Answer:$81
Explanation:
The options given are:
a. $76
b. $80
c. $81
d. $82
If the principal market that is, the market that the greatest volume of activity can't be identified, then the most advantageous market would be used to determine the fair value of a financial asset.
The most advantageous market is the market that has the highest net price, after transaction cost has been considered even though the transaction costs is not included into the fair value. Therefore, the second market gives the highest net price of $80 after the consideration of the transaction costs, hence, it should be utilized for fair value purposes.
The fair value amount include the transaction costs, which give $80 + $1 = $81
The fair value amount is $81.
Fave Motion Pictures sells movie tickets for $ 15 per movie patron. Variable costs are $ 9.00 per movie patron and fixed costs are $ 51 comma 000 per month. The company's relevant range extends to 33 comma 000 movie patrons per month. What is Fave Motion Pictures' projected operating income if 20 comma 000 movie patrons see movies during a month?
Answer:
Fave Motion Pictures' projected operating income if 20,000 movie patrons see movies during a month is $ 69,000.
Explanation:
We subtract the variable and fixed costs from the sales revenue to get the projexted operating income.
Fave Motion Pictures
Operating Income for 20,000 units
Sales $ 15 * 20,000= $ 300,000
Variable costs $ 9.00 *20,000 = $180,000
Fixed costs $ 51, 000
Operating Income $ 69,000
Fave Motion Pictures
Operating Income for 33,000 units
Sales $ 15 * 33,000= $ 495,000
Variable costs $ 9.00 *33,000 = $297,000
Fixed costs $ 51, 000
Operating Income $ 147,000
The fixed costs will not change as they are treated as period costs given per month. Fave Motion Pictures' projected operating income if 20,000 movie patrons see movies during a month is $ 69,000.
ou are the loan department supervisor for the Pacific National Bank. The following installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate, and the payoff for each loan. Enter the rebate fraction in this form: numerator / denominator (e.g., 82/165). Do not round intermediate calculations. Round your answers for finance charge rebate and loan payoff to the nearest cent. Do not reduce to lowest terms. Amount Financed Number of Payments Monthly Payment Payments Made Rebate FractionFinance Charge Rebate Loan Payoff $6,50024$570.515
Answer:
$56.74
Explanation:
Base on the scenario been described in the question, we can use the following method to solve the problem
Solution Correct Response Calculate the amount financed, the finance charge, and the monthly payments for the following add-on interest loan. Purchase(Cash) Price Down Payment Amount Financed Add-onInterest Number of Payments Finance Charge $78810% $8%12 $56.74
Ziff Corp. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Ziff Corp. sells to its customers on credit terms of 1/10, net 30. If a customer bought $150,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Ziff Corp. get from the customer? (Note: Round your answer to the nearest whole dollar.) $138,750 $157,500 $148,500 $123,750
Answer:
$148,500
Explanation:
Data given
Sales = $150,000
Rate of discount = 10
The computation of Ziff Corp. cash received from customer is shown below:-
Total collection = Sale × (1 - Rate of discount)
= $150,000 × (1 - 0.01)
= $150,000 × 0.99
= $148,500
Therefore for computing the total collection we simply applied the above formula.
There are many buyers who value high-quality used cars at the full-information market price of p1 and lemons at p2. There are a limited number of potential sellers who value high-quality cars at v1 less than or equals p1 and lemons at v2 less than or equals p2. Everyone is risk neutral. The share of lemons among all the used cars that might potentially be sold is theta. Assume Upper P 1 greater than Upper P 2 comma v 1 greater than v 2, and there are no transaction costs. Under what conditions are all cars sold?
Answer:
Cars would be sold when P2 > V1,
Explanation:
Given Data
Cars = P1
Lemons = P2
Sellers who value high quality cars = V1 ≤
P1
Sellers who value high quality lemons = V2 ≤ P2
Share of lemons among used cars that might be sold = θ
EP = P1 ( θ ) + P2 ( θ ) > V1 > V2
Under which conditions are cars sold
1. Cars would be sold when P2 > V1,
2. Only lemons would be sold when P1 < V1
3. No cars would be sold if P2 is < V1
Final answer:
All cars in a used car market can be sold when there is alignment between the buyers' perceived quality (based on market price) and the sellers' valuations of their cars. This hints on clear information about the quality and proportion of lemons in the market, allowing for an informed and confident buying decision. Seller reputation, warranties, and certifications can also help to bridge the gap of imperfect information and allow all cars to be sold.
