation for the net realizable value of Barker's accounts receivable in the May 31 balance sheet
First step is to find the credit sales
Credit sales=.75(400,000)
Credit sales=300,000
Second step is to find the 3% of 300,000
3% of 300,000=9,000
Third step is to add credit sales amount to Allowance For Doubtful Accounts
9,000 +1,800
=$10,800
Last step is to find the net realizable value
Net realizable value=Accounts Receivable $240,000-$10,800
Net realizable value=$229,200
Therefore the net realizable value of Barker's accounts receivable in the May 31 balance sheet is $229,200
All three of the $5000 billion GDP figures (Production, Income and Spending) are in ____________ dollars.
Answer: D inflation adjusted, real
Explanation:
The GDP calculation acquired in the flow chart of $5,000 billion were all done after adjusting for inflation which means that they were in real dollars.
Inflation adjusted GDP enables more effective comparison between different periods as inflation tends to inflate the prices of goods and services and can make one think that the economy has grown more than it actually has.
When the value of GDP is inflation adjusted, it can then be seen just how much the economy improved or shrank.
Smith and Jones start a business to build custom bicycles. Smith invests personal funds of $100,000 and Jones invests $70,000. Grandma Smith loans the company $24,000 with the provision it is to be paid back in 12 equal monthly payments plus 1.5% monthly interest on her original contribution. Smith and Jones agreed that ownership would be proportional to their equity investments. In addition, they borrow $40,000 from the bank at interest of 1.5% per month payable monthly. (They do not have to pay back the principal for five years, so ignore it.) They buy $120,000 worth of parts. They use $80,000 of those parts in the first month. They pay factory workers a total of $15,000 for the first month. They pay rent of $4,000 for the month for a factory. They each (not Grandma) draw salaries of $4,000 per month. They sell the resulting bicycles for $150,000. a. Prepare a balance sheet for day zero, that is, store is ready, people hired, parts on hand, money collected from bank, Grandma, Smith, and Jones. b. Prepare an income statement for the first month. c. Prepare a balance sheet for the last day of the first month. d. What is the percent ownership by Smith, Jones, and Grandma on the first day of the month.
Answer:
See answers below.
Explanation:
Question a
The balance sheet for day 0 will have the following balances.
Asset side
Parts $120,000
Cash $114,000
Total assets $234,000
Liabilities and Equity side
Capital $170,000
Short term loan $24,000
Long term loan $40,000
Total liabilities $234,000
Question b
The income statement for the first month will have the following balances.
Revenue (credit) side
Sales $150,000
Expenses (debit) side
Parts used $80,000
wages to factory workers $15,000
rent $4,000
salary $8,000
Interest on grandma's loan $360
Interest on bank loan $600.
Profit for the month $42,040.
Question c
The balance sheet for the last day of the month will have the following balances.
Asset side
Parts $40,000
Cash $234,040
Total assets $274,040
Liabilities and Equity side
Capital $170,000
Profit (added to reserves) $42,040
Short term loan $22,000
Long term loan $40,000
Total liabilities $274,040
Question d
Grandma is not an equity owner since she will be repaid after 1 year.
Therefore, percentage ownership by Smith, Jones and Grandma will be as follows in the ratio of their equity contribution.
Total capital contributed = 100,000 + 70,000 = 170,000
Smith percentage ownership = [tex]\frac{100,000}{170,000}[/tex] = 58.8%
Jones percentage ownership = [tex]\frac{70,000}{170,000}[/tex] = 41.2%
Grandma's ownership = 0% (no equity contribution).
Cameroon Corp. manufactures and sells electric staplers for $16 each. If 10,000 units were sold in December, and management forecasts 4% growth in sales each month, the number of units of electric stapler sales budgeted for March should be:_______
Answer:
= $173,056
Explanation:
The computation of the number of units of electric stapler sales budgeted for March is shown below:-
February = 10,000 + (4% × 10,000)
= 10,400
March = 10,400 + (4% × 10,400)
= 10816
and finally
The Budget sale for stapler for the month of March = 10,816 × 16
= $173,056
Iverson Company purchased a delivery truck for $45,000 on January 1, 2018. The truck was assigned an estimated useful life of 5 years and has a residual value of $10,000. Compute depreciation expense using the double-declining-balance method for the years 2018 and 2019.
