Answer:
Budgeted balance sheet
Explanation:
A budgeted balance sheet refers to a document that is used by administrators to estimate resource, liability, and capital rates for the present financial year depending on the plan.
In other terms, a planned balance sheet indicates where every account at the end of a year would have been if the company's actual performance met the projections budgeted.
Management typically begins preparing a strategic schedule for another period at the last of each year. The master budget consists of a lot of minor purchases, funds, revenues, and general spending budgets. To make a large, detailed realistic plan, all such budgets are integrated.
Your Memory Lane produces custom-made art prints that include graphics and icons to celebrate life’s special moments. For example, on his wedding anniversary, David had an art print produced that celebrated highlights of his ten years with his wife, Kathy. Suppose that Your Memory Lane sells the custom artwork for $500. It estimates its average variable costs to be $200 per unit produced. It figures its fixed costs to be $900,000 per year. How many prints does it have to sell to break even?
Answer:
3,000 prints
Explanation:
In this question we use the formula of break-even point in unit sales which is shown below:
= (Fixed cost) ÷ (Contribution margin per unit)
where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
= $500 - $200
= $300
And, the fixed cost is $900,000
Now put these values to the above formula
So, the value would equal to
= ($900,000) ÷ ($300)
= 3,000 prints
Your Memory Lane needs to sell 3000 custom-made art prints per year to cover its total costs and reach its break-even point.
Explanation:Your Memory Lane, the company in question, can calculate its break-even point by determining how many art prints it needs to sell such that its total revenue equals its total costs. This point represents a state of 'no profit loss.' The company's fixed cost, the cost that doesn’t change regardless of the quantity of goods produced, is $900,000 per year. The variable cost, which varies as the number of goods produced changes, is $200 per unit. The selling price per unit, or the revenue per unit, is $500.
The formula for calculating the break-even point is given by Fixed Costs ÷ (Selling Price per Unit - Variable Cost per Unit). Substituting the respective values into this formula yields $900,000 ÷ ($500 - $200) = 3000 units.
So, Your Memory Lane must sell 3000 custom-made art prints in a year to cover its total costs and break-even.
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Connecticut, Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet:
Connecticut, Inc.
Comparative Balance Sheet
December 31, 2019 and 2018
2019 2018 Increase / (Decrease)
Cash $ 24,000 $ 25,000 $( 1,000 )
Accounts Receivable 34,000 37,000 (3,000)
Merchandise Inventory 53,000 25,000 28,000
Plant and Equipment 125,000 93,000 32,000
Accumulated Depreciation-Plant and Equipment (46,000) (42,000) (4,000)
Total Assets $ 190,000 $ 138,000 $ 52,000
Additional information provided by the company includes the following:
1. Equipment was purchased for $ 69,000 with cash.
2. Equipment with a cost of $ 37, 000 and accumulated depreciation of $ 7,000 was sold for $ 45,000.
Required :
1. What was the amount of net cash provided by (used for) investing activities?
Answer:
$24,000
Explanation:
Given that,
Equipment was purchased = $ 69,000 with cash.
Equipment with a cost = $ 37, 000
Accumulated depreciation = $ 7,000 was sold for $45,000
Net cash provided (used) by investing activities:
= Proceeds from sale of equipment - Equipment purchase for cash
= $ 45,000 - $69,000
= $24,000
Therefore, the amount of net cash provided by (used for) investing activities is $24,000.
Leker exchanged real property that was used exclusively for business and had an adjusted tax basis of $20,000 for new real property. The new real property had a fair market value of $10,000, and Leker also received $3,000 in cash. What was Leker tax basis in the acquired real property?
Answer:
$17,000
Explanation:
Leker's Old Property Adjusted Tax Basis = $20,000
To calculate the new basis, subtract the $3000 recieved in cash from the new property.
New Tax Basis; $20,000-$3,000= $17,000
The transaction of Leker to exchange a real property for another led to a loss: Meaning a Property of $20,000 was exchanged for a property of $10,000+ $3,000 (cash)= $13,000
The Loss on the transaction= $20,000- $13,000= $7,000
Due to the loss no gain is recognized and the $3000 will reduce the basis for his new asset.
Income from operations for Division H is $220,000, and income from operations before service department charges is $975,000. As a result, a.total service department charges are $755,000 b.total manufacturing expenses are $565,000 c.direct materials, direct labor, and factory overhead total $565,000 d.total operating expenses are $565,000
Answer:
[A] Total Service Department Charges are $7,55,000
Explanation:
Working Notes:, consider the following calculations
Income before service dept. charges
9,75,000
Less: Income from Operations
(2,20,000)
Service Department Charges
7,55,000
In your own words, explain three of the nine building blocks for managers to use in developing an innovative and effective business model.
Explanation:
The business model, main customer section, distribution channels, interactions, core capacity, business designs, partners, revenue streams and cost structures are Osterwalder's nine building blocks for managers to use in the development of an innovative and effective business model (Trevino, s., et al., 2009). The basic activities of the organization are nine building blocks of which, sales sources, expense structures and core efficiency. A business must consider its key strengths before it heads to the market. In other words, they differ from other rivals in their ability and advantages.
