Answer:
This answer is found in . I've seen it. The whole thing
what is the effect on market when suppliers under invest in their businesses
Answer:
Low supplyScarcityLow economic growthExplanation:
When suppliers under invest in their business, they will end up having the capacity to only produce less than the market requires. Should this happen, supply will be reduced in the market which would lead to relative scarcity all else being equal.
For economic growth to happen, there must be increasing production in an economy so if suppliers are under investing and production is low, there might be low or no economic growth.
A statement of cash flows reflects a net cash flow from operating activities of -$89 million, a net cash flow from investing activities of $42 million, and a net cash flow from financing activities of $28 million. What can you determine from this information
Answer:
The net cash movement is -$19 million, this means that the firm is facing liquidity challenges.
Explanation:
Movement of Cash during the year :
Net cash flow from operating activities -$89 million
Net cash flow from investing activities $42 million
Net cash flow from financing activities $28 million
Movement during the year -$19 million
Conclusion,
The net cash movement is -$19 million, this means that the firm is facing liquidity challenges.
On July 15, Piper Co. sold $16,000 of merchandise (costing $8,000) for cash. The sales tax rate is 4%. On August 1, Piper sent the sales tax collected from the sale to the government. Record entries for the July 15 and August 1 transactions. On November 3, the Milwaukee Bucks sold a six game pack of advance tickets for $480 cash. On November 20, the Bucks played the first game of the six game pack (this represented one-sixth of the advance ticket sales). Record the entries for the November 3 and November 20 transactions.
Required:
Record the entry for cash sales and its sales taxes.
Answer:
Date Account titles Debit Credit
Jul-15 Cash $16,640
Sales revenue $16,000
Sales tax payable $640
($16,000*4%)
Jul-15 Cost of goods sold $8,000
Inventory $8,000
Aug-01 Sales tax payable $640
Cash $640
Nov-03 Cash $480
Unearned ticket revenue $480
Nov-20 Unearned ticket revenue $80
($480*1/6)
Ticket revenue $80
Standards for competitive rivalry differ in countries throughout the world. What should firms do to cope with these differences? How do the differences relate to ethical practices?
Explanation:
As a consequence of the market factors prevalent in the market, there really are various levels of competitiveness. The quality of the company's strategy, for example, will be determined by the quality standards imposed by government bodies.
These differences are linked to ethical behaviours in the sense that they will impact the quality of commodities produced by firms. When the quality of the products is degraded, it raises ethical concerns about the product.
A firm presents a market value balance sheet and a book value balance sheet to prospective investors. What is wrong with using the book value version of the balance sheet in making a decision to invest in the company?A : The book value is based on comparative values.B : The book value is too low compared to market values.C : The book value is based on historical values.D : The book value represents sample values used in the sheet.
Answer:
c
Explanation:
Twenty graduate students in business were asked how many credit hours they were taking in the current quarter. Their responses are shown as follows:
Student Number Credit Hours Student Number Credit Hours Student Number Credit Hours
1 2 8 8 15 10
2 7 9 12 16 6
3 9 10 11 17 9
4 9 11 6 18 6
5 8 12 5 19 9
6 11 13 9 20 10
7 6 14 13
Required:
a. Determine the mean, median, and mode for this sample of data. Write a sentence explaining what each means.
b. It has been suggested that graduate students in business take fewer credits per quarter than the typical graduate student at this university. The mean for all graduate students is 9.1 credit hours per quarter, and the data are normally distributed. Set up the appropriate null and alternative hypotheses, and determine whether the null hypothesis can be rejected at a 95 percent confidence level.
Answer:
Since the calculated value of t= -1.016 does not fall in the critical region t ≥ 1.729 we conclude that the mean for all graduate students is 8.5 and fail to reject the null hypothesis.
