Paragon comma Inc.​'s trial balance shows $ 255 comma 000 face value of bonds with a discount balance of $ 1 comma 200. The bonds mature in 10 years. How will the bonds be presented on the balance​ sheet? A. Bonds payable $ 255 comma 000 will be listed as a​ long-term liability. B. Bonds payable $ 255 comma 000 will be listed as a​ long-term liability. A $ 1 comma 200 discount on bonds payable will be listed as a contra current liability. C. Bonds payable $ 253 comma 800 ​(net of $ 1 comma 200 ​discount) will be listed as a​ long-term liability. D. Bonds payable $ 255 comma 000 will be listed as a​ long-term liability. A $ 1 comma 200 discount on bonds payable will be listed as a current liability.

Answers

Answer 1

Answer:

The correct option is C,Bonds payable $ 253 comma 800 ​(net of $ 1 comma 200 ​discount) will be listed as a​ long-term liability.

Explanation:

Upon issuance of the bonds,bonds payable would be credited with $255,000,the face value of the bond while discounts on bonds payable is debited with $1,200,with cash proceeds of $253,800($255,000-$1200) debited to cash accounts.

The $1,200 debited is a contra liability,the same way accumulated depreciation is a contra asset going against the non-current asset account in the balance.

By being contra liability,it effectively reduces bonds payable balance to $253,800,as a result the bonds is shown as a long term liability in the balance sheet


Related Questions

ou have an outstanding student loan with required payments of $ 550 per month for the next four years. The interest rate on the loan is 9 % APR​ (compounded monthly). Now that you realize your best investment is to prepay your student​ loan, you decide to prepay as much as you can each month. Looking at your​ budget, you can afford to pay an extra $ 250 a month in addition to your required monthly payments of $ 550​, or $ 800 in total each month. How long will it take you to pay off the​ loan? ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)

Answers

Answer:

Approx 34 months are required to payoff the loan

Explanation:

In order to calculate How long will it take you to pay off the​ loan we would have to calculate first the Loan amount outstanding as follows:

Loan amount outstanding = 600 *4 *12 = $ 28,800

Therefore, to calculate How long will it take you to pay off the​ loan we use the following formula:

Amount =Payment (1+ r/n)^t

28,800 = 775 (1+ .09/12)^t

28,800 /775 = (1 +.0075 ) ^t

37.16 = (1.0075)^ t

when we used it and trial method the compounded value comes to be 37.85 when t= 34 months

Hence, approx 34 months are required to payoff the loan

Heller Enterprises reports the following information. 2017 2016 Cash $10,800 $10,600 Operating assets $18,500 $18,800 Operating liabilities $14,100 $14,800 Net operating profit after tax $10,200 $10,300 Weighted average cost of capital 6.0% 6.0% What is the company's residual operating income (ROPI) for 2017? A. $9,072 B. $6,200 C. $9,312 D. $9,960 E. None of the above

Answers

Answer:

The company's residual operating income (ROPI) for 2017 is $9,960. The right answer is D.

Explanation:

In order to calculate the company's residual operating income (ROPI) for 2017 we would have to use the following formula:

Company's Residual operating Income = NOPAT - [ WACC x NOA at beginning ]

Where, NOPAT = Net operating profit after tax for 2017 = $10,200, WACC = weighted average cost of capital = 6%

NOA at beginning = Net operating assets at beginning of the year (NOA of 2016 closing) = $18,800 - $14,800 = $4000

Therefore, Company's residual operating income = $10,200 - [ 6% x $4000 ] = $9,960

The Card Shoppe needs to maintain 18 percent of its sales in net working capital. Currently, the store is considering a four-year project that will increase sales from its current level of $279,000 to $308,000 the first year and to $314,000 a year for the following three years of the project. What amount should be included in the project analysis for net working capital in Year 4 of the project?

Answers

Answer:

$56,520

Explanation:

As per given data

Year     Sales          Working Capital 18%

   0      $279,000   ($50,220)

   1       $308,000   ($5,220)

   2      $314,000    ($1,080)

   3      $314,000    $0

   4      $314,000   $56,520

As the sales value of year 2, 3 and 4 are same, as capital is adjusted in year 2 and company has equal working capital required in year 3, years 4 is the last year of the project so, working capital will be recovered from the project

Net Working capital will be reimbursed at the end of the project. The accumulated value of investment in working capital will be recorded as cash inflow in the analysis.

Our Lady of Sorrows Church, a not-for-profit entity, operates a school in connection with the Church. This year members of the Church decided to construct a new wing on the school with six classrooms. The Church hired an architect and a construction supervisor. The bulk of the labor for construction was donated by Church members who were willing workers but not necessarily skilled carpenters. Materials for the construction cost $600,000 and the paid labor was $200,000. The fair value of the completed building is $2 million. When the building is completed what should be the balance in the asset account "Building" and the account "Contribution Revenue"? A. Building $800,000; Contribution Revenue $0. B. Building $800,000; Contribution Revenue $1,200,000. C. Building $2 million; Contribution Revenue $1,200,000. D. Building $2 million; Contribution Revenue $0.

Answers

Answer:

C) Building $2 million; Contribution Revenue $1,200,000.

Explanation:

Volunteer work must be recorded in the In-Kind Contributions account, which is used to record contributions received as volunteer work:

E.g.

Dr Wages and salaries - masonry 1,200,000

    Cr In-kind contributions 1,200,000 (or contribution revenue)

Volunteer work does not accumulate revenue, since it must be expensed immediately against the appropriate account. The finished building must be recorded at fair value.

