Answer:
Hurte-Paroxysm Products, Inc. (HP)
The short-run impact of each pricing strategy is as follows:
Alternative 1 Alternative 2
Reduce Price to $170 Maintain Price of $200
Gross profit $2,500,000 $3,200,000
Reduction in Gross Profit $1,500,000 $800,000
b. (2) maintain the same dollar price of $200, raise the real price in Brazil (to R$800 from R$680)to compensate for the devaluation, and experience a 20% drop in volume.
c. If HP maintains the same real price and same unit volume, the firm's gross profits will be $2,500,000.
Explanation:
a) Data and Calculations:
Exchange rate = R$3.40/US$
Current exports of printers per year to Brazil = 50,000
US unit price of printer in dollars = $200
Brazil unit price of printer in R$ equivalent = R$680 ($200 * R$3.40)
Unit price of printer in R$ when reals is devalued = R$800 ($200 * R$4.00)
The reduced dollar price with devaluation, when real price is maintained = $170 (R$680/R$4.00)
Before Devaluation of Brazil's Real (R$):
Sales volume 50,000
Sales revenue $10,000,000 (50,000 * $200)
Direct costs 6,000,000 (50,000 * $120)
Gross profit $4,000,000
Alternative 1 Alternative 2
Reduce Price to $170 Maintain Price at $200
Sales volume 50,000 40,000 (50,000 * 80%)
Sales revenue $8,500,000 $8,000,000 ($200 * 40,000)
Direct costs 6,000,000 4,800,000 ($120 * 40,000)
Gross profit $2,500,000 $3,200,000 ($80 * 40,000)
Direct costs = $6m ($120 * 50,000) = $4.8m ($120 * 40,000)
g 2. Problems and Applications Q2 Indicate whether each of the following transactions represents an increase in net exports, a decrease in net exports, an increase in net capital outflow, or a decrease in net capital outflow for the United States. Transaction Net Exports Net Capital Outflow Increase Decrease Increase Decrease An American buys a Sony TV. An American buys a share of Sony stock. The Japanese car manufacturer Nissan builds a factory in Ohio. A German citizen buys an Apple computer.
Answer and Explanation:
a. Since an american buys a sony tv so it would decrease the net exports as we know that net exports would be determined by deducting the imports from exports. Here the sony is an import so if an import is increase the net export would decrease
b. As the american purchase a sony stock share so it would increase the net capital outlow as the financial asset and stock would be shown in the capital account. as the money is given to sony so it would increase the net capital outflow
c. Sine the Japanese car would build a factory in Ohio so it decrease the net capital outflow as it is an imported good
d. As German citizen purchase an apple computer so it would rise the net exports as export would increase
Waterway Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6400000 on March 1, $5250000 on June 1, and $8650000 on December 31. Waterway Industries borrowed $3200000 on January 1 on a 5-year, 11% note to help finance construction of the building. In addition, the company had outstanding all year a 9%, 3-year, $6440000 note payable and an 10%, 4-year, $12550000 note payable.
Required:
What are the weighted-average accumulated expenditures?
Answer:
$8,395,833
Explanation:
Calculation to determine What are the weighted-average accumulated expenditures
Weighted-average accumulated expenditures
=($6,400,000 × 10/12) + ($5,250,000 × 7/12) + ($8,650,000 × 0/12)
Weighted-average accumulated expenditures=$5,333,333+$3,062,500+0
Weighted-average accumulated expenditures=$8,395,833
Therefore the weighted-average accumulated expenditures will be $8,395,833
Southern Atlantic Distributors began operations in January 2021 and purchased a delivery truck for $40,000. Southern Atlantic plans to use straight-line depreciation over a four-year expected useful life for financial reporting purposes. For tax purposes, the deduction is 45% of cost in 2021, 30% in 2022, and 25% in 2023. Pretax accounting income for 2021 was $460,000, which includes interest revenue of $68,000 from municipal governmental bonds. The enacted tax rate is 25%.
Assuming no differences between accounting income and taxable income other than those described above:
Required:
1. Complete the following table given below and prepare the journal entry to record income taxes in 2021.
2. What is Southern Atlantic’s 2021 net income?
Answer:
1. Depreciation as per books = Cost of purchase/Useful life
Depreciation as per books = $40,000/4
Depreciation as per books = $10,000
Depreciation as per tax for 2021 = Cost of purchase * Deduction rate
Depreciation as per tax for 2021 = $40,000 * 45%
Depreciation as per tax for 2021 = $18,000
Temporary difference = $18,000 - $10,000
Temporary difference = $8,000
Particulars Amount Tax Rate Tax Recorded as
Pretax accounting income $460,000
Permanent difference -$68,000
Income subject to taxation $392.00 25% $98,000 Income tax expense
Temporary difference -$8,000 25% -$2,000 Deferred tax liability
Income taxable in $384,000 25% $96,000 Income tax payable
current year
Journal Entries - Southern Atlantic Distributors
Date Particulars and Explanation Debit Credit
Income tax expense $98,000
To Income taxes payable $96,000
To Deferred tax liability $2,000
(To record income tax expense)
2. Net income for 2021 = Pretax income - Income tax expense
Net income for 2021 = $460,000 - $98,000
Net income for 2021 = $362,000
On December 27, 2020, Roberta purchased four tickets to a charity ball sponsored by the city of San Diego for the benefit of underprivileged children. Each ticket cost $125 and had a fair market value of $25. On the same day as the purchase, Roberta gave the tickets to the minister of her church for personal use by his family. At the time of the gift of the tickets, Roberta pledged $11,050 to the building fund of her church. The pledge was satisfied by a check dated December 31, 2020, but not mailed until January 3, 2021.
a. Presuming Roberta is a cash basis and calendar year taxpayer, she can deduct $_________ for the tickets and $____________ for the pledge as a charitable contribution for 2018.
b. Would the amount of the deduction be any different if Roberta were an accrual basis taxpayer?
Answer:
a. Presuming that Roberta is a cash basis and calendar year taxpayer, how much can she deduct as a charitable contribution for 2020?
Roberta can deduct ($125 x 4) - ($25 x 4) = $500 - $100 = $500. She cannot deduct the check because it was not mailed before December 31.
b. Would the amount of the deduction be any different if Roberta was an accrual basis taxpayer? Explain.
As an accrual taxpayer, she could deduct $500 + $11,050 = $11,550. She had already written the check and the fact that it was mailed on January 3 doesn't make a difference for an accrual taxpayer.
what is the reading about?
he information systems department prides itself on being on the edge of high-tech course offerings. They were the first department to create online classes and the first to battle all of the issues associated with these offerings. When Wally interviewed for the new assistant professor position, he knew that his subcutaneous chip was only a hiring decision away. Corporate culture in this department is probably most affected by: The environment.
Answer: Technology
Explanation:
The options relating to the question are:
A) The environment.
B) Technology.
C) Geographical location.
D) Critical incidents.
Based on the information given in the question, we can infer that Corporate culture in this department is probably most affected by technology.
Since they were the first department to create online classes and also they were the first to solve the issues that were associated with these offerings, it simply means that they department was mostly affected by technology.
Lastly, Wally knowing that his subcutaneous chip was only a hiring decision away was because he knew that the department focused on technology.
Other options such as environment, geographical location and critical incidents are wrong in this case.
Stahl Company was incorporated as a new business on January 1, 2019. The company is authorized to issue 600,000 shares of $2 par value common stock and 80,000 shares of 6%, $20 par value, cumulative preferred stock. On January 1, 2019, the company issued 75,000 shares of common stock for $15 per share and 5,000 shares of preferred stock for $25 per share. Net income for the year ended December 31, 2019, was $500,000.
Required:
Prepare the stockholders’ equity section of the balance sheet for Stahl Company.
Answer:
Stahl Company
Stockholders' Equity section of the balance sheet
As of December 31, 2019
Authorized shares:
Common Stock, 600,000 at $2 par value
6%, Preferred Stock, 80,000 at $20 par value
Issued shares:
Common stock, 75,000 at $2 par value $150,000
6% Preferred stock, 5,000 at $20 par value 100,000
Additional Paid-in Capital, Common stock 975,000
Additional Paid-in Capital, 6% Preferred stock 25,000
Retained earnings, December 31, 2019 500,000
Total equity $1,750,000
Explanation:
a) Data and Calculations:
Authorized shares:
Common Stock, 600,000 at $2 par value
6%, Preferred Stock, 80,000 at $20 par value
Issued shares:
Cash $1,125,000 Common stock $150,000 Additional Paid-in Capital, Common stock (75,000 * $13) $975,000
Cash $125,000 6% Preferred stock, $100,000 Additional Paid-in Capital, 6% Preferred stock $25,000 ($5 * 5,000)
Retained earnings, December 31, 2019 = $500,000
Presented below is a list of items that could be included in the intangible assets section of the balance sheet. Choose the items that meet the qualifications to be treated as an intangible asset on the balance sheet.
a. Unsuccessful legal defense costs of trademark
b. Legal costs in securing copyright
c. Purchased patent
d. Investment in subsidiary
e. Filing fees for patent
f. Purchase of a franchise
g. Successful legal defense costs for copyright
h. Research costs for new drug
i. Sale of a franchise
j. Internal development costs for patent
k. Purchased copyright
l. Initial training costs for startup of new business
Answer:
Intangible Assets:
c. Purchased patent
f. Purchase of a franchise
k. Purchased copyright
Explanation:
Intangible assets are financial resources that have no physical properties. They must be acquired by the entity as a result of past events to be recognized. Examples of intangible assets are Brands, Goodwill, Intellectual properties (e.g. Trade Secrets, Patents, Trademark, and Copyrights), Licensing rights, Customer lists, and qualified R&D.
