If the economy is at potential output and consumption spending suddenly decreases due to a fall in consumer confidence, the appropriate fiscal policy would be expansionary fiscal policy.
This is because the decrease in consumption spending will lead to a decrease in aggregate demand, which could lead to a recession or a slowdown in economic growth.
Expansionary fiscal policy, such as an increase in government spending or a decrease in taxes, will stimulate aggregate demand and offset the decrease in consumption spending.
By increasing government spending or decreasing taxes, individuals and businesses will have more money to spend and invest, leading to an increase in economic activity and potentially bringing the economy back to its potential output level.
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A style of group decision making that is characterized by a greater desire among members to get along than to generate and critically evaluate alternative viewpoints and positions is referred to as __________.
A style of group decision making that is characterized by a greater desire among members to get along than to generate and critically evaluate alternative viewpoints and positions is referred to as groupthink.
Groupthink occurs when members of a group prioritize social harmony and conformity over effective decision-making. In groupthink, dissenting opinions are suppressed or ignored, and members conform to the prevailing viewpoint of the group without questioning its validity. This can lead to flawed decision-making and negative outcomes, as the group fails to consider all available information and alternatives.
To avoid groupthink, group members should encourage open discussion and the free exchange of ideas, value dissenting opinions, and consider all available information and alternatives before making a decision. By promoting critical thinking and challenging assumptions, groups can make better decisions and avoid the negative consequences of groupthink.
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How much money will Allen have at the end of 5 years if he saves by withdrawing $200 from his checking account every month and adding it to a piggy bank
Assuming Allen saves $200 every month for 5 years, he will have saved a total of $12,000. However, this does not take into account any interest that may accumulate over the 5-year period. If Allen chooses to keep his savings in a piggy bank, he will not earn any interest on his savings.
However, if he opens a savings account and deposits his monthly savings into it, he can earn interest on his savings.
The amount of interest earned will depend on the interest rate of the savings account. For example, if the savings account has an interest rate of 1%, Allen will earn approximately $609 in interest over the 5-year period, bringing his total savings to approximately $12,609. It's important to note that there may be fees associated with maintaining a savings account, so it's important to research and compare different account options before making a decision. If Allen saves by withdrawing $200 from his checking account every month and adds it to a piggy bank, he will have saved $12,000 after 5 years.
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Marisa has started a company to manufacture earrings. She will make $1.00 profit on each pair of earrings sold, but expects 1 pair in 30 to be returned for repair, which will cost $45.00. Will she make a profit with her company
Marisa's company will make a profit if the revenue from selling the earrings exceeds the cost of repairing the returned earrings.
Let's assume that Marisa sells 300 pairs of earrings. With a profit of $1.00 per pair, her revenue would be $300. However, since 1 pair in 30 is expected to be returned for repair, this means that she can expect 10 pairs to be returned (300 pairs/30 = 10 pairs). The cost of repairing these 10 pairs would be $45.00 each, which amounts to a total cost of $450.00 ($45.00 x 10).
To determine if Marisa's company will make a profit, we need to subtract the cost of repairing the returned earrings from the revenue generated from selling the earrings.
Revenue: $300.00
Cost of repairing returned earrings: $450.00
Net loss: -$150.00
Based on these calculations, it appears that Marisa's company will not make a profit as she will experience a net loss of -$150.00. Therefore, Marisa may need to re-evaluate her business model or pricing strategy to ensure that her company can make a profit.
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MM Model with Zero Taxes An unlevered firm has a value of $575 million. An otherwise identical but levered firm has $125 million in debt. Under the MM zero-tax model, what is the value of the levered firm
Under the MM zero-tax model, the value of the levered firm would still be $575 million. This is because the zero-tax model assumes that there are no taxes, and therefore the tax shield from the interest paid on the debt is not a factor in determining the value of the firm.
The MM model with zero taxes states that the value of a firm is independent of its capital structure, and therefore the addition of debt does not increase the value of the firm. In this scenario, the unleveled firm and the levered firm are assumed to be identical in every way except for the fact that the levered firm has $125 million in debt.
Since the value of the unleveled firm is $575 million, the value of the levered firm would also be $575 million. The presence of debt does not impact the value of the firm in the MM zero-tax model, and therefore the value of the levered firm is equal to the value of the unlevered firm.