 

Gitano Products operates a job-order costing system and applies overhead cost to jobs on production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $124,600 of manufacturing overhead for an estimated allocation base of $89,000 direct material dollars to be used in production. The basis of direct materials used in the company has provided the following data for the just completed year

Purchase of raw materials 139,000

Direct labor cost $85,000

Manufacturing overhead costs:

Indirect labor $ 127,800

Property taxes $8,880

Depreciation of equipment $18,000

Maintenance $ 12,000

Insurance $ 11,300

Rent, building $ 40,000

Beginning Ending
Raw Materials $ 27,000 $ 13,000
Work in Process $ 46,000 $36,000
Finished Goods $71,000 $56,000
Required:

1. Compute the predetermined overhead rate for the year

2. Compute the amount of underapplied or overapplied overhead for the year

3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials

4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer

Answers

Answer:

1.predetermined overhead rate for the year = $1.40

2.the amount of underapplied or overapplied overhead for the year = $3,780

3.schedule of cost of goods manufactured for the year

Raw Materials ($ 27,000+$139,000 -$ 13,000)        153,000

Direct labor cost                                                          85,000

Applied Overheads                                                    214,200

Add Opening Inventory - Work in Process                46,000

Less Closing Inventory - Work in Process                (36,000)

cost of goods manufactured for the year                462,200

4.the unadjusted cost of goods sold for the year = $477,200

Explanation:

1.predetermined overhead rate for the year

predetermined overhead rate = Budgeted Fixed Overheads / Budgeted Activity

                                                   = $124,600/$89,000

                                                   = $1.40

2.the amount of underapplied or overapplied overhead for the year

Actual Fixed Overheads > Applied Fixed Overheads = Underapplied

Actual Fixed Overheads < Applied Fixed Overheads = Overapplied

Applied Fixed Overheads = $1.40×($ 27,000+$139,000 -$ 13,000)

                                           = $214,200

Actual Fixed Overheads Calculation :

Indirect labor                     $ 127,800

Property taxes                       $8,880

Depreciation of equipment $18,000

Maintenance                        $12,000

Insurance                              $11,300

Rent, building                     $40,000

Total                                   $217,980

Note that : Actual Fixed Overheads > Applied Fixed Overheads

Therefore we have an Underapplied

Underapplied =  $217,980 - $214,200 = $3,780

3.schedule of cost of goods manufactured for the year

Raw Materials ($ 27,000+$139,000 -$ 13,000)        153,000

Direct labor cost                                                          85,000

Applied Overheads                                                    214,200

Add Opening Inventory - Work in Process                46,000

Less Closing Inventory - Work in Process                (36,000)

cost of goods manufactured for the year                462,200

4.the unadjusted cost of goods sold for the year

Opening Inventory - Finished Goods           $71,000

Add Cost of Goods Manufactured            $462,200

Less Closing Inventory - Finished Goods  ($56,000)

Cost of Goods Sold                                     $477,200

You are the treasurer of Arizona Corp. and must decide how to hedge (if at all) future receivables of 350,000 Australian dollars (A$) 180 days from now. Put options are available for a premium of $.02 per unit and an exercise price of $.50 per Australian dollar. The forecasted spot rate of the Australian dollar in 180 days is:

Answers

Answer:

50%

Explanation:

The computation of the probability for put option will be exercised is shown below:

She will exercise at the time when the exercise price i.e $.50 is bigger than the future spot price i.e (20% + 30% = 50%)

So in this case the probability should be 50%

Hence, the correct answer is option c.

All other information which is given is not relevant. Hence, ignored it

A division is considering the acquisition of a new asset that will cost $2,520,000 and have a cash flow of $700,000 per year for each of the four years of its life. Depreciation is computed on a straight-line basis with no salvage value. Ignore taxes. Required: a. & b. What is the ROI for each year of the asset's life if the division uses beginning-of-year asset balances and net book value for the computation? What is the residual income each year if the cost of capital is 8 percent? (Enter "ROI" answers as a percentage rounded to 1 decimal place (i.e., 32.1). Negative amounts should be indicated by a minus sign.)

Answers

Answer:

initial investment = $2,520,000

cash flow for years 1 - 4 = $700,000

ROI = (cash flow - depreciation) / investment

depreciation for year 1-4 using straight-line basis = $2,520,000 / 4 = $630,000

ROI year 1 = (700,000 - 630,000) / 2,520,000 = 70,000 / 2,520,000 = 2.8%

ROI year 1 = 70,000 / 1,890,000 = 3.7%

ROI year 1 = 70,000 / 1,260,000 = 5.6%

ROI year 1 = 70,000 / 630,000 = 11.1%

cost of capital year 1 = $2,520,000 x 8% = $201,600

cost of capital year 2 = $1,890,000 x 8% = $151,200

cost of capital year 3 = $1,260,000 x 8% = $100,800

cost of capital year 4 = $630,000 x 8% = $50,400

residual income = excess income - cost of capital

residual income year 1 = $70,000 - $201,600 = -$131,600

residual income year 2 = $70,000 - $151,200 = -$81,200

residual income year 3 = $70,000 - $100,800 = -$30,800

residual income year 4 = $70,000 - $50,400 = $19,600

year      net investment    cash flow - dep.      ROI       residual income

1             $2,520,000               $70,000           2.8%        ($131,600)

2             $1,890,000               $70,000           3.7%         ($81,200)

3             $1,260,000               $70,000           5.6%        ($30,800)

4               $630,000               $70,000            11.1%          $19,600

Inflation in the Philippines was 6.7% in September, far above the central bank’s target of 2 – 4%. Suppose the central bank decides to raise interest rates. (a) Using the money market, describe the type of monetary policy (increase or decrease in the money supply) that would achieve higher interest rates. (b) The central bank's goal is to reduce inflation. Using the IS-LM-FE model, explain whether the policy of higher interest rates is appropriate or not. (c) Use the AD-AS model to predict the short-run and long-run effects of the central bank’s policy on Philippine inflation, output, and unemployment. Does it matter whether wages are flexible or not? Explain. (d) Suppose the demographic transition of the Philippines causes labor supply to grow more rapidly than usual. How does this affect your answer about unemployment and wages in (c)? Use the labor market.

