Final answer:
Borrowing funds from an individual client with a promissory note by an investment adviser is considered unethical and does not adhere to NASAA Model Rule standards.
Explanation:
The question pertains to the ethical standards set by the NASAA Model Rule in the context of investment advisers and Federal Covered Advisers, especially regarding the borrowing of funds. Among the choices given, the one that does not adhere to the ethical standards is when an investment adviser decides to borrow funds with a promissory note in writing from an individual client. This is typically considered unethical because it can create a conflict of interest and may not be in the best interest of the client.
ason owns a small landscaping business called GreenScapes. When buying a new pickup truck for his landscaping business, Jason negotiated with Palmetto Dodge, a dealer, with the agreement that GreenScapes would be the service company Palmetto Dodge used for all of its landscaping needs. This is an example ofA) a new task purchaseB) a straight rebuyC) a modified rebuyD) reciprocityE) a straight purchase.
Answer: reciprocity
Explanation: In simple words, reciprocity refers to the agreement in which two parties exchange goods or services in such a way that both of them will gain benefit from such agreement.
In business it can achieved in many ways, for example by combining the efforts and resources or by providing each other some service in exchange for service from the other side.
In the given case, Jason made a deal with dodge to provide service to him in exchange for service by him. Hence we can conclude that the given case depicts reciprocity.
The Chemco Company uses a highly toxic chemical in one of its manufacturing processes. It must have the product delivered by special cargo trucks designed for safe shipment of chemicals. As such, ordering (and delivery) costs are relatively high, at $3600 per order. The chemical product is packaged in 1-gallon plastic contain- ers. The cost of holding the chemical in storage is $50 per gallon per year. The annual demand for the chemical, which is constant over time, is 7000 gallons per year. The lead time from time of order place- ment until receipt is 10 days. The company operates 310 working days per year. Compute the optimal order quantity, total minimum inventory cost, and the reorder poin
Answer:
Annual demand (D) =7,000 gallons
Ordering cost per order (Co) = $3,600
Holding cost per item per annum (H) = $50
EOQ = √2DCo
H
EOQ = √2 x 7,000 x $3,600
$ 50
EOQ = 1,004 units
Q = 1,004
Total minimum inventory cost
= Total ordering cost + Total holding cost
= DCo + QH
Q 2
= 7,000 x $3,600 + 1,004 x $50
1,004 2
= $25,099.60 + $25,100
= $50,199.60
Re-order point
= Maximum usage per day x Maximum lead time
= 7,000 gallons x 10 days
310 days
= 226 units
Explanation:
EOQ is a function of square root of 2 multiplied by annual demand and ordering cost per order divided by holding cost per item per annum.
Total minimum inventory cost is the aggregate of total ordering cost and total holding cost.
Re-order point is the product of maximum usage per day and maximum lead time.
Maximum usage per day is annual demand divided by the number of working days in a year.
The optimal order quantity is approximately 7106 gallons. The total minimum inventory cost is $180,326.87. The reorder point is 226 gallons.
Explanation:To determine the optimal order quantity, total minimum inventory cost, and the reorder point for Chemco Company, we can use the Economic Order Quantity (EOQ) model. The formula for EOQ is:
EOQ = sqrt((2 * D * S) / H)
Where D is the annual demand, S is the ordering cost, and H is the holding cost. Substituting the values given in the question:
EOQ = sqrt((2 * 7000 * 3600) / (50))
EOQ = sqrt(50400000)
EOQ = 7105.85 gallons (rounded to the nearest gallon)
The total minimum inventory cost can be calculated as:
Total Cost = ((D * S) / EOQ) + (H * (EOQ / 2))
Substituting the values:
Total Cost = ((7000 * 3600) / 7105) + (50 * (7105 / 2))
Total Cost = 2514.37 + 177,812.5
Total Cost = $180,326.87
The reorder point can be calculated as the lead time demand:
Reorder Point = (D * Lead Time) / Working Days
Substituting the values:
Reorder Point = (7000 * 10) / 310
Reorder Point = 225.81 (rounded up to the nearest gallon)
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Brief Exercise 8-5 Blossom Company uses the percentage-of-receivables basis to record bad debt expense and concludes that 4% of accounts receivable will become uncollectible. Accounts receivable are $419,300 at the end of the year, and the allowance for doubtful accounts has a credit balance of $2,941.Prepare the adjusting journal entry to record bad debt expense for the year.
Answer:
The adjusting journal entry to record bad debt expense for the year:
Debit Bad debts expense $13,831
Credit Allowance for doubtful accounts $13,831
Explanation:
Blossom Company uses the percentage-of-receivables basis to record bad debt expense.
At the end of the year, Accounts receivable are $419,300 and 4% of accounts receivable will become uncollectible.
