Answer:
Step 1: Identify contract(s) with customer
Correct Match: Customer agrees to purchase one computer plus two years of data services for an agreed upon price.
Step 2: identify performance obligation(s) in the contract
Correct Match: Customer will receive the computer immediately and will benefit from two years of data services for the tablet.
Step 3: Determine transaction price
Correct Match: The total price for the computer and two years of services is $800.
Step 4: Allocate transaction price to performance obligation(s)
Correct Match: The standalone selling price of the computer is $500 and of the two-year service contract is $300.
Step 5: Recognize revenue when (or as) each performance obligation is satisfied through a transfer of control
Correct Match: Customer takes possession of the computer and benefits from the data service over two years.
1. When distribution team members use replenishment reports to retrieve quantities of items to be sent to stores they are:
O A. Mixing
O B. Sending
O C.Packing
O D. Picking
Answer:
D. Picking.................
Distribution team members use replenishment reports to retrieve quantities of items to be sent to stores, this is called as Picking. Hence, Option D is the correct statement.
What is the picking system?Systems for picking orders from warehouses are created to improve picking operations' effectiveness, speed, and accuracy. A few of these systems can be used by businesses to improve order fulfillment processes in their distribution channels.
Hence, Distribution team members use replenishment reports to retrieve quantities of items to be sent to stores, this is called as Picking. Option D is the correct statement.
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Question 5 of 10
An increase in the money supply that causes money to lose its purchasing
power and prices to rise is known as
A. deflation
B. recession
C. conflation
D. inflation
Blossom Leasing Company agrees to lease equipment to Blue Corporation on January 1, 2020. The following information relates to the lease agreement.
1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years.
2. The cost of the machinery is $520,000, and the fair value of the asset on January 1, 2020, is $737,000.
3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $60,000. Blue estimates that the expected residual value at the end of the lease term will be 60,000. Blue amortizes all of its leased equipment on a straight-line basis.
4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020.
5. The collectibility of the lease payments is probable.
6. Blossom desires a 10% rate of return on its investments. Blue’s incremental borrowing rate is 11%, and the lessor’s implicit rate is unknown.
(Assume the accounting period ends on December 31.)
Compute the value of the lease liability to the lessee. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972.)
Present value of minimum lease payments
$ ?
Explanation:
Blossom Leasing Company agrees to lease equipment to Blue Corporation on January 1, 2020. The following information relates to the lease agreement.
If a product's demand rises as income rises, ceteris paribus, the product is
a) an inferior good
b) not enough information
c) a notmal good
d) outside of the market equilibrium
Generally, when a product's demand rises as income rises, ceteris paribus, the product is outside of the market equilibrium
Market equilibrium occurs when a market price of quantity demanded is equal to the quantity supplied
Hence, when a product's demand rises as income rises, ceteris paribus, the product is outside of the market equilibrium
In conclusion, the Option D is correct.
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Steelweld, a car parts manufacturer, pays employees a higher hourly rate as they learn to master more parts of the work process. Employees earn $10 per hour when they are hired and they can earn up to $20 per hour if they master all 12 work units in the production process. What is most likely a benefit Steelweld is trying to achieve with this reward system?
Answer:
The improvement of workforce flexibility
Explanation:
The work force flexibility may be defined as the strategy of the responding to changing circumstances as well as expectations. It lays emphasizes on the flexibility and the willingness to adapt to change. The employees who approach their work with a flexible mindset are highly valued by the employers.
In the context, Steelweld company pays their employees at a higher hourly rate when they learn to master more work skills. The employees are paid much higher when they master all the 12 work units than they were hired. By doing this, the Steelweld company is trying to benefit and improve the workforce flexibility in their company.
ReNew Corporation raises funds to build renewable energy systems by issuing 3-year bonds with a coupon rate of 6% and a face value of $1,600. Assume that the market interest rate for a 3-year bond issued by a firm like ReNew is currently the same as the coupon rate. The price of each of these bonds is____ , which means that the bonds sell at ___. Suppose that the market interest rate for bonds that are similar to the ReNew bond has increased to 7%. The price of the ReNew bond changes to____ , which means that it sells at ____. Suppose that instead of rising, the market rate decreases from 6% to 4%. The new price of the bond changes to ___, which means that the bond sells at ___.
Answer:
The price of each of these bonds is $1,600, which means that the bonds sell at par.
Suppose that the market interest rate for bonds that are similar to the ReNew bond has increased to 7%. The price of the ReNew bond changes to $1,558.00 , which means that it sells at discount.
Suppose that instead of rising, the market rate decreases from 6% to 4%. The new price of the bond changes to $1,688.80, which means that the bond sells at a premium.
When the coupon rate and the market interest rate are the same, the price will be at par.