Answers

Answer:

plsyes

Explanation:

Rugged Sports Enterprises LP is organized as a limited partnership consisting of two individual partners: Hockey LP and Football LP. Hockey LP Football LP Total Beginning-year balance $ 345,000 $ 1,414,500 $ 1,759,500 Annual net income 36,664 751,612 788,276 Cash distribution — (120,000 ) (120,000 ) Ending-year balance $ 381,664 $ 2,046,112 $ 2,427,776 Compute partner return on equity for each limited partnership (and the total) for the year using the above data from Rugged Sports Enterprises LP.

Answers

Answer:

Find the answers in the explanation section below

Explanation:

The return on equity for each of the partners and the firm in total is the net income for the year divided by average capital invested in the business in the year.

Average capital or equity is the beginning balance plus ending balance divided by 2:

Hockey LP:

Annual net income is $36,664

average equity=($345,000+$381,664)/2=$363,332

return on equity= $36,664/$363,332 =10.09%

Football LP:

Annual net income is $751,612

average equity=($1,414,500+ $2,046,112)/2=$1,730,306

return on equity=$751,612/$1,730,306 =43.44%

Rugged sports:

Annual net income is $788,276

average equity=($1,759,500+ $2,427,776)/2=$2093638

return on equity=$788276/$2093638 =37.65%

Final answer:

Explanation of calculating partner return on equity for Rugged Sports Enterprises LP.

Explanation:

Partner return on equity (ROE) is a financial metric used to evaluate the profitability of a partner's investment in a partnership.

To calculate ROE for each partner in Rugged Sports Enterprises LP, divide the annual net income by the beginning-year balance and then multiply by 100 to get a percentage:

Hockey LP ROE: (36664 / 345000) * 100Football LP ROE: (751612 / 1414500) * 100

Adding the individual ROEs will give you the total partnership ROE for Rugged Sports Enterprises LP for the year.

Linwood is making an equipment change at his company. An old piece of equipment, with a salvage value of $60,000, is being replaced by new equipment. The new equipment costs $980,000 and would have a 10 year useful life and no salvage value. By replacing the equipment, Linwood will save $164,000 per year in cash operating costs. The simple rate of return on this investment is

Answers

Answer:

The simple rate of return is 0.178 or 17.8%

Explanation:

From the given question, we solve for the simple rate return on this investment

Solution

Recall that, the simple rate of return is defined as:

The simple rate of return = The  operating  net cash savings /  Cash net investment

Thus,

The operating net cash savings = $164000  and

The cash net investment = $980000- $60000 = $920000

Then,

The Simple rate of return = $164000 / $920000 = 0.178 i.e. 17.8%

Therefore the simple rate of return on this investment is 0.178 or 17.8%

The simple rate of return for Linwood's new equipment investment is approximately 6.7%. Thus, option (b) is correct.

Let's calculate it step-by-step:

The cost of the new equipment: $980,000Annual savings in cash operating costs: $164,000The useful life of the new equipment: 10 years

To calculate the simple rate of return, we use the formula:

Simple Rate of Return = (Annual Incremental Net Operating Income) / Initial Investment

Since the new equipment has no salvage value, the annual depreciation is:

Annual Depreciation = Initial Investment / Useful Life = $980,000 / 10 = $98,000

Next, we calculate the annual incremental net operating income:

Annual Incremental Net Operating Income = Annual Cost Savings - Annual Depreciation = $164,000 - $98,000 = $66,000

Finally, the simple rate of return is:

Simple Rate of Return = $66,000 / $980,000 ≈ 6.7%

Complete Question:

Linwood is making an equipment change at his company. An old piece of equipment, with a salvage value of $60,000, is being replaced by new equipment. The new equipment costs $980,000 and would have a 10-year useful life and no salvage value. By replacing the equipment, Linwood will save $164,000 per year in cash operating costs. The simple rate of return on this investment is:

a. 7.2%

b. 6.7%

c. 16.7%

d. 17.8%

6. If two portfolios are well-diversified with a risk-free rate of 3.11% and the S&P market return for the past year has been 12.87%. Portfolio ABC has a return of 15.75% and has a beta of 1.4, while Portfolio XYZ returns 11.92% and has a beta of .85. Based on Jack Treynor's Model what are the Treynor Indexes for each stock, and assuming that the correlation of each the same, which stock would you add to your own portfolio based solely on the results of the Treynor Index? And what results would the Jensen Model provide and what would be your decision then?

Answers

Answer:

Answer 1---- D. none of the above

Answer 2---- B. the project will delay by one day

Explanation:

See attached image

A plant asset acquired on October 1, 2018, at a cost of $400,000 has an estimated useful life of 10 years. The salvage value is estimated to be $40,000 at the end of the asset's useful life. Collapse question part (a) Determine the depreciation expense for the first two years using the Straight-line method. Year 1Year 2 Straight-line method

Answers

Final answer:

To calculate depreciation using the straight-line method for a plant asset with a cost of $400,000, a salvage value of $40,000, and a useful life of 10 years, we find that the annual depreciation expense is $36,000. This amount is the same for the first two years of the asset's use.

