Answer:
The Aristotle's communication model is a speaker centered model
Explanation:
as the speaker has the most important role in it and is the only one active. It is the speaker's role to deliver a speech to the audience. The role of the audience is passive, influenced by the speech.
Which of the following statements is true? Group of answer choices The production function shows the trade-off between producing different kinds of outputs. The short-run production function includes both fixed and variable inputs. The short-run production function includes both fixed and variable costs. The production function shows the trade-off in inputs that produce the same amount of output. An inefficient firm is unable to achieve as much output as the production function shows.
Answer: An inefficient firm is unable to achieve as much output as the production function shows.
Explanation:
The Production function shows the maximum amount of output that can be produced by a company given the a certain number of inputs which are usually capital and labor.
At each combination of the input therefore, the function shows how much a company should be able to produce. If a company is therefore inefficient and unable to use its inputs effectively, it will be unable to produce at the point it is to be producing at given the combination of inputs they are using.
On January 1, 2019, Nichols Corporation granted 10,000 options to key executives. Each option allows the executive to purchase one share of Nichols' $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2021, if the grantee is still employed by the company at the time of the exercise. On the grant date, Nichols' stock was trading at $25 per share, and a fair value option-pricing model determines total compensation to be $400,000. On May 1, 2021, 8,000 options were exercised when the market price of Nichols' stock was $30 per share. The remaining options lapsed in 2023 because executives decided not to exercise their options. Instructions: Prepare the necessary journal entries related to the stock option plan for the years 2019 through 2023.
Answer:
1/1/19 No entry on the date of the grant
12/31/19
Dr Compensation expense200,000
Cr Paid-in capital-stock options200,000
12/31/20
Dr Compensation expense200,000
Cr Paid-in capital-stock options200,000
5/1/21
Dr Cash 160,000
Dr Paid-in capital-stock options 320,000
Cr Common stock 40,000
Cr Paid-in capital in excess of par 440,000
1/1/23
Dr Paid-in capital-stock options 80,000
Cr Paid-in capital-expired options 80,000
Explanation:
Preparation of the necessary journal entries that is related to the stock option plan for the years 2019 through 2023.
1/1/19 No entry on the date of the grant
12/31/19
Dr Compensation expense200,000
Cr Paid-in capital-stock options200,000
(400,000×1/2)
12/31/20
Dr Compensation expense200,000
Cr Paid-in capital-stock options200,000
($400,000 x 1/2)
5/1/21
Dr Cash 160,000
(8,000 x $20)
Dr Paid-in capital-stock options 320,000
($400,000 x 8,000 / 10,000 = $320,000)
Cr Common stock 40,000
(8,000 x $5)
Cr Paid-in capital in excess of par 440,000
(320,000+160,000-40,000)
1/1/23
Dr Paid-in capital-stock options 80,000
Cr Paid-in capital-expired options 80,000
($400,000–$320,000)
For productivity to increase 1. the total production or output has to increase. 2. the total number of hours worked has to increase 3. the value of the production per hour worked has to increase.
Answer:
. the value of the production per hour worked has to increase.
Explanation:
Productivity is a measure of output generated from per unit of input. It is a measure of the efficiency of a machine, worker, system, or factory in converting inputs to desired outputs. Productivity is calculated by dividing the average output per period by the incurred input (labor, time, capital, material, energy).
For productivity to increase, the value of production per hour has to increase. The output per hour has to increase compared to the input used.
"You are considering an investment in the FIN340 Company and want to evaluate the firm's free cash flow; From the income statement, you see that FIN340 Company earned an EBIT of $1,725,000, paid taxes of $326,025, and its depreciation expense was $86,250; FIN340 Company's gross fixed assets increased by $500,000 from 2017 to 2018. The firm's current assets increased by $545,000 and spontaneous current liabilities increased by $97,000 - What is FIN340 Company's free cash flow in 2018?
