The burden of proof in a civil case remains on the person who files the case.
What is Civil Case?Civil cases are those cases which includes the cases related to property , including respecting rights mentioned in the constitution. It does not include the criminal lawsuit.
For example: breach of the contract, divorce, violations regarding the copyright are the examples of the civil cases.
In Civil cases the person or the government entity also known as plaintiff has to proof the allegations are true. Plaintiff can provide the proofs in the form of the documents, witness testimonies or any object.
Learn more about Civil cases here:
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Tax laws permit installment sales, which are recognized in the year of sale for financial reporting purposes, to be reported in the tax return later when cash is received. This results in a deferred tax liability because taxable income is _______ than financial income in the year of sale, and _______ than financial income in later years when collected. Multiple choice question. higher; lower higher; higher lower; lower lower; higher
Answer:
lower; higher.
Explanation:
Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.
The different types of tax include the following;
1. Income tax: a tax on the money made by workers in the state. This type of tax is paid by employees with respect to the amount of money they receive as their wages or salary.
2. Property tax: a tax based on the value of a person's home or business. It is mainly taxed on physical assets or properties such as land, building, cars, business, etc.
3. Sales tax: a tax that is a percent of the price of goods sold in retail stores. It is being paid by the consumers (buyers) of finished goods and services and then, transfered to the appropriate authorities by the seller.
Generally, installment sales are permitted or allowed by the tax laws in a country. Typically, they are recognized in the year of sale for the purpose of financial reporting. Also, installment sales for any goods or services are to be reported in the tax return, at a later time when cash is received from the customer (buyer).
This results in a deferred tax liability because taxable income is lower than financial income in the year of sale, and higher than financial income in later years when collected.
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following
Machine A could be purchased for $27,000. It will last 10 years with annual maintenance costs of $900 per year. After 10 years the machine can be sold for $2,835.
Machine B could be purchased for $22,500. It also will last 10 years and will require maintenance costs of $3,600 in year three, $4,500 in year six, and $5,400 in year eight. After 10 years, the machine will have no salvage value.
Required: Assume an interest rate of 8% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year. Calculate the present value of Machine A & Machine B. Which machine Esquire should purchase?
Answer: Esquire should purchase Machine B because it has a lower present value.
Explanation:
Present value cost of Machine A:
= Initial investment + Present value of costs - Present value of sales amount
Present value of cost = 900 * Present value annuity factor, 10 years, 8%
= 900 * 6.7101
= $6,039
Present value of sales amount = 2,835 / (1 + 8%)¹⁰
= $1,313.15
Present value cost = 27,000 + 6,039 - 1,313.15
= $31,725.85
Present value of Machine B:
= 22,500 + 3,600 / 1.08³ + 4,500 / 1.08⁶ + 5,400 / 1.08⁸
= 30,198.18
Esquire should purchase Machine B
C.S. Sandhill Company had the following transactions involving notes payable. July 1, 2022 Borrows $62,000 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2022 Borrows $65,000 from Lyon County State Bank by signing a 3-month, 6% note. Dec. 31, 2022 Prepares adjusting entries. Feb. 1, 2023 Pays principal and interest to Lyon County State Bank. Apr. 1, 2023 Pays principal and interest to First National Bank. Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer:
C.S. Sandhill Company
Journal Entries:
July 1, 2022
Debit Cash $62,000
Credit 9-month, 8% Notes Payable (First National Bank) $62,000
To record signing of a 9-month 8% notes payable for cash borrowed.
Nov. 1, 2022
Debit Cash $65,000
Credit 3-month, 6% Notes Payable (Lyon County State Bank) $65,000
To record the signing of a 3-month 6% notes payable for cash borrowed.
Dec. 31, 2022
Debit Interest Expense $3,130
Credit Interest Payable $3,130
To record interest expense for the two notes. See calculations below.
Feb. 1, 2023
Debit 3-month, 6% Notes Payable (Lyon County State Bank) $65,000
Debit Interest Payable $650
Debit Interest Expense $325
Credit Cash $65,975
To record the repayment of the notes payable with interest due.
Apr. 1, 2023
Debit 9-month, 8% Notes Payable (First National Bank) $62,000
Debit Interest Payable $2,480
Debit Interest Expense $1,240
Credit Cash $65,720
To record the repayment of the notes payable with interest due.
