Blue Skies Inc. is a retail gardening company that is piloting a new strategic initiative aimed at increasing gross profit. Currently, the company’s gross profit is 25% of sales, and its target gross profit percentage is 30%. The company’s current monthly sales revenue is $480,000.
The new initiative being piloted is to produce goods in-house instead of buying them from wholesale suppliers. Its in-house production process has two procedures. The makeup of the costs of production for Procedure 1 is 40% direct labor, 45% direct materials, and 15% overhead. The makeup of the costs of production for Procedure 2 is 50% direct labor, 25% direct materials, and 25% overhead. Assume that Procedure 1 costs twice as much as Procedure 2.
Required:
Determine what the cost of labor, materials, and overhead for both Procedures 1 and 2 would need to be for the company to meet its target gross profit.
1. Cost makeup of Procedure 1:
Direct Labor
Direct Materials
Overhead
Total
2. Cost makeup of Procedure 2:
Direct Labor
Direct Materials
Overhead
Total
Answer:
Cost of Procedure 1: $268,800
Cost of Procedure 2: $134,400
Explanation:
Sales $480,000.
Gross Profit 25% of $480,000.= $ 120,000
Cost of Goods Sold = 480,000-120,000= $ 360,000
Procedure 1 costs twice as much as Procedure 2
Process 1 costs $ 240,000 Process 2 costs $ 120,000
To get a gross profit of 30% the sales would increase by
0.25 480,000
0.3 x
x= 480,000*0.3/0.25= $576,000
Sales $576,000.
Gross Profit 30% of $576,000.= $ 172,800
Cost of Goods Sold = 576,000-172,800= $ 403,200
Procedure 1 costs twice as much as Procedure 2
Process 1 costs $ 268,800 Process 2 costs $ 134,400
Procedure 1
1. Cost makeup of Procedure 1:
45% direct materials, = 45% of $ 268,800 = $ 120,960
40% direct labor, = 40% of $ 268,800 = $ 107,520
15% overhead.= 15% of $ 268,800 = $ 40,320
Total $268,800
Procedure 2
2. Cost makeup of Procedure 2
25% direct materials,=25% of $ 134,400 = $ 33,600
50% direct labor,= 50% of $ 134,400 = $ 67,200
25% overhead.=25% of $ 134,400 = $ 33,600
Total 134,400
1. Cost makeup of Procedure 1:
Direct materials, $ 120,960
Direct labor, $ 107,520
Overhead. $ 40,320
Total $268,800
Procedure 2
2. Cost makeup of Procedure 2
Direct materials $ 33,600
Direct labor, $ 67,200
Overhead. $ 33,600
Total 134,400
The management accountant at Lang Manufacturing Co. collected the following data in preparation for a life-cycle analysis on one of its products, a leaf blower: Item This Year Change Over Last Year Average Annual Change Over the Last Four Years Annual sales $ 2,700,000 + 1.8 % + 23.5 % Unit sales price 450 + 2.4 % + 8.3 % Unit profit 100 − 1.0 % + 3.0 % Total profit 600,000 − 1.2 % + 30.0 % The stage of the sales life cycle the product is in is:
Answer: Maturity
Explanation:
When a product gets to Maturity level, it will see its sales slow down. The sales will still be increasing but at a very low or stable rate.
At the growth state however, sales will be growing at a fast rate and so will profit.
This product is at the maturity stage because over the previous year, its sales have slowed down and are now increasing at a very low rate as a mature product would. In the past four years it was in growth based on the given figures but as of the last year, it had crossed over into maturity.
There is an investment with the discount rate of 6 %. What should be the present value of the investment if we want to get a net cash flow of $17500;
a) After 1 year
b) After 2 years
Answer:
a. $16,509.434
b. $15,574.94
Explanation:
The computation of the present value in each case is as followS:
As we know that
Present Value = Future Value ÷ (1+ rate of interest)^number of years
a. AFter one year
= $17,500 ÷ (1 + 0.06)^1
= $16,509.434
b. After 2 years
= $17,500 ÷ (1 + 0.06)^2
= $17,500 ÷ 1.1236
= $15,574.94
Hence, the present value after one year and 2 years is $16,509.434 and $15,574.94 respectively
Prepare the journal entries to record the following transactions on Kwang Company's books using a perpetual inventory system.
a. On March 2, Kwang Company sold $900,000 of merchandise to Sensat Company, terms 2/10, n/30. The cost of the merchandise sold was $620,000.
b. On March 6, Sensat Company returned $90,000 of the merchandise purchased on March 2. The cost of the returned merchandise was $62,000.
c. On March 12, Kwang Company received the balance due from Sensat Company. From the information in BE5-4, prepare the journal entries to record these transactions on Sensat Company's books under a perpetual inventory system.
