Complete Question:
On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. Sharper declares and immediately distributes a 50% stock dividend. Common stock-$10 par value, 120,000 shares authorized, 72,000 shares issued and outstanding $ 720,000
Paid-in capital in excess of par value, common stock 310,000
Retained earnings 715,000
Total stockholders' equity $1,745,000
Assume that instead of distributing a stock dividend, Sharper did a 3-for-1 stock split. Required: (1) Prepare the updated stockholders' equity section after the split. (2) Compute the number of shares outstanding after the split. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the updated stockholders' equity section after the split.
Answer:
Sharper Corporation
1. SHARPER CORPORATION
Stockholders' Equity Section of the Balance Sheet June 30
Total stockholders' equity
Common stock-$3.33 par value, 360,000 shares authorized,
216,000 shares issued and outstanding $ 720,000
Paid-in capital in excess of par value, common stock 310,000
Retained earnings 715,000
Total stockholders' equity $1,745,000
2. The number of shares outstanding after the split is:
= 216,000 shares.
Explanation:
a) Data and Calculations:
Common stock-$10 par value, 120,000 shares authorized,
72,000 shares issued and outstanding $ 720,000
Paid-in capital in excess of par value, common stock 310,000
Retained earnings 715,000
Total stockholders' equity $1,745,000
Authorized shares = 360,000 (120,000 * 3)
Outstanding shares = 216,000 (72,000 * 3)
Common stock par value = $3.333 ($10/3)
b) A 3-for-1 stock split means that shareholders will now have 3 shares for each share that they previously held. Therefore, the outstanding and authorized shares will be multiplied by 3 while the stock price is divided by 3 to arrive at their values after the split.
Huffman Corporation constructed a building at a cost of $30,000,000. Weighted-average accumulated expenditures (WAAE) were $12,000,000, actual interest was $1,200,000, and avoidable interest was $1,600,000. If the salvage value is $2,400,000, and the useful life is 40 years, depreciation expense for the first full year using the straight-line method is
a. $690,000
b. $705,000.
c. $720,000.
d. $735,000.
Answer:
$730,000
Explanation:
Calculation to determine what depreciation expense for the first full year using the straight-line method is
Using this formula
Depreciation expense=Costs of Building+Avoidable interest-Salvage value)/Useful life
Let plug in the formula
Depreciation expense=( $30,000,000 + $ 1,600,000- $2,400,000) / 40 years
Depreciation expense=$29,200,000/40 years
Depreciation expense= $730,000
Therefore depreciation expense for the first full year using the straight-line method is $730,000
Fabrics has budgeted overhead costs of $1,039,500. It has allocated overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 495,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $396,000 and $643,500 is allocated to the design cost pool. Additional information related to these pools is as follows:
Wool Cotton Total
Machine hours 110,000 110,000 220,000
Number of setups 1,100 550 1,650
Required:
Calculate the overhead rate using activity based costing.
Answer:
Fabrics
Overhead Rates based on activity-based costing
Cutting = $1.80
Design = $390
Explanation:
a) Data and Calculations:
Budgeted overhead costs = $1,039,500
Estimated direct labor hours for the current year = 495,000 hours
Predetermined overhead rate based on traditional method = $2.1 ($1,039,500/495,000)
Activity Cost Activity Cost Drivers Overhead Wool Cotton Total
Pools
Cutting Machine hours $396,000 110,000 110,000 220,000
Design Number of setups $643,500 1,100 550 1,650
Overhead Rates based on activity-based costing
Cutting = $1.80 ($396,000/220,000)
Design = $390 ($643,500/1,650)
The current economy is strong and many people are feeling confident about their future and ability to pay off debt. Because of this they are taking on more bank loans for things like new cars, renovating their homes, or buying new homes. Using the four step process with this type of market, what will banks most likely do with their loans
Answer:
They would increase the quantity supplied of loans and increase the interest rate
Explanation:
Monetary policy
This is simply refered to as alterations or changes in the interest rate to alter or influence the level of aggregate demand in an economy that is the demand side policy.