Explanation:
The condition under which all cars would be sold in a market where buyers base their assessment on market price, and where imperfect information about the quality of goods exists, revolves around the notion of adverse selection. For all cars to sell, both high-quality used cars (not lemons) and lemons must align with buyers' valuation such that the asking price matches the perceived quality. This assumes that the full-information market prices p1 (for high-quality cars) and p2 (for lemons) are equal to or greater than the valuations v1 and v2 set by sellers, respectively. The market must reach a point where buyers trust that the price reflects the quality, ensuring that cars valued at p1 are indeed high-quality and not lemons, and that cars priced at p2 provide value consistent with their lower quality.
In essence, an equilibrium is reached when the proportion of high-quality cars and lemons, represented by theta, is well-known to buyers and sellers, enabling them to adjust their expectations and price settings accordingly. This creates a transparent market where purchasers can make informed decisions, eliminating fears of inadvertently purchasing a lemon. Without assurance about car quality, mechanisms such as warranties, certifications, or well-established seller reputations might be needed to provide the buyer with sufficient confidence to proceed with a purchase despite the risk associated with imperfect information.
A licensing agreement: a. is the best way to protect proprietary technology from future competitors. b. can be greatly impacted by currency exchange rate fluctuations. c. allows a foreign firm to purchase the right to manufacture and sell a firm's products within a host country. d. results in two firms agreeing to share the risks and the resources of a new venture
Answer:
c. allows a foreign firm to purchase the right to manufacture and sell a firm's products within a host country.
Explanation:
The licensing agreement is a legal contract between the parties knows as licensor and the licensee, where the licensor allows for the sales of the goods and to apply the brand name of the product or use the patent technology. As it usually refers to a written contract and the payment s termed as loyalty. Any failure to follow the agreement may lead to the termination of the license and the payments.The Whistling Straits Corporation needs to raise $80 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $35 per share and the company's underwriters charge a spread of 5 percent. If the SEC filing fee and associated administrative expenses of the offering are $600,000, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, e.g., 1,234,567.)
Answer:
Number of shares= 2,424,060 units
Explanation:
The number of shares to be sold can be worked back as follows:
$
Gross proceeds 80,000,000
Administrative fees 600,000
80,600,000
Gross proceed inclusive of Underwriting fees
= 80,600,000/(100-8)%
=84,842,105.26
Number of shares to be sold = Gross proceeds/price per share
=$84,842,105.26 /$35
= 2,424,060.15
Number of shares= 2,424,060 units
Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion. Units started and completed: 250,000. Units completed and transferred out: 330,000. Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the equivalent units of conversion.
Answer:
Equivalent units of conversion cost = 317,000 units
Explanation:
The equivalent unit is the notional whole units which represent incomplete work and is used to apportion cost between cost between work in progress and completed units
Item units Equivalent units
Opening WIP 80,000 (80,000× 80%) = 64,000
Fully worked 250,000 (250,000× 100) = 250,000
Closing WIP 30,000 (30,000× 10%) = 3,000
Total equivalent units 317,000.
1. DOC for opening inventory is 80%, that is 100%-20%. Remember that 20% work has been done in the previous period, so the balance is to be done in this current period
2. Fully work represent the units of inventory introduced in the current period and completed in the same period. Meaning 100% work was achieved in October .
3. Closing work is only 10% completed. This represent work started this period but not yet completed.
Consider consecutive processes A-B-C, where process A has a capacity of 25 units per hour, process B has a capacity of 30 units per hour, and process C has a capacity of 20 units per hour. In addition to having an inventory buffer in front of the final product (also known as finished goods), where would an operations manager, who practices the principles of Theory of Constraints, want another inventory buffer?
a. in front of process A
b. in front of process B
c. in front of process C
d. Inventory should not exist anywhere.
Answer:
Right option is C.
Explanation:
The operation manager will put the inventory in front of the process C. So, the right option is C.
As we have given the outputs of these processes:
Process A = 25 units/hr
Process B = 30 units/hr
Process C = 20 units/hr Lowest output among all processes.
