Answer:
The answer is "subtracting the average return on the U.S. Treasury bill from".
Explanation:
By subtracting the average annual return on the US Treasury bill form of the investment's average return, that excess return is calculated, when the risk premium is another term for excess return. After subtracting the risk-free return from its investment's annualized value, the risk premium is calculated its avg treasury bond investment is a risk-free portfolio.
EllaJane Corporation was organized several years ago and was authorized to issue 4,000,000 shares of $50 par value 4% preferred stock. It is also authorized to issue 1,750,000 shares of $1 par value common stock. In its fifth year, the corporation has the following transactions: Mar. 1 Purchased 2,500 shares of its own common stock at $14 per share.
Apr. 10 Reissued 1,250 shares of its common stock held in the treasury for $18 per share.
Jun. 12 Reissued 1,250 shares of common stock at $12 per share.
Journalize the transactions.
Answer:
Ellajane Corporation - Journal Entries
Date Particulars Debit Credit
1-Mar Treasury Stock $35,000
To Cash $35,000
(Being 2500 shares of treasury stock purchased at $14 per share)
10-Apr Cash A/c (1250*$18) $22,500
To Treasury Stock (1250*14) $17,500
To Additional Paid in Capital $5,000
(Being 1250 shares of treasury stock sold at $18 per share)
12-Jun Cash A/c (1250*12) $15,000
Additional Paid in Capital A/c $2,500
To Treasury Stock (1250*14) $17,500
(Being 1250 shares of treasury stock sold at $12 per share)
You are auditing a bank, and someone provides you with an anonymous tip that an employee is embezzling money from the bank. You decide to investigate the allegation Your interviews with other bank employees confirm that the suspected embezzler has been acting very strange lately. Some employees have seen the employee crying in the bathroom and acting strange in other ways. The bank recently downsized due to poor economic growth, yet the suspect recently bought a new Lexus. Based on some "helpful" hints from bank employees and through your own investigation, you discover that the mortgage taken out by the suspect three years ago for his personal home has recently been paid in full After calculating the suspect's net worth, you deter- mine that he has about $249,000 in income from unknown sources this year alone.
Required:
a. What are possible explanations for why the suspect (1) is experiencing emotional changes and (2) has had an increase in unknown income?
b. Can you conclude from these facts that the suspect has indeed been committing fraud?
Solution :
a). The suspect may experience some emotional changes that are not necessarily due to a scandal or scam. We need to establish that the proper figures and facts are to be analyzed before reaching the conclusion. But however, the primary conclusion is that something is going on on the suspect's mind that needs to be further dealing. (2) increment in the income needs to be validated and also proper root cause of the changes should be analyzed.
b). No from the above facts we cannot conclude that the suspect had committed financial frauds. For this a full proof validation of the facts and the evidences are required for a solid conclusion for helding the suspect for committing financial frauds. Hence further investigation is needed for deriving a conclusion.
The Chilton Corporation specializes in manufacturing one type of desk lamp. Chilton allocates variable manufacturing overhead costs on the basis of machine hours. Chilton budgeted 0.5 machine hours per lamp and allocates overhead at a rate of $1.70 per machine hour. Last year Chilton manufactured 20,000 lamps, used 160,000 machine hours and incurred actual overhead costs of $192,000. What was Chilton's variable manufacturing overhead rate variance last year?
a. $24,000 favorable
b. $24,000 unfavorable
c. $210,900 unfavorable
d. $210,900 favorable
Answer:
Variable manufacturing overhead rate variance = 80,000 favorable
Explanation:
Given:
Overhead rate variance = $1.70 per hour
Total machine hour = 160,000 hour
Actual overhead costs = $192,000
Find:
Variable manufacturing overhead rate variance
Computation:
Variable manufacturing overhead rate variance = [Standard overhead rate - Actual overhead rate]Actual hour
Variable manufacturing overhead rate variance =[1.7 - (192,000 / 160,000)]160,000
Variable manufacturing overhead rate variance = [1.7 - (1.2)]160,000
Variable manufacturing overhead rate variance = [0.5]160,000
Variable manufacturing overhead rate variance = 80,000 favorable
Sam's Dog toys sells a Red toy and a Blue toy. The contribution margin for the Red toy is $5 and for the Blue toy is $10. The expected sales mix is 60% for Red toy and 40% for Blue toy. The total fixed costs amount to $3,000 and the company desires to earn a profit of $500. What is the sale volume in units necessary to reach the desired profit
Answer:
500 units
Explanation:
The computation of the sales units in volume to achieve the desired profit is shown below:
= (Fixed cost + target profit) ÷ (contribution margin per unit)
= ($3,000 + $500) ÷ ($5 × 60% + $10 × 40%)
= $3,500 ÷ 7
= 500 units
Hence, the sales units in volume to achieve the desired profit is 500 units
The above formula should be applied to determine the sales units
hence, the same would be considered
Question 3 of 10
A typical point-of-sale display features products that are likely to be
O A. luxury goods
O B. sophisticated electronics
O C. impulse purchases
O D. display samples
SUBMIT
Answer:
C. impulse purchases
Explanation:
I just took the test
it's c. impulse purchases
A group of young patrons come into the venue after a sports event. They are loud and excited, celebrating a win for their team. Some of the patrons seem as though they have already been drinking, and the other patrons in the venue have noticed this group. A) How do you respond to these patrons? Issue the group with a warning to make sure they know the type of behaviour that the venue expects. B) One of the patrons comes to the bar to order a few jugs of pre-mix alcoholic drinks for the group. Refuse service to the patron and explain why serving alcohol in this manner is irresponsible. C) The patron is not happy that you have refused him service and he pressures you to serve the group the jugs of alcohol. More of the patron’s friends come over to the bar and start to make a scene, talking loudly for the rest of the venue to hear. D) How do you respond to this? E) After you ask some of the patrons to leave the venue, others from the group start to get upset. They are getting more aggressive and you do not think you can handle the situation on your own. How do you respond to this?
