Answer:
$18,000 ordinary gain and $6,500 Section 1231 gain
Explanation:
Calculation to Determine the amount and character of Nipher's gain recognized.
Based on the information given we were told that the Accumulated MACRS depreciation was the amount of $18,000 which means that the ORDINARY INCOME will be $18,000 as well as $6,500 SECTION 1231 GAIN Calculated as:
Gain= Fair Value of Equipment -Book value of Equipment
Gain=$76,500-$70,000
Gain=$6,500
Therefore the amount and character of Nipher's gain recognized will be $18,000 ordinary gain and $6,500 Section 1231 gain
During the current year, Comma Co. had outstanding: 25,000 shares of common stock; 8,000 shares of $20 par, 10% cumulative preferred stock; and 3,000 bonds that are $1,000 par and 9% convertible. The bonds were originally issued at par, and each bond was convertible into 30 shares of common stock. During the year, net income was $200,000, no dividends were declared, and the tax rate was 30%. What amount was Comma's basic earnings per share for the current year?
a. $7.55
b. $7.36
c. $8.00
d. $3.38
Answer:
b. $7.36
Explanation:
The computation of the basic earning per share is shown below;
Basic earnings per share
= (Net income - Preferred dividends) ÷ Outstanding common shares
= [$200,000 - (8000 × $20 × 10%)] ÷ 25,000
= ($200,000 - $16,000) ÷ 25,000
= $184,000 ÷ 25,000
= $7.36
Hence, the option b is correct
The political business cycle refers to Group of answer choices the fact that about every four years some politician advocates greater government control of the Fed. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle. changes in output created by the monetary rule the Fed must follow.
Answer:
the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected.
Explanation:
A political business cycle can be defined as a business cycle that typically arises from the manipulation and tweaking of economic policy tools such as fiscal policy and monetary policy by incumbent (serving) politicians, in order to stimulate and enhance the economy of a particular country before an election. Thus, this would go a long way to boost the chances of the candidate representing the particular political party and reelection into office by the people.
Hence, the political business cycle refers to the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected.
The Gross Domestic Products (GDP) is a measure of the total market value of all finished goods and services made within a country during a specific period.
Simply stated, GDP is a measure of the total income of all individuals in an economy and the total expenses incurred on the economy's output of goods and services in a particular country.
Basically, the four (4) major expenditure categories of GDP are consumption (C), investment (I), government purchases (G), and net exports (N).
Additionally, Gross Domestic Products (GDP) of a country's economy gives an insight to it's social well-being such as Real GDP.
Suppose you've just inherited $66,000 from your rich Aunt. You're trying to decide whether to keep the $66,000 in cash so that you can use it for transactions or to deposit the entire amount in a savings account for one year. Suppose that the interest rate on a savings account is 2.5% per year. What would be the opportunity cost of holding the $66,000 as money
Answer:
Opportunity cost of holding the money = $1.650
Explanation:
Opportunity cost is the value of the next best alternative sacrificed in favour of a decision.
The opportunity cost of holding the money is the interest on deposit that would be have been earned should it be invested at the savings rate.
Interest on savings deposit = interest rate × deposit
= 2.5%× 66,000= $1,650
Opportunity cost of holding the money = $1.650
The opportunity cost of holding the money is $1,650.
Opportunity cost can be described as the cost of the next best option forgone when one alternative is chosen over other alternatives. The opportunity cost of holding the cash is the interest on the deposit that would be forgone.
Interest rate = amount deposited x interest rate
$66,000 x 2.5%
= $66,000 x 0.025 = $1,650
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Nona Curry started her own consulting firm, Curry Consulting Inc., on May 1, 2017. The following transactions occurred during the month of May.
May 1 Stockholders invested $15,000 cash in the business in exchange for common stock.
2 Paid $600 for office rent for the month.
3 Purchased $500 of supplies on account.
5 Paid $150 to advertise in the County News.
9 Received $1,400 cash for services performed.
12 Paid $200 cash dividend.
15 Performed $4,200 of services on account.
17 Paid $2,500 for employee salaries.
20 Paid for the supplies purchased on account on May 3.
23 Received a cash payment of $1,200 for services performed on account on May 15.
26 Borrowed $5,000 from the bank on a note payable.
29 Purchased office equipment for $2,000 paying $200 in cash and the balance on account.
30 Paid $180 for utilities.
Instructions
(a) Show the effects of the previous transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year.
Assets = Liabilities +
Stockholders' Equity Date Cash + Accounts Receivable + Supplies + Equipment=Notes Payable+Accounts Payable + Common Stock + Retained Earnings Revenues ? Expenses ? Dividends
During the first quarter, Francum Company incurs the following direct labor costs: January $55,200, February $51,000, and March $64,600. For each month, prepare the entry to assign overhead to production using a predetermined rate of 71% of direct labor cost.