Answer:
Solution BE5-4
Journal Entries
Date Particulars Debit Credit
(a) 02-Mar Accounts Receivable $900,000
Sales Revenue $900,000
02-Mar Cost of goods sold $620,000
Inventory $620,000
(b) 06-Mar Sales Return & allowances $90,000
Accounts receivable $90,000
06-Mar Inventory $62,000
Cost of goods sold $62,000
(c) 12-Mar Cash $793,800
Sales Discount $16,200
($810,000*2%)
Accounts receivable $810,000
($900000- $90000)
Solution BE5-5:
Journal Entries
Date Particulars Debit Credit
(a) 02-Mar Inventory $900,000
Accounts payable $900,000
(b) 06-Mar Accounts payable $90,000
Inventory $90,000
(c) 12-Mar Accounts Payable $810,000
($900000- $90000)
Inventory ($810000*2%) $16,200
Cash $793,800
wo firms, A and B, each currently emit 100 tons of chemicals into the air. The government has decided to reduce the pollution and from now on require a pollution permit for each ton of pollution emitted into the air. The government gives each firm 50 pollution permits, which it can either use of sell to the other firm. It costs Firm A $200 for each ton of pollution that it eliminates before it is emitted into the air, and it cots Firm B $100 for each ton of pollution that it eliminates before it is emitted into the air. If the two firms have the same bargaining power, what would be the gains from trade for Firm B
Answer:
Firm A will buy all of the firm B's pollution permits. Each one will cost between $100 and $200.
Explanation:
The firm B will gain from the trade of pollution permits. Firm A will need higher pollution permits since it emits 100 tons of chemicals into air and the cost for eliminating each ton is $200. This cost is higher than the cost to Firm B which is $100 only. Firm A will buy all the pollution permits from Firm B and there will advantage for the Firm B to gain from the trade.
(IRR of an uneven cash flow stream) Microwave Oven Programming, Inc. is considering the construction of a new plant. The plant will have an initial cash outlay of $ million ( = $ million), and will produce cash flows of $ million at the end of year 1, $ million at the end of year 2, and $ million at the end of years 3 through 5. What is the internal rate of return on this new plant?
Answer:
Explanation:
Here is the complete question used in answering this question
(IRR of uneven cash-flow stream) Microwave Oven Programming, Inc. is considering the construction of a new plant. The plant will have an initial cash outlay of $12 million, and will produce cash flows of $4 million at the end of year 1, $ 5 million at the end of year 2, and $3 million at the end of years 3 through 5. What is the internal rate of return on this new plant? The internal rate of return on this new plant is __%. (Round to two decimalplaces.)
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-12 million
Cash flow in year 1 = $4 million
Cash flow in year 2 = $5 million
Cash flow in year 3 = $3 million
Cash flow in year 4 = $3 million
Cash flow in year 5 = $3 million
IRR = 16.66%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Nancy Company has a balance of $15,000 in accounts receivable on December 31, of which $1,500 is more than 30 days overdue. The company has a beginning debit balance of $45 in the Allowance for Doubtful Accounts. They estimate the uncollectible accounts to be 1% of current accounts and 10% of accounts over thirty days. The adjusting entry on December 31 will include: A) $285 credit to Allowance for Doubtful Accounts B) $240 debit to Bad Debts Expense C) $195 debit to Bad Debts Expense D) $285 Debit to Allowance for Doubtful Accounts E) $330 credit to Allowance for Doubtful Accounts
Answer:
E. $330 credit to allowance for doubtful accounts
Explanation:
With regards to the above, the adjusting entry on December 31st is computed as;
= [($15,000 - $1,500)× 0.1)]
= $135
1% of the balance less than 30days
= $1,500 × 0.1 = $150
Total = $45 + $135 + $150 = $330
The chapter explained why exporters cheer when their home currency depreciates. At the same time, domestic consumers find that they pay higher prices, so they should be disappointed when the currency becomes weaker. Why do the exporters usually win out, so that governments often seem to welcome depreciations while trying to avoid appreciations? (Hint: Think about the analogy with protective tariffs.)