Answer:
The following is how I would deal with the issue of drinking and other associated issues among the Patron in the venue.
A) How do you respond to these patrons?
O. Issue the group with a warning to make sure they know the type of behaviour that the venue expects.
B) One of the patrons comes to the bar to order a few jugs of pre-mix alcoholic drinks for the group. Refuse service to the patron and explain why serving alcohol in this manner is irresponsible.
O. I would refuse to serve the group with the mix which they wanted because they are already drunk going by their behaviour. This would also help to prevent total intoxication in the group which would end up endangering the road users should they decide to go home by driving. The best option would be to ensure that, they took taxi back to their various homes rather than driving themselves.
C) The patron is not happy that you have refused him service and he pressures you to serve the group the jugs of alcohol. More of the patron’s friends ........D) How do you respond to this?
O. By subtle reminder to them that, they are becoming a public nuisance in the venue, and would end up calling the police should the continue with their acts.
E) After you ask some of the patrons to leave the venue, others from the group start to get upset. They are getting more aggressive and you do not think you can handle the situation on your own. How do you respond to this?
O. By informing my overall supervisor why at same time putting a call across to the police about the potential breakdown of order in the venue which has a very high chance of leading to fight or injury.
Explanation:
Sycamore Company, which expects to start operations on January 1, 2014, will sell digital cameras in shopping malls. Sycamore has budgeted sales as indicated in the following table. The company expects a 11 percent increase in sales per month for February and March. The ratio of cash sales to sales on account will remain stable from January through March.
Required:
a. Complete the sales budget by filling in the missing amounts.
Sales January February March
Cash sales $47,000
Sales on account 103,000
Total budgeted sale $150,000
b. Determine the amount of sales revenue Sycamore will report on its first quarter pro forma income statement.
Answer:
a. Sales January February March
Cash sales $47,000 $52,170 $57,908.7
Sales on account $103,000 $114,330 $126,906.3
Total budgeted sales $150,000 $166,500 $184,815
Workings
February Cash sales: 47,000*11% = $47,000 + $5170 = $52,170
February Sales on account: $103,000*11% = $103,000 + $11,330 = $114,330
March Cash sales: $52,170 * 11% = $52,170 + $5738.70 = $57,908.7
March Sales on account: $114,330 * 11% = $114,330 + $12,576.3 = $126,906.3
b. Sales revenue in first quarter = $150,000 + $166,500 + $184,815
Sales revenue in first quarter = $501,315
Conciseness of messe refers
Answer:
Kindly check explanation
Explanation:
Conciseness is an important attribute needed in other to attain or communicate effectively. We could think of being concise as having to pass a message or communicate in the simplest possible form without jeopardizing other important elements or attributes needed to communicate effectively. Conciseness eliminates having to go back and forth as well as the use of verbose sentences, unnecessarily long sentences or grammar as one intends to pass a message. Rather, employs the usage of simple, clear cut and minimum possible wordings necessary for the receiver to understand the message being passed across.
Speed World Cycles sells high-performance motorcycles and motocross racers. One of Speed World’s most popular models is the Kazomma 900 dirt bike. During the current year, Speed World Cycles purchased eight of these bikes at the following costs.
Purchase Date Units Purchased Unit Cost Total Cost
July 1 2 $ 4,950 $ 9,900
July 22 3 5,000 15,000
Aug. 3 3 5,100 15,300
8 $ 40,200
On July 28, Speed World Cycles sold four Kazomma 900 dirt bikes to the Vince Wilson racing team. The remaining four bikes remained in inventory at September 30, the end of Speed World’s fiscal year.
Assume that Speed World Cycles uses a perpetual inventory system. (See the data provided.)