They are usually amortized over their estimated useful life. Annually, the entity must carry out impairment tests to determine if there is an impairment loss, especially for indefinite intangible assets which are not amortized.
The legal costs are not intangible assets on their own but can be capitalized. This means that they can be included in the affected intangible assets.
A company prints proceedings books for a trade show that are sold to attendees for $10 per book. The books cost the company $2 per book to make. Any books left over at the end of the trade show can be sold to a local paper mill for $0.50 each, but it costs the printing company $0.25 per book to haul them to the paper mill. What are the underage and overage costs for the books
Answer and Explanation:
Given that
Selling price = $10
Cost price = $2
Now
The Salvage Value (SV) = 0.50 - 0.25 = 0.25
So,
Underage penalty (Cu) = Selling price - Cost price
= $10 - $2
= $8
And,
Overage penalty (Co) = Cost price - Salvage Value
= $2 - $0.25
= $1.75
Hence, the same is to be conisdered
A company must decide between scrapping or reworking units that do not pass inspection. The company has 22,000 defective units that cost $6 per unit to manufacture. The units can be sold as is for $2.00 each, or they can be reworked for $4.50 each and then sold for the full price of $8.50 each. If the units are sold as is, the company will be able to build 22,000 replacement units at a cost of $6 each, and sell them at the full price of $8.50 each.
What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the units as scrap or rework them? (Deductible amounts should be indicated with a minus sign.)
Sell as scrap Rework
Sales of scrap units
Sales of reworked units
Cost to rework units
Opportunity cost of not making new units
Incremental income (loss) $0 $0
The company should:
Answer: See explanation
Explanation:
Sell as scrap:
Sales of scrap units:
= 22000 × $2.00
= $44,000
Rework:
Sale of reworked unit = 22000 × $8.50 = $187,000
- Cost to rework unit = 22000 × $4.50 = $99,000
- Opportunity cost of not making new unit = 22000 × ($8.50 - $6) = $45000
Incremental income(loss) = $33000
Since the incremental Income from scrap is more than reworking, then it implies that the company should sell as scrap.
Answer:
A. Sales as scrap $44,000
Rework $33,000
B. The company should sell as scrap
Explanation:
A. Calculation to determine the incremental income from selling the units as scrap and reworking and selling the units
SALES AS SCRAP REWORK
Sales of scrap units $44,000 $0
( 22000 × $2.00)
Sale of reworked unit $0 $187,000
( 22000 × $8.50 )
Less Cost to rework unit $0 ($99,000)
(22000 × $4.50)
Less Opportunity cost of not making new unit
$0 ($55,000)
[22000 × ($8.50 - $6)]
Incremental income(loss) $44,000 $33,000
Therefore the incremental income from selling the units as scrap is $44,000 and reworking and selling the units is $33,000
B. Based on the above calculation the company should sell as SCRAP because the incremental income of SALES AS SCRAP is higher than that of rework.
Market Structure and Market Power
The marginal revenue curve of a firm with market power will always lie below its demand curve because of:_____.
a. the discount effect and the substitution effect.
b. the substitution effect and the income effect.
c. the output effect and the discount effect.
d. the output effect and the substitution effect.
Answer: c. the output effect and the discount effect.
Explanation:
The output effect is how firms with market power control their production in honest to make profit.
A firm with market farm will have to reduce it's marginal revenue curve to increase sales.
The marginal revenue will therefore be below the Demand curve to show that the marginal revenue has to be reduced for a team to sell more goods.
Required information: Analyzing income effects from eliminating departments.
Suresh Co. expects its five departments to yield the following income for next year.
Dept. M Dept. N Dept. O Dept. P Dept. T Total
Sales $66,000 $38,000 $59,000 $45,000 $31,000 $239,000
Expenses
Avoidable 11,300 38,200 23,300 15,500 40,500 128,800
Unavoidable 53,000 14,400 4,500 31,200 11,900 115,000
Total expenses 64,300 52,600 27,800 46,700 52,400 243,800
Net income (loss) $1,700 $(14,600) $31,200 $(1,700) $(21,400) $(4,800)
Re-compute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios.
1) Management eliminates departments with sales dollars that are less than avoidable expenses.
2) Management eliminates departments with expected net losses.
Answer and Explanation:
The computation and the preparation is presented below:
1.
