Answer and Explanation:
The consumer price index refers to an index in which the prescribed market cost of goods & services by the prices years from the base year prices of the prescribed market basket and then it is multiplied by 100.
But the Gross Domestic Inflator would be represented when the all types of prices of goods and services generated domestically
An increase in the price refelected the GDP deflator
And, the decrease in the price of treewood represents CPI
The transactions listed below are typical of those involving Amalgamated Textiles and American Fashions. Amalgamated is a wholesale merchandiser and American Fashions is a retail merchandiser. Assume all sales of merchandise from Amalgamated to American Fashions are made with terms n/60, and the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended December 31.
Amalgamated sold merchandise to American Fashions at a selling price of $230,000. The merchandise had cost Amalgamated $175,000. Two days later, American Fashions returned goods that had been sold to the company at a price of $20,000 and complained to Amalgamated that some of the remaining merchandise differed from what American Fashions had ordered. Amalgamated agreed to give an allowance of $5,000 to American Fashions. The goods returned by American Fashions had cost Amalgamated $15,270. Just three days later, American Fashions paid Amalgamated, which settled all amounts owed.
Required:
a. Indicate the effect (direction and amount) of each transaction on the Inventory balance of Readers' Corner.
b. Prepare the journal entries that Readers’ Corner would record and show any computations.
Answer:
Transaction Sales Sales Sales Net Cost of Gross
Revenues returns allowances sales goods sold profit
a. $230,000 230,000 175,000 55,000
b. 20,000 5,000 -25,000 15,270 9,730
c. - - - - - No effect
S/n General Journal Debit$ Credit$
a(1) Accounts receivable 230,000
Sales revenues 230,000
(Sales on account to American Fashions)
a(2) Cost of goods sold 175,000
Inventory 175,000
(Recorded cost of goods sold)
b(1) Sales allowances and returns 25,000
(20000+5000)
Accounts receivable 25,000
(Sales allowances and returns granted)
b(2) Inventory 15,270
Cost of goods sold 15,270
(Cost of goods sold on goods returned)
c Cash 205,000
(230,000-25,000)
Accounts receivable 205,000
You want a seat on the board of directors of Red Cow, Inc. The company has 260,000 shares of stock outstanding and the stock sells for $51 per share. There are currently 5 seats up for election. The company uses straight voting. How much will it cost you to guarantee that you will be elected to the board
Answer:
$2,210,051
Explanation:
The computation of the cost that would be guaranteed is shown below:
first find the number of shares controlled which is
= (S x N) ÷ (D + 1) ] + 1
Where,
S = the total number of shares
N = the number of directors required
D = total number of directors i.e. elected
So,
= (260,000 × 1) ÷ (5 + 1) + 1
= 43,334
Now the cost is
= 43,334 × $51
= $2,210,051
Performance Obligation Fulfilled Over Time Philbrick Company signed a three-year contract to develop custom sales training materials and provide training to the employees of Elliot Company. The contract price is $1,100 per employee and the number of employees to be trained is 500. Philbrick can send a bill to Elliot at the end of every training session. Once developed, the custom training materials will belong to Elliot Company, but Philbrick does not consider them to be a separate performance obligation. The expected number to be trained in each year and the expected development and training costs follow. Number of employees Development and training costs incurred
2019
150 $
55,000
2020
250
70,000
2021
100
20,000
Total 500 $145,000
For each year, compute the revenue, expense, and gross profit reported assuming revenue is recognized over time using... 1. the number of employees trained as a measure of the value provided to the customer. Note: Round answers to the nearest dollar.
Answer:
Philbrick Company
Performance Obligation Fulfilled Over Time
Computation of the revenue, expense, and gross profit:
Year Number of Development Sales Gross
Employees /Training Cost Value Profit
2019 150 $ 55,000 $165,000 $110,000
2020 250 70,000 275,000 205,000
2021 100 20,000 110,000 90,000
Total 500 $145,000 $550,000 $405,000
Explanation:
a) Data and Calculations:
Contract price = $1,100 per employee
No. of employees to be trained = 500
Total contract value = $550,000 ($1,100 * 500)
Expected Development and Training Costs:
Year Number of Development
Employees /Training Cost
2019 150 $ 55,000
2020 250 70,000
2021 100 20,000
Total 500 $145,000
You pay your neighbor $100 in exchange for the used washing machine she is selling. Your neighbor puts that $100 into her pocket and takes her family out to the movies and a nice dinner at the end of the week. She still has $20 left after this outing and decides to put the remaining $20 into her savings account. This is an example of:
Answer:savings
Explanation:saves the rest of the money where she can reuse it
Connors Corporation acquired manufacturing equipment for use in its assembly line. Below are four independent situations relating to the acquisition of the equipment. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
A. The equipment was purchased on account for $25,000. Credit terms were 2/10, n/30. Payment was made within the discount period and the company records the purchases of equipment net of discounts.
B. Connors gave the seller a noninterest-bearing note. The note required payment of $27,000 one year from date of purchase. The fair value of the equipment is not determinable. An interest rate of 10% properly reflects the time value of money in this situation.
C. Connors traded in old equipment that had a book value of $6,000 (original cost of $14,000 and accumulated depreciation of $8,000) and paid cash of $22,000. The old equipment had a fair value of $2,500 on the date of the exchange. The exchange has commercial substance.