Answer:
Results are below.
Explanation:
Giving the following information:
Purchase price= $45,000
Useful life= 5 years
Salvage value= $10,000
To calculate the annual depreciation under the double-declining balance method, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
2018:
Annual depreciation= 2[(45,000 - 10,000) / 5]
Annual depreciation= 14,000
2019:
Annual depreciation= 2*[(35,000 - 14,000)/5]
Annual depreciation= $8,400
The depreciation expense using the double-declining-balance method in 2018 is $18,000 and in 2019 is $10,800.
The double-declining balance method is an accelerated depreciation method when compared with other deprecation methods.
Depreciation expense = (2 x cost of the asset) / useful life of the asset
Deprecation expense in 2018
(2 x $45,000) / 5 = $18,000
Deprecation expense in 2019
Book value in 2019 = cost of the asset - deprecation expense
$45,000 - $18,000 = $27,000
Deprecation expense = (2 x $27,000) / 5 = $10,800
A similar question was answered here: https://brainly.com/question/16502007?referrer=searchResults
If merchandise is sold on account to a customer for $10,000, terms FOB shipping point, 1/10, n/30, what is the amount to be recorded as an accounts receivable on the date of the sale?
a. $10,000
b. $10,050
c. $9,950
d. none of the above
Answer: a. $10,000
Explanation:
The amount to be recorded as an Accounts Receivable on the date of the sale is the actual amount that the merchandise was sold for which is $10,000.
The discount of 1% if paid within 10 days will only apply if the customer pays within that time and if this is done, the discount will be deducted from the amount paid to the company and debited to the Sales discount account.
You are considering how to invest part of your retirement savings.You have decided to put $400,000 into three stocks: 61% of the money in GoldFinger (currently $28/share), 24% of the money in Moosehead (currently $73/share), and the remainder in Venture Associates (currently $9/share). Suppose GoldFinger stock goes up to $43/share, Moosehead stock drops to $67/share, and Venture Associates stock drops to $6 per share. a. What is the new value of the portfolio? b. What return did the portfolio earn? c. If you don't buy or sell any shares after the price change, what are your new portfolio weights?
Answer:
a. Number of shares of GoldFinger = 61%*400000/24
Number of shares of GoldFinger = 10166.6667
Number of shares of Moosehead = 24%*400,000/73
Number of shares of Moosehead = 1315.0685
Number of shares of Venture Associates = (1 - 61% - 24%) * 400,000/9
Number of shares of Venture Associates = 15% * 400,000/9
Number of shares of Venture Associates = 6666.6667
New value of the portfolio = 10166.6667*$43 + 1315.0685*$67 + 6666.6667*$6
New value of the portfolio = $437,166.6681 + $88,109.5895 + $40000.0002
New value of the portfolio = $565,276.2578
b. The return that the portfolio earn is = ($565,276.2578 - $400,000) / $400,000 = $165,276.2578 / $400,000 = 0.4131906445 = 41.32%
c. Weight of Goldfinger is now = (10166.6667*$43) / $565,276.2578
= $437166.6681 / $565,276.2578
= 0.7734
= 77.34%
Weight of Moosehead is now = (1315.0685*$67) / $565,276.2578
= $88109.5895 / $565,276.2578
= 0.15587
= 15.59%
Weight of Venture is now = 100% - 77.34 - 15.59%
= 7.07%
1. At December 1, 2022, Swifty Corporation Accounts Receivable balance was $12770. During December, Swifty had credit sales of $34200 and collected accounts receivable of $27360. At December 31, 2022, the Accounts Receivable balance is:_______.
a. $19610 credit.
b. $1 debit.
c. $46970 debit.
d. $19610 debit.
2. On July 7, 2017, Sheffield Corp. received cash $1480 for services rendered. The entry to record this transaction will include:_____.
Answer:
1.
d. $19610 debit
Option D is the correct answer.
2.
Cash 1480 Debit
Service Revenue 1480 Credit
Explanation:
1.