Explanation:
Student Credit Student Credit Student Credit
Number Hours Number Hours Number Hours
1 2 8 8 15 10
2 7 9 12 16 6
3 9 10 11 17 9
4 9 11 6 18 6
5 8 12 5 19 9
6 11 13 9 20 10
7 6 14 13
The mean is the value which gives the average value of all the data.It is obtained by adding the value and dividing it by the number of values.
x`= ∑x/n
x`=2 +8 +10+ 7+ 12 + 6+ 9 +11+ 9 +9 +6 + 6 +8 + 5+ 9 +11+ 9+ 10+ 6 + 13/20
x`= 8.3
Median is the middle value which divides the data into two equal halves.
2 5,6,6,6,6, 7,8 ,8, 9,9, 9,9 ,9 ,10, 10,11,11, 12 , 13
For even number
Median = n/2=10 th.
Here the 10th value is 9 when the data is arranged in ascending order.
Mode=9
Mode gives the repeated value .
Let the hypotheses be
H0 : u = 8.5 vs Ha: u ≥ 8.5
The mean for all graduate students is 8.5
against the claim that
The mean for all graduate students is greater than 8.5
The sample mean x`= 8.5 and standard deviation s= 2.64
Putting in the test statistic
t= x`- u / s/ √n
t= 8.5-9.1/2.64/√20
t= -0.6/2.64/4.472
t= -1.016
The critical region for alpha = 0.05 for one tailed test with n-1= 2-0-1= 19 degrees of freedom is t ≥ 1.729
Since the calculated value of t= -1.016 does not fall in the critical region t ≥ 1.729 we conclude that the mean for all graduate students is 8.5 and fail to reject the null hypothesis.
Sixty monthly deposits are made into an account paying 6% nominal interest compounded monthly. If the objective of these deposits is to accumulate $100,000 by the end of the fifth year, what is the amount of each deposit?
Answer:
The amount is "$1433.28"
Explanation:
The amount of each deposit is calculated as shown below:
[tex]\begin{aligned}&A=100000\left(A / F, \frac{6 \%}{12}, 5 * 12\right)=100000(A / F, 0.5 \%, 60)=100000(A / F, 0.005,60) \\&(A / F, i, N)=\frac{i}{\left((1+i)^{N}-1\right)} \quad(A / F, 0.005,60)=\frac{0.005}{\left((1+0.005)^{60}-1\right)}=0.0143328 \\&(A / F, 0.005,60)=\frac{0.005}{\left((1+0.005)^{60}-1\right)}=0.0143328 \\&A=100000(A / F, 0.005,60)=100000(0.0143328) \\&A=\$ 1433.28\end{aligned}[/tex]
If the shadow price for a resource is 0 (the allowable increase is 1000) and 150 units of the resource are added what happens to the optimal solution
Answer:
The answer is "No change"
Explanation:
The optimal solution is a feasible alternative where the optimal solution reaches its highest (or lowest) values, including most profit and the price is lower. There is no other viable solution with an objective function that is universally ideal. Whenever the resource regression coefficient is 0, the best solution would not be changed.
Transaction Analysis and Financial Statements, Including Dividends
(Alternates are 2-47, 2-48, 2-50, and 2-52.) Consider the following balance sheet of a wholesaler
of children’s toys:
Gecko Toy Company
Balance Sheet, December 31, 20X0
Assets Liabilities and Stockholders’ Equity
Liabilities
Cash $ 400,000 Accounts payable $ 800,000
Accounts receivable 400,000 Stockholders’ equity
Merchandise inventory 860,000 Paid-in capital $360,000
Prepaid rent 45,000 Retained earnings 645,000
Equipment 100,000 Total stockholders’ equity 1,005,000
Total $1,805,000 Total $1,805,000
The following is a summary of transactions that occurred during 20X1:
a. Acquisitions of inventory on open account, $1 million.
b. Sales on open account, $1.5 million; and for cash, $200,000. Therefore, total sales were
$1.7 million.
c. Merchandise carried in inventory at a cost of $1.3 million was sold as described in b.
d. The warehouse 12-month lease expired on October 1, 20X1. However, the company immediately
renewed the lease at a rate of $84,000 for the next 12-month period. The entire rent was
paid in cash in advance.
e. Depreciation expense for 20X1 for the warehouse equipment was $20,000.
f. Collections on accounts receivable, $1.25 million.
g. Wages for 20X1 were paid in full in cash, $200,000.
h. Miscellaneous expenses for 20X1 were paid in full in cash, $70,000.
i. Payments on accounts payable, $900,000.
j. Cash dividends for 20X1 were declared and paid in full in December, $100,000.