Explanation:
a) Data and Analysis:
July 1, 2022 Cash $62,000 9-month, 8% Notes Payable (First National Bank) $62,000
Nov. 1, 2022 Cash $65,000 3-month, 6% Notes Payable (Lyon County State Bank) $65,000
Dec. 31, 2022 Interest Expense $3,130 Interest Payable $3,130 ($62,000 * 8% * 6/12) + ($65,000 * 6% * 2/12)
Feb. 1, 2023 3-month, 6% Notes Payable (Lyon County State Bank) $65,000 Interest Payable $650 Interest Expense $325 Cash $65,975 (Interest expense = $325 ($65,000 * 6% * 1/12)
Apr. 1, 2023 9-month, 8% Notes Payable (First National Bank) $62,000 Interest Payable $2,480 Interest Expense $1,240 Cash $65,720 (Interest expense = $1,240 ($62,000 * 8% * 3/12)
g The effect on revenue due to a marginal increase in the input is called the marginal revenue product. Match the statements below with the appropriate type of market structure a firm operates in. The marginal revenue product of the input x is lower than the value of the marginal product of that input (price times marginal product). This statement is true for a
Answer:
Statement true for Imperfect Competition Markets
Explanation:
Marginal Revenue Product is additional revenue due to hiring of additional input, it is product of marginal product & marginal revenue = MP x MR
Value Marginal Product is money value of additional production with additional input, product of marginal product (MP) & price (AR), = MP x AR
Input demand curves are derived demand curves, derived from demand of final goods. In perfect competition, demand is perfectly inelastic & horizontal, AR = MR, so MRP = VMP in this case. In imperfect competition market (oligopoly, monopoly etc) - MR < AR, so MRP < VMP in this case.
On January 1, 2020, Doone Corporation acquired 80 percent of the outstanding voting stock of Rockne Company for $448,000 consideration. At the acquisition date, the fair value of the 20 percent noncontrolling interest was $112,000, and Rockne's assets and liabilities had a collective net fair value of $560,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $170,000 in 2021. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $230,000 in 2020 and $330,000 in 2021. Approximately 30 percent of the inventory purchased during any one year is not used until the following year.
Requied:
a. What is the noncontrolling interest's share of Rockne's 2021 income?
b. Prepare Doone's 2021 consolidation entries required by the intra-entity inventory transfers
Answer:
(A). $32,800
(B). Entries are shown below.
Explanation:
(A) According to the scenario, computation of the given data are as follows,
Net income of Rockne Company in 2021 = $170,000
Unrealized profit 2020 = $230,000 × 30% × 20% = $13,800
Unrealized profit 2021 = $330,000 × 30% × 20% = $19,800
So, Total income = $170,000 + $13,800 - $19,800 = $164,000
Now, noncontrolling interest's share of Rockne's 2021 income can be calculated as follows,
NCI share of Rockne's 2021 income = Total income × 20%
= $164,000 × 20%
= $32,800
(B). Journal entries for the given data are as follows,
1. Retained Earnings A/c Dr. $13,800
To, COG sold A/c. $13,800
( Being event *G entry is recorded)
2. Sales A/c Dr. $330,000
To, COG sold A/c. $330,000
( Being event TI entry is recorded)
3. COG sold A/c Dr. $19,800
To, Inventory A/c. $19,800
( Being event G entry is recorded)
A project manager for a not-for-profit organization is completing a new retail outlet project but is unable to get the planned amount of time from key resources to complete some of the critical path tasks. The key resources are focused on completing their day-to-day tasks, and the project manager does not control the work assignments for these people. This scenario is an example of what type of organization
Incomplete question. The options read;
A. Balanced matrix
B. Tight matrix
C. Functional
D. Project coordinator
Answer:
C. Functional
Explanation:
Remember, when we say an organization has a functional structure it implies that the line of authority is grouped based on the functions carried out by employees.
For example, we observe that in this scenario, the project manager could not control the work assignments of other employees because they had been assigned such tasks based on their specialization.
a. On July 1, 2018, the Churab Company paid $200,000 in return for a 5% interest (20,000 shares) in the UNCY Corporation’s common stock.
b. On December 21, 2018, UNCY paid all its stockholders a cash dividend of $1.00 a share.
c. On December 31, 2018, UNCY’s common stock had a market value of $15 a share.
d. On November 30, 2019, UNCY issued 100,000 shares of preferred stock that would be convertible, at the option of its stockholders, into 60,000 shares of common stock no earlier than 2022.
d. On December 31, 2019, UNCY’s common stock had a market value of $12 a share.
e. On February 1, 2020, Churab sold all its shares of its UNCY stock for $19 a share.
Required:
Provide all the journal entries that the Churab Company would make for the investment activity described above.
Answer:
Churab Company
Journal Entries
a. On July 1, 2018
Debit Investment in UNCY Corporation $200,000
Credit Cash $200,000
To record the purchase of 5% interest (20,000 shares) in the UNCY Corporation’s common stock.
b. On December 21, 2018
Debit Cash $20,000
Credit Dividend Revenue $20,000
To record the receipt of dividend from UNCY Corporation at $1.00 a share.
c. On December 31, 2018
Debit Investment in UNCY Corporation $100,000
Credit Unrealized Gain from Investment $100,000
To record the unrealized gain from investment when the market value rose to $15 a share.
d. On December 31, 2019
Debit Unrealized Loss from Investment $60,000
Credit Investment in UNCY $60,000
To record the unrealized loss from investment when the market value fell to $12 a share.
e. On February 1, 2020
Debit Cash $380,000
Credit Investment in UNCY Corporation $240,000
Credit Realized Gain from Investment $140,000
To record the sale of the shares of UNCY stock for $19 per share.