Particulars Dept. M Dept. N Dept. O Dept. P Dept. T Total
Sales $66,000 $59,000 $45,000 $170,000
Expenses
Avoidable $11,300 $23,300 $15,500 $50,100
Unavoidable $53,000 $14,400 $4,500 $31,200 $11,900 $115,000
Total expense $64,300 $14,400 $27,800 $46,700 $11,900 $165,100
Net income
or loss $1,700 -$14,400 $31,200 -$1,700 -$11,900 $4,900
2.
Particulars Dept. M Dept. N Dept. O Dept. P Dept. T Total
Sales $66,000 $59,000 $125000
Expenses
Avoidable $11,300 $23,300 $34,600
Unavoidable $53,000 $14,400 $4,500 $31,200 $11,900 $115,000
Total expense $64,300 $14,400 $27,800 $31,200 $11,900 $149,600
Net income
or loss $1,700 -$14,400 $31,200 -$31,200 -$11,900 -$24,600
Sheridan Company has 7500 shares of 5%, $100 par value, cumulative preferred stock and 15000 shares of $1 par value common stock outstanding at December 31, 2020. There were no dividends declared in 2018. The board of directors declares and pays a $71250 dividend in 2019 and in 2020. What is the amount of dividends received by the common stockholders in 2020
Answer:
See below
Explanation:
Given the above information,
The previous year preference dividend payable
= Previous year preferred dividend payable + Current year preference dividend payable - Total dividend paid in 2019
= (7,500 × $100 × 0.05) + (7,500 × $100 × 0.05) - $71,250
= $37,500 + $37,500 - $71,250
= $3,750
The dividends received by stockholders in 2020 will be
= Total dividend paid in 2020 - Current year preferred dividend - Previous year preference dividend payable
= ($71,250 - $37,500 - $3,750)
= $30,000
Suppose Dina gets a sales bonus at her place of work that gives her an extra $800 of disposable income. She chooses to spend $600 and save the remaining $200. From this, you can tell that Dina's marginal propensity to consume (MPC) is , and her marginal propensity to save (MPS) is . Mathematically, it must always be true that: Disposable Income = Therefore, it must also be true that: 1 =
Answer:
MPC = 0.75
MPS = 0.25
Disposable income = amount spent on consumption + amount saved
Marginal Propensity to Consume + Marginal Propensity to Save = 1
Explanation:
Marginal propensity to consume is the proportion of disposable income that is spent on consumption
Marginal propensity to consume = amount consumed / disposable income
Marginal propensity to save is the proportion of disposable income that is saved
Marginal propensity to save = amount saved / disposable income
MPC + MPS = 1
Disposable income = amount spent on consumption + amount saved
MPC = 600 / 800 = 0.75
MPS = 200 / 800 = 0.25
The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities:
Mixing: water, sugar, and beverage concentrate are mixed.
Filling: mixed beverage is filled into 12-oz. cans.
Packaging: properly filled cans are boxed into cardboard "fridge packs."
The activity costs associated with these activities for the period are as follows:
Mixing $286,000
Filling 253,500
Packaging 110,500
Total $650,000
The activity costs do not include materials costs, which are ignored for this analysis. Each can is expected to contain 12 ounces of beverage. Thus, after being filled, each can is automatically weighed. If a can is too light, it is rejected, or "kicked," from the filling line prior to being packaged. The primary cause of kicks is heat expansion. With heat expansion, the beverage overflows during filling, resulting in underweight cans. This process begins by mixing and filling 6,760,000 cans during the period, of which only 6,500,000 cans are actually packaged. 260,000 cans are rejected due to underweight kicks. A process improvement team has determined that cooling the cans prior to filling them will reduce the amount of overflows due to expansion. After this improvement, the number of kicks is expected to decline from 260,000 cans to 65,000 cans, thus increasing the number of filled cans to 6,695,000 [6,500,000 (260,000 - 65,000)].
Required:
a. Determine the total activity cost per packaged can under present operations.
b. Determine the amount of increased packaging activity costs from the expected improvements.
c. Determine the expected total activity cost per packaged can after improvements.
Answer:
A. $0.1 per can
B. $3,315
C. 0.098 per packaged can
Explanation:
a) Calculation to Determine the total activity cost per packaged can under present operations.
Using this formula
Total activity cost per packaged = Total activity cost under present operations ÷ total cans packaged
Let plug in the formula
Total activity cost per packaged= $650,000 ÷ 6,500,000
Total activity cost per packaged= $0.1 per can
Therefore the total activity cost per packaged can under present operations is $0.1 per can
b) Calculation to Determine the amount of increased packaging activity costs from the expected improvements.
First step is to calculate the Packaging cost per bottle =
Using this formula
Packaging cost per bottle = Current packaging cost ÷ total cans packaged
Let plug in the formula
Packaging cost per bottle = 110,500 ÷ 6,500,000
Packaging cost per bottle = $0.017 per bottle
Second step is to calculate the Total packaging cost
Using this formula
Total packaging cost = Total bottle × cost per bottle
Let plug in the formula
Total packaging cost= 6,695,000 × $0.017
Total packaging cost= $113,815
Now let determine the amount of increased packaging activity costs from the expected improvements.
