Answer:
An effective internal control Auditors must evaluate internal controlsExplanation:
The Sarbanes Oxley Act (SOX) was passed in the aftermath of several accounting scandals that shook the business world including the Enron and Worldcom sagas. The Government then decided to implement tougher accounting requirements to ensure that such does not happen again.
One way that SOX does this is to require that companies maintain a robust and effective internal control system which are Auditor evaluated that will catch errors and false information more effectively.
At the beginning of the year, Monroe Company estimates annual overhead costs to be $500,000 and that 250,000 machine hours will be operated. Using machine hours as a base, the amount of overhead applied during the year if actual machine hours for the year was 150,000 hours is A.$500,000. B.$300,000. C.$600,000. D.$150,000.
Answer:
Allocated MOH= $300,000
Explanation:
Giving the following information:
Estimated annual overhead costs= $500,000
Estimated machine-hour= 250,000
Actual machine-hour= 150,000
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 500,000/250,000
Predetermined manufacturing overhead rate= $2 per machine hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 2*150,000= $300,000
Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transaction. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
1. Stockholders invest $40,000 in cash in starting a real estate office operating as a corporation.
2. Purchased $500 of supplies on credit.
3. Purchased equipment for $25,000, paying $3,500 in cash and signed a 30-day, $21,500, note payable.
4. Real estate commissions billed to clients amount to $4,000.
5. Paid $700 in cash for the current month's rent.
6. Paid $250 cash on account for office supplies purchased in transaction 2.
7. Received a bill for $800 for advertising for the current month.
8. Paid $2,500 cash for office salaries.
9. Paid $1,200 cash dividends to stockholders.
10.Received a check for $2,000 from a client in payment on account for commissions billed in transaction 4.
Answer and Explanation:
The journal entries are shown below:
1. Cash $40,000
To Common stock $40,000
(Being invested amount is recorded)
2. Supplies Dr $500
To Account payable $500
(Being supplies purchased on account is recorded)
3. Equipment $25,000
To Cash $3,500
To Note payable $21,500
(Being equipment purchased is recorded)
4. Account receivable Dr $4,000
To Commission revenue $4,000
(being the commission revenue is recorded_
5. Rent expenses $700
To Cash $700
(Being rent paid in cash is recorded)
6. Accounts payable $250
To cash $250
(being cash paid is recorded)
7. Advertising expense Dr $800
To Account payable $800
(Being advertising expense is recorded)
8. Salaries expense $2,500
To cash $2,500
(being cash paid is recorded)
9. Dividend Dr $1,200
To cash $1,200
(being cash paid is recorded)
10. Bank Dr $2,000
To Account receivable $2,000
(being receiving of check is recorded)
Suppose government spending is cut. Other things being equal, the aggregate demand for national production will
rise.
remain constant.
fall.
All of the above
Answer:
Fall.
Explanation:
Since government spending is one of the components of aggregate demand, an increase in government spending will shift the demand curve to the right. A reduction in taxes will leave more disposable income and cause consumption and savings to increase, also shifting the aggregate demand curve to the right.
Carmel Corporation is considering the purchase of a machine costing $38,000 with a 4-year useful life and no salvage value. Carmel uses straight-line depreciation and assumes that the annual cash inflow from the machine will be received uniformly throughout each year. In calculating the accounting rate of return, what is Carmel's average investment?
Answer:
$19,000
Explanation
Calculation for Carmel's average investment
Using this formula
Average investment=Investment/2
Let plug in the formula
Average investment=($38,000 + $0)/2
Average investment=$19,000
Therefore Carmel's average investment will be $19,000
Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in department 2. The activities, overhead costs, and drivers associated with these two manufacturing processes and the company’s production support activities follow.
Process Activity Overhead cost Driver Quantity
Department 1 Mixing $4,500 Machine hours 1,500
Cooking 11,250 Machine hours 1,500
Product testing 112,500 Batches 600
$128,250
Department 2 Machine calibration $250,000 Production runs 400
Labeling 12,000 Cases of output 120,000
Defects 6,000 Cases of output 120,000
$268,000
Support Recipe formulation $90,000 Focus groups 45
Heat, lights, and water 27,000 Machine hours 1,500
Materials handling 65,000 Container types 8
$182,000
Additional production information about its two product lines follows.
