Answer:
$202,409
Explanation:
Firstly, we will need to calculate Break even in sales dollar for division Q using the formula;
= Division Q fixed cost / contribution margin ratio
Division Q fixed cost = $89,060
But,
Contribution margin ratio = Contribution margin / Sales
Contribution margin ratio = $161,920 / $368,000
Contribution margin ratio = 44%
Therefore, the Break even in sales dollar for Division Q
= $89,060 / 44%
= $202,409
The Break even in sales dollars for Division Q is closest to $202,409
The following expenditures relating to plant assets were made by Glenn Company during the first 2 months of 2014. (b) Indicate the account title to which each expenditure should be debited.
1. Paid $7,000 of accrued taxes at the time the plant site was acquired. choose an account title
2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit. choose an account title
3. Paid $850 sales taxes on a new delivery truck. choose an account title
4. Paid $21,000 for parking lots and driveways on the new plant site. choose an account title
5. Paid $250 to have the company name and slogan painted on the new delivery truck. choose an account title
6. Paid $8,000 for installation of new factory machinery. choose an account title
7. Paid $900 for a 1-year accident insurance policy on the new delivery truck. choose an account title
8. Paid $75 motor vehicle license fee on the new truck.
Answer with Explanation:
According to International Accounting Standard IAS 16 Property, Plant and Equipment, the cost of the asset acquired must include all the cost necessary to make it ready for its intended use.
This means that the expenditure that is the legal cost or must be very important for making it ready for use must form part of the asset.
The double entry of such transaction is as under:
Dr Non Current Asset XX
Cr Cash or Cash Equivalent Paid or Payables XX
From the above criteria, we can say that following accounts must be debited:
1. Paid $7,000 of accrued taxes at the time the plant site was acquired.
Dr Land-Plant Site $7,000
Cr Accrued Taxes $7,000
2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit.
Dr Factory Machine $200
Cr Cash $200
3. Paid $850 sales taxes on a new delivery truck.
Dr Delievery Truck $850
Cr Sales Tax - Not refundable $850
If the sales tax is refundable while we file tax returns then it must not be included in cost as it is paid for completing formalities of the vendor company.
4. Paid $21,000 for parking lots and driveways on the new plant site.
Dr Land-Plant Site $21,000
Cr Cash $21,000
5. Paid $250 to have the company name and slogan painted on the new delivery truck. choose an account title
Dr Delievery Truck $250
Cr Cash $250
6. Paid $8,000 for installation of new factory machinery.
Dr Factory Machinery $8,000
Cr Cash $8,000
7. Paid $900 for a 1-year accident insurance policy on the new delivery truck.
Dr Prepaid Insurance $900
Cr Cash $900
8. Paid $75 motor vehicle license fee on the new truck.
Dr Lisence Expense $75
Cr Cash $75
It is paid on behalf of an employee but it is 100% business oriented not employee oriented benefit. Hence is classified as a revenue expenditure.
Sundown LLC makes patio heating lamps. Their factory in Topeka has 800 in stock, the factory in Dallas has 700, while the warehouse in Memphis needs 500, and the warehouse in Austin needs 650. It costs $12 to ship each lamp from Topeka to Memphis, $20 for Topeka to Austin, $15 from Dallas to Memphis, and $22 from Dallas to Austin. What is the most economical way to minimize its shipping costs and meet the demands of the two warehouses
Answer:
500T1 + 300T2 + 350D2 = $19,700
500 units shipped from Topeka to Memphis300 units shipped from Topeka to Austin350 units shipped from Dallas to AustinExplanation:
minimize the following equation:
12T1 + 20T2 + 15D1 + 22D2
where:
T1 = lamp sent from Topeka to Memphis
T2 = lamp sent from Topeka to Austin
D1 = lamp sent from Dallas to Memphis
D2 = lamp sent from Dallas to Austin
T1 + D1 = 500
T2 + D2 = 650
T1 + T2 ≤ 800
D1 + D2 ≤ 700
using solver, the optimal solution is: 500T1 + 300T2 + 350D2 = $19,700
Equipment $ 7,000 Office supplies $ 2,100 Salaries expense 3,600 Rental revenue 1,100 Consulting revenue 15,000 Advertising expense 520 Cash 9,200 Prepaid insurance 1,600 Utilities expense 320 Accounts payable 3,220 Note payable 3,000 Note receivable 3,100 Accounts receivable 4,100 Rent expense 2,600 A. Lopez, Withdrawals 2,600 Unearned revenue 420 Required: 1. Prepare a March income statement for the business. 2. Prepare a March statement of owner’s equity. The owner’s capital account balance at February 28 was $0, and the owner invested $14,000 cash in the company on March 1. 3. Prepare a March 31 balance sheet. Hint: Use the owner’s capital account balance calculated in part 2.
Answer:
Required: 1. Income statement for the month end March 31 .
$ $
Rental revenue 1,100
Consulting revenue 15,000
Total Revenue 16,100
Less Expenses :
Salaries expense 3,600
Advertising expense 520
Utilities expense 320
Rent expense 2,600 (7,040)
Net Income/(loss) 9,060
Required: 2. Statement of owner’s equity for the month end March 31.
Beginning Balance $0
Capital $14,000
Add Profit earned during the month $ 9,060
Less A. Lopez, Withdrawals ($2,600)
Ending Balance $20,460
Required: 3. Balance Sheet as at March 31.