Required
1. Prepare an analysis of transactions, employing the balance sheet equation approach demonstrated
in Exhibit 2-3 (p. 49 ) . Show the amounts in thousands of dollars.
2. Prepare an ending balance sheet, a statement of income, and the retained earnings column of
the statement of stockholders’ equity for 20X1.
3. Reconsider transaction j. Suppose the dividends were declared on December 15, 20X1,
payable on January 31, 20X2, to shareholders of record on January 20. Indicate which
accounts and financial statements in requirement 2 would be changed and by how much. Be
complete and specific.
Answer:
Gecko Toy Company
1. Analysis of Transactions, using the balance sheet equation approach:
a. Inventory $1 million Accounts Payable $1 million
b. Accounts Receivable $1.5 million Cash, $200,000 Equity: Sales Revenue $1.7 million
c. Inventory ($1.3 million) Equity: Cost of goods sold ($1.3 million)
d. Cash ($84,000) Prepaid Rent $63,000 Equity: Rent Expenses $66,000
e. Equipment (Acc. Depreciation) ($20,000) Equity: Depreciation Expense ($20,000)
f. Cash $1.25 million Accounts Receivable ($1.25 million)
g. Cash ($200,000) Equity: Wages Expense ($200,000)
h. Cash, ($70,000) Equity: Miscellaneous expenses ($70,000)
i. Cash ($900,000) Accounts Payable ($900,000)
j. Cash ($100,000) Equity: Dividends ($100,000)
2. Statement of Income:
Sales Revenue $1.7 million
Cost of goods sold ($1.3 million)
Gross profit $0.4 million
Rent Expenses ($66,000)
Depreciation Expense ($20,000)
Wages Expense ($200,000)
Miscellaneous expenses ($70,000)
Total expenses $0.356 million
Net income $0.044 million
Statement of retained earnings:
Retained earnings 645,000
Net income 44,000
Dividends (100,000)
Retained earnings 589,000
Gecko Toy Company
Balance Sheet, December 31, 20X1
Assets Liabilities and Stockholders’ Equity
Liabilities
Cash $ 496,000 Accounts payable $ 900,000
Accounts receivable 650,000 Stockholders’ equity
Merchandise inventory 560,000 Paid-in capital $360,000
Prepaid rent 63,000 Retained earnings 589,000
Equipment 80,000 Total stockholders’ equity 949,000
Total $1,849,000 Total $1,849,000
3. Accounts and Financial Statements that would change:
Assets (Cash) will increase by $100,000 (Balance sheet)
Liabilities (Dividends Payable) will increase by $100,000 (Balance sheet)
Explanation:
a) Data and Calculations:
Gecko Toy Company
Balance Sheet, December 31, 20X0
Assets Liabilities and Stockholders’ Equity
Liabilities
Cash $ 400,000 Accounts payable $ 800,000
Accounts receivable 400,000 Stockholders’ equity
Merchandise inventory 860,000 Paid-in capital $360,000
Prepaid rent 45,000 Retained earnings 645,000
Equipment 100,000 Total stockholders’ equity 1,005,000
Total $1,805,000 Total $1,805,000
Analysis of Transactions, using the balance sheet equation approach:
a. Inventory $1 million Accounts Payable $1 million
b. Accounts Receivable $1.5 million Cash, $200,000 Equity: Sales Revenue $1.7 million
c. Inventory ($1.3 million) Equity: Cost of goods sold ($1.3 million)
d. Cash ($84,000) Prepaid Rent $63,000 Equity: Rent Expenses $66,000
e. Equipment (Acc. Depreciation) ($20,000) Equity: Depreciation Expense ($20,000)
f. Cash $1.25 million Accounts Receivable ($1.25 million)
g. Cash ($200,000) Equity: Wages Expense ($200,000)
h. Cash, ($70,000) Equity: Miscellaneous expenses ($70,000)
i. Cash ($900,000) Accounts Payable ($900,000)
j. Cash ($100,000) Equity: Dividends ($100,000)
Prepaid Rent
Account Title Debit Credit
Balance $45,000
Cash 84,000
Rent expense $66,000
Balance 63,000
Bond Long will pay $1 in 20 years with a discount interest rate of 5% and Bond Short will pay $1 in 5 years with a discount interest rate of 10%. Which bond has the higher present value
Answer:
Bond short has higher present value.