Answer:
See below
Explanation:
Date General journal Debit Credit
Jan. Work in process $39,192
Manufacturing overhead $39,192
($55,200 × 71%)
Feb. Work in process $36,210
($51,000 × 71%)
Manufacturing overhead $36,210
March. Work in process $45,866
($64,600 × 71%)
Manufacturing overhead $45,866
During the year, ABC. had the following cash flows: receipt from customers, $10,000; receipt from the bank for long-term borrowing, $6,000; payment to suppliers, $5,000; payment of dividends, $1,000, payment to workers, $2,000; and payment for machinery, $8,000. What amount would be reported for investing net cash flows on the Statement of Cash Flows (put a minus number in front if it is negative)
Answer:
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The following amounts were received by ABC throughout the course of the year: $10,000 from consumers; $6,000 from the bank for long-term borrowing; $5,000 to suppliers; $1,000 in dividends; $2,000 to employees; and $8,000 for machinery. The amount that would be reported for investment net cash flows is -8000.
What is meant by Cash Flow?A cash flow is a physical or fictitious flow of funds:
The phrase "cash flow" is typically used to represent payments that are anticipated to occur in the future, are thus unknown, and so need to be projected using cash flows;
A cash flow in its restricted sense is a payment (in a currency), especially from one central bank account to another;
A cash flow is determined by its time t, nominal amount N, currency CCY, and account A; symbolically, CF = CF (t,N,CCY,A).
Nonetheless, it is common to use the term "cash flow" in a less precise sense to describe (symbolic) payments into or out of a business, project, or financial product.
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Paige is a scratch golfer, former Division I college golf star and past member of the LPGA tour. She is well-known for her ability to teach golf techniques and is often hired to teach golf clinics. Beatriz was a less successful golf clinic consultant who was just starting out and was hired to run a clinic for Par Golf Promotions. Beatriz was nervous about the clinic because it was her first and she asked Paige if she could fill in for her and Paige agreed. What is this transfer called and will it be allowed under the law of contracts
Answer:
This contract transfer is called a delegation. It will be allowed under the law of contracts, provided there is no provision or contract term in the original contract forbidding such transfer.
Explanation:
A delegation involves the appointment of Paige to perform Beatriz's duties under the golf clinic contract. This transfer is distinguishable from a contract assignment, which involves the transfer of the contract rights and obligations by Beatriz (the assignor) to Paige (the assignee). A transfer by delegation does not allow the assignee to assume all the obligations and rights but to specifically perform a duty.
Cooper Company currently uses the FIFO method to account for its inventory but is considering a switch to LIFO before the books are closed for the year. Selected data for the year are:
Merchandise inventory, January 1 $1,430,000
Current assets 3,603,600
Total assets (operating) 5,720,000
Cost of goods sold (FIFO) 2,230,800
Merchandise inventory, December 31 (LIFO) 1,544,400
Merchandise inventory, December 31 (FIFO) 1,887,600
Current liabilities 1,144,000
Net sales 3,832,400
Operating expenses 915,200
1. Compute the current ratio, inventory turnover ratio, and rate of return on operating assets assuming the company continues using FIFO.
2. Repeat part (a) assuming the company adjusts its accounts to the LIFO inventory method.
Answer:
Cooper Company
1. FIFO:
Current ratio
= 3.15
Inventory turnover ratio
= 1.34
Rate of return on operating assets
= 12%
2. LIFO:
Current ratio
= 2.85
Inventory turnover ratio
= 1.73
Rate of return on operating assets
= 12.8%
Explanation:
a) Data and Calculations:
Merchandise inventory, January 1 $1,430,000
Current assets 3,603,600
Total assets (operating) 5,720,000
Cost of goods sold (FIFO) 2,230,800
Merchandise inventory, December 31 (LIFO) 1,544,400
Merchandise inventory, December 31 (FIFO) 1,887,600
Current liabilities 1,144,000
Net sales 3,832,400
Operating expenses 915,200
FIFO
Merchandise inventory, December 31 (FIFO) $1,887,600
Cost of goods sold (FIFO) 2,230,800
Goods available for sale $4,118,400
Merchandise inventory, January 1 1,430,000
Purchases $2,688,400
LIFO:
Goods available for sale $4,118,400
Merchandise inventory, December 31 (LIFO) 1,544,400
Cost of goods sold (LIFO) $2,574,000
Income Statements FIFO LIFO
Net sales $3,832,400 $3,832,400
Cost of goods sold (FIFO) 2,230,800 2,574,000
Gross profit $1,601,600 $1,258,400
Operating expenses 915,200 915,200
Net income $686,400 $343,200
Merchandise inventory, December 31 (LIFO) 1,544,400
Merchandise inventory, December 31 (FIFO) 1,887,600
Difference between FIFO and LIFO = 343,200
FIFO Difference LIFO
Current assets 3,603,600 343,200 3,260,400
Total assets (operating) 5,720,000 343,200 5,376,800
Cost of goods sold (FIFO) 2,230,800 2,574,000
Merchandise inventory, January 1 1,430,000 1,430,000
Merchandise inventory, December 31 1,887,600 1,544,400
Current liabilities 1,144,000 1,144,000
Average inventory 1,658,800 1,487,200
FIFO:
Current ratio = current assets/current liabilities
= $3,603,600/$1,144,000 = 3.15
Inventory turnover ratio = Cost of goods sold/Average Inventory
= $2,230,800/$1,658,800
= 1.34
Rate of return on operating assets = Net income/Total assets * 100
= $686,400/$5,720,000 * 100
= 12%
LIFO:
Current ratio = $3,260,400/$1,144,000
= 2.85
Inventory turnover ratio = $2,574,000/$1,487,200
= 1.73
Rate of return on operating assets = $686,400/$5,376,800 * 100
= 12.8%
Hershberger's Farms plans to mix two types of food to make a mix of low cost feed for the animals in his farm. A bag of food costs $10 and contains 40 units of protein, 20 units of minerals and 10 units of vitamins. A bag of food B costs $12 and contains 30 units of proteins, 20 units of minerals and 30 units of vitamins. Daily minimum requirements consist of 150 units of proteins, 90 units of minerals and 60 units of vitamins.