Non Current Assets
Equipment $ 7,000
Total Non Current Assets $ 7,000
Current Assets
Office supplies $ 2,100
Cash $ 9,200
Prepaid insurance $1,600
Note receivable $ 3,100
Accounts receivable $4,100
Total Current Assets $20,100
Total Assets $27,100
Equity and Liabilities
Equity
Equity $20,460
Total Equity $20,460
Liabilities
Accounts payable $ 3,220
Unearned revenue $ 420
Note payable $ 3,000
Total Liabilities $6,640
Total Equity and Liabilities $27,100
Explanation:
First prepare the Income statement to determine the profit earned during the year.
Then, include this profit in the statement of owners equity to determine the month end balance.
Lastly, prepare the balance sheet, remember to include the equity balance you have calculated.
Smith and Jones start a business to build custom bicycles. Smith invests personal funds of $100,000 and Jones invests $70,000. Grandma Smith loans the company $24,000 with the provision it is to be paid back in 12 equal monthly payments plus 1.5% monthly interest on her original contribution. Smith and Jones agreed that ownership would be proportional to their equity investments. In addition, they borrow $40,000 from the bank at interest of 1.5% per month payable monthly. (They do not have to pay back the principal for five years, so ignore it.) They buy $120,000 worth of parts. They use $80,000 of those parts in the first month. They pay factory workers a total of $15,000 for the first month. They pay rent of $4,000 for the month for a factory. They each (not Grandma) draw salaries of $4,000 per month. They sell the resulting bicycles for $150,000. a. Prepare a balance sheet for day zero, that is, store is ready, people hired, parts on hand, money collected from bank, Grandma, Smith, and Jones. b. Prepare an income statement for the first month. c. Prepare a balance sheet for the last day of the first month. d. What is the percent ownership by Smith, Jones, and Grandma on the first day of the month.
Answer:
See answers below.
Explanation:
Question a
The balance sheet for day 0 will have the following balances.
Asset side
Parts $120,000
Cash $114,000
Total assets $234,000
Liabilities and Equity side
Capital $170,000
Short term loan $24,000
Long term loan $40,000
Total liabilities $234,000
Question b
The income statement for the first month will have the following balances.
Revenue (credit) side
Sales $150,000
Expenses (debit) side
Parts used $80,000
wages to factory workers $15,000
rent $4,000
salary $8,000
Interest on grandma's loan $360
Interest on bank loan $600.
Profit for the month $42,040.
Question c
The balance sheet for the last day of the month will have the following balances.
Asset side
Parts $40,000
Cash $234,040
Total assets $274,040
Liabilities and Equity side
Capital $170,000
Profit (added to reserves) $42,040
Short term loan $22,000
Long term loan $40,000
Total liabilities $274,040
Question d
Grandma is not an equity owner since she will be repaid after 1 year.
Therefore, percentage ownership by Smith, Jones and Grandma will be as follows in the ratio of their equity contribution.
Total capital contributed = 100,000 + 70,000 = 170,000
Smith percentage ownership = [tex]\frac{100,000}{170,000}[/tex] = 58.8%
Jones percentage ownership = [tex]\frac{70,000}{170,000}[/tex] = 41.2%
Grandma's ownership = 0% (no equity contribution).
At the end of the current year, Newsmax Inc. has $400,000 of subscriptions received in advance included in its balance sheet. A disclosure note reveals that the entire $400,000 will be recognized in the income statement in the next year. In the absence of other temporary differences, in the balance sheet one would also expect to find a:
Question Completion with answer options:
a- Current deferred tax asset
b- Non-current deferred tax asset
c- Current deferred tax liability
d- Non-current deferred tax liability
Answer:
Newsmax Inc.
In the absence of other temporary differences, in the balance sheet one would also expect to find a:
a- Current deferred tax asset
Explanation:
When Newsmax Inc. received the subscriptions of $400,000 in advance, a deferred tax asset will arise on its balance sheet. This deferred tax asset results from the overpayment or advance payment of taxes on the $400,000 taxed because cash has been received, although, the associated costs have not been recorded. Deferred tax asset is the opposite of a deferred tax liability as the latter represents income taxes owed to the IRS, which will be settled in the coming period(s).
You are a business owner of a firm that services trucks. A customer would like to rent a truck from you for one week, while you service his truck. You must decide whether or not to rent him a truck. You have an extra truck that you will not use for any other purpose during this week. This truck is leased for a full year from another company for $300/ week plus $.50 for every mile driven. You also have paid an annual insurance premium, which costs $50/ week to insure the truck. The truck has a full 100-gallon fuel tank. The customer has offered you $600 to rent the truck for a week. The price includes the 100 gallons of fuel that is in the tank. It also includes the 100 gallons of fuel that is in the tank. It also includes up to 500 miles of driving. The customer will pay $.50 for each additional mile that he drives above the 500 miles. You anticipate that the customer will bring back the truck with an empty fuel tank and will have driven more than 500 miles. You sell fuel to truckers at a retail price $4.00/gallon. Any fuel you sell or use can be replaced at a wholesale price of $3.25/gallon. The customer will rent a truck from another company if you do not accept the proposed deal. In either case, you will service his truck. You know the customer and are confident that he will pay all charges incurred under the agreement.