A. "$170,725
B. "$450,975
C. "$1,398,975
D. "$1,485,225
E. "$364,725
D. "$537,225
Answer:
D
Explanation:
Free cash flow is the cash flow available to all the providers of capital of a firm
FCF = EBIT ( 1 - Tax rate) + deprecation - fixed capital - working capital
Tax rate = $326,025 / $1,725,000 = 18.9%
$1,725,000(1 - 0.189) + $86,250 - $500,000 - ( $545,000 - $97,000)
= $537,225
since noah is worried about completing his research project on time, the most helpful thing he could do is to choose a topic that
a. is broad
b. he has no interest in
c. is easy to research
d. he knows very little about
Answer:
c
Explanation:
They since Noah is worried about completing his research project on time, the most helpful thing he could do is to choose a topic that is easy to research. Thus, option (c) is correct.
What is research?The term “research” refers to generating and creating new ideas with the help of previous studies and phenomena. Using primary valid sources that have already been published on a subject that is related For example, journals, articles, population data, and historical events are based.
According to the case, Noah is worried about completing his research project. It was the necessary to decide the appropriate significance topic related to the research interested. The topic was the known to the easy to the search a matter and the completing her project.
As a result, the significance of the research are the aforementioned. Therefore, option (c) is correct.
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Investment X offers to pay you $7,700 per year for 9 years, whereas Investment Y offers to pay you $10,600 per year for 5 years. a. If the discount rate is 7 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. If the discount rate is 21 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Answer:
Investment X
Present value if discount rate is 7% = $50,167.29
Present value if discount rate is 21% = $30,071.84
Investment Y
Present value if discount rate is 7% = $43,462.09
Present value if discount rate is 21% = $31,015.43
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Investment X
Cash flow each year from year 1 to 9 = $7,700
Present value if discount rate is 7% = $50,167.29
Present value if discount rate is 21% = $30,071.84
Investment Y
Cash flow each year from year 1 to 5 = $10,600
Present value if discount rate is 7% = $43,462.09
Present value if discount rate is 21% = $31,015.43
Yesterday, Water and Power Co. released its 2018 annual report on the company’s website. While reading the report for her boss, Tessa came across several terms about which she was unsure. She leaned around the wall of her cubicle and asked her colleague, Asher, for help. TESSA: Asher, do you have a second to help me with my reading of Water & Power’s annual report? I’ve come across several unfamiliar terms, and I want to make sure that I’m interpreting the data and management’s comments correctly. For example, one of the footnotes to the financial statements uses "the book value of Water & Power’s shares," and then in another place, it uses "Market Value Added." I’ve never encountered those terms before. Do you know what they’re talking about? ASHER: Yes, I do. Let’s see if we can make these terms make sense by talking through their meaning and their significance to investors. The term book value has several uses. It can refer to a single asset or the company as a whole. When referring to an individual asset, such as a piece of equipment, book value refers to the asset’s , adjusted for any accumulated depreciation or amortization expense. The value, or difference between these two values, is called the asset’s book value. In contrast, when the term refers to the entire company, it means the total value of the company’s as reported in the firm’s .
Answer:
Yesterday, Water and Power Co. released its 2018 annual report on the company’s website. While reading the report for her boss, Tessa came across several terms about which she was unsure. She leaned around the wall of her cubicle and asked her colleague, Asher, for help.
TESSA: Asher, do you have a second to help me with my reading of Water & Power’s annual report? I’ve come across several unfamiliar terms, and I want to make sure that I’m interpreting the data and management’s comments correctly. For example, one of the footnotes to the financial statements uses "the book value of Water & Power’s shares," and then in another place, it uses "Market Value Added." I’ve never encountered those terms before. Do you know what they’re talking about?
ASHER: Yes, I do. Let’s see if we can make these terms make sense by talking through their meaning and their significance to investors. The term book value has several uses. It can refer to a single asset or the company as a whole. When referring to an individual asset, such as a piece of equipment, book value refers to the asset’s historical value or original purchase price, adjusted for any accumulated depreciation or amortization expense. The net value, or difference between these two values, is called the asset’s book value. In contrast, when the term refers to the entire company, it means the total value of the company’s shareholders’ equity as reported in the firm’s balance sheet .