a. Based on the lowest possible cost, how many bags of food A and food B should be consumed by the animals each day?
b. What is the overall cost? $46.50
c. Was there any unused resources?
Answer:
Following are the responses to the given choices:
Explanation:
For point a:
It is possible to say that as the material unit in either bag are same, the minimum bag number is 90 /20 = 4.5
rounded off=Minimum 5 bags
They will try to use all of these bags as the cost of bag A is poor.
When we have five bags of protein A, therefore the vitamin requirements were n’t fulfilled.
Currently, using 4 bags of A and 1 B bag, protein, vitamin and mineral obligations are fulfilled. They all are met.
Therefore, 4 food bags A and 1 food bag B need to be consumed due to the lowest cost.
For point b:
Cost total:
[tex]=( 4 \times 10 ) + ( 1 \times 12)\\\\=40 +12\\\\= \$52[/tex]
For point c:
The following are unused resources:
[tex]\text{Protein = Bag A + Bag B - Consumption}\\\\= 160 + 30 - 150\\\\=190-150\\\\= 40\\\\Minerals = 10 \\\\vitamins = 10[/tex]
Total quality management (TQM) is defined as a comprehensive approach dedicated to continuous quality improvement, training, and customer satisfaction. TQM is led by top management and supported throughout the organization. This activity is important because TQM requires hard work, and managers should understand its core principles in order to properly instill and support TQM in their organizations.
1. Employees, suppliers, and customers are all entrusted with decision-making power.
(Click to select) People orientation Improvement orientation
2. The way to success in business is through continuous, small enhancements to products.
(Click to select) People orientation Improvement orientation
3. Is driven by strong support at the highest levels of the organization.
(Click to select) People orientation Improvement orientation
4. The focus is on creating the most value possible for customers.
(Click to select) People orientation Improvement orientation
5. Assumes that it is better to expend more resources getting something right the first time than to have to engage in costly repairs and reworking after the fact.
(Click to select) People orientation Improvement orientation
6. Executives and researchers at the corporate level frequently interact with front-line salespeople to garner information on customer and product issues.
(Click to select) People orientation Improvement orientation
Solution :
TQM stands for Total quality management. It is a comprehensive approach and is led by the top management and is supported through the organization. This process is dedicated to the continuous quality improvement and training and customer satisfaction.
People orientation :
Entrusted, focus, interact
Improvement orientation :
Enhancement, resources, strong
Entries for bonds payable and installment note transactions
The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year:
2016
July 1. Issued $74,000,000 of 20-year, 11% callable bonds dated July 1, 2016, at a market (effective rate of 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30.
Oct. 1. Borrowed $200,000 by issuing a six-year, 6% installment note to Nicks Bank. The note requires annual payments of $40,673, with the first payment occurring on September 30, 2017.
Dec. 31. Accrued $3,000 of interest on the installment note. The interest is payable on the date of the next installment note payment.
31. Paid the semi-annual interest on the bonds. The bond discount amortization of $261,693 is combined with the semi-annual interest payment.
31. Closed the interest expense account.
2017
June 30. Paid the semi-annual interest on the bonds. The bond discount amortization of $261,693 is combined with the semi-annual interest payment.
Sept. 30. Paid the annual payment on the note, which consisted of interest of $12,000 and principal of $28,673.
Dec. 31. Accrued $2,570 of interest on the installment note. The interest is payable on the dat of the next installment note payment.
31. Paid the semi-annual interest on the bonds. The bond discount amortization of $261,693 is combined with the semi-annual interest payment.
31. Closed the interest expense account.
2018
June 30. Recorded the redemption of the bonds, which were called at 98. The balance in the bond discount account is $9,420,961 after payment of interest and amortization of discount have been recorded. (Record the redemption only).