The central banks are known to be regulators of commercial banks and bankers to governments. The interest rate is the price of money. They manages interest rates to influence the money supply. They set the base rate of interest and the base rate influences all other interest rates that commercial banks use (i.e. savings rate, mortgage rate, car loan rate
Red Co. recorded a right-of-use asset of $170,000 in a 10-year finance lease. Payments of $27,667 are made annually at the end of each year. The interest rate charged by the lessor and known by Red was 10%. The balance in the lease payable after two years will be
,Answer: $147,599.30
Explanation:
Lease payment = Interest component + Principal component
Year 1:
Interest = 10% * 170,000
= $17,000
Principal component = 27,667 - 17,000
= $10,667
Lease payable will drop to:
= Lease balance - Principal component
= 170,000 - 10,667
= $159,333
Year 2:
Interest = 10% * 159,333
= $15,933.30
Principal component = 27,667 - 15,933.30
= $11,733.70
Lease payable balance will drop to:
= 159,333 -11,733.70
= $147,599.30
True or false: Interest expense and income tax expense are considered general and administrative expenses and, therefore, are included on the general and administrative expense budget. True false question. True False
Answer: True
Explanation:
Interest expense and income tax expenses generally are stand-alone expenses but they fall under general and administrative expenses required to run the business.
Interest expense is charged on debt that was taken to run the company so will be an admin expense and tax is part of the expenses that a company has to take care of in order to run the company so it is an admin expense as well.
Entries for Discounted Note Payable A business issued a 90-day note for $57,000 to a creditor on account. The note was discounted at 8%. Assume a 360-day year.
a. Journalize the entry to record the issuance of the note. For a compound transaction, if an amount box does not require an entry, leave it blank. If necessary, round to one decimal place. Accounting numeric field
b. Journalize the entry to record the payment of the note at maturity.
Answer:
A. Dr Accounts payable 55,830
Dr Interest expense 1170
Cr Notes payable 57,000
B. Dr Notes payable 57,000
Cr Cash 57,000
Explanation:
A. Preparation of the journal entry to record the issuance of the note.
Dr Accounts payable 55,830
(57,000-1170)
Dr Interest expense (57,000*8%*90/360) 1170
Cr Notes payable 57,000
(To record the issuance of the note)
B. Preparation of the journal entry to record the payment of the note at maturity.
Dr Notes payable 57,000
Cr Cash 57,000
(to record the payment of the note at maturity)
Paris Summer 20 Company sells small laptops. Based on the information below, calculate the Break even point in sales dollars for the year.
Selling price per unit $150
Variable cost per unit $60
Fixed Costs per year $21,000
Answer:
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Explanation:
The rate of earnings is 6% and the cash to be received in 4 years is $20,000. The present value amount, using the following partial table of present
value of $1 at compound interest is
Year
6%
10%
12%
1
0.943
0.909
0.893
2
0.890
0.826
0.797
3
0.840
0.751
0.712
4
0.792
0.683
0.636
a. $12.720
Ob. $16,800
Oc. 513,660
Od. $15.840
Answer:
$15,840
Explanation:
Present value = Future value / (1 + r)^n
Rate, r = 6% = 0.06
Future value = $20,000
Number of years, n = 4
Present value = $20000 / (1 + 0.06)^4
Present value = $20000 / 1.06^4
Present value = $20,000 / 1.26247696
Present value = $15841.873
Using the partial table of present values :
Present value = Future value * PV(6%, 4)
PV at 6%, 4 years = 0.792
Present value = $20,000 * 0.792 = $15,840
"if Washburn achieves the sales target of 2,000 units at the $349 retail price, what will its profit be?"
Answer: $370,000
Explanation:
Your question isn't complete as there were some further questions asked before getting to this question.