Extra Fine Family Style
Units produced 20,000 cases 100,000 cases
Batches 200 batches 400 batches
Machine hours 500 MH 1,000 MH
Focus groups 30 groups 15 groups
Container types 5 containers 3 containers
Production runs 200 runs 200 runs
Required:
Using ABC, compute the total cost per case for each product type if the direct labor and direct materials cost is $6 per case of Extra Fine and $5 per case of Family Style.
Answer:
Extra Fine= $26
Family Style= $12.98
Explanation:
First, we need to calculate the activities rate for each department and support:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Department 1:
Mixing= 4,500/1,500= $3 per machine hour
Cooking= 11,250/1,500= $7.5 per machine hour
Product testing= 112,500/600= $187.5 per batch
Department 2:
Machine calibration= 250,000/400= $625 per production run
Labeling= 12,000/120,000= $0.1 per cases of output
Defects= 6,000/120,000= $0.05 per cases of output
Support:
Recipe formulation= 90,000/45= $2,000 per focus group
Heat, lights, and water= 27,000/1,500= $18 per machine hour
Materials handling= 65,000/8= $8,125 per container types
Now, we can allocate overhead to each product:
Extra Fine:
Department 1:
Mixing= 3*500= $1,500
Cooking= 7.5*500= $3,750
Product testing= 187.5*200= $37,500
Department 2:
Machine calibration= 625*200= 125,000
Labeling= 0.1*20,000= 2,000
Defects= 0.05*20,000= 1,000
Support:
Recipe formulation= 2,000*30= 60,000
Heat, lights, and water= 18*500= 9,000
Materials handling= 8,125*5= 40,625
Total allocated overhead= $280,375
Unitary cost= 280,375/20,000= $14
Family Style:
Department 1:
Mixing= 3*1,000= $3,000
Cooking= 7.5*1,000= $7,500
Product testing= 187.5*400= $75,000
Department 2:
Machine calibration= 625*200= 125,000
Labeling= 0.1*100,000= 10,000
Defects= 0.05*20,000= 5,000
Support:
Recipe formulation= 2,000*15= 30,000
Heat, lights, and water= 18*1,000= 18,000
Materials handling= 8,125*3= 24,375
Total allocated overhead= $297,875
Unitary cost= 297,875/100,000= $2.98
Finally, the total unitary cost:
Extra Fine= 6 + 6 + 14= $26
Family Style= 5 + 5 + 2.98= $12.98
Bank Reconciliation and Entries The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $12,270. The bank statement indicated a balance of $15,440 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items: Checks outstanding totaled $5,560. A deposit of $5,790, representing receipts of July 31, had been made too late to appear on the bank statement. The bank had collected $3,010 on a note left for collection. The face of the note was $2,860. A check for $800 returned with the statement had been incorrectly recorded by Stone Systems as $880. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. A check drawn for $400 had been incorrectly charged by the bank as $40. Bank service charges for July amounted to $50.
Required:
Prepare a bank reconciliation.
Answer: Please see below for the reconciliation of bank and book balance for Stone systems as $15,310
Explanation:
Bank Reconciliation Statement for July 31 , 20Y5 for Stone Systems
Particulars Amount
Balance on bank statement $15,440
Additions:
Outstanding Deposits $5,790
Deductions:
Outstanding checks $5,560
Bank Error (400-40) $360
Adjusted bank balance $15,310
Balance in books $12,270.
Additions:
Note Collection plus interest $3,010
Incorrect recording of check
($880-$800) $80
Deductions
Bank Service charges $50
Adjusted book balance $15,310
Skidmore Music Company had the following transactions in March:
a. Sold instruments to customers for $16, 700, received $10, 700 in cash and the rest on account. The cost of the instruments was $7, 100.
b. Purchased $4, 900 of new instruments inventory; paid $1, 700 in cash and owed the rest on account.
c. Paid $720 in wages for the month.
d. Received $3, 100 from customers as deposits on orders of new instruments to be sold to the customers in April.
e. Received a $280 bill for March utilities that will be paid in April.
Required:
Complete the following statements:
1. Cash basis Income Statement
2. Accrual basis Income Statement
Answer:
Please sew below
Explanation:
Skidmore Music Company.
1. Cash basis income statement
Sales
$13,800
Less: cost of goods sold
$1,700
Gross income
$12,100
Wages expense
$720
Operating income
$11,380
2. Accrual basis income statement
Sales.