The balance in the accounts receivable account can be calculated as follows,
Closing Balance = Opening balance + Credit sales - Cash Received from Accounts Receivable
Closing Balance of Accounts receivable at 31 December 2022 will be,
Closing Balance = 12770 + 34200 - 27360
Closing Balance = $19610 debit
The balance is debit because accounts receivables is an asset and the normal balance for asset account is debit.
2.
The entry to record the transaction is made in the answer part.
The transactions listed below are typical of those involving New Books Inc. and Readers’ Corner. New Books is a wholesale merchandiser and Readers’ Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers’ Corner are made with terms 3/10, n/30, and that the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August 31.
a. New Books sold merchandise to Readers’ Corner at a selling price of $625,000. The merchandise had cost New Books $445,000.
b. Two days later, Readers’ Corner complained to New Books that some of the merchandise differed from what Readers’ Corner had ordered. New Books agreed to give an allowance of $11,000 to Readers’ Corner.
c. Just three days later, Readers’ Corner paid New Books, which settled all amounts owed.
Required:
1. Indicate the effect (direction and amount) of each transaction on the Inventory balance of Readers' Corner. (Enter all amounts as positive values.)
2. Prepare the journal entries that Readers’ Corner would record and show any computations. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
Readers' Corner
1. Effect of each transaction on the Inventory Balance:
a. $625,000 Purchase: Inventory balance is increased
b. $11,000 Allowance: Inventory balance is decreased.
c. $614,000 Payment: Inventory balance is not affected.
2.
a. Debit Inventory $625,000
Credit Accounts Payable (New Books) $625,000
To record the purchase of new books on account.
b. Debit Accounts Payable (New Books) $11,000
Credit Inventory $11,000
To record the allowance received from New Books.
c. Debit Accounts Payable (New Books) $614,000
Credit Cash Account $614,000
To record the payment on account.
Explanation:
Readers' Corner records its transactions with New Books Inc. by initially using the journal. The entries in the journal identify the accounts involved in each transaction. During the recording, the accounts to be debited and the ones to be credited in the general ledger are identified and recorded accordingly.
Imagine that Scott has asked your opinion about whether Barcelona should try to reduce involuntary turnover. What is an advantage of the current practice of firing a large percentage of employees?
a. Barcelona can replace less effective performers with better performers.
b. Barcelona can develop a monoculture in which all employees behave similarly.
c. Barcelona saves money on training costs.
d. Barcelona can gain valuable feedback about deficiencies in the company by conducting exit interviews.
Answer:
a. Barcelona can replace less effective performers with better performers.
Explanation:
As per the conversation i.e. you cant give the training to the people for enthusiastic them as you want to hire them also it is a transient business
So here you need to fire the old employees who are less effective and hire new employees who are enthusiastic that ultimately benefits the company
Therefore option a is correct
and the same is to be considered
ere are simplified financial statements for Watervan Corporation:
INCOME STATEMENT
(Figures in $ millions)
Net sales $
888.00
Cost of goods sold
748.00
Depreciation
38.00
Earnings before interest and taxes (EBIT) $
102.00
Interest expense
19.00
Income before tax $
83.00
Taxes
17.43
Net income $
65.57
BALANCE SHEET
(Figures in $ millions)
End of Year Start of Year
Assets
Current assets $
376
$
326
Long-term assets
272
229
Total assets $
648
$
555
Liabilities and shareholders’ equity
Current liabilities $
201
$
164
Long-term debt
115
128
Shareholders’ equity
332
263
Total liabilities and shareholders’ equity $
648
$
555
The company’s cost of capital is 8.5%.
a. Calculate Watervan’s economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
b. What is the company’s return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
c. What is its return on equity? (Use start-of-year rather than average equity.) (Enter your answer as a percent rounded to 2 decimal places.)
d. Is the company creating value for its shareholders?
