Answer:
$149,000
Explanation:
Cash Budget for the month of November
Receipts :
Cash collections from customers :
From November Sales - ($240,000 x 1.25 x 0.35) $105,000
From October Sales - ($240,000 x 0.60) $144,000
Total Receipts $249,000
Payments :
Payments to Suppliers :
November Purchases ($100,000 x 0.35) $35,000
October Purchases ($100,000 x 0.65) $65,000
Total Payments $100,000
Balance (Receipts - Payments) $149,000
therefore,
The cash balance on November 30 will be $149,000.
Two methods can be used to produce expansion anchors. Method A costs $65,000 initially and will have a $18,000 salvage value after 3 years. The operating cost with this method will be $28,000 in year 1, increasing by $3600 each year. Method B will have a first cost of $108,000, an operating cost of $8000 in year 1, increasing by $8000 each year, and a $38,000 salvage value after its 3-year life. At an interest rate of 8% per year, which method should be used on the basis of a present worth analysis
Answer:
Method B should be used
Explanation:
Note: See the attached excel file for the calculation of the present worth of Method A and Method B.
From the attached excel file, we have:
Present worth of Method A = –$210,889.85
Present worth of Method B = –$118,011.18
Since the present worth of Method A and B above imply Method A costs more than Method B, Method B should be used.
What is the money multiplier when the reserve requirement is
Instructions: Round your responses to two decimal places.
a. 0.09?
b. 0.25?
C. 0.12?
833.33
d. 0.04?
Answer:
Money multiplier= 1 / reserve requirement
a. Reserve requirement = 0.09
Money multiplier = 1 / 0.09
Money multiplier = 11.11
b. Reserve requirement = 0.25
Money multiplier = 1 / 0.25
Money multiplier = 4
c. Reserve requirement = 0.12
Money multiplier = 1 / 0.12
Money multiplier = 8.33
d. Reserve requirement = 0.04
Money multiplier = 1 / 0.04
Money multiplier = 25
Blaine Air Transport Service, Inc., providing air delivery service for businesses, has been in operation for three years. The following transactions occurred in February:
February 1 Paid $310 for rent of hangar space in February.
February 2 Purchased fuel costing $490 on account for the next flight to Dallas.
February 4 Received customer payment of $850 to ship several items to Philadelphia next month.
February 7 Flew cargo from Denver to Dallas; the customer paid $870 for the air transport.
February 10 Paid $130 for an advertisement in the local paper to run on February 19.
February 14 Paid pilot $2,500 in wages for flying in January (recorded as expense in January).
February 18 Flew cargo for two customers from Dallas to Albuquerque for $4,700; one customer paid $1,100 cash and the other asked to be billed.
February 25 Purchased on account $2,540 in spare parts for the planes.
February 27 Declared a $220 cash dividend to be paid in March.
Required:
Prepare journal entries for each transaction.
Answer:
February 1
Debit : Rent expense $310
Credit : Cash $310
February 2
Debit : Fuel expense $490
Credit : Accounts Payable
February 4
Debit : Cash $850
Credit : Deferred Revenue $850
February 7
Debit : Cash $870
Credit : Service Revenue $870
February 10
Debit : Advertising expense $130
Credit : Cash $130
February 14
Debit : Wages Payable $2,500
Credit : Cash $2,500
February 18
Debit : Cash $1,100
Debit : Accounts Receivable $3,600
Credit : Service Revenue $4,700
February 25
Debit : Spare parts $2,540
Credit : Cash $2,540
February 27
Debit : Dividends $220
Credit : Shareholders for dividends $220
Explanation:
For expenses, if there is immediate payment of cash for expenses incurred, recognize cash out flow and otherwise recognize a liability accounts payable.
For revenue, if there is immediate payment of cash for services recognize cash inflow, otherwise recognize an asset accounts receivable.
Remember to recognize revenue as and when transfer of goods or services are made to customer, otherwise raise a liability - deferred revenue.
Red Co. uses the product cost concept of applying the cost-plus approach to product pricing. Below is cost information for the production and sale of 40,000 units of its sole product. Red Co. desires a profit equal to a 15% rate of return on invested assets of $1,200,000.