Using this formula
Amount of increased packaging activity costs = total packaging cost - current packaging cost
Let plug in the formula
Amount of increased packaging activity costs= $113,815 - 110,500
Amount of increased packaging activity costs= $3,315
Therefore the amount of increased packaging activity costs from the expected improvements is $3,315
c) Calculation to Determine the expected total activity cost per packaged can after improvements
First step is to calculate Total activity cost using this formula
Total activity cost = Mixing cost + filling cost + packaging cost
Let plug in the formula
Total activity cost == $286,000 + $253,500 + $113,815
Total activity cost == $653,315
Now let determine the Expected total activity cost per packaged can
Using this formula
Expected total activity cost per packaged can = Total activity cost ÷ no. of bottles
Let plug in the formula
Expected total activity cost per packaged can= $653,315 ÷ 6,695,000
Expected total activity cost per packaged can=0.098 per packaged can
Therefore the expected total activity cost per packaged can after improvements is 0.098 per packaged can
It takes courage to kill a project, but sometimes you know it has to be done. Some common symptoms of a failing project are ill-defined initial requirements, constant changes in scope, excessive changes in resources and personnel, and extreme stress/tension over anticipated changes. Yet, a project may have followed the "book" and done everything right, but still need to be terminated. This was the case with a project in the U.K. where the client was highly committed to the project, contributing time, resources, and prompt decisions. The scope was clear, completion criteria agreed upon, the budget and timeframe acceptable to all. Early on, however, an unavoidable scope change had to be made, requiring a 20 percent increase in time and a 10 percent increase in cost, agreed to by the client. As the project approached the end of the fi rst phase, it was clear that the quality and schedule were both deteriorating, as indicated in progress reports to both the client and senior management. A quick review showed that the results were not going to be acceptable. With the agreement of the PM, an outside Expert was called in to review the effort to date and make a recommendation. Then a joint meeting was held with the Expert, the PM, the Program Manager, and the primary contractor where it was decided that the best thing to do was to work together to complete phase one and then terminate the project, with a clean handover to another team to tackle phase two. Although disappointing to everyone, the close and frequent communications of both progress and concerns throughout the project with upper management and the client, offered in timely, digestible amounts, reduced their expectations and protected the client from a surprise at the end. Honest, consistent communication throughout the project life cycle resulted in improved trust, integrity, and confi dence in the vendor and their team.
Required:
a. What are your thoughts about doing everything right and the project still failing?
b. Does the admonition "Never surprise the boss!" now make more sense? Why?
c. Do you think the scope change at the beginning was the problem here, or was there going to be a problem anyway?
Solution :
a). There are several methodologies for the projects that are followed by the different companies. The successful of any project depends upon the far sightedness of the project manager and the ability of him to the execute the project in a proper order. One of the key factors that makes a project complete is the behavior of the people.
The vendors incur some excessive or some unnecessary costs to the project of they are not properly managed. The duty of the project manager is to foresee the scope of change if there is any.
If there were some additional cost and additional time for the completion of the project, then it means that it will delay the benefits of the project to others and hence attracts lower return of investments. Even though everything went according to the papers or the book, there is a lack of dedication on the project manager who believed and trusted the vendor too much.
b). A manager needs complete and clear information for an effective decision making. In any project, surprises gives a lesser amount of time and also less information related tot he project to resolve any issues that occurs at any time. It also disappoints the management that leads to spur of moment decision. So, 'Never surprise he Boss' makes a complete sentence.
c). The major factor why the project failed is the changed in the scope. The objectives are poorly cited and the timelines went overhead including the cost of the project. Too much trust of the project manager on the vendor also lead to the schedule and the quality issues.
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $640,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $7,000 per year.
Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $540,000. Scenic reported net income of $350,000. Placid Lake declared $170,000 in dividends during this period; Scenic paid $64,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows:
Placid Lake Scenic
Inventory $380,000 $114,000
Land 840,000 440,000
Equipment (net) 640,000 540,000
During 2020, intra-entity sales of $195,000 (original cost of $90,000) were made. Only 30 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $330,000 in intra-entity sales were made with an original cost of $83,000. Of this merchandise, 40 percent had not been resold to outside parties by the end of the year.
Required:
a. What is consolidated net income for Placid Lake and its subsidiary?
b. If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and interest?
c. If the intra-entity sales were downstream, how would consolidated net income be allocated to the controlling and interest?
Answer:
See the attached excel file for all the calculation related parts a, b, and c.
