Answer:
the intrinsic value of its stock is $19.78
Explanation:
Given the information:
D0 = $1required return for Deployment Specialists is 10.0%,(1+0.2) = Dividend for next 2 yearYear Year Year
0 1 2
20% 20%
Dividend 1 1.2 1.44
After this the next thing to do is to take out terminal value , were we will use the growth rate of 4%
= Dividend for second year x (1+growth rate thereafter) /( R - growth rate thereafter)
= $1.44( 1 + 3% ) / (10% - 3%)
= $21.18
=> the intrinsic value of its stock
= Dividend year 1/ (1+ R) + (Dividend year 2 + Terminal value) /[tex](1+R)^{2}[/tex]
= $1.20 / (1+10%) + ($1.44 + $21.18) / [tex](1+0.1)^{2}[/tex]
= $19.78
So the intrinsic value of its stock is $19.78
Lance Brothers Enterprises acquired $755,000 of 4% bonds, dated July 1, on July 1, 2021, as a long-term investment. Management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 5% for bonds of similar risk and maturity. Lance Brothers paid $675,000 for the investment in bonds and will receive interest semiannually on June 30 and December 31. Prepare the journal entries (a) to record Lance Brothers’ investment in the bonds on July 1, 2021, and (b) to record interest on December 31, 2021, at the effective (market) rate. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
July 1st 2021
Investment in Bonds 775,000
Discount on Bonds investment 100,000
Cash 675,000
*********************
Discount on Bonds investment is calculated by taking the difference between 775,000 and 675,000 so it would equal 100,000
December 31st 2021
Cash $15,500
Discount on Bond investment $1,375
Interest revenue $16,875
*********************
Cash is calculated by multiplying 775,000 with 4%/2 so that it equals 15,500
interest revenue is calculated by multiplying 675,000 with 5%/2 so that is will be 16,875
then for the discount, you take the difference between the interest of what you bought the bond at 16,875 and subtract the cash coupon payment you are receiving 15,500 = 1,375
Good luck!
On July 1, 2021, Lance Brothers made a journal entry to record the purchase of $755,000 face value bonds for $675,000. On December 31, 2021, the company recorded interest income using the market rate of 5%, which resulted in an interest receivable of $15,100 and an adjustment for the discount on bond investment to align with the effective yield.
Explanation:Lance Brothers Enterprises acquired $755,000 of 4% bonds as a long-term investment when the market interest rate was 5%. They purchased the bonds for $675,000 on July 1, 2021, and will receive semiannual interest payments.
Journal Entry on Acquisition Date: July 1, 2021Debit Investments in Bonds $675,000Credit Cash $675,000Journal Entry on Interest Receipt Date: December 31, 2021To record interest, we need to calculate the amount of interest income using the effective interest rate method:
Interest Income = Carrying amount of the bonds x Market interest rate per periodInterest Income = $675,000 x (5% / 2)Interest Income = $675,000 x 0.025Interest Income = $16,875However, because the bonds have a stated interest rate of 4%, they will pay semiannual interest of:
Semiannual Interest Payment = Face value of bonds x Stated interest rate per periodSemiannual Interest Payment = $755,000 x (4% / 2)Semiannual Interest Payment = $15,100Thus the journal entry on December 31, 2021, will be:
Debit Interest Receivable $15,100Debit Discount on Bonds Investment ($16,875 - $15,100)Credit Interest Revenue $16,875Learn more about Bond Investment Accounting here:https://brainly.com/question/30005800
#SPJ2
Collison and Ryder Company (C&R) has been experiencing declining market conditions for its sportswear division. Management decided to test the assets of the division for possible impairment. The test revealed the following: book value of division’s assets, $28.9 million; fair value of division’s assets, $22.2 million; undiscounted sum of estimated future cash flows generated from the division’s assets, $29.2 million. What amount of impairment loss should C&R recognize?
Answer:
The amount of impairment loss should C&R recognize is $6,700,000
Explanation:
According to the given data we have that the book value of division's assets is $28.9 million and fair value of division’s assets is $22.2 million.
Therefore, in order to calculate the amount of impairment loss should C&R recognize we would have to use the following formula:
impairment loss=book value of division's assets - fair value of division’s assets
impairment loss=$28.9 million-$22.2 million
impairment loss=$6,700,000
The amount of impairment loss should C&R recognize is $6,700,000
Answer:
0
Explanation:
Since the estimated future cash flows generated from the division’s assets, $29.2 million, greater than book value of division’s assets, $28.9 million; Therefore no impairment loss should C&R recognize.
Mike had been negotiating with a Japanese company for distribution rights for five days. He was afraid he was going to lose the contract, so at the last minute he decided to lower the price. They accepted the next day. What mistake did Mike make? Multiple Choice He should have come in with a low price at the outset. He should have had a written concession plan before he began the negotiation. He should have given the Japanese negotiators a menu of options including the lower price. He should have avoided all concessions. He should have deferred to his superiors.
Answer:
He should have given the Japanese negotiators a menu of options including the lower price.
Explanation:
As it was already on cards that whenever you negotiate you need to have some preparation beforehand and have a complete list of options you would opt if your best options fails to be executed.
Hence, Mike should have given the Japanese a list of options so that It would be easy for them to think about the offer as well as give Mike the advantage to make his deal a success through different options. And if still the options weren't good enough for the Japanese, then Mike would only be left with the option of lowering the price but he would still had a more chance of getting his deal done if he had prepared those options as well.