The profit from 2,000 units at $349 will be:
Profit = Total revenue – Total cost
Total revenue = (P x Q)
= $349 x 2000
= $698000
Total cost = [FC + (UVC x Q)]=
= [$38,000 + ($145 x 2,000)]
=$38000 + $290000
= $328000
Profit = Total revenue - Total cost
Profit = $698000 - $328000
Profit = $370000
Flesch Corporation produces and sells two products. In the most recent month, Product C90B had sales of $23,490 and variable expenses of $7,047. Product Y45E had sales of $34,800 and variable expenses of $13,920. The fixed expenses of the entire company were $15,200. If the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company:____________
Answer:
Contribution margin ratio = Contribution margin / Sales
Product C90B CMR = ($23,490 - $7,047) / $23,490 = $16,443 / $23,490 = 0.7 = 70%
Product Y45E CMR = ($34,800 - $13,920) / $34,800 = $20,880 / $34,800 = 0.6 = 60%
The rule, the Higher the contribution margin ratio, the lower the Break-Even point. So, if sales mix shifts to product C90B, overall Break-even point Decreases.
You made an investment of $15,000 into an account that paid you an annual interest rate of 3.8 percent for the first 8 years and 8.2 percent for the next 10 years. What was your annual rate of return over the entire 18 years
Answer: 6.22%
Explanation:
To find the annual rate of return, find the geometric mean of the returns:
= ¹⁸√ (1 + 3.8%)⁸ * (1 + 8.2%)¹⁰ - 1
= ¹⁸√ 2.9638173484126186153 - 1
= 1.0622187633434 - 1
= 6.22%
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The following information is available for a company's cost of sales over the last five months. Month Units sold Cost of sales January 470 $ 33,800 February 870 $ 40,500 March 1,950 $ 52,500 April 2,470 $ 64,500 Using the high-low method, the estimated total fixed cost is: Multiple Choice $26,586. $106,344. $53,172. $17,533. $30,700.
TC Units
$64,500 (High) 2,470
} $30,700 } 2000
$33,800( Low) 470
VC per Unit = 30 700 ÷ 2000 = $15.35
when 470 units are sold,( substitute vc per unit = 15.35)
TC = FC + VC
33, 800 = FC + ( 15.35× 470)
FC = $ 26 586
If the market index subsequently rises by 8% and Ford’s stock price rises by 7%, what is the abnormal change in Ford’s stock price? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 1 decimal place.)
Answer:
-1.9%.
Explanation:
The computation of the abnormal change in the stock price of ford should be given below:
Given that
The return on the market is 8%.
So, the forecast monthly return for Ford is
= 0.10% + (1.1 × 8%)
= 8.9%.
And, the Ford’s actual return was 7%,
So,
the abnormal return be
= 7% - 8.9%
= -1.9%.
On average, it takes one packaging and shipping employee 15 minutes to prepare a package and label, independent of the number or types of items in the shipment, plus 6 minutes per item to bubble wrap and pack it in the carton. What is the packaging and shipping cost assigned to Order 705, which has 40 items?
Question Completion:
Owl Company sells multiple products - very fragile hand carved stone owls. They use a time-driven ABC system. The company's products must be wrapped individually before shipping. The packaging and shipping department employs 12 people. Each person works 20 days per month on average. Employees in this department work an eight hour shift that includes a total of 75 minutes for breaks and a meal. The full compensation, including fringe benefits, for each packaging and shipping employee is $ 4,050 per month.