From the attached excel file, we have:
a. Consolidated net income for Placid Lake and its subsidiary is $815,700.
b-1. Noncontrolling interest share of consolidated net income is $27,570.
b-2. Placid Lakes share of consolidated net income is $788,130.
c-1. Noncontrolling interest share of consolidated net income is $34,300.
c-2. Placid Lakes share of consolidated net income is $781,400.
Explanation:
Note: See the attached excel file for all the calculation related parts a, b, and c.
In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $59,160, and the Purchasing Department had expenses of $20,680 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records:
Residential Commercial Government Contract
Sales $2,000,000 $3,250,000 $2,900,000
Weekly payroll (52 weeks per year) 400 250 150
Monthly payroll 80 30 10
Number of purchase requisitions per year 7,500 3,000 2,000
Required:
a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.
b. Residential's service department charge is _______ than the other two divisions because Residential is a user of service department services. Residential has many employees on a weekly payroll, which translates into a ________ number of payroll transactions.
Answer: See explanation
Explanation:
a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.
The solution has been attached.
b. Residential's service department charge is (higher) than the other two divisions because Residential is a (heavy) user of service department services. Residential has many employees on a weekly payroll, which translates into a (larger) number of payroll transactions.
Businesses rarely consider profits when supplying goods and services.
True of False
Bridgeport Co. both purchases and constructs various equipment it uses in its operations. The following items for two different types of equipment were recorded in random order during the calendar year 2020.
Purchase
Cash paid for equipment, including sales tax of $7,400 $155,400
Freight and insurance cost while in transit 2,960
Cost of moving equipment into place at factory 4,588
Wage cost for technicians to test equipment 5,920
Insurance premium paid during first year of operation on this equipment 2,220
Special plumbing fixtures required for new equipment 11,840
Repair cost incurred in first year of operations related to this equipment 1,924
Construction
Material and purchased parts (gross cost $296,000; failed to take 2% cash discount) $296,000
Imputed interest on funds used during construction (stock financing) 20,720
Labor costs 281,200
Allocated overhead costs (fixed-$29,600; variable-$44,400) 74,000
Profit on self-construction 44,400
Cost of installing equipmen 6,512
Compute the total cost to be capitalized for each of these two pieces of equipment.
Purchase equipment $enter a dollar amount
Construction equipment $enter a dollar amount
Answer:
See below
Explanation:
Total cost of equipment
Cash paid for equipment, including sales tax
$155,400
Freight and insurance cost while in transit
$2,960
Cost of moving equipment into place at factory
$4,588
Wage cost for technicians to test the new equipment
$5,920
Special plumbing fixtures required for new equipment
$11,840
Total cost of equipment
$180,708
Insurance premium paid reported in the profit and loss statement as insurance expense for $2,220
Repair cost of equipment reported in the profit and loss statement as repair and maintenance expense for $1,924
••All expenses up to put to use of fixed assets should be capitalized
Total cost of construction
Material and purchased price [$296,000 × 0.98]
$290,080
Labor cost
$281,200
Overhead cost
$74,000
Cost of installing equipment
$6,512
Total cost of construction
$651,792
•Material and purchase parts costs after discount is taken back because its cash equivalent price
•Inputted interest on funds used during construction(stock financing) is treated as opportunity cost and it should not be reported.
CHRO Conversations: SVP of HR Tim Richmond, AbbVie
People will work harder if they know their results are noticed and rewarded appropriately. At AbbVie, the Human Resources area places special emphasis on rewarding employees based on levels of contributions. This activity is important because it will examine how one company utilizes talent philosophies that differentiate rewards based on employee results.
The goal of this activity is to help you recognize how strategic goals of a company can be supported by HR activities that reward and recognize employees who produce at high levels. These rewards go well beyond salary and include opportunities for career growth and development.
At AbbVie, people want to know their ________ and results will be rewarded appropriately.
a) hard work
b) time off
c) verbal communication
d) philosophical ideals
At AbbVie, HR tends to think of "more and better and now" as it relates to career opportunities, human capital capabilities, and raising the bar on a continual basis for:__________
a) career growth.
b) higher salaries.
c) better benefits.
d) higher quantity outputs.
e) higher quality outputs.
The "talent philosophy" at AbbVie includes differentiating levels of:________
a) development and hiring.
b) performance and rewards.
c) rewards and terminations.
d) performance and hiring.
e) development and global travel.
AbbVie has a standard in hiring of "replacing every person who leaves with someone":________
a) younger.
b) with a college degree.
c) who has more experience.
d) better.
e) from another country.
AbbVie does not want to pay its ________ performers the same as it pays its higher performers.
a) older
b) more experienced
c) lower
d) international
e) specialized
Answer:
1. a) hard work
2. e) higher quality outputs
3. b) Performance and rewards
4. d) better
5. c) lower
Explanation:
AbbVie Human resource is mostly concerned with the performance of their employees and rewarding them according to their capabilities. The employees who perform better and completes their tasks within given time are rewarded more than those employees who fail to perform better.