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A proposed new investment has projected sales of $730,000. Variable costs are 42 percent of sales, and fixed costs are $225,000; depreciation is $102,000. Assume a tax rate of 24 percent. What is the projected net income?
The projected net income for this new investment is -$4,256. Which is loss.
To calculate the projected net income, we need to subtract the total cost both variable and fixed costs, and depreciation from the projected sales, and then apply the tax rate to the resulting figure.
Projected sales = $730,000
Variable costs = 42% of sales
Fixed costs = $225,000
Depreciation = $102,000
Tax rate = 24% (0.24
Total variable costs = Variable costs as a percentage of sales = 42% of $730,000
Total variable costs = 0.42 * $730,000
Total variable costs = $306,600
EBIT = Projected sales - Total variable costs - Fixed costs - Depreciation
EBIT = $730,000 - $306,600 - $225,000 - $102,000
EBIT = $96,400
Taxable income = EBIT - Depreciation
Taxable income = $96,400 - $102,000
Taxable income = -$5,600
Projected net income = Taxable income x (1 - Tax rate)
Projected net income = -$5,600 x (1 -0.24)
Projected net income = -$5,600 x 0.76
Projected net income = -$4,256
The projected net income is approximately -$4,256. Which is loss.
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In today's Lean terminology, what are processes associated with non-manufacturing areas of business or administration are referred to as
The answer to the question is that processes associated with non-manufacturing areas of business or administration are referred to as "office processes" or "administrative processes" in Lean terminology.
Lean principles can be applied beyond the manufacturing industry to other areas of a business, including administrative and service processes. These processes can be optimized to eliminate waste, reduce lead times, and improve overall efficiency. Examples of office processes include customer service, accounting, human resources, and procurement. By applying Lean principles to these processes, businesses can improve the quality of their services, reduce costs, and increase customer satisfaction.
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g The following data are the seasonally adjusted percent changes from the preceding month for the United States. August 2017 September 2017 Total CPI 0.4 0.5 Core CPI 0.2 0.1 In September 2017, food and energy prices in the United States _____ percent from their August 2017 levels.
In September 2017, food and energy prices in the United States increased by 0.4 percent from their August 2017 levels.
The data provided shows the seasonally adjusted percent changes in the Total Consumer Price Index (CPI) and Core CPI for August and September 2017. The Total CPI measures the overall inflation, including food and energy prices, while the Core CPI excludes food and energy prices.
In September 2017, the Total CPI increased by 0.5 percent, and the Core CPI increased by 0.1 percent. To determine the change in food and energy prices, subtract the Core CPI change (0.1%) from the Total CPI change (0.5%).
The result is 0.4 percent, which indicates that food and energy prices in the United States increased by 0.4 percent from August to September 2017.
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You are considering opening another restaurant in the TexasBurgers chain. The new restaurant will have annual revenue of $246,600 and operating expenses of $123,300. The annual depreciation and amortization for the assets used in the restaurant will equal $41,100. An annual capital expenditure of $9,000 will be required to offset wear-and-tear on the assets used in the restaurant, but no additions to working capital will be required. The marginal tax rate will be 40 percent.
The new Texas Burgers restaurant is projected to have a net income of $43,920 per year after considering revenue, operating expenses, depreciation and amortization, capital expenditure, and taxes.
When considering opening another restaurant in the TexasBurgers chain, it is essential to analyze the financial aspects to determine its profitability. The new restaurant will generate annual revenue of $246,600, with operating expenses amounting to $123,300. To assess the net operating income, subtract the operating expenses from the annual revenue: $246,600 - $123,300 = $123,300.
Depreciation and amortization for the restaurant's assets will be $41,100 per year. The annual capital expenditure required to maintain the assets is $9,000. To calculate the restaurant's earnings before taxes (EBT), subtract depreciation, amortization, and capital expenditure from the net operating income: $123,300 - $41,100 - $9,000 = $73,200.
The marginal tax rate is 40 percent, which will be applied to the EBT to find the taxes owed: $73,200 * 0.4 = $29,280. To determine the net income, subtract the taxes from the EBT: $73,200 - $29,280 = $43,920.
