Answer:
In the Baumol-Tobin model, if the nominal interest rate is 1%, the consumer's annual income is $36000, and every trip to the bank costs $20, then it is optimal for the consumer to visit the bank three times a year.
Explanation:
The optimal number of visit to banks = (iY/2F)0.5
i = 1% = 0.01
Y = $36000
F = $20.
The optimal number of visit to banks = (iY/2F)0.5
The optimal number of visit to banks = (0.01 * 36000 / 2* 20)0.5
The optimal number of visit to banks = (9)0.5
The optimal number of visits to banks = 3.
it is optimal for the consumer to visit the bank 3 times a year.
Probett Toy Company makes its own wind-up motors, which are then put into its toys. While the toy manufacturing process is continuous, the motors are intermittent flow. Demand is 2000 units per month, setup costs are $85 per batch, carrying costs are $2.00 per unit per year, daily subassembly production rate is 1000 units and daily subassembly usage rate is 400 units. To minimize cost, how large should each batch of subassemblies be?
Answer: 1683 units
Explanation:
Miltmar Corporation will pay a year-end dividend of $5, and dividends thereafter are expected to grow at the constant rate of 6% per year. The risk-free rate is 5%, and the expected return on the market portfolio is 10%. The stock has a beta of 0.76.a. Calculate the market capitalization rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Market capitalization rate _____ %b. What is the intrinsic value of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Intrinsic value $
Final answer:
The market capitalization rate for Miltmar Corporation, calculated using CAPM, is 8.80%. The intrinsic value of the stock, using the Gordon Growth Model, is $189.29.
Explanation:
To calculate the market capitalization rate for Miltmar Corporation, we can use the Capital Asset Pricing Model (CAPM), which is given by the formula:
Expected Return (CAPM) = Risk-Free Rate + Beta * (Market Return - Risk-Free Rate)
Plugging in the given values:
Expected Return (CAPM) = 5% + 0.76 * (10% - 5%)
Expected Return (CAPM) = 5% + 0.76 * 5%
Expected Return (CAPM) = 8.80%
The market capitalization rate is 8.80%.
The intrinsic value of the stock can be calculated using the Gordon Growth Model, which is:
Intrinsic Value = Expected Dividend Next Year / (Market Capitalization Rate - Growth Rate)
Plugging in the given values:
Intrinsic Value = $5 * (1 + 6%) / (8.80% - 6%)
Intrinsic Value = $5.30 / 2.80%
Intrinsic Value = $189.29
Therefore, the intrinsic value of Miltmar Corporation's stock is $189.29.
Celeste Nossiter borrowed $6200 from her father to buy a used car. She repaid him after 9 months, at an annual interest rate of 7.1%. Find the total amount she repaid. How much of this amount is interest?
Answer:
$6,530.15
Explanation:
Calculation:
First, converting R percent to r a decimal
r = R/100
= 7.1%/100 = 0.071 per year.
Putting time into years for simplicity,
9 months / 12 months/year = 0.75 years.
Solving our equation:
A = 6200(1 + (0.071 × 0.75)) = 6530.15
A = $6,530.15
The total amount accrued, principal plus interest, from simple interest on a principal of $6,200.00 at a rate of 7.1% per year for 0.75 years (9 months) is $6,530.15.
Based on the information given the total amount she repaid is $6,530.15 and the interest amount is $530.15.
a. Repayment amount
Amount=Principal+(Principal× Rate× Time)
Let plug in the formula
Amount=$6,200+[$6,200×7.1%×(9/12)]
Amount=$6,200+[$6,200×7.1%×0.75
Amount=$6,200+$330.15
Amount=$6,530.15
b. Interest amount
Interest=Repayment-Principal
Interest=$6,530.15-$6,200
Interest=$530.15
Inconclusion the total amount she repaid is $6,530.15 and the interest amount is $530.15.
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An analyst estimates that the enterprise value of a firm is $2.7 billion. The firm has $900 million in debt outstanding. If there are 900 million shares outstanding, what is the analyst's estimated value per share
Answer:
Analyst's estimated value per share is $2.
Explanation:
Enterprise value of the firm is the total value of the firm. It is used as an alternative to the market capitalization. It is the total value of equity and debts of firm.
Enterprise value = Value of equity + value of Debt
2,700,000,000 = Value of equity + $900,000,000
Value of equity = $2,700,000,000 - $900,000,000
Value of equity = $1,800,000,000
Estimated value per share = Value of equity / total number of outstanding shares
Estimated value per share = $1,800,000,000 / 900,000,000 shares
Estimated value per share = $2 per share
The analyst's estimated value per share of the firm is $2.00, calculated by subtracting the firm's debt from its enterprise value and then dividing by the number of shares outstanding.
Explanation:To calculate the estimated value per share of the firm, we need to subtract the firm's debt from the enterprise value to get the equity value and then divide that by the number of outstanding shares.