Answer:
Exporters usually win out when their home currency depreciates because it increases demand for the exported products.
Explanation:
The foreign consumers find that the prices of the imports are now reduced because of the depreciation of the exporting nation's currency. The impact is reduced cost of importation for the importing consumers. When prices fall, demand tends to increase relative to supply. For any government that wants to encourage exports for earning foreign exchange, it will always work hard to avoid currency appreciation so that consumers from the importing nation are not discouraged or made to develop alternatives.
Exporters usually win out when their home currency depreciates because the depreciation increases the demand of the exported products.
When the prices fall, demand of the products and goods tend to increase. When the home currency depreciates, this will leads to higher demand of goods from other countries so the exporters produce and exports more goods and earn more money.
The government also wants to encourage exports in order to earn foreign exchange so that's why the exporters as well as the government cheers when their home currency depreciates.
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Which of the following is not one of the drivers of supply chain performance? A. facilities B. procedures C. information D. inventory
B. Procedures is not one of the drivers of supply chain performance.
The four main drivers of supply chain performance are facilities, inventory, information, and transportation. These drivers help to determine how responsive and efficient the supply chain is.
Good facilities or locations ensure that the goods produced are in good condition till they are requested by consumers. The quality of the goods is also preserved. Efficient transportation ensures that goods get to the customers on time. Inventory which involves stock-taking helps salespeople to know what goods are available and readily provide customers with the needed information and stock. Information is also an essential factor. Knowledge of factors affecting pricing, push versus pull, forecasting, etc., helps decision-makers to know what is needed to improve the quality of goods and their delivery.Conclusively, Procedures are not one of the drivers of supply chain performance.
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Jahar is very friendly and loves interacting with customers. He has a lot of knowledge about loans and the risks associated with them. In which Finance career does Jahar work?
Business Finance Management
Financial Investment Planning
Insurance Services
Banking and Related Services
Answer:
banking and related services.
In the last example, we determined that Delta has a DTA of $35,000 related to the $100,000 NOL in 2015. In 2016, it decides to apply (use up) the DTA (carryforward). The company has book income of $200,000. No book/tax differences. So, Delta reports taxable income of $200,000 before considering the effect of its NOL. How much is I.T. payable for 2016
Answer:
The I.T. payable for 2016 is $35,000
Explanation:
Use the following formula to calculate the IT payable for 2016
IT payable = Tax on Income - DTA balance
Where
Tax on Income = Income x Tax rate = $200,000 x 35% = $70,000
DTA balance = $35,000
Placing values in the formula
IT payable = $70,000 - $35,000
IT payable = $35,000
Concord uses the periodic inventory system. For the current month, the beginning inventory consisted of 7400 units that cost $10.00 each. During the month, the company made two purchases: 3000 units at $11.00 each and 11900 units at $11.50 each. Concord also sold 12800 units during the month. Using the FIFO method, what is the ending inventory
Answer:
$109,250
Explanation:
FIFO assumes that the units to arrive first, will be sold first. Therefore, inventory valuation is based on later or recent prices.
Step 1 : units in ending inventory
Ending Inventory = units available for sale - units sold
= 9,500
Step 2 : inventory value
Ending Inventory = 9,500 x $11.50 = $109,250
To arrive at an accurate balance on a bank reconciliation statement, an error made by the bank in which the bank recorded the collection of a note and interest on behalf of another firm to the balance of the company's bank account should be
Answer:
Hi how are you doing today Jasmine
George noticed that some of the top salespeople on his team were spending more time checking their phones than contributing to the group's development of a new strategic plan. He decided that if his peers weren't going to make a concerted effort on the project, then he wasn't either. George put down his notepad and started tapping on his phone. Which concept best describes George's action
Answer:
The answer is "the s ucker effect"
Explanation:
Please find the image.
Some people work extremely hard but lose their drive when they see other riders who are not riding in the community. It won't fit, that's exactly what's happening here. After noting other people who did not carry out the initiative, he also began using his telephones and placed down his paper pad. It is also an operation, for which a person works less than a like independent member, as a group member.