The Human Resource department is an aspect of government that manages the people that work in the organization. The following answers to the prompts about the Human Resources at an organization called AbbVie have been indicated below;
At AbbVie, people want to know their (A. Hardwork) and results will be rewarded appropriately.At AbbVie, HR tends to think of "more and better and now" as it relates to career opportunities, human capital capabilities, and raising the bar on a continual basis for (A. career growth).The "talent philosophy" at AbbVie includes differentiating levels of (B. performance and rewards).AbbVie has a standard in hiring of "replacing every person who leaves with someone" (D. better).AbbVie does not want to pay its (C. lower) performers the same as it pays its higher performers
The excerpt above shows the policies that the Human Resource department of an organization has taken to move the system forward. They have resolved to reward only the top performers.
This will motivate the staff that are not doing well to get better at their jobs.
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On January 1, 2021, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $414,430 and has an expected economic life of five years. Aqua expects the residual value at December 31, 2024, to be $52,000. Negotiations led to Maywood guaranteeing a $73,000 residual value. Equal payments under the lease are $104,000 and are due on December 31 of each year with the first payment being made on December 31, 2021. Maywood is aware that Aqua used a 7 % interest rate when calculating lease payments. (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.) 6 Required: 1. & 2. Prepare the appropriate entries for Maywood on January 1, 2021 and December 31, 2021, related to the lease. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar.)
Answer: See explanation
Explanation:
The appropriate entries for Maywood on January 1, 2021 and December 31, 2021, related to the lease goes thus:
January 1, 2021:
Debit Right of use asset $368291
Credit Lease payment $368291
December 31, 2021:
Debit Ammortization expense $92073
Credit Rights of use asset $92073
Debit Interest expense $25780
Debit Lease payable $78220
Credit Cash $104000
The working to the above entries has been attached
Flychucker Corporation is evaluating an extra dividend versus a share repurchase. In either case $14,000 would be spent. Current earnings are $2.00 per share, and the stock currently sells for $50 per share. There are 2,000 shares outstanding. Ignore taxes and other imperfections. a. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share
Answer:
hereeeeeeeeeeeeeeeee
Flychucker Corporation is evaluating an extra dividend versus a share Alternative 1 Extra dividend Price per share 43.00-50-14000/2000 Shareholder wealth $50.00
What is corporate?A corporation is a collection of people or a business that has been given legal status as a single entity by the state and is used for specific legal purposes. Early corporations were created with a charter. The majority of governments currently permit the registration of new corporations.
Alternative 2 Repurchase Price per share Shareholder wealth $ 50.00 Corporation is evaluating an extra dividend versus a share Alternative 1 Extra dividend Price per share 43.00-50-14000/2000 Shareholder wealth $50.00
Therefore, Flychucker Corporation is evaluating an extra dividend versus a share of Alternative
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Alternative 2 Repurchase Price per share Shareholder wealth $ 50.00
The information in the table is from the statement of cash flows for a company at four different points in time (M, N, O, and P). Negative values are presented in parentheses.
For each point in time, state whether the company is most likely in the introductory phase, growth phase, maturity phase, or decline phase.
Point in Time
M N O P
Net cash provided by
operating activities $(60,000) $30,000 $120,000 $(10,000)
Cash provided by
investing activities (100,000) 25,000 30,000 (40,000)
Cash provided by
financing activities 70,000 (90,000) (50,000) 120,000
Net income (38,000) 10,000 100,000 (5,000)
Answer: m-introductory phase
n-decline phase
o-maturity phase
p-growth phase
Explanation:
For M, based on the values given, the company is in the introductory phase. This is the product's cycle first stage where a particular product is being launched into the market.
For N, based on the values given, the company is in the decline phase. This is the phase where there's reduction in sales and profits stop.
For O, based on the values given, the company is in the maturity phase. This is the stage of whereby the growth of the sales has started to reduce.
For P, based on the values given, the company is in the growth phase. This is the stage whereby the product gains acceptance among the consumers, and the public as a whole. There'll also be an increase in the sales and revenue.
Dixie Chicken is about to close one of its fast food franchises. As part of the closing, the firm will sell a refrigeration unit and its cooking units. The book value of the refrigeration unit is currently $18,203.00, while the book value of the cooking unit is $3,713.00. A buyer has offered $12,454.00 for the refrigerator and $6,116.00 for the cooking unit. The tax rate facing the firm is 35.00%. What is the cash flow from selling these assets
Answer:
$19741.10
Explanation:
Cash flow from the sale = salvage value - tax(salvage value - book value)
Salvage value is the price at which the asset is sold
The refrigerator : $12,454.00 -0.35($12,454.00 - $18,203.00) = $14,466.15
$6,116.00 - 0.35($6,116.00 - $3,713.00) = $5274.95
Total cash flow = $5274.95 + $14,466.15 = $19741.10
Vaughn Manufacturing purchased land as a factory site for $1345000. Vaughn paid $116000 to tear down two buildings on the land. Salvage was sold for $8100. Legal fees of $5500 were paid for title investigation and making the purchase. Architect's fees were $46900. Title insurance cost $3900, and liability insurance during construction cost $4200. Excavation cost $15860. The contractor was paid $4300000. An assessment made by the city for pavement was $9500. Interest costs during construction were $260000.