Answer:
income statements okay
Explanation:kokay
Budgets are prepared in which of the following orders? Group of answer choices sales budget, production budget, direct materials purchases budget sales budget, cash budget, production budget production budget, cost of goods sold budget, direct labor budget production budget, sales budget, direct labor budget
Answer:
Sales Budget,
Production Budget,
Direct Materials Purchases Budget
Explanation:
The budgets are prepared so that the company could get to know how much revenue earned and the expenses to be incurred during a particular period of time. It gives an idea of how much would be earned and how much would be incurred
Here, in the following orders, the budgets could be prepared
Sales Budget,
Production Budget,
Direct Materials Purchases Budget
A company, which is currently operating at full capacity, has sales of $2,480, current assets of $820, current liabilities of $510, net fixed assets of $1,670, and a 5 percent profit margin. The company has no long-term debt and does not plan on acquiring any. The company does not pay any dividends. Sales are expected to increase by 10 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year
Answer:
$61.60
Explanation:
Equity funding need = Projected assets - Projected liabilities - Current equity - Projected increase in retained earnings
Equity funding need = $2,739 - $561 - $1,980 - $136.40
Equity funding need = $61.60
Workings
Projected assets = (Current assets + Fixed assets) * 1.10 = 820+1,670 * 1.10 = $2,739
Projected liabilities = Current liabilities * 1.10 = 510 * 1.10 = $561
Current equity = Current assets + Fixed assets - Current liabilities = 820 + 1,670 - 510 = $1,980
Projected increase in retained earnings = Sales*5% * 1.10 = $2,480*5% * 1.10 = 124*1.10 = $136.40
The following expenditures relating to plant assets were made by Glenn Company during the first 2 months of 2014. (b) Indicate the account title to which each expenditure should be debited.
1. Paid $7,000 of accrued taxes at the time the plant site was acquired. choose an account title
2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit. choose an account title
3. Paid $850 sales taxes on a new delivery truck. choose an account title
4. Paid $21,000 for parking lots and driveways on the new plant site. choose an account title
5. Paid $250 to have the company name and slogan painted on the new delivery truck. choose an account title
6. Paid $8,000 for installation of new factory machinery. choose an account title
7. Paid $900 for a 1-year accident insurance policy on the new delivery truck. choose an account title
8. Paid $75 motor vehicle license fee on the new truck.
Answer with Explanation:
According to International Accounting Standard IAS 16 Property, Plant and Equipment, the cost of the asset acquired must include all the cost necessary to make it ready for its intended use.
This means that the expenditure that is the legal cost or must be very important for making it ready for use must form part of the asset.
The double entry of such transaction is as under:
Dr Non Current Asset XX
Cr Cash or Cash Equivalent Paid or Payables XX
From the above criteria, we can say that following accounts must be debited:
1. Paid $7,000 of accrued taxes at the time the plant site was acquired.
Dr Land-Plant Site $7,000
Cr Accrued Taxes $7,000
2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit.
Dr Factory Machine $200
Cr Cash $200
3. Paid $850 sales taxes on a new delivery truck.
Dr Delievery Truck $850
Cr Sales Tax - Not refundable $850
If the sales tax is refundable while we file tax returns then it must not be included in cost as it is paid for completing formalities of the vendor company.
4. Paid $21,000 for parking lots and driveways on the new plant site.
Dr Land-Plant Site $21,000
Cr Cash $21,000
5. Paid $250 to have the company name and slogan painted on the new delivery truck. choose an account title
Dr Delievery Truck $250
Cr Cash $250
6. Paid $8,000 for installation of new factory machinery.
Dr Factory Machinery $8,000
Cr Cash $8,000
7. Paid $900 for a 1-year accident insurance policy on the new delivery truck.
Dr Prepaid Insurance $900
Cr Cash $900
8. Paid $75 motor vehicle license fee on the new truck.
Dr Lisence Expense $75
Cr Cash $75
It is paid on behalf of an employee but it is 100% business oriented not employee oriented benefit. Hence is classified as a revenue expenditure.
A lawn company intends to use the sales of lawn fertilizer to predict the sales of lawn mower. The store manager estimates a probable six-week lag between fertilizer sales and mower sales. The pertinent data are
Answer:
Period ; Fertilizer ; Sales
1 ; 1.6 ; 10
2; 1.3 ; 8
3; 1.8 ; 11
4; 2.0 ; 12
5; 2.2 ; 12
6; 1.6 ; 9
7; 1.5 ; 8
8; 1.3 ; 7
9; 1.7 ; 10
10; 1.2 ; 6
Explanation:
Correlation is 0.960
R-Squared is 0.921
This is positive correlation which means both variables will move in same direction.