1. Should you accept or reject the proposed deal? Why, or why not? Show calculations.
2. Would your answer change if your fuel supplier limited the amount of fuel that you could purchase from him at the wholesale price? Explain.
Explanation:Given data:
Yearly lease from the company = $300/weekly +$.50 for every driven mile.
Annual insurance = $50/weekly.
Customer offer = $600 for a week ( 100 gallons of fuel in the truck inclusive).
Customer pays and additional $.50 for mile driven above 500.
Solution:
Cost of fuel in the truck
= 100 * $3.25
= $325.
Insurance cost = $50.
Total cost = $375.
Customer offer – total cost
= $600 – $375.
= $225.
1.The proposal should be accepted because even after deductions of the cost of running the truck, you are still left with $225 which doesn’t include the cost the customer would incite for driving above 500 miles.
2.No, as that would only have a little effect on the cost of running the truck. So my answer would still be same.
On May 1, 2019, Mary Smith signed a promissory note with Continental Bank. The note is due in one year with % interest. What journal entry should Continental Bank prepare on May 1, 2019?
a. Debit Cash for $10,000 and credit Notes Payable for $10,000.
b. Debit Notes Receivable for $10,700 and credit Cash for $10,700.
c. Debit Notes Receivable for $10,000 and credit Cash for $10,000.
d. Debit Cash for $10,700 and credit Accounts Receivable for $10,700.
Answer: c. Debit Notes Receivable for $10,000 and credit Cash for $10,000
Explanation:
Here is the completed question:
On May 1, 2019, Mary Smith signed a $10,000 promissory note with Continental Bank. The note is due in one year with 7% interest. What journal entry should Continental Bank prepare on May 1, 2019?
The journal entry shows the transactions incurred by Mary Smith. It should be noted that a journal shows both the debit and credit side.
Based on the information in the question, the journal entry will be:
Debit Notes Receivable for $10,000 and credit Cash for $10,000
Therefore, option C is the correct answer.
Check the attachment for further detail.
Imagine that you are holding 5,800 shares of stock, currently selling at $65 per share. You are ready to sell the shares but would prefer to put off the sale until next year due to tax reasons. If you continue to hold the shares until January, however, you face the risk that the stock will drop in value before year-end. You decide to use a collar to limit downside risk without laying out a good deal of additional funds. January call options with a strike price of $70 are selling at $5, and January puts with a strike price of $60 are selling at $6. What will be the value of your portfolio in January (net of the proceeds from the options) if the stock price ends up at $51, $65, $71
Answer:
call strike price $70
call premium received $5
put strike price $60
put premium paid $6
you pay $5 - $6 = -$1
stock price
$51 $65 $71
stock value $51 $65 $71
put value $9 - -
call value - - -$1
premium paid -$1 -$1 -$1
net stock value $59 $64 $69
total # of stocks 5,800 5,800 5,800
portfolio's value $342,200 $371,200 $400,200
You have a friend who is always resolving to improve his grades, but who never seems to find time to study. Which of the following suggestions could help him overcome his time inconsistency and help him meet his goal.
Instructions:
In order to receive full credit, you must make a selection for each option. For correct answer(s), click the option once to place a check mark. For incorrect answer(s), click the option twice to empty the box. Set aside a sum of money that he will only be allowed to spend if he achieves the desired grade for the class. unchecked Make firm time commitments to meet with a study partner who depends on him showing up. unchecked Utilize a tutor who charges a fee only (or alternatively a higher fee) if he misses an appointment. unchecked Rewarding himself with some type of treat only after he has studied.
Answer:
Set aside a sum of money that he will only be allowed to spend if he achieves the desired grade for the class. ⇒ REWARD
Rewarding himself with some type of treat only after he has studied. ⇒ REWARD
Explanation:
Your friend could use conditional training to change his behavior. But which is more efficient, punishments or rewards? Generally, most people consider that rewards are more efficient than punishments. Doing something because you can gain something good from it is better than not doing something because you are afraid of the punishment or the bad consequences.
Making a firm commitment to study with someone else can also yield a reward (social reward), the problem is that the option states that his partner depends on your friend for him/her to study. It is never good to depend on someone else to do something that you should be able to do for yourself. This means that both, your friend and his study partner, have serious issues regarding their study habits. Unlike math, two negatives do not form a positive in real life. The option would have been valid if your friend just committed himself to study with someone else.
The specific The specific identification inventory costing method: Select one: A. Measures the ending inventory at the actual prices of the specific units sold during the period B. Is more appropriate for a firm selling construction equipment than for a firm selling greeting cards C. Is not a generally accepted method of pricing inventories D. Uses expected future acquisition costs rather than historical costs to measure the ending inventoryinventory costing method:
Answer:
A. Measures the ending inventory at the actual prices of the specific units sold during the period
Explanation:
The Specific identification inventory costing method is a strategy of getting the actual ending inventory cost. To get this cost requires the deliberate manual calculation of each of the remaining commodities brought on certain dates, at year-end inventory. The number gotten is then multiplied by their actual cost of purchase date. The result is then taken as the ending inventory cost.
Consequently, the purpose is to allocates the specific cost of each inventory item to cost of goods sold.