Enterprise Value (EV): $2.7 billionDebt: $900 millionNumber of shares outstanding: 900 millionFirst, subtract the firm's debt from the enterprise value to find the equity value:
Equity Value = EV - Debt = $2.7 billion - $900 million = $1.8 billion
Next, divide the equity value by the number of shares outstanding to find the value per share:
Value per Share = Equity Value / Number of Shares = $1.8 billion / 900 million shares
Value per Share = $2.00 per share
Cohesion case Consider the types of hardware and software your business requires. You should consider the following: computers, mobile devices, servers, hardware for reading credit cards, telephones, etc. You should consider software requirements for: bookkeeping, customer payments, mobile apps, employee payroll, etc. Will you use local servers or a Cloud computing structure? You need to be thinking about what will be required within the first six months of updating your business. Describe everything you need to get your company up to date?
Answer:
human Resources
Explanation: the company will after having hardware and software, will require the services of human resources, a management structure to drive both the hardware and the software. building, motor vehicle, policies, visions and mission that will give the company direction to follow.
To update your company, you'll need computers, mobile devices, servers, credit card readers, telephones, as well as bookkeeping, payment processing, mobile apps, and payroll software. Cloud computing and collaboration platforms will aid in document sharing and communication, while office suite software will support daily operations.
Explanation:To bring your company up to date with its digital and technical requirements within the first six months, you will need to consider acquiring various types of hardware and software. For hardware, this includes computers, mobile devices, servers, credit card reading hardware, and telephones. For software, you will need systems for bookkeeping, processing customer payments, possibly a mobile app, and employee payroll management. Deciding between using local servers or a Cloud computing structure will depend on the specific needs and scale of your business. Cloud computing options like Microsoft's OneDrive or Drive could be beneficial for document storage and sharing. Additionally, collaboration platforms such as Slack, , Zoom, and Microsoft Teams can facilitate communication and teamwork. Office suite software, like Microsoft Office, will be crucial for day-to-day operations, including the use of Word processors for document creation and revision, as well as spreadsheet software, such as Microsoft Excel, for data analysis and reporting.
What professional organization has developed and published a data quality management tool that defines a specific set of characteristics of health care data that should always be present?
a.AHIMA
b.MIO
c.GAO
d.CMS
Answer:
The correct answer is letter "A": AHIMA.
Explanation:
The American Health Information Management Association (AHIMA) is a U.S. based organization that safeguards health data and information beneficial for healthcare consumers. The AHIMA mainly focuses on information that could be collected in hospitals analyzing electronic medical records and clinical decision support systems to ensure they have standard set characteristics.
The AHIMA describes its activities as having charitable and educational purposes.
In 1977, at age 23, Jake Burton left a job at an investment firm to work in a wood shop where he developed the first marketable snow board. Three decades later, he is the owner of Burton Snowboards, the leader in the $2.3 billion snow sports industry. Burton is responsible for the beginning of a technology cycle.a. True.b. False.
Answer:
The Correct answer is "False"
Explanation:
Jake Burton Carpenter (conceived April 29, 1954 in New York City), otherwise called Jake Burton, is an American snowboarder and author of Burton Snowboards and one of the innovators of the cutting edge snowboard. He experienced childhood in Cedarhurst, New York. He was not organizer of innovation cycle.
Based on the fact that Jake Burton developed the first marketable snowboard, saying he is responsible for the beginning of a technology cycle is True.
What is a technology cycle?This refers to the commercial gain that a product brings in from the costs to develop the product, to the profits it brings in while it is popular.
Jake Burton in developing the first marketable snow board, is responsible for the snowboard technology cycle beginning in the first place because it then began to sell since then.
In conclusion, this is true.
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Suppose a new process was developed that could be used to make oil out of seawater. The equipment required is quite expensive, but it would in time lead to low prices for gasoline, electricity, and other types of energy. What effect would this have on interest rates
Answer:
Interest rate will be higher
Explanation:
Funds invested in such opportunity will attract higher payoff,because only higher interest rate can be paid to attract such funds. Fewer people are ready to safe because they needed to consume their money in the purchase of expensive gasoline. The investment risk is higher because the returns are higher and that is what all investors look out for.Superior Printing, Inc. has provided you with its bank statement and Cash T-account for the month of June. The Controller has asked you to prepare the Bank Reconciliation for the month of June.
BANK STATEMENT
Date Checks Deposits Other Balance
June 1 18,500
3 440 18,060
4 1200 16,860
8 500 16,360
10 1200 15,160
13 250 10,000 24,910
20 80 NSF 840 23,990
22 9800 35,000 49,190
26 350 48,840
27 4600 44,240
29 700 17000 60,540
30 920 Serv. Charge 50 59,570
30 600 Interest 30 59,000
Earned
Sheet # 2
Cash
June 1 Bal. 18,500
June 13 deposit 10,000 Check #100 440
June 22 deposit 35,000 Check #101 1200
June 29 deposit 17,000 Check #102 500
June 30 deposit 28,000 Check #103 1200
Check #104 250
Check #105 80
Check #106 9800
Check #107 350 . Check #108 4600
Check #109 770
Check #110 4900
Check #111 700
Check #112 920
Check #113 600
June 30 Bal. 82,190
Bank reconciliation involves comparing a company's cash account balance with the bank statement balance, and then identifying and adjusting for any discrepancies. Discrepancies might include outstanding checks, NSF checks, and bank charges/interest not accounted for in the books.