Sept. 30. Paid the second annual payment on the note, which consisted of interest of $10,280 and principal of $30,393.
Instructions:
1. Journalize the entries to record the foregoing transactions.
2. Indicate the amount of the interest expense in (a) 2016 and (b) 2017.
Answer:
Winklevoss Inc.
Journal Entries:
2016
July 1. Debit Cash $63,532,267
Debit Bonds Discount $10,467,733
Credit 11% Callable Bonds Payable $74,000,000
To record the issuance of 20-year, 11% callable bonds dated
Oct. 1. Debit Cash $200,000
Credit 6% Installment Note Payable (Nicks Bank) $200,000
To record the issuance of a six-year, 6% installment note.
Dec. 31. Debit Interest Expense $3,000
Credit Interest Expense Payable $3,000
To accrue interest for 3 months.
Dec. 31. Debit Interest Expense on Bonds $4,331,693
Credit Bond discount amortization $261,693
Credit Cash $4,070,000
To record the first semiannual interest payment.
Dec. 31. Debit Income Summary $4,334,693
Credit Interest Expense $4,334,693
To close the expense accounts.
2017
June 30. Debit Interest Expense on Bonds $4,331,693
Credit Bond discount amortization $261,693
Credit Cash $4,070,000
To record the second semiannual interest payment.
Sept. 30. Debit 6% Installment Notes Payable $28,673
Debit Interest Expense $9,000
Debit Interest Expense Payable $3,000
Credit Cash $40,673
To record installment payment, including interest.
Dec. 31. Debit Interest Expense $2,570
Credit Interest Expense Payable $2,570
To accrue interest.
Dec. 31. Debit Interest Expense on Bonds $4,331,693
Credit Bond discount amortization $261,693
CreditCash $4,070,000
To record semiannual interest payment.
Dec. 31. Debit Income Summary $4,334,263
Credit Interest Expense $4,334,263
To close the interest expense account.
2018
June 30. Debit 11% Callable Bonds Payable $74,000,000
Credit Bond Discount $1,480,000
Credit Cash $72,520,000
To record the bond redemption only.
Sept. 30. Debit 6% Installment Notes Payable $30,393
Debit Interest Expense $7,710
Debit Interest Expense Payable $2,570
Credit Cash $40,673
To record the second annual payment on the note, which consisted of interest of $10,280 and principal of $30,393.
Explanation:
a) Data and Analysis:
2016
July 1. Cash $63,532,267 Bonds Discount $10,467,733 11% Callable Bonds Payable $74,000,000 issue of 20-year, 11% callable bonds dated
July 1, 2016, at a market (effective rate of 13%, receiving cash of . Interest is payable semiannually on December 31 and June 30.
Oct. 1. Cash $200,000 6% Installment Note Payable (Nicks Bank) $200,000
issuance of a six-year, 6% installment note to . The note requires annual payments of $40,673, with the first payment occurring on September 30,
2017.
Dec. 31. Interest Expense $3,000 Interest Expense Payable $3,000
Dec. 31. Interest Expense on Bonds $4,331,693 Bond discount amortization $261,693 Cash $4,070,000
Dec. 31. Income Summary $4,334,693 Interest Expense $4,334,693
2017
June 30. Interest Expense on Bonds $4,331,693 Bond discount amortization $261,693 Cash $4,070,000
Sept. 30. 6% Installment Notes Payable $28,673 Interest Expense $9,000 Interest Expense Payable $3,000 Cash $40,673
Dec. 31. Interest Expense $2,570 Interest Expense Payable $2,570
Dec. 31. Interest Expense on Bonds $4,331,693 Bond discount amortization $261,693 Cash $4,070,000
Dec. 31. Income Summary $4,334,263 Interest Expense $4,334,263
2018
June 30. 11% Callable Bonds Payable $74,000,000 Bond Discount $1,480,000 Cash $72,520,000 To record the bond redemption only.
Sept. 30. 6% Installment Notes Payable $30,393 Interest Expense $7,710 Interest Expense Payable $2,570 Cash $40,673
the second annual payment on the note, which consisted of interest of $10,280 and principal of $30,393.
Grass Frog Company sells merchandise only on credit. For the year ended December 31, 2018, the following data are available:
Sales (all on credit) $2,100,000
Accounts Receivable, January 1, 2018 305,000
Allowance for doubtful accounts,
January 1, 2018 (credit) 25,000
Cash collections during 2018 1,980,000
Accounts written off as uncollected
(default) during 2018 15,000
1. Determine the balance of Accounts Receivable at December 31, 2018.
2. Assume that the company estimates bad debts at 4% of credit sales. What amount will the company record as bad debt expense for 2018?