Hence, in this case, the correct answer is option A. Measures the ending inventory at the actual prices of the specific units sold during the period.
If Joel earns a 7 percent after-tax rate of return, $27,000 received in two years is worth how much today
Answer: $23571
Explanation:
For this question, we have to calculate the present value of $27,000 with the given rate and the time that have already been given in the question to know the worth tiday. This will then be:
= $27,000 x PVIF (7%, 2)
= $27,000 x 0.873
= $23,571
MC Qu. 22 Selected information from the accounting... Selected information from the accounting records of Dunn's Auto Dealers is as follows: Cost of furniture purchased for cash $ 8,000 Proceeds from bank loan 100,000 Repayment of bank loan (includes interest of $4,000) 44,000 Proceeds from sale of equipment 5,000 Cash collected from customers 320,000 Purchase of stock of another corporation as an investment 20,000 Common stock issued for cash 200,000 In its statement of cash flows, Dunn's should report net cash outflows from investing activities of:
Answer:
($23,000)
Explanation:
Cash flow from Investing Activities
Purchase of furniture ($ 8,000)
Proceeds from sale of Equipment $5,000
Investment in other companies ($20,000)
Net Cash used by Investing Activities ($23,000)
Notes :
Cash flow from Investing activities section of the cash flows statement shows the cash movement in acquisition of assets and sale of assets.
At the end of May, the unadjusted trial balance of Barker Industries included the following accounts:
Debit Credit
Sales (75% represent credit sales) $400,000
Accounts Receivable $240,000
Allowance For Doubtful Accounts 1,800
Barker Industries uses the percentage of sales approach in estimating uncollectible accounts. The uncollectible accounts expense is estimated to be 3% of credit sales The net realizable value of Barker's accounts receivable in the May 31 balance sheet is:_____.
a. $250,800.b. $229,200.c. $236,400.d. $226,200.
Answer:
b. $229,200
Explanation:
Computation for the net realizable value of Barker's accounts receivable in the May 31 balance sheet
First step is to find the credit sales
Credit sales=.75(400,000)
Credit sales=300,000
Second step is to find the 3% of 300,000
3% of 300,000=9,000
Third step is to add credit sales amount to Allowance For Doubtful Accounts
9,000 +1,800
=$10,800
Last step is to find the net realizable value
Net realizable value=Accounts Receivable $240,000-$10,800
Net realizable value=$229,200
Therefore the net realizable value of Barker's accounts receivable in the May 31 balance sheet is $229,200
Assume the appropriate discount rate for the following cash flows is 9.9 percent.
Year Cash Flow
1 $1,950
2 1,850
3 1,550
4 1,350
Required:
What is the present value of the cash flows?
Answer:
Total PV= $5,399.2
Explanation:
Giving the following information:
Year Cash Flow
1 $1,950
2 1,850
3 1,550
4 1,350
Discount rate= 9.9%
To calculate the present value, we need to use the following formula on each cash flow:
PV= Cf/(1+i)^n
PV1= 1,950/1.099= 1,774.34
PV2= 1,850/1.099^2= 1,531.71
PV3= 1,550/1.099^3= 1,167.72
PV4= 1,350/1.099^4= 925.43
Total PV= $5,399.2
What are the advantages and disadvantages of making small, frequent purchases from just a few suppliers?
Answer: The small frequent purchases means purchasing small budget goods and services in a short duration.
Explanation:
Advantages of small frequent purchases: It reduces the inventory levels.
Disadvantages of small frequent purchases: It increases the inbound transportation costs.
Using fewer supplier means to fill up the delivery transportation to its capacity of loading so that goods can be delivered at low transportation cost.
D0 is currently $3.00, Ke is 8 percent, and g is 5 percent. Under Plan A, D0 would be immediately increased to $3.40 and Ke and g will remain unchanged. Under Plan B, D0 will remain at $3.00 but g will go up to 6 percent and Ke will remain unchanged. a. Compute P0 (price of the stock today) under Plan A. Note D1 will be equal to D0 × (1 + g) or $3.40 (1.05). Ke will equal 8 percent, and g will equal 5 percent. (Round your intermediate calculations and final answer to 2 decimal places.)
Answer:
a.
P0 = 3.4 * (1+0.05) / (0.08 - 0.05)
P0 = $119
Explanation:
Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
Do is dividend today g is the growth rate r is the required rate of returna.
P0 = 3.4 * (1+0.05) / (0.08 - 0.05)
P0 = $119
If the discount rate is 10 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value at 18 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the present value at 24 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
there are no cash flows given, so I will use another question as an example:
NCF year 0 = -$1,150,000
NCF year 1 = $275,000
NCF year 2 = $275,000
NCF year 3 = $275,000
NCF year 4 = $275,000
NCF year 5 = $275,000
NCF year 6 = $275,000
NCF year 7 = $275,000
a) when cash flows are the same for all the years, you can use an ordinary annuity factor:
PV = $275,000 x 4.86842 (PV annuity factor, 10%, 7 periods) = $1,338,815.50
NPV = -$1,150,000 + $1,338,815.50 = $188,815.50
b) PV = $275,000 x 3.81153 (PV annuity factor, 18%, 7 periods) = $1,048,170.75
NPV = -$1,150,000 + $1,048,170.75 = -$101,829.25
c) PV = $275,000 x 3.24232 (PV annuity factor, 18%, 7 periods) = $891,638
NPV = -$1,150,000 + $891,638 = -$258,362
If the cash flows are different, then you must discount each cash flow individually.