Your brother-in-law borrowed $1,000 from you 10 years ago and then disappeared. Yesterday he returned and expressed a desire to pay back the loan, including the interest accrued. Assuming you had agreed to charge him interest of 7.00% per year, and that he wishes to make five equal annual payments beginning in one year, how much would your brother-in-law have to pay annually (rounded to the nearest dollar) to extinguish the debt
Answer:
$479.11
Explanation:
Loan + Accrued interest (1000*1.07^10) = 1,967.15
PMT = P *r*(1+r)^n / ((1+r)^n - 1)
PMT=Monthly payment , P = Principal=1967.15 , r = interest rate=0.07,n=number of payment =5
PMT=1967.15*.07*(1+.07)^5/((1+.07)^5 – 1)
PMT = 479.11
Loan amortization schedule Personal Finance Problem Joan Messineo borrowed $15,000 at a 14% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, end-of-year payments. a. Calculate the annual, end-of-year loan payment. b. Prepare a loan amortization schedule showing the interest and principal breadown of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of time. a. The amount of the equal, annual, end-of-year loan payment is $6460.976460.97. (Round to the nearest cent.) b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. Many financial calculators have an amortization function which makes this process easy. (Hint: Once the payment is determined in step a above, you can use the AMORT function to calculate the interest paid, principal paid and ending loan balance for each payment period). (Round to the nearest cent.) End-of-year Timeline Beginning-of-year Principal Loan Payment Interest Payment Principal Payment End-of-year Principal 1 $1500015000 $6460.976460.97 $21002100 $4360.974360.97 $10639.0310639.03 2 $nothing $nothing $nothing $nothing $nothing 3 $nothing $nothing $nothing $nothing $nothing c. Explain why the interest portion of each payment declines with the passage of time. (Select the best answer below.)
Answer:
a) annual payment = PV of the loan / PV annuity factor
i = 14%
n = 3
PV annuity factor, 14%, 3 periods = 2.3216
annual distribution = $15,000 / 2.3216 = $6,461.06
b)
principal cash payment interest paid principal paid ending bal.
15,000 6,461.06 2,100 4,361.06 10,638.94
10,638.94 6,461.06 1,489.45 4,971.61 5,667.33
5,667.33 6,461.06 793.73 5,667.33 0
c) the interest portion declines with every payment because interest is charged over the principal's balance, and if the principal decreases, then the interest will be lower.
Investment X offers to pay you $4,800 per year for 9 years, whereas Investment Y offers to pay you $7,100 per year for 5 years. If the discount rate is 6 percent, what is the present value of these cash flows
Answer and Explanation:
The computation is shown below:
Present value of investment X is
= Annuity × [1 - 1 ÷ (1 + r)^n] ÷ r
= $4,800 × [1 - 1 / (1 + 0.06)^9] ÷ 0.06
= $4,800 * 6.801692
= $32,648.12
And,
The Present value of investment Y is
= Annuity × [1 - 1 ÷ (1 + r)^n] ÷ r
= $7,100 × [1 - 1 ÷ (1 + 0.06)^5] ÷ 0.06
= $7,100 × 4.212364
= $29,907.78
The following is a list of account balances for Pick-A-Pet, Inc., as of June 30, Year 3: Accounts Payable $ 357,600 Accounts Receivable 74,000 Cash 736,100 Common Stock 672,600 Equipment 59,800 Logo and Trademarks 423,000 Long-term Notes Payable 269,600 Retained Earnings 118,600 Software 125,500 The company entered into the following transactions during July, Year 3. Stockholders contribute $370,000 cash for additional ownership shares and the company borrows $185,000 in cash from a bank to buy new equipment by signing a formal agreement to repay the loan in 2 years. No other transactions took place during July, Year 3. Required: Prepare a classified balance sheet for the company at June 30, Year 3. Show the effects of the July transactions on the basic accounting equation. Prepare the journal entries that would be used to record the transactions.
Answer:
Please see attached solution.