As, we can see that the process C has the lowest output of all which is 20 units per hour. It clearly means that operation manager will utilize the low output of process C and put the inventory infront of process C in order to increase the output of the overall process.
A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 22,000 defective units that cost $6 per unit to manufacture. The units can be a) sold as is for $2.00 each, or b) reworked for $4.50 each and then sold for the full price of $8.50 each. What is the incremental income from selling the units as scrap and reworking and selling the units
In comparing scrapping or reworking defective units, the company sees an incremental income of $44,000 in favor of reworking and selling the units, notwithstanding both options resulting in a loss.
Explanation:When deciding between scrapping or reworking defective units, a company with excess capacity should consider the incremental income from both options. Given the costs to manufacture are $6 per unit, and there are 22,000 units, we have two scenarios:
Option A: Selling as scrap - The defective units can be sold as is for $2.00 each, resulting in a total revenue of $44,000 (22,000 units x $2/unit).Option B: Reworking and selling - The defective units can be reworked for $4.50 each and sold for $8.50 each. Reworking costs are $99,000 (22,000 units x $4.50/unit), and total revenue after rework is $187,000 (22,000 units x $8.50/unit).To calculate the incremental income, we consider the net gain from both options:
Net gain from Option A (scrapping): $44,000 (total revenue) - $132,000 (manufacturing cost) = -$88,000 (loss).Net gain from Option B (reworking and selling): $187,000 (total revenue after rework) - $132,000 (manufacturing cost) - $99,000 (reworking cost) = -$44,000 (loss).The incremental income is the difference in losses between the two options, which is -$44,000 - (-$88,000) = $44,000 favoring Option B (reworking and selling).
Tandoor Inc. financial statements included the following amounts for the current year: Retired bonds $73,000 Proceeds from collection of note receivable 37 comma 000 Dividends received 45,000 Acquired production machinery with cash 52 comma 000 Sold treasury stock 31 comma 000 Based on this information, what is the amount of net cash provided (used) by investing activities?
Answer:
-$15,000
Explanation:
The computation of the net cash provided or used by investing activities is shown below:
= Proceeds from collection of note receivable - Acquired production machinery with cash
= $37,000 - $52,000
= -$15,000
This negative amount represents the cash used by investing activities
Plus the collection show the inflow of cash and the acquired production represents the outflow of cash
On December 31, 2017, Blair Company issued $600,000 of 20‑year, 11 percent bonds payable for $554,861, yielding an effective interest rate of 12 percent. Interest is payable semiannually on June 30 and December 31. Prepare journal entries to reflect (a) the issuance of the bonds, (b) the semiannual interest payment and discount amortization (effective interest method) on June 30, 2018, and (c) the semiannual interest payment and discount amortization on December 31, 2018. Round amounts to the nearest dollar.
Answer:
No Account and explanation Debit Credit
Dec 31 Cash 554861
Discount on bonds payable 45139
Bonds payable 600000
(To record issuance of bonds)
June 30 Bond interest expense 33292
(554861*12%*6/12)
Discount on bonds payable 292
Cash (600000*11%*6/12) 33000
(To record first semiannual interest)
Dec 31 Bond interest expense 33309
(555153*12%*6/12)
Discount on bonds payable 309
Cash 33000
(To record interest)
The appropriate journal entries to reflect the issuance of the bonds and the semiannual interest payment and discount amortization are:
Blair Company Journal entries
a. Dec 31
Debit Cash $554,861
Debit Discount on Bonds payable $45,139
($600,000-$554,861)
Credit Bonds payable $600,000
(To record issuance of bonds)
b. Jun 30
Debit Bond interest expense $33,292
($554,861×12%/2)
Debit Discount on Bonds payable $292
($33,000-$33,292)
Credit Cash $33,000
($600,000×11%/2)
(To record semiannual interest payment)
c. Dec 31
Debit Bond interest expense $33,309
[($554,861+$292)×12%/2]
Credit Discount on Bonds payable $309
($33,000-$33,309)
Credit Cash $33,000
($600,000×11%/2)
(To record semiannual interest payment)
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Which of the following statements about GDP is correct? a. GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy’s output of goods and services. b. Money continuously flows from households to firms and then back to households, and GDP measures this flow of money. c. GDP is generally regarded as the best single measure of a society’s economic well-being. d. All of the above are correct.