Interest rate increases:
Bond Price = Present value of coupon + Present value of bond price
Coupon = 6% * 1,600
= $96
Bond price = 96 * (1 - 1.07⁻³ / 0.07) + 1,600 / 1.07³
Bond price = $1,558.00
Interest rate decreases:
= 96 * (1 - 1.04⁻³ / 0.04) + 1,600 / 1.04³
= $1,688.80
Stephen discusses with his boss his initial ideas on how to approach his hosting duties. His boss claims he is on the right track, but that he should remember to build goodwill in his remarks. Stephen remembers that this will be the workers' introduction to him, so he needs them to trust him in the role of chief operating officer going forward. Although he will be introducing other speakers during the meeting, he doesn't want to get his goals confused. Select the statement that describes something Stephen should do for a goodwill speech.A. Stephen contacts his boss to ask him what information about himself he would like shared. B. Stephen speaks respectfully about his boss and his positive characteristics. C. Stephen tells the workers that he also believes in fairness and teamwork. D. Stephen conducts research to understand more about the corporate executives.
Answer:
D. Stephen conducts research to understand more about the corporate executives.
Explanation:
Analyzing the information above, it is correct to say that a good presentation should be able to retain the public's attention and positively impact people. For this, it is considered that the letter D is the most relevant option for Stephan to achieve his goals in his speech, because knowing his audience in depth will be a decisive factor to align his presentation with the interests of the audience and thus retain attention and integrate them with what is being said. Therefore, research to understand more about corporate executives will lead Stephan to achieve effectiveness in his presentation.
Plastic Company purchased 100 percent of Spoon Company's voting common stock for $657,000 on January 1, 20X4. At that date, Spoon reported assets of $707,000 and liabilities of $249,000. The book values and fair values of Spoon's assets were equal except for land, which had a fair value $118,000 more than book value, and equipment, which had a fair value $81,000 more than book value. The remaining economic life of all depreciable assets at January 1
Answer:
$51,800
Explanation:
Missing word "January 1,20x4, was five years. Spoon reported net income of $68,000 and paid dividends of $34,000 in 20X4 Required Compute the amount of investment income to be reported by Plastic for 20X4"
Share in income from investment ($68,000*100%) $68,000
Adjustment:
Depreciation on equipment ($81,000/5) $16,200
Investment Income (Loss) $51,800
Note: Land is never depreciated.
The trial balance for Lindor Corporation, a manufacturing company, for the year ended December 31, 2016, included the following income accounts: Account Title Debits Credits Sales revenue 2,300,000 Cost of goods sold 1,400,000 Selling and administrative expenses 420,000 Interest expense 40,000 Unrealized holding gains on investment securities 80,000 The trial balance does not include the accrual for income taxes. Lindor's income tax rate is 30%. One million shares of common stock were outstanding throughout 2016. Required: Prepare a single, continuous multiple-step statement of comprehensive income for 2016, including appropriate EPS disclosures.
Answer:
Net income $302,000
Comprehensive Income $382,000
Earnings Per Share 0.30
Explanation:
Preparation of a single, continuous multiple-step statement of comprehensive income for 2016, including appropriate EPS disclosures.
Lindor Corporation Statement of Comprehensive Income for 2016
Sales revenue $2,300,000
Less Cost of goods sold $1,400,000
Gross profit 900,000
($2,300,000-$1,400,000)
Less Operating expenses:
Selling and administrative expenses ($420,000)
Operating income $480,000
($900,00-$420,000)
Less other expenses:
Interest expense ($40,000)
Income before tax Expenses $440,000
($480,000-$40,000)
Income tax Expenses $132,000
(30%*$440,000)
Net income $302,000
($440,000-$132,000)
Other comprehensive income:
Add Unrealized holding gain on investment securities,net of tax $80,000
Comprehensive Income $382,000
($302,000+$80,000)
Earnings Per Share:
Net Income
(302,000 / 1,000,000) 0.30
Therefore Lindor Corporation single, continuous multiple-step statement of comprehensive income for 2016, including appropriate EPS
disclosures will be :
Net income $302,000
Comprehensive Income $382,000
Earnings Per Share 0.30
The legal theory of contributory negligence:
a. is in effect in the majority of states throughout the nation.
b. means that, even assuming the defendant is negligent, if the plaintiff is even slightly negligent, the plaintiff recovers nothing.
c. allows the negligent plaintiff to recover if he was responsible for less than 50 percent of his injury.
d. has been criticized as rewarding a plaintiff for being careless.
Answer:
b. means that, even assuming the defendant is negligent, if the plaintiff is even slightly negligent, the plaintiff recovers nothing.
Explanation:
Contributive negligence is a tort in law that allows the defender in a case to completely prevent a plaintiff from getting any recovery in a case.
This occurs if the defender can prove the plaintiff is negligent resulting in their own injury. That is self injury.
On the other hand comparative negligence allows the plaintiff recover a certain percentage in case of negligence that affects himself. For example if plaintiff was 10% negligent then they lose 10% of the amount they were to recover.