Estimated uncollectible = $419,300 x 4% = $16,772
Before adjusting, the allowance for doubtful accounts has a credit balance of $2,941.
Bad debts expense = $16,772 - $2,941 = $13,831
The adjusting journal entry:
Debit Bad debts expense $13,831
Credit Allowance for doubtful accounts $13,831
The Blossom Company estimates that 4% of their accounts receivable, totalling $419,300, will be uncollectible. This equates to a Bad Debt Expense of $16,772. The appropriate adjusting journal entry is to debit Bad Debt Expense and credit Allowance for Doubtful Accounts by the same amount.
Explanation:The Blossom Company anticipates that 4% of their accounts receivable, which currently amount to $419,300, will be uncollectible. This 4% represents the bad debt expense that the Blossom Company will need to account for. Calculating 4% of $419,300 gives us $16,772. This is the amount that the Blossom Company expects will not be paid by their debtors. To accurately reflect this anticipated loss in accounts receivable, they will need to make an adjustment to their accounts with an adjusting journal entry.
The adjusting journal entry to record the bad debt expense would be as follows:
Bad Debt Expense 16,772
Allowance for Doubtful Accounts 16,772
Here, the Bad Debt Expense is debited with the amount of $16,772, which represents the anticipated loss due to uncollectible accounts. On the other hand, the Allowance for Doubtful Accounts, which is a contra-asset account tied to Accounts Receivable, is credited with the same amount to show that a portion of the accounts receivable is expected to be uncollectible.
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company looks at its expenses and finds that its payments to freelancers increased significantly over the past few months, exceeding the budget by 25 percent. This is an example of ________.
(A) using a budget for planning
(B) using data to confirm a budget
(C) justifying expenses with a budget
(D) using a budget for monitoring and controlling
Answer:
D
Explanation:
Using a budget for monitoring and controlling
Company looks at its expenses and finds that its payments to freelancers increased significantly over the past few months, exceeding the budget by 25 percent. This is an example of using a budget for monitoring and controlling. The correct option is (D).
What do you mean by the Budget?A budget is a financial plan that projects future earnings and costs. A budget, put simply, forecasts future spending and saving in addition to anticipated income and expenses.
For each fiscal year, a budget can be created and filled with data on projected sales and cost values. This allows you to predict how the upcoming accounting period will probably end.
The business's actual performance can be compared to this suggested plan.
Therefore, Company looks at its expenses and finds that its payments to freelancers increased significantly over the past few months, exceeding the budget by 25 percent. This is an example of using a budget for monitoring and controlling.
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You’re thinking of buying one of two firms. One has a profit margin of $4 per unit; the other has a profit margin of $10 per unit. Which should you buy? Why?
If both firms are producing where MR = MC and you could buy either for the same amount, then you should buy the firm:
A. that has a profit margin of $4 per unit because it must be producing more and is therefore earning the higher total profits.
B. that has a profit margin of $10 per unit because it must be producing more and is therefore earning the higher total profits.
C. there is not enough information to determine which firm to buy.
D. The one with the highest total profit should be bought.
E. that has a profit margin of $10 per unit.
A higher profit margin means that you could increase output and further increase total profits.
There is not enough information to determine which firm to buy.
Answer: Option C
Explanation:
In the question above, only the profit margin of both the firms are given, but only on these basis, it cannot be decided which firm to be bought. A lot of other things are to be kept in mind while taking into consideration the decision of buying a fir.
Even if both the firms are working in the equilibrium condition which is the condition of MR = MC, then also it can not be decided, which one firm to buy.
A new tax on gasoline causes a reduction in the purchase of new vehicles with poor fuel economy. This is an example of what type of incentive?a. Negative directb. Positive directc. Negative indirectd. Positive indirecte. The tax does not provide an incentive.
Answer:
Option (C) is correct.
Explanation:
Negative Indirect.
This is due to the indirect affect of tax on the purchase of new vehicle because a new tax on gasoline reduces the consumers incentive to the buy the new vehicles. Therefore, it is a negative indirect incentive.
Also, there is a fall in the number of cars or vehicles purchased because of the tax imposed on the gasoline.
Final answer:
A new tax on gasoline causing the purchase of fuel-inefficient vehicles to decline exemplifies a negative direct incentive, option A
Explanation:
A new tax on gasoline that leads to a decrease in the purchase of new vehicles with poor fuel economy is an example of a negative direct incentive. When the government imposes a tax on gasoline, it effectively raises the price of using vehicles that consume a lot of fuel. As a result, consumers have a financial motivation to avoid these costs by selecting more fuel-efficient vehicles or alternative means of transportation.
This is a direct change in behavior resulting from the economic incentive created by the tax. This approach mirrors what is known as a Pigovian tax, proposed by economist Arthur Pigou, aimed at addressing negative externalities such as air pollution.