Explanation:To prepare a bank reconciliation, you should start by comparing the company's cash account balance (found in the company's books) with the bank statement balance. In this case, the cash account balance at the end of June was $82,190, and the bank statement balance was $59,000.
he next steps involve reconciling any discrepancies between these two balances by identifying any items included in one statement but not the other. Here are the differences:
Once these discrepancies are taken into account, the adjusted balances from both the company's cash account and the bank statement should match.
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The amount of time an activity can be delayed without delaying the early start date of any immediately following activities is known as a _____. a. forward pass b. backward pass c. fast tracking d. free slack
Answer:
Free slack
Explanation:
Free slack can be defined as the amount of time an activity may be delayed without delaying a succeeding activity or a project finish time.
Free slack gives resilience in project management. When leveraged in the right way, project managers can shift activities and resources to meet the project objectives. It is the amount of time an activity can be delayed without impacting other activities or the project end date and changes during the period of the project accomplishment.
Free slack is the amount of time an activity can be delayed without delaying the early start date of any immediately following activities in project management. It allows for flexibility in scheduling and does not affect the overall project completion time.
Explanation:The amount of time an activity can be delayed without delaying the early start date of any immediately following activities is known as free slack. This is a term used in project management and is part of scheduling and control mechanisms. The idea is if an activity has free slack, it can be delayed without affecting the start of the subsequent activities or the project completion time.
For example, if you're working on a project that involves painting a room and the room needs to be clean first, the cleaning can be delayed (assuming it has free slack) without affecting the painting schedule.
In contrast, a forward pass and backward pass are used to determine the earliest and latest an activity can start and end without delaying the project. Fast tracking is a technique used to shorten the project schedule without changing the project scope.
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Reader's Digest Association, Inc., has published Reader's Digest magazine for over 80 years, and many believe the publication is dated and can no longer attract many readers. They believe _____ plans are needed to revamp the magazine's content, editorial staff, and readership.
They believe Strategic plans are needed to revamp the magazine's content, editorial staff, and readership.
Explanation:
Strategic preparation is the practice of recording and leading the small organisation— deciding where you are and when you go. The strategic plan offers you with a location to document your purpose, vision, and principles, your long-term priorities and action plans.
Vision planning, scenario preparation and dilemma solving are three growing priority areas of the strategic planning.
Examples of a Business Strategy Includes: assessment of corporate assets and deficiencies. Design of a framework for business strategy.
Reader's Digest Association, Incorporation believes that strategic plans are needed to revamp the magazine's content, editorial staff, and readership.
From the information given, the company has published Reader's Digest magazine for over 80 years, and many believe the publication is dated and can no longer attract many readers.
Therefore, it's important that they utilize strategic plans to revamp the magazine's content, editorial staff, and readership. This is vital as it'll help in increasing sales and thereby improve the revenue as well.
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Dunbar Distribution markets CDs of numerous performing artists. At the beginning of March, Dunbar had in
beginning inventory 2,500 CDs with a unit cost of $7. During March Dunbar made th following purchases of CDs.
March 5 - 2,000 @ $8
March 13 - 3,500 @ $9
March 21 - 5,000 @ $10
March 26 - 2,000 @ $11
During March 12,000 units were sold. Dunbar used a periodic inventory system.
a. Determine the cost of goods available for sale
b. Determine 1. the ending inventory and 2, the cost of goods sold under each of the assumed cost flow methods
(FIFO, LIFO, and average cost). Prove te accuracy of the cost of goods sold under the FIFO and LIFO mehtods.
(Note: for average cost, round cost per unit to three decimal places.)
c. Which cost flow method results in 1. the highest inventory amount for the balanc sheet abd 2. the highest cost of
goods sold for the income statement?
Final answer:
The FIFO method results in the highest inventory amount for the balance sheet, while the LIFO method results in the highest cost of goods sold for the income statement.
Explanation:
The two cost flow methods commonly used in accounting are the first-in, first-out (FIFO) method and the last-in, first-out (LIFO) method.
1. If Dunbar Distribution wants to report the highest inventory amount for the balance sheet, they should use the FIFO method. This is because FIFO assumes that the goods purchased first are sold first, which means the ending inventory would reflect the most recent purchases and therefore have a higher value.
2. On the other hand, if Dunbar Distribution wants to report the highest cost of goods sold for the income statement, they should use the LIFO method. LIFO assumes that the goods purchased last are sold first, which means the cost of goods sold would reflect the most recent and potentially higher-cost purchases.
Amy Xia's plant is designed to produce 7,000 hammers per day but is limited to making 6,300 hammers per day because of the time needed to change equipment between styles of hammers. The utilization rate for the plant = _______% (enter your answer as a percentage rounded to two decimal places)
Answer: 90%
Explanation: The utilization rate is the percentage of time an asset is productive compared to its capacity.
When it applies to human capital, it is amount of billable hours compared to the total hours they are at work.
The capacity of Amy Xia's plant is 7000 hammers/day.
However, it only produces 6300 hammers/day.
Utilization rate = productivity/capacity X 100%
Utilization rate = 6300/7000 X 100%
Utilization rate = 90%
The utilization rate for Amy Xia's plant is 90%.
Explanation:The utilization rate for the plant can be calculated by dividing the actual production rate by the maximum production rate.