So contributory negligence means that, even assuming the defendant is negligent, if the plaintiff is even slightly negligent, the plaintiff recovers nothing.
1. Write a hierarchical list of Excel components by size, starting with cells as the smallest
component and workbooks as the largest component.
Answer:
Hierarchical List of Excel Components:
1. Cells
2. Navigation buttons
3. Sheet tabs
4. Formula bar
5. Name box
6. Row Headings
7. Column Headings
8. Toolbar
9. Menu bar
10. Title bar
11. Worksheet
12. Workbook
Explanation:
Microsoft Excel, which is traditionally the workbook of accounting, consists of worksheets (standard three, but you can add more, as required). Each worksheet contains 256 columns and 65,536 rows. The cell is the intersection of columns and rows, where texts and numbers are input. Each cell is named after the combination of its column letter and the row number.
On April 1, Ringo Company borrowed $20,000 from its bank by issuing a 9%, 12-month note, with the interest to be paid on the maturity date. Required: Prepare journal entries to record the issuance of the note and the related year-end adjusting entry on December 31.
Answer:
April 1
Issuance of Loan Note
Dr. Cash $20,000
Cr. Loane Note Payable $20,000
December 31
Adjusting Entry of accrued interest
Dr. Interest Expane $1,350
Cr. Interest Payable $1,350
Explanation:
April 1:
First, we need to record the loan note issuance as follow:
Ringo company received the cash against the loan note issuance so the cash will be debited and a liability is created against the receipt of the cash. The Loan note payable account is credited.
December 31:
Now calculate the accrued interest for the year as follow
Accrued Interest = Value of Loan Note x Interest rate x Fraction of accrued months
Where
Value of Loan note = $20,000
Interest rate = 9%
Fraction of accrued months = Accrued months / 12 months = ( December 31 - April 1 ) / 12 months = 9 months / 12 months = 3/4
Placing values in the formula
Accrued Interest = $20,000 x 9% x 3/4
Accrued Interest = $1,350
As the payment of interest is not made so there is no cash involvement. Interest expense is recorded at the end of the period by adjusting entry of debit interest expense and credit interest payable account.
On June 30, 2021, Georgia-Atlantic, Inc. leased a warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $677,829 over a four-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC uses to calculate lease payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of the equipment is $4.6 million. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the present value of the lease payments at June 30, 2021 that Georgia-Atlantic uses to record the right-of-use asset and lease liability. 2. What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2021
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution to Part 1:
Present Value of Lease payments:
Total Semiannual Periods (4*2) = 8
Incremental Borrowing Rate (10%/2) = 5%
Semi-annual lease payment = $677829
Cumulative PV factor for annuity due at 5% for 6 periods = 6.786373
So,
Present Value of Lease payments = $677829 x 6.786373
Present Value of Lease payments = $4600000
Solution to Part 2:
Pretax Amount of Liability At December 31:
Present Value of Lease payments = $4600000
Add: Interest expense [(4600000-677829)*5%] = 196109
less: Payments (semiannual payment x 2) = 1355658
Pretax Amount of Liability = 3440451
Pretax Amount of Asset At December 31:
Value of Asset = 4600000
Less: Depreciation (Value of Asset/ Semiannual periods) = 575000
So,
Pretax Amount of Asset = 4600000 - 575000
Pretax Amount of Asset = 4025000
Dave M. Company issues 500 shares of $10 par value Common Stock and 100 shares of $40 par value Preferred Stock as a basket for a lump sum of $105,000. Total transaction costs paid to complete the sale was $5,000. Common Stock of the company was selling for $198 per share in the market that day and Preferred Stock was selling for $110 per share in the market that day.
Required:
a. Prepare a table showing how the sale price is allocated between the Common Stock and the Preferred Stock.
b. Prepare the journal entry to record the basket sale of the two stocks.
Answer:
a.
Allocation
Common Stock $94,500
Preferred Stock $10,500
b.
Journal Entry
Cash _____________________________$105,000
Common stock _____________________ $5000
Paid-in capital in excess of par - Common _$89,500
Preferred stock _____________________$4,000
Paid-in capital in excess of par - Preferred _$6,500
Explanation:
a.
First, we need to calculate the Market value of both stock using the foloowinf formula
Market value = Numbers of shares x Market value per share
Market value of common stock = 500 x $198 = $99,000
Market value of preferred stock = 100 x $110 = $11,000
Total value = $99,000 + $11,000 = $110,000
Now calculate the weight of each sock
Weight of common stock $99,000 / $110,000 = 0.90
Weight of preferred stock = $11,000 / $110,000 = 0.10
Allocation of the sale price is as follow
Allocated sale price = Weight of Stock x Sale price
Allocated sale price of common stock = $105,000 x 0.90 = $94,500
Allocated sale price of common stock = $105,000 x 0.10 = $10,500
b.