Fixed factory overhead cost $80,000.00
Fixed selling and administrative costs 140,000.00
Variable direct materials cost per unit 7.00
Variable direct labor cost per unit 11.00
Variable factory overhead cost per unit 3.00
Variable selling and administrative cost per unit 2.00
What is the markup percentage for the company's product? (Round the answer to two decimal places.)
a 30.30%
b 43.50%
c 40.00%
d 35.60%
Answer:
b 43.50%
Explanation:
Product Cost = Variable Manufacturing Costs + Fixed Manufacturing Cost
Product Cost = 40,000*($7.00 + $11.00 + $3.00) + $80,000
Product Cost = 40,000*$21 + $80,000
Product Cost = $840,000 + $80,000
Product Cost = $920,000
Markup = Total Selling and Administrative Expenses + Desired Profit
Markup = $2.00*40,000 + $140,000 + $1,200,000*15%
Markup = $80,000 + $140,000 + $180,000
Markup = $400,000
Markup percentage = Markup / Product Cost * 100
Markup percentage = $400,000 / $920,000 * 100
Markup percentage = 0.434783 * 100
Markup percentage = 43.47%
Last year, Pastis Productions reported $100,000 in sales and $40,000 in cost of goods sold. The company estimates it would have doubled its sales and cost of goods sold had it allowed customers to buy on credit, but it also would have incurred $50,000 in additional expenses relating to wages, bad debts, and interest. Using these estimates, calculate the amount by which Income from Operations would increase (decrease).
Answer:
$10,000
Explanation:
The computation of the increase or decrease of income from operations is shown below
Without Credit
Income from Operations is
= $100,000 - $40,000
= $60,000
And,
With Credit
Income from Operations is
= 2 × ($100,000 - $40,000) -$50,000
= $70,000
So, there is Increase in Income from Operations i.e.
= $70,000 - $60,000
= $10,000
Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $172,800 to $215,400. Variable costs and their percentage relationship to sales are sales commissions 7%, advertising 4%, traveling 4%, and delivery 1%. Fixed selling expenses will consist of sales salaries $35,500, depreciation on delivery equipment $7,500, and insurance on delivery equipment $1,100.
Required:
Prepare a monthly flexible budget for each $11,100 increment of sales within the relevant range for the year ending December 31, 2017.
Answer:
Sales Revenue Total expenses
$172,800 $71,748
$183,900 $73,524
$195,000 $75,300
$206,100 $77,076
Explanation:
Note: See the attached excel file for the monthly flexible budget for the year ending December 31, 2017.
Also note that since it is stated that the budget must be for each $11,100 increment of sales within the relevant range of $172,800 to $215,400 of monthly expected sales, the highest expected sales that fall within the range is $206,100 in the attached excel file.
From the attached excel file, we have:
Sales Revenue Total expenses
$172,800 $71,748
$183,900 $73,524
$195,000 $75,300
$206,100 $77,076
In 1999, the Federal Trade Commission allowed Exxon and Mobil to merge. At the time, Exxon and Mobil were the top two firms in their industry, and their merger created the largest corporation in the world. To allow the merger, Exxon and Mobil agreed to sell 2,431 gas stations. Of these, 1,740 were in the mid-Atlantic states, 360 were in California, 319 were in Texas, and 12 were in Guam.
Why would the U.S. government require Exxon and Mobil to divest themselves of so many gas stations in localized parts of the country to be willing to allow the merger to occur?
a. Because these geographic regions had too many gas stations.
b. To protect consumers from inappropriate price decreases.
c. To ensure competition in these regions and protect consumers from unwarranted price increases.
d. To ensure that Exxon-Mobil would earn fair profits in these geographic areas.
Answer:
1999 Merger of Exxon and Mobil
The reason that made the U.S. government to require Exxon and Mobil to divest themselves of so many gas stations in localized parts of the country to be willing to allow the merger to occur is:
c. To ensure competition in these regions and protect consumers from unwarranted price increases.
Explanation:
The agreement to sell so many gas stations in localized parts of the country was to forestall antitrust lawsuits. It was also made to protect consumers from unwarranted price increases, allowing more competition in the affected areas, where ExxonMobil owed too many gas stations.
The reason why the US would require these two companies to divest themselves is because to ensure competition in these regions and protect consumers from unwarranted price increases.
The answer to this question is option c. Sometimes when two companies merge into one, they could become too powerful. When this is the case, they may end up driving out all their competitors from the market.
At this point, a monopoly may arise from the companies. When a monopoly arises, they would be able to set the price to any amount that they want. This divest option by the government was to ensure the protection of consumers from a situation of price hikes.