Slope is 6.153
Intercept is -0.649
Regression line will be formed with x intercept as fertilizers and y intercept as Lawn Mowers sold.
Bond Ratings. Companies pay rating agencies such as Moody’s and S&P to rate their bonds, and the costs can be substantial. However, companies are not required to have their bonds rated in the first place; doing so is strictly voluntary. Why so you think they do so?
Answer:
Bond Ratings
Companies employ rating agencies such as Moody's and S&P to rate their bonds despite the substantial costs and their voluntariness because ratings by these agencies add a badge of honor to the bonds. It gives investors some level of assurance that the bonds will be honored at maturity and that the pricing is right, given the company's credit risk.
Explanation:
Credit risk rating agencies assess the credit risk of a company or financial product as formal and credit-worthy benchmarks for investment decisions. While companies pay huge costs to have these ratings conducted by the big three, including Moody's, S&P, and Fitch, the main value goes to the potential investors who require the information to decide whether to invest in the rated companies.
Epiphany is an all-equity firm with an estimated market value of $400,000. The firm sells $275,000 of debt and uses the proceeds to purchase outstanding equity. Compute the weight in equity and the weight in debt after the proposed financing and repurchase of equity. Group of answer choices 0.31, 0.69 0.34, 0.66 0.48, 0.52 0.69, 0.31
Answer:
Epiphany
Weight in equity = 0.31
Weight in debt = 0.69
Explanation:
a) Data and Calculations:
Estimated market value of equity = $400,000
Debts = $275,000
Net equity after debt = $125,000
Weight in equity = $125,000/$400,000 = 0.31
Weight in debt = $275,000/$400,000 = 0.69
b) The weight in equity shows the relationship between the equity and the total capital (equity and debt) in use in Epiphany after the sale of debt and repurchase of outstanding equity.
c) The weight in debt shows the relationship between the debt capital and the total capital (equity and debt) in use in Epiphany after the sale of debt and repurchase of outstanding equity.
On September 15, 2021, Oliver's Mortuary received a $7,200, nine-month note bearing interest at an annual rate of 8% from the estate of Jay Hendrix for services rendered. Oliver's has a December 31 year-end. What adjusting entry will the company record on December 31, 2021
Answer: PLease see answer below
Explanation:
Date Account title and explanation Debit Credit
Dec 31 Interest receivable $168
2021 Interest revenue $168
Calculation
Interest =Principal x time x rate
= 7,200 x 8% x 3.5 /12(15th september to 31st December)
=$168
The ratio of total cash, marketable securities, accounts receivable, and short-term notes to current liabilities is:
Answer:
Acid-test ratio
Explanation:
Acid-test ratio I finance can also be regarded as quick ratio, it gives the measurement of how an organization can utilize her quick asset as well as cash to settle her liabilities at at that current period.
It can be calculated theoretically using this expresion;
Quick ratio= (Current Asset- Inventory)/Current Liabilities
It should be noted that acid-test ratio gives The ratio of total cash, marketable securities, accounts receivable, and short-term notes to current liabilities. It enables to know shot term liquidity of a particular company.
A double-entry accounting system is an accounting system: Multiple Choice That records each transaction twice. That records the effect of each transaction in at least two accounts with equal debits and credits. In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits. That allows total credits to be greater than total debits. That allows total debits to be greater than total credits.
Answer:
That records the effect of each transaction in at least two accounts with equal debits and credits.