E.g. NCF year 0 = -$150,000
NCF year 1 = $75,000
NCF year 2 = $85,000
NCF year 3 = $95,000
NPV = -$150,000 + $75,000/1.1 + $85,000/1.1² + $95,000/1.1³ = $59,804.66
Iverson Company purchased a delivery truck for $45,000 on January 1, 2018. The truck was assigned an estimated useful life of 5 years and has a residual value of $10,000. Compute depreciation expense using the double-declining-balance method for the years 2018 and 2019.
Answer:
Results are below.
Explanation:
Giving the following information:
Purchase price= $45,000
Useful life= 5 years
Salvage value= $10,000
To calculate the annual depreciation under the double-declining balance method, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
2018:
Annual depreciation= 2[(45,000 - 10,000) / 5]
Annual depreciation= 14,000
2019:
Annual depreciation= 2*[(35,000 - 14,000)/5]
Annual depreciation= $8,400
The depreciation expense using the double-declining-balance method in 2018 is $18,000 and in 2019 is $10,800.
The double-declining balance method is an accelerated depreciation method when compared with other deprecation methods.
Depreciation expense = (2 x cost of the asset) / useful life of the asset
Deprecation expense in 2018
(2 x $45,000) / 5 = $18,000
Deprecation expense in 2019
Book value in 2019 = cost of the asset - deprecation expense
$45,000 - $18,000 = $27,000
Deprecation expense = (2 x $27,000) / 5 = $10,800
A similar question was answered here: https://brainly.com/question/16502007?referrer=searchResults
Joint Cost Allocation—Net Realizable Value Method Nature's Garden Inc. produces wood chips, wood pulp, and mulch. These products are produced through harvesting trees and sending the logs through a wood chipper machine. One batch of logs produces 20,304 cubic yards of wood chips, 14,100 cubic yards of mulch, and 9,024 cubic yards of wood pulp. The joint production process costs a total of $32,000 per batch. After the split-off point, wood chips are immediately sold for $25 per cubic yard while wood pulp and mulch are processed further. The market value of the wood pulp and mulch at the split-off point is estimated to be $22 and $24 per cubic yard, respectively. The additional production process of the wood pulp costs $5 per cubic yard, after which it is sold for $30 per cubic yard. The additional production process of the mulch costs $4 per cubic yard, after which it is sold for $32 per cubic yard.
Allocate the joint costs of production to each product using the net realizable value method.
Joint Product Allocation
Wood chips $
Wood pulp
Mulch
Totals $
Support department cost allocation—comparison
Becker Tabletops has two support departments ( Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows:
Support Department Cost Driver
Janitorial Department Square footage to be serviced
Cafeteria Department Number of employees
Janitorial
Department Cafeteria
Department Cutting
Department Assembly
Department
Department costs $310,000 $169,000 $1,504,000 $680,000
Square feet 50 5,000 1,000 4,000
Number of employees 10 3 30 10
Allocated the support department costs to the production departments using the direct method below.
Cutting
Department Assembly
Department
Janitorial Department cost allocation $62,000 $248,000
Cafeteria Department cost allocation $126,750 $42,250
Allocated the support department costs to the production departments using the reciprocal services method below.
Cutting
Department Assembly
Department
Janitorial Department cost allocation $38,200 $152,800
Cafeteria Department cost allocation $216,000 $72,000
Allocated the support department costs to the production departments and Cafeteria Department using the sequential method below.
Cafeteria
Department Cutting
Department Assembly
Department
Janitorial Department cost allocation $155,000 $31,000 $124,000
Cafeteria Department cost allocation $243,000 $81,000
Compare the total support department costs allocated to each production department under each cost allocation method.
a. Which production department is allocated the most support department costs under the direct method?
Cost
$
b. Which production department is allocated the most support department costs under the sequential method?
Cost
$
c. Which production department is allocated the most support department costs under the reciprocal services method?
Cost
$
Support Department Cost Allocation—Direct Method
Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 18 and 72 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows:
Maintenance Department $8,000
Janitorial Department 5,000
Cutting Department 56,000
Pruning Department 12,000
Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production departments.
Cutting
Department Pruning
Department
Production departmentsʼ total costs $ $
Answer:
1. Nature's Garden Inc.
Joint Cost Allocation—Net Realizable Value Method:
Joint Product Allocation
Wood chips $11,268 ($25/$71 * $32,000)
Wood pulp 9,915 ($22/$71 * $32,000)
Mulch 10,817 ($24/$71 * $32,000)
Totals $32,000
2. Becker Tabletops
Allocation of Janitorial and Cafeteria Costs:
a. Assembly
b. Cutting
c. Cutting
Direct Method:
Department Cutting Assembly
Janitorial $62,000 $248,000
Cafeteria $126,750 $42,250
Total costs $188,750 $290,250
Reciprocal Method:
Department Cutting Assembly
Janitorial $38,200 $152,800
Cafeteria $216,000 $72,000
Total costs $254,200 $224,800
Sequential Method:
Department Cutting Assembly Cafeteria
Janitorial $155,000 $31,000 $124,000
Cafeteria $243,000 $81,000
Total costs $398,000 $112,000 $124,000
3. Christmas Timber, Inc.
Allocation of support departmental costs to production to departments:
Maintenance Janitorial Cutting Pruning
Department costs $8,000 $5,000 $56,000 $12,000
Maintenance (8,000) 7,200 800
Janitorial (5,000) 1,000 4,000
Total costs $64,200 $16,800
Maintenance allocation ratio = 9:1
Janitorial allocation ratio = 1:4
Explanation:
Becker Tabletops
Allocation of Janitorial and Cafeteria Costs:
Direct Method:
Department Cutting Assembly
Janitorial $62,000 $248,000
Cafeteria $126,750 $42,250
Total costs $188,750 $290,250
Reciprocal Method:
Department Cutting Assembly
Janitorial $38,200 $152,800
Cafeteria $216,000 $72,000
Total costs $254,200 $224,800
Sequential Method:
Department Cutting Assembly Cafeteria
Janitorial $155,000 $31,000 $124,000
Cafeteria $243,000 $81,000
Total costs $398,000 $112,000 $124,000
Cornerstone Exercise 5-35 (Algorithmic) Notes Receivable Link Communications programs voicemail systems for businesses. For a recent project, they charged $135,000. The customer secured this amount by signing a note bearing 11% interest on February 1, 2019. Required: 1. Prepare the journal entry to record the sale on February 1, 2019. fill in the blank 8dca2303e075fa6_2 fill in the blank 8dca2303e075fa6_4 Record sale 2. Determine how much interest Link will receive if the note is repaid on December 1, 2019. Round your answer to the nearest whole dollar. $fill in the blank 0365ff0a4046fbb_1 3. Prepare Link's journal entry to record the cash received to pay off the note and interest on December 1, 2019. If an amount box does not require an entry, leave it blank. fill in the blank a9105402601503d_2 fill in the blank a9105402601503d_3 fill in the blank a9105402601503d_5 fill in the blank a9105402601503d_6 fill in the blank a9105402601503d_8 fill in the blank a9105402601503d_9 Record collection of note
Answer:
1) February 1, 2019, service revenue
Dr Notes receivable 135,000
Cr Service revenue 135,000
2) if the note is collected on December 1, 2019, the amount of interest revenue = $135,000 x 11% x 10/12 months = $12,375
3) December 1, 2019, note receivable and interest collected
Dr Cash 147,375
Cr Notes receivable 135,000
Cr Interest revenue 12,375
At the end of the year, the deferred tax asset account had a balance of $4 million attributable to a temporary difference of $16 million in a liability for estimated expenses. Taxable income is $44 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the journal entry(s) to record income taxes, assuming it is more likely than not that three-fourths of the deferred tax asset will not ultimately be realized.
Answer:
1 . Dr ncome tax expense 7
Dr Deferred tax asset 4
Cr Income tax payable 11
2. Dr Income tax expense3
Cr Valuation allowance-Deferred tax asset3
Explanation:
Preparation of Journal entries
JournalDebitCredit
(In million)
1 . Dr ncome tax expense 7
($11-$4=7)
Dr Deferred tax asset 4
($16× 25% = $4)
Cr Income tax payable 11
($44 × 25% = $11 )
2. Dr Income tax expense3
Cr Valuation allowance-Deferred tax asset3
(3/4 × $4) = $3 million
Deferred tax asset= ($16× 25%)
Deferred tax asset= $4 million
Income tax payable= ($44 × 25%)
Income tax payable= $11 million
Joni Hyde Inc. has the following amounts reported in its general ledger at the end of the current year.
Organization costs $24,000
Trademarks 15,000
Discount on bonds payable 35,000
Deposits with advertising agency
for ads to promote goodwill of company 10,000
Excess of cost over fair value of net
identifiable assets of acquired subsidiary 75,000
Cost of equipment acquired for research
and development projects; the equipment
has an alternative future use 90,000
Costs of developing a secret formula for a
product that is expected to be marketed for
at least 20 years 80,000
On the basis of this information, compute the total amount to be reported by Hyde for intangible assets on its balance sheet at year-end. Equipment has alternative future use.
Answer:
90,000
Explanation:
An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets.
Trademarks = 15,000
Excess of cost over the fair value of net
identifiable assets (Goodwill) = 75,000
Total intangible assets = 90,000
Compute Topp Company’s price-earnings ratio if its common stock has a market value of $29.04 per share and its EPS is $4.80. Considering Lower deck, its key competitor, has a PE ratio of 9.5, which company does the market have higher expectations of future performance?
Answer:
Since the Lower deck's price-earnings ratio of 9.5 is higher than Topp Company’s price-earnings ratio of 6.05, the market therefore have higher expectations of future performance of Lower deck.
Explanation:
Price-earnings ratio refers to the ratio of the market price per share (MPS) to the earning per share (EPS) of a company.
Topp Company’s price-earnings ratio can therefore, be computed using the following formula:
Topp Company’s price-earnings ratio = MPS / EPS ........... (1)
Where;
MPS = Common stock market value = $29.04
EPS = $4.80
Substituting into equation (1), we have:
Topp Company’s price-earnings ratio = $29.04 / $4.80 = 6.05
It should be noted that companies that have a high Price Earnings Ratio are usually referred as growth stocks. The implication of this is that there is a positive future performance which makes investors to have higher expectations for future earnings growth. As a result, the investors are ready to pay more for the stock of the firms.