Answer:
Owl Company
The packaging and shipping cost assigned to Order 705, which has 40 items is:
= $127.50
Explanation:
a) Data and Calculations:
Number of people employed by the packaging and shipping department = 12
Working days per employee = 20 days per month on average
Shift per day = 8 hours
Minutes for breaks and a meal = 75 minutes per day
Total minutes spent working per month = (20 * 8 * 60) - (75 * 20) = 8,100
Salary per employee = $ 4,050 per month
Salary per minute = $0.50 ($4,050/8,100)
Minutes spent in preparing a package and label = 15 minutes
Minutes spent for bubble wrap and packaging = 6 minutes per item
Total Packaging and shipping cost = Total Minutes of labor used in Packaging (40 * 6 + 15) * Labor cost per minute
= 255 minutes * $0.50 per minute
= $127.50
Two leading home appliance companies, Globex Inc. and Pug Tech, are in competition for market share. In their quest for exciting new products, Globex employs an open innovation model, while Pug Tech pursues a closed innovation model. Which of the following statements is most likely true?
a. Globex has a greater chance of capturing market share.
b. Pug Tech has a superior absorptive capacity.
c. Pug Tech will protect its intellectual property with patents and trade secrets.
d. Globex is most concerned with securing first-mover advantages.
Answer: c. Pug Tech will protect its intellectual property with patents and trade secrets.
Explanation:
A closed innovation model means that the company develops the product internally instead of through collaboration with external sources.
Pug Tech will therefore produce new products internally. As a result, they will be able to protect these products from being copied by others through patents and trade secrets because the law will recognize that they have exclusive rights to the new technology seeing as they came up with it.
Dance Creations manufactures authentic Hawaiian hula skirts that are purchased for traditional Hawaiian celebrations, costume parties, and other functions. During its first year of business, the company incurred the following costs: Variable Cost per Hula Skirt Direct materials $ 9.60 Direct labor 3.40 Variable manufacturing overhead 1.05 Variable selling and administrative expenses 0.40 Fixed Cost per Month Fixed manufacturing overhead $ 16,125 Fixed selling and administrative expenses 4,950 Dance Creations charges $30 for each skirt that it sells. During the first month of operation, it made 1,500 skirts and sold 1,375. Required: 1. Assuming Dance Creations uses variable costing, calculate the variable manufacturing cost per unit for last month. 2. Complete a variable costing income statement for the last month. 3. Assuming Dance Creations uses full absorption costing, calculate the full manufacturing cost per unit for the last month. 4. Complete a full absorption costing income statement. 6. Suppose next month Dance Creations expects to produce 1,500 hula skirts and sell 1,600. Without recreating the new income statements, calculate the difference in profit between variable costing and full absorption costing. Which would be higher
Answer:
1. $14.05 per unit
2. Contribution Margin $21,381
Net Operating Income $306
3.$24.08 per unit
4.Gross Margin $7,150
Net Operating Income $4,620
6. $1,075
Variable costing would be higher
Explanation:
1. Calculation to determine the variable manufacturing cost per unit for last month
Using this formula
Variable manufacturing cost per unit = Direct material + Direct labor + variable manufacturing overhead
Let plug in the formula
Variable manufacturing cost per unit= $9.60+3.40+1.05
Variable manufacturing cost per unit=$14.05 per unit
Therefore Variable manufacturing cost per unit is $14.05 per unit
2. Calculation to Complete a variable costing income statement for the last month
Variable costing income statement
Sales Revenue $41,250
($30*1,375)
Less: Variable cost per unit $19,869
1,375*($9.60+3.40+1.05 +$0.4)
Contribution Margin $21,381
($41,250-$19,869)
Less: Fixed costs $21,075
($ 16,125+$4,950)
Net Operating Income $306
($21,381-$21,075)
Therefore the complete variable costing income statement for the last month will have Contribution Margn of $21,381 and Net Operating Income of $306
3. Calculation to determine the full manufacturing cost per unit for the last month
Using this formula
Full manufacturing cost per unit = Direct material + Direct labor + variable manufacturing overhead + Fixed manufacturing overhead per unit
Let plug in the formula
Full manufacturing cost per unit= $9.60+3.40+1.05+ $ 16,125/1,500
Full manufacturing cost per unit=$14.05+ $10.75
Full manufacturing cost per unit=$24.08 per unit
Therefore the full manufacturing cost per unit for the last month is $24.08 per unit
4. Calculation to Complete a full absorption costing income statement
Absorption costing Income Statement
Sales Revenue $41,250
($30*1,375)
Less: Cost of Goods sold $34,100
($24.08*1,375)
Gross Margin $7,150
($41,250-$34,100)
Less: Selling expenses $2,530
($0.4*1,375+4,950)
Net Operating Income $4,620
($7,150-$2,530)
Therefore the Complete a full absorption costing income statement will have Gross Margin of $7,150 and Net Operating Income of $4,620