Utilization rate = (Actual production rate / Maximum production rate) x 100%
So, in this case, the utilization rate for Amy Xia's plant is ((6,300 hammers per day) / (7,000 hammers per day)) x 100% = 90%.
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Boeing's new 787 Dreamliner:
a. is assembled in Washington, D.C.
b. uses engines from Japan
c. has its fuselage sections built in Australia
d. has increased efficiency from new engine technology
e. results from a partnership of about a dozen companie
Answer:
The correct answer is letter "D": has increased efficiency from new engine technology.
Explanation:
American aircraft maker Boeing Commercial Airplanes introduced in 2009 the Boeing 787 under the name of "Dreamliner". The new plane has capacity for around 350 passengers. The Boeing 787 advantage relies on the three engines that move the airplane developed by General Electric and Rolls-Royce. Those engines are fuel-efficient, reducing consumption and having an irrelevant impact on the environment.
K Company estimates that overhead costs for the next year will be $2,970,000 for indirect labor and $990,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 99,000 direct labor hours are planned for this next year, how much overhead would be assigned to a product requiring 4 direct labor hours
Answer:
$164
Explanation:
Data provided in the question
Indirect labor cost for the next year = $2,970,000
Factory utilities for the next year = $990,000
Planned direct labor hours = 99,000
Required direct labor hours = 4
So by considering the above information, the overhead assigned is
= (Indirect labor cost for the next year + Factory utilities for the next year) ÷ (Planned direct labor hours) × (Required direct labor hours
= ($2,970,000 + $990,000) ÷ (99,000 direct labor hours) × 4 direct labor hours
= $164
A cultural attitude marked by the tendency to regard one's own culture as superior to others is called_____________.
A) ethnocentrism.
B) polycentrism.
C) geocentrism.
D) technocentrism.
E) none of these.
Answer:
A) ethnocentrism.
Explanation:
Ethnocentrism is the term used to describe the belief that one’s own culture to be natural or correct, and therefore superior to all other cultures.
The word ethnos, derived from Greek, means "nation, people, or cultural grouping". Therefore, to be ethnocentric means to be centered towards a particular race or culture, believing it to be superior.
The answer is A) ethnocentrism.
Answer:
The correct answer is letter "A": ethnocentrism.
Explanation:
In anthropology, ethnocentrism is the belief of individuals or groups believing they are superior to others because of features such as language, custom, religion or behavior. These individuals assume their culture is the point of reference of others, thus, all other cultures should imitate them. Ethnocentrism is called cultural ignorance.
Wright Company's cash account shows a $28,900 debit balance and its bank statement shows $27,200 on deposit at the close of business on May 31. The May 31 bank statement lists $170 in bank service charges; the company has not yet recorded the cost of these services.
Answer:
$28,390
Explanation:
Bank Reconciliation Statement is a compulsory to pronounce a bank statement/cash book records free from error.
Steps in Preparation of Bank Reconciliation Statement
1. Check for Uncleared Dues
2. Compare the debit and credit sessions
3. Check for missed data
4. Make sure the left-hand side is the same as the right hand Side
See attached for the Bank Reconciliation Statement of the exercise.
Reliable is debating whether to add 2 million units or 1.5 million units of capacity to the Asia plant. The larger plant increase will cost $18 million, whereas the smaller addition will cost $15 million. Assume that Reliable users a discount factor of 10 percent. What do you recommend?
Answer:
Explanation:
10% of 18 million =1.8 million for 2 million units
10% of 15 million =1.5 million for 1.5 million units
For 2 million units at 10 percent discount you would spend
18 million -1.8 million= 16.2 million
For 1.5 million units at 10 percent discount you would spend
15 million -1.5 million = 13.5 million
You have a shortfall of 500 000 units between spending 16.2 million and 13.5 million.
My strong recommendation will be to use $15 million.
Tangshan Mining borrowed $100,000 for one year under a line of credit with a stated interest rate of 7.5 percent and a 15 percent compensating balance. Normally, the firm keeps almost no money in its checking account. Based on this information, the effective annual interest rate on the loan is ________.
Final answer:
The effective annual interest rate for Tangshan Mining, which borrowed $100,000 at a stated interest rate of 7.5% with a 15% compensating balance, is approximately 8.82%.
Explanation:
To calculate the effective annual interest rate on a loan with a compensating balance, you need to consider the actual amount of loan funds available for use. For Tangshan Mining, which borrowed $100,000 with a compensating balance of 15%, this means $85,000 is available ($100,000 less the 15% compensating balance of $15,000). The stated interest rate is 7.5%, but since the company must maintain a 15% compensating balance, the effective interest rate is higher. The effective interest rate can be calculated by dividing the annual interest by the available funds. The annual interest amount is the product of the total loan amount and the stated interest rate, which is $100,000 * 7.5% = $7,500. To find the effective annual interest rate, divide $7,500 by $85,000 and multiply by 100 to convert to a percentage. This gives us an effective annual interest rate of approximately 8.82%.
The effective annual interest rate on the loan is 8.82%.