They should be precise in describing the key capability of the business model. A central skill, for example, is not customer service; the company has customer service 24 hours a day, where consumers speak to a real person who is a professional engineer. It is anticipated that customers will be likely to take advantage of our competitiveness to purchase more services from us. Revenue streams are all the ways that the company gets revenue.
A business model should describe the anticipated sources, periods and quantities of profit predicted and how internal and external variables can be influenced by this distribution and how these factors can be mitigated. Finally, cost structures refer to both fixed and variable operating costs required to operate, produce a product or perform a service. In comparison to the expected revenue source, the expense ratios would determine the expected costs, in effect reflecting the projected productivity of the product.
Lean AccountingModern Lighting Inc. manufactures lighting fixtures, using lean manufacturing methods. Style Omega has a materials cost per unit of $16. The budgeted conversion cost for the year is $308,000 for 2,200 production hours. A unit of Style Omega requires 18 minutes of cell production time. The following transactions took place during June:Materials were acquired to assemble 620 Style Omega units for June.Conversion costs were applied to 620 Style Omega units of production.600 units of Style Omega were completed in June.580 units of Style Omega were sold in June for $100 per unit.a. Determine the budgeted cell conversion cost per hour.$ per hourb. Determine the budgeted cell conversion cost per unit.$ per unitFeedbackc. Journalize the summary transactions (1)–(4) for June.
Answer:
(a) Conversion cost per hour:
= budgeted conversion cost ÷ production hours
= 308,000 ÷ 2,200
= $140 Per hr
Budgeted cell conversion cost per unit :
= $140 Per hr × (18 ÷ 60 )
= $42 per unit
The Journal entries are as follows:
(i) Raw and in process inventory A/c [620 × 16] Dr. $9,920
To Account Payable $9,920
(To record the Raw and in process inventory)
(ii) Raw and in process inventory A/c [620 × 42] Dr. $26,040
To Conversion cost $26,040
(To record the Conversion cost )
(iii) Finished good Inventory A/c [600 × 58] Dr. $34,800
To Raw and in process inventory $34,800
(To record the Finished good Inventory )
(iv) Account Receivable A/c [580 × 100] Dr. $58,000
To sales $58,000
(To record the sales )
(v) cost of goods sold A/c [580 × 58] Dr. $33,640
To Finished good Inventory $33,640
(To record the cost of goods sold)
conversion cost per unit = Direct Material + conversion cost
= 16 + 42
= 58
In the workplace, racial discrimination is a very serious issue. Consider a company in which 20% of the employees are African-American. At the end of the year, promotions are awarded to a group of employees. Out of the 40 promotions awarded, five are African-American. Given that the awarding follows the binomial distribution, B(40,.2).
Answer:
a) It is expected that 8 African-Americans get promotions.
b) There is a 8.6% probability that 5 African-Americans get promotions.
c) There is a 16.2% probability that at five or less African-Americans get promotions.
d) The company may be accused of racial discrimination because the ammount of promotions given to African-Americans is much less than expected if there were no discrimination. The expected value, if there is no discrimination, of having more than 5 promotions for African American employees is 84%.
Explanation:
The question is incomplete.
Complete question:
In the workplace, racial discrimination is a very serious issue. Consider a company in which 20% of the employees are African-American. At the end of the year, promotions are awarded to a group of employees. Out of the 40 promotions awarded, five are African-American. Given that the awarding follows the binomial distribution, B(40,.2).
a) How many African-Americans would you expect to get promotions?
b) What is the probability that five African-Americans receive promotions?
c) What is the probability that five or fewer African-Americans receive promotions?
d) Do you think the company is suspect of racial discrimination? Explain your thinking.
a) As this situation can be modeled by a binomial distribution B(40,0.2), the expected number of African-Americans that get promotions can be calculated as the expected value of the binomial distribution:
[tex]X\sim B(40,0.2)\\\\E(X)=np=40*0.2=8[/tex]
It is expected that 8 African-Americans get promotions.
b) Accordingly to the binomial distribution, we have:
[tex]P(X=5)=\frac{40!}{5!35!}*(0.2)^5*(0.8)^{35}=658008*0.00032*0.0004= 0.086[/tex]
There is a 8.6% probability that 5 African-Americans get promotions.
c) We have to calculate the probabilities for X=0,1,2,3,4 and 5.