Explanation:
Below is the calculation of present value:
Present value calculation of bond long.
Future value = $1
Time = 20 years
Present value = Future Value (P/F, n, r)
Present value = 1 (P/F, 20, 5%)
Present value = 1 x 0.376
Present value = 0.376
Present value calculation of bond short.
Future value = $1
Time = 5 years
Present value = Future Value (P/F, n, r)
Present value = 1 (P/F, 5, 10%)
Present value = 1 x 0.376
Present value = 0.6209
Bond short has higher present value.
A small firm builds television antennas. The investment in plan and equipment is $200,000. The variable cost per television antenna is $500. The price of the television antenna is $1000. How many television antennas would be needed for the firm to break even
Answer:
Break-even quantity is 400 units.
Explanation:
Below is the calculation for the number of television antennas:
At break-even, the firm's total revenue is equal to the total cost.
Cost of investment (fixed cost) = $200000
Variable cost = $500
Pirce of television antenna = $1000
At break-even, TR = TC
(P x Q) = (TFC + TVC)
1000Q = 200000 + 500Q
10000Q-500Q = 200000
500Q = 200000
Q = 200000 / 500
Q = 400 units
Thus break-even quantity is 400 units.
Simpson Company makes and sells a single product. Budgeted sales for April are $1,150,000. Gross margin is budgeted at 30% of sales. If the net income for April is budgeted at $155,000, budgeted selling and administrative expenses must be:
Answer:
Budgeted selling and administrative expenses must be $190,000.
Explanation:
Budgeted selling and administrative expenses can be calculated as follows:
Budgeted gross margin = Budgeted sales * Percentage of budgeted sales that is budgeted gross margin = $1,150,000 * 30% = $345,000
Budgeted net income = Budgeted gross margin - Budgeted selling and administrative expenses …………. (1)
Substituting the relevant values into equation (1) and solve for budgeted selling and administrative expenses, we have:
$155,000 = $345,000 - Budgeted selling and administrative expenses
Budgeted selling and administrative expenses = $345,000 - $155,000 = $190,000
Therefore, budgeted selling and administrative expenses must be $190,000.
After getting her degree in Economics, Jeanine went to work for the Bureau of Labor Statistics. She compiles data on the unemployment rate, which serves as an economic indicator. What does this data help Jeanine to understand
Answer:
A. how the economy is doing at the macro level
Explanation:
Since in the given situation it is mentioned that jeanine wants to work so she combined the unemployment rate data that represent the economic indicator so here she need to understand that how the economy is working at the macro level as the unemployment represent the condition that should be made in the labor market and the macro would deals with the overall GDP also how the unemployment level, inflation level and the price level impact it
Therefore the first option is correct
According to the media report how have the commited collusion
Answer:
You must post the whole paragraph?????
When Simple Semiconductors was operating at the minimum efficient scale of 10,000–12,000 units per month, the firm's cost per unit was $45. However, when the output level was increased beyond 12,000 units, the cost per unit increased to $47. This increase was attributed to the wear-and-tear of the machinery, and complexities of managing and coordinating. What is this phenomenon known as?
a) minimum efficient scale
b) diseconomies of scale
c) experience curve effect
d) learning-curve effect
Answer:
b
Explanation:
Diseconomies of scale is when a firm increases its output and cost per unit increases. This occurs when a firm produces beyond its minimum efficient scale
The minimum efficient scale is the lowest point on the cost curve where a firm can produce its output at the lowest cost
Diseconomies of scale is the opposite of economies of scale. Economies of scale is when as output is increases, cost per output falls.