Explanation:
A double-entry accounting system is the accounting system in which it shows the impact of each transaction in terms of debit and credit. In this the amount of credit should be equivalent to the amount of credit that means both the amount should be equivalent to each other
hence, the second option is correct and the same is to be considered
Rocky Mountain Bottling Company produces a soft drink that is sold for a dollar. At production and sales of 1,000,000 units, the company pays $700,000 in production costs, half of which are fixed costs. At that volume, general, selling, and administrative costs amount to $320,000, of which $70,000 are fixed costs. What is the amount of contribution margin per unit
Answer:
contribution margin per unit = $0.40
Explanation:
total variable production costs = $350,000
total fixed production costs = $350,000
total variable S&A expenses = $250,000
total fixed S&A expenses = $70,000
total costs = $1,020,000
total fixed costs = $420,000
total variable costs = $600,000
sales price = $1
variable cost per unit = $600,000 / 1,000,000 = $0.60
contribution margin per unit = $1 - $0.60 = $0.40
Flyer Company has provided the following information prior to any year-end bad debt adjustment: Cash sales, $152,000 Credit sales, $452,000 Selling and administrative expenses, $112,000 Sales returns and allowances, $32,000 Gross profit, $492,000 Accounts receivable, $130,000 Sales discounts, $16,000 Allowance for doubtful accounts credit balance, $1,400 Flyer prepares an aging of accounts receivable and the result shows that 3% of accounts receivable is estimated to be uncollectible. How much is bad debt expense
Answer:
$2,500
Explanation:
The computation of bad debt expense is shown below:-
Total Bad Debt = $130,000 × 3%
= $3,900
Balance of allowance for doubtful accounts after Bad debt Expense = Total bad debt - Allowance for doubtful account credit balance
= $3,900 - $1,400
= $2,500
So, we have applied the above formula.
The same is to be considered
Westbank Real Estate, Inc. owns 10 acres of forested land. Westbank wants the land cleared in order to build houses. Westbank emails a signed electronic memorandum to a representative of Hardell Lumber Co. offering to sell the mature trees and rich topsoil to Hardell for lumber and agricultural purposes. The electronic memorandum includes the parties' typed names, the consideration, the price, and a description of the property, lumber, and soil. Hardell replies via email to Westbank that it accepts Westbank's terms, electronically signs the memorandum, and will start removing the trees and soil next month. Before Hardell can begin clearing the land, Westbank changes its mind, wants to keep the land forested, and prevents Hardell from accessing the property claiming no contract has been formed.
2. Does the electronic agreement for the sale of trees and soil fall under the statute of frauds? (YES / NO)
3. Under which category? (CONTRACTS INVOLVING LAND/ CONTRACTS THAT BY THEIR TERMS CANNOT BE PREFORMED IN LESS THAN A YEAR AFTER THE DATE OF AGREEMENT/ A PROMISE TO ANSWER FOR A DEBT OF ANOTHER/ A PROMISE MADE IN CONSIDERATION OF MARRIAGE/ CONTRACTS FOR THE SALE OF GOODS OVER $500)
4. An electronic memorandum (DOES/ DOES NOT) satisfy the writing requirements for the Statute of Frauds.
5. Land is considered to be (REAL PROPERTY/ PERSONAL PROPERTY)
6. The definition of land includes (NO/ SOME/ ALL) physical objects that are permanently attached to the property.
7. Examples of physical objects that constitute land for purposes of the statute of frauds include (BUILDINGS/ FENCES/ TREES/ SOIL/ ALL OF THESE)
8. A written or electronic memorandum evidencing a contract will suffice provided that the writing is signed by (THE PERSON WHO IS ENFORCING THE CONTRACT/ THE PERSON AGAINST WHOM THE CONTRACT IS BEING ENFORCED)
9. Who signed the e-mails? (WESTBANK REAL ESTATE/ HARDELL LUMBER/ BOTH PARTIES)
10. What type of signature must be on an e-mail in order to enforce an electronic record? (A TYPED NAME/ AN OFFICIAL SIGNATURE/ A NOTARIZED SIGNATURE/ AN ENCRYPTED SIGNATURE)
11. Does the electronic memorandum have the parties' typed names? (YES/ NO)
12. Does the electronic memorandum describe the property involved?(YES/ NO)
13. Is it likely a court would find that the electronic memorandum satisfied the statue of frauds? (YES/ NO)
14. As a result, Hardell (WILL/ WILL NOT) likely be able to enforce the contract against Westbank.
Answer:
Westbank Real Estate, Inc. and Hardell Lumber Co.