[tex]P(X\leq5)=P(X=0)+P(X=1)+P(X=2)+P(X=3)+P(X=4)+P(X=5)\\\\\\P(X=0)=\frac{40!}{0!40!}*0.2^0*0.8^{40}=1*1*0.00013=0\\\\P(X=1)=\frac{40!}{1!39!}*0.2^1*0.8^{39}=40*0.2*0.00017=0.001\\\\P(X=2)=\frac{40!}{2!38!}*0.2^2*0.8^{38}=780*0.04*0.00021=0.007\\\\P(X=3)=\frac{40!}{3!37!}*0.2^3*0.8^{37}=9880*0.008*0.00026=0.021\\\\P(X=4)=\frac{40!}{4!36!}*0.2^4*0.8^{36}=91390*0.0016*0.00032=0.047\\\\P(X=5)=\frac{40!}{5!35!}*0.2^5*0.8^{35}=658008*0.00032*0.00041=0.086[/tex]
[tex]P(X\leq5)=P(X=0)+P(X=1)+P(X=2)+P(X=3)+P(X=4)+P(X=5)\\\\P(X\leq5)=0+0.001+0.007+0.021+0.047+0.086=0.162[/tex]
There is a 16.2% probability that at five or less African-Americans get promotions.
d) The company may be accused of racial discrimination because the ammount of promotions given to African-Americans is much less than expected if there were no discrimination. The expected value, if there is no discrimination, of having more than 5 promotions for African American employees is 84%.
You have noticed that your next-door neighbor, Mary, always works in the garden, and her husband, Joe, always walks the dog. You conclude that if Joe and Mary are efficient, then it must be the case that:A. Mary has an absolute advantage in gardening. B. Joe has a comparative advantage in walking the dog. C. Mary does not understand the principle of low-hanging fruit D. Joe experiences increasing opportunity costs when he gardens, but not when he walks the dog.
Answer:
B
Explanation:
One had noticed the next-door neighbor, Mary, always works in the garden, and her husband, Joe, always walks the dog. So one conclude that if Joe and Mary are efficient, then it must be the case that: Joe has a comparative advantage in walking the dog. Option B is correct.
What do you mean by Comparative Advantage?The ability of an economy to produce a specific good or service at a lower opportunity cost than its trading counterparts is known as comparative advantage.
Further an opportunity cost is a new consideration in the idea of comparative advantage when comparing various manufacturing possibilities.
When manufacturing a specific good, agents in an economic model have a comparative advantage over rivals if they can do so at a lower relative opportunity cost or autarky price, that is, at a lower relative marginal cost before trade.
Thus according to Ricardo's renowned comparative advantage theory, countries can benefit from a trade advantage by concentrating on producing items that have the lowest opportunity costs when compared to those of other countries.
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In your own success in achieving a college education, consider the four factors listed below. Rank these factors in terms of their importance in your own experience. a. your parents' attitude toward education, b. your parents' financial resources, c. the quality of your elementary and secondary schools, and d. your own hard work and determination.
Answer:
Explanation:
The top of the list would be my own hard work and determination; being serious with studies will make me graduate from college on time. Next, my parents' attitude toward education will influence my decision to pursue college education or not since as kids, close family members can influence our choices. Thirdly, my parent's financial resources could help support my college education, otherwise I could apply for scholarships or student loans. Lastly, the quality of your elementary and secondary schools may not matter much as long as I'm ready to learn.
Suppose the economy is closed with national saving of $3 trillion, consumption of $10 trillion, and government purchases of $4 trillion. What is GDP?
Answer:
The correct answer is: $17 trillion.
Explanation:
The Gross Domestic Product or GDP represents the overall market value of all the goods and services a country produces and it measures the size of the economy. The GDP is determined with the following formula:
GDP = C + G + I + NX
where:
C: private consumption or consumer spendingG: government spendingI: businesses' capital spendingNX: net exports (exports - imports)In the example:
GDP = $3 trillion + $10 trillion + $4 trillion = $17 trillion
You are considering the purchase of real estate that will provide perpetual income that should average $65,000 per year. How much will you pay for the property if you believe its market risk is the same as the market portfolio’s? The T-bill rate is 5%, and the expected market return is 8.0%.
Answer:
$812,500
Explanation:
If market risk is the same as market portfolio, then the beta is equal to 1.
Use the CAPM formula to find the appropriate discount rate for valuation of this real estate;
CAPM; r = rf + beta(rM - rf ) whereby,
rf = risk free rate = 5% or 0.05 as a decimal
rM = Market return = 8% or 0.08
CAPM ; r = 0.05 + 1(0.08 - 0.05)
r = 0.05 + 0.03
r = 0.08 or 8%
Present value of perpetual CF formula;
PV = CF/ rate
PV = 65,000 / 0.08
PV = 812,500
Therefore, you should pay $812,500
Which of the following provides essential project data including objective performance status, cost impact of known problems, identification of emerging problems, possible sources of problems, and schedule deviations from the contract plan?
A. Integrated Master Schedule (IMS)
B. Integrated Program Management Report (IPMR)
C. Cost/Benefit AnalysisWork Breakdown Structure (WBS)
D. Mark for follow up
Answer:
The correct answer is letter "B": Integrated Program Management Report (IPMR).
Explanation:
The Integrated Program Management Report (IPMR) is a legally authorized report containing performance details extracted from the internal Earned Value Management System of the contractor. The IPMR provides an extract on the advance of the agreement including potential problems, costs, and change in schedules.