$16,700
Less: cost of goods sold
$4,900
Gross income
$11,800
Wages expense
($720)
Utility expense
($280)
Operating income
$10,800
Identify which control activity is violated in each of the following situations, and explain how the situation creates an opportunity for fraud or inappropriate accounting practices.
1. Once a month, the sales department sends sales invoices to the accounting department to be recorded.
2. Leah Hutcherson orders merchandise for Rice Lake Company; she also receives merchandise and authorizes payment for merchandise.
3. Several clerks at Great Foods use the same cash register drawer
Answer:
1. Once a month, the sales department sends sales invoices to the accounting department to be recorded.
⇒ documentation procedures
Unless all of the company's sales take place only once a month, sales should be recorded as soon as possible. Accounting records must be as precise and accurate as possible, and they must be processed on time. Stacking invoices makes no sense, since sales might be on cash or the collection period might be very short. Who holds the money until the sales records are made?
2. Leah Hutcherson orders merchandise for Rice Lake Company; she also receives merchandise and authorizes payment for merchandise.
⇒ segregation of duties
One single person cannot be responsible for the whole process, since this creates a huge opportunity for fraud. Imagine if the person in charge of the inventory is also in charge of making new purchases, paying for them and reporting ending inventory. No company would be able survive one year, while the person in charge would get rich.
3. Several clerks at Great Foods use the same cash register drawer
⇒ establishment of responsibility
If everyone is allowed to collect money, no one can be responsible for any loss.
Cash flows from operations may not be sufficient for a firm to keep up with growth-related financing needs, or the firm may not be able to always generate enough cash flow to maintain a surplus of cash. Firms prefer to borrow now to fulfill their capital requirements through means of short-term financing or long-term financing. Both methods have their advantages and disadvantages.
The following statement identifies a possible characteristic of short-term financing.
Consider this case:
Short-term loans usually have a lower cost than long-term loans. Identify whether the preceding statement is true or false.
a. This statement is false and a disadvantage of short-term financing.
b. This statement is true and an advantage of short-term financing.
Firms use a variety of short-term financing sources to support working capital. Use the descriptions in the following table to identify the short-term financing source.
Description Short-Term Financing Source
A formal, committed line of credit extended by a bank or other lending institution.
An obligation backed by collateral, often inventories or accounts receivable.
Answer:
1. Consider this case:
Short-term loans usually have a lower cost than long-term loans. Identify whether the preceding statement is true or false.
a. This statement is false and a disadvantage of short-term financing.
2. Identify the short-term financing source:
An obligation backed by collateral, often inventories or accounts receivable.
Explanation:
Some organizations regularly require short-term financing to ease uneven cash flows. It is also called working capital financing. Its duration is less than 12 months, unlike long-term financing that can last more than two years. Most of this financing is arranged with banks in the form of bank overdraft.
Every 6 months, Leo Perez takes an inventory of the consumer debts he has outstanding. His latest tally shows that he still owes $4,250 on a home improvement loan (monthly payments of $100); he is making $50 monthly payments on a personal loan with a remaining balance of $825; he has a $1,500, secured single- payment loan that's due late next year; he has a $70,000 home mortgage on which he's making $850 monthly payments; he still owes $12,500 on a new car loan (monthly payments of $550); and he has a $1,200 balance on his Mastercard (minimum payment of $50), a $50 balance on his Shell credit card (balance due in 30 days), and a $500 balance on a personal line of credit ($90 monthly payments).
a. Use Worksheet to prepare an inventory of Leo's consumer debt.
Type of Consumer Debt Creditor Currently Monthly Latest Balance Due
Payment
Auto loans
Personal installment loans
Home improvement loan
Single-payment loans
Credit cards Mastercard
(retail charge cards, bank
cards, T&E Shell cards, etc.)
Personal line of credit $ $
Totals $
b. Find his debt safety ratio, given that his take-home pay is $2,000 per month. Round the answer to 1 decimal place. %
c. Would you consider this ratio to be good or bad?
Answer:
The answer is "87%".
Explanation:
Please find the attached file.
Chance company had two operating divisions, one manufacturing farm equipment and other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on Sept. 1, 2016, the company adopted a plan to sell the assets of the division.
The actual sale was completed on Dec. 15, 2016, at the price of $600,000. The book value of the division's assets was $1,000,000, resulting in a before-tax loss of $400,000 on the sale. The division incurred a before-tax operating loss from operations of $130,000 from the beginning of the year through Dec. 15. The income tax rate is 40%. Chances after-tax income from its continuing operations is $350,000.