Common Sock is recorded separately as par value and paid-in capital excess of par as follow
Common Stock ( Par Value ) = 500 x $10 = $5,000
Common Stock ( Excess of Par ) = $94,500 - $5,000 = $89,500
Preferred Stock ( Par Value ) = 100 x $40 = $4,000
Preferred Stock ( Excess of Par ) = $10,500 - $4,000 = $6,500
Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.
Production Activity
Indirect Labor
Indirect Materials
Other Overhead
Grinding
$320,000
Polishing
$135,000
Product modification
600,000
Providing power
$255,000
System calibration
500,000
Additional information on the drivers for its production activities follows.
Grinding
13,000 machine hours
Polishing
13,000 machine hours
Product modification
1,500 engineering hours
Providing power
17,000 direct labor hours
System calibration
400 batches
Required
1. Classify each activity as unit level, batch level, product level, or facility level.
2. Compute the activity overhead rates using ABC. Form cost pools as appropriate.
3. Determine overhead costs to assign to the following jobs using ABC.
Job 3175
Job 4286
Number of units
200 units
2,500 units
Machine hours
550 MH
5,500 MH
Engineering hours
26 eng hours
32 eng. hours
Batches
30 batches
90 batches
Direct labor hours
500 DLH
4,375 DLH
4. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286?
5. If the company used a plantwide overhead rate based on direct labor hours, what is the overhead cost for each unit of Job 3175? Of Job 4286?
6. Compare the overhead costs per unit computed in requirements 4 and 5 for each job. Which method more accurately assigns overhead costs?
Answer:
Craftmore Machining
1. Classification of activity as unit level, batch level, product level, or facility level:
Production Activity Level
Indirect Labor Facility
Indirect Materials Product
Grinding Product
Polishing Product
Product modification Product
Providing power Facility
System calibration Batch
2. The Activity Overhead Rates using ABC:
Grinding = $24.62/machine hour
Polishing = $10.38/machine hour
Product modification = $400/eng.h
Providing power = $15/DLH
System calibration = $1.25/batch
3. Assignment of overhead costs:
Job 3175 Job 4286
Number of units 200 units 2,500 units
Machine hours 550 MH 5,500 MH
Engineering hours 26 eng hours 32 eng. hours
Batches 30 batches 90 batches
Direct labor hours 500 DLH 4,375 DLH
Job 3175 Job 4286
Grinding = $24.62/machine hour $13,541 $135,410
Polishing = $10.38/machine hour 5,709 57,090
Product modification = $400/eng.h 10,400 12,800
Providing power = $15/DLH 7,500 65,625
System calibration = $1.25/batch 37.50 112.50
Total costs allocated $37,187.50 $271,037.50
Cost per unit $185.94 $108.42
4. Overhead cost per unit:
Job 3175 , Overhead cost per unit = $185.94 ($37,187.50/200)
Job 4286 Overhead cost per unit = $108 ($271,037.50/2,500)
5. Plantwide overhead rate
Total overhead costs = $1,810,000
Total direct labor hours = 4,875
Overhead rate = $1,810,000/4,875 = $371.28
Job 3175 Job 4286
Direct labor hours 500 DLH 4,375 DLH
Total overhead cost $185,640 $1,624,350
Overhead cost per unit $928.20 $649.74
6. Overhead cost per unit Job 3175 Job 4286
Using ABC $185.94 $108.42
Using Plantwide rate $928.20 $649.74
ABC rate more accurately assigns overhead costs than using plantwide rate.
Explanation:
a) Data and Calculations:
Production Activity
Indirect Labor
Indirect Materials
Other Overhead Costs Usage Usage Rate
Grinding $320,000 13,000 machine hours $24.62/mh
Polishing $135,000 13,000 machine hours $10.38/mh
Product modification 600,000 1,500 engineering hours $400/eng.h
Providing power $255,000 17,000 DLH $15/DLH
System calibration 500,000 400 batches $1.25/batch
Total overhead $1,810,000
b) Craftmore incurs unit-level costs each time a unit is produced. It incurs batch-level costs each time it produces a batch of goods. It incurs product-level costs to support the production of each type of product. Finally, Craftmore's facility-level costs sustain the facility's general manufacturing process.
At a local family bakery in Hyde Park, a neighbourhood of Chicago, Illinois, the marginal products of the first, second, and third sales clerks are 20, 17, and 11 customers served, respectively. The total product of the first two sales clerks is'\
Answer: 37
Explanation:
Marginal product is simply referred to as the additional output that's generated based on the additional input added to the production.