Explanation:
1. Prepare a classified balance sheet for the company June 30
2. Show the effect of July transaction on the basic accounting equation
3. Prepare the journal entries that would be used to record the transactions.
Please find attached solution to the above questions
Department A had 5,000 units in Work in Process that were 60% completed as to labor and overhead at the beginning of the period. 34,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 8,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for material costs for the period was
Answer:
34,000 units
Explanation:
The computation of the number of equivalent units of production for material costs is shown below:
= (Opening work in process × completion percentage) + (Completed units × completion percentage) + (ending work in process × completion percentage)
= (5000 × 0%) + ((31,000 - 5,000) × 100%) + (8000 × 100%)
= 34000 Units
Hence, the number of equivalent units for production is 34,000 units
When a multi-product factory operates at full capacity, decisions must be made about which products to emphasize. In making such decisions, products should be ranked based on: Group of answer choices
Group of answer choices
A. selling price per unit contribution.
B. margin per unit contribution
C. margin per unit of the constraining resource.
D. unit sales volume
Answer:
C. contribution margin per unit of the constraining resource.
Explanation:
When a multi-product factory operates at full capacity, decisions must be made about which products to emphasize. In making such decisions, products should be ranked based on contribution margin per unit of the constraining resource.
Ten years ago, you took out a $500,000 loan to buy a small apartment building. The loan had a 6.25% interst rate, 25-year amortization and, like all mortgage loans, had monthly payments and interest compounding. Currently, mortgage rates have declined so that you could refinance the current loan balance with a new loan having a 5.75% interest rate and 20 year amortization period. You intend to own the property for 5 more years and are considering refinancing. a) Calculate the payments on the original loan b) Calculate the current loan balance of the original loan c) Calculate the loan balance of the original loan 5 years from now. d) Using the current, lower interest rate, calculate the present value of the remaining original loan payments (i.e. the PV of 60 monthly loan payments and the repayment of the loan balance after 5 years) e) Assume you refinance, taking out a new loan at the lower rate with an initial balance equal to the current balance of the original loan (i.e. the new loan amount is your answer from part b). Calculate the payments on this new loan. f) Calculate the loan balance of the new loan 5 years from now.
Answer:
a) Calculate the payments on the original loan
monthly payment = principal / annuity factor
principal = $500,000
PV annuity factor, 300 periods, 0.52% = 151.59095
monthly payment = $500,000 / 151.59095 = $3,298.349934 ≈ $3,298.35
b) Calculate the current loan balance of the original loan
I prepared an amortization schedule on an excel spreadsheet. The balance after the 120th payment is $384,681.
c) Calculate the loan balance of the original loan 5 years from now.
the balance after the 180th payment = $293,760
d) Using the current, lower interest rate, calculate the present value of the remaining original loan payments
we can use the present value of an ordinary annuity formula to determine the present value of the remaining 60 payments (of $3,298.35 each) and the present value of $293,760.
PV of loan payments = $3,298.35 x 52.0404 (PV annuity factor, 0.479%, 60 periods) = $171,647.45
PV of principal = $293,760 / (1 + 5.75%)⁵ = $222,121.59
total = $393,769.04
e) Assume you refinance, taking out a new loan at the lower rate with an initial balance equal to the current balance of the original loan (i.e. the new loan amount is your answer from part b). Calculate the payments on this new loan.
monthly payment = principal / annuity factor
principal = $384,681PV annuity factor, 240 periods, 0.479% = 142.43323monthly payment = $384,681 / 142.43323 = $2,700.78
f) Calculate the loan balance of the new loan 5 years from now.
I prepared a second amortization schedule (modified amortization schedule). The principal balance after the 60th payment is $325,235
The ethical dilemma in the Getaway Cruise Lines case can best be described as: The external auditors are being blocked by the client in attempting to verify accounting treatment of surplus electricity and water provided by the client to the local government The external auditors question the requirement to make facilitating payments to the local authorities The Director of International Accounting questions the requirement to provide surplus electricity and water to the local government The Director of International Accounting questions the requirement to provide surplus electricity and water and make facilitating payments to the local authorities
Answer:
The Getaway Cruise Lines
The ethical dilemma in the Getaway Cruise Lines case can best be described as:
The Director of International Accounting questions the requirement to provide surplus electricity and water and make facilitating payments to the local authorities
Explanation:
Kirsten as the Director of International Accounting faces an ethical dilemma or with the difficult choice of assuaging the demands of the Brazilian authorities or complying with her company's high ethical standards, including the issue of foreign bribes in the US.
For example, an ethical dilemma or moral judgement call is required when Kirsten is faced with the difficult choice of two courses of action, either of which entails transgressing a moral principle.
If a union operates in a right to work state, it will not be allowed to create a ________ workplace, but may have a ________ workplace.