Required:
a-1. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes at September 30, using Average cost.
a-2. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes at September 30, using FIFO method.
a-3. Compute the cost of goods sold relating to the sale on July 28 and the ending inventory of Kazomma 900 dirt bikes at September 30, using LIFO method.
b-1. Which of the three cost flow assumptions will result in Speed World Cycles reporting the highest net income for the current year?
b-2. Which of the three cost flow assumptions minimizes the income taxes owed by Speed World Cycles for the year?
b-3. May Speed World Cycles use the cost flow assumption that results in the highest net income for the current year in its financial statements, but use the cost flow assumption that minimizes taxable income for the current year in its income tax return?
Answer:
Speed World Cycles
a. Average Cost FIFO LIFO
Cost of goods sold $20,100 $19,900 $20,300
Ending inventory $20,100 $20,300 $19,900
b-1. FIFO will result in Speed World Cycles reporting the highest net income for the current year, because of the reduced cost of goods sold.
b-2. LIFO minimizes the income taxes owed by Speed World Cycles for the year, because it reduces the income before taxes.
b-3. Yes. However, the cost flow assumptions self-correct in later years, by which time it is not allowed to be jumping from one cost flow assumption to another.
Explanation:
a) Data and Calculations:
Purchase Date Units Purchased Unit Cost Total Cost
July 1 2 $ 4,950 $ 9,900
July 22 3 5,000 15,000
Aug. 3 3 5,100 15,300
Total 8 $ 40,200
July 28 Sold 4
September 30 4 (8 - 4)
Average cost = $40,200/8 = $5,025
a-1. Cost of goods sold = $20,100 (4 * $5,025)
Ending inventory = $20,100 (4 * $5,025)
a-2. FIFO:
Ending inventory = $20,300 (3 * $5,100 + 1 * $5,000)
Cost of goods sold = Cost of goods available minus cost of ending inventory
= $40,200 - $20,300
= $19,900
a-3 LIFO:
Cost of goods sold = $20,300 (3 * $5,100 + 1 * $5,000)
Ending inventory = Cost of goods available minus cost of goods sold
= = $40,200 - $20,300
= $19,900
During a(n) _____ interview, all applicants will be asked the exact same questions.
structured
open
inquiry
behavioral
Answer:
structured is the correct answer.
Explanation:
on edge.
The long-run industry supply curve is the graphic representation of the quantity of output that the industry is prepared to a. supply at a single price after the entry and exit of firms is completed. b. supply at different prices after the exit of firms is completed. c. purchase at different prices after the entry and exit of firms is completed. d. supply at different prices after the entry and exit of firms is completed. e. purchase at different prices after the entry of firms is completed.
Answer: d. supply at different prices after the entry and exit of firms is completed.
Explanation:
The industry supply curve simply shows the relationship that exist between the price at which a good is sold and the industry's total output.
The long-run industry supply curve simply refers to the graphic representation of the quantity of output that the industry is prepared to supply at different prices after the entry and exit of firms has been completed.
At the long-run industry supply curve, it depicts the locus of price and the output produced in that industry as each firm aims to maximize profit.
8. Imagine a private company decides to sponsor an event in exchange for publicity. Give an example of when a sponsorship could have a negative result for the sponsoring company.
Answer:
Political events like a candidate rally are particularly tricky for companies, and sponsoring them could result in a lot of consumer backlash, specially from the people who are not affiliated to the sponsored politician or political party.
This is why many companies avoid political sponsorships or political statements, because politics is a very divisive issue, and while such an action could earn the company the loyal following of a few, it could also discourage a lot more people from ever buying their products.
Carla Vista Company reports the following operating results for the month of August: sales $385,000 (units 5,500), variable costs $250,000, and fixed costs $94,000. Management is considering the following independent courses of action to increase net income. 1. Increase selling price by 10% with no change in total variable costs or units sold. 2. Reduce variable costs to 56% of sales. Compute the net income to be earned under each alternative. 1. Net Income $ 2. Net Income $ Which course of action will produce the higher net income
Answer and Explanation:
The computation is shown below:
1.
Selling Price = Sales ÷ Units Sold
Current Selling Price = $385,000 ÷ 5500
= $70
Now
Expected Selling Price per unit = $70 + ($70× 10%)
= $77
Now
Expected Sales = 5500 × $77
= $423,500
Now
Net Income = Sales - Variable Cost - Fixed Cost
= $423,500 - $250,000 - $94,000
2.
Sales = $385000
Variable cost = $385,000 × 56% = $215,600
Sales $385,000
Less: variable cost -$215,600
Contribution Margin $169,400
Les: fixed cost -$94,000
Net Income $75,400
As we can see that if there is an increase in Selling Price by 10% so it would produce highest Net Income.
On September 1, Best Company began a contract to provide services to Dildwood Company for six months, with the total $10,800 payment to be made at the end of the six-month period. Equal services are provided each month. The firm uses the account Fees Receivable to reflect amounts due but not yet billed. What proper adjusting entry would Best Company make on October 31, the end of the accounting period (no previous adjustment has been made)
Answer and Explanation:
The journal entry is shown below;
Fees receivable $7,200 ($10,800 × 4 months ÷ 6 months)
To Service fees earned $7,200
(being service fees earned is recorded)
Here the fees receivable is debited as it increased the assets and credited the service fees earned as it also increased the revenue
So, this journal entry should be recorded
Those who believe in
monetarism look to all of the
following as a way to raise or
lower the money supply
EXCEPT which one?