1. The cost of the land that should be recorded by Wilson Co. is:_____.
a. $989,880.
b. $980,480.
c $996,280.
d. $986,880.
2. The cost of the building should be recorded by Wilson Co. is:_____.
a. 2,804,840.
b. 2,813,200.
c. 2,803,800.
d. 3,014,240.
Answer:
Cost of Land = $1,471,800
Cost of Building = $4,626,960
Explanation:
Note: "The options attached to the question are incorrect because its belongs to another question entirely and this can be seen as attached as picture below"
1. Cost of Land = Purchase Value + Cost Incurred to Tear Down two Buildings - Salvage + Legal Fees + Title Insurance Cost + Assessment Cost
Cost of Land = $1345000 + $116000 - $8100 + $5500 + $3900 + $9500
Cost of Land = $1,471,800
2. Cost of Building = Architect's Fees + Liability Insurance Cost + Excavation Cost + Contractor's Payment + Interest Cost
Cost of Building = $46900 + $4200 + $15860 + $4300000 + 260000
Cost of Building = $4,626,960
You have received a research report done by a consultant for your firm, a life insurance company. The study is a survey of morale in the home office and covers the opinions of about 500 secretaries and clerks plus about 100 executives. You are asked to comment on its quality.
What will you look for?
Answer:
The research report must have the following attributes:
Easy to read and prepared in very simple languageA good report must outlay all arguments and results, facts, and arguments in a way that aligns properly with the objective of the reportthe report must be prepared on time It must be straightforward. The presentation must be very well articulated, properly spaced, aligned using very clear font types.Cheers
Coronado Industries had 293000 shares of common stock issued and outstanding at December 31, 2020. No common stock was issued during 2021. On January 1, 2021, Coronado issued 200000 shares of nonconvertible preferred stock. During 2021, Coronado declared and paid $110000 cash dividends on the common stock and $79000 on the preferred stock. Net income for the year ended December 31, 2021 was $618000. What should be Coronado's 2021 earnings per common share
Answer:
$3.72
Explanation:
earnings per common share = earning attributable to holder of common stock ÷ weighted average number of common stocks outstanding
therefore,
earnings per common share = $3.72
Waterways has discovered that a small fitting it now manufactures at a cost of $1.00 per unit could be bought elsewhere for $0.83 per unit. Waterways has fixed costs of $0.20 per unit that cannot be eliminated by buying this unit. Waterways needs 474,000 of these units each year. If Waterways decides to buy rather than produce the small fitting, it can devote the machinery and labor to making a timing unit it now buys from another company. Waterways uses approximately 500 of these units each year. The cost of the unit is $13.26. To aid in the production of this unit, Waterways would need to purchase a new machine at a cost of $2,369, and the cost of producing the units would be $10.00 a unit. Without considering the possibility of making the timing unit, evaluate whether Waterways should buy or continue to make the small fitting. The company should (buy/Make) the fitting. Incremental cost / (savings) will be ____________$
Answer:
Particulars Make Buy Incremental cost
Manufacturing cost $474,000 $474,000
Purchase $393,420 ($393,420)
(474,000*$0.83)
Fixed Cost $94,800 ($94,800)
(474,000*$0.20)
Total relevant cost $474,000 $488,220 ($14,220)
Conclusion: The company should make the fitting and the incremental savings will be $14,220
Units-of-activity Depreciation A truck acquired at a cost of $160,000 has an estimated residual value of $10,350, has an estimated useful life of 41,000 miles, and was driven 3,300 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $fill in the blank 1 (b) The depreciation rate $fill in the blank 2 per mile (c) The units-of-activity depreciation for the year $fill in the blank 3
Answer:
Cost of Truck = $160,000
Residual Value = $10,350
Useful Life = 41,000 miles
a. Depreciable Cost = Cost of Truck / Residual Value
Depreciable Cost = $160,000 - $10,350
Depreciable Cost = $149,650
b. Depreciation Rate = Depreciable Cost / Useful Life
Depreciation Rate = $149,650 / 41,000
Depreciation Rate = $3.65 per mile
c. Number of miles driven during the year = 3,300
Depreciation for the Year = Depreciation Rate * Number of miles driven during the year
Depreciation for the Year = $3.65 per mile * 3,300
Depreciation for the Year = $12,045