In summary, the new TexasBurgers restaurant is projected to have a net income of $43,920 per year after considering revenue, operating expenses, depreciation and amortization, capital expenditure, and taxes. This information is crucial when deciding whether to proceed with the expansion and can help guide further analysis on the potential return on investment and overall feasibility of the project.
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If long-term interest rates are high by historical standards and are expected to fall, managers will be:
If long-term interest rates are currently high by historical standards and are expected to fall, managers will likely adopt a cautious approach when it comes to borrowing and investment decisions.
High interest rates usually mean higher borrowing costs, which can lead to reduced profits and lower demand for products and services. In such a scenario, managers may delay investment decisions until interest rates have declined, in order to take advantage of lower borrowing costs and potentially stronger demand.
They may also explore alternative financing options, such as issuing equity or seeking out lower-cost debt financing, in order to mitigate the impact of high interest rates on their business operations. Ultimately, managers will need to make informed decisions based on their specific circumstances and market conditions.
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Dawn Framing Gallery sold a frame to Cheryl Gonzales for cash of $1,000. The entry to record this transaction will include a credit to:
To record the transaction of Dawn Framing Gallery selling a frame to Cheryl Gonzales for cash of $1,000, the entry will include a credit to the revenue account.
This is because the sale of the frame represents revenue earned by the business. The revenue account is a nominal account that reflects the income generated by the business during a particular period.
When a business sells goods or services, it generates revenue, which is recognized in the financial statements. The revenue account is credited to reflect the increase in revenue, while the cash account is debited to record the inflow of cash.
The revenue account is an important account in the financial statements, as it reflects the primary source of income for the business. The balance of the revenue account is transferred to the profit and loss account at the end of the financial period to determine the net profit or loss of the business.
In summary, the entry to record the transaction of Dawn Framing Gallery selling a frame to Cheryl Gonzales for cash of $1,000 will include a credit to the revenue account. This reflects the increase in revenue earned by the business from the sale of the frame.
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The Henry, Isaac, and Jacobs partnership was about to enter liquidation with the following account balances: Estimated expenses of liquidation were $5,000. Henry, Isaac, and Jacobs shared profits and losses in a ratio of 2:4:4. What amount of cash was available for safe payments, based on the above information
There is no cash available for safe payments after the estimated expenses of liquidation are deducted from the total assets of the partnership.
To determine the amount of cash available for safe payments, we need to calculate the partnership's total assets, subtract the estimated expenses of liquidation, and then distribute the remaining funds according to the partners' profit and loss sharing ratio.
Let's first calculate the total assets:
Total assets = Henry's share + Isaac's share + Jacobs's share
Since we are not given the value of the assets, we cannot calculate the total assets directly. However, we can use the fact that the partners' profit and loss sharing ratio adds up to 10 (2+4+4=10) to set up a proportion:
Henry's share : Isaac's share : Jacobs's share = 2 : 4 : 4 = 2x : 4x : 4x
We can simplify this proportion by dividing each share by 2:
Henry's share : Isaac's share : Jacobs's share = 1 : 2 : 2
Now we can assign a value to Henry's share, such as $1,000, and use the ratio to calculate the other shares:
Henry's share = 1/5 of total profit and loss sharing ratio
Isaac's share = 2/5 of total profit and loss sharing ratio = 2/5 x total profit and loss = $2,000
Jacobs's share = 2/5 of total profit and loss sharing ratio = 2/5 x total profit and loss = $2,000
Therefore, the total assets of the partnership are:
Total assets = Henry's share + Isaac's share + Jacobs's share = $1,000 + $2,000 + $2,000 = $5,000
Now we can calculate the amount of cash available for safe payments:
Cash available = Total assets - Estimated expenses of liquidation
Cash available = $5,000 - $5,000 = $0
Based on the information given, there is no cash available for safe payments after the estimated expenses of liquidation are deducted from the total assets of the partnership.
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a. The basic determinant of the transactions demand for money is the multiple choice 1 price level. level of nominal GDP. reserve ratio. interest rate. b. The basic determinant of the asset demand for money is the multiple choice 2 level of nominal GDP.
a. The primary factor determining the demand for money for transactions is the A) interest rate, not the price level, nominal GDP, or reserve ratio.
The transactions demand for money refers to the amount of money needed for day-to-day transactions such as buying goods and services. The interest rate affects the cost of holding money, and thus influences the amount of money people choose to hold for transactions purposes.