Required:
Prepare an income statement for 2016 beginning with income from continuing operations. Include appropriate EPS disclosures assuming that 100,000 shares of common stock were outstanding throughout the year.
Answer:
Chance Company
Income Statement
For the Year Ended December 31, 2016
After tax income from continuing operations $350,000
Discontinued operations:
Operating income ($130,000 )
Loss on disposal ($400,000)
Income tax on discontinued operations $212,000
Income from discontinued operations ($318,000 )
Net income $32,000
Earnings per share (100,000 outstanding shares) $0.32
Lipscomb Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for 1,000 USD. The firm could sell, at par, 100 USD preferred stock which pays a 12 percent annual dividend, but flotation costs of 5 percent would be incurred. Libscomb is a constant-growth firm which just paid a dividend of $2.00, sells for 27.00 USD per share, and has a growth rate of 8 percent. The firm's marginal tax rate is 40.
Required:
a. What is Rollins' cost of common stock using the bond-yield-plus-risk-premium approach?
b. What is Rollins' WACC?
Answer:
a. 16%
b. 13.566%
Explanation:
The weighted average cost of capital is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital.
DATA
P is price = 27
G is growth = 8%
Tax rate = 40%
Requirement a.
When the market rate of bond is equal to par value then yield is equal to the coupon rate
Tax rate = 12(1-0.4) = 7.2%
Cost of preferred stock = dividend/price
There will be a 5% floatation cost so net proceeds is 95
Cost of preferred stock = 12/95 = 12.63%
Cost of equity = D1/P + g
Where D1 is dividend for year 1 = 2+8% = 2.16
Cost of equity = 2.16/27 + 0.08
Cost of equity = 16%
Requirement b
Wacc = 7.2×20% + 12.63×20% + 16×60%
Wacc = 13.566%
DS Unlimited has the following transactions during August.
August 6 Purchases 52 handheld game devices on account from GameGirl, Inc.,
for $110 each, terms 2/10, n/60.
August 7 Pays $310 to Sure Shipping for freight charges associated with the
August 6 purchase.
August 10 Returns to GameGirl seven game devices that were defective.
August 14 Pays the full amount due to GameGirl.
August 23 Sells 32 game devices purchased on August 6 for $130 each to
customers on account. The total cost of the 32 game devices sold is
$3,670.00.
Required:
Record the transactions of DS Unlimited, assuming the company uses a perpetual inventory system.
Answer:
Date Account Title Debit Credit
Aug-06 Inventory $5,720
(52 * $110)
Accounts Payable $5,720
Aug-07 Inventory $310
Cash $310
Aug-10 Accounts Payable $770
(7 * $110 )
Inventory $770
Aug-14 Accounts Payable $4,950
Inventory $99
Cash $4,851
Aug-23 Accounts Receivable $4,160
( 32*$130)
Sales revenue $4,160
Aug-23 Cost of goods sold $3,670
Inventory $ 3,670
ogan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 40,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $466,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Logan's actual manufacturing overhead for the year was $713,400 and its actual total direct labor was 41,000 hours.
Required:
Compute the company's pre-determined overhead rate for the year.
Answer:
Predetermined manufacturing overhead rate= $14.65 per direct labor hour
Explanation:
Giving the following information:
Estimated direct labor hour= 40,000
Estimated fixed overhead= $466,000
Variable manufacturing overhead of $3.00 per direct labor-hour.
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (466,000/40,000) + 3
Predetermined manufacturing overhead rate= $14.65 per direct labor hour
Question # 5
Multiple Select
Aside from distributing investments and savings, the primary tasks of the financial service system
are (Select all that apply.)
U providing avenues to borrow money
growing the country's economy
aiding in the creation of capital formation
U managing and mitigating the risks
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Answer:
Growing the country's economy Aiding in the creation of capital formation Managing and mitigating the risksExplanation:
The Financial system is very important because it helps grow the economy of the country. They do this by creating capital when they transfer funds from those who have it (savers) to those who need it (borrowers). These borrowers will then use it to invest in projects that will grow the economy.
The Financial system also works to manage and mitigate risk because they have experience in such areas and are able to discern which projects to go after to avoid or properly manage risk.
Larkspur Incorporated factored $124,300 of accounts receivable with Cullumber Factors Inc. on a without-recourse basis. Cullumber assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable for possible adjustments.