3. What journal entry Grass Frog prepare to record bad debt expense for 2018 (related to part 2)?
4. Now assume the company estimates bad debts based on the aging method. Estimate the ending balance in the allowance for doubtful accounts at December 31, 2018 using the information below:
AGE CLASS % UNCOLLECTIBLE AMOUNT
Not Past Due 1% $220,000
1-30 Days Past Due 5% $110,000
31-60 Days Past Due 10% $40,000
61-90 Days Past Due 25% $30,000
Over 90 Days Past Due 50% $10,000
1. What journal entry would Grass Frog prepare to record bad debt expense for 2018 (related to part 4)?
2. What is the net realizable value of the receivables to be reported on the balance sheet at year-end (assuming aging method was used by Grass Frog)?
Answer:
Grass Frog Company
1. The balance of Accounts Receivable at December 31, 2018 is:
= $410,000.
2. The amount that the company will record as bad debt expense for 2018 is:
= $74,000.
3. Journal Entry to record the bad debt expense for 2018:
Debit Bad Debt Expense $74,000
Credit Allowance for Doubtful Accounts $74,000
To record the bad debt expense for the year.
4. The ending balance in the allowance for doubtful accounts at December 31, 2018 is:
= $24,200
a. Journal Entry to record bad debt expense:
Debit Bad Debt Expense $14,200
Credit Allowance for Doubtful Accounts $14,200
To record the bad debt expense for the year.
b. The net realizable value of the receivables to be reported on the balance sheet at year-end (assuming aging method was used by Grass Frog) is:
Accounts receivable balance $410,000
Allowance for doubtful accounts (24,200)
Net realizable value = $385,800
Explanation:
a) Data and Calculations:
December 31, 2018:
Accounts Receivable
January 1, 2018 $305,000
Sales (all on credit) 2,100,000
Cash collections during 2018 (1,980,000)
Accounts written off during 2018 (15,000)
Dec. 31, 2018 balance $410,000
Allowance for doubtful accounts,
Accounts written off during 2018 $15,000
December 31, 2018 (4%) 84,000
January 1, 2018 (credit) (25,000)
Bad Debts Expense 74,000
AGE ANALYSIS:
AGE CLASS % UNCOLLECTIBLE ALLOWANCE
AMOUNT
Not Past Due 1% $220,000 $2,200
1-30 Days Past Due 5% $110,000 5,500
31-60 Days Past Due 10% $40,000 4,000
61-90 Days Past Due 25% $30,000 7,500
Over 90 Days Past Due 50% $10,000 5,000
Total $410,0000 $24,200
Accounts written off during 2018 $15,000
December 31, 2018 24,200
January 1, 2018 (credit) (25,000)
Bad Debts Expense 14,200
The following table contains statements that provide some analysis of policies that address globalization.
Categorize each statement as positive or normative.
1-In the past decade, U.S. companies have outsourced millions of jobs overseas.
2-Companies that outsource jobs are acting immorally.
3- If the U.S. government were to institute higher tariffs on imports, companies would stop outsourcing jobs.
4-The U.S. government should institute higher tariffs on imports.
I need help in this problem. that what I got: 1-Positive 2- Normative 3- postive 4- Normative
Is that correct??
Answer:
Positive statement
Normative statement
Positive statement
Normative statement
Explanation:
Positive Economics is objective and statements are usually based on facts and economic theory. They can be tested.
For example, -In the past decade, U.S. companies have outsourced millions of jobs overseas - is a statement that can be verified with data
Normative economics is based value judgements, opinions and perspectives. For example, -Companies that outsource jobs are acting immorally - is subject to opinion. Some would agree and some would not
How do consumer preferences shape the market for livestock?
Answer:
The consumer preference is to have a meat that is leaner, and an equal amount of fat distributed throughout the meat.
Explanation:
This means that the cuts of meat that fit this description can be sold at a higher price than others.
Ficus, Inc. began business on March 1 of the current year, and elected to file its income tax return on a calendar-year basis. The corporation incurred $800 in organizational expenditures. Assuming the corporation does not elect to expense but chooses to amortize the costs over 180 months, the maximum allowable deduction for amortization of organizational expenditures in the current year is: a.$44.44 b.$800.00 c.$4.44 d.$53.28 e.None of these choices are correct.
Answer:
a. $44.44
Explanation:
The amortization will be allowed for 10 months in the year (March-December) as the return is filed on a calendar year basis. The deduction allowed per month $4.44 ($800 / 180).
The maximum allowable deduction for amortization of organizational expenditures in the current year is $44.44 ($4.44*10 months).
Thomas believes that he has an NOL for the current year and wants to carry it back to a previous year and receive a tax refund. In determining his NOL, Thomas offset his business income by alimony payments he made to his ex-wife, contributions he made to his traditional Individual Retirement Account (IRA), and moving expenses he incurred. His reason for using these items in the NOL computation is that each item is a deduction for AGI.
Required:
Identify the relevant tax issues for Thomas
Answer:
The relevant tax issues for Thomas to consider are whether the amount of NOL would be reduced if ; payments made with regards to Alimony , Moving Expenses and contributions made to Traditional IRA are included .