Thanks.
Goodluck buddy.
Final answer:
When planning to enter a monopolistic market with lower prices, it's important to prepare for the monopolist's potential aggressive responses, including price matching, product enhancements, or tactics to restrict market entry.
Explanation:
When managing a small firm and considering entering the market of a monopolist who is charging high prices, it's crucial to anticipate the monopolist's potential reactions. As you plan to offer a product at 10% lower than the monopolist's price, you should consider the possibility that the monopolist could respond aggressively to maintain their market dominance. This could include lowering their prices to match or beat yours, improving their product's quality or features to justify their higher price, or leveraging their market power to hinder your firm's market entry, such as through exclusive contracts with suppliers or distributors.
Toyota Motor Corporation uses target costing. Assume that Toyota marketing personnel estimate that the competitive selling price for the Camry in the upcoming model year will need to be $27,000. Assume further that the Camry's total unit cost for the upcoming model year is estimated to be $22,500 and that Toyota requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total cost). a. What price will Toyota establish for the Camry for the upcoming model year?
Toyota will set the Camry's price at $27,000 for the upcoming model year to meet the required 20% profit margin on sales.
The question involves calculating the price Toyota should set for the Camry, given the required profit margin. Toyota requires a 20% profit margin on the selling price, which would be the additional amount on top of the cost to achieve the desired profit level. The selling price can be found as follows:
Calculate the profit by multiplying the total unit cost by the profit margin: $22,500 × 20% = $4,500.
Add the profit to the total unit cost to get the selling price. $22,500 + $4,500 = $27,000.
Therefore, Toyota will establish the Camry's price at $27,000 for the upcoming model year to meet the required profit margin.
a. The price that Toyota will establish for the Camry for the upcoming model year is $27,000.
Given Data:
- Competitive selling price estimate: $27,000
- Total unit cost estimate: $22,500
- Profit margin on selling price required: [tex]\( 20\% \)[/tex] (equivalent to a [tex]\( 25\% \)[/tex] markup on total cost)
Part a:
Toyota uses target costing, which means they set the selling price based on the target cost and desired profit margin.
1. Calculate the target cost:
Target cost is derived from the competitive selling price and the desired profit margin.
Given:
- Competitive selling price = $27,000
- Desired profit margin on selling price = [tex]\( 20\% \)[/tex]
Profit margin = [tex]\( 20\% \) of \( $27,000 \)[/tex]
[tex]\[ \text{Profit} = 0.2 \times 27000 = $5,400 \][/tex]
Target cost = Competitive selling price - Profit
[tex]\[ \text{Target Cost} = 27000 - 5400 = $21,600 \][/tex]
So, Toyota will target a cost of $21,600 per unit.
2. Establish the selling price:
Toyota will establish the selling price based on the target cost and the desired profit margin on selling price.
Competitive selling price = Target cost + Profit
[tex]\[ \text{Selling Price} = 21600 + 5400 = $27,000 \][/tex]
Therefore, Toyota will establish the selling price of $27,000 for the Camry in the upcoming model year.
The complete question is
Toyota Motor Corporation uses target costing. Assume that Toyota marketing personnel estimate that the competitive selling price for the Camry in the upcoming model year will need to be $27,000. Assume further that the Camry's total unit cost for the upcoming model year is estimated to be $22,500 and that Toyota requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total cost).
a. What price will Toyota establish for the Camry for the upcoming model year? $
On June 1, Sawyer Co. borrowed $5,000 by extending their past-due account payable with a 45-day, 12% interest-bearing note. On July 16, the due date, Sawyer pays the amount due in full. Sawyer would record this payment with a (debit/credit) _______ to Interest Expense in the amount of _______.
A. credit; $600
B. debit; $75
C. debit; $600
D. credit; $75
Answer:
The correct answer is Option B.
Explanation:
Note receivable is a promissory note with a written promise made by the borrower to the lender (payee) to pay a certain, definite sum at a specified date.
The interest expense on the notes is calculated as: Principal x Interest Rate x Time
In this case, the total interest expense is $5,000 x 12%/12 x 1.5 months = $75.
Therefor, total debit to interest expense is $75.
Answer:
The correct answer is D)
Explanation:
The amount borrowed is an expense to Sawyer Co. Therefore it has to be recorded as a credit transaction in their Interest Expense Account by the interest on the $5,000 that was borrowed.
The interest on the $5,000 is calculated by apply the rate (12%) on $5,000.
= 5000(12/100)
= 50*12
= $600
The actual amount is gotten by dividing the interest by 12 months and multiplying by a month and a half (45 days) assuming that a month is 30 days.
= (600/12)1.5
= $50 * 1.5
= $75
The principle of double-entry in accounting states that you must always credit any increase in liability and debit a decrease in an amount due to another.
Cheers!