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1. A manufacturer of industrial motors has identified ten new prospective customers for its products and estimated each customer's annual sales potential as follows:
Customer 1 2 3 4 5 6 7 8 9 10
Sales Potential
(in $1,000,000s) $113 $106 $84 $52 $155 $103 $87 $91 $128 $131
The company would like to allocate these ten prospective customers to five of its current salespeople in the most equitable way possible. (Each customer may be assigned to only one sales person.) To do this, ideally, the customers assigned to each of the five salespeople would have exactly the same sales potential. If such a solution is not possible, the company would like to minimize the total amount by which the actual sales potentials for the customers assigned to each salesperson deviate from the ideal allocation.
a. Ideally, what sales potential should be assigned to each salesperson?
b. Formulate a mathematical programming model for this problem.
c. Implement your model in a spreadsheet and solve it.
d. What is the optimal solution and the optimal objective value?
e. Suppose we instead want to minimize the maximum amount by which any salesperson's assigned sales potential deviates from the ideal allocation. What is the optimal solution and optimal objective value?
Answer:
a. the assigned sales potential to each person is 210
d. the total minimum over/above potential is 20
Explanation:
took it out from Spreadsheet Modeling and Decisions Analysis. hope this helps.
The following is the ending balances of accounts at December 31, 2018 for the Valley Pump Corporation Account Title Cash Accounts receivable Inventories Interest payable Marketable securities Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Copyright (net of amortization) Prepaid expenses (next 12 months) Accounts payable Deferred revenues (next 12 months) Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits Credits 30,000 66,000 91,000 15,000 54,000 130,000 325,000 105,000 85,000 30,000 17,000 37,000 70,000 25,000 275,000 5,000 250,000 60,000 835,000 835,000
1. The $130,000 balance in the land account consists of $105,000 for the cost of land where the plant and office buildings are located. The remaining $25,000 represents the cost of land being held for speculation.
2. The $54,000 balance in the investment in equity securities account represents an investment in the common stock of another corporation. Valley intends to sell one-half of the stock within the next year.
3. The notes payable account consists of a $110,000 note due in six months and a $165,000 note due in three annual installments of $55,000 each, with the first payment due in August of 2022.
Required:
Prepare a classified balance sheet for the Valley Pump Corporation at December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)
Answer and Explanation:
The preparation of the classified balance sheet is presented below:
Valley Pump Corporation
Balance sheet
December 31, 2018
Assets
Current assets
Cash $30,000
Marketable securities $27,000
Account receivable $61,000
Inventory $91,000
Prepaid expense $37,000
Investments
Marketable securities $27,000
Land $25,000 $52,000
Property, plant & equipment
Land $105,000
Buildings $325,000
Equipment $85,000
Less:
Accumulated depreciation -$135,000
Net property, plant & equipment $380,000
Intangibles
Copyright $17,000
Total assets $695,000
Liabilities & shareholder equity
Current liabilities
Account payable $70,000
Interest payable $15,000
Unearned revenue $25,000
Note payable $110,000
Current maturities $55,000
Total current liabilities $275,000
Long term liabilities
Note payable $110,000
Shareholder equity
Common stock $250,000
Retained earnings $60,000
Total shareholder equity $310,000
Total liabilities & shareholder equity $695,000
Working notes
Accumulated depreciation = building + equipment
= $105,000 + $60,000
= $695,000
The note payable is
= $55,000 × 2
= $110,000
he controller of Wildhorse Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs. Month Total Maintenance Costs Total Machine Hours January $2,925 3,880 February 3,324 4,432 March 3,989 6,648 April 4,986 8,753 May 3,546 5,540 June 5,420 8,870 (a1) Determine the variable-cost components using the high-low method. (Round answer to 2 decimal places e.g. 2.25.) Variable cost per machine hour $
Answer:
Variable cost per unit= $0.5
Explanation:
To calculate the variable and fixed costs under the high-low method, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (5,420 - 2,925) / (8,870 - 3,880)
Variable cost per unit= $0.5
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 5,420 - (0.5*8,870)
Fixed costs= $985
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 2,925 - (0.5*3,880)
Fixed costs= $985
A company's income statement reported net income of $80,000 during 2016. The income tax return excluded a revenue item of $6,000 (reported on the income statement) because under the tax laws the $6,000 would not be reported for tax purposes until 2017. Which of the following statements is incorrect assuming a 21% tax rate?
a. Income tax expense on the income statement exceeds the tax liability to the IRS.
b. The $6,000 of revenue creates a deferred tax liability.
c. A $2,100 deferred tax liability is reported as of December 31, 2014.
d. Income tax expense on the income statement is $25,900.
Answer:
d. Income tax expense on the income statement is $25,900.