Explanation:
The relevant tax issues for Thomas to consider are whether the amount of NOL would be reduced if ; payments made with regards to Alimony , Moving Expenses and contributions made to Traditional IRA are included .
according to rule : Non business deductions are limited in the Ongoing year's NOL hence Non business deductions made with regards to Alimony , Moving Expenses and contributions made to Traditional IRA are included the amount of NOL will reduce.
an unmarried taxpayer, has wages of $45,000. He has a significant amount of income from dividends and interest and therefore expects to have a federal income tax liability of $18,000. His total federal income tax withholding for the year is $9,500. Randy had $100,000 of adjusted gross income and a federal tax liability of $11,000 on his 2017 return. To avoid a penalty for underpayment of estimated taxes, what is the minimum amount of total estimated tax that Randy must pay in 2018
Answer: $8500
Explanation:
Since the total amount of estimated tax liability for 2018 is $18000 and the tax withholding is $9500$, then the balance tax payable for 2018 will be:
= $18000 - $9500
= $8500
Therefore, the minimum amount of total estimated tax that Randy must pay in 2018 in order to avoid a penalty for underpayment of estimated taxes will be $8500
Dos Amugus Company has income from continuing operations of $621,000 (after tax) for the year ended December 31, 2020. It also has the following items (before considering income taxes): (1) An unrealized loss of $120,000 available-for-sale-securities. (2) A gain of $60,000 on the discontinuance of a major component. (3) A cumulative effect of a change in accounting principle that resulted in an increase in prior years' depreciation of $50,000. Assume all items are subject to income taxes at a 30% tax rate. Prepare an income statement, beginning with income from continuing operations. DOS AMUGUS COMPANY Partial Statement of Comprehensive Income For the Year Ended December 31, 2020
Answer:
Dos Amugus company
Partial Statement of Comprehensive Income
Particulars Amount
Income from continuing operations $621,000
Discontinued operations. Gain on discontinued $42,000
segment net of tax (60,000 * 30% of 60,000)
Net income $663,000
Other comprehensive income ($84,000)
Unrealized holding loss, on available for sale
securities net of income tax (120,000-30%*120,000)
Comprehensive income $579,000
An ARMA(3, 0) model is fit to the following quarterly time series: Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 2018 3.53 1.33 1.85 0.61 2019 0.98 3.61 3.44 3.38 2020 2.91 2.12 4.62 2.93 The estimated coefficients are: ar1 ar2 ar3 intercept 0.252 0.061 -0.202 2.637 Forecast the value for Quarter 1 of 2021. Give full explanation on how you arrived to your answer. Show calculations. A. Less that 3.00 B. At least 3.00, but less than 3.25 C. At least 3.25, but less than 3.50 D. Atleast 3.50, but less than 3.75 E. At least 3.75.
Answer: A. Less that 3.00
Explanation:
We will essentially be using a multiple regression formula to predict the value of the first quarter of 2021.
Equation is:
Y₂₀₂₁ = Intercept + ar1X₁ + ar2X₂ + ar3X₃
Y = Quarter 1, 2021
X₁ = Quarter 1, 2018
X₂ = Quarter 1, 2019
X₃ = Quarter 1, 2020
= 2.637 + (0.252 * 3.53) + (0.061 * 0.98) + (-0.202 * 2.91)
= 2.99852
This is less than 3 so the first option is correct.
Suppose that Freddie's Fries has annual sales of $520,000; cost of goods sold of $395,000; average inventories of $11,000; average accounts receivable of $27,000, and an average accounts payable balance of $22,000. Assuming that all of Freddie's sales are on credit, what will be the firm's cash cycle? (Round your answer to 2 decimal places.)
Answer:
8.78
Explanation:
The computation of the cash cycle is given below;
We know that
Cash cycle = Inventory conversion period + Receivables conversion period - Payables conversion period.
Here
1. Inventory conversion period = Avg. Inventory ÷ (COGS ÷365)
= (11,000) ÷ (395000 ÷ 365)
= 10.16
2. Receivables conversion period = Avg. Accounts Receivable ÷ (Credit Sales × 365)
= (27000/520000) × 365
= 18.95
3. Payables conversion period = Avg. Accounts Payable ÷ (Purchases × 365)
= (22000 ÷ 395000) × 365
= 20.33
Now the cash cycle is
= 10.16 + 18.95 - 20.33
= 8.78
Whirlwind mowers manufacturers and sells power lawnmower still public and distributes the products through its own dealers. Andrew is a homeowner who has purchased a power mower from an authorized dealer on the basis of the dealer's recommendation that the mower is the best one available to the job. Andrew was cutting his lawn when the mower blade flew off and seriously injured his leg.
Required:
a. Andrew sues Whirlwind Mowers and asks for damages based on negligence in producing the power mower. Is Whirlwind Mowers guilty of negligence? Explain your answer.
b. The doctrine of res ipsa loquitur can often be applied to cases of this type. Show how this doctrine can be applied to this case. Your answer must include a definition of res ipsa loquitur .
c. Explain the various types of damages that Andrew might receive if Whirlwind Mowers is found guilty of negligence.