Company A purchased machinery with a list price of $96,000. They were given a 10% discount by the manufacturer. They paid $600 for shipping and sales tax of $4,500. Company A estimates that the machinery will have a useful life of 10 years and a residual value of $30,000. If Compnay A uses straight-line depreciation, annual depreciation will be
Answer:
The annual depreciation will be $6,150
Explanation:
First, let us calculate the total cost of purchasing the machinery as follows
list price = $96,000
percentage discount = 10% = 10/100 = 0.1
∴ Discount amount = 10% × 96,000 = 0.1 × 96,000 = $9,600
∴ New price after discount = 96,000 - 9,600 = $86,400
shipping cost = $600
sales tax = $4,500
Total cost of machinery = New price after discount + shipping cost + sales tax
= 86,400 + 600 + 4,500 = $91,500
useful life = 10 years
residual/salvage value = $30,000
Note that Straight-line depreciation allocates depreciation costs evenly over the useful life of the equipment, and the formula is shown below:
Straight-line depreciation = (cost of machinery - residual value) ÷ (useful life in years)
= (91,500 - 30,000) ÷ 10
= 61,500 ÷ 10 = $6,150
You own a company that produces pens. The marginal product of the last unit of labor input is 25 and the marginal product of the last unit of capital input is 75. The market wage is $10, if your company is using the optimal combination of inputs, then the price of capital is Select one: a. $250 b. $30 c. $187.5 d. $750
Answer:
Option(b) $30
Explanation:
As per the data given in the question,
marginal product of labor per capital should be equal to marginal product of capital i.e.
Marginal product of labor ÷ Price of capital = Marginal product of capital ÷ wage
Price of capital = Marginal product of labor × Wage ÷ Marginal product of capital
= (75 × $10) ÷ 25
Price of capital = $30
Final answer:
If the company is using the optimal combination of inputs, the marginal product of labor to the marginal product of capital should be equal to the market wage to the price of capital. Given the marginal products and a market wage of $10, the price of capital would be $30.
Explanation:
When a company is using the optimal combination of inputs, it follows that the ratio of the marginal products (MP) of the inputs should be equal to the ratio of their prices. This is known as the marginal rate of technical substitution (MRTS). Given that the marginal product of the last unit of labor (MPL) is 25 and the marginal product of the last unit of capital (MPK) is 75, and the market wage (price of labor) is $10, then the price of capital should be set so that MPL / MPK = Wage / Price of Capital.
Calculating this we get: 25 / 75 = $10 / Price of Capital, hence the Price of Capital = 75 * $10 / 25. This simplifies to 3 * $10, which is $30. Therefore, the correct answer is b. $30.
Burger Emporium Inc. is currently losing $100,000 per year on its Zhou Burger product line. The revenue from the Zhou Burger is $500,000 per year. The related variable costs are $300,000 and the fixed costs specific to the Zhou Burger operation are $300,000 per year. Burger Emporium Inc. is deciding whether or not they should drop their Zhou Burger line. They suspect $160,000 of the fixed costs will be avoidable if they drop the line. Assuming there are no opportunity costs, what should they do from a financial perspective
Answer:
The correct answer to the following question will be "keeping the product line since they would lose an extra $40000 if they dropped".
Explanation:
Keep Drop
Loss $100000 (given) -
Fixed asset loss - (300000-160000)
Loss $100000 140000
If dropped, so the $40000 damage would be included. Such that the correct approach is "keeping the product line since they would lose an extra $40000 if they dropped."
HiLo Mfg. is analyzing a project with anticipated sales of 7,400 units, plus or minus 2 percent. The variable cost per unit is $11 /- 3 percent and the expected fixed costs are $267,000 plus or minus 2 percent. The sales price is estimated at $60 a unit, plus or minus 4 percent. The depreciation expense is $67,000 and the tax rate is 32 percent. What is the earnings before interest and taxes under the base-case scenario
Answer:
$28,600
Explanation:
The computation of the earning before interest and taxes in case of the base-case scenario
Sales $444,000 (7,400 units × $60)
Less: Variable cost - $81,400 (7,400 units × $11)
Fixed cost - $267,000
Depreciation expense - $67,000
Earning before interest and taxes $28,600
We simply deduct the depreciation expense, fixed cost and the variable cost from the sales revenue so that the Earning before interest and taxes could come
It will cost $7,500 to acquire a cotton candy cart. Cart sales are expected to be $3,800 a year for four years. After the four years, the cart is expected to be worthless as the expected life of the cotton candy producing machine is only four years. What is the payback period? a. 4.00 years b. 2.00 years c. 1.48 years d. 1.97 years e. 1.67 years
Answer:
It will take 1.97 years to payback the machine.
Explanation:
Giving the following information:
It will cost $7,500 to acquire a cotton candy cart. Cart sales are expected to be $3,800 a year for four years.
We need to determine the amount of time required to payback the machine.
Year 1= 3,800 - 7,500= -3,700
Year 2= 3,800 - 3,700= 100
3,700/3,800= 0.97
It will take 1.97 years to payback the machine.
A chemical company produces a special industrial chemical that is a blend of three chemical ingredients. The beginning-year cost per pound, the ending-year cost per pound, and the blend proportions follow. (Round your answers to the nearest integer.) Cost per Pound ($) Ingredient Beginning Ending Quantity (pounds) per 100 Pounds of Product A 2.50 2.95 25 B 8.75 9.90 10 C 0.99 0.90 60 (a) Compute the price relatives for the three ingredients. Item Price Relative A B C
Answer:
The item price relative of ingredients A, B and C is 118, 113 and 91
Explanation:
Given
-----------------Cost per Pound ($)
Ingredient ---- Beginning ------ Ending Quantity (pounds) per 100 Pounds of Product
A ---------------- 2.50 ------ 2.95 ------ 25
B ---------------- 8.75 ------ 9.90 ------- 10
C ----------------- 0.99 ----- 0.90 ----- 60
Required
Calculate the price relatives for all ingredients
The price relatives for each ingredient is calculated using the following formula.