Explanation:

The question involves calculating the depreciation expense of a plant asset using the straight-line method. The formula to calculate straight-line depreciation is: (Cost of the asset - Salvage value) / Useful life. The cost of the asset is $400,000, the salvage value is $40,000, and the useful life is 10 years.

First, calculate the total depreciation over the asset's life: $400,000 - $40,000 = $360,000. Then, divide this by the useful life: $360,000 / 10 years = $36,000 per year.

For year 1 (October 1, 2018, to September 30, 2019), the depreciation expense is $36,000. As the asset was acquired at the beginning of October, you would depreciate it for the full year.

For year 2 (October 1, 2019, to September 30, 2020), the depreciation expense is also $36,000.

On December 31, Year 1, Mr. and Mrs. Wise purchased 50% of Cobra’s only class of stock outstanding for $300,000. Cobra is an electing S corporation. On November 30, Year 2, they purchased the other 50% of Cobra’s stock for $300,000. For the year, Cobra incurred an ordinary loss of $474,500. How much of the loss can Mr. and Mrs. Wise deduct on their individual income tax return for the year

Answers

Answer:

$257400

Explanation:

Under Sec. 1366(a) and Sec. 1377(a), a pro rata share is the tax payers hare of loss determined on a per-day and then a per-share basis.   Cobra shareholder includes his or her pro rata share of loss from the cobra.

The ordinary loss for the whole year was  $474,500, Therefore the loss per day was $1300 per day ( $474,500 ÷ 365 days).

Since Mr. and Mrs. Wise owned 50% of the stock for the full year and the other 50% for 31 days, their share of loss =  [ $474,500/2 + (31 days × $1300 × 50%)] = $237250 + $20150 = $257400

Refer to the payoff matrix at right for the profits​ (in ​$ millions) of two firms​ (A and​ B) and two pricing strategies​ (high and​ low). Which of the following is the outcome of the dominant strategy without​ cooperation? A. Both firm A and firm B choose the low price. B. Firm A chooses the high price while firm B chooses the low price. C. Firm A chooses the low price while firm B chooses the high price. D. Both firm A and firm B choose the high price.

Answers

Answer:

A. Both firm A and firm B choose the low price.

Explanation:

In a strategy of this form, it is said that both firm A and B chose the same pricing strategies which is of high and low.

In other words , a payoff matrix is defined as a visual representation of all the possible outcomes that can occur when two people or groups have to make a strategic decision. The decision is referred to as a strategic decision because each decision maker has to take into consideration how their choice will affect their opponent's choice and how their opponent's choice will affect their own choice. The payoff matrix illustrates each possible strategy that one side can choose, as well as every combination of outcomes that are possible based on each opponent's choice.

In its first year of operations, Woodmount Corporation reported pretax accounting income of $640 million for the current year. Depreciation reported in the tax return in excess of depreciation in the income statement was $480 million. The excess tax will reverse itself evenly over the next three years. The current year's tax rate of 25% will be reduced under the current law to 30% next year and 35% for all subsequent years. At the end of the current year, the deferred tax liability related to the excess depreciation will be:

Answers

Answer:

At the end of the current year, the deferred tax liability related to the excess depreciation will be 144 million

Explanation:

In order to calculate At the end of the current year, the deferred tax liability related to the excess depreciation we would have to use the following formula:

Deferred tax liability = ($160 million * 25%) + ($160 million * 30%) + ($160 million * 35%)

Deferred tax liability =$40 million + $48 million + $56 million

 Deferred tax liability = $144 million

At the end of the current year, the deferred tax liability related to the excess depreciation will be 144 million

To find the deferred tax liability due to excess depreciation, calculate the temporary difference and apply future tax rates, resulting in a liability of $312 million.

Deferred tax liability:

1. Calculate the temporary difference due to excess depreciation: $480 million - $0 million = $480 million.

2. Calculate the tax effect at the different tax rates for the next three years: $480 million x 30% = $144 million, $480 million x 35% = $168 million.

3. The deferred tax liability related to the excess depreciation at the end of the current year will be $144 million + $168 million = $312 million.

Moe ’s Electric sales vacuum cleaners with a one-year warranty to fix any defects. For the current year, 200 vacuums have been sold. By the end of the year 12 ovens have been repaired for an average cost of $45 dollars. Management estimates that 8 more vacuums of the 200 sold will need to be repaired next year at the same amount. How much should Paul’s Electric report warranty expense for the current year?

Answers

Answer:

$900

Explanation:

Given that

Total repair up to end of year = 12

Estimated need to be repaid = 8

Average cost = $45

The computation of warranty expense for the current year is shown below:-

For computing the warranty expense for the current year first we need to find out the total repaired cost which is here below

Total repaired cost = Total repair up to end of year + Estimated need to be repaid

= 12 + 8

= 20

Warranty expense for the current year = Average cost × Total

= $45 × 20

= $900

Therefore for computing the warranty expense for the current year we simply applied the above formula.

A new barcode reading device has an installed cost basis of ​$21 comma 680 and an estimated service life of ten years. It will have a zero salvage value at that time. The 200​% declining balance method is used to depreciate this asset. a. What will the depreciation charge be in year ten​? b. What is the book value at the end of year nine​? c. What is the gain​ (or loss) on the disposal of the device if it is sold for ​$700 after nine ​years?