6. Calculation to determine the difference in profit between variable costing and full absorption costing.
Difference=(1,600-1,500)*($16,125/1,500)
Difference= 100*($16,125/1,500)
Difference=100*$10.75
Difference= $1,075
Therefore Variable costing would be higher $1,075
On December 31, 2020, Brisbane Company had 100,000 shares of common stock outstanding and 32,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2021, Brisbane purchased 26,000 shares of common stock on the open market as treasury stock paying $42 per share. Brisbane sold 6,200 treasury shares on September 30, 2021, for $47 per share. Net income for 2021 was $182,905. Also outstanding during the year were fully vested incentive stock options giving key officers the option to buy 52,000 common shares at $42. The market price of the common shares averaged $52 during 2021.
Required:
Compute Brisbane's basic and diluted earnings per share for 2021. (Round your answers to 2 decimal places.)
Answer and Explanation:
The computation of the basic and diluted earning per share is given below:
For Basic EPS
Given that
Income for 2016 = 182,905
Income after 7% dividend on cumulatie peference share is
= 182,905 - ( 7% × 1,600,000)
= $ 70,905
And,
Outstanding shares is
= 100,000 - (26,000 × 10 ÷ 12) + ( 6,200 × 3 ÷12 )
= 79,884
So,
Basic earning per share is
= $70,905 ÷ 79,884
= $0.89 per share
For Diluted EPS
Outstanding shares is
= 79,884 + 10,000
= 89,884
So,
Diluted EPS is
= $70,905 ÷ 89,884
= $0.79 per share
Working note
Option to be exercised = 52,000 shares
So,
shares to be bought back with proceeds = (52,000 × 42) ÷ 52 = 42,000 shares
so difference should be of 10,000 shares
A plant asset can be defined by which of the following statements?
a. Its original cost is expensed in the period in which it was purchased.
b. It is a tangible long-term asset.
c. It is reported on the balance sheet.
d. Its cost (minus any salvage value) is gradually reported as expenses over its useful life.
Answer:
it's a tangible long-term asset
Answer:all of them
Explanation:
Got it right
TB MC Qu. 08-156 Fortune Drilling Company acquires... Fortune Drilling Company acquires a mineral deposit at a cost of $5,900,000. It incurs additional costs of $600,000 to access the deposit, which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract. What journal entry would be needed to record the expense for the first year assuming 418,000 tons were mined
Answer:
Fortune Drilling Company
Journal Entry:
Debit Depletion Expense $1,350,000
Credit Accumulated Depletion $1,350,000
To record the first year's expense.
Explanation:
a) Data and Calculations:
Acquisition cost of mineral deposit = $5,900,000
Additional costs incurred = $600,000
Total costs of mine = $6,500,000
Estimated mineral deposit = 2,000,000 tons
Estimated years of extraction = 5 years
First year's extraction quantity = 418,000
Expenses for the first year = 418,000/2,000,000 * $6,500,000
= $1,350,000
Analysis:
Depletion Expense $1,350,000 Accumulated Depletion $1,350,000
In a board of directors election for five directors and straight voting, a majority group of shareholders will elect a. four directors. b. five directors. c. four or five depending on how the cumulative voters vote. d. the same proportional share of directors as their ownership share.