You are 25 years old and are considering full-time study for an MBA degree. Tuition and other direct costs will be $60,000 per year for two years. In addition, you will have to give up your current job that has a salary of $50,000 per year. Assume tuition is paid and salary received at the end of each year. By how much does your salary have to increase (in real terms) as a result of getting your MBA degree to justify the investment? Assume a real interest rate of 2% per year, ignore taxes, assume that the salaries for both jobs increase at the rate of inflation (i.e. they stay constant in real terms), and that you retire at 65. Note: the $1 for T periods annuity formula is (1/r)*[1-1/(1+r)^T]. g
Answer:
$8,403.73
Explanation:
The job will be started at the age of 27 ( 25 years + 2 years ) and retirement will be at the age of 65.
Hence the employment years are 38 years ( 65- 27 ).
Cost of MBA program = Direct cost + Opportunity cost = $60,000 + $50,000 = $110,000
At the age of 27, the total cost of the program will be
Total Cost of MBA program = Cost of program in first year + Cost of program in last year = $110,000 + ( $110,000 x ( 1 + 2% ) ) = $110,000 + $112,200 = $222,200
Use the following formula to calculate teh required salary
Calculate the annuity factor
Annuity factor = (1/r)*[1-1/(1+r)^T] = (1/2%)*[1-1/(1+2%)^38] = 26.440640602064
Now use the following formula to calculate the required salary
Required salary = Total cost of MBA program / Annuity factor for 38 years at 2% = $222,200 / 26.440640602064 = $8,403.73
Chronic Pain Clinic has estimated the following cash flows associated with a new project. The project cost of capital (discount rate) is 10 percent. Year Expected Net Cash Flow 0 ($800,000) 1 400,000 2 400,000 3 400,000 What is the project’s IRR? A. 18.5 percent B. 19.9 percent C. 20.4 percent D. 21.8 percent E. 23.4 percent
Answer:
E. 23.4 percent
Explanation:
The computation of the internal rate of return is shown below
Given that
The project cost of capital is 10%
And, the year and net cash flow is
Year Expected Net Cash Flow
0 ($800,000)
1 400,000
2 400,000
3 400,000
Now we apply the following formula
= IRR()
So the internal rate of return is 23.38% i.e. 23.4%
To be effective, an item used as money should serve several functions. Select the statement that best describes money's function as a standard of deferred payment.
a. That a currency can be used to express the value goods and services that are both relatively expensive and goods and services that are relatively cheap.
b. That the purchasing power of a currency is relatively stable over time.
c. That people are willing to accept a currency in the future as compensation for debts accrued earlier.
d. That a currency is widely accepted in exchange for goods and services and therefore makes economic transactions easier.
Answer:
c. That people are willing to accept a currency in the future as compensation for debts accrued earlier.
Explanation:
Money defines the legal tender i.e. offically issued and that involved the notes, currencies, coins that are circulated via medium of exchange that govern by the government.
So here the people would to accept the currency in the future that become compensation for the debt that accrued earlier
Hence, the option c is correct
A company has the following information. What is the financial leverage ratio? Total assets $736,000 Total liabilities 314,000 Interest expense 9,400
Answer:
1.7441
Explanation:
Calculation to determine financial leverage ratio
Using this formula
Financial leverage ratio=Total assets/(Total assets-Total liabilities)
Let plug in the formula
Financial leverage ratio=736,000/(736,000 - 314,000)
Financial leverage ratio= 1.7441
Therefore the financial leverage ratio is 1.7441
what is the cost driver for rent expense?
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales $ 5,100,000 $ 9,100,000 $ 8,200,000 Average operating assets $ 1,020,000 $ 2,275,000 $ 1,640,000 Net operating income $ 214,200 $ 746,200 $ 118,900 Minimum required rate of return 17.00 % 32.80 % 14.00 % Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 19% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity
Answer:
1. Return on Investment = Net operating income (NOI)/Average operating assets (AOA) * 100
Division A = 21%
Division B = 32.8%
Division C = 7.25%
2. Residual income (loss) = Operating Income - (Operating Assets x Target Rate of Return)
Division A = $40,800
Division B = $0
Division C = ($110,700)
3-a. If performance is being measured by ROI, Divisions A and C will accept the opportunity, while Division B will reject it because the actual rate of return of 19% is less than the minimum required rate of return of 32.8%.
3-b. Divisions A and C will accept the opportunity, while Division B will reject it.