D. Connors issued 1,000 shares of its nopar common stock in exchange for the equipment. The market value of the common stock was not determinable. The equipment could have been purchased for $24,000 in cash.
Required:
For each of the above situations, prepare the journal entry required to record the acquisition of the equipment.
Answer:
Entries and their narrations are posted below
Explanation:
We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.
Journal Entries
Debit Credit
A. The equipment was purchased on account for $25,000.
Equipment $25,000
Accounts Payable $25,000
B. Connors gave the seller a noninterest-bearing note. The note required payment of (27,000 x 1/(1+10%)
Equipment $24,545
Discount on Notes Payable $2,455
Note Payable $27,000
C. Connors traded in old equipment that had a book value of $6,000
Equipment New $24,500
Accumulated Depreciation $8,000
Loss on Equipment $3,500
Cash $22,000
Equipment Old $14,000
D.Connors issued 1,000 shares of its nopar common stock in exchange for the equipment
Equipment $24,000
Common Stock $24,000
On December 1, year 1, Lester Company issued at 103, four hundred of its 9%, $1,000 bonds. Attached to each bond was one detachable stock warrant entitling the holder to purchase 10 shares of Lester's common stock. On December 1, year 1, the market value of the bonds, without the stock warrants, was 95, and the market value of each stock purchase warrant was $50. The amount of the proceeds from the issuance that should be accounted for as the initial carrying value of the bonds payable would be:______
a. $387,280.
b. $391,400.
c. $400,000.
d. $412,000.
Answer:
Lester Company
The amount of the proceeds from the issuance that should be accounted for as the initial carrying value of the bonds payable would be:______
c. $400,000.
Explanation:
Bonds issued at 103, 9% $1,000
Number of bonds issued = 400
Face value of bonds = $1,000 * 400 = $400,000
Proceeds from Bonds = $1,030 * 400 = $412,000
Premium from bonds issue = $12,000 ($412,000 - 400,000)
Carrying amount = $400,000
$400,000 is the bonds payable at maturity. The $12,000 bonds premium will be amortized with the interest expense. This implies that for the life of the bonds, part of the $12,000 will be deducted from the annual interest expense.
A diet is to contain at least 3640 mg vitamin C, 2190 mg Calcium, and 2170 calories every day. Two foods, a dairy-based meal and a vegan option are to fulfill these requirements. Each ounce of the dairy-based meal provides 40 mg vitamin C, 30 mg Calcium, and 10 calories. Each ounce of the vegan option provides 60 mg vitamin C, 30 mg Calcium, and 50 calories. If the dairy-based meal costs $0.21 per ounce and the vegan option costs $0.27 per ounce.
Required:
a. How many ounces of each food should be purchased to minimize costs?
b. What is that minimum cost (per day)?
Answer:
(A) 73 ounces of diary-based meal and 28.8 ounces of the vegan option.
(B) The minimum cost per day is [73 × 0.21] + [28.8 × 0.27] = 15.33 + 7.776 = $23.106
Explanation:
First thing to note is that the dairy-based meal costs less than the vegan option. In otherwords, if you're to minimize cost, you should purchase as many ounces of dairy-based meal as possible. This is the first mindset or step.
What the diet should contain everyday:
3640mg - Vitamin C
2190mg - Calcium
2170 - Calories
DAIRY BASED:
(40 × 91 = 3640), (30 × 73 = 2190), (10 × 217 = 2170)
VEGAN OPTION:
(60 × 60.67 = 3640), (30 × 73 = 2190), (50 × 43.4 = 2170)
Getting 73 ounces of dairy-based meal, you have
(40 × 73), (30 × 73), (10 × 73) = 2920mg, 2190mg, 730 calories.
You have left 720mg of Vitamin C and 1440 calories to obtain from the Vegan Option.
(60 × 12 = 720), (30 × 0 = 0), (50 × 28.8 = 1440)
The highest quantity needed here is 28.8 ounces of calories from the vegan option, hence 28.8 ounces of the vegan meal should be purchased. There will be excesses of Vitamin C and Calcium but that is necessary in order to purchase the stipulated minimum amount of each nutrient.
The minimum cost per day will now be [73 × 0.21] + [28.8 × 0.27] = 15.33 + 7.776 = $23.106
Nanjones Company manufactures a line of products distributed nationally through wholesalers. Presented below are planned manufacturing data for the year and actual data for November of the current year. The company applies overhead based on planned machine hours using a predetermined annual rate.
Planning Data
Annual November
Fixed manufacturing overhead $1,200,000 $100,000
Variable manufacturing overhead 2,400,000 220,000
Direct labor hours 48,000 4,000
Machine hours 240,000 20,000
Data for November
Direct labor hours (actual) 4,200
Direct labor hours (plan based on output) 4,000
Machine hours (actual) 21,600
Machine hours (plan based on output) 21,000
Fixed manufacturing overhead $101,200
Variable manufacturing overhead $214,000
The fixed overhead volume variance for November was
a. $1,200 unfavorable.
b. $5,000 favorable.
c. $5,000 unfavorable.
d. $10,000 favorable.