2. Does the electronic agreement for the sale of trees and soil fall under the statute of frauds? (YES / NO)
3. Under which category? (CONTRACTS INVOLVING LAND/ CONTRACTS THAT BY THEIR TERMS CANNOT BE PERFORMED IN LESS THAN A YEAR AFTER THE DATE OF AGREEMENT/ A PROMISE TO ANSWER FOR A DEBT OF ANOTHER/ A PROMISE MADE IN CONSIDERATION OF MARRIAGE/ CONTRACTS FOR THE SALE OF GOODS OVER $500)
4. An electronic memorandum (DOES/ DOES NOT) satisfy the writing requirements for the Statute of Frauds.
5. Land is considered to be (REAL PROPERTY/ PERSONAL PROPERTY)
6. The definition of land includes (NO/ SOME/ ALL) physical objects that are permanently attached to the property.
7. Examples of physical objects that constitute land for purposes of the statute of frauds include (BUILDINGS/ FENCES/ TREES/ SOIL/ ALL OF THESE)
8. A written or electronic memorandum evidencing a contract will suffice provided that the writing is signed by (THE PERSON WHO IS ENFORCING THE CONTRACT/ THE PERSON AGAINST WHOM THE CONTRACT IS BEING ENFORCED)
9. Who signed the emails? (WESTBANK REAL ESTATE/ HARDELL LUMBER/ BOTH PARTIES)
10. What type of signature must be on an email in order to enforce an electronic record? (A TYPED NAME/ AN OFFICIAL SIGNATURE/ A NOTARIZED SIGNATURE/ AN ENCRYPTED SIGNATURE)
11. Does the electronic memorandum have the parties' typed names? (YES/ NO)
12. Does the electronic memorandum describe the property involved?(YES/ NO)
13. Is it likely a court would find that the electronic memorandum satisfied the statute of frauds? (YES/ NO)
14. As a result, Hardell (WILL/ WILL NOT) likely be able to enforce the contract against Westbank.
Explanation:
The memoranda exchanged between Westbank Real Estate and Hardell Lumber Co provides the evidence of their oral contract. The statute of fraud covers most oral contracts, especially those involving real property or sale of land. It is important to note that land includes all its permanent attachments.
If Tonya purchased 200 decorative pillows at $12 each and sold 75 of the pillows for $20 each, what is the cost of goods sold
Answer:
the cost of goods sold is $1,500
Explanation:
The computation of the cost of goods sold is
= Opening inventory + purchase - ending inventory
= $0 + 200 × $12 - (200 × $12 - 75 × $20)
= $ + $2,400 - ($2,400 - $1,500)
= $2,400 - $900
= $1,500
hence, the cost of goods sold is $1,500
We simply applied the above formula so that the correct value could come
And, the same is to be considered
At the beginning of 2015, Elixir Inc. has the following ledger balances:During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000 and $18,000 has been written off. At the end of the year, company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance in the Allowance for Bad Debts would be ________. Prepare all necessary journal entries.
Answer:
$$7,000
Explanation:
Calculation for the ending balance in the Allowance for Bad Debts
Using this formula
Allowance for Bad Debts Ending balance =
Debts - Write offs + Bad Debt Expense
Let plug in the formula
Allowance for Bad Debts Ending balance= $5,000 - $18,000 + (2.5%*$800,000)
Allowance for Bad Debts Ending balance= $5,000 - $18,000 + $20,000
Allowance for Bad Debts Ending balance = $$7,000
Therefore the ending balance in the Allowance for Bad Debts would be $7,000
Corporation A has the following returns for the past three years: 7 percent, 13 percent, and 10 percent. Assume each year return had the same probability (weights of 1/3 each). Calculate the expected return
Answer:
10.00%
Explanation:
The expected return is the weighted average of all the returns recorded thus far wherein the probability of each return occurring is used as the weight of each return as shown below:
Expected return=sum of (weight* value of return)
Expected return=(7%*1/3)+(13%*1/3)+(10%*1/3)
Expected return=0.023333333 +0.043333333 +0.033333333
Expected return=10.00%
Joseph just received an inheritance of $35,775 from his great aunt. He plans to invest the funds for retirement. If Joseph can earn 4.75% per year with quarterly compounding for 32 years, how much will he have accumulated?
a. $237,416.b. $71,550.c. $184,622.d. $162,113.