A. Place taxes on humanitarian aid.
B. Let the "invisible hand" decide things.
C. The government can change the reserve
ratio.
D. Allow for more governmental securities.
Answer:
C. The government can change the reserve
ratio.
Dary Co. Produces a single product. Its normal selling price is $28 per unit. The variable costs are $18 per unit. Fixed costs are $20,000 for a normal production run of 5,000 units per month. Dary received a request for a special order that would not interfere with normal sales. The order was for 1,500 units and a special price of $17.50 per unit. Dary Co. has the capacity to handle the special order and, for this order, a variable selling cost of $2 per unit would be eliminated.
1. If the order is accepted, what would be the impact on net income?
a. decrease of $750
b. decrease of S6,750
c. increase of $2,250
d. increase of $1,500
2. Should the special order be accepted?
a. Cannot determine from the data given
b. Yes
c. No
d. There would be no difference in accepting or rejecting the special order.
Answer:
1. c. increase of $2,250
2. b. Yes
Explanation:
1. Calculation to determine what would be the impact on net income if the order is accepted
First step is to calculate the variable cost
Variable cost special order= ($18-$2)
Variable cost special order=$16
Now let calculate what would be the impact on net income if the order is accepted
Impact on net income=($17.50-$16)*1,500 units
Impact on net income=$1.50*1,500 units
Impact on net income= increase of $2,250
2. YES the special order should be accepted.
The stockholders’ equity section of Whisper Co. at December 31, 2018 is as follows. Common stock—$15 par value, 100,000 shares authorized, 45,000 shares issued and outstanding $ 675,000 Paid-in capital in excess of par value, common stock 70,000 Retained earnings 430,000 Total stockholders' equity $ 1,175,000 During 2019, the company has the transactions including the following.
Jan. 2 Purchased 6,000 shares of its own stock at $20 cash per share.
Jan. 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record.
Feb. 28 Paid the dividend declared on January 5.
July 6 Sold 2,250 of its treasury shares at $24 cash per share.
Aug. 22 Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Sept 5 Sold 3,750 of its treasury shares at $17 cash per share.
Oct. 28 Paid the dividend declared on September 5.
Dec. 31 Closed the $368,000 debit balance (from net loss) in the Income Summary account to Retained Earnings.
Required:
1. Prepare journal entries to record each of these transactions.
2. Prepare a statement of retained earnings for the year ended December 31, 2019.
3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019.
Answer:
Whisper Co.
1. Journal Entries to record transactions:
Jan. 2 Debit Treasury stock $90,000
Debit Paid-in Capital in Excess $30,000
Credit Cash $120,000
To record the purchase of 6,000 shares of its own stock at $20 cash per share.
Jan. 5 Debit Cash Dividend $78,000
Credit Dividend Payable $78,000
To record the declaration of a $2 per share cash dividend payable on 39,000 (45,000 - 6,000) shares
Feb. 28 Debit Dividend Payable $78,000
Credit Cash $78,000
To record the payment of the dividends.
July 6 Debit Cash $54,000
Credit Treasury stock $33,750
Credit Paid-in Capital in Excess $20,250
To record the resale of 2,250 of its treasury shares at $24 cash per share.
Aug. 22 Debit Cash Dividend $90,000
Credit Dividend Payable $90,000
To record the declaration of a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record (45,000 shares).
Sept 5 Debit Cash $63,750
Credit Treasury stock $56,250
Credit Paid-in Capital in Excess $7,500
To record the resale of 3,750 of its treasury shares at $17 cash per share.
Oct. 28 Debit Dividend Payable $90,000
Credit Cash $90,000
To record the payment of the dividends.
Dec. 31 Debit Retained earnings $368,000
Credit Income Summary $368,000
To close the net loss to the retained earnings.
2. Statement of Retained Earnings for the year ended December 31, 2019
Retained earnings, December 31, 2018 $430,000
Net loss -368,000
Dividends paid -168,000
Retained earnings, December 31, 2019 ($106,000)
3. Stockholders' Equity, December 31, 2019:
Common stock—$15 par value, 100,000 shares authorized,
45,000 shares issued and outstanding $ 675,000
Paid-in capital in excess of par value, common stock 67,750
Retained earnings ($106,000)
Total stockholders' equity $ 636,750
Explanation:
a) Data and Calculations:
Stockholders' Equity (December 31, 2018)
Common stock—$15 par value, 100,000 shares authorized,
45,000 shares issued and outstanding $ 675,000
Paid-in capital in excess of par value, common stock 70,000-30,000+20,250+7,500 = 67,750
Retained earnings 430,000
Total stockholders' equity $ 1,175,000
Transaction Analysis:
Jan. 2 Treasury stock $90,000 Paid-in Capital in Excess $30,000 Cash $120,000 purchase of 6,000 shares of its own stock at $20 cash per share.