Since the Lower deck's price-earnings ratio of 9.5 is higher than Topp Company’s price-earnings ratio of 6.05, the market therefore have higher expectations of future performance of Lower deck.
Topp Company’s price-earnings ratio is 6.05.
The company that has a higher expectations of future performance is Lower deck.
PE ratio is known as the price per earnings ratio. It the ratio of the price of the shares of a company to its earnings per share. The higher the PE ratio, the higher the prospects of higher future performance.
Topp Company’s price-earnings ratio = $29.04 / $4.80 = 6.05
Lower deck has a higher PE ratio compared with Topp Company’s price-earnings ratio, so it has a higher expectations of future performance.
A similar question was answered here: https://brainly.com/question/14528659
Prepare journal entries to record the following merchandising transactions of Lowe’s, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Aron.) Aug. 1 Purchased merchandise from Aron Company for $8,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. 5 Sold merchandise to Baird Corp. for $5,600 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $4,000. 8 Purchased merchandise from Waters Corporation for $7,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. 9 Paid $210 cash for shipping charges related to the August 5 sale to Baird Corp. 10 Baird returned merchandise from the August 5 sale that had cost Lowe’s $500 and was sold for $1,000. The merchandise was restored to inventory. 12 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe’s received a credit memorandum from Waters granting a price reduction of $700 off the $7,000 of goods purchased. 14 At Aron’s request, Lowe’s paid $500 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron. 15 Received balance due from Baird Corp. for the August 5 sale less the return on August 10. 18 Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. 19 Sold merchandise to Tux Co. for $4,800 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $2,400. 22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe’s sent Tux a $800 credit memorandum toward the $4,800 invoice to resolve the issue. 29 Received Tux’s cash payment for the amount due from the August 19 sale less the price allowance from August 22. 30 Paid Aron Company the amount due from the August 1 purchase.
Answer:
Aug 1 Dr Inventory $8,000
Cr Accounts Payable - Aaron $8,000
Aug 5 Dr Accounts Receivable - Baird Corp $5,600
Cr Sales $5,600
Aug 5 Dr Cost of Good Sold $4,000
Cr Inventory $4,000
Aug 8 Dr Inventory $7,000
Cr Accounts Payable - Walter Corporation $7,000
Aug 9 Dr Freight - Out $210
Cr Cash $210
Aug 10 Dr Sales Return and Allowance $1,000
Cr Accounts Receivable - Baird Corp $1,000
Aug 10 Dr Inventory $500
Cr Cost of Good Sold $500
Aug 12 Dr Accounts Payable - Walter Corporation $700
Cr Inventory $700
Aug 14 Dr Accounts Payable - Aaron $500
Cr Cash $500
Aug 15 Dr Cash $4,508
[(100%-2%)×$4,600]
Dr Discount on Sales $92
[($5,600-$1,000) x2%]
Cr Accounts Receivable - Baird Corp $4,600
($5,600-$1,000)
Aug 18 Dr Accounts Payable - Walter Corporation $6,300
($7,000-$700)
Cr Discount on Purchase $63
[($7,000-$700) x1%]
Cr Cash $6,237
[(100%-1%)×$6,300]
Aug 19 Dr Accounts Receivable - Tux Co $4,800
Cr Sales $4,800
Aug 19 Dr Cost of Good Sold $2,400
Cr Inventory $2,400
Aug 22 Dr Sales Return and Allowance $800
Cr Accounts Receivable - Tux Co $800
Aug 29 Dr Cash $4,000
Cr Accounts Receivable - Tux Co $4,000
($4,800-$800)
Aug 30 Dr Accounts Payable - Aaron $7,500
Cr Cash $7,500
($8,000-$500)
Explanation:
Preparation of Journal entries
Aug 1 Dr Inventory $8,000
Cr Accounts Payable - Aaron $8,000
(To record purchase of inventory)
Aug 5 Dr Accounts Receivable - Baird Corp $5,600
Cr Sales $5,600
(To record sale of merchandise)
Aug 5 Dr Cost of Good Sold $4,000
Cr Inventory $4,000
(To record cost of good sold)
Aug 8 Dr Inventory $7,000
Cr Accounts Payable - Walter Corporation $7,000
(To record purchase of inventory)
Aug 9 Dr Freight - Out $210
Cr Cash $210
(To record freight outward expense)
Aug 10 Dr Sales Return and Allowance $1,000
Cr Accounts Receivable - Baird Corp $1,000
(To record sales return)
Aug 10 Dr Inventory $500
Cr Cost of Good Sold $500
(To record restore the inventory )
Aug 12 Dr Accounts Payable - Walter Corporation $700
Cr Inventory $700
(To record price reduction)
Aug 14 Dr Accounts Payable - Aaron $500
Cr Cash $500
(To record payment of freight charges on behalf of Aaron)
Aug 15 Dr Cash $4,508
[(100%-2%)×$4,600]
Dr Discount on Sales $92
[($5,600-$1,000) x2%]
Cr Accounts Receivable - Baird Corp $4,600
($5,600-$1,000)
(To record amount received from Baird Corp)
Aug 18 Dr Accounts Payable - Walter Corporation $6,300
($7,000-$700)
Cr Discount on Purchase $63
[($7,000-$700) x1%]
Cr Cash $6,237
[(100%-1%)×$6,300]
(To record payment made to Walter Corporation)
Aug 19 Dr Accounts Receivable - Tux Co $4,800
Cr Sales $4,800
(To record sale of merchandise)
Aug 19 Dr Cost of Good Sold $2,400
Cr Inventory $2,400
(To record cost of good sold)
Aug 22 Dr Sales Return and Allowance $800
Cr Accounts Receivable - Tux Co $800
(To record price reduction for sales made to Tux Co)
Aug 29 Dr Cash $4,000
Cr Accounts Receivable - Tux Co $4,000
($4,800-$800)
(To record payment received from Tux Co)
Aug 30 Dr Accounts Payable - Aaron $7,500
Cr Cash $7,500
($8,000-$500)
(To record payment made to Aaron)
Define each of the following terms:
(a) Contraction
(b) Business cycle
(c) Trough
(d) Disposable income
(e) Net domestic product
Answer: See explanation
Explanation:
Contraction: Contraction, is a phase of the business cycle that simply occurs gene there's decline in the economy. At this phase, the demand for goods and services reduces and there's decline in growth.