Answers

Answer:

a. $2,910

b. $2,910

c. $2,210 loss

Explanation:

Note: See the attached excel file to see how the depreciation is calculated.

Since the useful life is 10, the normal depreciation rate is 10%. Therefore, 200% double declining depreciation rate implies 20% rate to be used (i.e. 10% * 200% = 20%).

a. What will the depreciation charge be in year ten​?

Since the salvage value at year ten is zero, the depreciation charge in year 10 is $2,910.

b. What is the book value at the end of year nine​?

The book value at the end of year nine = $2,910.

c. What is the gain​ (or loss) on the disposal of the device if it is sold for ​$700 after nine ​years

Loss = Sales proceed - book value at the end of year nine = $700 - $2,910 = 2,210 loss

Under its executive stock option plan, National Corporation granted 15 million options on January 1, 2021, that permit executives to purchase 15 million of the company’s $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $32 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. Suppose that the options are exercised on April 3, 2024, when the market price is $36 per share. Ignoring taxes, what journal entry will National record?

Answers

Answer and Explanation :

As per the data given in the question,

Before passing the journal entries we need to do the following calculations which are shown below

Total compensation expense = Options granted ×  Fair value per option

= 15 million × $4 per options

= $60 million

Compensation expense to be recognized each year = $60 million ÷ 3 years

= $20 million

Now

Journal Entries  are as follows

On Dec-31,2021

Compensation expense A/c Dr. $20 million

   To Paid in capital stock options Cr.  $20 million

(Being the compensation expense is recorded )

On Dec-31,2022

Compensation expense A/c Dr. $20 million

    To Paid in capital stock options Cr. $20 million

(Being the compensation expense is recorded )

On Apr-3,2024

Cash A/c Dr. $480 million  (15 million × $32)

Paid in capital stock options A/c Dr. $60 million

          To Common stock Cr.  $15 million

          To Paid in capital in excess of par Cr.  $525 million

(Being the exercise of options is recorded)

At December 31, 2020 Marigold Corp. had 305000 shares of common stock and 9600 shares of 6%, $100 par value cumulative preferred stock outstanding. No dividends were declared on either the preferred or common stock in 2020 or 2021. On January 30, 2022, prior to the issuance of its financial statements for the year ended December 31, 2021, Marigold declared a 100% stock dividend on its common stock. Net income for 2021 was $1135000. In its 2021 financial statements, Marigold's 2021 earnings per common share should be

Answers

Answer:

Marigold Corp.

2021 Earnings per common share:

Common Stock:

Dec 31, 2020 Balance = 305,000 shares

Jan 30, 2022 Stock dividend = 305,000 shares

Balance on Jan 30 = 610,000 shares

Net Income for 2021 = $1,135,000

6% Cumulative preferred dividend for 2020 & 2021 = $115,200 ($57,600 x2)

2021 Earnings per share = ($1,135,000 - $115,200)/305,000 = $3.34

Explanation:

Earnings per share is the net income dividend by the number of outstanding stock.

As at December 31, 2021, the common stock outstanding equals 305,000 shares.

The preferred stock is cumulative.  This means that whether dividend is declared or not in a year, it continues to be accumulated year on year until when the company is able to pay.

Since 2020 dividend for preferred stock was not declared, in 2021 when the common stock dividend was declared, the previous year's and the present would be accumulated and deducted from earnings to arrive at earnings for common stockholders.

Answer:

Marigold's 2021 earnings per common share should be $1.77

Explanation:

Given:

Net income for 2021: $1,135,000

Num. of common stck shares: 305,000

Cumulative preferred stock outstanding: 9600 shares of 6%, $100 par value.

The dividend to be accrued on preference shares=

9,600 * $100 * 6% = $57,600

Share outstanding will be:

305,000 * 2 = 610,000

Earnings available to common share-holders =

(Net income-Preferred dividend) =

$1,135,000 - $57,600 = $1,077,400

Earnings per share is calculated as:

$1,077,400 / 610,000 = $1.77

Therefore, Marigold's 2021 earnings per common share should be $1.77

The Wood Valley Dairy makes cheese to supply to stores in its area. The dairy can make 454 pounds of cheese per day (355 days per year), and the demand at area stores is 62 pounds per day. Each time the dairy makes cheese, it costs $295 to set up the production process. The annual cost of carrying a pound of cheese in a refrigerated storage area is $1.01. Determine the minimum total annual cost.

Answers

Answer:

$245,277

Explanation:

The dairy makes 454 pounds per day of which only 62 pounds is sold, thus the extra pounds of cheese per day are (454-62) = 392.

Now, the dairy operated 355 days a year, hence the annual cost of storage is,

(355 * 392) * $1.01 => $140,552.

Now the setup cost is $295 a day, so the annual would be,

(295 * 355) => $104,725.

Hence the minimum total annual costs will be = 140552+104725 = $245,277.

Hope I made myself clear.

Thanks

Which of the following questions would most likely be important for ABC managers to evaluate as they consider expanding into the Asian market? What U.S. firms have successfully partnered with Asian companies? Where will ABC management locate the staff needed to oversee an Asian plant? What are the pricing strategies followed by competitor firms in Asia? How much control does ABC management want to have over their Asian operations?

Answers

Answer:

What are the pricing strategies followed by competitor firms in Asia?

Explanation:

In simple words, any corporate entity willing to expand its business to a new market should first evaluate the existing business players. By doing so, the subject entity can get a significant level of understanding of the threats and opportunities available in the market.