Jan. 5 Cash Dividend $78,000 Dividend Payable $78,000
a $2 per share cash dividend payable on 39,000 (45,000 - 6,000) shares
Feb. 28 Dividend Payable $78,000 Cash $78,000
July 6 Cash $54,000 Treasury stock $33,750 Paid-in Capital in Excess $20,250 2,250 of its treasury shares at $24 cash per share.
Aug. 22 Cash Dividend $90,000 Dividend Payable $90,000
$2 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Sept 5 Cash $63,750 Treasury stock $56,250 Paid-in Capital in Excess $7,500 3,750 of its treasury shares at $17 cash per share.
Oct. 28 Dividend Payable $90,000 Cash $90,000
Dec. 31 Retained earnings $368,000 Income Summary $368,000
Dec. 31 Retained earnings $168,000 Cash Dividend $168,000
Two or more items are omitted in each of the following tabulations of income statement data. Fill in the amounts that are missing.
2013 2014 2015
Sales revenue $294,170 $ $414,180
Sales returns and allowances 11,200 13,470
Net sales 347,350
Beginning inventory 21,590 33,560
Ending inventory
Purchases 263,090 298,600
Purchase returns and allowances 5,180 8,330 10,440
Freight-in 8,140 9,480 12,440
Cost of goods sold 236,230 294,740
Gross profit on sales 46,740 91,560 98,700
Answer:
Income Statements
2013 2014 2015
Sales revenue $294,170 $360,920 $414,180
Sales returns and allowances 11,200 13,470 20,740
Net sales 282,970 347,350 393,440
Beginning inventory 21,590 33,560 42,010
Purchases 245,240 263,090 298,600
Purchase returns and allowances (5,180) (8,330) (10,440)
Freight-in 8,140 9,480 12,440
Total cost of goods available 269,790 297,800 342,610
Ending inventory 33,560 42,010 47,870
Cost of goods sold 236,230 255,790 294,740
Gross profit on sales 46,740 91,560 98,700
Explanation:
a) Data and Calculations:
2013 2014 2015
Sales revenue $294,170 $ $414,180
Sales returns and allowances 11,200 13,470
Net sales 347,350
Beginning inventory 21,590 33,560
Ending inventory
Purchases 263,090 298,600
Purchase returns and allowances 5,180 8,330 10,440
Freight-in 8,140 9,480 12,440
Cost of goods sold 236,230 294,740
Gross profit on sales 46,740 91,560 98,700
Beginning inventory 21,590 33,560 42,010
Purchases 245,240 263,090 298,600
Purchase returns and allowances (5,180) (8,330) (10,440)
Freight-in 8,140 9,480 12,440
Total cost of goods available 269,790 297,800 342,610
Ending inventory 33,560 42,010 47,870
Cost of goods sold 236,230 255,790 294,740
A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 19,000 defective units that cost $5.40 per unit to manufacture. The units can be a) sold as is for $3.50 each, or b) reworked for $4.60 each and then sold for the full price of $8.90 each. What is the incremental income from selling the units as scrap and reworking and selling the units
Answer:
Incremental income as scrap=$66,500
Incremental income when re-worked= $81,700
Explanation:
Unit contribution from selling as scrap is the equal to the scrap value = 3.50
Unit contribution when reworked and sold as scrap =Selling price - cost of re-work= $8.90-4.60= $4.3
Incremental income as scrap = $3.50×19,000= $66,500
Incremental income when re-worked= $4.3 × 19,000 = $81,700
Incremental income as scrap=$66,500
Incremental income when re-worked= $81,700
Golf Ball Inc. expects earnings to be $10,000 per year in perpetuity if it pays out all of its earnings in dividends. Suppose the firm has an opportunity to invest $1,000 of next year's earnings to upgrade its machinery. It is expected that this upgrade will increase earnings in all future years (starting two years from now) by $140. Assume that Golf Ball's next dividend is one year from now. The required rate of return is 12%.
What is the value of Golf Ball Inc. if it undertakes the upgrade?
Answer: $ 83,333.33
Explanation:
Based on the information given, the value of Golf Ball Inc. if it undertakes the upgrade will be:
It should be noted that the earning will be distributed as dividend if there's no upgrade. Hence, dividend will be $10000.
Since the required rate of return is 12%, then the value of Golf Ball Inc. if it undertakes the upgrade will be:
= Dividend / required rate of return
= 10000 / 12 %
= 10000 / 0.12
= $ 83,333.33
Xavier Company had the following transactions during the current year:
• Earned revenues of $100,000 and incurred expenses of $56,000, all in cash.
• Purchased a truck for $20,000.
• Sold land for $10,000.
• Borrowed $15,000 from a local bank.
What was the total change in cash during the year?
The total change in cash of the Xavier Company would be $44,000.