In this case, the total product of the first two sales clerks will be gotten by adding the marginal product of the first two sales clerk which will be:
= 20 + 17
= 37
You purchase a property with a Market Value of $520,000 in 2005 using 5-year Interest Only 90% Loan-to-Value financing. In 2010, the Market Value of the property drops to $460,000. You are considering refinancing. The Loan-to-Value you can get for refinancing is only 70%. How much Total Cash Out of Pocket would you need to have to go through with the refinancing and pay back the original loan Principal outstanding
Answer:
$155,660
Explanation:
Note: The table to question is attached below
==> Loan to Value 90% in 2005
==> Loan to Value 70% in 2010
Loan Amount in 2005 = $520,000*0.9 = $468,000
Loan Amount in 2010 = $460,000*0.7 = $322,000
Loan Amount owed = $468,000
Through Refinancing = $322,000
Total cash out of pocket = $322,000*3% + $468,000 - $322,000
Total cash out of pocket = $9,660 + $468,000 - $322,000
Total cash out of pocket = $155,660
Olympic Sports has two issues of debt outstanding. One is a 5% coupon bond with a face value of $33 million, a maturity of 10 years, and a yield to maturity of 6%. The coupons are paid annually. The other bond issue has a maturity of 15 years, with coupons also paid annually, and a coupon rate of 6%. The face value of the issue is $38 million, and the issue sells for 90% of par value. The firm's tax rate is 30%.
a. What is the before-tax cost of debt for Olympic? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. What is Olympic's after-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Answer and Explanation:
The computation is shown below
a. For before tax cost of debt
But before that following calculations need to be determined
For Bond 1:
Face value = $33,000,000
Coupon payment = 0.05 × $33,000,000 = $1,650,000
The Price of the bond is
= Coupon × [ 1 - 1 ÷ ( 1 + r)^n] ÷ r + FV ÷ ( 1 + r)^n
= $1,650,000 × [ 1 - 1 ÷ ( 1 + 0.06)^10] ÷ 0.06 + $33,000,000 ÷ ( 1 + 0.06)^10
= 1,650,000 × 7.360087 + 18,427,027.64
= $30,571,171.196
For Bond 2:
Price = 0.9 × $38,000,000
= $34,200,000
Now
Coupon = 0.06 × $38,000,000
= $2,280,000
Now before tax cost of debt is
Given that
PV -$34,200,000,
FV $38,000,000,
N 15,
PMT $2,280,000
The formula is shown below:
= RATE(NPER,PMT, PV,FV,TYPE)
After applying the above formula, the Before tax cost of debt of bond is 7.1053%
Now
Total market value is
= $34,200,000 + $30,571,171.196
= $64,771,171.19
And,
finally
Before tax cost of debt for olympic is
= ($30,571,171.196 ÷ 64,771,171.19) × 0.06 + ($34,200,000 ÷ 64,771,171.19) × 0.071053
= 0.028319 + 0.037517
= 0.0658 or 6.58%
b)
And,
After tax cost of debt is
= 0.0658× ( 1 - 0.3)
= 0.0461 or 4.61%
At year end, the following items have not yet been recorded.
a. Insurance expired during the year, $2,000.
b. Estimated bad debts, 1% of gross sales.
c. Depreciation on furniture and equipment, 10% per year.
d. Interest at 6% is receivable on the note for one full year.
e. Rent paid in advance at December 31, $5,400 (originally charged to expense).
f. Accrued salaries at December 31, $5,800.
Required:
(a) Prepare the necessary adjusting entries.
(b) Prepare the necessary closing entries.
Question Completion:
The following trial balance was taken from the books of Sheridan Corporation on December 31, 2020.
Account Debit Credit
Cash $8,500
Accounts Receivable 40,700
Notes Receivable 11,200
Allowance for Doubtful Accounts $1,870
Inventory 35,300
Prepaid Insurance 4,720
Equipment 122,600
Accumulated Depreciation--Equip. 14,100
Accounts Payable 10,100
Common Stock 49,100
Retained Earnings 64,550
Sales Revenue 268,000
Cost of Goods Sold 123,900
Salaries and Wages Expense 48,600
Rent Expense 12,200
Totals $407,720 $407,720
At year end, the following items have not yet been recorded.
a. Insurance expired during the year, $2,000.
b. Estimated bad debts, 1% of gross sales.
c. Depreciation on furniture and equipment, 10% per year.
d. Interest at 6% is receivable on the note for one full year.
e. Rent paid in advance at December 31, $5,400 (originally charged to expense).
f. Accrued salaries at December 31, $5,800.
Required:
a. Prepare the necessary adjusting entries.
b. Prepare the necessary closing entries.
Answer:
Sheridan Corporation
a. Adjusting Journal Entries on December 31, 2020:
a. Debit Insurance Expense $2,000
Credit Prepaid Insurance $2,000
To record the insurance expense for the year.
b. Debit Bad Debts Expense $2,680
Credit Accounts Receivable $2,680
To record bad debts written off.
c. Debit Depreciation Expense - Equipment $12,260
Credit Accumulated Depreciation - Equipment $12,260
To record the depreciation expense for the year.
d. Debit Interest Receivable $672
Credit Interest Revenue $672
To record interest revenue receivable on the note.
e. Debit Rent Prepaid $5,400
Credit Rent Expense $5,400
To record rent prepaid, previously recorded as an expense.
f. Debit Salaries and Wages Expense $5,800
Credit Salaries Payable $5,800
To record accrued salaries.
b. Closing Journal Entries on December 31, 2020:
Debit Sales Revenue $268,000
Interest Revenue $672
Credit Income Summary $268,672
To close the revenue accounts to the income summary.