Explanation:
a) Data and Analysis:
a. On July 1, 2018 Investment in UNCY Corporation $200,000 Cash $200,000 5% interest (20,000 shares) in the UNCY Corporation’s common stock.
b. On December 21, 2018, Cash $20,000 Dividend Revenue $20,000 $1.00 a share.
c. On December 31, 2018, Investment in UNCY Corporation $100,000 Unrealized Gain from Investment $100,000 (a market value of $15 a share).
d. On November 30, 2019, UNCY issued 100,000 shares of preferred stock that would be convertible, at the option of its stockholders, into 60,000 shares of common stock no earlier than 2022.
d. On December 31, 2019, Unrealized Loss from Investment $60,000 Investment in UNCY $60,000 a market value of $12 a share.
e. On February 1, 2020, Cash $380,000 Investment in UNCY Corporation $240,000 Realized Gain from Investment $140,000
A year-end review of accounts receivable and estimated uncollectible percentages revealed the following: Category Accounts Receivable Uncollectible percentages 1-30 days $40,000 1.5% 31-60 days $10,000 8.0% 61-90 days $6,000 15.0% The beginning balance of Allowance for Doubtful Accounts is $400 (credit). Based on this information, the bad debt expense for the year is:
Answer:
$1,900
Explanation:
Calculation to determine what the bad debt expense for the year is:
Accounts Receivable Uncollectible percentages 1-30 days $40,000* 1.5% =$600
31-60 days $10,000 *8.0% =$800
61-90 days $6,000 *15.0% =$900
Total $2,300
Bad debt expense =$2,300-400
Bad debt expense =$1,900
Therefore Based on this information, the bad debt expense for the year is:$1,900
A CFO of a start-up company is evaluating the timing of a significant capital expenditure. He was previously at a mature company that used a discount rate of 8% so he used the same rate at the start-up company. Which of the following would be impacted if the discount rate were raised to reflect the risk of the start-up company?
a) Internal rate of return
b) Payback period
c) Return on investment
d) Net present value
Answer:
d) Net present value
Explanation:
The net present value is the value that shows the difference between the initial investment present value and the cash flows present value. If the present value cash flows is more than the initial investment present value so the project should be accepted else rejected
So here in the given situation, the net present value would be effected in the case when the discount rate would be raised in order to present the start up company risk
Hence, the option d is correct
using a scale: Three boys Isaac ,Alex and Ken are standing in different parts of a field .Isaac is 100 metres north of Alex and Ken is 120 metres east of Alex .Find the compass bearing of Ken from Isaac
Answer:
156 m South East of Isaac
Explanation:
This is going to be solved by using Pythagoras theorem
We have the adjacent of the triangle as the Eastern distance between Ken and Alex, and that is 120 m. We have the opposite side to be the Northern distance between Isaac and Alex to be 100 m
If so, then we know that the hypotenuse side is the distance between Isaac and Ken. Using Pythagoras, we know that
100² + 120² = x²
x² = 10000 + 14400
x² = 24400
x =√24400
x = 156.2 m
The compass bearing of Ken, from Isaac then is,
Ken is 156.2 m South East of Isaac
can you help with 1040 form for acct 130 class
Answer:
what is the question lol? I could probably help you out !
Suppose Kevin and Maria are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Kevin chooses Right and Maria chooses Right, Kevin will receive a payoff of 7 and Maria will receive a payoff of 6.
Maria
Left Right
Kevin Left 4, 3 6, 4
Right 6, 7 7, 6
The only dominant strategy in this game is for ___________ to choose ______________ The outcome reflecting the unique Nash equilibrium in this game is as follows: Kevin chooses _______________ and Maria chooses _____________
Answer:
The only dominant strategy in this game is for Kelvin to choose right. The outcome reflecting the unique Nash equilibrium in this game is as follows: Kevin chooses right and Maria chooses left.
Explanation:
A dominant strategy can described as a strategy that makes a player better off no matter his or her opponent in a game chooses.
In the game in the question, when Kelvin plays left, it best for Maria to play right because 4 > 3. But when Kelvin plays right, Maria will play left because 7 > 6. Therefore, there is no particular strategy that will make Maria better off. This implies Maria has no dominant strategy.
On the other hand, when Maria plays left, Kelvin will play right because 6 > 4. And when Maria plays right, Kelvin will still also play right because 7 > 6. This implies that no matter what Maria plays, Kelvin will always be better off by playing right. Therefore, the dominant strategy for Kelvin is right.
The implication of the above analysis in that the only dominant strategy in this game is for Kelvin to choose Right.
The only dominant strategy in this game is for Kelvin to choose right. The outcome reflecting the unique Nash equilibrium in this game is as follows: Kevin chooses right and Maria chooses left.