The firm borrowed $100,000 at an annual interest rate of 7.5 percent.A 15 percent compensating balance requirement means the company must keep 15 percent of $100,000 in the bank, which is $15,000.This means the firm effectively has access to only $85,000 ($100,000 - $15,000).The interest to be paid on the $100,000 loan is $7,500 ($100,000 × 7.5%).The effective interest rate is then calculated as the actual interest paid divided by the usable funds: $7,500 / $85,000 = 0.0882 or 8.82%.On July 1, 2014, Falcon Company received a $20,000 promissory note from Jordyn Company. The annual interest rate is 5%. Principal and interest are paid in cash at the maturity date of June 30, 2015. If Falcon’s fiscal year ends September 30, 2014, an adjusting entry is needed to:a. Increase interest revenue by $1,000b. Increase notes receivable by $250c. Increase interest receivable by $250d. Increase notes receivable by $1,000
Answer:
c. Increase interest receivable by $250
Explanation:
The question says that the interest and notes receivable amount will be received at maturity and till then the note is an asset while any interest accrued on the note will be our interest revenue and it will also be a current asset as it will be classified as receivable.
We calculate the interest on note receivable,
20000 * 0.05 = 1000 1000 is the total interest that will be receivable after one year on this notes of 20000The interest for the period from July to September is 1000 * 3/12 = 250So the interest income pertaining to the period ended 30 September is $250This will be recorded by the adjusting entry on 30 Sep as,Interest Receivable 250 Dr
Interest Income 250 Cr
So, the answer is C.
Final answer:
The correct adjusting entry is to increase interest receivable by $250, accounting for the interest earned by Falcon Company from July to September 2014 on the promissory note with Jordyn Company.
Explanation:
On July 1, 2014, Falcon Company received a $20,000 promissory note from Jordyn Company. The annual interest rate is 5%. Principal and interest are paid in cash at the maturity date of June 30, 2015. Given Falcon’s fiscal year ends on September 30, 2014, an adjusting entry is necessary to account for the interest earned but not yet received. The amount of interest for three months (July to September) can be calculated as follows:
Interest = Principal x Rate x Time = $20,000 x 5% x (3/12) = $250.
Therefore, the correct adjusting entry to increase interest receivable by $250 is needed. This entry acknowledges the interest income earned during the fiscal period ending September 30, 2014, but not yet received, thus accurately reflecting Falcon Company’s financial position.
Omitted variable bias a. will always be present as long as the regression R2 < 1. b. is always there but is negligible in almost all economic examples. c. exists if the omitted variable is correlated with the included regressor but is not a determinant of the dependent variable. d. exists if the omitted variable is correlated with the included regressor and is a determinant of the dependent variable.
Answer:
d. exists if the omitted variable is correlated with the included regressor and is a determinant of the dependent variable.
Explanation:
Omitted-variable bias exists when one or more germane variables are left out of a statistical model, and this bias bring about a situation whereby the estimated effects of the variables included in the model are attributed to the impact of the missing variables.
This usually happens when the form and data used for other parameters in the regression model that is estimated are not appropriate.
Vaughn Company reports pretax financial income of $66,100 for 2020. The following items cause taxable income to be different than pretax financial income.
1. Depreciation on the tax return is greater than depreciation on the income statement by $14,800.
2. Rent collected on the tax return is greater than rent recognized on the income statement by $23,900.
3. Fines for pollution appear as an expense of $10,600 on the income statement.
Vaughn’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2014.
Required:
(a) Compute taxable income and income taxes payable for 2020.
(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.
Answer:
a) Taxable Income = $65,200
Income Taxes Payable = $19,560
b) Debit Income tax Expense $19,560 Credit Income Tax payable $19,560
Debit Income Tax Expense $11,610 Credit Deferred Tax $11,610
Debit Profit and loss Account $31,170 Credit Income Tax Expense $31,170
Explanation:
PreTax Income $66,100
1 . Depreciation -$14,800
2 . Rent +$23,900
3 . Fines -$10,000
Taxable Income $65,200
Income Tax Payable (30%) $19,560
Taxable income is in few words net income computed by The Taxman using tax laws and methods. in some cases the Accountant and Taxman can disagree on some things therefore creating temporal and permanent difference. Hence we adjust the Pretax income to arrive at Taxable income.
Income Tax Expense = Income Tax Payable + Deferred tax
Deferred tax arises from temporal difference (Carrying amount - Tax Base)
Deferred Tax = (14,800 * 30%) + ($23,900*30%)
= $4,440 + $7,170
= $11,610
Fines are permanent difference therefore no differed tax arises from them.
Answer:
A1. Taxable income is $85,800
A2. Income tax payable is $19,830
B.
B.
Income tax expense will be the tax rate applied to the Tax Payable amount of $85,800 = $25,740
Whereas the Tax Payable was worked out in the part 1 of our solution as $19,830. This leaves us with an under provision of taxes of $5,910. This $5,910 under provision is referred to as the Deferred tax provision.
Journal Entries
Income tax expense
Debit Income tax payable account with $19,830
Debit Deferred income tax liability Account with $5,910
Credit Cash with $25,740
(Being payment of 2020 Income tax expense to the IRS)
Deferred income tax
Debit Deferred Income tax Account with $5,910
Credit Deferred income tax Liability Account with $5,910
(Being deferred income tax liability for 2020)
Income tax payable
Debit income tax Account with $19,830
Credit Income tax Payable Account with $19,830
(Being Income tax payable on
income from 2020)
Explanation:
Vaughn company
Taxable income is income reviewed from the eyes of the tax authority.