Business cycle: The business cycle shows the movement of the GDP which can either be upward or downward. It shows how the economy's doing.
Trough: The trough is a phase in the business cycle whereby the gross domestic product for a particular economy has stopped reducing and the economy has started to rise.
Disposable income: This is the income that is left with an individual after personal income tax has been removed from the personal income of such individual.
Net domestic product: Net domestic product is when depreciation is subtracted from the gross domestic product.
Your boss wants to purchase a graphics design application to be distributed to approximately 40 users in the company. Although the vendor says the application has broad OS support, your boss wants to be sure it will work on the five different OSs running on the company’s user workstations. He wants you to verify compatibility by using evaluation copies of the software without disrupting users or their computers. You have the installation disks for all five OSs your company uses, but you don’t have a lot of computers available to install the OSs. a. What’s your plan?
Explanation:
My plan is to use this same machine for testing more than one operating system available in more than one disk. Virtual machines can be run with more than one operating systems. Now this is the idea, firstly install the first operating system in a machine. After testing well enough, then reboot. Then install second operating system in same machine and also test. Follow this process for testing all the operating systems with the aid of installation disks without causing any Interference to the users in the company.
Suppose you purchase a ten-year bond with annual coupons.You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per face value? b. What is the internal rate of return of your investment?
Answer:
Explanation:
The Full question is "Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond’s yield to maturity was 5% when you purchased and sold the bond, what cash flows will you pay and receive from your investment in the bond per $100 face value?"
Face Value = $100
YTM = 5%
Annual Coupon = 6% * $100 = $6
Purchase Price = $6*PVIFA(5%, 10) + $100*PVIF(5%, 10)
Purchase Price = $6*(1-(1/1.05)^10)/0.05 + 100/1.05^10
Purchase Price = $107.72
Selling Price = $6*PVIFA(5%, 6) + $100*PVIF(5%, 6)
Selling Price = $6*(1-(1/1.05)^6)/0.05 + 100/1.05^6
Selling Price = $105.08
Cash Outflow at Year 0 = $107.72
Cash Inflow at Year 1 = $6
Cash Inflow at Year 2 = $6
Cash Inflow at Year 3 = $6
Cash Inflow at Year 4 = $6 + $105.08 = $111.08
B. The internal rate of return of your investment = 5.001% (Find attach the calculation)
A stock just paid a dividend of $4.01 and is expected to maintain a constant dividend growth rate of 4.7 percent indefinitely. If the current stock price is $66, what is the required return on the stock?
Answer:
11.06%
Explanation:
According to the given situation, the computation of the required return on the stock is shown below:-
Required rate of return = Current Dividend × (1 + growth) ÷ Current Price + Growth
= $4.01 × (1 + 4.7%) ÷ 66 + 4.7%
= 11.06%
Therefore for computing the required rate of return we simply applied the above formula.
Joseph just received an inheritance of $35,775 from his great aunt. He plans to invest the funds for retirement. If Joseph can earn 4.75% per year with quarterly compounding for 32 years, how much will he have accumulated?
a. $237,416.b. $71,550.c. $184,622.d. $162,113.
Answer:
FV= $162,113.25
Explanation:
Giving the following information:
Initial investment= $35,775
Interest rate= 0.0475/4= 0.011875
Number of periods= 32*4= 128
To calculate the future value, we need to use the following formula:
FV= PV*(1+i)^n
FV= 35,775*(1.011875^128)
FV= $162,113.25
A company declared and paid a cash dividend. The dividend would appear on the company's statement of cash flows as: Select one: a. an addition to net income in order to arrive at net cash provided by operating activities under the indirect method. b. a deduction from net income in order to arrive at net cash provided by operating activities under the indirect method. c. a deduction under investing activities. d. a deduction under financing activities.
Answer:
d. a deduction under financing activities.
Explanation:
As if the company declared and paid the cash dividend so the same is to be considered in the financing activities of the cash flow statement.
This amount should be shown in the negative amount as it decreases the cash that means it is an outflow of cash
Hence, the correct option is d. and the same is to be considered