Students with learning disabilities typically have good organizational skills.a. Trueb. False
Answer:
false
Explanation:
Organisational skills are developed with experience and continuous learning. Likewise, students with learning disabilities are not very good at organisational skills, because developing organisational skills require learning. Students with learning disabilities can generate organisational skills, but to have good organisational skills is nearly unmanageable for disable students. This is why learning disable students don't get managerial roles in firms and organisations.
False. Students with learning disabilities typically do not have good organizational skills.
Explanation:False. Students with learning disabilities typically do not have good organizational skills. Learning disabilities are neurological disorders that affect a person's ability to receive, process, or communicate information effectively. These disabilities can impact various areas of learning, such as reading, writing, math, and organization. For example, students with dysgraphia may struggle with organizing their thoughts and writing legibly, while students with dyslexia may have difficulty with reading and spelling.
An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation. Production Volume (units) Total Cost ($) 400 4000 450 5000 550 5400 600 5900 700 6400 750 7000 What is the variable cost per unit produced?
Answer:
The answer is $7.6
Explanation:
We have to build up the regression equation to predict the total cost at a given production level to find out the estimated amount of variable cost per unit.
Denote the equation as: y = ax + b; where: a is the variable cost per unit; x is the units produced; b is fixed cost; y is total production cost at x units produced.
Apply the formula in Least Squares Regression, we have:
a = (n*Σ(x*y) - Σx * Σy) / [n*Σ(X^2) - (ΣX)^2], in which n = 6 observations: x0 denote production volume and y denote total cost at an x0 production volume. Thus, we have the below calcualtion:
Σ(x*y) = 400 * 4000 + 450 * 5000 +... + 750 *7000 = 20,090,000;
Σx = 400 + 450 + ...+ 750 = 3,450; (Σx)^2 = 11,902,500
Σy = 4,000 + 5,000 +...+7,000 = 33,700
Σx^2 = 400^2 + 450^2 + ... + 750^2 = 2,077,500
=> a = (6*20,090,000 - 3,450*33,700) / ( 6*2,077,500 - 11,902,500) = 7.6
So, variable cost per unit produced is $7.6.
The payback method, unlike the net present value method, does not ignore cash flows after the point of cost recovery.
a. True
b. False
Answer:
Explanation:
The payback period measures the length of time it takes a project cash inflow s to recoup its cash outflows.
Though it does not incorporate time value of money but it is a sure measure of a project's liquidity- it gives an idea of how soon it will take a project to recover its initial cost. In addition, it is very easy to calculate.
However, it suffers a number of setbacks. For example, it treats cash flows occurring at different periods in the project life as been the same- it ignores the time value of money concept.
Furthermore, it also excludes cash inflows coming up after the payback date in its computation. The date at which the accumulated cash inflows equals the initial cost is also known as point of cost recovery
The payback period is a method of investment appraisal which focuses on liquidity and not profitability. Yes, it is concerned about a project breaking even but investors are concerned about profitable.
In contrast, the net present value corrects some of the major pitfalls of the payback period method. For example, It uses the concept of time value of money as it involves calculating the present values of cash flows.
Also, all cash flows are included in the calculation of net present value.
Note that the question negates some of these points.
For example if a project costs $60,000 with a seires of annual cash inflows as follows Year 1- $20,000, year 2- $20,000, year 3 -$20,000 and year 4- $10.
The payback period is 3 year in this example of mine. The $10 of year 4 is excluded in the computation of the payback perod and does give an idea of whether the project is profibale
The payback method is defined as the time required to recoup the funds invested to reach the break-even point. The payback period is the initial investment done per year cash flow.
The given statement is False.
The payback method or period is the time taken to project the inflow of cash to recoup the outflow of cash.
The payback method can be calculated by the formula:
[tex]\text{Payback} &= \dfrac{\text{Initial Investment}} {\text{Cash flow per year}}[/tex]
In the payback period, after the payback point has been reached, the cash flows are ignored.
A payback period is an approach to capital budgeting, such that it understands the cash flow as an investment. The payback ignores the overall profitability of the investment, unlike the net present value.
Therefore, the given statement is False.
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Julie has just retired. Her company’s retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $150,000 immediately as her full retirement benefit. Under the second option, she would receive $14,000 each year for 20 years plus a lump-sum payment of $60,000 at the end of the 20-year period.Required:1. Calculate the present value for the following assuming that the money can be invested at 11%.2. If she can invest money at 11%, which option would you recommend that she accept?
Final answer:
To advise Julie on the best retirement benefit option, we calculate the present value of both options assuming an 11% return. The first option's present value is simply the lump sum of $150,000. For the second option, we calculate the present value of the annuity using the annuity formula and add it to the discounted present value of the future lump sum.