Explanation:
Calculation to determine the statements that is incorrect assuming a 21% tax rate
INCOME TAX EXPENSE
Using this formula
Income tax expense=Net income*Tax rate
Let plug in the formula
Income tax expense=$80,000*.21
Income tax expense=$16,800
Based on the above calculationThe income tax expense ($80,000 × .21) on the income statement is $16,800
Therefore the statements that is incorrect assuming a 21% tax rate is
INCOME TAX EXPENSE ON THE INCOME STATEMENT is $25,900
The model of competitive market relies on these three core assumptions:
1. There must be many buyers and sellers-a few players can't dominate the market.
2. Firms must produce an identical product--buyers must regard all seller's products as equivalent.
3. Firms and resources must be fully mobile, allowing for free entry into and ext from the industry.
The first two conditions imply that all consumers and firms are price takers. While the third is not necessarily for price-taking behavior, assume for this problem that a market cannon maintain competition in the long run without free entry.
Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.
a. Several stores in the mall sell hooded sweatshirts. Each store's sweatshirts reflect the style of that particular store. Additionally, some stores use higher-quality cotton than others, which is reflected in the apparel's prices.
b. In a small town, there are two providers of broadband internet access: a cable company and the phone company. The internet access offered by both providers is of the same speed.
c. There are hundreds of high schools students in need of algebra tutoring services in Dallas. Dozens of companies offer tutoring services, and the parents who seek out tutors view the quality of the tutoring at the different companies to be largely the same.
d. The government has granted a patent to a pharmaceutical company for an experimental AIDS drug. That company is the only firm permitted to sell the drug.
i. Yes, meets all assumptions.
ii. No, no free entry
iii. No, not many sellers
iv. No, not an identical product.
Answer:
iv
iii
i
ii
Explanation:
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopoly has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.
An example of monopolistic competition are restaurants
When firms are earning positive economic profit, in the long run, firms enter into the industry. This drives economic profit to zero
If firms are earning negative economic profit, in the long run, firms leave the industry. This drives economic profit to zero
in the long run, only normal profit is earned
a. this is not a perfect competition because the sweatshirts are not homogenous. they differ in quality and style
b. this is not a perfect competition because there are not plenty firms. this is more of a duopoly
c. this is a perfect competition. there are many tutoring services with homogenous products
d. the company is a monopoly. there is no free entry into the industry as a result of the government permit
Management of Mittel Company would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported: Inspection time 0.3 days Wait time (from order to start of production) 16.6 days Process time 2.8 days Move time 1.0 days Queue time 4.2 days
1. Compute the throughput time.
2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your answer to 2 decimal places.)
3. What percentage of the throughput time was spent in non–value-added activities? (Enter your answer as a percentage (i.e., 0.12 should be entered as 12).)
4. Compute the delivery cycle time.
5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your percentage answer to 1 decimal place (i.e., 0.123 should be entered as 12.3).)
Answer:
1. Throughput time = Process time + Inspection time + Move time + Queue time
Throughput time = 2.8 + 0.3 + 1 + 4.2
Throughput time = 8.3 days
2. Manufacturing cycle efficiency = Value added time/Throughput time
Manufacturing cycle efficiency = 2.8/8.3
Manufacturing cycle efficiency = 0.3373493976
Manufacturing cycle efficiency = 0.34
3. Percentage of the throughput time spent in non-value-added activities:
= 1 - 0.34
= 0.66
= 66%
4. Delivery cycle time = Wait time + Throughput time
Delivery cycle time = 16.6 + 8.3
Delivery cycle time = 24.9
Delivery cycle time = 25 days
5. New throughput time = Process time + Inspection time + Move time + Queue time
New throughput time = 2.8 + 0.3 + 1
New throughput time = 4.1
Manufacturing cycle efficiency = Value added time/Throughput time
Manufacturing cycle efficiency = 2.8/4.1
Manufacturing cycle efficiency = 0.6829268292682927
Manufacturing cycle efficiency = 68.30%
Calculating Liquidity Ratios SDJ, Inc., has net working capital of $1,050, current liabilities
of $4,300, and inventory of $1,300. What is the current ratio? What is the quick ratio?
Answer:
Current Ratio = 1.244
Quick Ratio = 0.942
Explanation:
NWC = 1050 = Current Assets – Current Liabilities = CA - 4300
=> CA = 1050+ 4300 = 5350
Current Ratio = Current Assets/Current Liabilities
= 5350/ 4300 = 1.244
Quick Ratio = (Current Assets – Inventory) / Current Liabilities
= (5350 – 1,300)/4300 = 0.942
Computing Straight-Line and Double-Declining-Balance Depreciation
On January 2, 2016, Dechow Company purchases a machine to help manufacture a part for one of its key products. The machine cost $306,180 and is estimated to have a useful life of six years, with an expected salvage value of $32,760.