Explanation:
a) Data and Calculations:
Selected sales and operating data for three divisions of different structural engineering firms are given as follows:
Division A Division B Division C
Sales $ 5,100,000 $ 9,100,000 $ 8,200,000
Average operating assets $ 1,020,000 $ 2,275,000 $ 1,640,000
Net operating income $ 214,200 $ 746,200 $ 118,900
Minimum required rate of return 17.00 % 32.80 % 14.00 %
1. Return on Investment = Net operating income (NOI)/Average operating assets (AOA) * 100
= 21% 32.8% 7.25%
Division A = 21% ($214,200/$1,020,000 * 100)
Division B = 32.8% ($746,200/$2,275,000 * 100)
Division C = 7.25% ( $118,900/$1,640,000 * 100)
2. Residual income (loss) = Operating Income - (Operating Assets x Target Rate of Return)
Division A = $40,800 ($214,200 - ($1,020,000 * 17%) )
Division B = $0 ($746,200 - ($2,275,000 * 32.8%))
Division C =($110,700) ( $118,900 - ($1,640,000 * 14%))
Investment opportunity that would yield a 19% rate of return:
Division A Division B Division C
Sales $ 5,100,000 $ 9,100,000 $ 8,200,000
Average operating assets $ 1,020,000 $ 2,275,000 $ 1,640,000
Net operating income (19%) $ 193,800 $ 432,250 $ 311,600
Minimum required rate of return 17.00 % 32.80 % 14.00 %
3-a. If performance is being measured by ROI, Divisions A and C will accept the opportunity, while Division B will reject it because the actual rate of return of 19% is less than the minimum required rate of return of 32.8%.
3-b. Divisions A and C will accept the opportunity, while Division B will reject it.
Residual income (loss) = Operating Income - (Operating Assets x Target Rate of Return)
Division A = $20,400 ($193,800 - ($1,020,000 * 17%))
Division B = ($313,950) ($432,250 - ($2,275,000 * 32.8%))
Division C = $82,600 ($311,600 - ($1,640,000 * 14%))
Discuss 5 factors to considerwhen choosing the location of afirm
Answer:
please give me brainlist and follow
Explanation:
Factors to Consider When Choosing a Business Location
Style of Operation. Is your business going to be formal or elegant? ..
Demographics. When considering demographics, you should think about two important angles. ...
Foot Traffic. For many businesses, foot traffic is very important. ...
Parking and Accessibility. ...
Competition. ...
Site's Image and History.
The manufacturer wishes to set up a control chart at the final inspection station for a gas water heater. Defects in workmanship and visual quality features are checked in this inspection. For the past 22 working days, 176 wate rheaters were inspected and a total of 924 nonconformities were reported. a) What type of control chart would you reccommend here
Answer:
I will recommend a c chart
Explanation:
From the question, we have:
[tex]n= 22\ working\ days[/tex]
[tex]Inspection = 176[/tex]
[tex]Noncomformities = 924[/tex]
First, it should be noted that a chart is used for a count datatype (in other words, numerical values) and they are usually discrete (i.e. whole numbers).
Notice that all the given data are whole digits.
Also, the c chart is to be used when the number of noncomformities are known because through the c chart shows the process of the noncomformities over specific time.
Indicate which activities of Stockton Corporation violated the rights of a stockholder who owned one share of common stock.
a. Paid the stockholder a smaller dividend per share than another common stockholder.
b. Rejected the stockholder's request to be put in charge of its retail store.
c. Rejected the stockholder's sale of stock on an organized exchange.
d. Rejected the stockholder's request to vote via proxy because she was home sick.
e. In liquidation, paid the common shareholder after preferred stockholders were already paid.
Answer:
a
c
d
Explanation:
A shareholder is a person that buys stocks of a publicly traded company. they are referred to as owners and are entitled to dividends. Dividends are a proportion of income
All common shareholders earn the same amount of dividends
prefferred shareholders are given higher preference that common shareholders
Bill Evans began Evans Distributors, a sporting goods distribution company, in January 20X1 and engaged in the transactions below. Assume Evans Distributors and its customers take advantage of all cash discounts.
DATE TRANSACTIONS 20X1
Jan.
1 Bill Evans started Evans Distributors with an investment of $55,750. He also invested personal business equipment worth $7,800.