Explanation:
To determine which retirement benefit option is more favorable for Julie, we need to calculate the present value of both options, assuming an investment return of 11%. The present value of an annuity formula is used to calculate the value of a series of future payments in today's dollars, which is given by the formula: PV = P * [1 - (1 + r)^{-n}] / r, where PV is the present value, P is the payment per period, r is the interest rate per period, and n is the number of periods.
Option 1: Lump Sum Payment
The first option offers a lump sum of $150,000 immediately, so the present value of this option is simply $150,000, as no calculations are necessary for a single lump sum already in today's dollars.
Option 2: Annuity Plus Lump Sum
The second option is an annuity of $14,000 per year for 20 years and a separate lump sum of $60,000 at the end of 20 years. To find the present value of the annual payments, we use the present value of annuity formula:
Present Value of Annuity = $14,000 * [1 - (1 + 0.11)^{-20}] / 0.11
We also calculate the present value of the $60,000 lump sum to be received at the end of 20 years by discounting it back to its present value using the formula:
Present Value of Lump Sum = $60,000 / (1 + 0.11)^{20}
By adding these two present values together, we obtain the total present value for the second option.
Once the present values of both options are calculated, Julie can compare the two and choose the option with the higher present value, meaning the most beneficial option when taking into account the time value of money.
If Julie can invest money at 11%, she should choose the option that offers her the highest present value as that would represent the greater amount of money in today's dollars.
Who would certify the interoperability performance of a command and control system used by both the Army and the Navy?
A. Joint Interoperability Test Command (JITC)
B. Joint Requirements Oversight Council (JROC)
C. Joint Staff
Answer:
A. Joint Interoperability Test Command (JITC)
Explanation:
The Joint Interoperability Test Command (JITC) is a wing of the United States Department of Defense that tests and certifies information technology products for military use. JITC provides risk based Test, Evaluation & Certification services, tools, and environments to ensure Joint War-fighting IT capabilities are interoperable and support mission needs.
TarHeel Corporation reported pretax book income of $1,026,000. During the current year, the net reserve for warranties increased by $101,300. In addition, tax depreciation exceeded book depreciation by $206,500. Finally, TarHeel subtracted a dividends received deduction of $55,200 in computing its current-year taxable income. TarHeel's accounting effective tax rate is:
a. 21%.
b. 19.87%.
c. 18.74%.
d. 1761%.
Answer:
Effective accounting tax rate = 17.61%
Explanation:
given data
Pre Tax book income = $1,026,000
Reserve for warranties = $101,300
Tax depreciation = $206,500
Deduction inform of dividends received = $55,200
to find out
accounting effective tax rate
solution
we assume here tax rate is 21 %
So Taxable income will be here as
Taxable income = [ $1,026,000 + $101,300 ] - [ $206,500 + $55,200 ]
Taxable income = $1,127,300 - $261,700
Taxable income = $865,600
Tax @21% = $865,600 × 21%
Tax = $181,776
Effective accounting tax rate will be
Effective accounting tax rate = [tex]\frac{181776}{1026000}[/tex]
Effective accounting tax rate = 17.61%
A put option on a stock with a current price of $42 has an exercise price of $44. The price of the corresponding call option is $3.60. According to put-call parity, if the effective annual risk-free rate of interest is 6% and there are four months until expiration, what should be the price of the put? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
The price of the put should be $4.73.
Explanation:
Please find the below for detailed explanations and calculations:
We have the put-call parity as:
C + PV(S) = P + MP in which:
C= Price of a call option = $3.6;
PV(S) = Present value of exercise price = 44*e^-6%*(4/12) = $43.13;
MP = current market price = $42.
Thus, P = Value of the put = C +PV(S) - MP = 3.6 + 43.13 - 42 = $4.73
So, the answer is : "The price of the put should be $4.73."
A local finance company quotes an interest rate of 17.1 percent on one-year loans. So, if you borrow $20,000, the interest for the year will be $3,420. Because you must repay a total of $23,420 in one year, the finance company requires you to pay $23,420/12, or $1,951.67, per month over the next 12 months. Is the interest rate on this loan 17.1 percent?
a. What rate would legally have to be quoted? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the effective annual rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
The APR or legal interest rate quoted must be computed based on the present value of monthly payments, and it may differ from the advertised rate. The EAR, reflecting the actual cost of borrowing, accounts for the compounding of interest at this monthly rate over a year.
The question is asking whether the interest rate on a loan truly reflects the advertised rate when repayments are structured differently.
In this scenario, the finance company offers a one-year loan at 17.1% but requires monthly repayments that don't align directly with simple interest computations.
This involves calculating the actual annual percentage rate (APR) and the effective annual rate (EAR).