Required:
Prepare the journal entry for Larkspur Incorporated and Cullumber Factors to record the factoring of the accounts receivable to Cullumber.
DR Cash 115,599
Due from Factor (Cullumber) 6,215
Loss on Sale of Receivables 2,486
CR Accounts Receivable 124,300
Working
Due from Factor = 5% * 124,300
= $6,215
Loss on sale of receivables = 2% * 124,300
= $2,486
Cash = 124,300 - 6,215 - 2,486
= $115,599
Cullumber Factors Inc.DR Accounts Receivable 124,300
CR Due to Larkspur 6,215
Financing Revenue 2,486
Cash 115,599
Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows.
Work in Process, May 1 (54,000 units, 100% complete for direct materials, 35% complete with respect to conversion costs; includes $78,500 of direct material cost; $42,050 of conversion costs).
Units started in May 233,000
Units completed in May 208,000
Work in Process, May 31 (79,000 units, 100% complete for direct materials; 15% complete for conversion costs).
Costs incurred in May
Direct materials $391,440
Conversion costs $401,900
Required:
If Pitt Enterprises uses the FIFO method of process costing, compute the cost per equivalent unit for direct materials and conversion costs respectively for May.
Answer:
cost per equivalent unit : materials = $1.37 and conversion costs = $1.78.
Explanation:
Please note that we have to use FIFO costing method
Calculation of the Equivalent Units of Production with respect to Materials and Conversion Costs
1. Raw Materials
To finish Beginning Work In Process (54,000 × 0%) 0
Started and Completed ((233,000 - 54,000) × 100%) 179,000
Ending Work In Process (79,000 × 100%) 79,000
Equivalent Units of Production with respect to Materials 258,000
1. Conversion Cost
To finish Beginning Work In Process (54,000 × 65%) 35,100
Started and Completed ((233,000 - 54,000) × 100%) 179,000
Ending Work In Process (79,000 × 15%) 11,850
Equivalent Units of Production with respect to Conversion 225,950
Calculation of the cost per equivalent unit for direct materials and conversion costs.
Unit Cost = Current Period Costs ÷ Equivalent units of production
1. Raw Materials
Unit Cost = $391,440 ÷ 258,000
= $1.37
2. Conversion Cost
Unit Cost = $401,900 ÷ 225,950
= $1.78
Example 1: Alex began putting money in his 401(k) in his early 20s; consequently, he will have financial security when he retires.
Example 2: Louise is the most qualified candidate for the position; therefore, we should hire her.
Identify the correctly written compound sentences. Check all that apply.
a. All e-mail, even once deleted, is retrievable and, therefore, you should avoid sending sensitive information in an e-mail.
b. E-mail facilitates collaboration between people in remote locations; however, when collaboration requires the exchange of large data files, it is often easier to use web-based collaboration software.
c. Many people prefer e-mail over phone conversations, they leave a written record.
d. E-mail can be an efficient way to communicate, and it makes communicating across time zones much easier.
Answer:
b. E-mail facilitates collaboration between people in remote locations; however, when collaboration requires the exchange of large data files, it is often easier to use web-based collaboration software.
d. E-mail can be an efficient way to communicate, and it makes communicating across time zones much easier.
Explanation
Sentence B is correct because it employs the use of a semicolon to separate two independent clauses. The use of the conjunction, however, helps to separate two sentences that have opposite connotations.
Sentence D is correct because the conjunction, and, was used appropriately to add a second thought to the sentence. The comma was also used correctly as it spliced the sentence and was immediately followed by the conjunction, and.
Money is to an economy what language is to communication. What does this statement mean?
Answer:
i think it means that you need money to have an economy and you also need a language to be able to talk to someone
Explanation:
Hussein got a call yesterday from First Bank, the company that issued his credit card inquiring about an $105.00 charge made in Buenos Aires, Argentina. Upon learning that Hussein was in Detroit and had not made this purchase, the bank quickly took steps to cancel the card and issue a new one. Given the circumstances that Hussein's credit card number had an illegal transaction, he may also want to:____________.
A) check his computer's firewall to make sure it's working.
B) cancel his account and eliminate credit cards from his life.
C) change his passwords and store them in a password manager.
D) diversify his spending habits by using one of several credit cards when making purchases.
Answer:
C) change his passwords and store them in a password manager.