ABC Company's production budget for October is based on 500 units. Standard unit cost for raw materials is $130 per unit ($10 per pound x 13 pounds per unit).
ABC's actual production in October= = 525 units.
The actual cost of materials used = $69,300 ($11 per pound x 12 pounds per unit).
Required:
a. Calculate the raw materials price variance for October. Is it favorable or unfavorable?
b. Calculate the raw materials usage variance for October. Is it favorable or unfavorable?
Answer and Explanation:
The computation is shown below;
a. Raw material price variance is
= (standard price - actual price) × actual quantity
= ($10 - $11) × ($69,300 ÷ $11)
= ($10 - $11) × 6,300
= $6,300 unfavorable
b. The raw material usage variance is
= (Standard quantity - actual quantity) × standard price
= (525 × 13 - 6,300) × $10
= $5,250 favorable
In this way it should be calculated
Signature Appliance Group decided to remove the grill unit from the ovens it sells in South America after customers complained they preferred to grill outside and would never use this feature. Which environmental force caused the company to change its product
Answer:
Signature Appliance Group
The environmental force that caused the company to change its product features is:
the Social and Cultural Environment.
Explanation:
The Social and Cultural Environment refers to the changing needs of customers in South America as a result of the values, attitudes, and preferred styles of consumers. These are always in a state of flux every year. Since customers preferred to grill outside rather than inside their kitchens, adding the grill unit in the ovens that the company sells in South America will not enable customers to choose its ovens over competitors'. To respond to the stated needs of its customers, the grill must be removed, thereby reducing the cost of the ovens.
Lang Warehouses borrowed $178,960 from a bank and signed a note requiring 8 annual payments of $28,819 beginning one year from the date of the agreement. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the interest rate implicit in this agreement. (
Answer: 6%
Explanation:
The annual payments can be considered to be annuity payments as they are constant. The amount borrowed can be considered the present value of the annuity.
Present value of annuity = Annuity * Present value interest factor of annuity, 8 years, %?
178,960 = 28,819 * Annuity factor
Annuity factor = 178,960 / 28,819
= 6.20979
To find out the interest rate, look at the Present Value of Annuity table and go to the 8 period column. Look for 6.20979. The interest rate that intersects with this factor is the interest rate implicit in this agreement.
That rate is 6%.
In the simple Keynesian model, there are three simplifying assumptions. Among these assumptions is: __________
a. the price level is flexible no foreign sector
b. the price level is constant until
c. the economy reaches its full-employment level
d. the money supply always rises b and c
Answer: B and C
No foreign sector
The price level is constant until the economy reaches its full-employment level
Explanation:
Keynesian economics refers to the theory that relates to total spending in the economy and how it affects output, Inflation and employment in the economy.
Assumptions of the Keynesian Model include:
• No foreign sector as economy is closed.
• Demand creates its own supply.
• The aggregate price level is fixed. ...
• The price level is constant until the economy reaches its full-employment level
• No retained earnings etc.
A portfolio consists of $16,800 in Stock M and $27,400 invested in Stock N. The expected return on these stocks is 9.70 percent and 13.30 percent, respectively. What is the expected return on the portfolio?
A) 11.07%.
B) 11.93%.
C) 12.62%.
D) 11.50%.
E) 10.15%.
When 30-year-old Lindsay was in a coma for 3 months, her friend Corey had the legal authority to handle her personal, financial, and medical affairs. Why did Corey have the legal right to do this? A. Corey was her life insurance agent. B. She had chosen Corey as her executor. C. Corey was named as her guardian. D. Corey had designated power of attorney.