Answer:
If a union operates in a right to work state, it will not be allowed to create a CLOSED SHOP workplace, but may have a OPEN SHOP workplace.
Explanation:
A closed shop workplace refers to a company where all the employees must belong to the union in order to be hired or to continue working for the company. An open shop workplace refers to a company where joining a union is optional, and no one can be fired (or not hired) for not belonging to a union.
The fill in the blanks should be filled with union shop and open shop.
The following information should be considered:
In the case when the union operated for right to work so it is not permitted to develop the union shop workplace.But at the same time, the open shop workplace should be created.Therefore we can conclude that The fill in the blanks should be filled with union shop and open shop.
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A country wants to promote economic growth by giving companies more
freedom. It cuts taxes on corporations, eliminates environmental regulations,
and makes it easier to start new businesses. The government tries to limit its
involvement in economic issues as much as possible.
This situation best reflects the influence of which economic thinker?
Answer:
Adam Smith
Explanation:
Adam Smith lived in the 18th century. He was Scottish, a decorated philosopher, economist, and author. Many view him as the father of modern economics.
Adam Smith was a principal advocate of the market economy. In his book, ''The Wealth of Nations," Adam emphasized that the individual's need to satisfy self-interest has more societal benefit. Adam Smith wrote this book at a time when markets were heavily regulated by the state, church, and trading societies . He argued that removing unnecessary interference would permit trade to flourish and prosper. Although Smith advocated for individual profits maximization and low trade barriers, he also saw to need for government to participate through regulation. Smith thought that the government had a big role in education and the country's defense.
Smith believed that competition in business ensures that private firms driven by profit motive will produce their goods at the lowest possible cost. This benefits society and ensures markets use resources efficiently.
Smith is also accredited with developing the gross domestic product (GDP) concept and the theory of compensating wage differentials.
Ryan Company deposits all cash receipts on the day they are received and makes all cash payments by check. Ryan's June bank statement shows $30,861 on deposit in the bank. Ryan's comparison of the bank statement to its cash account revealed the following: Deposit in transit 3,950 Outstanding checks 1,512 Additionally, a $58 check written and recorded by the company correctly, was recorded by the bank as a $85 deduction. The adjusted cash balance per the bank records should be:
Answer:
$33,316
Explanation:
Preparation of the adjusted cash balance per the bank records
Balance as per bank statement $30,861
Add Deposit in transit 3,950
Add Bank error (85-58) 17
Less Outstanding checks (1,512 )
Adjusted cash balance per the bank RECORDS $33,316
Therefore the adjusted cash balance per the bank records should be $33,316
You want to invest an amount of money today and receive back twice that amount in the future. You expect to earn 8 percent interest. Approximately how long must you wait for your investment to double in value
Answer:
It will take 8.75 years to double the investment.
Explanation:
Giving the following information:
Interest rate= 8%
To calculate the time required to double any amount of money, we can use the rule of 70. The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double.
Number of Years to Double= 70/Annual Rate of Return
Number of Years to Double= 70/8
Number of Years to Double= 8.75
It will take 8.75 years to double the investment.
The MoMi Corporation’s cash flow from operations before interest, depreciation and taxes was $2.0 million in the year just ended, and it expects that this will grow by 5% per year forever. To make this happen, the firm will have to invest an amount equal to 20% of pretax cash flow each year. The tax rate is 21%. Depreciation was $260,000 in the year just ended and is expected to grow at the same rate as the operating cash flow. The appropriate market capitalization rate for the unleveraged cash flow is 10% per year, and the firm currently has debt of $4 million outstanding. Use the free cash flow approach to calculate the value of the firm and the firm’s equity.