What is the cash?Cash is defined as money in the form of actual currency, such as banknotes and coins. Cash is a current asset in bookkeeping and financial accounting that consists of currency or currency equivalents that may be obtained immediately or almost immediately.
Computation of change in cash:
Total change in cash = Cash change in operating activity + Cash change in Investing activities + Financing activities
Total change in cash = $44,000–$15,000 + $15,000
Total change in cash = $44,000
Whereas,
Change in cash in operating activities:
Change in cash in operating activities = Revenue – Expenses
Change in cash in operating activities = $100,000 – $56,000
Change in cash in operating activities = $44,000
Change in cash in investing activities:
Change in cash in investing activities = Sold land – Purchase of truck
Change in cash in investing activities = $10,000 – $25,000
Change in cash in investing activities = -$15,000
Change in cash from financing activities:
Change in cash from financing activities = Borrowed $15,000 from local bank = $15,000
Therefore, The Xavier Company's total cash change would be $44,000.
Learn more about the cash, refer to:
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Coastal Shores Inc. (CSI) was destroyed by Hurricane Fred on August 5, 2021. At January 1, CSI reported an inventory of $170,000. Sales from January 1, 2021, to August 5, 2021, totaled $480,000 and purchases totaled $195,000 during that time. CSI consistently marks up its products 60% over cost to arrive at a selling price. The estimated inventory loss due to Hurricane Fred would be:
Answer:
$65,000
Explanation:
Calculation to determine what The estimated inventory loss due to Hurricane Fred would be
Beginning inventory$170,000
Add Net purchases195,000
Goods available for sale365,000
($170,000+$195,000)
Less: Cost of goods sold (300,000)
($480,000/160%)
Estimated ending inventory$65,000
($365,000-$300,000)
Therefore The estimated inventory loss due to Hurricane Fred would be $65,000
You are the price manager at a restaurant that, for customer relations reasons, can reset its prices (reprint menus) no more than once every two years. Because you want prices that are competitive but cover costs with as much of a profit margin to spare as possible, you require as accurate a prediction of inflation over the next two years as possible.
What would be your best method of predicting inflation?
a. Take the forecast of the economist with the best track record of predicting inflation.
b. Look to the yields of inflation swaps.
c. Consult the University of Michigan survey of inflation expectations among the public.
d. Take the average inflation forecast across many professional economists.
Answer:
My best method of predicting inflation as the price manager at a restaurant is:
b. Look to the yields of inflation swaps.
Explanation:
An inflation swap is a financial derivative contract that transfers inflation risk between two parties. Inflation swap yields can provide a more accurate estimation of the future inflation rates than relying on the predictions of individual economists. This method is widely used by finance professionals to hedge or reduce inflation risk and set long-term prices.
Bonita, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats.
Activity Cost Pools Estimated Overhead Estimated Use of Cost Drivers per Activity
Designing $452,795 11,900 designer hours
Sizing and cutting 4,231,150 157,000 machine hours
Stitching and trimming 1,501,000 79,000 labor hours
Wrapping and packing 327,050 31,000 finished units
Required:
Compute the activity-based overhead rates using the following budgeted data for each of the activity cost pools.
Answer:
Results are below.
Explanation:
To calculate the activities rates, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Designing= 452,795 / 11,900= $38.05 per designer hour
Sizing and cutting= 4,231,150 / 157,000= $36.95 per machine hour
Stitching and trimming= 1,501,000 / 79,000= $19 per labor hour
Wrapping and packing= 327,050 / 31,000= $10.55 per finished unit
One of the defining characteristics of a matrix organizational structure is that it overlays two organizational structures in order to leverage the benefits of both. is the only structure that organizes employees around specific knowledge or other resources. uses self-directed work teams rather than individuals as the basic building block of organizations. is an alliance of several organizations for the purpose of creating a product or serving a client.
Answer:
overlays two organizational structures in order to leverage the benefits of both.
Explanation:
An organizational structure can be defined as the process which typically involves dividing an organization into various functional units.
Basically, the organizational structure comprises of three (3) main dimensions and these are;
I. The vertical dimension: this is typically the decision-making responsibilities (decentralization and centralization).
II. The horizontal dimension: this divides the organization into subunits.
III. Integrating mechanisms: it is based typically on the strategic mechanism that controls the various subunits within an organization.
A functional (departmental) organizational structure is a type of structure used to organize staffs by dividing them into various departments based on their skill set, roles or functions and knowledge.
These departments which are vertically structured may include, finance, IT, sales and marketing, research and development, customer service etc. Also, the various departments are headed by a functional manager who are saddled with the responsibility of overseeing, managing and reporting to the executive management.
A matrix organizational structure is a type work structure where reporting relationships between employees are set up as a matrix rather than the conventional hierarchy approach. This simply means, there are two (2) chains of command; employees have dual reporting relationships to both a project and functional manager.