Price Relative = (P' * Q)/P°
Where
P' = Ending Cost per pound
P° = Beginning Cost per pound
Q = Quantity
The quantity is uniform for all products because it's measured per 100 pounds of each product.
So, Q = 100
Calculating Price Relative of A
P' of Ingredient A = 2.95
P° of Ingredient A = 2.50
By Substituting the right values in the given formula
P = (2.95 * 100)/2.50
P = 295/2.50
P = 118
Calculating Price Relative of B
P' of Ingredient B = 9.90
P° of Ingredient B = 8.75
By Substituting the right values in the given formula
P = (9.90 * 100)/8.75
P = 990/8.75
P = 113.1429
P = 113 ( Approximated)
Calculating Price Relative of C
P' of Ingredient C = 0.9
P° of Ingredient C = 0.99
By Substituting the right values in the given formula
P = (0.9 * 100)/0.99
P = 90/0.99
P = 90.90909
P = 91 (Approximated).
Hence, the item price relative of ingredients A, B and C is 118, 113 and 91
Purchases$111,000 Freight-in 3,100 Sales 185,000 Sales returns 6,000 Purchases returns 4,500 In addition, the controller is aware of $8,500 of inventory that was stolen during November from one of the company's warehouses. Required: 1. Calculate the estimated inventory at the end of November, assuming a gross profit ratio of 40%. 2. Calculate the estimated inventory at the end of November, assuming a markup on cost of 60%.
Answer:
Closing Stock = 38000
Explanation:
Net Sales = COGS + Gross Profit
Net sales = sales - sales return = 185000 - 6000 = 179000 Gross Profit = 60% of sales (as per gross profit ratio)= 60% of 179000 = 107400
COGS = Opening Stock + Net Purchase + direct expenses - Closing Stock* Net purchase = Purchase - purchase return = 111000 - 4500 = 106500
*Direct Expense = Freight Inwards = 3100
Putting all values in formula :- Net Sales = COGS + Gross Profit
179000 = (0 + 106500 + 3100 - closing stock) + 107400
179000 = 106500 + 3100 + 107400 - closing stock
179000 = 217000 - closing stock
closing stock = 217000 - 179000
closing stock = 38000
A firm with a cost of capital of 10% is evaluating two independent projects utilizing the internal rate of return technique. Project X has an initial investment of $70,000 and cash inflows at the end of each of the next five years of $25,000. Project Z has an initial investment of $120,000 and cash inflows at the end of each of the next four years of $35,000. The firm should ________.
Answer:
The firm should invest in project X, which yields a net return of $30,000
Explanation:
To determine the project for which the company should invest in, we will calculate the net return (profit) from each investment, and choose the project with the greater profit.
Project Z:
initial investment = $120,000
cash inflow per year = $35,000
cash inflow for the next four years = 35,000 × 4 = $140,000
Net return on investment = 140,000 - 120,000 = 20,000.
Next, you will notice that for the project X, a period of 5 years was given, while for project Z, a 4 year period was given. In order to effectively compare both projects, we will use the same time period, hence, calculating the net return on project X after 4 years:
Project X:
initial investment = $70,000
cash inflow per year = $25,000
cash inflow for the next 4 years = 25,000 × 4 = 100,000
Net return on investment = 100,000 - 70,000 = $30,000
since the net return on investment for project X is greater than that for project Z by $10,000, the firm should invest in project Z.
Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2017, Skybox sold inventory costing $210,600 to Parkette for $270,000. A total of 20 percent of this inventory was not sold to outsiders until 2018. During 2018, Skybox sold inventory costing $163,510 to Parkette for $197,000. A total of 30 percent of this inventory was not sold to outsiders until 2019. In 2018, Parkette reported cost of goods sold of $537,500 while Skybox reported $437,500. What is the consolidated cost of goods sold in 2018
Answer:
$776,167
Explanation:
The computation of the consolidated cost of goods sold is shown below:-
Intra entity Gross Profit in 2017 = $270,000 - $210,600
= $59,400
Unrealized Gross Profit = Intra entity Gross Profit in 2017 × Inventory percentage
= $59,400 × 20%
= $11,880
Intra entity Gross Profit in 2018 = $197,000 - $163,510
= $33,490
Unrealized Gross Profit at 31/12/2018 = Intra entity Gross Profit in 2018 × Inventory percentage
= $33,490 × 30%
= $10,047
Consolidated cost of goods sold for 2018 = Parent COGS + Subsidiary COGS - Intra entity transfer for 2018 - Recognized 2017 deferred Gross profit + Defer unrealized gross profit for 2018
= $537,500 + $437,500 - $197,000 - $11,880 + $10,047
= $776,167
Therefore for computing the consolidated cost of goods sold we simply applied the above formula.
At the beginning of the year, manufacturing overhead for the year was estimated to be $821,100. At the end of the year, actual direct labor-hours for the year were 36,280 hours, the actual manufacturing overhead for the year was $790,000, and manufacturing overhead for the year was overapplied by $44,440. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been:
Answer:
estimated direct labor hours= 35,700 hours
Explanation:
Giving the following information:
Estimated overhead= $821,100.