There are some elements of the income statement that are allowable and some not allowable for tax deductions subject to the IRS rules. These are to be considered in finalising the Business Taxable income
Pretax income from financial statement for 2020 = $66,100
Deduct Tax adjustments on Asset Written down Value = -$14,800
Add back Rent received in advance = $23,900
Add back fines on pollution = $10,600
TAXABLE INCOME = $85,800
Income tax Payable on the other hand is a provision made for tax liability based on income arising from the Financial statement. It is an Accounting provision not calculated by the Tax authorities.
In this case, Gross Income was declared to be $66,100
Applying 30% on that gives us our income Tax payable = $19,830
B.
Income tax expense will be the tax rate applied to the Tax Payable amount of $85,800 = $25,740
Whereas the Tax Payable was worked out in the part 1 of our solution as $19,830. This leaves us with an under provision of taxes of $5,910. This $5,910 under provision is referred to as the Deferred tax provision.
Journal Entries
Income tax expense
Debit Income tax payable account with $19,830
Debit Deferred income tax liability Account with $5,910
Credit Cash with $25,740
(Being payment of 2020 Income tax expense to the IRS)
Deferred income tax
Debit Deferred Income tax Account with $5,910
Credit Deferred income tax Liability Account with $5,910
(Being deferred income tax liability for 2020)
Income tax payable
Debit income tax Account with $19,830
Credit Income tax Payable Account with $19,830
(Being Income tax payable on
income from 2020)
Crossett Trucking Company claims that the mean weight of its delivery trucks when they are fully loaded is 6,000 pounds and the standard deviation is 310 pounds. Assume that the population follows the normal distribution. Fifty-five trucks are randomly selected and weighed.
Answer:
95% of 55 trucks will have weights between 5915.5 lbs and 6084.5 lbs
Explanation:
Complete question:
Crossett Trucking Company claims that the mean weight of its delivery trucks when they are fully loaded is 6,000 pounds and the standard deviation is 310 pounds. Assume that the population follows the normal distribution. Fifty-five trucks are randomly selected and weighed. Within what limits will 95% of the sample mean occur
Subtract 1 from sample size to find degree of freedom(df). Here sample size is 55,sodf= 55-1= 54
To determine α, subtract confidence interval from 1 and then divide by 2. Here confidence interval is 95% or 0.95, soα= (1-0.95)/2= 0.025
Use t-distribution table(see attachment) to find t-value for α=0.025 and df=54. So t=2.021(since df=54 is not listed in the table, I have used the table row corresponding to the next lowest value of df that is 40)divide sample deviation, 310, by root of sample size that is 55. So,[tex]\frac{310}{\sqrt{55} }[/tex]= 41.8
Now multiply the answers from last two steps 41.8 × 2.021= 84.5lower limit= 6000-84.5=5915.5upper limit= 6000+84.5=6084.595% of 55 trucks have weights between 5915.5 lbs and 6084.5 lbs
XYZ makes and sells bicycle parts. Last year XYZ sold 6,000 handlebars, generating sales of $180,000. This year they are considering a new pricing strategy with a target profit goal of $72,000. They determined that for every $2 increase to the selling price, a 100 decrease in unit sales was expected. Their total costs were $100,000 with fixed costs accounting for $64,000. This year, XYZ is considering changing the selling price to $36.
a) What was XYZ's average selling price per handlebar last year?
b) What were XYZ's total variable costs last year?c)What were XYZ's average unit variable costs last year?
d) What were XYZ's average unit contribution margins ($) last year?
Answer:
a. XYZ's average selling price per handlebar last year was $30
b.
XYZ's total variable costs last year were $36,000
c. XYZ's average unit variable costs last year were $6
d. XYZ's average unit contribution margins ($) last year were $24
Explanation:
a.
XYZ's average selling price per handlebar last year = Total Sales/number of handlebars sold = $180,000/6,000 = $30
b.
XYZ's total variable costs last year = total costs - fixed costs = $100,000 - $64,000 = $36,000
c. XYZ's average unit variable costs last year = Total variable costs/number of handlebars = $36,000/6,000 = $6
d. XYZ's average unit contribution margins ($) last year = Selling price per handlebar - average unit variable costs = $30 - $6 = $24
The price which the consumers pays for a service or product is called the selling price while the variable cost is the amount that varies according to the companies sale and produce.
The prices are a) $30, b) $36000, c) $6 and d) $24.
The values can be estimated as:
Given,
Number of handlebars sold = 6000Annual sales = $180,000Profit Goal = $72,000Total cost = $100,000Fixed cost = $64,000Selling Price = $36a. XYZ's average selling price (SP) per handlebar last year:
[tex]\rm Selling\; Price = \dfrac {Total \;Sales}{Number\; of\; handlebars\; sold}[/tex]
[tex]\rm Selling\; Price = \dfrac {\$ \;180,000}{6000}\\\\= \$30[/tex]
b. XYZ's total variable costs (VC) last year:
[tex]\rm Variable\; cost = Total\; costs - Fixed \;costs[/tex]
[tex]\rm VC = \$100,000 - \$64,000 \\\\= \$36,000[/tex]
c. XYZ's average unit variable costs (VC) last year:
[tex]\rm VC = \dfrac {Total \;variable \;costs}{Number\; of \;handlebars}[/tex]
[tex]\rm VC = \dfrac{\$36,000}{6,000} \\\\= \$6[/tex]
d. XYZ's average unit contribution margins ($) last year:
[tex]\rm Contributional\; margin = Selling\; price\; per\; handlebar - Average\; unit \;variable \;costs[/tex]
[tex]\rm Margin = \$30 - \$6 \\\\= \$24[/tex]
Thus, a) $30, b) $36000, c) $6 and d) $24 are the prices.