Answer:
The correct answer is C. Corey was named as her guardian.
Explanation:
A legal guardian is a person appointed by a guardianship authority or a district court to represent a principal in matters where he or she is unable to control his or her own interests or manage his or her affairs himself or herself for other reasons, usually health. A legal guardian cannot act as such in matters where he or she and the principal could have a conflict of interest. Thus, in short, the guardian has the power to make decisions by and for the principal, without requiring the consent of the principal, who consents to his actions by means of a prior mandate.
Zigzag Manufacturing has just hired a new controller, Leslie Demorest. During her first week on the job, Leslie was asked to establish a budget for operating expenses in 2019. Since Leslie was not yet familiar with the operations of Zigzag Manufacturing, she decided to budget these expenses using the same procedures as the prior controller. Therefore, in order to establish a budget for operating expenses, Leslie started with actual operating expenses incurred in 2018 and added 3.8%. Leslie based this percentage on inflation as measured by the consumer price index.
Required: Comment on the effectiveness of Leslie’s budgeting strategy.
Answer:
Zigzag Manufacturing
The Effectiveness of Leslie Demorest's Budgeting Strategy
The strategy of adjusting the previous year's operating expenses with inflation is not an effective way of strategic budget planning. Leslie's budgeting strategy does not take advantage of forecasts of unexpectedly good performance and fails to provide any reaction that can occur when there are downturns in cash flow.
An effective budgeting strategy should provide the standard for the effective use of financial resources of Zigzag Manufacturing in its business operations. There are no clear goals to be achieved and an evaluation of how the goals will be achieved through the budget implementation.
Explanation:
An effective budget should be able to forecast and track revenues and expenses, which are received and incurred in pursuit of business goals and projections. An effective budget ensures that those who implement the projections contained in the budget remain motivated. The idea of adjusting previous expenses with inflation is not an effective budgeting strategy.
The expected average rate of return for a proposed investment of $5,610,000 in a fixed asset, using straight-line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $16,830,000 over the 20 years is (round to two decimal points). a.15.00% b.30.00% c.1.50% d.60.00%
Answer:
b.30.00%
Explanation:
Calculation to determine what the expected total net income of $16,830,000 over the 20 years is
Expected total net income =($16,830,000/20)/($5,610,000/2)*100
Expected total net income=$841,500/$2,805,000
Expected total net income =30.00%
Therefore the expected total net income of $16,830,000 over the 20 years is 30.00%
actor Co. can produce a unit of product for the following costs: Direct material $ 8.60 Direct labor 24.60 Overhead 43.00 Total product cost per unit $ 76.20 An outside supplier offers to provide Factor with all the units it needs at $48.40 per unit. If Factor buys from the supplier, the company will still incur 60% of its overhead. Factor should choose to:
Answer:
Relevant cost to make = Direct materials + Direct labor + Variable overhead
Relevant cost to make = $8.60 + $24.60 + $43.00 (1-60%)
Relevant cost to make = $8.60 + $24.60 + $17.20
Relevant cost to make = $50.40
Outside supplier cost ($48.40) < Relevant cost to make ($50.40). So, Factor should choose to buy because the relevent cost is less than outside supplier cost.
We are given the following information for the Pettit Corporation.
Sales (credit) $3,549,000
Cash 179,000
Inventory 911,000
Current liabilities 788,000
Asset turnover 1.40 times
Current ratio 2.95 times
Debt-to-assets ratio 40%
Receivables turnover 7 times
Current assets are composed of cash, marketable securities, accounts receivable, and inventory.
Calculate the following balance sheet items:
a. Accounts receivable.
b. Marketable securities.
c. Fixed assets.
d. Long-term debt.