Answer:
Kindly check explanation
Explanation:
Given the following :
Previous year cash flow from operations before interest, depreciation and taxes = $2.0 million
Growth rate (g) = 5% per year
Pretax cashflow per year = 20%
Tax rate = 21%
Depreciation = $260,000
Market capitalization rate = 10%
Outstanding debt = 4 million
Cash flow from operation before interest tax:
Previous year cashflow + (5% growth in previous year)
(2,000,000) + (0.05 * 2,000,000)
(2,000,000 + 100,000) = $2,100,000
Depreciation + growth (5%):
260,000 + (260,000*0.05) = $273,000
Taxable income = cashflow - depreciation
Taxable income = $(2,100,000 - 273,000)
= $1,827,000
Tax amount = 0.21 * 1827000 = $383670
After tax income = (1827000 - 383670):
After tax income = $1,443,330
After tax cash flow from operations :
(After tax unleveraged income + Depreciation)
After tax Cash flow from Operation = $1,443,330 + $273,000 = $1716330
New investment :
20% of pretax cashflow from operation:
0.2 * $2,100,000 = $420,000
Free cash flow = $1716330 - $420,000 = $1,296,330
Present value of all future free cash flow:
Free cashflow / (capitalization rate - growth rate) = 1296330 / (0.1 - 0.05)
= 1296330 / 0.05
= $25,926,600
Hence, value of firm = $25,926,600
Value of equity :
Value of firm - outstanding debt
$25,926,600 - $4,000,000
= $21,926,600
name three benefits of being a for-profit business
Answer:
Owner Income
Owner Income
Company Morale
Explanation:
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Income and Expenditure – End of Chapter Problems 5. The Bureau of Economic Analysis reported that, in real terms, overall consumer spending increased by $345.8 billion in 2015. a. If the marginal propensity to consume is 0.50, by how much will real GDP change in response? Enter your answer in billions of dollars. Change in GDP: $ billion b. If there are no changes in autonomous spending other than the increase in consumer spending described in part a, and unplanned inventory investment, ????unp????anned , decreases by $100 billion, what is the change in real GDP? Enter your answer in billions of dollars. Change in GDP: $ billion c. GDP at the end of 2014 was $15,982.3 billion. If GDP were to increase by the amount calculated in part b, what would be the percentage increase in GDP? Round your answer to the nearest hundredth of a percent.
Answer:
Please see solution below
Explanation:
a. Details from the above question;
MPC = 0.50
Change in consumption spending = $345.8 billion
Recall that;
Marginal propensity to consume = 1 / 1 - MPC
= 1 / 1 - 0.5
= 1 / 0.5
= 2
Hence, change in GDP = change in consumption spending × 2
= $345.8 × 2
= $691.6 billion
Therefore,
Change in GDP = $691.6 billion
b. Recall that; change in investment = -$100 billion
Marginal propensity to consume [Change in real GDP / Change in investment = 1 / 1 - MPC
=1 / 1 - 0.5
= 1 / 0.5
= 2
Change in GDP = Change in investment × 2
= (-$100) × 2
= -$200 billion
Hence, total change in GDP
= $691.6 - $200
= $491.6 billion
c. Percentage change in real GDP
= (change in real GDP / GDP at year end of 2014) × 100
= (491.6 / 15,982.3) × 100
= 3.08%
A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, $4,225; Freight In, $467; Purchases, $14,439; Purchases Returns and Allowances, $2,701; Purchases Discounts, $319. The cost of merchandise purchased is equal to
Answer:
$11,886
Explanation:
the cost of merchandise purchased = purchases (goods purchased by the company) + freight in costs (cost of transporting purchased goods to the company) - purchase returns and allowances (goods returned to suppliers) - purchase discounts (discounts handed out by suppliers) = $14,439 + $467 - $2,701 - $319 = $11,886
The initial inventory is not included in the calculation since it was purchased during previous periods.
Which item is important to consider when selecting a
credit card?
Answer:
APR, annual fees, charges, etc.
Explanation:
where in the book do you find calcualtions for Dennis is a self-employed hair stylist who operates a salon in his home. The property taxes and interest allocated to the business amount to $5,000, maintenance and utilities allocated to the business total $2,100, and depreciation allocated to the business use of the home equals $3,100 for the 2020 tax year. a. If Dennis' gross revenue after deducting supplies for his business is $5,900 for the current tax year, calculate his allowable deductions for the home office. b. If Dennis' gross revenue after deducting supplies for his business is $13,800, calculate his allowable deductions for the home office.
Answer:
Explanation:
a. . If Dennis' gross revenue after deducting supplies for his business is $5,900 for the current tax year, calculate his allowable deductions for the home office.