Answer:
d. All of the above are correct.
Explanation:
Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.
GDP can be calculated using the expenditure or income approach.
Using the expenditure approach, GDP = Consumption spending + Investment spending + Government Spending + Net Export
GDP calculated using either the income and expenditure approach always arrives at the same figure.
Real GDP per capita is used to measure the level of wellbeing in the society.
I hope my answer helps you
has a target capital structure of 50% debt and 50% common equity. Davola funds debt by issuing 20-year, 8.6% semi-annual coupon bonds that currently sell for $900. Davola Inc. expects to pay a $1.75 dividend at the end of this year, its expected constant growth rate is 5%, and its common stock sells for $25. Their tax rate is 25%. 1. What is Davola’s component cost of debt? 2. What is Davola’s component cost of equity? 3. What Davoloa’s WACC?
Answer:
Cost of debt after tax is 7.3%
cost of equity is 12.35%
WACC is 9.83%
Explanation:
The cost of debt can be computed using the rate formula in excel.
The rate formula=rate(nper,pmt,-pv,fv)
the nper is the number of coupon payments the bond would make over its entire bond life i.e 20 years*2=40
pmt is the semiannual coupon=$1000*8.6%/2=$43
pv is the current price of $900
fv is the face value of $1000
=rate(40,43,-900,1000)=4.87%
yield =4.87%*2=9.74%
after tax cost=9.74%*(1-tax rate)=9.74%*(1-0.25%)=7.3%
The cost of equity:
share price=D*(1+g)/r-g
D is the dividend expected
g is the dividend growth rate
r is the cost of equity
r=(D*(1+g)/share price)+g
r=($1.75*(1+5%)/$25)+5%=12.35%
WACC=Ke*E/V+Kd*D/V
Ke is the cost of equity of 12.35%
E is 50% or 0.5
D is 50% or 0.5
V=0.5+0.5=1
Kd(after tax) =7.3%
WACC=(12.35%*0.5/1)+(7.3%*0.5/1)=9.83%
On June 1 of the current tax year, Elisha and Ezra (who are equal partners) contribute property to form the Double E Partnership. Elisha contributes cash of $227,520. Ezra contributes a building and land with an adjusted basis and fair market value of $379,200, subject to a liability of $151,680. The partnership borrows $23,700 to finance construction of a parking lot in front of the building. At the end of the first year (December 31), the accrual basis partnership owes $9,480 in trade accounts payable to various creditors. The partnership reported net income of $35,550 for the year that they share equally. Assume that Elisha and Ezra share equally in partnership liabilities. How much is Elisha's basis in the partnership interest on December 31
Answer:
Elisha's basis in the partnership interest on December 31 is $339,525
Explanation:
In order to calculate Elisha's basis in the partnership interest on December 31 we would to calculate the following formula as follows:
Elisha’s basis=cash contributes + liability/2 +reported net income/2 + partnership borrowship/2 + partnership obligations/2=
Elisha’s basis= $227,520+ $151,680/2 + $35,550/2 + $23,700/2 + $9,480/2
Elisha’s basis=$339,525
Elisha's basis in the partnership interest on December 31 is $339,525
week 3 and week 4 calculation and explanation required
Week 3
RCK Ltd issues a prospectus inviting the public to subscribe for 90 million ordinary shares of $2.00 each. The terms of the issue are that $1.00 is to be paid on application and the remaining $1.00 within one month of allotment.
Applications are received for 108 million shares during July 2018. The directors allot 90 million shares on 15 August 2018. All applicants receive shares on a pro rata basis. The amounts payable on allotment are due by 20 September 2018. By 20 September 2018 the holders of 18 million shares have failed to pay the amounts due on allotment. The directors forfeit the shares on 30 September 2018.
The shares are resold on 15 October 2018 as fully paid. An amount of $2.00 per share is received. The balance of forfeited shares is refunded on 20 October 2018.
Required:
Provide the journal entries necessary to account for the above transactions and events.
Week 4
Provide some examples of items that would be adjusted directly against equity, rather than being included as part of profit or loss. and explain it
Answer:
RCK Ltd
Journal Entries:
July 2018:
Debit Stock Application Account with $90,000,000
Credit Common Stock with $90,000,000
To record issue of prospectus for 90 million shares at $1 per share on application.