Actual direct-labor hours= 36,280 hours
Actual manufacturing overhead= $790,000
Manufacturing overhead for the year was overapplied by $44,440.
We need to reverse engineer the overhead application process to calculate the estimated direct labor hours.
Under/over applied overhead= real overhead - allocated overhead
-44,440= 790,000 - allocated overhead
allocated overhead= 834,440
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
834,440= Estimated manufacturing overhead rate*36,280
Estimated manufacturing overhead rate= $23
Finally, we can determine the estimated direct labor hours:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
23= 821,100/ estimated direct labor hours
estimated direct labor hours= 821,100/23
estimated direct labor hours= 35,700 hours
Rudyard Corporation had 240,000 shares of common stock and 24,000 shares of 6%, $100 par convertible preferred stock outstanding during the year. Net income for the year was $680,000 and dividends were paid to both common and preferred shareholders. Rudyard's effective tax rate is 25%. Each share of preferred stock is convertible into five shares of common stock. What is Rudyard's diluted EPS (rounded)?
Answer:
$1.90 per share
Explanation:
The computation of the diluted earning per share is shown below:
Diluted earning per share = Net income ÷ Weighted number of outstanding shares
where,
Net income is $680,000
And, the Weighted number of outstanding shares is
= 240,000 + 24,000 × 5
= 240,000 + 120,000
= 360,000 shares
So, the diluted EPS is
= $680,000 ÷ 360,000 shares
= $1.90 per share
We simply applied the above formula
The shareholders' equity of Green Corporation includes $200,000 of $1 par common stock and $400,000 par value of 6% cumulative preferred stock. The board of directors of Green declared cash dividends of $50,000 in 2013 after paying $20,000 cash dividends in each of 2012 and 2011. What is the amount of dividends common shareholders will receive in 2013?
Answer:
$22,000
Explanation:
The computation of amount of dividends common shareholders is shown below:-
Amount of annual preferred stock dividend = $ 400,000 par value × 6%
= $24,000
Total Cash Paid to Preferred Paid to Dividends in
Dividend paid Common Arrears at Year end
2011 $40,000 $24,000 $16,000
2012 $20,000 $20,000 $ - $4,000
2013 $50,000 $28,000 $22,000 $ -
Total $110,000 $72,000 $38,000
Therefore, out of $ 50,000 dividend declared and $28,000 is for Preferred stockholders $24,000 annual + 4,000 Arrears
Keating Co. is considering disposing of equipment with a cost of $52,000 and accumulated depreciation of $36,400. Keating Co. can sell the equipment through a broker for $25,000, less a 7% broker commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $46,000. Keating will incur repair, insurance, and property tax expenses estimated at $10,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is
Answer:
$12,750
Explanation:
The computation of net differential income is shown below:-
For computing the net differential income first we need to find out the net income if equipment is sold and net income if offer lease is accepted which is given below:-
Net income if equipment is sold = Sales consideration - Commission
= $25,000 - ($25,000 × 7%)
= $25,000 - $1,750
= $23,250
Now,
Net income if offer lease is accepted = Lease amount - Repair, insurance and property tax expenses
= $46,000 - $10,000
= $36,000
So,
Net differential income from the lease alternative = Net income if offer lease is accepted - Net income if equipment is sold
= $36,000 - $23,250
= $12,750
Use the cost and revenue data to answer the questions. Quantity Price Total Revenue Total Cost 15 90 1350 900 30 80 2400 1500 45 70 3150 2250 60 60 3600 3150 75 50 3750 4200 90 40 3600 5400 What is marginal revenue when quantity is 30 ? 30? $ What is marginal cost when quantity is 60 ? 60? $ If this firm is a monopoly, at what quantity will profit be maximized? quantity: If this is a perfectly competitive market, which quantity will be produced? quantity: Comparing monopoly to perfect competition, which statement is true? The perfectly competitive market's ouput is lower. The consumer surplus is smaller with a monopoly. The monopoly's price is higher.
Answer:
What is marginal revenue when quantity is 30 ? 30?
$70= ($2,400 - $1,350) / (30 - 15) = $900 / 15 = $70
What is marginal cost when quantity is 60 ? 60?
$60= ($3,150 - $2,250) / (60 - 45) = $900 / 15 = $60
If this firm is a monopoly, at what quantity will profit be maximized?
quantity: 45 unitsa monopoly maximizes its accounting profit when marginal revenue = marginal cost, in this case they both equal $50 per unit when total output is 45 units
If this is a perfectly competitive market, which quantity will be produced?
quantity: 45 unitsa perfectly competitive firm maximizes its accounting profit when marginal revenue = marginal cost, in this case they both equal $50 per unit when total output is 45 units
Comparing monopoly to perfect competition, which statement is true?
The consumer surplus is smaller with a monopoly. The monopoly's price is higher.In a monopoly, output is smaller than the perfectly competitive output. The price charged by a monopolist is also higher. This also results in lower consumer surplus with a monopoly.
Explanation:
Quantity Price Total Revenue Total Cost
15 90 1350 900
30 80 2400 1500
45 70 3150 2250
60 60 3600 3150
75 50 3750 4200
90 40 3600 5400
The marginal revenue is $70, when the quantity is 30.
The marginal cost is $60 when quantity is 60.
If this firm is a monopoly, at 450units the profit will be maximized.