Answer:
Manufacturing overhead volume variance= $1,200 unfavorable
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Fixed Predetermined manufacturing overhead rate= 1,200,000/240,000
Fixed Predetermined manufacturing overhead rate= $5 per machine hour
Now, to calculate the fixed manufacturing overhead volume variance, we need to use the following formula:
Manufacturing overhead volume variance = Actual Factory Overhead - Budgeted Allowance Based on Standard Hours
Manufacturing overhead volume variance= (101,200) - (5*20,000)
Manufacturing overhead volume variance= $1,200 unfavorable
The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2021:
Penske Stanza
Revenues $(842,000 ) $(568,000 )
Cost of goods sold 299,700 142,000
Depreciation expense 207,000 304,000
Investment income Not given 0
Dividends declared 80,000 60,000
Retained earnings, 1/1/21 (668,000 ) (222,000 )
Current assets 572,000 566,000
Copyrights 1,076,000 449,500
Royalty agreements 604,000 1,180,000
Investment in Stanza Not given 0
Liabilities (546,000 ) (1,631,500 )
Common stock (600,000 )($20 par) (200,000 ) ($10 par)
Additional paid-in capital 150,000 80,000
On January 1, 2013, Penske acquired all of Stanza's outstanding stock for $680,000 fair value in cash and common stock. Penske also paid $10,000 in stock issuance costs. At the date of acquisition copyrights (with a six-year remaining life) have a $440,000 book value but a fair value of $560,000.
a. As of December 31,2013, what is the consolidated copyrights balance?
b. For the year ending December 31,2013, what is consolidated net income?
c. As of December 31,2013, what is the consolidated retained earnings balance?
d. As of December 31,2013, what is the consolidated balance to be reported for goodwill?
Answer:
a. $1,625,500
b. $437,300
c. $1,025,300
d. $58,000
Explanation:
a. As of 31, December 2013, what is the consolidated copy rights balance
b. For the year ending, December 31, 2013, what is consolidated net income
c. As of December 31, 2013, what is the consolidates retained earnings balance
d. As of December 31, 2013 what is the consolidated balance to be reported for Goodwill.
Please find attached detailed explanations to the above questions and answers.
Bird Corp.'s trademark was licensed to Brian Co. for royalties of 15% of the sales of the trademarked items. Royalties are payable semiannually on March 15 for sales in July through December of the prior year, and on September 15 for sales in January through June of the same year. Bird received the following royalties from Brian:
March 15 September 15
20X4 $5,000 $7,500
20X5 6,000 8,500
Brian estimated that the sales of the trademarked items would total $30,000 for July through December 20X5. In Bird's 20X5 Income Statement, the royalty revenue should be:______.
a. $13,000.
b. $14,500.
c. $19,000.
d. $20,500.
Answer:
a. $13,000
Explanation:
Calculation for what royalty revenue should be
First step is to find the estimated amount for the second half of the year
Royalties for the second half =
15%*$30,000
Royalties for the second half= $4,500
Now let Compute for the total royalty revenue
Total royalty revenue for 20X5=$8,500+$4,500
Total royalty revenue for 20X5=$13,000
Therefore the royalty revenue should be $13,000
Question 5 of 10
Why do business often add fees to their invoices?
O A. To help pay for business expenses
B. To attract new customers
C. To reward customers' for their loyalty
D. To make more profit than their competitors
Answer: I think it's A
Explanation:
Answer:
Its A!
Explanation:
Just took the quiz
On January 1, Merry Walker established a catering service. Listed below are accounts to use for transactions (a) through (f), each identified by a number. Following are the transactions that occurred in Walker's first month of operations. You need to indicate for each transaction the accounts that should be debited and credited by selecting the account number(s).
1. Cash
2. Accounts Receivable
3. Supplies
4. Prepaid Insurance
5. Equipment
6. Truck
7. Notes Payable
8. Accounts Payable
9. Merry Walker, Capital
10. Merry Walker, Drawing
11. Fees Earned
12. Wages Expense
13. Rent Expense
14. Utilities Expense
15. Truck Expense
16. Miscellaneous Expense
17. Insurance Expense
Answer:
a. Recorded jobs completed on account and sent Invoices to customers.
Account to be Debited ⇒ 2. Accounts Receivable
Account to be Credited ⇒ 11. Fees Earned
The fees are to be credited as it is revenue. The amount will be debited to Accounts receivables because the customers owe the company.
b. Received an invoice for truck expense to be paid in February.
Account to be Debited ⇒ 15. Truck Expense
Account to be Credited ⇒ 8. Accounts Payable
This is an expense so it is debited as expenses are debited when they increase. As it is to be paid in future, it is a liability and will be credited to Payables.
c. Paid utilities expense
Account to be Debited ⇒ 14. Utilities Expense
Account to be Credited ⇒ 1. Cash
As explained, this is an expense and will have to be debited. It was paid with cash which will reduce the cash balance so Cash should be credited.
d. Received cash from customers on account
Account to be Debited ⇒ 1. Cash
Account to be Credited ⇒ 2. Accounts Receivable
Debtors are paying the company cash which will increase the cash balance so Cash is debited. The Receivables will be credited to reflect that they are decreasing from the debt settlement.
e. Paid Employees Wages
Account to be Debited ⇒ 12. Wages Expense
Account to be Credited ⇒ 1. Cash
As explained, this is an expense and will have to be debited. It was paid with cash which will reduce the cash balance so Cash should be credited.
f. Withdrew cash for personal use.
Account to be Debited ⇒ 10. Merry Walker, Drawing
Account to be Credited ⇒ 1. Cash
The owner withdrew cash for personal use and so this is sent to the Drawings account. It is debited to reflect that it is reducing capital. Cash will be credited as it is decreasing.