2 Purchased merchandise for cash, $11,850, Check 100.
3 Sold merchandise on account to Rivera Corporation, $1,010, terms 2/10, n/30, Invoice 1001.
4 Purchased merchandise on account from Tsang Company, $2,420, terms 1/10, n/30, Invoice 1125.
5 Received and paid freight charges related to January 4 purchase of merchandise from Tsang Company, $220, Check 101.
10 Rivera Corporation returned merchandise purchased on January 3; issued credit memo #101 for $220.
11 Received payment in full from Rivera Corporation, after the return of January 10 and after the discount.
13 Paid amount due to Tsang Company for purchase of January 4, Check 102.
15 Recorded cash sales for the two-week period ended January 15 of $7,620.
15 Recorded sales on credit cards for the two-week period ended January 15, $1,315; the bank charges a 3 percent fee on all credit card sales.
15 Paid wages, $2,025, Check 103.
16 Purchased equipment (not for resale), $1,915, Check 104.
17 Paid freight for delivery of equipment purchased on January 16, $230, Check 105.
18 Purchased merchandise on account from Terri Manufacturing with a list price of $6,300, subject to a trade discount of 40 percent, terms 1/10, n/30, Invoice 2078.
20 Sold merchandise on account to Moloney Corp., $3,380, terms 1/10, n/30, Invoice 1002.
21 Purchased merchandise on account from Johnson Company, $2,480, terms 1/10, n/30, Invoice 3204; freight prepaid by Johnson Company and added to invoice, $150. (Total invoice amount, $2,630.00.)
27 Paid amount owed to Terri Manufacturing for purchase of January 18, Check 106.
28 Purchased merchandise from Fronke Sports Fabricators with a list price of $3,280, subject to trade discounts of 25 percent and 10 percent, terms n/30, Invoice 1888.
29 Received amount due from Moloney Corp. for the sale of January 20.
30 Paid amount due to Johnson Company for purchase of January 21, Check 107.
31 Recorded cash sales for the period from January 16–31, $8,225.
31 Recorded sales on the credit cards for the period from January 16–31, $2,520; the bank charges a 3 percent fee on all credit card sales.
Required:
Record the transactions in a general journal.
Answer:
Jan. 1
Dr Cash $55,750
Dr Supplies $7,800
Cr Common Stock $63,550
Jan. 2
Dr Purchases $11,850
Cr Cash $11,850
Jan. 3
Dr Accounts Receivable - Rivera Corporation, $ $1,010
Cr Sales Revenue $1,010
Jan. 4
Dr Purchases $2,420
Cr Accounts Payable - Tsang Company $2,420
Jan. 5
Dr Freight Expenses $220
Cr Cash $220
Jan. 10
Dr Sales Returns and Allowances $220
Cr Accounts Receivable - Rivera Corporation $220
Jan. 11
Dr Cash $790
Cr Accounts Receivable - Chu Corporation $790
Jan. 13
Dr Accounts Payable - Tsang Company $2,420
Cr Cash $2,420
Jan. 15
Dr Cash $7,620
Cr Sales Revenue $7,620
Jan. 15
Dr Accounts Receivable $1,315
Cr Bank Charges $39
Cr Sales Revenue $1,276
Jan. 16
Dr Equipment $1,915
Cr Cash $1,915
Jan. 17
Dr Equipment $230
Cr Cash $230
Jan. 18
Dr Purchases $6,300
Cr Accounts Payable - Terri Manufacturing $6,300
Jan. 20
Dr Accounts Receivable - Moloney Corp. $3,380
Jan. 21
Dr Purchases $2,480
Dr Freight Expenses $150
Cr Accounts Payable - Johnson Company $2,630
Jan. 27
Dr Accounts Payable - Terri Manufacturing $6,300
Cr Cash $6,300
Jan. 29
Dr Cash $3,380
Accounts Receivable - Moloney $3,380
Jan. 30
Dr Accounts Payable - Johnson Company $2,630
Cr Cash $2,630
Jan. 31
Dr Cash $8,225
Sales Revenue $8,225
Jan. 31
Dr Accounts Receivable $2,520
Cr Bank Charges $76
Cr Sales Revenue $2,444
Explanation:
Preparation of the Journal Entries
Jan. 1
Dr Cash $55,750
Dr Supplies $7,800
Cr Common Stock $63,550
($55,750+$7,800)
(To record the amount invested into the business along with supplies)
Jan. 2
Dr Purchases $11,850
Cr Cash $11,850
(To record the purchase of merchandise inventory by cash)
Jan. 3
Dr Accounts Receivable - Rivera Corporation, $ $1,010
Cr Sales Revenue $1,010
(To record the sale of merchandise on account)
Jan. 4
Dr Purchases $2,420