In perfect competition, a firm produces where price and marginal cost both are equal. Both price and marginal cost are equal at 60 units. Comparing monopoly to perfect competition, the monopoly's price is higher. Thus, the first option is correct.
A financial ratio called the marginal revenue (MR)formula estimates the change in total revenue brought on by the sale of more goods or units. It typically slows down as output levels rise and is observed to follow the rule of diminishing returns. It is frequently shown as a graph with a declining slope.
Marginal revenue at 30 units of quantity:
= Change in Total Revenue / Change in Quantity
2400 - 1350 / 30 - 15
= $70
Marginal cost at 60 units of quantity:
= Change in Total Cost / Change in Quantity
= 3150 - 2250 / 60 - 45
= $60
If the firm is a monopoly then marginal profit will be zero at 45 units. If marginal revenue and marginal cost both are equal then marginal profit can be zero
In perfect competition, a firm produces where price and marginal cost both are equal. Both price and marginal cost are equal at 60 units
Comparing monopoly to perfect competition, the monopoly's price is higher .As in monopoly, the price at 45 units is $70 and in perfect competition, the price at 60 units is $60.
A table is attached for reference.
To learn more on marginal revenue, here:
https://brainly.com/question/33446428
#SPJ6
Selected financial data of two competitors, Target and Wal-Mart, are presented here. (All dollars are in millions.) Suppose the data were taken from the 2017 financial statements of each company. Target (1/31/17) Wal-Mart (1/31/17) Income Statement Data for Year Net sales $64,948 $401,244 Cost of goods sold 44,157 306,158 Selling and administrative expenses 16,389 76,651 Interest expense 894 2,103 Other income 28 4,213 Income taxes 1,322 7,145 Net income $ 2,214 $ 13,400 Target Wal-Mart Balance Sheet Data (End of Year) Current assets $17,488 $ 48,949 Noncurrent assets 26,618 114,480 Total assets $44,106 $163,429 Current liabilities $10,512 $ 55,390 Long-term liabilities 19,882 42,754 3 Target (1/31/17) Wal-Mart (1/31/17) Income Statement Data for Year Total stockholders' equity 13,712 65,285 Total liabilities and stockholders' equity $44,106 $163,429 Net cash provided by operating activities $4,430 $23,147 Cash paid for capital expenditures $3,547 $11,499 Dividends declared and paid on common stock $465 $3,746 Weighted-average shares outstanding (millions) 774 3,951 Instructions For each company, compute these values and ratios. (a)Working capital. (b)Current ratio. (c)Debt to assets ratio. (d)Free cash flow. (e)Earnings per share. (f)Compare the liquidity and solvency of the two companies.
Answer:
Explanation:
The file attached shows the complete calculation to the problem
a) working capital = Current asset - current liabilities =h-k
Target $ 6,976 Wal-Mart $ (6,441)
b)Current ratio = Current Asset / Current liabilities = h/k Target 1.66 Wal-Mart 0.88
c) Debt to asset ratio : (Current liabilities + Long term liabilities)/Total asset = (k+l)/j Target 0.69 Wal-Mart 0.60
e) Earning per share = net income/number of share outstanding = g/r Target $ 2.86 Wal-Mart $ 3.39
f) Liquidity is reflected by net working capital, current asset ratio. We can see net working capital is negative for Wal-Mart and also Current ratio is lower compared to
Target. Hence, Target has better liquidity compared to Wal-mart
Solvency : is reflected by ability of company to pay its debt on time. We can see debt to asset ratio is lower for Wal-Mart.
Target has relatively higher debt compared to Wal-mart. Hence solvency for Wal-mart is better .
Target's working capital, current ratio, debt to assets ratio, free cash flow, and earnings per share are calculated and compared to those of Wal-Mart. Target has better liquidity but Wal-Mart has better solvency.
Explanation:Let's compute the values and ratios for Target and Wal-Mart:
Working capital = Current Assets - Current Liabilities. For Target, it's $17,488 - $10,512 = $6,976 million. For Wal-Mart, it's $48,949 - $55,390 = - $6,441 million. Current ratio = Current Assets / Current Liabilities. For Target, it's $17,488 / $10,512 = 1.66. For Wal-Mart, it's $48,949 / $55,390 = 0.88. Debt to assets ratio = Total Liabilities / Total Assets. For Target, it's ($10,512 + $19,882) / $44,106 = 0.69. For Walmart, it's ($55,390 + $42,754) / $163,429 = 0.60. Free cash flow = Net Cash Provided by Operating Activities - Capital Expenditure. For Target, it is $4,430 - $3,547 = $883 million. For Wal-Mart, it's $23,147 - $11,499 = $11,648 million. Earnings per share = Net Income / Weighted average shares outstanding. For Target, it's $2,214 / 774 = $2.86 per share. For Walmart, it's $13,400 / 3,951 = $3.39 per share.
Comparing the liquidity and solvency, Target has better liquidity (higher working capital and current ratio), while Wal-Mart has better solvency (lower debt to assets ratio).
Learn more about Financial Analysis here:https://brainly.com/question/33539037
Rosalie owns 50% of the outstanding stock of Salmon Corporation. In a qualifying stock redemption, Salmon distributes $592,000 to Rosalie in exchange for one-half of her shares, which have a basis of $740,000. Rosalie has a $ realized loss of which $ is recognized.