Debit Income Summary $202,040
Credit:
Cost of Goods Sold 123,900
Salaries and Wages Expense 54,400
Rent Expense 6,800
Bad debts Expense 2,680
Insurance Expense 2,000
Depreciation Expense 12,260
To close the expense accounts to the income summary.
Explanation:
a) Data and Calculations:
Sheridan Corporation
Unadjusted Trial Balance as of December 31, 2020:
Account Titles Debit Credit
Cash $8,500
Accounts Receivable 40,700
Notes Receivable 11,200
Allowance for Doubtful Accounts $1,870
Inventory 35,300
Prepaid Insurance 4,720
Equipment 122,600
Accumulated Depreciation--Equip. 14,100
Accounts Payable 10,100
Common Stock 49,100
Retained Earnings 64,550
Sales Revenue 268,000
Cost of Goods Sold 123,900
Salaries and Wages Expense 48,600
Rent Expense 12,200
Totals $407,720 $407,720
Adjustments:
a. Insurance Expense $2,000 Prepaid Insurance $2,000
b. Bad Debts Expense $2,680 Accounts Receivable $2,680 (1% of $268,000)
c. Depreciation Expense - Equipment $12,260 Accumulated Depreciation - Equipment $12,260 (10% of $122,600)
d. Interest Receivable $672 Interest Revenue $672 (6% of $11,200)
e. Rent Prepaid $5,400 Rent Expense $5,400
f. Salaries and Wages Expense $5,800 Salaries Payable $5,800
Sheridan Corporation
Adjusted Trial Balance as of December 31, 2020:
Account Titles Debit Credit
Cash $8,500
Accounts Receivable 38,020
Notes Receivable 11,200
Interest Receivable 672
Allowance for Doubtful Accounts $1,870
Inventory 35,300
Prepaid Insurance 2,720
Prepaid Rent 5,400
Equipment 122,600
Accumulated Depreciation--Equip. 26,360
Accounts Payable 10,100
Salaries Payable 5,800
Common Stock 49,100
Retained Earnings 64,550
Sales Revenue 268,000
Interest Revenue 672
Cost of Goods Sold 123,900
Salaries and Wages Expense 54,400
Rent Expense 6,800
Bad debts Expense 2,680
Insurance Expense 2,000
Depreciation Expense 12,260
Totals $426,452 $426,452
b) The adjusting entries made in the accounting records of Sheridan Corporation comply with the accrual concept and the matching principle of generally accepted accounting principles. These accounting principles require that expenses and revenues for a period are recognized in the period they occur and not when cash is exchanged. The closing entries show the revenue and the expense accounts closed to the income summary.
Which of the following are mechanisms that have evolved to mitigate potential agency problems?
I) Using the firm's stock options for compensation
II) Hiring bickering family members as corporate spies
III) Boards of directors forcing out underperforming management
IV) Security analysts monitoring the firm closely
V) Takeover threats
Answer:
I) Using the firm's stock options for compensation
III) Boards of directors forcing out underperforming management
IV) Security analysts monitoring the firm closely
V) Takeover threats
Explanation:
Agency problem can be regarded as
conflict of interest which are inherent that can exist between management of a company and its stockholders. It exist when there is expectation that one party act in the best interest of other.
It should be noted that Mechanism that are used in mitigation of potential agency problems are;
I) Using the firm's stock options for compensation
III) Boards of directors forcing out underperforming management
IV) Security analysts monitoring the firm closely
V) Takeover threats
On January 2, 2020, Riverbed Company sells production equipment to Fargo Inc. for $46,000. Riverbed includes a 2-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on January 2, 2020. During 2020, Riverbed incurs costs related to warranties of $900. At December 31, 2020, Riverbed estimates that $690 of warranty costs will be incurred in the second year of the warranty.
Required:
a. Prepare the journal entry to record this transaction on January 2, 2020, and on December 31, 2020.
b. Repeat the requirements for (a), assuming that in addition to the assurance warranty.