Compute each year's depreciation expense for 2016 and 2017 for each of the following depreciation methods.
a. Straight-line.
b. Double-declining balance.
Answer:
a.
2016 = $45,570
2017 = $45,570
b.
2016 = $102,080
2017 = $68,014
Explanation:
Straight line method
Straight line method charges a fixed amount of depreciation
Depreciation Charge = (Cost - Salvage Value) ÷ Estimated useful life
2016
Depreciation Charge = $45,570
2017
Depreciation Charge = $45,570
Double declining method
Double declining method charges a higher amount of depreciation at the early years and less in the later years
Depreciation Charge = 2 x SLDP x BVSLDP
2016
Depreciation Charge = 2 x 16.67 % x $306,180 = $102,080
2017
Depreciation Charge = 2 x 16.67 % x ($306,180 - $102,080) = $68,014
You borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part interest)
Loan amount $670,000
Interest Rate 11.4%
Life 54 years
Date of Loan January 1, 2021
Use the installment method - not straight line
Do NOT round any interrmediate numbers.
Do NOT turn this into a monthly problem.
Do NOT put in minus signs, answer all positive numbers.
Required:
1. What is the annual payment (round to the nearest $)?
$ ____
2. What are the total interest payments (round to the nearest $)?
$ _____
3. After 34 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?
____ %
4. After 34 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?
____ %
Redo the problem if the interest rate is 2%
(for a well designed spreadsheet this should take 30 seconds)
Required:
5. What is the annual payment (round to the nearest $)?
____$
6. What are the total interest payments (round to the nearest $)?
____$
7. After 34 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?
____ %
8. After 34 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?
____ %
Answer:
Loan = $670,000
Interest Rate = 11.4%
Years (Life) = 54 years
1. Loan = Annual installment * (1-(1+i)^-n)/i
$670,000 = Annual installment * (1-(1+11.4%)^-54)/11.4%
$670,000 = Annual installment * 8.74614912
Annual installment = $670,000 /8.74614912
Annual installment = 76605.14257
Annual installment = $76,605
2. Total interest payment = Total installments - Original loan
Total interest payment = $76605.14*54 - $670,000
Total interest payment = $4,136,677.56 - $670,000
Total interest payment = $3,466,677.699
Total interest payment = $3,466,678
3. Capital o/s after 34 payments = 76605.14257 × (1-(1+11.4%)^-20)/11.4%
= $594412.8888
Capital repaid = $670000 - $594412.8888 = $75587.11123
Total interest paid till 34 installments = $76605.14257*34 - $75587.11123 = $2528987.736
Percentage of interest = ($2528987.736/ ($76605.14257*54- $670000)) * 100
Percentage of interest = 0.7295133715
Percentage of interest = 72.95133715%
4. Percentage of principal = (75587.11123/670000)*100
Percentage of principal = 0.1128165839
Percentage of principal = 11.28165839%
Percentage of principal ≈ 11%
Skysong Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch. 3,800 ounces of grape concentrate at $0.07 per ounce 54 pounds of granulated sugar at $0.45 per pound 60 lemons at $0.70 each 150 yeast tablets at $0.28 each 200 nutrient tablets at $0.17 each 1,900 ounces of water at $0.005 per ounce Skysong estimates that 5% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used. Compute the standard cost of the ingredients for one gallon of wine. (Round intermediate calculations and final answer to 2 decimal places, e.g. 1.25.) Standard Cost Per Gallon $
Answer:
Skysong Itzek
Standard Cost Per Gallon = $8.36
Explanation:
a) Data and Calculations:
Requirements for the production of a 50-gallon batch:
Materials Quantity Price Total costs
Ounces of grape concentrate 3,800 $0.07/ounce $266.00
Pounds of granulated sugar 54 $0.45/pound 24.30
Lemons 60 $0.70 each 42.00
Tablets of yeast 150 $0.28 each 42.00
Tablets of nutrient 200 $0.17 each 34.00
Ounces of water 1,900 $0.005/ounce 9.50
Total costs $417.80
Standard cost per unit = Total material costs/Batch Quantity
= $417.80/50 = $8.36
b) Since the estimated wastages of grape concentrate, sugar, and lemons are of no further use, the full costs of the direct materials are used in determining the standard cost. The standard cost is, therefore, equal to the total material costs divided by the batch quantity.