The matrix organizational structure can be classified into three (3) categories, these are;
1. Weak matrix structure.
2. Balanced matrix structure.
3. Strong matrix structure.
One of the defining characteristics of a matrix organizational structure is that it overlays two organizational structures in order to leverage the benefits of both.
Which of the following is TRUE regarding omni-channel buyers?
Incomplete question. The missing options read:
A. They shift easily across online and in-store channels.
B. They always shop in-store channels, then order online.
C. They prefer the online environment.
D. They purchase online but tend to purchase more in-store.
Answer:
A. They shift easily across online and in-store channels.
Explanation:
Indeed, these types of buyers do not have one preferred channel of making purchasing. Hence, companies who are aware of this employ the omnichannel strategy so as to satisfy the wants of their customers.
For example, a smartphone company would would make its smartphones not only in physical stores but also in online stores.
Excel Online Structured Activity: Capital budgeting criteria A company has a 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:
0 1 2 3 4 5 6 7
Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180
Project B -$405 $132 $132 $132 $132 $132 $132 $0
The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.
1. What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
2. What is each project's IRR? Round your answer to two decimal places
3. What is each project's MIRR?
Answer:
ion the answer do u have options ?
Explanation:
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is %, on A bonds %, and on B bonds %. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond if the total investment is $, and the investor wants an annual return of $ on the three investments.
Answer:
The investor should invest $4,000 in AAA bonds, $3,000 in A bonds, and $2,000 in B bonds.
Explanation:
Note: This question is not complete as all the data in it are omitted. The complete question with the omitted is therefore presented before answering the question as follows:
An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 5%, on A bonds 6%, and on B bonds 9%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should be invested in each type of bond under the following conditions? How much should be invested in each type of bond if the total investment is $9,000, and the investor wants an annual return of $560 on the three investments.
The explanation of the answer is now given as follows:
From the question, we have:
AAA = 2B
Total investment is therefore as follows:
2B + A + B = $9,000
3B + A = $9,000 …………………………. (1)
Annual return is also as follows:
(5% * 2B) + (6% * A) + (9% * B) = $560
0.1B + 0.06A + 0.09B = $560
0.1B + 0.09B + 0.06A = $560
0.19B + 0.06A = $560 …………………. (2)
From equation (1), we have:
A = $9,000 – 3B …………………………. (3)
Substituting A from equation (3) into equation (2), we have:
0.19B + 0.06($9,000 – 3B) = $560
0.19B + 540 – 0.18B = $560
0.19B – 0.18B = $560 - $540
0.01B = $20
B = $20 / 0.01
B = $2,000
Since:
AAA = 2B
Therefore, we have:
AAA = 2 * $2,000
AAA = $4,000
Substituting B = $2,000 into equation (3), we have:
A = $9,000 – (3 * $2,000)
A = $9,000 - $6,000
A = $3,000
By implication, we have total investment as follows:
AAA + A + B = $4,000 + $3,000 + $2,000 = $9,000
Therefore, the investor should invest $4,000 in AAA bonds, $3,000 in A bonds, and $2,000 in B bonds.
Jane was employed by ABC Construction Company as a forklift operator. She noticed that the foreman was taking shortcuts on some of the trenching which caused a dangerous condition that could possibly cause injury to employees who were close to the area of the trench. Jane was not at risk of being hurt by the shortcut in the trenching operation. Jane refused to do the work because of her belief that the trenching work was not being done in a safe manner. Jane was told to punch out and go home. Jane would like to file a claim against her employer.
We will be conducting a classroom debate on this case. Presume you have been hired to represent either the Jane or ABC Construction in this case (students are assigned by their last name see below). Provide the class in your initial response a statement as to why your client’s position is correct. For those representing ABC Construction, explain why the company was within its rights to send Jane home without pay. For those representing the employee Jane, explain why she is justified in refusing to do work in light of a dangerous condition on the worksite.
Answer:
According to the OSHA act, Jane is right in her claim to refuse to work until safe working conditions are provided.
Explanation:
I would be representing Jane and will be following the debate in light of the Occupational Safety and Health Administration(OSHA) act. According to the OSHA act, employers are responsible for the provision of a safe and healthy workplace to their employees. Failing to do so could lead to a refusal. According to the section of the OSHA act, An employee has the right to refuse to work, if all of the below-mentioned conditions are met:
A real and imminent danger of serious injury or death exists in the workplace. Where possible the employee has asked the employer to eliminate the danger. The employer has failed to eliminate the danger. The employee refuses to work because the employee believes, in good faith, that there is an imminent danger of serious injury or death.As the foreman of ABC construction was using shortcuts in trenching and thus stigmatized the trenching. This could lead to a dangerous situation for the area of the trench leading to its collapse. This is an indication of imminent danger and thus the employee in the area of the trench has a serious threat to his/her life Thus Jane is right in her claim to refuse to work until safe working conditions are provided.