You are the manager of a small pharmaceutical company that received a patent on a new drug three years ago. Despite strong sales ($125 million last year) and a low marginal cost of producing the product ($0.40 per pill), your company has yet to show a profit from selling the drug. This is, in part, due to the fact that the company spent $2 billion developing the drug and obtaining FDA approval. An economist has estimated that, at the current price of $1.20 per pill, the own price elasticity of demand for the drug is -1.5. Based on this information, what can you do to boost profits?
Answer: Reduce the price of the drug
Explanation:
The own price elasticity of a good shows how much its quantity demanded will change as a result of an increase in price.
A -1.5 own price elasticity means that if the price of the drug is reduced by 1%, quantity demanded will increase by 1.5%.
The company is incurring a relatively low marginal cost of $0.40 to produce the pills and charges $1.20. If they can reduce this price by 17% for example, to $1, they would still make a profit and the demand for the pill would increase by 25.5%.
Scenario.
A hundred people were buying the drug at $1.20. Revenue:
= 100 * 1.20
= $120
Reduce price to $1 and 25.5% more people buy:
= 1 * (100 * 1.255)
= $125.50
Profit will increase by $5.50 proving that to boost profits, you should reduce prices.
Speedy Bikes could sell its bicycles to retailers either assembled or unassembled.
The cost of an unassembled bike is as follows:
Direct materials $150
Direct labor 70
Variable overhead (70% of direct labor) 49
Fixed overhead (30% of direct labor) 21
Manufacturing cost per unit $290
The unassembled bikes are sold to retailers at $450 each.
Speedy currently has unused productive capacity that is expected to continue indefinitely; management has concluded that some of this capacity can be used to assemble the bikes and sell them at $495 each. Assembling the bikes will increase direct materials by $5 per bike, and direct labor by $10 per bike. Additional variable overhead will be incurred at the normal rates, but there will be no additional fixed overhead as a result of assembling the bikes.
Additional variable overhead will be incurred at the normal rates but there will be no additional fixed overhead as a result of assembling the bikes.
Required:
a. Prepare an incremental analysis for the sell-or-process-further decision.
b. Should Speedy sell or process further?
Why or why not?
Answer:
Speedy Bikes
a. Incremental Analysis for the sell-or-process-further decision:
Cost of an Cost an Difference
unassembled bike assembled bike
Alternative 1 Alternative 2 Increment
Sales price of unassembled bike $450 $495 $45
Manufacturing cost per unit $290 $312 (22)
Net operating income $160 $183 $23
b. Speedy should process the bikes further.
c. It will generate an incremental net operating income of $23 per bike.
Explanation:
a) Data and Calculations:
Cost of an Cost an
unassembled bike assembled bike
Direct materials $150 $155
Direct labor 70 80
Variable overhead (70% of direct labor) 49 56 ($80 * 70%)
Fixed overhead (30% of direct labor) 21 21
Manufacturing cost per unit $290 $312
The December 31, 2021, inventory of Tog Company, based on a physical count, was determined to be $467,000. Included in that count was a shipment of goods received from a supplier at the end of the month that cost $67,000. The purchase was recorded and paid for in 2022. Another supplier shipment costing $28,500 was correctly recorded as a purchase in 2021. However, the merchandise, shipped FOB shipping point, was not received until 2022 and was incorrectly omitted from the physical count. A third purchase, shipped from a supplier FOB shipping point on December 28, 2021, did not arrive until January 3, 2022. The merchandise, which cost $97,000, was not included in the physical count and the purchase has not yet been recorded.
The company uses a periodic inventory system.
Required:
a. Determine the correct December 31, 2021, inventory balance and, assuming that the errors were discovered after the 2021 financial statements were issued, analyze the effect of the errors on 2021 cost of goods sold, net income, and retained earnings. (Ignore income taxes.)
b. Prepare a journal entry to correct the errors.
Answer:
Tog Company
a. The correct December 31, 2021 balance of Inventory is
= $592,500.
b. The error increased the cost of goods sold, thereby reducing the net income and the retained earnings.
c. Journal Entries to correct errors:
Debit 2021 Inventory $67,000
Credit 2022 Inventory $67,000
To correct the error.
December 31, 2021
Debit Purchase $97,000
Credit Accounts Payable $97,000
To record the purchase of merchandise, shipped FOB shipping point on December 28, 2021.
Explanation:
a) Data and Calculations:
Physical count Inventory = $467,000
FOB shipping point 2021 = 28,500
December 28 FOB shipping point = 97,000
December 31, 2021 balance = $592,500
The error would increase the cost of goods sold, thereby reducing the net income and the retained earnings.
Journal Entries to correct errors:
December 31, 2021
a. 2021 Inventory $67,000 2022 Inventory $67,000. The records should be for 2021 and not 2022.
b. This only affects the physical count and not the records.
c. Purchase $97,000 Accounts Payable $97,000. Both the physical count and the records were omitted.