To calculate the APR, which is the legal rate that must be quoted, considering the monthly payments, we would have to solve for the interest rate that equates the present value of the loan (the amount borrowed) to the present value of the monthly payments.
However, since the actual numbers aren't provided, a generic formula would be:
Use the equation PV of loan = PV of annuity (monthly payments)
Apply the formula for the present value of an annuity:
Calculate the interest rate (i) that satisfies this equation.
To find the EAR, which measures the actual interest rate after considering compounding, we would:
Take the monthly rate calculated from the APR.
Convert it to an annual rate considering monthly compounding using the formula (1 + i)12 - 1, where i is the monthly rate.
The APR generally differs from the advertised rate when repayments are not in sync with the interest accrual period, leading to an EAR that reflects the true cost of borrowing.
Pelican Partnership makes an operating distribution to Prabakhar consisting of $30,000 in cash and capital assets worth $10,000 (partnership basis $8,000). Immediately prior to the distribution Prabhakar’s outside basis in the partnership was $35,000. What amount of gain will Prabhakar recognize on the distribution, and what is Prabhakar’s resulting outside basis in the partnership?
Answer:
$0 and $0
Explanation:
Since the cash distribution is $30,000 and the Prabhakar outside basis in the partnership is $35,000 which reduced his basis by $5,000 ($35,000 - $30,000)
The Prabhakar outside basis in the partnership i.e $35,000 is more than the cash distribution i.e $30,000 which results in no gain and no outside basis in the partnership.
An accrual-basis C corporation that prepared its financial statements based on GAAP recorded $800,000 of bad debt expense. The total amount of bad debts that actually became worthless was $930,000. In respect to bad debt expense, what type of disclosure should the corporation show on Schedule M-3
Complete Question:
A.A permanent bad debt expense difference of $130,000.
B.A temporary difference in which book deductions exceed tax deductions by $130,000.
C.A temporary difference in which tax deductions exceed book deductions by $130,000.
D.No difference between bad debt expense per income statement and deduction per tax return.
Answer:
C.A temporary difference in which tax deductions exceed book deductions by $130,000.
Explanation:
As the book bad debt was $800,000 and the actual bad debt was $930,000. One can clearly see a difference of $130,000 and this is the amount which the book bad debt is increasing by. In this case of tax, bad debts becomes worthless in the year they are announced collectible.
The Herfindahl-Hirschman Index is a measure of market power that focuses on:
(A) the ratio of the price of a firm's product to the price elasticity of demand for the product.
(B) the share of the market controlled by the X largest firms in the market.
(C) the sum of the squares of the market share of each firm in an industry.
(D) the difference between a firm's product price and its marginal costs of production.
Answer:
C
Explanation:
Measures concentration by adding market shares squared
Oriole Company built a warehouse for $524,700. It could have purchased the building for $614,800. The controller made the following entry. Buildings 614,800 Cash, Materials, Other Accounts 524,700 Profit on Construction 90,100 Prepare the entry that should have been made to record the acquisition.
Answer:
Building A/c Dr $524,700
To Cash A/c $524,700
(Being the acquisition of building is recorded)
Explanation:
The journal entry is shown below:
Building A/c Dr $524,700
To Cash A/c $524,700
(Being the acquisition of building is recorded)
Since the acquisition is made which increase the fixed asset so we debited the fixed assets account and credited the cash account because cash is gone for acquiring it
All other information which is mentioned is not important. Therefore, ignore d it
Sunland Company had two issues of securities outstanding: common stock and an 9% convertible bond issue in the face amount of $15350000. Interest payment dates of the bond issue are June 30th and December 31st. The conversion clause in the bond indenture entitles the bondholders to receive forty shares of $20 par value common stock in exchange for each $1000 bond. On June 30, 2018, the holders of $2302500 face value bonds exercised the conversion privilege. The market price of the bonds on that date was $1200 per bond and the market price of the common stock was $35. The total unamortized bond discount at the date of conversion was $980000. In applying the book value method, what amount should Sunland credit to the account "paid-in capital in excess of par," as a result of this conversion?
Answer:
$313,500
Explanation:
Applying the book value method,
Common stock:
= ($2,302,500 face value bonds ÷ $1000) × 40 shares × $20 par value
= 2,302.5 × 40 shares × $20 par value
= $1,842,000
Unamortized discount:
= ($2,302,500 face value bonds ÷ $15,350,000) × $980,000
= 0.15 × $980,000
= $147,000
Amount should Sunland credit to the account "paid-in capital in excess of par," as a result of this conversion:
= $2,302,500 face value bonds - Common stock - Unamortized discount
= $2,302,500 - $1,842,000 - $147,000
= $313,500
The company's adjusted trial balance as follows includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Retained earnings, $59,000; Dividends, $2,000; Fees Earned, $56,000; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare closing entry #1.