Debit Cash Account with $108,000,000
Credit Stock Application Account with $90,000,000
Credit Stock Allotment Account with $18,000,000
To record receipt of subscription for 108 million shares.
August 15:
Debit Stock Allotment Account with $90,000,000
Credit Common Stock with $90,000,000
To record 90 million shares at $1 on allotment.
September 20:
Debit Cash Account with $54,000,000
Credit Stock Allotment with $54,000,000
To record receipt of allotment money.
September 30:
Debit Forfeited Stock Account with $18,000,000
Credit Stock Allotment Account with $18,000,000
To record the forfeiture of 18 million shares on allotment.
October 15:
Debit Cash Account with $36,000,000
Credit Forfeited Stock Account with $36,000,000
To record the resale of forfeited shares.
October 20:
Debit Forfeited Stock Account with $18,000,000
Credit Cash Account with $18,000,000
To record the refund of forfeited shares.
Explanation:
a) When shares are issued, the application money is debited to the Stock Application Account while the corresponding credit goes to the (Common) Stock Account.
b) When the application money is received, the Cash Account is debited with the amount received and a credit to the Stock Application Account to close the account. If oversubscription is involved the difference is transferred to the allotment account for part settlement of allotment money.
c) The forfeiture of shares means that the potential shareholders failed to pay up the balance due on their allotted shares. The shareholders therefore lose the balance they have already contributed.
d) The reissue of forfeited shares is done in such a way that the difference is received to balance off the forfeited shares account. However, management may decide to receive the shares at par and refund the forfeited shares balance.
Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 20% weight in equity, 5% in preferred stock, and 75% in debt. The cost of equity capital is 12%, the cost of preferred stock is 9%, and the pretax cost of debt is 8%. What is the weighted average cost of capital for Ford if its marginal tax rate is 35%?
Answer:
The WACC is 6.75%
Explanation:
The weighted average cost of capital, also called WACC, is the cost of a firm's capital structure. The capital structure is made up of debt, preferred stock and common stock.
The formula for WACC is,
WACC = wD * rD * (1 - tax rate) + wP * rP + wE * rE
Where,
w represents the weight of each component in the capital structure or value of each component as a proportion of total assetsr represents the cost of each componentwe take after tax cost of debt. So we multiply cost of debt by (1 - tax rate)The WACC is:
WACC = 0.75 * 0.08 * (1 - 0.35) + 0.05 * 0.09 + 0.20 * 0.12
WACC = 0.0675 or 6.75%
Denny Corporation is considering replacing a technologically obsolete machine with a new state-of-the-art numerically controlled machine. The new machine would cost $330,000 and would have a twelve-year useful life. Unfortunately, the new machine would have no salvage value. The new machine would cost $56,000 per year to operate and maintain, but would save $97,000 per year in labor and other costs. The old machine can be sold now for scrap for $33,000. The simple rate of return on the new machine is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.)
Answer:
The simple rate of return of 4.54%
Explanation:
The simple rate of return of 8.75%
($97,000 - $56,000 - $27,500) ÷$297,000
=$13,500÷$297,000
=0.0454×100
=4.54%
The new machine $330,000 ÷ 12 years useful life
=$27,500
The new machine $330,000
Les old machine scrap $33,000
=$297,000
Therefore the simple rate of return is 4.54%
In 2022, Company A had net credit sales of $2,250,000. On January 1, 2022, Allowance for Doubtful Accounts had a credit balance of $54,000. During 2022, $90,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivables basis). If the accounts receivable balance at December 31 was $600,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2022?
Answer:
A credit entry of $96,000
Explanation:
When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.
To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.
Given that Past experience indicates that the allowance should be 10% of the balance in receivables
Allowance = 10% * $600,000
= $60,000
Amount written off of $90,000 would have made the balance in the allowance for doubtful debts to
= $90,000 - $54,000
= $36,000 (Debit)
However, the balance in the account at the end of the year should amount to $60,000 hence the adjustments required
= $60,000 + $36,000
= $96,000 (credit)
The allowance for doubtful accounts at December 31, 2022, should be $60,000 based on the company's policy. After taking into account that existing balance is in deficit of $36,000 after writing off $90,000, a credit adjustment of $96,000 is required.