Answer:
A. Jan 2,2020
Dr Cash $46,000
Cr Sales Revenue $46,000
During 2020
Dr Warranty expenses $900
Cr Cash $900
Dec 31,2020
Dr Warranty expense $690
Cr Accrued warranty liability $690
B. Jan 2,2020
Dr Cash $46,760
Cr Sales revenue $46,000
Cr Unearned warranty expense $760
During 2020
Dr Warranty expenses $900
Cr Cash $900
Dec 31,2020
Dr Warranty expense $690
Cr Accrued warranty liability $690
Explanation:
Preparation of the journal entry to record this transaction on January 2, 2020, and on December 31, 2020
Jan 2,2020
Dr Cash $46,000
Cr Sales Revenue $46,000
(Being to record sale of equipment)
During 2020
Dr Warranty expenses $900
Cr Cash $900
(Being to record warranty expense)
Dec 31,2020
Dr Warranty expense $690
Cr Accrued warranty liability $690
(Being to record warranty liability)
B. Preparation of the Journal entry to Repeat the requirements for (a)
Jan 2,2020
Dr Cash $46,760
($46,000+$760)
Cr Sales revenue $46,000
Cr Unearned warranty expense $760
(Being to record sale of equipment and extended warranty)
During 2020
Dr Warranty expenses $900
Cr Cash $900
(Being to record warranty expense)
Dec 31,2020
Dr Warranty expense $690
Cr Accrued warranty liability $690
(Being to record warranty liability)
Vinny and Sandra have just had their first baby, and need to make a decision about how to handle work and child‑care responsibilities. Vinny earns $1000 per week working full time, and Sandra's full‑time salary is $1200 per week. They each can work part time and earn half their full‑time wage. Calculate the change in GDP for each situation, relative to when they both worked full time and had no child‑care responsibilities. If GDP falls, include a negative sign in your answer. a. Both Vinny and Sandra return to work full time and pay a child‑care provider $600 per week to care for their child. $ b. Both Vinny and Sandra will return to work full time, while Sandra’s mother takes care of their child without financial compensation. $ c. Both Vinny and Sandra will return to work full time, while Vinny's brother takes care of their baby. They'll pay him $600 a week to care for their child, but neither they nor Vinny’s brother will report those payments to the IRS, or on any government surveys. $ d. Vinny and Sandra will each return to work part time, and split child‑care responsibilities. $ e. Vinny will stay home to care for the baby, while Sandra returns to work full time. $
Answer:
A. 600
B. 0
C. 0
D. -1100
E. -1000
Explanation:
For part A you are asked to find the change in GDP with the addition of paying a babysitter $600. The GDP beforehand was the total income from both Vinny and Sandra which is $1200 + $1000 = $2200. For these questions, you are being asked to find a change in GDP which would simply be the addition of $600. Similiary, for part B there is no change in GDP because they do not pay Sandra's mother, so the change in GDP is 0. For part C, since the payments are not reported, there is no change in GDP. Part C can be thought of as a reference to the shadow market and GDP from the shadow market is not recorded. Part D has a negative 1100 because they each go back to work part-time, Vinnie earning $500 per week and Sandra earning $600. The change in GDP would be negative because they are losing 1100 in order to care for a new child. For part E, Vinnie gives up all his income which would normally amount to $1000 per week. The change in GDP is therefore negative.
The change in GDP for each situation will be:
(a) 600(b) 0(c) 0(d) -1100(e) -1000According to the question,
Whenever both work full time and had no child care then the b will be:
= [tex]1000+1200[/tex]
= [tex]2200[/tex]
(a)
New GDP,
= [tex]1000+1200+600[/tex]
= [tex]2800[/tex]
Change will be:
= [tex]2800-2200[/tex]
= [tex]600[/tex]
(b)
→ When mother doing child care isn't part of GDP then,
New GDP,
= [tex]1000+1200[/tex]
= [tex]2200[/tex]
Change will be:
= [tex]2200-2200[/tex]
= [tex]0[/tex]
(c)
→ Private non-reported transaction isn't a part of GDP then
New GDP,
= [tex]1000+1200[/tex]
= [tex]2200[/tex]
Change will be:
= [tex]2200-2200[/tex]
= [tex]0[/tex]
(d)
→ Working part time so will earn half of wages then,
New GDP,
= [tex]500+600[/tex]
= [tex]1100[/tex]
Change in GDP,
= [tex]1100-2200[/tex]
= [tex]-1100[/tex]
(e)
Only Sandra works then,
New GDP,
= [tex]1200[/tex]
Change in GDP,
= [tex]1200-2200[/tex]
= [tex]-1000[/tex]
Thus the above answers are correct.
Learn more about change in GDP here:
https://brainly.com/question/19131753
What is the present value of the following cash flow stream at a rate of 11.5% per year? Select the correct answer. a. $425.24 b. $419.54 c. $430.94 d. $442.34 e. $436.64
Answer:
the answer to the question would be E
The bond of Tuckpeck is 8¼ 14. The bond traded for a high of 93.25 and closed at 93. The current yield of the bond to the nearest tenth of a percent is:
Answer:
8.9%
Explanation:
Calculation for what The current yield of the bond to the nearest tenth of a percent is:
Current yield of Bond=[(8+1/4)*10]/(93*10)
Current yield of Bond=(8.25*10)/930
Current yield of Bond=82.5/930
Current yield of Bond=0.089*100
Current yield of Bond=8.9%.
Therefore The current yield of the bond to the nearest tenth of a percent is 8.9%
Transactions for Crane Company for the month of June are presented below.