Answer:
Dr. Fees Earned $56,000
Cr. Income Summary $56,000
Explanation:
Prepare closing entry # 1
Close means to make the balance zero. From the Adjusted Trial Balance that Fees Earned Account has a credit balance of $56,000 and to make it zero we will credit it with Income Summary Account, as follows;
(+) Fees Earned $56,000
(-) Income Summary $56,000
To Close Fees Earned Account
Final answer:
The first closing entry for the company includes debiting Fees Earned for $56,000 and crediting Income Summary for $56,000, which zeroes out the Fees Earned and increases the Income Summary by the same amount.
Explanation:
Preparing closing entries in accounting is a step at the end of the accounting period to zero out temporary accounts and transfer their balances to permanent accounts. The first closing entry always involves closing revenue and expense accounts. In the given adjusted trial balance, the revenue account is Fees Earned and the expense accounts are Depreciation Expense and Salaries Expense.
The first closing entry will close the Fees Earned account and transfer its balance to an income summary account. The entry would typically be a debit to Fees Earned for $56,000 and a credit to Income Summary for $56,000, effectively reducing the Fees Earned to zero and increasing the Income Summary balance by the same amount. Then, the expense accounts (Depreciation Expense and Salaries Expense) are closed and their balances are transferred to the Income Summary account.
Here is how the first closing entry would look:
Debit Fees Earned for $56,000Credit Income Summary for $56,000Since the question specifies to prepare only closing entry #1, we focus on closing the revenue (Fees Earned) account in this step.
If there are 10 directors to be elected and a shareholder owns 100 shares, calculate the maximum number of votes that he or she can cast for a favorite candidate under each of the voting methods. MaximumNumber of Votes a. Majority voting b. Cumulative voting
Answer:
a. 100 votes
b. 1,000 votes
Explanation:
a.
Under Majority voting, the maximum number of votes which can be cast by shareholder will be 100 votes for a favorite candidate as owned 100 shares.
b.
Under Cumulative voting, the maximum number of votes can be cast by shareholder for the favorite candidate is as:
10 Candidates and owns 100 shares, so
= 10 × 100
= 1,000
The Product Owner of a team was asked for a forecast for the completion of a product release. There were 140 story points worth of work remaining in the project. The team's average velocity in the past 3 Sprints has been 65, though the best Sprint among the last three had a velocity of 85 story points. What should the Product Owner say?
Answer:
The product owner should say:
The team will need about 3 Sprints more to complete the product release.
Explanation:
As given the team's average velocity in the past 3 Sprints has been 65 points and best sprint among three was 85 points. There were 140 story points worth of work in the project.
So, if the team keep such a performance then,
three sprints can get = 3 x 65 points
Three sprints can get = 195 points
So, the team will need about 3 sprints more to complete the product release.
Griffen Corporation uses a standard costing system. Information for the month of May is as follows: Actual manufacturing overhead costs ($26,000 is fixed) $80,000 Direct labor: Actual hours worked 12,000 hrs. Standard hours allowed for actual production 10,000 hrs. Average actual labor cost per hour $18.00 The overhead rate is based on a normal volume of 12,000 direct labor hours. Standard cost data at 12,000 direct labor hours were as follows: Variable overhead $48,000 Fixed overhead 24,000 Total overhead $72,000 What is the fixed overhead spending variance for Griffen?
Answer:
Fixed overhead spending variance $
Budgeted fixed overhead cost (12,000 hrs x $2) 24,000
Less: Actual fixed overhead cost 26,000
Fixed overhead spending variance 2,000(A)
Explanation:
In this case, we need to calculate the standard fixed overhead application rate, which is the ratio of Budgeted fixed overhead cost to budgeted direct labour hours (normal capacity). Fixed overhead spending variance is the difference between budgeted fixed overhead cost and actual fixed overhead cost. Budgeted fixed overhead cost is budgeted hours multiplied by standard fixed overhead application rate.
The fixed overhead spending variance for Griffen Corporation is $56,000.
To calculate the fixed overhead spending variance for Griffen Corporation, we need to compare the actual fixed overhead costs incurred with the budgeted (standard) fixed overhead costs.
Fixed Overhead Spending Variance = Actual Fixed Overhead Costs - Budgeted (Standard) Fixed Overhead Costs
Actual Fixed Overhead Costs = $80,000 (given)
Budgeted (Standard) Fixed Overhead Costs = $24,000 (given in the standard cost data)
Now, let's calculate the fixed overhead spending variance:
Fixed Overhead Spending Variance = Actual Fixed Overhead Costs - Budgeted (Standard) Fixed Overhead Costs
Fixed Overhead Spending Variance = $80,000 - $24,000
Fixed Overhead Spending Variance = $56,000
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which of the following are not required to register as investment advisers under the investment advisers act of 1940?