Thus, ABC managers should first evaluate the strategies used by the existing participants of the market as after that they can make their plan to how attract other's customers towards ABC.

Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $400,000 of net income, declared no dividends, and the following selected transactions occurred in the order given:
1) Issued 100,000 shares of the common stock at $55 cash per share.
2) Reacquired 25,000 shares at $50 cash per share.
3) Reissued 10,000 shares from the treasury for $51 per share.
4) Reissued 10,000 shares from the treasury for $49 per share.
Required:
Prepare the stockholders' equity section of the balance sheet at December 31, 2013. (Amounts to be deducted should be indicated by a minus sign.)

Answers

Answer:

Total equity of stock holder = $5,650,000

Explanation:

As per the data given in the question,

Balance sheet  Equity of Stock holder

Capital Contribution Amount

Common stock = $500,000 ((100,000 × $55) - ( 1,000,000 × $5))

Additional paid in capital = $5,000,000 ($5,000,000 + 10,000 - 10,000)

Retained earnings = $400,000

Total = $5,900,000 ($500,000 + $5,000,000 + $400,000)

Treasury stock at cost = $250,000 ($1,250,000 - $500,000 - $500,000)

Total equity of stock holder = $5,650,000 ($5,900,000 - $250,000)

Final answer:

To prepare the stockholders' equity section, account for the common stock issued, treasury stock transactions, and retained earnings of Global Marine. The balance sheet will include common stock, additional paid-in capital, treasury stock, and retained earnings.

Explanation:

Stockholders' Equity Section

To prepare the stockholders' equity section of Global Marine's balance sheet, we need to account for the common stock issued, treasury stock transactions, and retained earnings for the year. Here's a breakdown:

Common Stock: 100,000 shares were issued at $55 per share, but the par value of the stock is $5. The excess over par ($50 per share) is recorded in the additional paid-in capital account.

Treasury Stock: 25,000 shares were reacquired at $50 cash per share and later, 10,000 shares were reissued at $51 per share and another 10,000 at $49 per share.

Retained Earnings: The company earned $400,000 net income and declared no dividends.

Based on these transactions, the stockholders' equity section would appear as follows:

Common Stock (100,000 shares issued and outstanding at $5 par value): $500,000

Additional Paid-In Capital (100,000 shares × $50 excess over par): $5,000,000

Treasury Stock (25,000 shares reacquired at $50 per share): -$1,250,000 (Net of 20,000 shares reissued at $51 and $49 per share)

Retained Earnings from Net Income: $400,000

The treasury stock reissued at a different price affects the balance of treasury stock and additional paid-in capital. The total treasury stock is computed by subtracting the cost of reissued shares from the cost of acquired treasury stock.

Prahm Corp. wants to raise $4.7 million via a rights offering. The company currently has 530,000 shares of common stock outstanding that sell for $48 per share. Its underwriter has set a subscription price of $23 per share and will charge the company a spread of 5 percent. If you currently own 6,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

If you choose not to participate in Prahm Corp.'s rights offering and sell your 6,000 rights, you can receive approximately $37,500 based on a subscription price of $23 per share and an ex-rights price of $12.50.

To calculate the value of the rights, you can follow these steps:

1. Determine the Subscription Ratio:

[tex]\[ \text{Subscription Ratio} = \frac{\text{Number of New Shares Issued}}{\text{Number of Existing Shares}} \][/tex]

  In a rights offering, the subscription ratio is usually 1:1, meaning for every existing share, shareholders can buy one new share.

2. Calculate the Number of Rights You Hold:

[tex]\[ \text{Number of Rights} = \text{Number of Existing Shares You Own} \times \text{Subscription Ratio} \] \[ \text{Number of Rights} = 6,000 \times 1 \][/tex]

3. Determine the Ex-Rights Price:

[tex]\[ \text{Ex-Rights Price} = \frac{\text{Market Price - Subscription Price}}{1 + \text{Subscription Ratio}} \] \[ \text{Ex-Rights Price} = \frac{\$48 - \$23}{1 + 1} \][/tex]

4. Calculate the Value of One Right:

[tex]\[ \text{Value of One Right} = \text{Ex-Rights Price} - \text{Subscription Price} \] \[ \text{Value of One Right} = \frac{\$48 - \$23}{1 + 1} - \$23 \][/tex]

5. Calculate the Total Value of Your Rights:

[tex]\[ \text{Total Value of Rights} = \text{Number of Rights} \times \text{Value of One Right} \][/tex]

Now, you can substitute the values and calculate:

[tex]\[ \text{Ex-Rights Price} = \frac{\$48 - \$23}{1 + 1} = \frac{\$25}{2} = \$12.50 \]\[ \text{Value of One Right} = \frac{\$25}{2} - \$23 = \$6.25 \]\[ \text{Total Value of Rights} = 6,000 \times \$6.25 \]\[ \text{Total Value of Rights} = \$37,500 \][/tex]

Therefore, if you decide not to participate in the rights offering and choose to sell your rights, you can potentially receive $37,500.

How does a payroll accountant use the information in the General Ledger? (You may select more than one answer. The account balances form the basis for accounting reports. Payroll expenses contained in the General Ledger are not used to make personnel decisions. General Ledger account balances aggregate data to determine payroll costs. The payroll accountant uses General Ledger balances to determine the effectiveness of individual employees.