Answer:
A) Yes Whirlwind mowers are guilty
B) If
The negligence causes an injury event occurred due to the negligence applicant/defendant has an exclusive ownership of the equipmentC) Compensative damages : special and general
Explanation:
A)
Andrew can sue whirlwind mowers and claim damages for production negligence ( i.e. not following the standard of care ) as enshrined in the doctrine of " res ipsa loquitur " hence Whirlwind mowers are guilty
B)
"res ipsa loquitur ." means the thing speaks for itself and this doctrine can be applied to this case following that the:
The negligence causes an injury event occurred due to the negligence applicant/defendant has an exclusive ownership of the equipmentc) The various types of damages
Compensative damages ( divided into 2 )
i) special damages which includes hospital expenses and other properly documented damages ii) general damages : includes damages that are non-measurable damages
Part U67 is used in one of Broce Corporation's products. The company's Accounting Department reports the following costs of producing the 15,400 units of the part that are needed every year.
Per Unit
Direct materials $2.30
Direct labor $3.30
Variable overhead $6.10
Supervisor's salary $6.60
Depreciation of special equipment $7.70
Allocated general overhead $4.80
An outside supplier has offered to make the part and sell it to the company for $27.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $21,400 of these allocated general overhead costs would be avoided.
Required:
a. Prepare a report that shows the financial impact of buying part U67 from the supplier rather than continuing to make it inside the company.
b. Which alternative should the company choose?
Answer:
Broce Corporation
a. The Financial Impact of Buying Part U67 is as follows:
Differential Analysis:
Cost of buying from supplier = $415,800 (15,400 * $27)
Avoidable cost of making = 303,220
Differential cost for buying = $112,500
b. The company should choose to continue to produce the part internally.
Explanation:
a) Data and Calculations:
Production units for the year = 15,400
Per Unit Costs:
Direct materials $2.30
Direct labor $3.30
Variable overhead $6.10
Total variable costs $11.70
Supervisor's salary $6.60
Depreciation of special equipment $7.70
Allocated general overhead $4.80
Total fixed costs $19.10
Total costs $30.80
Outside supplier's offer per unit = $27
Avoidable costs:
Direct materials $2.30
Direct labor $3.30
Variable overhead $6.10
Supervisor's salary $6.60
Total avoidable variable costs $18.30 * 15,400 = $281,820
General overhead costs 21,400
Total avoidable costs = $303,220
Differential Analysis:
Cost of buying from supplier = $415,800 (15,400 * $27)
Avoidable cost of making = 303,220
Differential cost for buying = $112,500
Sweet Acacia Industries closes its books on its July 31 year-end. The company does not make entries to accrue for interest except at its year-end. On June 30, the Notes Receivable account balance is $27,200. Notes Receivable include the following.
Date Maker Face Value Term Maturity Date Interest Rate
April 21 Coote Inc. $5,600 90 days July 20 8%
May 25 Brady Co. 8,400 60 days July 24 10%
June 30 BMG Corp. 13,200 6 months December 31 6%
During July, the following transactions were completed.
July 5 Made sales of $4,310 on Sweet Acacia Industries credit cards.
14 Made sales of $600 on Visa credit cards. The credit card service charge is 3%.
20 Received payment in full from Coote Inc. on the amount due.
24 Received payment in full from Brady Co. on the amount due.
Journalize the July transactions and the July 31 adjusting entry for accrued interest receivable. (Interest is computed using 360 days; omit cost of goods sold entries.)
Answer:
Sweet Acacia Industries
Journal Entries:
July 5: Debit Cash $4,310
Credit Sales Revenue $4,310
To record sales on Sweet Acacia credit cards.
July 14: Debit Cash $582
Debit Service Charge Expense $18
Credit Sales Revenue $600
To record sales made on Visa credit cards with service charge of 3%.
July 20: Debit Cash $5,712
Credit Notes Receivable (Coote Inc.) $5,600
Credit Interest Revenue $112
To record the receipt of full payment with interest.
July 24: Debit Cash $8,540
Credit Notes Receivable (Brady Co.) $8,400
Credit Interest Revenue $140
To record the receipt of full payment with interest.
July 31: Debit Interest Receivable (BMG Corp.) $66
Credit Interest Revenue $66
To accrue interest revenue for 30 days.