Carlton Office Systems Inc. needs to improve overall organizational efficiency. To accomplish this, the company has implemented a complete redesign of all business systems and reporting hierarchies. During this process, significant cuts were made in middle management staff. What organizational trend is taking place at this company
Answer:
Reengineering
Explanation:
Reengineering means to redesign the process of the business i.e. systems & organization structure so that the dramatic business performance could be accomplished
Since in the question it is given that company wants to improve its organizational efficiency and for this they have to implement the redesigning of the business system and reporting hierarchies so here the trend would be reengineering
Suppose that in a given month $51 million is deposited into the banking system while $55 million is withdrawn. Also suppose that the Fed has set the reserve requirement at 25 percent and that banks have no excess reserves at the beginning of the month. What is the maximum amount of new checkable-deposit money that can be created (or removed) by the banking system as a result of these deposits and withdrawals?
Answer and Explanation:
The computation of the maximum amount of new checkable deposit money is given below:
The Net impact represent the decrease in the reserves by
= $55 million - $51 million
= $4 million
Now the
Multiplier = 1 ÷ Reserve requirement
= 1 ÷ 25%
= 4
Now Decrease in money supply is
= $4 million × 4
= -$16 million
Sarasota Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2017, Sarasota had the following transactions related to notes payable.
Sept. 1 Issued a $16,800 note to Pippen to purchase inventory. The 3-month note payable bears interest of 9% and is due December 1. (Sarasota uses a perpetual inventory system.)
Sept. 30 Recorded accrued interest for the Pippen note.
Oct. 1 Issued a $22,800, 10%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1.
Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note.
Nov. 1 Issued a $27,600 note and paid $8,100 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 6% and matures in 12 months.
Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note.
Dec. 1 Paid principal and interest on the Pippen note.
Dec. 31 Recorded accrued interest for the Prime Bank note and the vehicle note.
I was wondering how to do the journal entries for...
1. October 1st
2. November 1st
3. November 30th
4. December 31st
Answer:
Sarasota Corporation
Journal Entries for the following dates:
Oct. 1: Debit Equipment $22,800
Credit 10% Notes Payable (Prime Bank) $22,800
To record the issuance of a 4-month note.
Nov. 1: Debit Vehicle $35,700
Credit Cash $8,100
Credit 6% Notes Payable $27,600
To record the issuance of a 12-month note and cash for purchased vehicle.
Nov. 30: Debit Interest Expense $454
Credit Interest payable $454
To accrue the interests due on the notes.
Dec. 31: Debit Interest Expense $328
Credit Interest payable $328
To accrue the interests due on the outstanding notes.
Explanation:
a) Data and Analysis:
Sept. 1: Inventory $16,800 9% Notes Payable (Pippen) $16,800
3-month note
Sept. 30: Interest Expense $126 Interest payable $126
Oct. 1: Equipment $22,800 10% Notes Payable (Prime Bank) $22,800
4-month note
Oct. 31: Interest Expense $316 Interest payable 316
Nov. 1: Vehicle $35,700 Cash $8,100 6% Notes Payable $27,600
12-month note
Nov. 30: Interest Expense $454 Interest payable $454
Dec. 1: Notes payable (Pippen) $16,800 Interest payable $378 Cash $17,178
Dec. 31: Interest Expense $328 Interest payable $328
Super Clinics offers one service that has the following annual cost and utilization estimates: Variable cost per visit $ 10 Annual direct fixed costs $50,000 Allocation of overhead costs $20,000 Expected utilization 1,000 visits What price per visit must be set if the clinic wants to make an annual profit of $10,000 on the service? A. $ 70 B. $ 80 C. $ 90 D. $100 E. $110
Answer:
C. $ 90
Explanation:
Number of visits = 1,000
Variable cost = $10 × 1,000 = $10,000
Fixed cost = $50,000
Overhead cost = $20,000
Required profit = $10,000
So,Total Cost = Variable Cost+ Fixed Cost+ Overhead Cost
= $10,000 + $50,000 + $20,000
= $80,000
Now, Price per Visit = (Total Cost+ Required Profit) ÷ Number of visits
= ($80,000 + $10,000) ÷ 1,000
= $90,000 ÷ 1,000
= $90
Suppose a hypothetical economy is currently in a situation of deficient aggregate demand of $16 billion. Four economists agree that expansionary fiscal policy can increase total spending and move the economy out of recession, but they are debating which type of expansionary policy should be used. Economist A believes that the government spending multiplier is 4 and the tax multiplier is 2. Economist B believes that the government spending multiplier is 2 and the tax multiplier is 8.
Required:
Compute the amount the government would have to increase spending to close the output gap according to each economist's belief.