Answers

A payroll accountant uses the General Ledger to manage payroll expenses, prepare accounting reports, and ensure accurate financial statements. They do not assess individual employee effectiveness but focus on overall payroll cost aggregation and reconciliation.

A payroll accountant primarily utilizes information within the General Ledger to manage and analyze the company's payroll expenses. The account balances found in the General Ledger serve as the foundation for various accounting reports and are crucial for accurate financial statement preparation.

Contrary to assessing individual employee effectiveness, which is not the role of a payroll accountant, the General Ledger helps in aggregating data to determine overall payroll costs, ensuring that payroll is correctly accounted for as an expense of the organization in line with the accounting recognition principles.

In practice, the payroll accountant might also use the General Ledger to reconcile payroll expenses and ensure that they are accurately reported in those financial statements, which include the income statement and balance sheet.

They aim to verify that expenses align with budgeted amounts and to check for accuracy in employee compensation, taxes, benefits, and other associated costs. It's important to understand that the personnel decisions or assessing individual employee performance are generally not derived from payroll accounting but rather from human resources management metrics and performance evaluations.

Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $519,000 cost with an expected four-year life and a $23,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Expected annual sales of new product $ 1,870,000 Expected annual costs of new product Direct materials 495,000 Direct labor 678,000 Overhead (excluding straight-line depreciation on new machine) 337,000 Selling and administrative expenses 167,000 Income taxes 38 % Required: 1. Compute straight-line depreciation for each year of this new machine’s life. 2. Determine expected net income and net cash flow for each year of this machine’s life. 3. Compute this machine’s payback period, assuming that cash flows occur evenly throughout each year. 4. Compute this machine’s accounting rate of return, assuming that income is earned evenly throughout each year. 5. Compute the net present value for this machine using a discount rate of 6% and assuming that cash flows occur at each year-end. (Hint: Salvage value is a cash inflow at the end of the asset’s life.)

Answers

Answer:

Explanation:

Base on the scenario been describe in the question, we can use the following method to solve the given problem with the image attached below

Final answer:

The question involves several calculations pertaining to a business decision on purchasing a machine including calculating the straight-line depreciation, expected net income and cash flow, payback period, accounting rate of return, and net present value.

Explanation:

1. The straight-line depreciation for each year of the machine’s life is computed by subtracting the salvage value from the total cost and then dividing it by the machine’s expected life. In this case, it would be ($519,000 - $23,000) / 4 = $124,000 per year.

2. To calculate the expected net income, we subtract all costs associated with the product from the expected sales revenue, and then account for the income tax. That is, [(1,870,000 - 495,000 - 678,000 - 337,000 - 167,000 - $124,000)* (1-.38)]. The net cash flow on the other hand, is the net income plus depreciation.

3. The payback period is calculated by dividing the total cost of the machine by the annual net cash flow. With the given information, this cannot be computed.

4. The accounting rate of return is the average annual profit divided by Investment. To calculate this, the annual net income would be divided by the cost of the machine, [(Expected net income / $519,000)* 100]

5. To compute the net present value (NPV), the future net cash flows are discounted at the given rate and summed up. Then the initial cost of the machine is subtracted. The salvage value is also accounted for by discounting it back to the present value. This cannot be computed with the information given.

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Which one of the following is an argument in favor of a low dividend policy? Few, if any, positive net present value projects are available to the firm. A preponderance of stockholders have minimal taxable income. Corporate tax rates exceed personal tax rates. The tax on capital gains is deferred until the gain is realized. A majority of stockholders have other investment opportunities that offer higher rewards with similar risk characteristics.

Answers

Answer: The tax on capital gains is deferred until the gain is realized

Explanation:

The TAX DIFFERENTIAL VIEW of DIVIDEND POLICY is a notion that states that shareholders generally prefer capital gains fo dividend payouts because capital gains are taxed at a lower rate than dividend payouts.

Therefore they would like to pay less tax on dividends and instead wait until they make a capital gain as the taxes on that are less and are only charged after the gain is realized.

This translates to less dividends being paid by companies that follow this logic therefore the 4th option is correct.

For which capital component must you make a tax adjustment when calculating a firm’s weighted average cost of capital (WACC)? Equity Preferred stock Debt Water and Power Company (WPC) can borrow funds at an interest rate of 10.20% for a period of seven years. Its marginal federal-plus-state tax rate is 25%. WPC’s after-tax cost of debt is (rounded to two decimal places). At the present time, Water and Power Company (WPC) has 5-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,050.76 per bond, carry a coupon rate of 10%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 25%. If WPC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.) 6.53% 7.51% 5.22% 7.84%

Answers

Answer:

Debt

7.65%

6.53%

Explanation:

The debt finance has its capital component adjusted for tax when computing weighted average cost of capital.

The after tax cost of borrowing =pretax cost of debt*(1-t)

t  is the tax rate of 25% or 0.25

The after tax cost of borrowing =10.20%*(1-0.25)=7.65%

The pretax cost of bond=rate(nper,pmt,-pv,fv)

nper is the duration of bond which is 5 years

pmt is the annual interest=$1000*10%=$100

pv is the current price of $1,050.76

fv is the face value of $1000

=rate(5,100,-1050.76,1000)=8.70%

After tax cost of bond=8.70% *(1-0.25)=6.53%

Individuals derive utility from​ picnics, p, and kayak​ trips, k. Assuming that an​ individual's utility is ​U(p,k) = k Superscript 0.5k0.5p Superscript 0.5p0.5 and income is​ $100, what is the marginal rate of substitution​ (MRS) between picnics and kayak​ trips? A. MRS​ = minus−1. B. MRS​ = 1. C. MRS​ = minus−one half 1 2 D. There is no substitution because picnics and kayak trips are perfect complements.