3. The price elasticity of demand for wine is estimated to be 1 at all possible quantities. Currently, 200 million gallons of wine are sold per year, and the price averages $6 per bottle. Assuming that the price elasticity of supply of wine is 1 and the current tax rate is $1 per bottle, calculate the current excess burden of the tax on wine. Suppose the tax per bottle is increased to $2 per bottle. What will happen to the excess burden of the tax as a result of the tax increase
Answer:
The excess burden would quadruple to $33,333
Explanation:
In order to calculate the excess burden as a result of the tax increase, we first calculate the excess burden at current tax rate which is $1 per bottle. Excess burden is calculated using the following formulae:
W = 1/2(T)²(Q/P) x (Es x Ed / (Es - Ed))
where:
T = Tax per unit
Q = Total Quantity
P = Price per unit
Es = Elasticity of Supply
Ed = Elasticity of Demand
W = 1/2(1)² (200,000/6) x (1 x 1 / (1 - (-1)))
W = 1/2 (33.333) x (1/2)
W = $8,333
Now after-tax rate goes up to $2, the excess burden would as follow:
W = 1/2(2)² (200,000/6) x (1 x 1 / (1 - (-1)))
W = 2 (33.333) x (1/2)
W = $33,333 per year
Hence, the excess burden is $33,333 after the increase in tax.
Label each description with the appropriate term. Any label can be used more than once, but each description requires only one term. The reward a saver expects on loaned funds: The cost a borrower pays for loaned funds: The difference between the real interest rate and the nominal interest rate: The percentage of disposable income that is kept as personal savings: The term that indicates why most people need to be incentivized to save: The result of consumption exceeding income over a particular period:
Answer Bank
inflation rate
savings rate
interest rate
dissaving
time preferences
Answer:
inflation rate - The difference between the real interest rate and the nominal. The term that indicates why most people need to be incentivized to save
Inflation rate is the general increase in the price of goods and services within an economy over time. The real interest rate is the nominal interest rate minus inflation rate. Inflation incentivizes people to save, because if they save, they can invest their money at an interest rate higher than inflation, otherwise, their money will end up losing value.
savings rate - The percentage of disposable income that is kept as personal savings
Savings rate is simply the percentage of income that is left for saving. If a person earns 1,000 and saves 200, the savings rate is 20%.
interest rate - The reward a saver expects on loaned funds
The interest rate is the price of borrowing. The loaner accepts to give temporary control of his or her money to another person, in exchange for an extra payment, the interest rate.
dissaving - The result of consumption exceeding income over a particular period
Dissaving occurs when people spend more than they earn. Dissaving can be very harmful not only for household economies, but also for the economy as a whole, because it does not allow investment to flourish, and could lead to actual destruction of wealth via overconsumption.
An inflation rate, savings rate, interest rate, dissaving and time preferences are all important terms in finance field.
What is an inflation rate?The inflation rate is the difference between the real interest rate and the nominal rate.
What is saving rate?The savings rate is the percentage of disposable income that is kept as personal savings.
What is an interest rate?An interest rate is the reward a saver expects on loaned funds
What is dissaving?A dissaving occurs as a result of consumption exceeding income over a particular period.
What is time preference?A time preference is a theory that indicates why most people need to be incentivized to save as its explain the time value of money.
In conclusion, the inflation rate, savings rate, interest rate, dissaving and time preferences are all important terms in finance field.
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The following information is available from the accounting records of Manahan Co. for the year ended December 31, 2019: Net cash provided by financing activities $ 168,000 Dividends paid 27,000 Loss from discontinued operations, net of tax savings of $70,000 155,000 Income tax expense 39,000 Other selling expenses 20,000 Net sales 966,000 Advertising expense 67,000 Accounts receivable 186,000 Cost of goods sold 552,000 General and administrative expenses 214,000 Required: a. Calculate the operating income for Manahan Co. for the year ended December 31, 2019.
Answer:
See below
Explanation:
1. Operating income for Manahan
Net sales
$966,000
Less:
Cost of goods sold
($552,000)
Gross profit
$444,000
Less:
Expenses
Selling, general and administrative
($214,000)
Other selling expenses
($20,000)
Advertising expenses
($67,000)
Operating income
$143,000
2. Computation of net income
Operating income
$143,000
Less;
Income tax expense
($39,000)
Income from continuing operations before taxes
$104,000
Less:
Income from discontinuing operations, net of savings
$70,000 ($155,000)
Net loss
($51,000)
emiannual coupon bonds with the same risk (Aaa) and maturity (20 years) as your company's bonds have a nominal (not EAR) yield to maturity of 9%. Your company's treasurer is thinking of issuing, at par, some $1,000 par value, 20-year, quarterly payment bonds. She has asked you to determine what quarterly interest payment, in dollars, the company would have to set in order to provide the same effective annual rate (EAR) as those on the 20-year, semiannual payment bonds. What would the quarterly, dollar interest payment be
Answer:
quarterly coupon payment = $22.25
Explanation:
effective annual interest rate of current bonds = (1 + 9%/2)² - 1 = 9.2025%
if the new bonds will have quarterly payments, then the nominal interest rate should be:
1.092025 = (1 + r/4)⁴
⁴√1.092025 = ⁴√(1 + r/4)⁴
1.02225 = 1 + r/4
0.02225 = r/4
r = 8.9% annual
quarterly rate = 2.225%
quarterly coupon payment = $22.25
Required: 1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) individual products, (b) product categories, and (c) total inventory. 2. Assuming inventory write-downs are common for Almaden, record any necessary year-end adjustment amount for each of the LCNRV applications in requirement 1.