Answer:
$148,000
Explanation:
The computation of the realized loss recognized is shown below:
= Basis of shares - consideration
= $740,000 - $592,000
= $148,000
By deducting the consideration from the basis of shares we can get the realized loss i.e to be recognized and the same is to be considered while taking the two items together i.e basis of shares and the consideration amount
In 2019, BayKing Company sold used equipment for $ 21 comma 000. The equipment had an original cost of $80,000 and accumulated depreciation as of the date of sale was $60,000. BayKing also purchased heldminustominusmaturity securities for $ 10 comma 000. Net income for the year was $74,000. There were no other transactions conducted during the period. What are the net investing cash flows for BayKing?
Answer:
$11,000
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow. Depreciation and other non-cash expenses deducted in the income statements are added back while the non-cash income such gain on asset are deducted from net income.
net investing cash flows
= $21,000 - $10,000
= $11,000
Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 100,000 units per year. The total budgeted overhead at normal capacity is $1,100,000 comprised of $400,000 of variable costs and $700,000 of fixed costs. Byrd applies overhead on the basis of direct labor hours. During the current year, Byrd produced 71,800 putters, worked 99,000 direct labor hours, and incurred variable overhead costs of $197,450 and fixed overhead costs of $734,800. Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answers to 2 decimal places, e.g. 2.75.) Variable Fixed Predetermined Overhead Rate $ $ Compute the applied overhead for Byrd for the year. Overhead Applied $ Compute the total overhead variance. Total Overhead Variance $
The predetermined variable overhead rate is $4.00 per direct labor hour, and the fixed overhead rate is $7.00 per direct labor hour. The total overhead applied for Byrd is $1,089,000, and the total overhead variance for the year is $156,750.
To compute the predetermined variable overhead rate for Byrd Company, we divide the total budgeted variable overhead costs by the normal production capacity in terms of direct labor hours. With budgeted variable costs of $400,000 and a normal production capacity of 100,000 units or 100,000 direct labor hours, the predetermined variable overhead rate is $400,000 / 100,000 hours = $4.00 per direct labor hour.
Similarly, the predetermined fixed overhead rate is calculated by dividing the total budgeted fixed overhead costs by the normal production capacity in terms of direct labor hours. The budgeted fixed costs are $700,000 and, again, with the normal production capacity being 100,000 direct labor hours, the predetermined fixed overhead rate is $700,000 / 100,000 hours = $7.00 per direct labor hour.
To compute the overhead applied, Byrd would multiply the actual direct labor hours by each of the predetermined overhead rates. Byrd worked 99,000 direct labor hours, so the overhead applied is (99,000 hours
$4.00 / hour for variable overhead) + (99,000 hours
$7.00 / hour for fixed overhead), which equals $396,000 + $693,000, amounting to $1,089,000.
The total overhead variance is the difference between the actual overhead incurred and the overhead applied. Byrd's total actual overhead for the year is the sum of the actual variable overhead and actual fixed overhead costs, which is $197,450 + $734,800 = $932,250. Thus, the total overhead variance is $1,089,000 (applied) - $932,250 (actual) = $156,750.
Company uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $ 1 comma 400. During the year Back wrote off uncollectible receivables of $ 2 comma 400. Back recorded Bad Debts Expense of $ 3 comma 000. Back's year-end balance in Allowance for Bad Debts is $ 2 comma 000. Back's ending balance of Accounts Receivable is $ 20 comma 900. Compute the net realizable value of Accounts Receivable at year-end.
Answer: $18,900
Explanation:
Seeing as this company uses the Allowance method for accounting for Uncollectible Receivables, only 2 figures here matter, the ending Account balance on the Receivables account and the Allowance for bad debts account.
The formula for the Net Realizable Value for Accounts Receivable is,
= Account Receivable Ending Balance - Allowance for Doubtful Accounts Ending Balance
= 20,900 - 2,000
= $18,900
The Net Realizable Value of Accounts Receivable at year-end is $18,900.
With the Allowance method, only the Allowance is deducted. Bad debts are then removed from the Allowance account. If the Allowance increases or decreases there is an entry in the Income Statement as well but thats unrelated to this.
What is the motivation for stockpiling? a. to avoid the unintended transformation of inventory before sale or use, rendering it inappropriate for its original purpose b. to produce at a level rate despite varying demand for the finished goods output c. to avoid delays in order fulfillment due to inadequate supply d. to save money by ordering large amounts that last longer and reduce the frequency of deliveries
Answer:
c. to avoid delays in order fulfillment due to inadequate supply
Explanation:
Stockpiling refers to keeping a large amount of inventory to have it avaiable in the future. Usually, companies do this when they think that the products may not be available to purchase it later and they decide to buy a large amount to avoid problems with the supply. According to this, the answer is that the motivation for stockpiling is to avoid delays in order fulfillment due to inadequate supply.
The other options are not right because having a large inventory is not related to be able to produce at a level rate, stockpiling can lead to unintended transformation of inventory and you might save money by ordering a large amount but you will increase your storage costs to maintain the inventory in a warehouse.
Domino Company uses the aging of accounts receivable method to estimate uncollectible accounts expense. Domino began Year 2 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $44,010 and $3,440, respectively. During the year, the company wrote off $2,620 in uncollectible accounts. In preparation for the company's Year 2 estimate, Domino prepared the following aging schedule: Number of days Receivables % Likely to be past due amount uncollectible Current $ 70,000 1% 0-30 26,700 5% 31-60 6,760 10% 61-90 3,420 25% Over 90 3,100 50% Total $ 109,980 What will Domino record as Uncollectible Accounts Expense for Year 2
Answer:
Domino will record $4,296 as Uncollectible Accounts Expense for Year 2.