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If the government could raise taxes on one good, which product should the government increase tax rates in order to raise tax revenue? a. Cigarettes b. Alcohol c. Sodas d. None of the above
Answer:
a. Cigarettes
Explanation:
Goods such as cigarettes, alcohol, gambling, etc are referred to as Demerit goods as all of these are harmful to the consumers in some form or the other.
In order to raise taxes and thereby reduce the consumption, governments of various states have historically increased taxes on cigarettes and tobacco.
Taxes imposed on cigarettes, cigars and tobacco account for major tax revenues, usually higher than revenue derived from taxation of alcohol and gambling.
Such taxes are referred to as "sin" taxes. The twin objectives served by such a tax being discouraging purchase of such products and in the meantime generation of high tax revenues.
During 2017, Windsor Company changed from FIFO to weighted-average inventory pricing. Pretax income in 2016 and 2015 (Windsor’s first year of operations) under FIFO was $174,610 and $191,390, respectively. Pretax income using weighted-average pricing in the prior years would have been $151,100 in 2016 and $173,400 in 2015. In 2017, Windsor reported pretax income (using weighted-average pricing) of $206,200. Show comparative income statements for Windsor, beginning with "Income before income tax," as presented on the 2017 income statement. (The tax rate in all years is 29%.)
Answer:
Description 2017 2016 2015
Net Income $146,402 $107,281 $123,114
Explanation:
The question is to compute a statement of income comparative figures. The step is therefore to use the weighted average pricing method to replace the historical income before taxes for both years 2016 and 2015. After this is done, we then re-calculate the appropriate taxes and arrive at the net income.
Description 2017 2016 2015
Income before taxes 206,200 151,100 173,400
Subtract: Income tax @29% 59,798 43,819 50,286
Net Income 146,402 107,281 123,114
The government might levy an excise tax on a product if it wants to collect _________- from the purchase of that particular good or service. The government would prefer to tax goods with a __________ demand. The government might also tax a product to incentivize consumers to _________-. If taxes are too high on a certain good or service, many consumers will ________- that good.
Answer: Tax revenue,highly inelastic,modify,stop buying
Explanation:
The government might levy an excise tax on a product if it wants to collect tax revenue from the purchase of that particular good or service. The government would prefer to tax goods with a highly inelastic demand. The government might also tax a product to incentivize consumers to modify their behavior. If taxes are too high on a certain good or service, many consumers will stop buying that good.
Final answer:
The government uses excise taxes to generate revenue from goods with inelastic demand and to discourage consumption of certain products. If the tax is too high, consumers might stop buying the taxed goods, especially if their demand is elastic. Examples of such taxed goods include gasoline, cigarettes, and alcohol.
Explanation:
The government might levy an excise tax on a product if it wants to collect revenue from the purchase of that particular good or service. The government would prefer to tax goods with a inelastic demand, meaning the demand for the product does not change significantly with an increase in price. Governments might also tax a product to incentivize consumers to reduce consumption of harmful or less desirable goods. If taxes are too high on a certain good or service, many consumers will avoid purchasing that good, especially if the demand for the product is elastic.
Examples of goods that are commonly taxed include gasoline, cigarettes, and alcohol. These are often referred to as 'sin taxes.' Taxes on these goods help to generate revenue because their inelastic demand ensures continued purchase despite the increased cost. Still, the primary purpose may also be to discourage their use due to the negative impacts they have on health and the environment.
Moreover, an excise tax introduces a difference between the price paid by consumers and the price received by sellers. This is known as the tax incidence, which can fall more heavily on either the consumer or the seller, depending on the relative elasticities of demand and supply for the taxed good. Goods with inelastic demand see consumers bearing a larger share of the tax burden.
Consider the GDP price index and the CPI, and then choose the correct answer. A. The GDP price index weights each item using information from past expenditure surveys. B. The GDP price index is not an alternative to the CPI as a measure of the cost of living. C. If nominal GDP rises but real GDP remains unchanged, it must be that production has increased. D. The CPI and the GDP price index give us the same value.
Answer:
C. If nominal GDP rises but real GDP remains unchanged, it must be that production has increased.
Explanation:
The CPI and the GDP price index and implicit price deflator are alternative measures of inflation in the U.S. economy. The choice of which one to use in a given scenario likely depends on the set of goods and services in which one is interested as a measure of price change. The CPI measures price change from the perspective of an urban consumer and thus pertains to goods and services purchased out of pocket by urban consumers. The GDP price index and implicit price deflator measure price change from the perspective of domestic production of goods and services and thus pertain to goods and services purchased by consumers, businesses, government, and foreigners, but not importers. In addition, the formulas used to calculate these two measures differ.