Cr Accounts Payable - Tsang Company $2,420
(To record the purchase of merchandise inventory on account)
Jan. 5
Dr Freight Expenses $220
Cr Cash $220
(To record the payment of freight charges)
Jan. 10
Dr Sales Returns and Allowances $220
Cr Accounts Receivable - Rivera Corporation $220
(To record the return of merchandise that was sold to Chu Corporation)
Jan. 11
Dr Cash $790
Cr Accounts Receivable - Chu Corporation ($1,010 - $220) $790
(To record the collection of amount from credit sales)
Jan. 13
Dr Accounts Payable - Tsang Company $2,420
Cr Cash $2,420
(To record the payment made to credit purchases)
Jan. 15
Dr Cash $7,620
Cr Sales Revenue $7,620
(To record the cash sales)
Jan. 15
Dr Accounts Receivable $1,315
Cr Bank Charges ($1,315*3/100) $39
Cr Sales Revenue $1,276
($1,315-$39)
(To record the sales made on credit card)
Jan. 16
Dr Equipment $1,915
Cr Cash $1,915
(To record the purchase of equipment on account)
Jan. 17
Dr Equipment $230
Cr Cash $230
(To record the payment of freight charges)
Jan. 18
Dr Purchases $6,300
Cr Accounts Payable - Terri Manufacturing $6,300
(To record the purchase of merchanise inventory on account)
Jan. 20
Dr Accounts Receivable - Moloney Corp. $3,380
Cr Sales Revenue $3,380
(To record the sales made on account)
Jan. 21
Dr Purchases $2,480
Dr Freight Expenses $150
Cr Accounts Payable - Johnson Company $2,630
($2,480+$150)
(To record the purchase of inventory on account)
Jan. 27
Dr Accounts Payable - Terri Manufacturing $6,300
Cr Cash $6,300
(To record the payment made to credit purchases)
Jan. 29
Dr Cash $3,380
Accounts Receivable - Moloney $3,380
(To record the amount received from credit sales)
Jan. 30
Dr Accounts Payable - Johnson Company $2,630
($2,480+$150)
Cr Cash $2,630
(To record the payment made to credit purchases)
Jan. 31
Dr Cash $8,225
Sales Revenue $8,225
(To record the cash sales)
Jan. 31
Dr Accounts Receivable $2,520
Cr Bank Charges ($2,520*3/100) $76
Cr Sales Revenue $2,444
($2,520-$76)
(To record the sales made on credit card)
The Chilton Corporation specializes in manufacturing one type of desk lamp. Chilton allocates variable manufacturing overhead costs on the basis of machine hours. Chilton budgeted 0.3 machine hours per lamp and allocates overhead at a rate of $1.90 per machine hour. Last year Chilton manufactured 19,000 lamps, used 7,600 machine hours and incurred actual overhead costs of $12,920. What was Chilton's variable manufacturing overhead efficiency variance last year?
A. $9,660 favorable
B. $4,140 unfavorable
C. $4,140 favorable
D. $9,660 unfavorable
Answer:
See below
Explanation:
Given the above information, we can compute variable manufacturing overhead efficiency variance to be;
= (SA - AQ) × SR
Where
Standard quantity = SQ = 19,000
Actual Quantity = AQ = 7,600
Standard Rate = SR = $1.9
Variable manufacturing overhead efficiency variance
= [(19,000 × 0.3) - 7,600] × $1.9
= (5,700 - 7,600) × $1.9
= $3,610 U
Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $900,000 of 10-year, 7% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year.
May 1. Issued the bonds for cash at their face amount.
Nov. 1. Paid the interest on the bonds.
Dec. 31. Recorded accrued interest for two months.
Required:
Journalize the entries to record the above selected transactions for the current year.
Answer:
May 1
Cash $900000 Dr
Bonds Payable $900000 Cr
November 1
Interest Expense $31500 Dr
Cash $31500 Cr
Dec 31
Interest Expense $10500 Dr
Interest Payable $10500 Cr
Explanation:
May 1
The bonds are issued at face value which means the company has received full amount of face value which is $900000. So, we debit cash by $900000 and credit bonds payable by the same amount.
Nov 1
The bonds pay interest semi annually and the amount of semi annual interest is,
Semi annual interest = 900000 * 0.07 * 6/12 = $31500
So, when this interest is paid, interest expense is recorded by $31500 as debit and cash is credited by same amount.