When interest rates are low, people are more willing to hold onto money because the cost of doing so is low. Conversely, when interest rates are high, people may be more willing to invest their money elsewhere and hold less cash for transactions.So A is correct.
b. The key determinant of the asset demand for money is the A) level of nominal GDP, not the interest rate or any other factor.
The asset demand for money refers to the demand for holding money as a store of value, rather than for transactions purposes. As such, the asset demand for money is influenced by factors such as the level of economic activity, uncertainty about future income and prices, and the availability of alternative assets.
The level of nominal GDP, which represents the total value of goods and services produced in an economy, can impact the asset demand for money by affecting expectations about future income and economic growth.
When nominal GDP is expected to increase, people may be more willing to hold onto money as an asset, while a decline in nominal GDP may encourage people to seek out alternative assets.So A is correct.
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One advantage of using the Blank______ channel over the Blank______ channel is the much higher probability of having a deeper assortment of merchandise available.
HELP 50 POINTS AND BRAINLIEST
The table presents the percentage contribution of sectors to the total gross domestic product of six countries for 2015. Which two of these countries are the least developed?
a. Brazil
b. Canada
c. Chad
d. Germany
e. Japan
f. Somalia
Somalia and Chad are two of these nations with the lowest levels of development. As a result, choices (C) and (F) are appropriate.
A significant trading hub in antiquity was Somalia. It is one of the locations of the former Land of Punt that is most likely to exist. The Ajuran Sultanate, the Adal Sultanate, and the Sultanate of the Geledi were among the strong Somali dynasties that ruled the region's trade during the Middle Ages.
Late in the 19th century, both the Italian and British Empires colonized Somali Sultanates including the Isaaq Sultanate and the Majeerteen Sultanate. Italian nations Somaliland and the British Somaliland Protectorate were the two colonies created by European colonists from the merging of the tribal lands.
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Under ______ performance, if the buyer in an alleged contract for the sale of land has paid any portion of the sales price and has begun to improve the land permanently, the course will consider such actions proof of the contract.
Under part performance, if the buyer in an alleged contract for the sale of land has paid any portion of the sales price and has begun to improve the land permanently, the court will consider such actions proof of the contract.
Part performance is a legal principle that allows a court to find a contract for the sale of land even if it is not in writing. If the buyer has paid part of the sales price and has begun to make permanent improvements to the land, such actions can serve as evidence of the existence of a contract. This is because it would be unfair to allow the seller to take advantage of the buyer's payment and improvements without recognizing the existence of a valid contract.
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A company's old machine that cost $55,000 and had accumulated depreciation of $43,500 was traded in on a new machine having an estimated 20-year life with an invoice price of $66,500. The company also paid $56,500 cash, along with its old machine to acquire the new machine. If this transaction has commercial substance, the new machine should be recorded at:
The new machine should be recorded at $79,000, which is the cost of the new machine plus the gain on the trade-in: The cost of the new machine should be recorded at $79,000.
To calculate this, we need to determine the book value of the old machine, which is the original cost minus the accumulated depreciation:
Book value of old machine = Cost - Accumulated depreciation
Book value of old machine = $55,000 - $43,500
Book value of old machine = $11,500
The cash paid and the book value of the old machine traded-in amounts to:
Cash paid + Book value of old machine = $56,500 + $11,500 = $68,000
Since the transaction has commercial substance, the company should recognize a gain or loss on the trade-in. To calculate the gain or loss, we need to compare the book value of the old machine with the fair value of the new machine. If the fair value is greater than the book value, there is a gain. If the fair value is less than the book value, there is a loss.
Fair value of new machine = Cash paid + Book value of old machine
Fair value of new machine = $56,500 + $11,500
Fair value of new machine = $68,000
Since the invoice price of the new machine is $66,500, which is less than the fair value of the new machine, there is a gain on the trade-in. The gain is calculated as:
Gain on trade-in = Fair value of new machine - Book value of old machine
Gain on trade-in = $68,000 - $11,500
Gain on trade-in = $56,500
The cost of the new machine is the fair value minus the gain:
Cost of new machine = Fair value of new machine - Gain on trade-in
Cost of new machine = $68,000 - $56,500
Cost of new machine = $11,500
New machine cost = Cost of new machine + Gain on trade-in
New machine cost = $66,500 + $12,500
New machine cost = $79,000
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A Qualified Health Plan meets the minimum value requirement if it is designed to pay at least ______% of the total costs for covered benefits.