Answer:
See below
Explanation:
a. Accounts receivables
= Sales / Receivables turnover
= $3,549,000 / 7x
= $507,000
b. Marketable securities
= Current assets - (Cash + Accounts receivable + Inventory)
Where;
Current asset = Current ratio × Current liabilities
Current asset = 2.95 × $788,000
Current asset = $2,348,240
Hence,
Marketable securities
= $2,348,240 - ($179,000 + $507,000 + $911,000)
= $2,348,240 - $1,597,000
= $751,240
c. Fixed assets
Total assets = Current assets + Fixed assets
$2,535,000 = $2,348,240 + Fixed assets
Fixed assets = $2,535,000 - $2,348,240
Fixed assets = $186,760
d. Long term debt
= Total debt - Current liabilities
Where,
Total debt = Debt to assets × Total assets
= 40% × ($3,549,000 / 1.40)
= 40% × $2,535,000
= $1,014,000
Hence,
Long term debt
= $1,014,000 - $788,000
= $226,000
In much of the country, homeowners choose to heat their houses with either natural gas or heating oil, both of which are normal goods. Which factor would cause an increase in the demand for natural gas
Group of answer choices.
a. an increase in consumer incomes
b. an increase in the price of natural gas
c. a decrease in the price of heating oil
d. a decrease in the price of natural gas
Answer:
a. an increase in consumer incomes
Explanation:
A market demand curve is used to graphically represent the quantity of goods demanded by all the buyers or consumers at different price points.
This ultimately implies that, a market demand curve can be determined by the horizontal summation of the various quantities for which, each buyer or consumer in a market is willing to pay for at different prices.
Thus, the market demand curve is downward sloping due to the fact that as the price of a product increases, the quantity demanded by the consumer decreases.
Generally, the demand for a good or service increases when consumer income increases and it decreases when the income earned by consumers fall. Thus, the demand for goods or services is directly proportional to consumer income.
Hence, a factor which would cause an increase in the demand for natural gas is an increase in consumer incomes.
Strong, Inc., bundles two kinds of service activities into a single $6,000 fixed-price contract, yielding two distinct performance obligations, A and B. Each activity has a stand-alone selling price of $3,200. Obligation A is satisfied immediately upon contract signing. Obligation B is satisfied evenly over an eight-month period. After the date of contract signing and the satisfaction of obligation A, two months have passed. Cumulatively, how much revenue should Strong, Inc., recognize by the end of the second month
Answer:
the revenue recognized is $3,750
Explanation:
The computation of the revenue that recognized by the end of the second month is given below:
= $6,000 ÷ $6,400 × $3,200 + $6,000 ÷ $6,400 × $3,200 × 2 months ÷ 8 months
= $3,750
The $6,400 comes from
= $3,200 + $3,200
= $6,400
Hence, the revenue recognized is $3,750
__________________ includes policies, procedures and mindset of top management. A tangible representation can be found in the employee handbook or annual statement. Monitoring process Control activity Control environment Risk assessment
Answer:
Control environment
Explanation:
Internal controls can be defined as the policies, set of rules, and procedures implemented or put in place by an organization to protect its assets, boost efficiency, enhance financial accountability, enforce adherence to company policies and prevent fraudulent behaviors among the employees.
The main purpose of internal controls is to guarantee that loss is eliminated by ensuring that there is an accurate and reliable accounting system.
An internal control involves the timely use of both internal and external sources of auditing or financial reporting and as such enhance the maintenance of accurate and proper financial records which would also improve their operational efficiency.
Hence, internal controls if properly executed helps to increase operational efficiency, protect and safeguard assets, provides accurate financial information, prevents fraudulent or unlawful behaviors, timeliness of financial records and reporting. Internal control includes the control environment.
Control environment includes policies, procedures and mindset of top management. One good example of the representation of a control environment can be found in the employee handbook or annual statement of the business firm or organization.
A business manager finds that the building expense each month is completely uncorrelated with revenue levels. What should the business manager assume about this cost?
Answer:
The business manager should assume that the building expense is fixed.
Explanation:
Fixed costs are not correlated with the revenue levels. Within the relevant range, fixed costs remain constant. They do not vary with the activity levels as variable costs do. For example, a manufacturer must pay for rent, repairs and maintenance, and utility bills irrespective of the revenue levels at which it is operating. This is why the business manager always discovers that the building expense each month does not correlate with the revenue levels, unlike the product's variable costs.