Final answer:
The Integrated Program Management Report (IPMR) provides a comprehensive overview of a project's performance, including cost impacts, problem identification, and schedule deviations. It uses KPIs to measure and monitor different aspects of the project such as budget and goal fulfillment.
Explanation:
The document that provides essential project data including objective performance status, cost impact of known problems, identification of emerging problems, possible sources of problems, and schedule deviations from the contract plan is the Integrated Program Management Report (IPMR). The IPMR is a comprehensive report that provides a snapshot of the project's health, integrating various aspects such as cost performance, scheduling, work progress, and risk management. It serves as a critical tool for project managers to monitor and control project execution, ensuring alignment with the project goals and objectives.
Key performance indicators (KPIs) are vital in the monitoring process, which generally covers areas such as risks, budget, resources, and goal fulfilment. To effectively manage a project, the project manager should establish an efficient information flow, where reporting by team members is streamlined, reducing the time spent on data collection. This can often involve utilizing automated systems for financial data and other measurable aspects of the project.
Labor relations is becoming more diverse around the world because _________________________ play a much greater role in establishing employment conditions, most especially employee benefits outside the U.S.
O Government regulations
O Collective bargaining agreements
O Human resource management decisions
O Union policies and benefits
Answer: Human resource management decisions
Explanation: Administration of human capital is all about decision-making. This is not the activity that should be abandoned to opportunity or speculation to choose the best candidate for the accessible place.
The task of judgment-making in HR is difficult, and using the current technologies and recruiting tools, you will be able to take informed decisions based on an actual assessment of all variables.
Therefore, due to heavy scrutiny by human resource managers on the operations of the business the relations of employees and organisation are improving continuously and are becoming diverse.
All of the following statements concerning shortage are true, EXCEPT: Group of answer choices
a. shortage costs are often times just an educated guess because lost customers are hard to quantify
b. shortage costs decrease as inventory on hand increases
c. shortage costs increase as total carrying costs increase
d. shortage costs can relate to temporary, as well as permanent, loss of sales
Answer:
The correct answer is letter "C": shortage costs increase as total carrying costs increase.
Explanation:
A shortage takes place when the quantity demanded is higher than the supply at the current price. Typically, shortages occur because of an increase in demand, a decrease in supply or due to government policies. Shortage costs are those costs a firm is responsible for because the is no enough stock in its inventory. When shortage costs increase, the carrying costs do not necessarily increase.
Final answer:
The false statement about shortage costs is that they increase as total carrying costs increase. In reality, shortage costs tend to decrease with higher inventory levels, while carrying costs increase, making them inversely related.
Explanation:
The statement concerning shortage costs that is NOT true is: "shortage costs increase as total carrying costs increase." Shortage costs are related to situations where the demand for a product exceeds the supply. Shortage costs do indeed rise with decreased inventory because there's a higher probability of running out of stock and missing sales opportunities. However, carrying costs are the expenses associated with holding inventory, and these costs tend to increase with larger inventories. Therefore, carrying costs and shortage costs are often inversely related; as one increases, the other tends to decrease.
Here's why the other options are true:
Shortage costs are challenging to calculate because it's difficult to quantify the value of lost customers or sales that didn't happen due to stockouts.As inventory on hand increases, the likelihood of a shortage decreases, hence shortage costs tend to decrease as well.Shortage costs can be associated with both temporary sales losses, like those due to an item being out of stock, and permanent losses, such as a customer deciding to permanently switch to a competitor.The 2017 balance sheet of Staples, Inc. shows total assets of $8,271 million, operating assets of $6,566 million, operating liabilities of $3,527 million, and shareholders’ equity of $3,688 million. Staples' 2017 net operating assets are: Select one:
A. $11,798 million
B. $ 6,566 million
C. $ 4,744 million
D. $ 3,039 million
E. None of the above
Answer:
D. $ 3,039 million
Explanation:
Net Operating Assets = Operating Assets - Operating Liabilities
Net Operating Assets = $6,566 million - 3,527 million
Net Operating Assets = $3,039 million
Visburg Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Visburg's normal sales territory, asks Visburg to pour 40 slabs for Lancing's new development of homes. Visburg has the capacity to build 300 slabs and is presently working on 250 of them. Lancing is willing to pay only $3, 300 per slab. Visburg estimates the cost of a typical job to include unit-level materials, $1, 440: unit-level labor, $720: and an allocated portion of facility-level overhead, $1, 200.
Required:
Calculate the contribution to profit from the special order. Should Visburg accept or reject the special order to pour 40 slabs for $3, 300 each?