Dec 31
Following the accrual basis of accounting, the interest on bond that relates to November and December of the current year will be recorded as a liability and as an expense for this year. Thus, the amount of the interest will be,
Interest accrued - two months = 900000 * 0.07 * 2/12 = 10500
Example: (0) sweeps
Rising from the sea like a goddess, the island nation of Cyprus ......... (sweep) you off
your feet with ancient monuments. Cyprus has the distinction of ........ (be) the birthplace
of Aphrodite --Goddess of Love and Beauty. With such a legendary background it is
hardly ......... (surprise) that Cyprus ....3.... (develop) into a ....4.... (tour) destination. It
........ (bless) with natural beauty that ranges from golden beaches to ......... (roll) hills.
To walk through its old streets is ....7.... (step) backwards in time. Old houses with
ornate balconies peep from weather-beaten walls, and craftsmen in small workshops
practise trades, which have not ....8.... (change) for centuries.
Answer:
(0)Sweeps, (1)being, (2)surprising, (3)has developed, (4)tourist, (5)is blessed, (6)rolling, (7)to step, (8)changed.
Explanation:
The use of the correct form of the words refers to using or changing the given words in such a way that they correspond to the noun(s) or subjects in the sentence. This will also enable the correct construction of the sentences in a perfect and corresponding form of tenses.
The verbs given in parenthesis in the given passage will be changed accordingly as given below-
Rising from the sea like a goddess, the island nation of Cyprus sweeps you off your feet with ancient monuments. Cyprus has the distinction of being the birthplace of Aphrodite-- Goddess of Love and beauty. With such a legendary background, it is hardly surprising that Cyprus has developed into a tourist destination. It is blessed with natural beauty that ranges from golden beaches to rolling hills.
To walk through its old streets is to step backwards in time. Old houses with ornate balconies peep from weather-beaten walls, and craftsmen in small workshops practice trades, which have not changed for centuries.
Jonah tells his friend Derek that he would like to go parasailing. Derek is very enthusiastic and suggests that they try an outfit called Wind Beneath My Wings because he has heard good things about it. Derek offers to arrange everything. He makes a reservation, puts the $600 fee on his credit card, and picks Jonah up to drive him to the Wings location. What a friend! But the day does not turn out as Jonah had hoped. While he is soaring up in the air over the Pacific Ocean, his sail springs a leak, he goes plummeting into the sea and breaks both legs. During his recuperation in the hospital, he learns that Wings is unlicensed. He also sees an ad for Wings offering parasailing for only $350. Derek is listed in the ad as one of the company's owners.
Required:
a. Does an agency relationship exist between Derek and Jonah?
b. Discuss what duties the agent had to the principal in the above example. Did the agent fulfill his duties? Why or Why not?
Answer:
- Derek is an agent of Jonah
- Derek failed in his fiduciary duties to his principal
Explanation:
An a agent is someone that is appointed by a principal to take care of their interests. The agent's loyalty is to only his principal and he should not manipulate the relationship for personal gain.
In the given scenario Jonah appointed Derek to arrange for parasailing activity. So he is an agent to Jonah in this respect.
However Derek chooses an outfit called Wind Beneath My Wings where he is an owner, he put aside $600 instead of $350 for the reservation, and the company is unlicensed.
All these are violations of Derek's fiduciary duty. He put Jonah at risk for his own personal gain.
Alan Krueger conducted a survey of fans at the 2001 Super Bowl who purchased tickets to the game for $325 or $400. Krueger found that (a) 94 percent of those surveyed would not have paid $3,000 for their tickets, and (b) 92 percent of those surveyed would not have sold their tickets for $3,000. These results are an example of A. the failure to ignore sunk costs. B. rational consumer behavior. C. the endowment effect. D. the fallacy of composition.
Answer:
C. the endowment effect
If a bank has $500 million of checkable deposits, a required reserve ratio of 15%, and it holds $126 million reserves, then the maximum deposit outflow it can sustain without running into reserve deficiency is Group of answer choices $20 million $60 million $71 million $51 million
Answer: $51 million
Explanation:
Firstly, we need to calculate the required reserve which will be:
= $500 × 15%
= $500 million × 0.15
= $75 million
Then, the excess reserve will be:
= $126 million - $75 million
= $51 million
Therefore, the maximum deposit outflow it can sustain without running into reserve deficiency is $51 million.