In 2021, Ryan Management collected rent revenue for 2022 tenant occupancy. For financial reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period tenants occupy rental property. For tax reporting, the rent is taxed when collected in 2021. The deferred portion of the rent collected in 2021 was $194.0 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Suppose the deferred portion of the rent collected was $76 million at the end of 2022. Taxable income is $760 million. Prepare the appropriate journal entry to record income taxes Iin 2022.
Transaction General Journal Debit Credit
Income tax expense
Deferred tax asset
Income taxes payable 340.0
Answer:
Ryan Management
Journal Entries
Date Particulars Debit'million Credit'million
31-Dec-22 Income tax expense $219.50
To Income tax payable $190
($760 * 25%)
To Deferred tax asset $29.50
[($194 - $76)*25%]
(To record income tax expense and reversal of Deferred
tax asset)
Question 7
5 pts
(03.02 MC)
Gina made a down payment on a motorcycle. What incentive did she have for making a down payment?
O A tax break
O A higher loan rate
O A less secure loan
O A reduced time in debt
Because Gina made a down payment on a motorcycle, an incentive that she have for making such down payment is a reduced time in debt.
What do we mean by down payment?Basically, a down payment refers to the cash that the buyer pays upfront in a transaction and other large purchases. These payment are typically a percentage of the purchase price and can range from as little as 3% to as much as 20%
Here, she intends to purchase that motorbike on credit and by making a down-payment, she is reducing the amount she needs to borrow to buy the bike. So, a reduced loan amount means that Gina will require less to repay which implies that the interest to be paid will reduce.
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Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc and Michelle also paid $2,500 of qualifying moving expenses, and Marc paid alimony to a prior spouse in the amount of $1,500. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $1,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $5,500 in federal income taxes withheld from their paychecks during the course of the year.
a) What is Marc and Michelle’s gross income?
b) What is Marc and Michelle’s adjusted gross income?
c) What is the total amount of Marc and Michelle’s deductions from AGI?
d) What is Marc and Michelle’s taxable income?
e) What is Marc and Michelle’s taxes payable or refund due for the year? (Use the tax rate schedules.)
f) Complete the first two pages of Marc and Michelle’s Form 1040 (use 2015 forms if 2016 forms are unavailable).
Answer:
A) $76500
B) $72500
C) $24750
D) tax refund of $260
Explanation:
A) calculate Marc and Michelle's gross income
Marc salary = $64000
Michelle's salary = $12000
interest from corporate bond = $ 500
Hence gross income = 64000 + 12000 + 500 = $76500
B) Calculate Marc and Michelle's Adjusted gross income
Gross income = $76500
qualifying moving expenditure = $2500
Alimony paid to previous spouse = $1500
adjusted gross income = 76500 - 2500 - 1500 = $72500
C) Calculate the total amount of Marc and Michelle's deductions from AGI
Standard deduction = $12600
itemized deduction = $6000
personal and dependency allowance = $12150
To calculate the Deductions from AGI we have to add the personal and dependency allowance to the standard deduction ( higher value between standard deduction and itemized deduction )
= 12600 + 12150 = $24750
D ) calculate Marc and Michelle's taxable income
Adjusted gross income = $72500
deduction from itemized deduction = $24750
taxable income = 72500 - 24750 = $47750
E) Determine if Marc and Michelle's taxes payable or refund due for the year
Tax rate schedules :
between $18451 to $79000 : tax rate = $1845 + 15% of income over $18450
Taxable income = $47750
Tax liability = 1845 + (47750 - 18450) * 15% = $6240
child tax credit = $1000
prepayment of taxes = $5500
Tax refund = tax liability - child tax - prepayment of taxes
6240 - 1000 - 5500 = $260
hence there will be a tax return of $260
QUESTION 19
¿Cuál de las siguientes descripciones representa la dimensión masculinidad-feminidad de Hofstede?
01. La dependencia de las decisiones del grupo frente a la dependencia de las decisiones individuales.
2 Todo el mundo debería tener los mismos derechos dente a los que tiene er control para poder tener derecho a los privilegios.
3. La voluntad de tomar niesgos frente a la preocupación con la seguridad en la vida.
4. La asertividad y las preocupaciones materiales frente a la preocupación por las relaciones humanas y los sentimientos.
5. El tiempo es libre versus el tiempo es dinero
Answer:
4. La asertividad y las preocupaciones materiales frente a la preocupación por las relaciones humanas y los sentimientos.
Explanation:
The correct answer for the given question is:
4. La asertividad y las preocupaciones materiales frente a la preocupación por las relaciones humanas y los sentimientos.
Women care more about relationships as compared to men who are assertive in nature and does not care on a priority for a relationship.
We run a delivery service, and we believe our firm has market risk equally between that of UPS and FedEx. We know the following about these 2 firms:______.
Stock Price per share # shares outstanding Market Value of Debt
UPS $65 0.7 billion $ 5 billion
FedEx $55 250 million $ 3 billion
We also have the following data on the securities of these firms:_______.
Beta E Beta D
UPS 0.8 0
FedEx 1.1 0.1
Assume that our firm has risk-free debt with market value $20 million and equity with market value $450 million. Assume that taxes are not relevant. Please estimate our firm’s equity beta
Answer:
The firm’s equity beta is therefore equal to 0.85.