Answers

Answer:

B) MRS = 1

Explanation:

In this question, we have been given the options as follows:

A) MRS = -1

B) MRS = 1

C) MRS = -1/2

D) There is no substitution because picnics and Kayak trips are perfect complements.

Where, MRS stands for = Marginal Rate of Substitution

First of all, we have to calculate the marginal utility with respect to kayak trips (k) and with respect to picnics (p).

Marginal Utility with respect to P = [tex]\frac{0.5k^{0.5} }{p^{0.5} }[/tex]

Now, calculate with respect to K

Marginal Utility with respect to K  =   [tex]\frac{0.5p^{0.5} }{k^{0.5} }[/tex]

Now, the formula for MRS is as follows:

Marginal Rate of Substitution = (Marginal Utility with respect to P ÷ Marginal Utility with respect to K)

MRS = [tex]\frac{0.5k^{0.5} }{p^{0.5} }[/tex] ÷ [tex]\frac{0.5p^{0.5} }{k^{0.5} }[/tex] = 1

Hence, the right answer is B) MRS = 1

Final answer:

The marginal rate of substitution (MRS) between picnics and kayak trips, given the utility function U(p,k) = k^0.5p^0.5, is -1, which means the consumer is willing to give up one picnic for one additional kayak trip without changing the level of utility.

Explanation:

The student's question revolves around the concept of the marginal rate of substitution (MRS), which is a pivotal idea in microeconomics and consumer behavior. The given utility function is U(p,k) = k0.5p0.5, and we want to find the MRS between picnics (p) and kayak trips (k). To compute the MRS, we need to find the negative of the slope of the indifference curve at a given point, which is derived by finding the ratio of the marginal utilities of both goods.

The marginal utility with respect to picnics is 0.5k0.5p-0.5 and with respect to kayak trips is 0.5k-0.5p0.5. Thus, the MRS, which is the absolute value of the ratio of marginal utilities, will be:

MRS =  -(0.5k0.5p-0.5) / (0.5k-0.5p0.5)

This simplifies to MRS = -1, which is option A. Therefore, the marginal rate of substitution between picnics and kayak trips is -1.

Omicron Technologies has $ 40 million in excess cash and no debt. The firm expects to generate additional free cash flows of $ 32 million per year in subsequent years and will pay out these future free cash flows as regular dividends. ​ Omicron's unlevered cost of capital is 11​% and there are 8 million shares outstanding. ​ Omicron's board is meeting to decide whether to pay out its $ 40 million in excess cash as a special dividend or to use it to repurchase shares of the​ firm's stock. Assume that Omicron uses the entire $ 40 million to repurchase shares. The number of shares that Omicron will have outstanding following the repurchase is closest​ to:

Answers

Answer:

$4.55 million

Explanation:

The calculation of number of shares repurchased is shown below:-

Market value = Enterprise value + Cash

= $32 million ÷ 0.11 + $40 million

= $330.909 million

Share price = Market value ÷ Outstanding shares

= $330.909 million ÷ $8 million

= $41.36 million

Number of shares repurchases = $40 million ÷ $41.36 million × 1,000,000

= 967,118 shares

Outstanding shares = 8 million - $967,118 shares

= $7,032,882

Dividend = Enterprise value ÷ Outstanding shares

= $32 million ÷ $7,032,882

= $4.55 million

uppose that a Swiss watchmaker imports watch components from Sweden and exports watches to the United States. Also suppose the dollar depreciates, and the Swedish krona appreciates, relative to the Swiss franc. Speculate as to how each would hurt the Swiss watchmaker. Explain why the U.S. demand for Mexican pesos is downsloping and the supply of pesos to Americans is upsloping.

Answers

Answer:

1)

In this case, the depreciation of the US dollar will make the Swiss watches more expensive for American customers, which will probably lower their demand.

The Swedish krona appreciation will increase the production costs of the watches, so the company will suffer twice, its sales will lower and its costs will increase.

2)

The US demand for Mexican pesos is downsloping because there is an inverse relationship between the price of the Mexican peso against the US dollar and the quantity of Mexican pesos demanded. As the exchange rate of the Mexican pesos depreciates against the US dollar, the demand for Mexican products in the US will increase because Mexican products are cheaper.

Final answer:

When the Swiss franc depreciates and the Swedish krona appreciates, it would hurt the Swiss watchmaker by increasing their production costs and making their watches more expensive for American consumers. The downsloping demand for Mexican pesos in the United States can be attributed to the law of demand, while the upsloping supply of pesos to Americans can be explained by the law of supply.

Explanation:

If the Swiss franc depreciates and the Swedish krona appreciates, it would hurt the Swiss watchmaker in several ways. Firstly, importing watch components from Sweden would become more expensive because the watchmaker would need to pay more Swiss francs for the same amount of Swedish krona. This would increase their production costs. Secondly, when the Swiss watchmaker exports watches to the United States, the watches would become more expensive for American consumers because the dollar depreciated against the Swiss franc. This could lead to a decrease in demand for Swiss watches in the US market.

The downsloping demand for Mexican pesos in the United States can be attributed to the law of demand. When the price of Mexican pesos increases, American consumers would demand fewer pesos as they become more expensive. On the other hand, the upsloping supply of pesos to Americans can be explained by the law of supply. When the price of Mexican pesos increases, Mexican sellers would be willing to supply more pesos to American consumers as they can now sell them for a higher price.

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