Question Completion:
Almaden Hardware Store sells two product categories, tools and paint products. Information pertaining to its 2018 year-end inventory is as follows:
Inventory, by Per Unit Net Realizable
Product Category Quantity Cost Value
Tools:
Hammers 100 $5.00 $5.50
Saw 200 10.00 9.00
Screwdrivers 300 2.00 2.60
Paint products:
1-gallon cans 500 6.00 5.00
Paint brushes 100 4.00 4.50
Required:
1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) individual products, (b) product categories, and (c) total inventory.
2. Assuming inventory write-downs are common for Almaden, record any necessary year-end adjustment amount for each of the LCNRV applications in requirement 1.
Answer:
Almaden Hardware Store1. The carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to
(a) individual products:
= $5,800
(b) product categories:
= $6,050
(c) total inventory:
= $6,080
2. Inventory write-down as a line item in the income statement, for each of the LCNRV applications for:
(a) individual products:
Debit Cost of goods sold $700
Credit Inventory $700
To record the inventory write down based on LCNRV.
(b) product categories:
Debit Cost of goods sold $450
Credit Inventory $450
To record the inventory write down based on LCNRV.
(c) total inventory:
Debit Cost of goods sold $420
Credit Inventory $420
To record the inventory write down based on LCNRV.
Explanation:
a) Data and Calculations:
Inventory, by Per Unit Net Realizable LCNRV Inventory
Product Category Quantity Cost Value Value
Tools:
Hammers 100 $5.00 $5.50 $5.00 $500
Saw 200 10.00 9.00 9.00 1,800
Screwdrivers 300 2.00 2.60 2.00 600
Paint products:
1-gallon cans 500 6.00 5.00 5.00 2,500
Paint brushes 100 4.00 4.50 4.00 400
Inventory amount (LCNRV rule applied to individual products) $5,800
Inventory amount (LCNRV rule applied to product categories)
Tools: Cost value = (100 * $5) + (200 * $10) + (300 * $2) = $3,100
NRV value = (100 * $5.50) + (200 * $9) + (300 * $2.60) = $3,130
LCNRV = $3,100 for tools
Paint products: Cost value = (500 * $6) + (100 * $4) = $3,400
NRV value = (500 * $5) + (100 * $4.50) = $2,950
LCNRV = $2,950 for paint products
Total LCNRV = $6,050 ($3,100 + $2,950)
Inventory amount (LCNRV rule applied to total inventory):
Cost value = (100 * $5) + (200 * $10) + (300 * $2) + (500 * $6) + (100 * $4)
= $6,500
NRV value = (100 * $5.50) + (200 * $9) + (300 * $2.60) + (500 * $5) + (100 * $4.50) = $6,080
Year-end Adjustments for each of the LCNRV applications in requirement 1:
(a) individual products:
Cost of Inventory = $6,500
LCNRV = 5,800
Inventory write down $700
(b) product categories:
Cost of Inventory = $6,500
LCNRV = 6,050
Inventory write down $450
(c) total inventory:
Cost of Inventory = $6,500
LCNRV = 6,080
Inventory write down $420
Shondura Inc. focuses on both local responsiveness and standardization in global business. The company typically begins with a strong emphasis in a single strategy and then works to minimize the downsides associated with that strategy as much as possible as they begin to implement the second strategy. Which of the following is best exemplified in this case?
a. A multidomestic strategy
b. A global strategy
c. An arbitrage strategy
d. A transnational strategy
Answer:
d. A transnational strategy
Explanation:
A transnational strategy refers to a set of plans and actions that are decided by the business to perform them beyond domestic borders. The plans are set to perform the actions across the international borders. By applying this set of strategy, the connection is established among the nations dealing with the same operation.
In the give case, transnational strategy has been applied by Shondura Inc.
Exercise 10-2 Recording bond issuance at par, interest payments, and bond maturity LO P1 Brussels Enterprises issues bonds at par dated January 1, 2019, that have a $2,700,000 par value, mature in four years, and pay 6% interest semiannually on June 30 and December 31. 1. Record the entry for the issuance of bonds for cash on January 1. 2. Record the entry for the first semiannual interest payment and the second semiannual interest payment. 3. Record the entry for the maturity of the bonds on December 31, 2022 (assume semiannual interest is already recorded).