Qualified Health Plan meets the minimum value requirement if it is designed to pay at least 60% of the total costs for covered benefits.
This means that the plan must cover at least 60% of the average expected costs of essential health benefits for a standard population. The remaining 40% can be paid by the enrollee through deductibles, coinsurance, or copayments. It's important to note that some states may have higher minimum value requirements, so it's important to check the specific requirements in your state.
A Qualified Health Plan (QHP) meets the minimum value requirement if it is designed to pay at least 60% of the total costs for covered benefits. This percentage is also known as the actuarial value, and it represents the share of healthcare expenses the plan covers for a standard population.
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The priority rule where jobs are processed according to the smallest ratio of due date to processing time is: Question 8 options: S/O CR FCFS EDD
EDD (Earliest Due Date) refers to the priority rule where jobs are processed in accordance with the smallest ratio of the due date to processing time. Here option D is the correct answer.
EDD is a scheduling algorithm used in production planning and control, and it prioritizes jobs based on their due dates and processing times.
The EDD rule is based on the principle that jobs with earlier due dates should be given priority over jobs with later due dates. However, it also takes into account the processing times of each job, so that jobs that require less time to complete are given higher priority than jobs that require more time.
For example, if Job A has a due date of 5 days from now and requires 10 hours of processing time, and Job B has a due date of 7 days from now and requires 5 hours of processing time, the EDD rule would prioritize Job B because it has a smaller ratio of the due date to processing time (1.4) than Job A (2.5).
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Complete question:
The priority rule where jobs are processed according to the smallest ratio of due date to processing time is:
A - S/O
B - CR
C - FCFS
D - EDD
Home Depot segments its campaigns to the Hispanic market; it creates different ads for second- or third-generation Hispanic-Americans, also known as _______________ Hispanics.
Home Depot segments its campaigns to the Hispanic market; it creates different ads for second- or third-generation Hispanic-Americans, also known as acculturated Hispanics.
Acculturation is the process of integrating two cultures while adapting to the dominant culture of the society. It involves social, psychological, and cultural transformation. Acculturation is the process by which a person adopts, acquires, and adapts to a new cultural environment as a result of being raised in a new culture or when a person is exposed to a different culture.
People from other cultures attempt to assimilate into the new, more dominant culture by engaging in components of it, such as their customs, while clinging to their original cultural values and traditions.Both individuals who are integrating into the culture and those who are devoted to it might experience the consequences of acculturation on a variety of levels.
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Lowell Riverhawk Corporation has a total debt to assets ratio of 62.5 percent. Its net income last year was $25,000. If the total debt was $200,000, what was the return on equity (ROE)
The return on equity (ROE) for Lowell Riverhawk Corporation was 20.83% when a total debt to assets ratio of 62.5 percent. Its net income last year was $25,000. If the total debt was $200,000.
To calculate the return on equity (ROE), we need to first find the total equity of the Lowell Riverhawk Corporation. We can do this by subtracting the total debt from the total assets:
Total Assets = Total Debt / (Total Debt / Total Assets Ratio)
Total Assets = $200,000 / (62.5%)
Total Assets = $320,000
Total Equity = Total Assets - Total Debt
Total Equity = $320,000 - $200,000
Total Equity = $120,000
Now that we have the total equity, we can calculate the ROE by dividing the net income by the total equity:
ROE = Net Income / Total Equity
ROE = $25,000 / $120,000
ROE = 0.2083 or 20.83%
Therefore, the return on equity (ROE) for Lowell Riverhawk Corporation was 20.83%.
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A principal of $3900 is invested at 3% interest, compounded annually. How much will the investment be worth after 6 years
The investment will be worth approximately $4,677.56 after 6 years.
To solve this problem, we can use the formula for compound interest:
A =[tex]P(1 + r/n)^(nt)[/tex]
Where:
A = the amount of money in the account after a certain number of years
P = the principal (initial amount of money)
r = the annual interest rate (as a decimal)
n = the number of times per year the interest is compounded
t = the number of years
Plugging in the given values, we get:
A =[tex]3900(1 + 0.03/1)^(1*6)[/tex]
A = [tex]3900(1.03)^6[/tex]
A = 4677.56.