Explanation:
a) Data and Calculations:
June 30 balances of Notes Receivable:
Date Maker Face Value Term Maturity Date Interest Rate
April 21 Coote Inc. $5,600 90 days July 20 8%
May 25 Brady Co. 8,400 60 days July 24 10%
June 30 BMG Corp. 13,200 6 months December 31 6%
July 5: Cash $4,310 Sales Revenue $4,310
July 14: Cash $582 Interest Expense $18 Sales Revenue $600
July 20: Cash $5,712 Notes Receivable (Coote Inc.) $5,600 Interest Revenue $112 ($5,600 * 8% * 90/360)
July 24: Cash $8,540 Notes Receivable (Brady Co.) $8,400 Interest Revenue $140 ($8,600 * 10% * 60/360)
July 31: Interest Receivable (BMG Corp.) $66 Interest Revenue $66 ($13,200 * 6% * 30/360)
Consumption expenditures $ 4,150 Federal government purchases of goods and services 850 State and local government’s purchases 331 Investment 751 Proprietors income 150 Compensation of employees 4,080 Corporate profits 134 Taxes on corporate profits 23 Rental income 31 Capital consumption allowance 295 Indirect business taxes 130 Net interest 147 Exports 300 Imports 320 Undistributed corporate profits 111 Transfer payments 66 Personal taxes 45 Dividends 0 Income Earned from the Rest of the World 252 Income Earned by the Rest of the World 1,347 Social insurance taxes 222 Statistical discrepancy 5 Refer to Exhibit 7-1. What is the value of disposable income?
Answer:
The value of disposable income is $4,207
Explanation:
Dispossable income refers to the addition of income of an individual minus his taxes.
Therefore, the value of the value of disposable income can be calculated as follows:
Disposable income = Proprietors income + Compensation of employees + Rental income + Net interest + Transfer payments - Social insurance taxes - Personal taxes = $150 + $4,080 + $31 + $147 + $66 - $222 - $45 = $4,207
Therefore, the value of disposable income is $4,207.
A corporation that transfers restricted stock to an employee as compensation may deduct the stock’s fair market value in the year of transfer even if the employee doesn’t recognize the value as gross income in the year of transfer.
A. True
B. False
Leaders at ABC Corp. now encourage employees to experiment with new ideas. In particular, the executives emphasize that reasonable mistakes are tolerated and expected as part of the discovery process. Which of the following best describes what these leaders are trying to develop?
a. cross-pollination
b. a learning orientation
c. associative play
d. intuitive decision making
e. escalation of commitment
Answer:
b. a learning orientation
Explanation:
The learning orientation would be focused on the learning, its persistance, hard work, watching the situations that would result in performing the task in a better way and at the same time we would able to learn it from the given situation that consist of the challenges & efforts with respect to the work
Therefore as per the given situation, the option b is correct
Compute the payback period for each of these two separate investments: A new operating system for an existing machine is expected to cost $280,000 and have a useful life of five years. The system yields an incremental after-tax income of $80,769 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $11,000. A machine costs $200,000, has a $15,000 salvage value, is expected to last seven years, and will generate an after-tax income of $44,000 per year after straight-line depreciation.
Answer and Explanation:
The computation of the payback period for each investment is shown below;
For Option 1
= Initial Investment ÷ Annual Cash Flow
= $280,000 ÷ $134,569
= 2.081 Year
Here Annual cash inflow is
= Net income + Depreciation
= $80,769 + (($280,000 - $11,000) ÷ 5)
= $134,569
For Option-2
= Initial Investment ÷ Annual Cash Flow
= $200,000 ÷ $70,429
= 2.84 Year
Here Annual cash inflow is
= Net income + Depreciation
= $44,000 + (($200,000 - $15,000) ÷ 7)
= $70,429
You should consider a person's a. Grade in the class b. Personality before asking them to join your study group. C. All of these d. None of these
All of these
Hope it will helps you!
Suppose that Toyota operates two large plants: one in Japan and one in the United States. In the Japanese plant it takes Toyota 4 hours to produce a sedan and 3 hours to produce a truck. In the plant in the United States it take Toyota 6 hours to produce a sedan and 4 hours to produce a truck. This implies that ___________ has the absolute advantage in producing sedans and _____________ has the absolute advantage in producing trucks. Japan ; Japan Japan ; United States United States ; Japan United States ; United States no one ; Japan no one ; United States Japan ; no one United States ; no one no one ; no one
Answer: Japan ; Japan
Explanation:
Absolute advantage in the production of a good means that one is able to produce more of the good in a certain period of time. This can also mean that they take a shorter time to produce a single unit of a good.
Going by this definition, Japan has an absolute advantage in the production of both sedans and trucks because they take less time to produce both types of vehicles which means that they can produce more of both than the United States if given a certain period of time.
Park Place Company reported cost of goods sold of $140,000 for the year 2020. Park Place also reported the following amounts on its balance sheets. Jan. 1, 2020Dec. 31, 2020 Inventory$25,000$27,500 Accounts payable15,00014,500 What amount would be reported as cash paid to suppliers in the operating activities section of the statement of cash flows using the direct method
Answer:
the cash paid to supplier is $143,000
Explanation:
The computation of the cash paid to the supplier is given below;
Purchases = Ending inventory + cost of goods sold - beginning inventory
= $27,500 + $140,000 - $25,000
= $142,500
Now the Cash paid to supplier is
= Beginning account payable + purchases - ending account payable
= $15,000 + $142,500 - $14,500
= $143,000
hence the cash paid to supplier is $143,000