Answer:
June 30 Bond Interest Expense Dr $81000
Cash Cr $81000
(6%/2*$2,700,000)
December 31 Bond Interest Expense Dr $81000
Cash Cr $81000
Bonds Payable Dr $2,700,000
Cash Cr $2,700,000
Explanation:
Record the entry for the first semiannual interest payment and the second semiannual interest payment.
June 30 Bond Interest Expense Dr $81000
Cash Cr $81000
(6%/2*$2,700,000)
December 31 Bond Interest Expense Dr $81000
Cash Cr $81000
Record the entry for the maturity of the bonds on December 31, 2022 (assume semiannual interest is already recorded).
Bonds Payable Dr $2,700,000
Cash Cr $2,700,000
maximum amount willing to payGenesis Scents has two divisions: the Cologne Division and the Bottle Division. The Bottle Division produces containers that can be used by the Cologne Division. The Bottle Division's variable manufacturing cost is $2, shipping cost is $0.10, and the external sales price is $3. No shipping costs are incurred on sales to the Cologne Division, and the Cologne Division can purchase similar containers in the external market for $2.60. The maximum amount the Cologne Division would be willing to pay for each bottle transferred would be:
Answer: $2.60
Explanation:
Based on the information given in the question, the maximum amount that the Cologne Division would be willing to pay for each bottle transferred would be the amount that the company can purchase the containers in the external market which is given in the question as $2.60.
That's the highest amount that they can but the containers for. Therefore, the answer is $2.60
Lakeview Company completed the following two transactions. The annual accounting period ends December 31.
On December 31, calculated the payroll, which indicates gross earnings for wages ($64,000), payroll deductions for income tax ($6,400), payroll deductions for FICA ($4,800), payroll deductions for American Cancer Society ($2,400), employer contributions for FICA (matching), and state and federal unemployment taxes ($560). Employees were paid in cash, but payments for the corresponding payroll deductions have not yet been made and employer taxes have not yet been recorded.
Collected rent revenue of $5,700 on December 10 for office space that Lakeview rented to another business. The rent collected was for 30 days from December 12 to January 10 and was credited in full to Deferred Revenue.
Required:
1. & 2. Prepare the journal entries to record payroll on December 31, the collection of rent on December 10 and adjusting journal entry on December 31.
3. Show how any of the liabilities related to these items should be reported on the company’s balance sheet at December 31.
Answer: Check attachment and explanation.
Explanation:
a. The question has been solved. Check the attachment.
b. LAKEVIEW COMPANY
Balance sheet (Partial)
December 31
Current liabilities
FICA Payable=$4800 + $4800= $9600
Charitable contribution payable = $2400
Withheld income tax payable = $6400
State and Federal unemployment tax payable = $560
Unearned rent revenue = $5700 - $3800 = $1900
Total current liabilities = $20860
William is preparing to file his tax return. Which two items are necessary to complete his tax return?
W-2 form from an employer
driver's license
receipts for expenses taken as deductions or credits
copy of a birth certificate
voter registration card
employment verification
Answer:
W-2 form from an employer, Receipts for expenses taken as deductions or credits
Explanation:
Got it right on Plato
Parker Company pays each member of its sales staff a salary as well as a commission on
each unit sold. For the coming year, Parker plans to increase all salaries by 5% and to keep
unchanged the commission paid on each unit sold. Because of increased demand, Parker
expects the volume of sales to increase by 10%. How will the total cost of sales salaries and
commissions change for the coming year?
A. Increase by 5% or less.
B. Increase by more than 5% but less than 10%.
Answer: B is correct
Explanation:
Sales salaries will increase by exactly 5%. The per-unit commission amount will remain constant, but sales commissions in total are expected to increase by 10%. Thus, total sales salaries and commissions will increase somewhere between 5% and 10%.