The allowance for uncollectible accounts is a contra account that is used to offset accounts receivable on the balance sheet, and it represents the estimated amount of accounts receivable that are unlikely to be collected. When an account is deemed uncollectible, it is written off by reducing accounts receivable and the allowance for uncollectible accounts.
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You are auditing general cash for the Pittsburgh Supply Company for the fiscal year ended July 31, 2016. The client has not prepared the July 31 bank reconciliation. After a brief discussion with the owner, you agree to prepare the reconciliation, with assistance from one of Pittsburgh Supply’s clerks. You obtain the following information:
General ledger Bank Statement
Beginning balance 7/1/16 $ 6,400 $ 8,378
Deposits 25,474
Cash receipts journal 26,874
Checks cleared (25,307)
Cash disbursements journal (23,171)
July bank service charge (107)
Note paid directly (6,400)
NSF check (516)
Ending balance 7/31/16 $ 10,103 $ 1,522
June 30 Bank reconciliation
Information in General ledger and Bank Statement
Balance per bank $8,378
Deposits in transit 600
Outstanding checks 2,578
Balance per books $6,400
Additional information obtained is as follows:
1. Checks clearing that were outstanding on June 30 totaled $2,411.
2. Checks clearing that were recorded in the July disbursements journal totaled $21,120.
3. A check for $1,130 cleared the bank but had not been recorded in the cash disbursements journal. It was for an acquisition of inventory. Pittsburgh Supply uses the periodic-inventory method.
4. A check for $646 was charged to Pittsburgh Supply but had been written on a different company’s bank account.
5. Deposits included $600 from June and $24,874 for July.
6. The bank charged Pittsburgh Supply’s account for a nonsufficient funds check totaling $516. The credit manager concluded that the customer intentionally closed its account and the owner left the city. The check was turned over to a collection agency.
7. A note for $6,000, plus interest, was paid directly to the bank under an agreement signed four months ago. The note payable was recorded at $6,000 on Pittsburgh Supply’s books.
a. Prepare a bank reconciliation that shows both the unadjusted and adjusted balance per books.
b. Prepare all adjusting entries.
c. What audit procedures would you use to verify each item in the bank reconciliation?
d. What is the cash balance that should appear on the July 31, 2016, financial statements?
The cash balance that should appear on the July 31, 2016, financial statements is $2,819.
a. Bank reconciliation: Unadjusted Balance per Bank: $1,522Add: Deposit in transit (June) - $600Add: Deposit in transit (July) - $24,874Less: Outstanding checks (June) - $2,411Less: Outstanding checks (July) - $21,120Less: Incorrectly charged check - $646Adjusted Balance per Bank: $2,819Unadjusted Balance per Books: $10,103
Less: Bank service charge - $107Less: Note paid directly (Principal + Interest) - $6,400Add: Unrecorded inventory acquisition check - $1,130Less: NSF check - $516Adjusted Balance per Books: $2,819
b. Adjusting entries:
1. Dr. Bank service charge expense $107, Cr. Cash $107
2. Dr. Notes payable $6,000, Dr. Interest expense $400, Cr. Cash $6,400
3. Dr. Inventory $1,130, Cr. Cash $1,130
4. Dr. Cash $646, Cr. Accounts payable (Other company) $646
5. Dr. Accounts receivable $516, Cr. Cash $516, Cr. Collection agency fees (if any)
c. Audit procedures for bank reconciliation:
1. Confirm outstanding checks with the bank.
2. Confirm deposits in transit with the bank and review supporting documentation.
3. Review the bank statement for any unusual or unexpected charges.
4. Verify bank service charges and note payments.
5. Review cash receipts and disbursements journals for accuracy.
6. Confirm the NSF check and related collection activities with the collection agency.
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The tendency of people to place too much emphasis on personal factors when accounting for other people's actions and too little emphasis on personal factors when accounting for our own actions is known as the ________.
The tendency of people to place too much emphasis on personal factors when accounting for other people's actions and too little emphasis on personal factors when accounting for our own actions is known as the fundamental attribution error.