Answer:
FV= $162,113.25
Explanation:
Giving the following information:
Initial investment= $35,775
Interest rate= 0.0475/4= 0.011875
Number of periods= 32*4= 128
To calculate the future value, we need to use the following formula:
FV= PV*(1+i)^n
FV= 35,775*(1.011875^128)
FV= $162,113.25
Kepler Company Comparative Income Statements This Year Last Year Sales $ 950,000 $ 900,000 Less: Cost of goods sold 500,000 490,000 Gross margin $ 450,000 $ 410,000 Less: Selling and administrative expenses 275,000 260,000 Operating income $ 175,000 $ 150,000 Less: Interest expense 12,000 18,000 Income before taxes $ 163,000 $ 132,000 Less: Income taxes 65,200 52,800 Net income $ 97,800 $ 79,200 Less: Dividends (common) 27,800 19,200 Net income, retained $ 70,000 $ 60,000 Also, assume that for last year and for the current year, the market price per share of common stock is $2.98. In addition, for last year, assets and equity were the same at the beginning and end of the year. Required: Note: Round all answers to two decimal places. 1. Compute the following for each year: This Year Last Year a. Return on assets % % b. Return on stockholders' equity % % c. Earnings per share $ $ d. Price-earnings ratio e. Dividend yield % % f. Dividend payout ratio
Kepler Company
Comparative Balance Sheets
This Year Last Year
Assets
Current assets:
Cash $ 50,000 $100,000
Accounts receivable, net 300,000 150,000
Inventory 600,000 400,000
Prepaid expenses 25,000 30,000
Total current assets $ 975,000 $680,000
Property and equipment, net 125,000 150,000
Total assets $1,100,000 $830,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 400,000 $290,000
Short-term notes payable 200,000 60,000
Total current liabilities $ 600,000 $350,000
Long-term bonds payable, 12% 100,000 150,000
Total liabilities $ 700,000 $500,000
Stockholders' equity:
Common stock
(100,000 shares) 200,000 200,000
Retained earnings 200,000 130,000
Total liabilities and
stockholders' equity $1,100,000 $830,000
Answer:
Kepler Company
a. Return on assets = Net Income/Total Assets
= $ 97,800/$1,100,000 $ 79,200/$830,000
= 8.89% = 9.54%
b. Return on stockholders' equity = Net Income/Stockholders' equity
= $ 97,800/$400,000 $ 79,200/$330,000
= 24.45% = 24%
c. Earnings per share = Net Income/Outstanding common shares
= $ 97,800/100,000 $ 79,200/100,000
= $0.98 = $0.79
d. Price-earnings ratio = Market price/Earnings per share
= $2.98/$0.98 = $2.98/$0.79
= 3.04 times = 3.77 times
e. Dividend yield = Dividend per share/price per share
= $0.28/$2.98 = $0.19/$2.98
= 9.40% = 6.38%
f. Dividend payout ratio = Total dividends/Net Income
= $27,800/$97,800 = $19,200/$79,200
= 28.43% = 24.24%
Explanation:
Kepler Company
Comparative Income Statements
This Year Last Year
Sales $ 950,000 $ 900,000
Less: Cost of goods sold 500,000 490,000
Gross margin $ 450,000 $ 410,000
Less: Selling and
administrative expenses 275,000 260,000
Operating income $ 175,000 $ 150,000
Less: Interest expense 12,000 18,000
Income before taxes $ 163,000 $ 132,000
Less: Income taxes 65,200 52,800
Net income $ 97,800 $ 79,200
Less: Dividends (common) 27,800 19,200
Net income, retained $ 70,000 $ 60,000
What are the advantages and disadvantages of making small, frequent purchases from just a few suppliers?
Answer: The small frequent purchases means purchasing small budget goods and services in a short duration.
Explanation:
Advantages of small frequent purchases: It reduces the inventory levels.
Disadvantages of small frequent purchases: It increases the inbound transportation costs.
Using fewer supplier means to fill up the delivery transportation to its capacity of loading so that goods can be delivered at low transportation cost.