Explanation:
Hussein, being a victim of cyber theft of money from his bank account, after having informed bank about the fraudulent transaction, should :-
Take further precautionary measures for modifying & safely saving other related crucial information, like passwords. So, he should change his passwords and store them in a password manager.
Below are cash transactions for a company, which provides consulting services related to mining of precious metals.
a. Cash used for purchase of office supplies, $1,600.
b. Cash provided from consulting to customers, $42,600.
c. Cash used for purchase of mining equipment, $67,000.
d. Cash provided from long-term borrowing, $54,000.
e. Cash used for payment of employee salaries, $23,400.
f. Cash used for payment of office rent, $11,400.
g. Cash provided from sale of equipment purchased in c. above, $21,900.
h. Cash used to repay a portion of the long-term borrowing in d. above, $37,000.
i. Cash used to pay office utilities, $3,700.
j. Purchase of company vehicle, paying $9,400 cash.
Required:
Calculate cash flows from operating activities.
Answer:
Cash Flow Statement
Cash Flow from Operating Activities
Cash received from customers $42,600
Cash payment to salaries -$23,400
Cash used for purchase of office supplies -$1,600
Office rent paid -$11,400
Payment for office utilities -$3,700
Net Cash Inflow from Operating activities $2,500
Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $139,107.
Related Information:
Lease term 2 years (8 quarterly periods)
Quarterly rental payments $18,000 at the beginning of each period
Economic life of asset 2 years
Fair value of asset $139,107
Implicit interest rate 4% (Also lessee’s incremental borrowing rate)
Required:
Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2019. Edison’s fiscal year ends December 31.
Answer:
Amortization table
Opening liability Installments Interest Principal payment Closing liability
139,108 18000 1211 16788.92498 122,319
122,319 18000 1043 16956.81423 105,362
105,362 18000 873 17126.38238 88,235
88,235 18000 702 17297.6462 70,938
70,938 18000 529 17470.62266 53,467
53,467 18000 354 17645.32889 35,822
35,822 18000 178 17821.78218 18,000
18,000 18000 0 0 0
The Dean of Admissions at Pace University is considering a survey of high school seniors in order to design better promotional materials for Pace. Discuss the issues to be considered, the different methods of conducting this survey, and the advantages and disadvantages of each.
Answer:
different methods can be used here to conduct this survey
1.questionnaire method
2. focus groups
3. interview
Explanation:
Answer 1)
We have several ways of conducting a research. t, the research issue is basically to know how can the university can do better promotion of their their school, theyaretring to put their school on the spotlight on how they can get more students to be interested in the university and what can be done to raise awareness le about the school.
different methods of doing this survey:
1) Questionnaire Method:
in this survey method through the use of Google forms or other survey sites, the students can get a link where they can fill in their preferences or make suggestions by writing. it is quite a popular and simple way of doing a survey.
Advantages
· It has a good rate of Representativeness.
· it is relatively cheap
· data can be gotten in a convenient way
· it gives good Statistical Significance
· its design is inflexible
Disadvantages
· Respondents do not always give exact and fair answers.
· it is difficult to convey emotions through this
· There may be a problem in understanding and interpreting some of the qusetsions
. developing rapport can be quite an issue
2) Focus Group:
Focus group discussions is another method where some of the students and the dean who acts as a moderator, organizes a meeting and everyone is given the opportunity to share useful inputs.
Advantages
· Its easy to see and know the emotions of the respondents based on the issues at hand
. uncovered ideas would be discussed
. gives an opportunity to know the view point of everyone present·
Disadvantages
· people may not want to convey their true thoughts or belief about the discussion on ground.
· people may be reluctant to chip in their perspective especially if it is against tahtof another member
· students would be made to give responses to things they have not seen or experienced
3) Interviews:
the use of Interview is the most reliable way of going about this survey. the dean would be able to generate original data. few students can be interviewed and their inputs can be taken regarding the issue.
Advantages
· adaptability on the side of interviewers
. better response rate
. flexibility on the side of interviewer
disadvantage
time consuming
provides less anonymity
costly
it could be biased
connecting u dropped its price from $20 to $16 per gigabyte of data. Joe according to the midpoint formula, Connecting U reduced its price by what percentage?
Answer:
-$22.2
Explanation:
The computation of price by percentage is shown below:-
Price by percentage = (End price - Beginning price) ÷ (End price - Beginning price) ÷ 2 × 100
= ($16 - $20) ÷ ($16 - $20) ÷ 2 × 100
= -$4 ÷ $18 × 100
= -$400 ÷ $18
= -$22.2
So, we have applied the above formula.