Explanation:Based on past experience, Company A decides that the allowance for doubtful accounts should be 10% of its accounts receivable balance. The accounts receivable balance at December 31, 2022, is $600,000. Therefore, the required allowance for doubtful accounts should be 10% of $600,000, which is $60,000.
At the beginning of the year, the allowance for doubtful accounts had a credit balance of $54,000. During the year $90,000 of uncollectible accounts were written off, which would have decreased the allowance by that amount, resulting in a debit balance of $36,000 ($54,000 - $90,000).
To bring the allowance back up to its required balance of $60,000, an adjustment entry should be made to credit allowance for doubtful accounts for the difference between the existing balance and the required balance. Therefore, the required adjustment to the allowance for doubtful accounts at December 31, 2022, is $96,000 ($60,000 - (-$36,000)).
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The following information was extracted from the 2020 financial statements of Sheridan Company:
Income from continuing operations before income tax $703500
Selling and administrative expenses 478000
Income from continuing operations 502000
Gross profit 1343000
Required:
a. Assuming that there are no other revenues and gains, amount reported for other expenses and losses is ________.
O $24000.
O $201500.
O $225500.
O $161500.
Answer:
$161500.
Explanation:
a normal income statement should be:
total revenue x
- COGS (y)
gross profit = $1,343,000
- selling and administrative expenses = ($478,000)
EBIT = $865,000
- interests paid, other expenses & losses = ?????
income before taxes $703,500
- taxes (t)
net income
other expenses and losses = $865,000 - $703,500 = $161,500
Juhasz Corporation makes a product with the following standards for direct labor and variable overhead: Standard Quantity or HoursStandard Price or Rate Direct labor 0.50hours$23.00per hour Variable overhead 0.50hours$4.30per hour In August the company produced 8,200 units using 4,250 direct labor-hours. The actual variable overhead cost was $17,000. The company applies variable overhead on the basis of direct labor-hours. The variable overhead efficiency variance for August is: Multiple Choice $645 U $600 U $600 F $645 F
Answer:
Efficiency variance $645 unfavorable
Explanation:
Variable overhead efficiency variance: A variance is the difference between a standard cost and the actual cost. Variable overhead efficiency variance aims to determine whether or not their exist savings or extra cost incurred on variable overhead as a result of workers being faster or slower that expected.
Since the variable overhead is charged using labour hours, any amount by which the actual labour hours differ from the standard allowable hours would result in a variance
To calculate this variance, we do as follows:
Hours
8,200 units should have taken (8,200 × 0.50 hrs) 4,100
but did take 4,250
Variance in hours 150 unfavorable
Standard rate × $4.30
Efficiency variance $645 unfavorable
8. Written termination notices, with properly documented reasons for termination, and approval by an appropriate official are required. 9. All checks and notices of electronic payments not distributed to employees are returned to the treasurer for safekeeping and follow-up. 10. Online ability to add employees or change pay rates to the payroll master file is restricted via passwords to authorized human resource personnel. a. For each internal control, identify the type(s) of specific control activity (or activities) to which it applies (such as adequate documents and records or physical control over assets and records). b. For each internal control, identify the transaction-related audit objective(s) to which it applies. c. For each internal control, identify a specific misstatement that is likely to be prevented if the control exists and is effective. d. For each control, list a specific misstatement that could result from the absence of the control. e. For each control, identify one audit test that the auditor could use to uncover misstatements resulting from the absence of the control. 12-21 (Objectives 12-1, 12-2, 12-3, 12-6) Lew Pherson and Vera Collier
Answer:
Part 8
a) Particular Control Action: acceptable agreement of actions and businesses.
b) Operation related audit: Presence of logged transactions.
c) Prevented particular mis-statement: The management avoids research of an unsuitable check for a worker who functioned for the association once.
d) Particular mis-statement in control deficiency: A worker who is previously terminated might still stay on the workforce and somebody else could acquire the payments in his name.
e) Audit test: Amazement payoff ought to be achieved wherever the auditor himself books for and issues the paychecks to the workers when they supply their credentials.