Alpha Communications, Inc., which produces telecommunications equipment in the United States, has a very strong local market for its circuit board. The variable production cost is $130, and the company can sell its entire supply domestically for $170. The U.S. tax rate is 40 percent. Alternatively, Alpha can ship the circuit board to its division in Germany, to be used in a product that the German division will distribute throughout Europe. Information about the German product and the division’s operating environment follows.
Selling price of final product: $360
Shipping fees to import circuit board: $20
Labor, overhead, and additional material costs of final product: $115
Import duties levied on circuit board (to be paid by the German division): 10% of transfer price
German tax rate: 60%
Assume that U.S. and German tax authorities allow a transfer price for the circuit board set at either U.S. variable manufacturing cost or the U.S. market price. Alpha’s management is in the process of exploring which transfer price is better for the firm as a whole.
Required:
1. Compute overall company profitability per unit if all units are transferred and U.S. variable manufacturing cost is used as the transfer price. Show separate calculations for the U.S. operation and the German division.
2. Repeat requirement (1). assuming the use of the U.S. market price as the transfer price. Which of the two transfer prices is better for the firm?
3. Assume that the German division can obtain the circuit board in Germany for $155.
a. If you were the head of the German division, would you rather do business with your U.S. division or buy the circuit board locally? Why?
b. Rather than proceed with the transfer, is it in the best interest of Alpha to sell its goods domestically and allow the German division to acquire the circuit board in Germany? Why? Show computations to support your answer.
Answer:
1-If the transfer price is set equal to the U.S. variable manufacturing cost, Alpha Communications will have a profit of $32.80 per circuit board with US Share as $0 and German Share as $32.80.
2-If the transfer price is set equal to the U.S. market price, Alpha Communications will have a profit of $39.20 per circuit board with US Share as $24 and German Share as $15.20. The transfer price as US market price is more effective for the Alpha Communications.
3:a- If the German division can obtain the boards in Germany for 155, it is better for the German division because due to lack of additional shipping fee and import duty, this price is more feasible for the German division.
3:b- If the company decide to sell the US circuit boards locally and allow German division to obtain the circuit boards in Germany, then Alpha Communication will have a profit of $60 per circuit board with US Share as $24 and German Share as $36.
Explanation:
1-If the transfer price is set equal to the U.S. variable manufacturing cost, Alpha Communications will have a profit of $32.80 per circuit board. The calculations are as follows:
US Operation:
Sales Revenue(Price set to variable manufacturing cost): $130
Variable Manufacturing Cost: : ($130)
_________________________________________________
Contribution Margin : $ 0
German Operation:
Selling Price: $360
Transfer Price: ($130)
Additional Cost: ($115)
Shippng Cost: ($20)
Import Duty (10% of Transfer Price): 10% x 130=0.1x130= ($13)
_________________________________________________
Income Before Tax: $82
Income Tax (60% of Income Before Tax):60%x82 ($49.20)
___________________________________________________
Income After Tax $32.80
2-If the transfer price is set equal to the U.S. market price, Alpha Communications will have a profit of $39.20 per circuit board. The transfer price as US market price is more effective for the Alpha Communications. The calculations are as follows:
US Operation:
Sales Revenue(Price set to variable manufacturing cost): $170
Variable Manufacturing Cost: : ($130)
_________________________________________________
Income Before Tax : $ 40
Income Tax (40% of Income Before Tax):40%x40 :($16)
_________________________________________________
Income After Tax: : $24
German Operation:
Selling Price: $360
Transfer Fee: ($170)
Additional Cost: ($115)
Shippng Cost: ($20)
Import Duty (10% of Transfer Price): 10% x 170=0.1x170= ($17)
_________________________________________________
Income Before Tax: $38
Income Tax (60% of Income Before Tax):60%x38 ($22.80)
___________________________________________________
Income After Tax $15.20
Total Income By Alpha Communication: $24+$15.20=$39.20
3-a: If the German division can obtain the boards in Germany for 155, it is better for the German division because due to lack of additional shipping fee and import duty, this price is more feasible for the German division.
At the lower tranfer price of 130, the total impact of transfer is given by
Transfer Price: $130
Shippng Cost: $20
Import Duty (10% of Transfer Price): 10% x 130=0.1x130= $13
___________________________________________________
Total Impact $163
It is more than the local available price, Thus the company should purchase their circuit board locally.
3-b If the company decide to sell the US circuit boards locally and allow German division to obtain the circuit boards in Germany, then Alpha Communication will have a profit of $60 per circuit board.
US Operation:
Sales Revenue(Price set to variable manufacturing cost): $170
Variable Manufacturing Cost: : ($130)
_________________________________________________
Income Before Tax : $ 40
Income Tax (40% of Income Before Tax):40%x40 :($16)
_________________________________________________
Income After Tax: : $24
German Operation:
Selling Price: $360
Local Circuit Board Price ($155)
Additional Cost: ($115)
_________________________________________________
Income Before Tax: $90
Income Tax (60% of Income Before Tax):60%x38 ($54)
___________________________________________________
Income After Tax $36
Total Income By Alpha Communication: $24+$36=$60.0