Explanation:
Note: The data in the question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
The explanation of the answer is now provided as follows:
The equity beta refers to a beta that considers different levels of debt of a firm. The equity beta is also known as the levered beta or the project beta. The equity beta is therefore different from the asset beta.
Asset beta refers to a beta does not consider debt and assume that the firm uses only equity financing. Asset beta is known as unlevered beta.
The Firm’s equity can be calculated using the following steps:
Step 1: Calculation of average unlevered beta of the firm
Unlevered beta = Levered beta / (1 + ((1 - Tax rate) * (Debt / Equity ratio))) ……… (1)
Where for UPS;
Levered beta = Beta E = Beta of Equity = 0.80
Tax rate = 0
Debt = Market value of debt = $5 billion
Equity = Market value of equity = Stock Price per share * Number of shares outstanding = $65 * 0.7 billion = $45.50 billion
Substituting the values into equation (1), we have:
UPS unlevered beta = 0.80 / (1 + ((1 - 0) * (5 / 45.50))) = 0.720792079207921 = 0.72
Where for FedEx;
Levered beta = Beta E = Beta of Equity = 1.10
Tax rate = 0
Debt = Market value of debt = $3 billion
Equity = Market value of equity = Stock Price per share * Number of shares outstanding = $55 * 250 million = $13.75 billion
Substituting the values into equation (1), we have:
FedEx unlevered beta = 1.10 / (1 + ((1 - 0) * (3 / 13.75))) = 0.902985074626866 = 0.90
Therefore, firm’s averaged unlevered beta can be calculated as follows:
Firm’s averaged unlevered beta = (UPS unlevered beta + FedEx unlevered beta) / 2 = (0.72 + 0.90) / 2 = 0.81
Step 2: Calculation of firm’s levered beta
Firms’ levered beta = Firm’s averaged unlevered beta * (1 + ((1 - Tax rate) * (Debt / Equity ratio))) …….. (2)
Where;
Firm’s averaged unlevered beta = 0.81
Tax rate = 0
Debt = Market value of risk-free debt = $20 million
Equity = Market value of equity = $450 million
Substituting the values into equation (2), we have:
Firms’ levered beta = 0.81 * (1 + ((1 - 0) * (20 / 450))) = 0.846 = 0.85
Since from the definitions above, the equity beta is also known as the levered beta, the firm’s equity beta is therefore equal to 0.85.
Susie buys a share of Alphabet stock through her broker, Mr. Diaz, who works for Acme Investing and purchases the stock at the New York Stock Exchange. In this transaction, __________ is a financial instrument, __________ is a financial institution, and __________ represents a financial market.
Answer:
Alphabet stock; Acme Investing; New York Stock Exchange.
Explanation:
Susie buys a share of Alphabet stock through her broker, Mr. Diaz, who works for Acme Investing and purchases the stock at the New York Stock Exchange. In this transaction, Alphabet stock is a financial instrument, Acme Investing is a financial institution, and New York Stock Exchange represents a financial market.
Financial instruments can be defined as assets which are having monetary value or used to record a monetary transaction. Financial instruments are generally classified on the basis of their risks, maturity, issuers etc. Some examples of financial instruments are stocks, treasury bills, commercial paper, money market mutual fund, certificate of deposits, corporate bonds etc. The market where these financial instruments (securities and derivatives) are being traded at a low transaction rate is referred to as the financial market.
Furthermore, financial institutions can be defined as a business firm or company that is involved in the business of trading financial instruments.
Champion manufactures winter fleece jackets for sale in the United States. Demand for jackets during the season is normally distributed, with a mean of 20,000 and a standard deviation of 10,000. Each jacket sells for $60 and costs $30 to produce. Any leftover jackets at the end of the season are sold for $25 at the year-end clearance sale. Holding jackets until the year-end sale adds another $5 to their cost. A recent recruit has suggested shipping leftover jackets to South America for sale in the winter there rather than running a clearance. Each jacket will fetch a price of $35 in South America, and all jackets sent there are likely to sell. Shipping costs add additional $5 to the cost of any jacket sold in South America, along with the $5 for holding jackets till the end of the season.
Required:
a. Would you recommend the South American option? Support your decision with calculations.
b. How will the South American option affect production and profitability at Champion?
c. On average, how many jackets will Champion ship to South America each season? (Note: you have already calculated this value in order to get the expected profit for the South American option.
Answer:
The question puts
Mean demand to be 20000
Standard deviation to be 10000
Storage cost = 60-30= 30
Excess cost to be 30+5-25 = 10
For shipping to south america
Excess cost = 30+5+5-35 = 5 dollars
A.
It is of more benefits to ship to south america because we have an excess cost of 5 dollars and excess clearance cost of 10 dollars
B.
Production and profitability are high for south america. Please check attachment for the calculations I added
C.
Number of units
27142-20000
= 7142 units.