Answer:
$45,600 and yes
Explanation:
The computation of the contribution to profit from the special order is shown below:
= Sales revenue - Material cost - Labor cost
where,
Sales revenue = $3,300 × 40 slabs = $132,000
Material cost = $1,440 × 40 slabs = $57,600
Labor cost = = $7200 × 40 slabs = $28,800
Now put these values to the above formula
So, the value would equal to
= $132,000 - $57,600 - $28,800
= $45,600
The material and labor cost is a variable cost and the same is taken in the computation part
So, it should accept the special order
Visburg would suffer a loss of $2,400 if they accepted the special order from Lancing because the cost to manufacture each slab ($3,360) is more than what Lancing is willing to pay ($3,300). Therefore, Visburg should reject the order.
Explanation:First, we need to calculate the cost per slab for Visburg. This includes $1,440 for materials, $720 for labor, and $1,200 for overhead, which sums up to $3,360. However, Lancing is only willing to pay $3,300 per slab, which is $60 less than the cost. Multiplying this by 40 (the number of slabs in the special order), the total loss is $2,400. The contribution to profit from this special order would therefore be a loss of $2,400. Thus, Visburg should reject the special order since it would not be profitable given the cost to manufacture each slab.
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Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:
Cost Category Standard Cost per 100 Two-Liter Bottles
Direct labor $ 2.00
Direct materials 9.10
Factory overhead 0.55
Total $11.65 B.
At the beginning of July, GBC management planned to produce 400,000 bottles. The actual number of bottles produced for July was 406,000 bottles. The actual costs for July of the current year were as follows:
Cost Category Actual Cost for the Month Ended July 31
Direct labor $ 7,540
Direct materials 35,750
Factory overhead 2,680
Total $45,970
Required:
A. Prepare the July manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for GBC, assuming planned production.
B. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for July.
C. Interpret the budget performance report.
Answer:
See below.
Explanation:
Since the costs are per 100, to calculate total standard we multiply by 400,000/100 = 4000 and actual qty then is 4060.
For A, standard cost budget at standard prices.
Direct Labor (2*4000) = $8,000
Direct Material (9.1*4000) = $36,400
Factory Overhead (0.55*4000) = $2,200
Total = $46,600
For B, The total cost variances are as follows,
Material cost variance = (Standard Price - Actual Price) * Actual Quantity
where, Standard price = 9.1 and Actual price = (35750/4060) = $8.81
Variance = (9.1 - 8.81) * 4060 = $1177.4 Favorable
Direct labor cost variance = (Standard rate - Actual Rate) * Actual Quantity
where, Standard rate = 2 and Actual rate = (7540/4060) = $1.86
Variance = (2-1.86) * 4060 = $568.4 Favorable
Factory Overhead variance
= Standard applied - Actual applied
Variance = (0.55*4060) - 2680 = $447 Unfavorable
Net effect on total cost variances = (1177.4+568.4-447) = $1298.8 Favorable
For c)
The over all cost performance has favored the business as they ere able to lessen costs in direct labor and material department. However, the fixed costs performance has deteriorated and there may be some technical issues that the company can deal with to ensure they perform better on fixed costs. The over all performance is favorable.
The standard cost budget for July for GBC was $46,600, and the budget performance report shows favorable variances for direct labor and direct materials, and an unfavorable variance for factory overhead. Overall performance was better than budgeted due to the larger favorable variances.
Explanation:A. To prepare the July manufacturing standard cost budget for GBC, first, we need to know the per-bottle cost of direct labor, direct materials, and factory overhead. Given that for every 100 bottles the costs are $2.00, $9.10, and $0.55 respectively, we find that each bottle costs $0.02, $0.091, and $0.0055. For a planned production of 400,000 bottles, the budgeted costs are calculated by multiplying the per-bottle cost by the total number of bottles. This provides us with $8,000 for direct labor, $36,400 for direct materials, and $2200 for factory overhead, totalling up to a standard cost budget of $46,600.
B. The budget performance report for July shows the variances from the actual costs. The variances for direct labor, direct materials, and factory overhead are calculated by subtracting the budgeted cost from the actual cost. This provides us with -$460 for direct labor, -$650 for direct materials, and $480 for factory overhead. A positive variance indicates that the actual cost was higher than budgeted, while a negative variance indicates that the actual cost was lower than budgeted, indicating better than expected performance.
C. To interpret the budget performance report, we can say that direct labor and direct materials performed better than expected as their actual costs were lower than budgeted, while the factory overhead cost was higher than expected. Despite this, the overall cost was lower as the favorable variances in direct labor and direct materials were greater than the unfavorable variance in factory overhead.