Answer:
The correct answer is letter "C": If nominal GDP rises but real GDP remains unchanged, it must be that production has increased.
Explanation:
The Gross Domestic Product (GDP) is a calculation of the overall economic production of a country's goods and services. In general, GDP is measured annually within one year. Real GDP is equal to the economic output adjusted for the effects of inflation. Nominal GDP equals economic output without the inflation adjustment. Nominal GDP is usually higher than real GDP because inflation is typically a positive number.
Thus, nominal GDP can increase without increasing the real GDP.
Northwest Fur Co. started 2021 with $105,000 of merchandise inventory on hand. During 2021, $480,000 in merchandise was purchased on account with credit terms of 3/15, n/45. All discounts were taken. Purchases were all made f.o.b. shipping point. Northwest paid freight charges of $9,100. Merchandise with an invoice amount of $3,200 was returned for credit. Cost of goods sold for the year was $366,000. Northwest uses a perpetual inventory system.
What is ending inventory assuming Northwest uses the gross method to record purchases?
Answer:
$210,596
Explanation:
Northwest Fur Co.
Beginning inventory $105,000
Inventory purchase $480,000
Freight $9,100
Merchandise return ($3,200)
Discounts [(480,000-3,200)×3%] ($14,304)
Cost of goods available for sale $576,596
Cost of goods sold ($366,000)
Ending inventory $210,596
Therefore the ending inventory assuming Northwest uses the gross method to record purchases is $210,596
Answer: $210,596
Explanation:
GIVEN the following ;
Beginning inventory = $105,000
Inventory Purchased = $480,000
Discount = 3% = 0.03
Freight charge = $9,100
Returned merchandise = $3,200 Cost of goods sold = $366,000
Calculate the ending inventory :
Discount = $(480,000 - 3200) × 0.03
Discount = $14,304
Cost of goods sold = (Beginning inventory + inventory purchased + Freight - ending inventory) - (returned merchandise + discount)
$366,000 = $(105,000 + 480,000 + 9,100 - ending inventory) - $( 3,200 + 14,304)
$366,000 = $594,100 - ending inventory - $17,504
$366,000 = $576,796 - ending inventory
Ending inventory = $(576,596 - 366,000) = $210,596
:
3335 Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows along with descriptions of items a through h that require adjusting entries on December 31.
Answer:
A
Dr. Insurance Expense.....3335
Cr. Prepaid Insurance.............3335
Being Insurance policies expired during the period
B
Dr. Teaching supplies expense....( 10,420 – 2,891).....7,529
Cr. Teaching Supplies ...............................................................7,529
Being teaching supplies made for the period
C
Dr. Depreciation Expense - Equipment............13,342
Cr. Accumulated Depreciation - Equipment......................13,342
Being Equipment Depreciation expense for the period
D
Dr. Depreciation Expense – Professional Library....6,671
Cr. Accumulated Depreciation – Professional Library.........6,671
Being Depreciation of Professional Library for the period
E
Dr. Unearned Training Fees (2 months * 3000) ...6,000
Cr. Training fees earned.................................................6,000
Being recognition of revenue against prepaid income for Nov and Dec
F
Dr. Tuition Receivable (2.5 months x 3,561) ...8,902.5
Cr. Tuition earned ...........................................................8,902.5
Being recognition of Tuition revenue against Account receivable for Oct 15 to Dec
G
Dr. Wages Payable......................400
Cr. Accrued Wages...........................400
Being Wages Accrued for 2 workers for 2 days as at Dec 31st at the rate $100 per day
Explanation:
Required:
1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end.
Additional Information Items
1. An analysis of WTI's insurance policies shows that $3,335 of coverage has expired.
2. An inventory count shows that teaching supplies costing $2,891 are available at year-end 2017.
3. Annual depreciation on the equipment is $13,342.
4. Annual depreciation on the professional library is $6,671.
5. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $3,000, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2018.
6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,561 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.)
7. WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee.
JOURNAL ENTRIES
A
Dr. Insurance Expense.....3335
Cr. Prepaid Insurance.............3335
Being Insurance policies expired during the period
B
Dr. Teaching supplies expense....( 10,420 – 2,891).....7,529
Cr. Teaching Supplies ...............................................................7,529
Being teaching supplies made for the period
C
Dr. Depreciation Expense - Equipment............13,342
Cr. Accumulated Depreciation - Equipment......................13,342
Being Equipment Depreciation expense for the period
D
Dr. Depreciation Expense – Professional Library....6,671
Cr. Accumulated Depreciation – Professional Library.........6,671
Being Depreciation of Professional Library for the period
E
Dr. Unearned Training Fees (2 months * 3000) ...6,000
Cr. Training fees earned.................................................6,000
Being recognition of revenue against prepaid income for Nov and Dec
F
Dr. Tuition Receivable (2.5 months x 3,561) ...8,902.5
Cr. Tuition earned ...........................................................8,902.5
Being recognition of Tuition revenue against Account receivable for Oct 15 to Dec
G
Dr. Wages Payable......................400
Cr. Accrued Wages...........................400
Being Wages Accrued for 2 workers for 2 days as at Dec 31st at the rate $100 per day