And, the same is to be considered
Connecting u dropped price in percentage is 22.2%
Midpoint formula:Given that;
Old price = $20
New price = $16
Find:
Connecting u dropped price in percentage
Computation:
[tex]Dropped\ price\ in\ percentage=[\frac{16-20}{\frac{16+20}{2} }]100\\\\Dropped\ price\ in\ percentage=[\frac{16-20}{18}]100\\\\Dropped\ price\ in\ percentage=[\frac{-4}{18}]100\\\\Dropped\ price\ in\ percentage=22.2[/tex]
Connecting u dropped price in percentage = 22.2%
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Transactions for Buyer and SellerShore Co. sold merchandise to Blue Star Co. on account, $112,000, terms FOB shipping point, 2/10, n/30. The cost of the merchandise sold is $67,200. Shore Co. paid freight of $1,800.Journalize Shore Co.'s entry for the sale, purchase, and payment of amount due.Accounts Receivable-Blue Star Co. Sales Cost of Merchandise Sold Merchandise Inventory Common Stock Cash Cash Accounts Receivable-Blue Star Co. Journalize Blue Star Co.'s entry for the sale, purchase, and payment of amount due.Merchandise Inventory Accounts Payable-Shore Co. Accounts Payable-Shore Co. Cash
Answer:
The definition is defined in the clarification portion beneath, as per the particular circumstance.
Explanation:
Correct you're. FOB shipping comments mean that perhaps the shipping can be paid for by consumers. But perhaps the freight is paid by the seller in the question. It would reimburse the freight treated as income from the buyer. The credit including its buyer would be debited with either the deferred revenue sum of freight.Account Titles and Explanation Debit Credit
Receivable accounts -Blue Star Co. $1,800 -
Cash - $1,800
(To record freight paid)
Below is the Retained Earnings account for the year 2020 for Swifty Corp. Retained earnings, January 1, 2020 $261,300 Add:_______.
Gain on sale of investments (net of tax) $44,900
Net income 88,200
Refund on litigation with government, related to the year 2017 (net of tax) 25,300
Recognition of income earned in 2019, but omitted from income statement in that year (net of tax) 29,100 187,500 448,800
Deduct:
Loss on discontinued operations (net of tax) 38,700
Write-off of goodwill (net of tax) 63,700
Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2020 (net of tax) 26,900
Cash dividends declared 35,700 165,000
Retained earnings, December 31, 2020 $283,800
Prepare a corrected retained earnings statement. Waterway Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2020 to compute net income. (List items that increase adjusted retained earnings first.)
Answer: See attachment
Explanation:
The retained earnings as at December 31, 2020 was gotten as $283,800. In the attachment, net income was calculated as:
Net income = $88,200
Add: Gain on investment sale = $44,900
Add: Refund on litigation = $25,300
Less: loss on discounted Operation = $38,700
Less: Goodwill write-off = $63,700
Net income = $56,000
Check the attachment for further explanation
Which of the following is a key role that a human resource manager can play in a company?
A. Public Relations officer
B. Marking Analyst
C. Training specialist
D. Sales supervisor
Answer:
c training specialist
Sheridan Company pays all salaried employees on a biweekly basis. Overtime pay, however, is paid in the next biweekly period. Sheridan accrues salaries expense only at its December 31 year end. Data relating to salaries earned in December 2020 are as follows: Last payroll was paid on 12/26/20, for the 2-week period ended 12/26/20. Overtime pay earned in the 2-week period ended 12/26/20 was $24000. Remaining work days in 2020 were December 29, 30, 31, on which days there was no overtime. The recurring biweekly salaries total $444000.
Assuming a five-day workweek, Sheridan should record a liability at December 31, 2020 for accrued salaries of:_________.
a. $266400
b. $290400
c. $133200
d. $157200
Answer:Sheridan should record a liability at December 31, 2020 for accrued salaries of =d. $157200
Explanation:
Since there are 5 workdays in a week
we consider First, Workdays Biweekly (Two weeks)
= 5 work days per week X 2 = 10 days
then the Remaining work days in 2020 for December 29,30 and 31 = 3 days
Accrued salaries = Recurring biweekly salaries/10 days X 3 days + Overtime pay earned in the 2-week period ended 12/26/20
$444,000/10 days x 3 days + $24000
$133,200 +$24000
= $157,200
A University is offering a charitable gift program. A former student who is now 50 years old is consider the following offer: The student can invest $8,900.00 today and then will be paid a 9.00% APR return starting on his 65th birthday (i.e For a $10,000 investment, a 9% rate would mean $900 per year). The program will pay the cash flow for this investment while you are still alive. You anticipate living 21.00 more years after your 65th birthday. The former student wants a return of 6.00% on his investments, but would like to consider this opportunity.