(A) A person who provides advice to people who are investing in antique furniture.
(B) A person who provides advice to people who are investing in coin collections.
(C) A person who provides advice to insurance companies on their portfolios.
(D) A person who provides advice to people who are investing in companies registered under the Investment Company Act of 1940.
Answer:
The correct answers are letters "A" and "B": A person who provides advice to people who are investing in antique furniture; A person who provides advice to people who are investing in coin collections.
Explanation:
The Investment Advisers Act of 1940 is a set of laws that establishes the boundaries for the activities of investment advisers. This act was originally written by the Securities and Exchange Commission (SEC) and provides the legal limitations for people who advise individuals or companies regarding securities.
In that case, people who advise purchases or antique furniture or coin collections do not fall under this category.
Under the Investment Advisers Act of 1940, persons who provide advice on non-securities, such as antique furniture (A) and coin collections (B), are typically not required to register as investment advisers.
The individuals who are not required to register as investment advisers under the Investment Advisers Act of 1940 include those who provide advice on non-securities investments. Based on the given options:
(A) A person who provides advice to people who are investing in antique furniture.
(B) A person who provides advice to people who are investing in coin collections.
(C) A person who provides advice to insurance companies on their portfolios. This could be considered as requiring registration since insurance companies often invest in securities.
(D) A person who provides advice to people who are investing in companies registered under the Investment Company Act of 1940. This person would likely need to be registered as they are advising on securities.
Therefore, options (A) and (B) are typically not required to be registered as investment advisers since antique furniture and coin collections are generally not considered securities.
George Johnson recently inherited a large sum of money; he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 6% for the bond fund and 10% for the stock fund. Whatever portion of the inheritance George finally decides to commit to the trust fund, he wants to invest at least 30% of that amount in the bond fund. In addition, he wants to select a mix that will enable him to obtain a total return of at least 7.5%. Formulate a linear programming model that can be used to determine the percentage that should be allocated to each of the possible investment alternatives. If required, round your answers to three decimal places. Value of optimal solution is %
Answer:
Return on investment
X * 0.06 + (1-X)*0.1 = 0.075
where:
1>X >0.30
X is the percentage invest on bond fund
It needs to invest 62.5% in the bond fund
and 37.5% in the stock und to achieve 7.5% return
Explanation:
We have a certain amount divided into two option.
being X the bond fund the rmainder (1 - X) will be invested in the stock fund
We want at least an X of 30%
and achieve 7.5% return
0.06X + 0.1 - 0.1X = 0.075
0.1-0.075 = 0.04X
X = 0.025/0.04 = .625 = 62.5%
Kaplan, Inc. produces flash drives for computers, which it sells for $27 each. The variable cost to make each flash drive is $13. During April, 700 drives were sold. Fixed costs for April were $2 per unit for a total of $1,400 for the month. How much is the monthly break-even level of sales in dollars for Kaplan? Select one:
a. $100
b. $2,700
c. $14,000
d. $8,400
Answer:
Break even sales will be $2700
So option (b) will be correct option
Explanation:
We have given fixed cost = $1400
Sells per unit = $27 each
And variable cost per unit = $13 each
So contribution margin ratio [tex]=\frac{sales\ per\ unit-variable\ cost\ perunit}{sales\ per\ unit}=\frac{27-13}{27}=0.5185[/tex]
We know that break even sales is given by
Break even sales [tex]=\frac{fixed\ cost}{contribution\ margin\ ratio}=\frac{1400}{0.5185}=$2700[/tex]
So option (b) will be correct answer
Liam Company signed a lease for an offi ce building for a period of 12 years. Under the lease agreement, a security deposit of $9,600 is made. The deposit will be returned at the expiration of the lease with interest compounded at 4% per year. What amount will Liam receive at the time the lease expires?Amount at the time the lease expires ___ $.
Answer:
Present value (P) = $9,600
Number of years (n) = 12 years
Interest rate (r) = 4% = 0.04
Future value (FV) = ?
FV = P(1 + r)n
FV = $9,600(1 + 0.04)12
FV = $9,600(1.04)12
FV = $9,600 x 1.6010
FV = $15,370
Explanation:
In this case, there is need to compound the security deposit of $9,600 for 12 years at 4% interest rate per annum. The formula for future value of a lump sum(Single investment) is applied.
Liam will receive $14,208 at the time the lease expires.
Explanation:To calculate the amount Liam will receive at the time the lease expires, we need to calculate the interest earned on the security deposit. The interest is compounded at a rate of 4% per year. Using the formula for compound interest, we can calculate the amount:
Amount = Principal + Principal × Interest Rate × Time
Amount = $9,600 + $9,600 × 0.04 × 12
Amount = $9,600 + $4,608 = $14,208
Therefore, Liam will receive $14,208 at the time the lease expires.