Answer: b. five directors
Explanation:
Straight voting refers to a voting convention where shareholders are allowed to cast a single vote towards each director seat for each share they own. This is in contrast to cumulative voting where a single shareholder can decide to cast all their votes to one director.
In such a convention therefore, the majority will elect all five seats because the majority that voted for each seat will decide which director will be elected.
To assign overhead costs to each product, the company:_____.
a. multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
b. assigns the cost of each activity cost pool in total to one product line.
c. multiplies the overhead rate by the number of direct labor hours used on each product.
d. multiplies the rate of cost drivers per estimated cost for the cost pool by the estimated cost for each cost pool.
Answer:
a. multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
Explanation:
Costing is the measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.
Generally, an activity-based costing uses multiple cost pools such as manufacturing cost or customer services and multiple cost drivers such as direct labor hours worked, number of changes used in engineering department, etc.
Cost pool is simply the amount of money spent by a firm on a particular activity.
Hence, to assign overhead costs to each product, the company multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
In activity-based costing, the activity rate for an activity cost pool is calculated by using the following formula;
Activity rate = total overhead cost/activity for the activity cost pool.
Prepare journal entries to record each of the following sales transactions of a merchandising company. Show supporting calculations and assume a perpetual inventory system.
Apr. 1 Sold merchandise for $2,000, granting the customer terms of 2/10, End of Month; invoice dated April 1. The cost of the merchandise is $1,400.
Apr. 4 The customer in the April 1 sale returned merchandise and received credit for $500. The merchandise, which had cost $350, is returned to inventory.
Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4.
Answer:
Apr 01
Dr Accounts receivable $2,000
Cr Sales $2,000
Apr 01
Dr Cost of goods sold $1,400
Cr Merchandise inventory $1,400
Apr 04
Dr Sales returns and allowances $500
Cr Accounts receivable $500
Apr 04
Dr Merchandise inventory $350
Cr Cost of goods sold $350
Apr 11
Dr Cash $1,500
Cr Accounts receivable $1,500
Explanation:
Preparation of the journal entries to record each of the following sales transactions of a merchandising company
Apr 01
Dr Accounts receivable $2,000
Cr Sales $2,000
Apr 01
Dr Cost of goods sold $1,400
Cr Merchandise inventory $1,400
Apr 04
Dr Sales returns and allowances $500
Cr Accounts receivable $500
Apr 04
Dr Merchandise inventory $350
Cr Cost of goods sold $350
Apr 11
Dr Cash $1,500
Cr Accounts receivable $1,500
($2,000-$500)
Demand for a specific design of dinning sets has been fairly large in the past several years and Statewide Furnishings, Inc. usually orders new dinning sets 10 times a year. It is estimated that the ordering cost is $400 per order. The carrying cost is $50 per unit per year. Furthermore, State Wide Furnishings, Inc. has estimated that the stock out cost is $120 per unit per year. Based on forecast, the annual demand is 600 units. State Wide Furnishings, Inc. has 350 working days in a year and its lead time is 14 working days.
Assume shortage is allowed and the store manager is sure that shortages will not become lost sales, determine the annual ordering cost.
a. 592.82
b. 1472.01
c. 2051.28
d. 4116.11
e. None of the above
Answer:
e. None of the above
Explanation:
Annual demand, D = 600 units
Ordering cost, S = $400
Holding cost, H = $50
Economic order quantity without stock-out = SQRT(2*D*S/H)
Economic order quantity without stock-out = SQRT(2*600*400/50)
Economic order quantity without stock-out = 98
Total annual ordering cost = (D/Q)*S + (Q/2)*H
Total annual ordering cost = (600/98)*$400 + (98/2)*$50
Total annual ordering cost = $2,448.97 + $2,450
Total annual ordering cost = $4,898.97
You're trying to save to buy a new $207,000 Ferrari. You have $57,000 today that can be invested at your bank. The bank pays 6.5 percent annual interest on its accounts. How long will it be before you have enough to buy the car?