Required:
Using the student's desired return, what is the value of this deferred annuity today on his 50th birthday?
Answer:
The value of this deferred annuity today on his 50th birthday is $2,621.27.
Explanation:
Since the student's desired return of 6% will also start to be paid starting on his 65th birthday, the value of this deferred annuity today on his 50th birthday can be calculated by first calculating the value of the investment on the 65th birthday.
We therefore proceed with the following two steps:
Step 1: Calculation of the value of the investment on the 65th birthday
The value of the investment on the 65th birthday can be calculated using the formula for calculating the present value of an ordinary annuity as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PV at 65 = Present value of the annuity at 65th birthday =?
P = Annuity payment = Invested amount * Student's desired return = $8,900 * 6% = $534
r = Student's desired return rate = 6%, or 0.06
n = number of more years anticipate to live after 65th birthday = 21
Substitute the values into equation (1) to have:
PV at 65 = $534 * ((1 - (1 / (1 + 0.06))^21) / 0.06)
PV at 65 = $534 * 11.764076621288
PV at 65 = $6,282.02
Therefore, the value of the investment on the 65th birthday is $6,282.02.
Step 2: Calculation of the value of this deferred annuity today on his 50th birthday
The value of this deferred annuity today on his 50th birthday can therefore be calculated using the simple present value for as follows:
PV at 50 = PV at 65 / (1 + r)^N …………………………….. (2)
Where;
PV at 50 = the value of this deferred annuity today on his 50th birthday = ?
PV at 65 = Present value of the annuity at 65th birthday = $6,282.02
r = Student's desired return rate = 6%, or 0.06
N = number of years from 50th birthday to 65th birthday = 65 - 50 = 15
Substitute the values into equation (2) to have:
PV at 50 = $6,282.02 / (1 + 0.06)^15
PV at 50 = $6,282.02 / 2.39655819309969
PV at 50 = $2,621.27
Therefore, the value of this deferred annuity today on his 50th birthday is $2,621.27.
The following information is available for Mergenthaler Corporation for the year ended December 31, 2022:
Collection of principal on long-term loan to a supplier $16,000
Acquisition of equipment for cash 10,000
Proceeds from the sale of long-term investment at book value 22,000
Issuance of common stock for cash 20,000
Depreciation expense 25,000
Redemption of bonds payable at carrying (book) value 34,000
Payment of cash dividends 6,000
Net income 30,000
Purchase of land by issuing bonds payable 40,000
In addition, the following information is available from the comparative balance sheet for Mergenthaler at the end of 2022 and 2021:
2021 2022
Cash $148,000 $91,000
Accounts receivable (net) 25,000 15,000
Prepaid insurance 19,000 13,000
Total current assets $192,000 $119,000
Accounts payable $30,000 $19,000
Salaries and wages payable 6,000 7,000
Total current liabilities $36,000 $26,000
Required:
Prepare Mergenthaler's statement of cash flows for the year ended December 31, 2014, using the indirect method.
Answer:
Cash Flow from Operating Activities Amount$
Net Income 30000
Add Depreciation Expense 25000
Increase in Accounts Payable 11000
Increase in Accounts Receivables -10000
Increase in Prepaid Insurance -6000
Decrease in Salaries and Wages Payable -1000
Net Cash Flow from Operating Activities A 49000
Cash Flow from Investing Activities
Acquisition of Equipment for Cash -10000
Proceeds from Sale of Long-Term Investment 22000
Net Cash Flow from Investing Activities B 12000
Cash Flow from Financing Activities
Redemption of Bonds Payable -34000
Proceeds from Issuance of Common Stock 20000
Payment of Cash Dividends -6000
Collection of Principal on Long-Term Loan 16000
Net Cash Used in Financing Activities C -4000
Opening Cash Balance 91000
Add Increase in Cash (A+B+C) 57000
Closing Cash Balance 148000