Answer:
Economist A
Government spending multiplier $4billion
Tax multiplier $8billion
Economist B
Government spending multiplier $8billion
Tax multiplier $2billion
Explanation:
Computation for the amount the government would have to increase spending to close the output gap according to each economist's belief
ECONOMIST A
Government spending multiplier=16/4
Government spending multiplier=$4billion
Tax multiplier=16/2
Tax multiplier=$8billion
ECONOMIST B
Government spending multiplier=16/2
Government spending multiplier=$8billion
Tax multiplier=16/8
Tax multiplier=$2billion
Therefore the amount the government would have to increase spending to close the output gap according to each economist's belief are :
ECONOMIST A
Government spending multiplier=$4billion
Tax multiplier=$8billion
ECONOMIST B
Government spending multiplier=$8billion
Tax multiplier=$2billion
Market screening is a method of market analysis and assessment that permits management to identify a small number of desirable markets by eliminating those judged to be less attractive.
When considering initial entry into international markets, or later expansion of international presence, companies Inust screen the large number of potential markets to identify the smaller subset of most promising candidates. This exercise examines one type of market screening, called country screening, and reviews the steps in this screening process as well as key tasks and considerations in each step.
Place the country screening steps in the order they occur, from first to last.
Rank the options below
1. Assess competitive forces such as the number, size, and financial strength of the competitors.
2. Assess economic and financial forces such as trends in inflation, currency exchange rates, and interest rates.
3. Assess sociocultural forces associated with doing business in a particular area or country,
4. Assess basic need potential of specific goods or services
5. Assess political and legal forces such as profit remittance barriers and policy stability
6. Assess prospective markets through personal visits to those markets with the best potential
Answer: See explanation
Explanation:
The country screening steps when placed accordingly from the first to the last will be:
1. Assess basic need potential of specific goods or services.
2. Assess economic and financial forces such as trends in inflation. currency exchange rates, and interest rates.
3. Assess political and legal forces such as profit remittance barriers and policy stability.
4. Assess sociocultural forces associated with doing business in a particular area or country.
5. Assess competitive forces such as the number, size, and financial strength of the competitors.
6. Assess prospective markets through personal visits to those markets with the best potential.
A firm has current assets that could be sold for their book value of $22 million. The book value of its fixed assets is $60 million, but they could be sold for $90 million today. The firm has total debt with a book value of $40 million, but interest rate declines have caused the market value of the debt to increase to $50 million. What is this firm's market-to-book ratio
Answer:
the firm market to book ratio is 1.48
Explanation:
The computation of the market to book ratio is shown below:
The Market values is
= $22 million + $90 million - $50 million
= $ 62 million
And, the Book values is
= $22 million + $60 million - $40 million
= $42 million
Now the firm market to book ratio is
= $62 million ÷ $42 million
= 1.48
Hence, the firm market to book ratio is 1.48
Oriole Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available. Units Unit Cost Total Cost April 1 inventory 270 $30 $ 8,100 April 15 purchase 440 36 15,840 April 23 purchase 290 39 11,310 1,000 $35,250 Compute the April 30 inventory and the April cost of goods sold using the FIFO method. Ending inventory $enter a dollar amount Cost of goods sold $enter a dollar amount
Answer:
. Ending inventory = $15,270
cost of goods sold = $19,980
Explanation:
FIFO means first in, first out. It means that it is the first purchased inventory that is the first to be sold
the cost of goods sold would be determined using the prices of inventories on April 1 and 15
cost of goods sold
270 x $30 = $8100
+
(600 - 270) x $36 = $11,880
cost of goods sold = $19,980
ending inventory would consist of the inventory not sold on April 15 and the inventory bought on April 23
inventory not sold on April 15 = 440 - (600 - 270) = 110
110 x 36 = $3960
+
290 x 39 = 11,310
total = $15,270
he SSC, a cash-method partnership, has a balance sheet that includes the following assets on December 31 of the current year: Basis FMV Cash $ 180,000 $ 180,000 Accounts receivable 0 60,000 Land 90,000 120,000 Total $ 270,000 $ 360,000 Susan, a one-third partner, has an adjusted basis of $90,000 for her partnership interest. If Susan sells her entire partnership interest to Emma for $120,000 cash, how much capital gain and ordinary income must Susan recognize from the sale
Answer:
$10,000 capital gain; $20,000 ordinary income
Explanation:
Calculation to determine how much capital gain and ordinary income must Susan recognize from the sale
Calculation for ORDINARY INCOME
Using this formula
Ordinary income=(
Unrealized receivables × Interest)
Let plug in the formula
Ordinary income=($60,000*1/3)
Ordinary income=$20,000
Calculation for CAPITAL GAIN
Using this formula
Capital gain= Total gain -Ordinary income
Let plug in the formula
Capital gain=$30,000-$20,000
capital gain=$10,000
Therefore the capital gain and ordinary income that Susan must recognize from the sale are:
$10,000 capital gain; $20,000 ordinary income
Marginal revenue,graphically is:_________
a. the slope of a line from the origin to a point on the total revenue curve.