Straight-Line Depreciation A building acquired at the beginning of the year at a cost of $2,200,000 has an estimated residual value of $400,000 and an estimated useful life of 20 years. Determine the following: (a) The depreciable cost $fill in the blank 1 (b) The straight-line rate fill in the blank 2 % (c) The annual straight-line depreciation $fill in the blank 3
Answer:
a)
Depreciable Cost = $ 1800000
b)
Straight Line Depreciation Rate = 5%
c)
Depreciation expense per year = $90000
Explanation:
a)
The depreciable cost is the cost that qualifies for depreciation. It is calculated as,
Depreciable Cost = Cost - Salvage Value
Depreciable Cost = 2200000 - 400000
Depreciable Cost = $ 1800000
b)
The straight line depreciation method charges a constant depreciation expense every period. The rate of straight line depreciation can be calculated as follows,
Straight Line Depreciation Rate = Depreciable cost percentage / Estimated useful life
Straight Line Depreciation Rate = 100% / 20
Straight Line Depreciation Rate = 5%
c)
The annual straight line depreciation expense can be calculated as follows,
Depreciation expense per year = Depreciable cost * Straight line depreciation rate
Depreciation expense per year = 1800000 * 0.05
Depreciation expense per year = $90000
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows:
Standard Quantity or Hours Standard Price or Rate Standard Cost
Direct materials 2.40 ounces $27.00 per ounce $64.80
Direct labor 0.60 hours $12.00 per hour 7.20
Variable manufacturing overhead 0.60 hours $3.50 per hour 2.10
Total standard cost per unit $74.10
During November, the following activity was recorded related to the production of Fludex
a. Materials purchased, 13,000 ounces at a cost of $330,200
b. There was no beginning inventory of materials; however, at the end of the month, 2,850 ounces of material remained in ending inventory
c. The company employs 20 lab technicians to work on the production of Fludex. During November, they each worked an average 160 hours at an average pay rate of $11.00 per hour
d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead during November totaled $6,000
e. During November, the company produced 4,200 units of Fludex.
Required
1. For direct materials:
a. Compute the price and quantity variances
b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract?
2. For direct labor:
a. Compute the rate and efficiency variances
b. In the past, the 20 technicians employed in the production of Fludex consisted of 7 senior technicians and 13 assistants. Durin November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. Woulc recommend that the new labor mix be continued?
3. Compute the variable overhead rate and efficiency variances
Answer:
Becton Labs, Inc.
1. Direct materials:
a. Price variance
= $20,600 Favorable
Quantity variance
= $1,890 Unfavorable
b. The company can sign the contract provided it is made clear to the new supplier that price variations would not be welcome shortly after signing the contract, but will depend on the market realities.
2. Direct labor:
a. Direct labor rate and efficiency variances:
Direct labor rate variance
= $3,200 Favorable
Efficiency variance
= $8,160 Unfavorable
b. I would not recommend that the new labor mix be continued. The old mix may be working better because the labor efficiency cost increased with the new mix labor mix.
3. The variable overhead rate and efficiency variances:
Variable overhead rate variance
= $5,200 Favorable
Variable overhead efficiency variance
= $2,380 Unfavorable
Explanation:
a) Data and Calculations:
Standard Costs for 1 Unit of Fludex:
Standard Standard Standard Cost
Quantity or Hours Price or Rate
Direct materials 2.40 ounces $27.00 per ounce $64.80
Direct labor 0.60 hours $12.00 per hour 7.20
Variable manufacturing
overhead 0.60 hours $3.50 per hour 2.10
Total standard cost per unit $74.10
Activities recorded during November:
a. Materials purchased = 13,000 ounces at $330,300
Each ounce = $25.41 (330,300/13,000)
b. Materials used for production = 10,150 ounces (13,000 - 2,850)
Standard materials = 4,200 * 2.40 = 10,080 ounces
c. Direct labor hours = 20 * 160 = 3,200 hours
Standard labor hours = 0.60 * 4,200 = 2,520
Average labor rate = $11.00 per hour
Direct labor costs = $35,200 ($11.00 * 3,200)
d. Standard variable overhead = $11,200 (3,200 *$3.50)
Actual overhead incurred = $6,000
Actual overhead rate = $1.43 ($6,000/4,200)
e. Units produced = 4,200
1. Direct materials:
a. Price variance = (Actual price - standard price)* Actual units
= ($25.41 - $27.00)13,000 = $20,600 F
Quantity variance = (Actual quantity - Standard quantity) Standard Cost
= (10,150 - 10,080) * $27.00
= $1,890 U
b. The company can sign the contract provided it is made clear to the new supplier that price variations would not be welcome shortly after signing the contract, but will depend on the market realities.
2. Direct labor:
a. Direct labor rate and efficiency variances:
Direct labor rate variance = (Actual rate - Standard rate) * Actual hours
= ($11 - $12) * 3,200 = $3,200 Favorable
Efficiency variance = (Actual hours - Standard hours) * Standard rate
= (3,200 - 2,520) * $12
= $8,160 Unfavorable
b. I would not recommend that the new labor mix be continued. The old may be working better because the labor efficiency cost increased.
3. The variable overhead rate and efficiency variances:
Variable overhead rate variance = Actual costs − (AH × SR)
= $6,000 - (3,200 * $3.50)
= $6,000 - $11,200
= $5,200 Favorable
Variable overhead efficiency variance = (AH − SH) × SR
= (3,200 - 2,520) * $3.50
= $2,380 Unfavorable
In what circumstances might you decide to use cash
Shannon, who has a job and no dependents, has two credit cards she uses for food and entertainment. All card balances are close to the limit. What could be the best action for Shannon to take next?
Request an extension of credit to her credit card company.
Pay off all her balances within the payment cycle.
Apply for a new credit card to increase her credit limit.
Cancel all her credit cards.
Pay off all her balances is my answer for your question.