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Below are transactions for Lobos, Inc., during the month of December. Calculate the amount of revenue to recognize in December.
a.Receive $1,200 cash from customers for services to be provided next month.0
b.Perform $900 of services during the month and bill customers. Customers are expected to pay next month.900
c.Perform $2,300 of services during the month and receive full cash payment from customers at thetime of service.2300
Answer:
Revenue recognized in Dec= $3200
Explanation:
Lets first understand the criteria for revenue recognition. According to the accruals concept of accounting, an entity is supposed to record revenues and expenses as soon as they are earned and incurred. An entity shouldn't wait until the revenue is received and expenses are actually paid. The accruals concept of accounting is also based on the matching principle which requires entities to match and record expenses with the revenue of the period in which they occur. Considering the two concepts mentioned above, we may classify these transactions for revenue recognition as follows;
a. Receipt of $1200 cash:
In this case Lobos Inc. has received the cash in advance and the services against this payment will be rendered next month, therefore, this transaction doesn't imply an earned revenue rather it's a liability for Lobos Inc until the services are actually rendered. No revenue is recognized in December.
b. Perform $900 of services:
Lobos Inc. will provide services to this customer and will receive payment in next month, however the services have been provided which implies Lobos Inc has earned the revenue, though not received it yet but still following the accruals concept, Revenue is recognized in December.
c. Perform $2300 of services:
Similarly, Lobos Inc. will render services and will receive the payment against these services in the month of Dec, therefore, Lobos Inc can recognize revenue in December.
Considering the provided transactions, Lobos, Inc., should recognize $3,200 as revenue for December. The $1,200 cash received does not count as December's revenue since the service will be provided next month.
Explanation:In the field of accounting, revenue is recognized when it's earned, not necessarily when the cash payment is made. Looking at Lobos, Inc.,'s December transactions, we have:
Received $1,200 for services to be provided next month: This money does not count as December's revenue because the service will be provided next month, not in December.Performed $900 worth of services and billed customers: This $900 counts as revenue for December because the services were performed during this month, regardless of when customers make their payments.Performed $2,300 worth of services and received full cash payment from customers: This $2,300 counts as December revenue because services were provided and payment was received during this month.Adding the $900 and $2,300 transactions, Lobos, Inc., should recognize $3,200 in revenue for December.
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During 2020, Sarasota Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Sarasota for a lump sum of $131,670 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below.Col1 Type Lounge chairs Armchairs Straight chairsCol2 No. of Chairs 880 660 1540Col3 Estimated Selling Price Each $90 80 50During 2020, Sarasota sells 440 lounge chairs, 220 armchairs, and 264 straight chairs.
What is the amount of gross profit realized during 2020? What is the amount of inventory of unsold straight chairs on December 31, 2020?
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
Gross profit = Sales - Cost of goods sold
= (440 x 90 + 220 x 80 + 264 x 50) - (440 x 56.7 + 220 x 50.4 + 264 x 31.5)
= (39,600 + 17,600 + 13,200) - (24,948 + 11,088 + 8,316)
= 70,400 - 44,352
= $26,048
Ending inventory schedule attached in the excel archive
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Brad and Angelina are a wealthy couple who have three children, Fred, Bridget, and Lisa. Two of the three children, Fred and Bridget, are from Brad’s previous marriages. On Christmas this year, Brad gave each of the three children a cash gift of $6,500, and Angelina gave Lisa an additional cash gift of $41,000. Brad also gave stock worth $54,000 (adjusted basis of $13,500) to the Actor’s Guild (an "A" charity).
(Leave no answer blank. Enter zero if applicable.)
a. Brad and Angelina have chosen to split gifts. Calculate Brad’s gift tax. Assume that Angelina has no previous taxable gifts, but Brad reported previous taxable gifts of $2 million in 2009 when he used $345,800 of unified credit and paid $435,000 of gift taxes. (Reference the tax rate schedule in Exhibit 25-1 and the Unified Credit schedule in Exhibit 25-2 to answer this problem.)
Final answer:
Brad's gift tax calculation involves determining the total value of gifts given and applying the annual exclusion. However, subtracting the annual exclusions from the total gifts given by Brad ($40,000) shows that there are no taxable gifts, resulting in no gift tax being due.
Explanation:
The question involves calculating Brad's gift tax considering that he and Angelina have chosen to split gifts. First, we'll calculate the total amount of gifts given by Brad. He gave each of his three children a cash gift of $6,500 totaling $19,500. Since gift splitting is elected, Angelina's additional gift of $41,000 to Lisa is also considered as half given by Brad, adding $20,500 to his gifts. The stock gift worth $54,000 to the Actor's Guild charity falls under charitable contribution and is not typically subject to gift tax.
After combining the amounts, we get Brad’s total gifts for the year as $40,000. We subtract the annual exclusion amount ($15,000 in 2021) for each gift to Fred, Bridget, and Lisa which amounts to $45,000 ($15,000 x 3). Therefore, $40,000 - $45,000 results in no taxable gift exceeding the annual exclusion. Since there are no taxable gifts exceeding the annual exclusion, there would be no gift tax incurred, and Brad's unified credit and previous taxable gifts are not affected.
Please note, this calculation is a basic example and actual gift tax calculations can vary depending on the tax code and any applicable exclusions or deductions that may apply at the time of the gifts.
Maple Inc. collects 30% of its sales in the month of sale and the other 70% in the following month. The following shows budgeted sales for January through March.
January $250,000
February $325,000
March $387,500
What is the amount of cash receipts budgeted for February?