b. the slope of a line from the origin to the end of the total revenue curve.
c. the slope of the total revenue curve at a given point.
d. the vertical intercept of a line tangent to the total revenue curve at a given point.
e. the horizontal intercept of a line tangent to the total revenue curve at a given point.
Answer:
c. the slope of the total revenue curve at a given point.
Explanation:
Cost-volume-profit analysis is also known as the break even analysis, it is an important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is. It is used to determine how changes in differing levels of activities such as costs and volume affect a company's operating income and net income.
Marginal cost can be defined as the additional or extra cost that is being incurred by a company as a result of the production of an additional unit of a product or service.
Generally, marginal cost can be calculated by dividing the change in production costs by the change in level of output or quantity.
Marginal revenue can be defined as the additional amount of money that is gained or generated by a business firm from the sales of an additional unit of a product or service.
Marginal revenue, graphically is the slope of the total revenue curve at a given point.
This ultimately implies that, the change in the value of the total revenue curve at a given point gives the marginal revenue.
For a business owner, insurance is a cost just like any other expenses. How does buying business
insurance and offering insurance to employees affect the business's profit and success?
Answer:
It adds an additional expense which means a percentage of profits are depleted. However, it contributes to the wellbeing of the employees showing that they are cherished and have the opportunity to earn benefits which can play a role in motivating them. Due to this it is more likely the workforce would be more comfortable working for the organisation thus leading to a higher chance at success.
Jenny has a $82,500 basis in her 50 percent partnership interest in the JM Partnership before receiving any distributions. This year JM makes a proportionate operating distribution to Jenny of a parcel of land with an $110,000 fair value and a $89,700 basis to JM. The land is encumbered with a $42,850 mortgage (JM's only liability). What is Jenny's basis in the land and her remaining basis in JM after the distribution
Answer:
$89,700 land basis, $14,225 JM basis.
Explanation:
Calculation to determine Jenny's basis in the land and her remaining basis in JM after the distribution
Based on the information given her basis in the land equal to the amount of $89,700 while are remaining basis in JM is the amount of $14,225, Calculated as:
Predistribution basis in JM $82,500
Add deemed contribution $21,425
(50%*$42,850)
Less: basis allocated to land ($89,700)
Remaining basis in JM $14,225
Therefore her basis in the land and her remaining basis in JM after the distribution are:
$89,700 land basis, $14,225 JM basis.
Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2021. The inventory as reported at the end of 2020 using LIFO would have been $53,000 higher using FIFO. Retained earnings at the end of 2020 was reported as $710,000 (reflecting the LIFO method). The tax rate is 35%.
Required:
a. Calculate the balance in retained earnings at the time of the change (beginning of 2009) as it would have been reported if FIFO had been used in prior years.
b. Prepare the journal entry at the beginning of 2009 to record the change in principle.
Answer:
a. The balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years is $744,450.
b. Debit Inventory for $53,000; Credit Income tax payable for $18,550; and Credit Retained earnings for $34,450.
Explanation:
Note: There is an error in the date stated in the requirements of the question as they are different from the date in the body of the question. The requirements are therefore restated with the correct date before answering the question as follows:
a. Calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years.
b. Prepare the journal entry at the beginning of 2021 to record the change in principle.
The explanation of the answer is now given as follows:
a. Calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years.
The effect of LIFO is to overstate the cost of goods sold and understated the retained earnings.
The balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years can therefore be determined as follows:
Inventory understatement net of tax = $53,000 * (100% - Tax rate) = $53,000 * (100% - 35%) = $34,450
Therefore, we have:
Retained earnings under FIFO = Retained earnings as reported + Inventory understatement net of tax = $710,000 + $34,450 = $744,450
Therefore, the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years is $744,450.
b. Prepare the journal entry at the beginning of 2021 to record the change in principle.
The journal entry will look as follows:
Details Debit ($) Credit ($)
Inventory 53,000
Income tax payable (53,000 * 35%) 18,550
Retained earnings 34,450
(To record the change in principle.)