Part 9
a) Particular Control Action: Physical regulator on the archives and possessions, and enough isolation of responsibilities.
b) Operation related audit: Presence of logged transactions.
c) Prevented particular mis-statement: The management avoids research of checks for workers on holiday or absent and missing staffs.
d) Particular mis-statement in control deficiency: If the regulator isn't there the payments ready for absent staff may well be lost or might be taken by the worker chargeable for delivery of the payments.
e) Audit test: The auditor ought to examine the off payments to verify that every payment is supported befittingly, and therefore the worker for who the payment has been ready remains operating for the association.
Part 10
a) Particular Control Action: The transactions are accurately licensed and responsibilities are sufficiently divided.
b) Operation related audit: The logged transactions occur and are expressed at right amounts.
c) Prevented particular mis-statement: The management avoids research of payments within the name of false staff or at unapproved wage charges.
d) Particular mis-statement in control deficiency: If an equivalent staff are particular the duties of record possession and coming into new worker variety into the main file, it's doable that a false bank check is managed within the name of a false worker.
e) Audit test: The auditor ought to conceive to access the staff main file exploitation an illegal parole.
A company must decide between scrapping or reworking units that do not pass inspection. The company has 13,000 defective units that cost $5.20 per unit to manufacture. The units can be sold as is for $3.00 each, or they can be reworked for $5.00 each and then sold for the full price of $8.20 each. If the units are sold as is, the company will be able to build 13,000 replacement units at a cost of $5.20 each, and sell them at the full price of $8.20 each. What is the incremental income from selling the units as scrap and reworking and selling the units? Should the company sell the units as scrap or rework them? (Enter costs and losses as negative values.)
Answer:
A.Incremental income(loss)
Sales as scrap $39,000
Rework $41,600
B.The company should REWORK
Explanation:
A. Sales as Scrap Rework
Sales of scrap units ($13,000×3.00)
$39,000
Sales of rework units ($13,000×8.20)
$106,600
Cost to rework units($13,000×5.00) $65,000
Incremental income(loss)
$39,000 $41,600
B.Therefore the company should REWORK
($106,600-$65,000)
=$41,600
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $3,000. The division sales for the year were $1,050,000 and the variable costs were $860,000. The fixed costs of the division were $193,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be:
Answer:
Decrease by $132,100
Explanation:
Computation of the given data are as follow:-
We can calculate the Operating Income by using following formula:-
Fixed Cost = Fixed Cost * Dropped Rate
= $193,000 * 30/100
= $57,900
So, Operating Income = Sales - Variable Cost - Fixed Cost
= $,1050,000 - $860,000 - $57,900
= $132,100
According to the Analysis, the operating income will be decrease by $132,100 if the business segment is eliminated.
A broker advertised in his local newspaper that a home was for sale for $50,000 when it was really for sale for $500,000. A buyer called in and was told that this was simply a typing error and that the correct price was $500,000. The buyer was angry that the associate was so arrogant on the phone and the buyer filed a written complaint with the FREC. The most serious determination by the FREC would be to:
Answer: Punish the broker with an administrative fee of $1000 up to a one-year suspension
Explanation: In situations such as described in the question, the most serious determination by the Florida Real Estate Commission (FREC) in response to a complaint by a buyer who filed a written complaint concerning the arrogance of the associate would be to punish the broker with an administrative fee of $1000 up to a one-year suspension.
On October 1, 2021, Ca Corporation declared and issued a 10% stock dividend. Before this date, Ca had 80,000 shares of $5 par common stock outstanding. The market value of Ca Corporation on the date of declaration was $10 per share.
Required:
1. As a result of this dividend, Chief's retained earnings will ___________.
MULTIPLE CHOICE
a. decrease by $80,000
b. not change
c. decrease by $40,000
d. increase by $80,000
Answer:
The correct answer is Option A.
Explanation:
The overall effect this declaration would has on the retained earnings would be determined using the current market value, meanwhile the effect on common stock would determined using the par value.
Stock dividend declared = 10% x 80,000 shares x $10 = $80,000
The effect on common stock will be = 10% x 80,000 shares x $5 = $40,000
So, paid in capital in excess of par value common stock is $80,000 - $40,000 = $40,000.