Answer:
19.84 years
Explanation:
Number of years = in ( fv / pv) / r
FV = future value
PV = present value
r = interest rate
IN(207000 / 57000) / 0.065
IN (3.631579) / 0.065 = 19.84
ing using a calculator) Jesse Pinkman is thinking about trading cars. He estimates he will still have to borrow $ to pay for his new car. How large will Jesse's monthly car loan payment be if he can get a -year ( equal monthly payments) car loan from the university's credit union at an APR of percent compounded monthly?
Answer:
Monthly car loan payment = $414 (Approx.)
Explanation:
Missing information;
Amount borrow = $29,000
NUmber of payment = 7 year x 12 = 84
Rate = 5.3% yearly = 0.053 / 12 monthly
Find:
Monthly car loan payment
Computation:
PV = $29,000
N = 84
r = 0.053/12
FV = 0
PV = (PMT/r)[1 – 1/(1 + r)ⁿ] + FV/(1 + r)ⁿ
29,000 = [PMT/(0.053/12)][1 – 1/(1 + 0.053/12)^84] + 0
PMT = 413.98
Monthly car loan payment = $414 (Approx.)
a ceo decides to change an accounting method at the end of the current year. the change results in reported profits increasing by 5% but the company's cash flows are not changing. if capital markets are efficient, then the stock price will:
Answer:
The stock price will not be affected by the accounting change.
Explanation:
Since it is assumed that the capital markets are efficient, the stock's market price is expected to reflect all available and relevant information. This implies that all the necessary information is already incorporated into the stock price. The CEO cannot deceive the market through this change in accounting method. Therefore, the stock price will not be undervalued or overvalued. Moreover, the change in accounting method only shifts the timing for reporting income.
All of the following are qualified education expenses for the Lifetime Learning Credit and American Opportunity Credit, except: _________
a) Books and Supplies.
b) Tuition and Fees.
c) Equipment.
d) Room and Board.
Answer:
d) Room and Board.
Explanation:
The only option that is not qualified as an educational expense would be Room and Board. This is because a place to stay on campus is not a necessity for learning. Tuition/Fees, Equipment, and Books/Supplies are all necessary in order to be able to attend the university and learn. Without these, it would be impossible for you as a student to learn what is needed. However, with these things you can easily travel by car, bus, or train to the faculty without the need for a room or board.
Maverick law office currently orders ink refills 120 units at a time. The firm estimates that carrying cost is 40% of the $10 unit cost and that annual demand is about 480 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its current action (order quantity) be optimal
Answer:
Economic order quantity (EOQ)= 49 units
Explanation:
Giving the following information:
Demand= 480 units per year
Order cost= $10
Holding cost= 10*0.4= $4
Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs.
Economic order quantity (EOQ)= √[(2*D*S)/H]
D= Demand in units
S= Order cost
H= Holding cost
Economic order quantity (EOQ)= √[(2*480*10) / 4]
Economic order quantity (EOQ)= √(2,400)
Economic order quantity (EOQ)= 49 units
Economists assume that individual decisions will be determined by the output or production costs they create. the output or production costs they create. the trade-offs they creates. the trade-offs they creates. the societal demands associated with them.
Answer:
the trade-offs they creates.
Explanation:
Trade-off is the opportunity cost of taking a particular decision
Opportunity cost of the next best option forgone when one alternative is chosen over other alternatives
For example, if there is a worker who values an hour of leisure at $10 and he is paid $20 per hour. If he has to choose between leisure and working. He would choose to work because the opportunity cost of not working (10) is lower when compared to the opportunity cost of leisure ($20)
A trade off is a situation that includes the decline or reduction n one quality and property for the sake of another. Only a certain value of objected can fit into the terms of multiple terms of the configurations.
An economics always assumes the individual decision making ability to determine the output or production costs they create.Hence the option A is correct.
Learn more about the assume that individual decisions will.
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