Assignment 3 Suggested Length: 750 to 1000 words Ethical Theories to Apply: Golden Rule and Virtue Ethics
1. Task You work in the Ethics Department for ABC Company (ABC). Your department is dedicated to advising its employees about their ethical obligations in the corporate setting. You are an internal consultant who provides advice and most importantly, recommendations for action to employees of the firm. All communications you receive in this capacity are confidential. Luke, an employee of ABC, comes to you with the following scenario and asks for your advice. He wants to fully consider the situation. Your task is to advise and recommend a course of action based on the specified ethical lenses and facts as given. Below are the facts that Luke provides to you. ***** Luke has been asked to work on a project that involves developing land recently purchased by ABC to build an adult entertainment retail store. According to the plan, the land is located on the corner of the neighborhood where Owen, Luke’s brother, lives. Luke knows that as soon as the plans for the store are made public, property values for the surrounding neighborhood will decrease significantly. ABC plans to publicly announce the project one month from today. Luke is concerned about his obligations of confidentiality to his company. However, Luke is also very close to Owen, who recently told Luke that he received an offer to sell his house at an "okay" price given the current real estate market. Owen is considering selling but hasn’t made any final decision yet. He wonders if he might get a better offer a few years from now when the real estate market improves. What is the ethical issue, why is this an issue, and what should Luke do about it?
***** For assignment 3, prepare a memo, setting out your analysis and recommendations, that considers ONLY the following two theories: Golden Rule and Virtue Ethics.
Answer:
My answer is a little long, so you will probably need to summarize it.
The ethical issue here is that you work for a company that is about to open a store that will make the price of your brother's house to plummet. Your brother has the option to sell his house right now, but if you tell him to accept the offer, you will be breaching your employment duties.
Is your duty towards your brother more or less important than the duty towards the company?
We can analyze both possible outcomes:
You do not tell your brother and he does not sell his house. After the store is announced, your brother's house will decrease in value. That means that your brother will lose a lot of money, but you complied with the obligation of confidentiality that you have with your company. The downside is that once your brother knows about it, he will hate you for the rest of his life. And the hatred will probably not be limited to only your brother, most, if not all of your family will be very unpleased and terribly mad at you. Your family will probably wonder why your parents didn't abort you?, or are you adopted?, or do you simply hate humanity? On the other hand, you decide that you value your brother and whole family, and you decide to tell him to accept the offer. You will have breached your confidentiality obligation towards the company, but you will have literally saved your brother's financial situation, and you will have saved any type of relationship that you have with your family. Will the company be hurt by your decision? No, it will not make any difference to them. They are announcing the decision in just a few days, so anything that you tell your brother will not make any difference. Since your brother will try to sell his house, he will keep the information to himself, since telling other people will only ruin any possible sale.If we follow the golden rule: do to others what you would like them to do to you, then obviously we should tell Owen about our company's plans. If we were Owen, that information would be really important for us.
If we follow virtue ethics, then it gets a little bit more complicated. Is telling Owen about the new store a virtuous action? Would a virtuous person do it? To be honest, I'm not really sure what exactly is a virtuous person.
What I understand is that virtue ethics is based on who you are, and not what you really will do. So, the question here would be: Are you a good (or virtuous) brother? Are you a good (or virtuous) employee? In this case, you cannot be a virtuous employee and a virtuous brother at the same time, so it depends on which you value the most. Going back to the possible outcomes, I would prefer to be a virtuous brother in this case.
Table 1 shows the financial position of Bank Uno once $ 3375.00 has been deposited. Assume that the required reserve ratio is 5.00 %, that banks do not keep excess reserves, and that all the money loaned out from Bank Uno is deposited into Bank Duo (whose loans go to other banks not shown here). Once the lending and depositing process is complete, what will the accounts look like in Tables 2 and 3? Specify all answers to two decimal places. Table 1. Bank Uno's Initial T-Account Assets Liabilities Reserves: $3375.00 Deposits: $3375.00 Table 2. Bank Uno's T-Account After Loans Assets Liabilities Reserves: ? Deposits: ? Loans: ? Table 3. Bank Duo's T-Account After Deposits and Loans Assets Liabilities Reserves: ? Deposits: ? Loans: ? What are Bank Uno's deposits in Table 2? $ What are Bank Uno's reserves in Table 2? $ What are Bank Duo's loans in Table 3? $ What are Bank Uno's loans in Table 2? $
Answer:
(a) Bank Uno's deposits in Table 2 = $3,375.00
(b) Bank Uno's reserves in Table 2 = $168.75
(c) Bank Duo's loans in Table 3 = $3,045.94
(d) Bank Uno's loans in Table 2 = $3,206.25
Explanation:
Note: The data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
The explanation to the answers is now given as follows:
Also note: See the attached Microsoft Word file for how the accounts will look like in Tables 2 and 3 once the lending and depositing process is complete.
Required reserve ratio refers to the percentage of reserves that the central bank of a country requires banks in the country to keep on hand in case depositors want to withdraw their funds.
The loan given out by a bank is therefore obtained by deducting the required reserve from the total reserve.