Answer:
$272,500
Explanation:
The computation of the budgeted cash receipts for February month is shown below:
= February sales × collection percentage + January sales × following month collection percentage
= $325,000 × 30% + $250,000 × 70%
= $97,500 + $175,000
= $272,500
We simply compute the sales based on the collection percentage
All other information which is given is not relevant. Hence, ignored it
Final answer:
The budgeted cash receipts for Maple Inc. in February consist of 30% of February's sales and 70% of January's sales, resulting in a total of $272,500.
Explanation:
The question asks us to calculate the amount of cash receipts budgeted for February for Maple Inc., given their pattern of collecting sales. The company collects 30% of its sales in the month of the sale and 70% in the following month. To solve this, we need to consider the sales from both January and February.
For February cash receipts, we calculate:
30% of February sales: 30% of $325,000 = $97,500
70% of January sales: 70% of $250,000 = $175,000
Adding these amounts together, we get:
February's cash receipts = $97,500 (February's current month collection) + $175,000 (January's following month collection) = $272,500.
A distribution center (DC) in Wisconsin stocks Sony plasma TV sets. The center receives its inventory from a mega warehouse in Kansas with a lead time (L) of 5 days. The DC uses a reorder point (R) of 300 sets and a fixed order quantity (Q) of 250 sets. Current on-hand inventory at the end of Day 1 is 400 sets. There are no scheduled receipts (SR) and no backorders (BO). All demands and receipts occur at the end of the day.
Determine when to order using a Q system
Answer: The order can be placed when the quantity is 1,350 units
Explanation:
Lead time = 5days
Reorder point = 300 set
Fixed order quantity = 250 sets
Current on hand inventory = 400 sets
To determine when to order using a Q system, we use the formula
Reorder level = maximum usage × maximum Lead time + Fixed order quantity
= ( 300 × 5) + 250
= 1,500 + 250
= 1,750
To determine when to order we subtract Reorder level from the current on hand inventory
= 1,750 - 400
= 1,350units
Final answer:
To determine when to order using a Q system, monitor the inventory daily and place an order when it reaches the reorder point, taking into account the lead time. In this example, with a reorder point of 300, lead time of 5 days, and starting inventory of 400, the order should be placed immediately assuming constant daily demand, to avoid running out of inventory.
Explanation:
The question involves determining when to place an order for inventory using a fixed order quantity (Q) system. With no scheduled receipts (SR), no backorders (BO), a reorder point (R) of 300 sets, an order quantity (Q) of 250 sets, and a lead time (L) of 5 days, we can calculate when a new order should be placed.
On Day 1, the on-hand inventory is 400 sets. Each day, we should monitor the inventory level. Once the inventory falls to the reorder point of 300 sets, that will be the signal to trigger a new order. Since we know that the lead time is 5 days, we need to place the order at least 5 days before the inventory hits the reorder point to avoid stockouts.
If the daily usage rate is constant, we can predict when the inventory will reach the reorder point; however, since the daily demand rate is not given in the question, we will assume a constant usage rate for the example. If one day has passed and the inventory level is now at 400 sets, we can subtract the daily usage rate (assuming it is known) from the inventory each day until we reach the reorder point. For demonstration purposes, let's assume a daily demand of 20 sets. It would take 5 days (400 sets - 5 days * 20 sets/day) to reach the reorder point. Therefore, the order should be placed on Day 1 to ensure the inventory is restocked before running out.
Joanne is a member of a group that is developing a questionnaire as a group project in her sociology class. The leader of her group is always trying to gain consensus by explaining proposed actions and suggesting alternative approaches and giving facts as the basis for their evaluation of the members work. What leadership style is being exhibited in this case?
Answer:
Expressive leadership
Explanation:
The group leader is exhibiting expressive leadership style. Expressive leadership style is one of the most effective techniques which help to engage employees in a healthy informative discussion. Effective leaders are also democratic leaders and that is why such are mostly successful in running a business and in leading employees. Group harmony and communication are some priorities of expressive leaders. Moreover, such leaders make decisions by collaborating with every member of the team. Joanne must listen to those suggestions and try to implement them in her questionnaire.
A(n) ________ occurs when an authorized federal employee signs a document that legally binds the Government to a future expenditure; a(n) _____________ occurs when the Government check is cashed and money is withdrawn from the Treasury.
a. Obligation; outlay
b. Expenditure; obligation
c. Commitment; obligation
As part of an estate settlement Mary received $1 million. She decided to use the money to purchase a small business in Anywhere, USA. If Mary would have invested the $1 million in a risk-free bond fund she could have made $100,000 each year. She also quit it her job with Lucky.Com Inc. to devote all of her time to her new business; her salary at Lucky.Com Inc. was $75,000 per year.
At the end of the first year of operating her new business, Mary's accountant reported an accounting profit of $150,000. What was Mary's economic profit?
a. $25,000 loss
b. $50,000 loss
c. $25,000 profit
d. $150,000 profit 13.