June 1 Issues common stock to investors in exchange for $4,960 cash.
2 Buys equipment on account for $1,720. 3 Pays $930 to landlord for June rent.
12 Sends Wil Wheaton a bill for $820 after completing welding work.
Required:
Journalize the transactions.
Answer:
1. Dr Cash $4,960
Cr Common Stock Issues $4,960
2. Dr Equipment $1,720
Cr Accounts Payable $1,720
3. Dr Rent Expenses$930
Cr Cash $930
4. Dr Service receivables $820
Cr Service Revenue $820
Explanation:
Preparation of the journal entries
1. Dr Cash $4,960
Cr Common Stock Issues $4,960
2. Dr Equipment $1,720
Cr Accounts Payable $1,720
3. Dr Rent Expenses$930
Cr Cash $930
4. Dr Service receivables $820
Cr Service Revenue $820
KB Homes is a nationwide home builder that develops entire communities of dozens and even hundreds of homes, in addition to, building custom homes for individual customers. While a Job Costing system is appropriate for the custom home building, their new controller is planning on using a Process Costing system for the large developments. She argues that because even large developments of 100 homes only offer three or four different floor plans and thus would be more efficient for tracking costs because of the homogeneity. Do you agree or disagree? Why?
Answer:
Answer is explained in the explanation section below.
Explanation:
Yes, I do agree.
Reasoning:
The Argument of the new supervisors in favor of applying the technological calculation to large projects which have homogeneous buildings with 3-4 different floor plans is correct. There are no settings for buildings / dwellings with the same layout and all units go through the same processes and use the same funds. For major developments of a homogeneous nature, instead of creating works to make for each unit and cost collection separately for each unit, a process that costs each floor a plan as a separate product will be much easier and more efficient for control purposes.
This procedure will also provide important data, and reintroduction and monitoring will be much easier.
Creating individual work, so that it is only more difficult to follow a work order, costs and to monitor a large number of work orders at a given moment, which can easily be avoided by adopting a process that costs money.
Therefore, the arguments put forward by the new controller are quite acceptable.
Arif told Bano, his wife, that he would divorce her, if she does not transfer her
personal assets to him. She agreed to transfer her assets to him. Can Bano avoid
the contract?
Patrick has an adjusted gross income of $160,000 in the current year. He donated $30,000 in cash to a public charity, capital gain property with a basis of $15,000 and a fair market value of $40,000 to a public charity, and publicly traded stock with a basis of $20,000 and a fair market value of $35,000 to a private nonoperating foundation. The amount that Patrick can deduct for the stock donation to the private nonoperating foundation is ______.
An$8,000
swer:
Explanation:
Non-cash contributions of capital gain property are subject to limit of 30% of AGI = 30% * 160000 = $48,000
$40,000 in property to public charity is allowable deduction (Contribution to private non-operating foundation is further subject to a 30% limit)
Hence, allowable deduction of contribution to private non-operating foundation = 30% * AGI (Contribution subject to 30% limit) = $48,000 - $40,000 = $8,000
Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead costs to be $432,000, and direct labor costs to be $2,160,000. Actual overhead costs for the year totaled $404,000, and actual direct labor costs totaled $1,880,000. At year-end, the balance in the Factory Overhead account is a:
Answer:
$28,000 Underapplied
Explanation:
Calculation for what the balance in the Factory Overhead account is
Estimated Overhead Cost/Estimated DL = Overhead Rate
$432,000/$2,160,000 = 20 %
Actual Overhead: $404,000
Applied Overhead: (DL 20%) = ($1,880,000 20%) = $376,000
Actual OH - Applied OH = FOH
$404,000 - $376,000 =
$28,000 Underapplied
Therefore At year-end, the balance in the Factory Overhead account is a:$28,000 Underapplied
During fiscal year 2019, Magic Kingdom had sales of $2 million. Its cost of goods sold, selling and general administrative expenses, and depreciation were $1.2 million, $.5 million and $.9 million, respectively. Its 7% semiannual coupon bonds will mature in 10 years, and there is no other debt. The tax rate is 21%, and tax losses cannot be carried forward or back. What is the operating cash flow for Magic Kingdom in fiscal year 2019?
Answer:
$300,000
Explanation:
The computation of the operating cash flow is shown below:
But before that EBIT should be determined
Sales $ 2,000,000.00
Less : Cost of Goods Sold $1,200,000.00
Gross Profit $800,000.00
Less: selling and general administrative expenses $500,000.00
Less: Depreciation expense $900,000.00
EBIT i.e. Operating Income/(Loss) $(600,000.00)
Tax at 21% $(126,000.00)
Since it is negative so the tax loss would not be determined
Now Operating Cash flow
= EBIT × (1 -T) + Depreciation expense - Chane in Working Capital
= EBIT + Depreciation expense
= -$600,000 + $900,000
= $300,000