Liang Company began operations on January 1, 2012. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows:
2012
a. Sold $1,345,434 of merchandise (that had cost $975,000) on credit, terms n/30.
b. Wrote off $18,300 of uncollectible accounts receivable.
c. Received $669,200 cash in payment of accounts receivable.
d.
In adjusting the accounts on December 31, the company estimated that 1.5% of accounts receivable will be uncollectible.
2013
e. Sold $1,525,634 of merchandise (that had cost $1,250,000) on credit, terms n/30.
f. Wrote off $27,800 of uncollectible accounts receivable.
g. Received $1,204,600 cash in payment of accounts receivable.
h.
In adjusting the accounts on December 31, the company estimated that 1.5% of accounts receivable will be uncollectible.
Required:
Prepare journal entries to record Liang’s 2012 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar amount.)
Answer:
Liang Company
Journal Entries:
2012
a. Debit Accounts receivable $1,345,434
Credit Sales revenue $1,345,434
To record the sale of goods on credit, terms n/30.
Debit Cost of goods sold $975,000
Credit Inventory $975,000
To record the cost of goods sold.
b. Debit Allowance for Uncollectible accounts $18,300
Credit Accounts receivable $18,300
To write-off uncollectible accounts.
c. Debit Cash $669,200
Credit Accounts receivable $669,200
To record cash received on account.
d. Debit Bad Debts Expense $28,169
Credit Allowance for Uncollectible accounts $28,169
To record bad debts expense and maintain a balance of $9,869 being 1.5% of accounts receivable as uncollectible.
2013
e. Debit Accounts receivable $1,525,634
Credit Sales revenue $1,525,634
To record the sale of goods on credit, terms n/30.
Debit Cost of goods sold $1,250,000
Credit Inventory $1,250,000
To record the cost of goods sold.
f. Debit Allowance for Uncollectible accounts $27,800
Credit Accounts receivable $27,800
To write-off uncollectible accounts.
g. Debit Cash $1,204,600
Credit Accounts receivable $1,204,600
To record the receipt of cash on account.
h. Debit Bad Debts Expense $32,199
Credit Allowance for Uncollectible accounts $32,199
To record bad debts expense and maintain a balance of $14,268 being 1.5% of accounts receivable as uncollectible.
Explanation:
a) Data and Analysis:
2012
a. Accounts receivable $1,345,434 Sales revenue $1,345,434
Cost of goods sold $975,000 Inventory $975,000, terms n/30.
b. Allowance for Uncollectible accounts $18,300 Accounts receivable $18,300
c. Cash $669,200 Accounts receivable $669,200
d. Bad Debts Expense $28,169 Allowance for Uncollectible accounts $28,169 balance of $9,869 being 1.5% of accounts receivable will be uncollectible.
2013
e. Accounts receivable $1,525,634 Sales revenue $1,525,634
Cost of goods sold $1,250,000 Inventory $1,250,000 credit, terms n/30.
f. Allowance for Uncollectible accounts $27,800 Accounts receivable $27,800
g. Cash $1,204,600 Accounts receivable $1,204,600
h. Bad Debts Expense $32,199 Allowance for Uncollectible accounts $32,199 balance of $14,268 being 1.5% of accounts receivable will be uncollectible
T-accounts:
Accounts Receivable
Account Titles Debit Credit
2012
Sales revenue $1,345,434
Allowance for Uncollectible accounts $18,300
Cash 669,200
Balance 657,934
2013
Balance $657,934
Sales revenue 1,525,634
Allowance for Uncollectible accounts $27,800
Cash 1,204,600
Balance 951,168
Allowance for Uncollectible accounts
Account Titles Debit Credit
2012
Accounts receivable $18,300
Bad Debts Expense $28,169
Balance 9,869
2013
Balance $9,869
Accounts receivable $27,800
Bad Debts Expense 32,199
Balance $14,268