Based on the explanation above, we have:
For Table 2, we have:
Deposits in Table 2 = Deposits in Table 1 = $3,375.00
Reserve in Table 2 = Deposits in Table 1 * Required reserve ratio = $3,375.00 * 5% = $168.75
Loans in Table 2 = Deposits in Table 1 - Reserve in Table 2 = $3,375.00 - $168.75 = $3,206.25
For Table 3, we have:
Deposits in Table 3 = Loans in Table 2 = $3,206.25
Reserve in Table 3 = Deposits in Table 3 * Required reserve ratio = $3,206.25 * 5% = $160.31
Loans in Table 3 = Deposits in Table 3 - Reserve in Table 3 = $3,206.25 - $160.31 = $3,045.94
Based on the above calculations, we can now answer the following:
(a) What are Bank Uno's deposits in Table 2? $
Bank Uno's deposits in Table 2 = $3,375.00
(b) What are Bank Uno's reserves in Table 2? $
Bank Uno's reserves in Table 2 = $168.75
(c) What are Bank Duo's loans in Table 3? $
Bank Duo's loans in Table 3 = $3,045.94
(d) What are Bank Uno's loans in Table 2? $
Bank Uno's loans in Table 2 = $3,206.25
If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is:
Answer:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Explanation:
If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
For example:
Total estimated overhead= $150,000
Allocation base= direct labor hours
Estimated Total number of direct labor hours= 10,000
Predetermined manufacturing overhead rate= 150,000/10,000
Predetermined manufacturing overhead rate= $15 per direct labor hour
Question 5
1 pts
The optimal level of inflation is not zero
True
False
Consider a simple example economy where there are two goods, coconuts and restaurant meals (coconut-based). There are two firms. A coconut producer collects and sells 10 million coconuts at $2.00 each. The firm pays $5 million in wages, $0.5 million in interest on an old loan, and $1.5 million in taxes to the government. We also know that 4 million coconuts are sold to the public for consumption, and 6 million coconuts are sold to the restaurant firm, which uses them to prepare meals. The restaurant sells $30 million in meals. The restaurant pays $4 million in wages and the government $3 million in taxes. The government supplies security and accounting services and employs only labor, and government workers are paid $5.5 million, collected in taxed by the government. Finally, consumers pay $1 million in taxes to the government in addition to the taxes paid by the two firms.
Required:
a. Compute GDP for this simple economy using the product approach.
b. Compute GDP for this simple economy using the expenditure approach.
c. Compute GDP for this simple economy using the income approach.
d. Now, suppose that the coconut producer cannot sell 1 million coconuts during the course of the year. These are collected coconuts that are not sold to the public (assume that sales to the other firm, the restaurant, remain the same).
e. How does this new piece of information affect your calculations in the expenditure approach? Explain.
A) Product Approach
GDP = Value added of all industries
Value added = revenue - intermediate costs
Value added coconut producer = $20,000,000 (it does not have intermediate costs)
Value added restaurant = $30,000,000 - $12,000,000 (cost of coconuts)
= $18,000,000
Value added government = $5,500,000 (collected in taxes, $3 million from the restaurant, $1.5 million from the coconut producer, and $1 million from consumers).
GDP = $20,000,000 + $18,000,000 + $5,500,000
= $43,000,000
B) Expenditure Approach
GDP = Consumption + Investment + Government Spending + Net Exports
Consumption = $8,000,000 in coconuts + $30,000,000 in meals
= $38,000,000
Investment = $0
Government Spending = $5,500,000 in government wages
Net Exports = $0 (it is a closed-economy)
GDP = $38,000,000 + $0 + $5,500,000 + $0
= $43,500,000
C) Income Approach
Wages = $14,500,000
Corporate Profits = $24,000,000
Interest income = $500,000
Taxes = $4,500,000
GDP = $43,500,000
e. How does this new piece of information affect your calculations in the expenditure approach? Explain.
GDP under the expenditure approach, would rise by the value of the unsold coconuts ($1 million) as long as the coconuts were harvested in the given year. This is because inventory produced in the given year, is part of that year's GDP.
Which franchise model do automobile dealerships usually follow?
Answer:
hope it helps..
Explanation:
Automakers sold vehicles through department stores, by mail order and through the efforts of traveling sales representatives. The prevailing delivery system was direct-to-consumer sales.
Company Owned Company Operated franchise model do automobile dealerships usually follow. These are companies that have been granted a franchise to purchase and resell cars made by particular manufacturers. They are typically found on sites with enough space to accommodate an automobile showroom as well as a small garage for upkeep and repairs.
What is the difference between a franchise and a dealership?A licensed dealer functions much like a retail distributor. Dealers have more freedom when it comes to the layout of their stores and the products they offer, while franchisees are subject to a set of corporate regulations. The majority of the time, a dealer will sell the same goods and have the parent company's name and logo.
The business model for franchises. You can run a business if you buy a franchise as an investor or franchisee. You receive a format or system created by the business (franchisor), the right to use its name for a predetermined period of time, and assistance in exchange for paying a franchise fee.
Learn more about franchises here:
https://brainly.com/question/29376853
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Ishmael’s, a localgrocer, offers to purchase all of the corn produced by Whittaker Farms for $4.15/bushel. Whittaker Farms agrees. Although at first glance this looks like an illusory contract because Whittaker Farms is not obligated to produce any corn, it is actually a valid ____ contract.
Since farms do not have liability to generate the corn so it is a valid Bilateral contract
What is the bilateral contract?
The bilateral contract is the contract in which both the parties are agreed to perform their work and give their acceptance of performing the work within the stipulated time. Here an agreement is formed in which there is an exchange of promise is done between two parties
Therefore according to the given situation, it is a valid plus bilateral contract.
learn more about the contract here: https://brainly.com/question/24519299
Assume you invested $100,000 into your lawn mowing business, but you could have invested in a similar operation with the same risk and received a 20 percent return. You should expect a “normal profit “ of $ _____________ . (Answer to the nearest whole number of THOUSANDS of dollars)
Answer:
you would get $20,000
Explanation:
100,000 x .2
The December 31, 2018, adjusted trial balance for Fightin' Blue Hens Corporation is presented below.