Explanation:
The write-off of the accounts receivable is as follows:
Debit Allowance for doubtful accounts $2,620
Credit Accounts receivable $2,620
(Write-off of accounts receivable)
The effect of the write-off on the allowance account is $3,440 - $2,620 = $820 (credit). It was assumed that the opening balance of $3,440 is credit balance.
Estimate of the uncollectible amount
No of days Receivables % Past due Amount uncollectible
Current $ 70,000 1% $700
0-30 26,700 5% 1,335
31-60 6,760 10% 676
61-90 3,420 25% 855
Over 90 3,100 50% 1,550
Total $109,980 $5,116
The bad debt expense will be $5,116 - $820 = $4,296.
Lyons Company deducts insurance expense of $126,000 for tax purposes in 2020, but the expense is not yet recognized for accounting purposes. In 2021, 2022, and 2023, no insurance expense will be deducted for tax purposes, but $42,000 of insurance expense will be reported for accounting purposes in each of these years. Lyons Company has a tax rate of 40% and income taxes payable of $108,000 at the end of 2020. There were no deferred taxes at the beginning of 2020. 3. What deferred amount should be recorded for Lyon's in relation to the above temporary difference at 12/31/20? If zero, write 0
Answer:
$50,400
Explanation:
Lyons company needs to recognize $126,000 x 40% (tax rate) = $50,400 as deferred tax liability at 12/31/2020.
Deferred tax temporary differences exist because sometimes US GAAP rules are not consistent with the rules that the IRS uses to determine the current taxes of a firm. E.g. US GAAP does not recognize expensing the purchase of assets, but the IRS does. So you need to depreciate the assets in your accounting records, but the ax benefits have already been taken by the firm in the first year.
To determine the deferred amount for Lyon's Company related to the temporary difference at the end of 2020, calculate the future tax deduction on the insurance expense, resulting in a deferred tax liability of $33,600.
The deferred amount recorded for Lyon's in relation to the temporary difference at 12/31/20 can be calculated as follows:
Calculate the temporary difference in insurance expense: ($126,000 - $42,000) = $84,000Calculate the future tax deduction on insurance expense: $84,000 * 40% = $33,600Deferred tax liability to be recorded: $33,600Granfield Company has a piece of manufacturing equipment with a book value of $44,000 and a remaining useful life of four years. At the end of the four years the equipment will have a zero salvage value. The market value of the equipment is currently $22,800. Granfield can purchase a new machine for $128,000 and receive $22,800 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $19,800 per year over the four-year life of the new machine. The total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is:
Answer:
$26,000
Explanation:
The calculation of Net increase or decrease in income on replacement is shown below:-
Net savings in Variable cost for 4 years = Variable manufacturing costs × Life
= $19,800 × 4
= $79,200
Net Investment to be made in New machine = Initial investment of new machine - Traded in value of old machine
= $128,000 - $22,800
= $105,200
Net financial disadvantage of replacement = Net savings in Variable cost for 4 years - Net Investment to be made in New machine
= $79,200 - $105,200
= $26,000
So, for computing the net financial disadvantage of replacement we simply applied the above formula.
On January 1, 2021, Gridley Corporation had 375000 shares of its $2 par value common stock outstanding. On March 1, Gridley sold an additional 750000 shares on the open market at $20 per share. Gridley issued a 20% stock dividend on May 1. On August 1, Gridley purchased 420000 shares and immediately retired the stock. On November 1, 600000 shares were sold for $25 per share. What is the weighted-average number of shares outstanding for 2021
Answer:
1,075,000
Explanation:
Weighted average numbers of share account the weightage of outstanding numbers of the share in the year based on the outstanding period.
Outstanding Balances
375,000 share for 2 months
Addition of new 750000 shares on March 1
1,125,000 shares (375,000+ 750,000) for 2 months
Stock dividend of 20% ( 1,125,000 x 20% = 225,000) on May 1
1,350,000 shares (1,125,000+ 225,000) for 3 months
Retirement of 420,000 Shares on August 1
930,000 shares (1,350,000 - 420,000) for 3 months
Issuance of 600000 shares on November 1
1530,000 shares (930,000 - 600,000) for 2 months
Schedule for weighted average numbers of shares is attached please find it.
n January the company produced 3,380 units using 13,520 pounds of the direct material and 2,824 direct labor-hours. During the month, the company purchased 14,280 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $75,841 and the actual variable overhead cost was $33,828. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for January is: Multiple Choice $407 F $407 U $2,833 U $2,833 F
Answer:
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Explanation:
Giving the following information:
Actual direct labor hours= 2,824
Actual direct labor cost= $75,841
Actual direct labor rate= 75,841/2,824= $26.86
To calculate the direct labor rate variance, we need the standard cost information. I will provide the formula and an invented standard cost per hour to guide an answer.
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Standard cost per direct labor hour= 30
Direct labor time (efficiency) variance= (30 - 26.86)*2,824
Direct labor time (efficiency) variance= $8,867.36 favorable
It is favorable because the cost per hour was lower than estimated.