Necessary accounting entries
Debit Retained earnings $80,000
Credit Common stock $40,000
Credit paid in capital in excess of par value common stock $40,000
(To record declaration of 10% stock dividend)
The LaGrange Corporation had the following budgeted sales for the first half of the current year:
Cash Sales Credit Sales
January $ 80,000 $ 180,000
February $ 85,000 $ 200,000
March $ 46,000 $ 160,000
April $ 41,000 $ 126,000
May $ 51,000 $ 230,000
June $ 110,000 $ 200,000
The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:
Collections on sales:
45% in month of sale
50% in month following sale
5% in second month following sale
The accounts receivable balance on January 1 of the current year was $81,000, of which $55,000 represents uncollected December sales and $26,000 represents uncollected November sales.
The total cash collected during January by LaGrange Corporation would be ______.
Answer:
The LaGrange Corporation
The total cash collected during January by LaGrange Corporation would be $237,000.
Explanation:
January Collections:
1. January cash sales = $80,000
2. 45% January sales = $81,000
3. 50% December sales = $50,000 *
4. 5% November sales = $26,000
Total = $237,000
* Uncollected December sales = $55,000. This represents 55% (50% collectible in January and 5% collectible in February). Therefore January collection will be equal to $55,000/55 * 50 = $50,000.
Explain why each of the following statements is a rationale for conducting active or passive policy: Economic circumstances can change dramatically between the time that an economic downturn begins and the time when policy actions have an effect on the economy. Economists are not very accurate forecasters. Increases in government spending generate increases in economic output. Fluctuations in economic output have been less severe since World War II.
Answer:
The rationale for conducting active policy is the interest of Congress to alter the state of the economy through a deliberate change in established policies.
But in the case of Passive policy, the government permits the status quo.
Active policy relies on the government to enforce it while passive policy does not need the government's interference to work in stabilizing the economy.
Explanation:
The following statements applies passive policy because the economy is expected to stabilize on it's own without the deliberate act of congress influencing it:
Economic circumstances can change dramatically between the time that an economic downturn begins and the time when policy actions have an effect on the economy. Fluctuations in economic output have been less severe since World War II.The following statements is a rationale for conducting active policy since the government's intervention is required:
Economists are not very accurate forecasters.Increases in government spending generate increases in economic output.The income statements for Urban Outfits, Inc. are presented below: Urban Outfits, Inc. Income Statements Year Ended December 31 Current Year Prior Year Sales Revenue $ 806,559 $ 747,270 Cost of Goods Sold 403,589 373,505 Gross Profit 402,970 373,765 Operating and Other Expenses 141,050 129,500 Interest Expense 7,750 18,000 Income Tax Expense 48,200 46,700 Net Income $ 205,970 $ 179,565 Required: Prepare a horizontal analysis of the income statement above.
Answer and Explanation:
As per the data given in the question,
Prior year Current year Increase in $ increase in %
Sales $747,270 $806,559 $59,289 7.93%
COGS $373,505 $403.589 $30,084 8.05%
Gross Profit $373,765 $402,970 $29,205 7.81%
Operating and
other expenses$129,500 $141,050 $11,550 8.92%
Interest expense $18,000 $7,750 -$10,250 -56.94%
Income tax $46,700 $48,200 $1,500 3.21%
Net income $179,565 $205,970 $26,405 14.70%
The accounting records for Eisner Manufacturing Company included the following cost information relating to its first year of operations: Direct materials $ 52,000 Direct labor $ 80,000 Fixed manufacturing overhead $ 91,000 Variable manufacturing overhead $ 25,000 Assume the company produced 10,000 units of inventory and sold 6,000 of these units during the year for $184,000. The cost per unit under variable and absorption costing would be, respectively: Multiple Choice $18.70 and $28.80. $13.70 and $8.80. $4.70 and $9.80. $15.70 and $24.80.
Answer:
Option (d) : $24.8 and $15.7
Explanation:
As per the data given in the question,
Number of units produced = 10,000
Number of units sold = 6,000
Cost per unit = Amount/ 10,000
Absorption Variable
Direct material $5.2 $5.2
Direct Labor $8 $8
Variable manufacturing overhead $2.5 $2.5
Fixed manufacturing overhead $9.1 $9.1
Unit product cost $24.8 $15.7
Will give BRAINLIEST! Please read the question THEN answer correctly! No guessing.
Answer: The answer is A
Explanation: just took the test
Answer:
B
Explanation:
Jules would need seed capital, or an initial investment, likely to rent a store so that he could have somewhere to operate his jewelry store out of. Hope this helps!