Accounts Debit Credit
Cash $12,000
Accounts Receivable 150,000
Prepaid Rent 6,000
Supplies 30,000
Equipment 400,000
Accumulated Depreciation $135,000
Accounts Payable 12,000
Salaries Payable 11,000
Interest Payable 5,000
Notes Payable (due in two years) 40,000
Common Stock 300,000
Retained Earnings 60,000
Service Revenue 500,000
Salaries Expense 400,000
Rent Expense 20,000
Depreciation Expense 40,000
Interest Expense 5,000
Totals $1,063,000 $1,063,000
Accounts Debit Credit
Service Revenue 500,000
Salaries Expense 400,000
Rent Expense 20,000
Depreciation Expense 40,000
Interest Expense 5,000
Total $1,063,000 $1,063,000
Required:
1. Prepare an income statement for the year ended December 31, 2021.
2. Prepare a statement of stockholders' equity for the year ended December 31, 2021, assuming no common stock was issued during 2021.
3. Prepare a classified balance sheet as of December 31, 2021.
Answer:
Please see answers below
Explanation:
1. Prepare an income statement for the year ended, December 31, 2021
Fightin' Blue Hems Corporation, Income statement for the year ended, December 31, 2021.
Details
$
Service revenue
500,000
Salaries expense
400,000)
Rent expense
20,000)
Depreciation expense
40,000)
Interest expense
5,000)
Earnings for the year
35,000
2. Prepare a statement of stockholder's equity for the year ended, 31, December, 2021
Fightin' Blue Hens Corporation statement of stockholder equity for the year ended , December 31, 2021.
Details
$
Common stock
300,000
Retained earnings
60,000
Earnings for the year
35,000
Stockholder equity
395,000
3. Prepare a classified balance sheet as at 31, December
Fightin' Blue Hens Corporation, classified balance sheet for the hear ends, December 31, 2021.
Details
$
Fixed assets
Equipment
400,000
Accumulated depreciation
135,000
Net fixed assets
265,000
Current assets
Cash
12,000
Accounts receivables
150,000
Prepaid rent
6,000
Supplies
30,000
Total current assets
198,000
Current liabilities
Accounts payable
($12,000)
Salaries payable
(11,000)
Interest payable
(5,000)
Working capital
170,000
Long term liabilities
Notes payable (due in two years)
(40,000)
Net total assets
395,000
Financed by;
Common stock
300,000
Retained earnings
60,000
Earnings for the year
35,000
Stockholder equity
395,000
Presented below is information from Headland Computers Incorporated.
July 1 Sold $22,600 of computers to Robertson Company with terms 3/15, n/60. Headland uses the gross method to record cash discounts. Headland estimates allowances of $1,334 will be honored on these sales.
10 Headland received payment from Robertson for the full amount owed from the July transactions.
17 Sold $256,100 in computers and peripherals to The Clark Store with terms of 2/10, n/30.
30 The Clark Store paid Headland for its purchase of July 17.
Omitted question-- Prepare the necessary journal entries for Headland computers
Answer: Please see answers below
Explanation:
Journal to record sales revenue
Date Account and explanation Debit Credit
July 1st Account receivables $22,600
Sales Revenue $22,600
Journal to record allowances for sales returns
July 1st Sales returns and allowances $1,334
Allowances for sales return and allowances $1,334
Journal to record receipt of cash from Robertson within discount period
July 10 Cash $21,922
Sales discount $678
Account receivables $22,600
Calculation
Discount = 22,600 x 3%= $678
Cash = $22,600 - $678= $21,922
Journal to record sales revenue
July 1`7 Account receivables $256,100
Sales revenue $256,100
Journal to record receipt of cash from Clark within discount period
July 30 Cash $250,978
Sales discount $5,122
Account receivables $256,100
Calculation
Discount = 256,100 x 2%= $5,122
Cash = $256,100 -$5,122= $250,978
Mark M. Upp has just been fired as the university book store manager for setting prices too low (only 20% above suggested retail). He is considering opening a competing bookstore near the campus, and he has begun an analysis of the situation. There are two possible sites under consideration. One is relatively small, while the other is large. If he opens at Site 1 and demand is good, he will generate a profit of $50,000. If demand is low, he will lose $10,000. If he opens at Site 2 and demand is high he will generate a profit of $80,000, but he will lose $30,000 if demand is low. He also has decided that he will open at one of these sites. He believes that there is a 50% chance that demand will be high. He assigns the following utilities to the different profits:
U = 50,000 = ? U(-10,000) = 0.22
U = 80,000 = 1 U(-30,000) = 0
For what value of utility for $50,000, U(50000), will Mark be indifferent between the two alternatives?
Answer:
The utility of Mark for getting a 50,000 profit should be of 0.78 to make both Site option indifferent.
Explanation:
To be indifferent between the two sites the utility of Site 1 should match the utility of Site 2
Site 2:
weighted Utility of good demand +
weighted Utility of low demand:
50% x 1 + 50% 0 = 0.5
Site 1
50% of Ux + 50% 0.22
This shold match 0.50 to be indifferent
0.5Ux + 0.11 = 0.50
Ux = (0.50 - 0.11) / 0.5 = 0.39/0.50 = 0.78