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Which is an attribute of an effective organiation structure?
An effective organization structure attribute is the balance between hierarchical levels and span of control, with flat structures offering more autonomy and taller structures providing closer supervision.
An attribute of an effective organization structure that contributes to a company's effectiveness and innovativeness is the appropriate balance between hierarchical levels and span of control. Flat structures have a wider span of control, allowing managers to supervise more employees directly, which can lead to increased employee autonomy and satisfaction. On the other hand, tall structures have more levels and a narrower span of control, potentially providing more opportunities for close supervision and a greater sense of job security for the employees. Both structures have their benefits and challenges, and the effectiveness of each depends on the company's specific context and goals.
Imagine that you are the marketing manager for a U.S. manufacturer of disposable diapers. Your firm is considering entering the Brazilian market. Your CEO believes the advertising message that has been effective in the United States will suffice in Brazil. Outline some possible objections to this. Your CEO also believes that the pricing decisions in Brazil can be delegated to local managers. Why might she be wrong? Hill, Charles W. L.,Hill, Charles W. L.. Global Business Today (Kindle Locations 16475-16478). McGraw-Hill Higher Education. Kindle Edition.
Answer:
It is wrong to use the same advertising message and it is right to delegate the pricing decisions to local managers who have wide experience.
Explanation:
First of all, it is strongly wrong to think that the advertising message that has been effective in the U.S. will suffice in Brazil and mostly due to the fact that every country has its very own culture and population that tend to see products in a very particular way depending on their beliefs and values. Once said that, the message in the adversiting campaign will have to be unique and made specilly for target customers in Brazil because they will find the product good or bad depending on the culture they rely on.
Secondly, it is also important to delegate the decisions about pricing strategy to managers who have local experience in the subject due to the fact that as said before target customers vary from country to country and even there from regions to regions too. Therefore that it is important to establish a price that feels comfortable to the people inside that economy and that will the make the value of the product high enough so the people will buy it, and for that it is necessary to have an experienced local manager who will understand his own people.
Adapting advertising messages and pricing strategies for the Brazilian market is crucial due to cultural differences, consumer behaviors, and local market conditions, which can greatly influence the success of a U.S. disposable diaper brand's entrance into the country.
The assumption that the advertising message effective in the United States will suffice in Brazil overlooks critical cultural differences and consumer behavior. Examples of advertising failures when not considering local culture have been numerous, indicating the importance of understanding and adapting marketing strategies for local audiences. Additionally, consumer preferences, legal regulations, and advertising standards can vary greatly across countries, posing potential issues both ethically and in terms of brand reception.
Pricing decisions are heavily dependent on local factors such as purchasing power, competition, taxation, and cost structure. Delegating these decisions to local managers without due consideration of the global brand strategy and economic variances can lead to inconsistencies, misaligned brand positioning, or missed profit opportunities.
Therefore, adaptations of both advertising messages and pricing strategies are crucial to address the various local market conditions and consumer expectations, align with ethical standards, and consequently ensure the success of the brand in the Brazilian market.
On June 30 the general ledger of Beverly Hills Clothiers, a clothing store, showed a balance of $63,895 in the Purchases account, a balance of $2,975 in the Freight In account, and a balance of $4,280 in the Purchases Returns and Allowances account. What was the delivered cost of the purchases made during June?
Answer:
$62,590
Explanation:
The computation of the delivered cost of the purchases made is shown below:
= Balance in purchase account + freight in charges - purchase return and allowance
= $63,895 + $2,975 - $4,280
= $62,590
We simply added the freight in charges and deduct the purchase return and allowances to the purchase balance so that the correct amount can come
Final answer:
The delivered cost of the purchases made by Beverly Hills Clothiers during June is $62,590, calculated by adding purchases of $63,895 to freight costs of $2,975 and subtracting returns and allowances of $4,280.
Explanation:
The student asked about calculating the delivered cost of purchases made during June by Beverly Hills Clothiers. To find this value, we utilize the information provided from the general ledger: the balance in the Purchases account, the Freight In account, and the Purchases Returns and Allowances account.
To calculate the delivered cost of the purchases, we must add the cost of purchases to the cost of freight and subtract any returns and allowances. The formula for this calculation is as follows:
Delivered Cost of Purchases = Purchases + Freight In - Purchases Returns and Allowances
Using the given balances:
Purchases: $63,895
Freight In: $2,975
Purchases Returns and Allowances: $4,280
Delivered Cost = $63,895 + $2,975 - $4,280 = $62,590
Therefore, the delivered cost of the purchases made by Beverly Hills Clothiers for June is $62,590.