The allowable deductions for the home office will be $5900. It should be noted that of the $5900, $5,000 will be for taxes and interest while the remaining $900 will be for maintenance and utilities.
b. Dennis' gross revenue after deducting supplies for his business is $13,800, calculate his allowable deductions for the home office.
Allowable deductions will be:
= $5,000 + $2,100 + $3,100
= $10,200
The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves assessing whether the diversification move A. will make the company better off because it will produce a greater number of core competencies. B. will make the company better off by improving its balance sheet strength and credit rating. C. will make the company better off by spreading shareholder risks across a greater number of businesses and industries. D. offers potential for the company's existing businesses and new businesses to perform better together under a single corporate umbrella. E. will benefit shareholders due to gains in earnings per share and faster stock price appreciation.
Answer:
A. will make the company better off because it will produce a greater number of core competencies.
Explanation:
The better-off test means that a business must benefit from the proposed diversification. This benefit van be a one time benefit or a continuous benefit
Reasons for diversification that don't pass the better of test
Diversification to diversify shareholders investments Increasing the size of the company.You run a nail salon. Fixed monthly cost is $5,093.00 for rent and utilities, $5,924.00 is spent in salaries and $1,370.00 in insurance. Also every customer requires approximately $4.00 in supplies. You charge $116.00 on average for each service.You are considering moving the salon to an upscale neighborhood where the rent and utilities will increase to $11,944.00, salaries to $6,992.00 and insurance to $2,427.00 per month. Cost of supplies will increase to $8.00 per service. However you can now charge $151.00 per service. At what point will you be indifferent between your current location and the new loaction
Answer:
The indifference point is 290 services.
Explanation:
Current location:
Rent and utilities= $5,093
Salies= $5,924
Insurance= $1,370
Total fixed cost= $12,387
Contribution margin per unit= 116 - 4= $112
New location:
Rent and utilities= $11,944
Salies= $6,992
Insurance= $2,427
Total fixed costs= $21,363
Contribution margin per unit= 151 - 8= $143
First, we need to structure the total income formula (y):
Current location:
y= 112x - 12,387
New location:
y= 143x - 21,363
x= number of services
Now, we equal both formulas and isolate x:
112x - 12,387 = 143x - 21,363
31x =8,976
x= 289.55 = 290 services
The indifference point is 290 services.
Prove:
y= 112*290 - 12,387= $20,093
y= 143*290 - 21,363= $20,107
The difference is due to round up.
What internal dimensions of the company were part of the problems that
occurred?
Zurich Corporation has 38,000 shares of $90 par common stock outstanding. On February 8, Zurich Corporation declared a 4% stock dividend to be issued April 11 to stockholders of record on March 10. The market price of the stock was $117 per share on February 8. Journalize the entries required on February 8, March 10, and April 11.
Answer and Explanation:
The journal entries are shown below:
1. Stock dividend (38,000 × 117 × 4 % ) $177,840
To stock dividend distributable (38,000 × 90 × 4 %) $136,800
To paid in capital in excess of par common stock ($177,840 - $136,800) $41,040
(being the stock dividend is recorded)
2. No journal entry is required as no transaction is take place
3. stock dividend distributable $136,800
To common stock $136,800
(being the stock dividend is recorded)
Parker Company uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year manufacturing overhead and direct labor-hours were estimated at $50,000 and 20,000 hours, respectively, for the year. In June, Job #461 was completed. Materials costs on the job totaled $4,000 and labor costs totaled $1,500 at $5 per hour. At the end of the year, it was determined that the company worked 24,000 direct labor-hours for the year and incurred $54,000 in actual manufacturing overhead costs. Required: a. Job #461 contained 100 units. Determine the unit product cost that would appear on the job cost sheet. b. Determine the underapplied or overapplied overhead for the year.
Answer:
Instructions are below.
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (50,000/20,000)
Predetermined manufacturing overhead rate= $2.5 per direct labor hour
Now, we can determine the total cost and unitary cost of Job 461:
Direct labor hours= 1,500/5= 300
Total cost= 4,000 + 1,500 + 2.5*300= $6,250
Unitary cost= 6,250/100= $62.5
To calculate the under/over allocation, first, we allocate overhead for the whole company:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 2.5*24,000= $60,000
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 54,000 - 60,000
Under/over applied overhead= $6,000 overallocated