Answer:
a. $25,000 loss
Explanation:
Economic profit = revenues - explicit costs - opportunity costs
In this case, Mary's economic profit = profit from investment in new business - opportunity cost of not investing $1 million in risk-free bond - opportunity cost of quitting job
= $150,000 - $100,000 - $75,000
= ($25,000)
If overapplied or underapplied overhead is material, it should be disposed of by allocating it to: Select one: a. Cost of goods sold and finished goods inventory. b. Finished goods inventory and work in process inventory. c. work in process inventory, finished goods inventory, and cost of goods sold. d. work in process inventory. e. Raw materials inventory, work in process inventory, and finished goods inventory.
If overapplied or underapplied overhead is material, it should be disposed of by allocating it to Cost of goods sold and finished goods inventory.
Option A
Explanation:
Fixed Overhead expenses are allotted to on the basis of predetermined overhead rate to each unit. Sometimes overhead expenses estimated and actually incurred have differences.
If the actual overhead is more than overhead applied to production than it is called under applied overhead. When actual overhead is less than applied overhead than it is called over applied overhead.
Balance of difference of these overhead is debited or credited to Cost of goods sold of company.
Material overapplied or underapplied overhead should be allocated to work in process inventory, finished goods inventory, and cost of goods sold because it mirrors the course of overhead costs better in production.
Explanation:When an overhead cost is either overapplied or underapplied and is deemed to be material, it is generally appropriate to dispose of it by allocating it to: work in process inventory, finished goods inventory, and cost of goods sold. Hence the correct answer is option c: work in process inventory, finished goods inventory, and cost of goods sold. This reflects more accurately the stages that overhead costs are incurred during the manufacturing process, from work-in-progress to the finished product ready for sale. If the amounts are immaterial, they could be written off to cost of goods sold alone. Nevertheless, the method of allocation should always align with the company's accounting policy and the principle of materiality.
Learn more about Overhead Cost Allocation here:https://brainly.com/question/34659373
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Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a building (basis of $30,000, fair market value of $200,000) that is subject to a $16,000 liability which Bonnie assumes. Puffin has no accumulated E&P and $30,000 of current E&P from other sources during the year. What is Puffin's E&P after taking into account the distribution of the car
Question 4 options:
$0
$6,000
$10,000
$16,000
None of the above.
Answer:
correct option is $16,000
Explanation:
given data
basis = $30,000
fair market value = $200,000
liability = $16,000
current E&P = $30,000
to find out
Puffin's E&P after taking into account the distribution
solution
we know that E and P will decrease by higher of the adjusted basis and fair market value of the distributed property
so distribution loss is not taken into consideration to find out E and P
and we have given current E & P of Puffin is = $30,000 that is reduce to
reduce = basis - liability
reduce = $30000 - $16000 = $14000
so after distribution current E & P remaining will be $16000
so correct option is $16,000
Mountain High Ice Cream Company transferred $74,000 of accounts receivable to the Prudential Bank. The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%.
When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $6,400) less a 2% fee (2% of the total factored amount).Required:
Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Would handle this 2moro
Explanation:
Answer:
Mountain high journal S
Date
1.Cash Dr 66,600
Receivable Cr 66,600
Narration. Amount received on factoring of S74000 receivable with Prudential bank less 10%.
2.Cash Dr 5920
Receivable Cr 5920
Narration. Additional amount received on factoring of S74000 receivable with prudent bank less 2% factor price.
3. Factor cost Dr 1480
Receivable Cr 1480
Narration. Balance written off receivable as factor cost to income account.
Explanation:
There will be no entry for the fair value of ,S6400 has the transaction has already been concluded and the value cannot increase or decrease though further discount or penalties can be applied to it.
The company has an opportunity to sell 40,000 additional units at $13 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs: (1) total overhead would increase by 15% and (2) administrative expenses would increase by $172,000. Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $13 per unit. Should the company accept or reject the offer?
Answer:
Yes, the company should accept the offer.
Explanation:
The company should accept the offer as it increases income by $44,000.
Additional volume computations:Additional sales revenue = 40,000 units @ $13 = $520,000
Materials cost per unit = $800,000 / 400,000 units = $2 per unit
Labor cost per unit = $1,600,000 / 400,000 units = $4 per unit
Direct materials = (40,000 × $2) = $80,000
Direct labor = (40,000 × $4) = $160,000
Incremental overhead = $400,000 × 16% = $64,000
Incremental administrative = $172,000 (given).
Which incentives do interest groups engage in to overcome the free rider problem?
a. special discounts
b. subscription to a magazine
c. access to special information on the Internet
d. All of these are correct
Answer:
The correct answer is letter "D": All of these are correct.
Explanation:
The Free Rider Problem refers to someone being able to gap for less or even for free what others pay more for. The problem arises when individuals are unwilling to pay their fair share for something that most others pay for. The problem is more often while talking about public goods. To avoid this issue, some sort of special must be given to consumers such as discounts, promotions for subscriptions or special information online.