The fundamental attribution error is a cognitive bias that leads people to overemphasize dispositional (personal) factors and underestimate situational factors when explaining the behavior of others, while doing the opposite when explaining their own behavior. For example, if someone sees another person yelling at a waiter in a restaurant, they may assume that the person is rude or aggressive, rather than considering that they may be having a bad day or have been provoked.
The fundamental attribution error can have negative consequences, such as leading to unfair judgments or stereotypes of others. It is important to be aware of this bias and to try to consider both personal and situational factors when evaluating the behavior of others, as well as when evaluating our own behavior.
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On April 1, Robinson Company paid $3,600 for one year of advertising, in advance. Robinson Company recorded the transaction by debiting Prepaid Advertising and crediting Cash. Required: Journalize the adjusting entry on December 31. Note: Assume that the advertising is used evenly throughout the year.
Debit Advertising Expense: $1,800 Credit Prepaid Advertising: $1,800
Since Robinson Company paid for one year of advertising in advance, the initial journal entry on April 1 was:
Debit Prepaid Advertising: $3,600
Credit Cash: $3,600
As of December 31, nine months have passed, which means that 9/12 or 3/4 of the prepaid advertising has been used. The amount of prepaid advertising that has been used is $3,600 x 3/4 = $2,700.
To adjust the accounts, we need to debit Advertising Expense for $1,800 (which is the amount of prepaid advertising that has been used during the current year), and credit Prepaid Advertising for $1,800 (which is the amount of prepaid advertising that has not yet been used).
After this adjusting entry, the Prepaid Advertising account will have a balance of $900 ($2,700 - $1,800), which represents the amount of prepaid advertising that has not yet been used and will be carried forward to the next accounting period. The Advertising Expense account will have a balance of $1,800, which represents the amount of advertising expense that has been recognized during the current year.
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At the beginning of the current period, Marigold Corp. had balances in Accounts Receivable of $218,000 and in Allowance for Doubtful Accounts of $9,700 (credit). During the period, it had net credit sales of $895,000 and collections of $850,250. It wrote off as uncollectible accounts receivable of $6,900. However, a $3,300 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $25,800 at the end of the period. (Omit cost of goods sold entries.) (a - d) (a) Prepare the entries to record sales and collections during the period. (b) Prepare the entry to record the write-off of uncollectible accounts during the period. (c) Prepare the entries to record the recovery of the uncollectible account during the period. (d) Prepare the entry to record bad debt expense for the period.
(a) Sales: $895,000 Accounts Receivable: $895,000; Collections: $850,250 Accounts Receivable: $850,250 (b) Allowance for Doubtful Accounts: $6,900 Accounts Receivable: $6,900 (c) Accounts Receivable: $3,300 Allowance for Doubtful Accounts: $3,300; (d) Bad Debt Expense: $17,100 Allowance for Doubtful Accounts: $17,100.
(a) The entry to record sales during the period:
Accounts Receivable 895,000
Sales 895,000
The entry to record collections during the period:
Cash 850,250
Accounts Receivable 850,250
(b) The entry to record the write-off of uncollectible accounts during the period:
Allowance for Doubtful Accounts 6,900
Accounts Receivable 6,900
(c) The entry to record the recovery of the uncollectible account during the period:
Accounts Receivable 3,300
Allowance for Doubtful Accounts 3,300
(d) The entry to record bad debt expense for the period:
Bad Debt Expense X
Allowance for Doubtful Accounts X
To calculate the amount of bad debt expense, we need to consider the change in the allowance for doubtful accounts balance. The current balance in the allowance account is $25,800 (credit), and the previous balance was $9,700 (credit). So, the increase in the allowance balance is $16,100. Therefore, the bad debt expense for the period is $16,100. The entry to record the bad debt expense is:
Bad Debt Expense 16,100
Allowance for Doubtful Accounts 16,100
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The current spot rate for the British pound in terms of U.S. dollars is $1.533 and the 180-day forward rate is $1.508. Relative to the pound, the dollar is trading closest to a 180-day forward:
The current spot rate for the British pound in terms of U.S. dollars so dollar is trading closest to a 180-day forward: 1.66%.
The price stated for immediate settlement on an interest rate, commodity, asset, or currency is known as the spot rate. The spot rate, which is often known as the "spot price," is the current market value of an item that is available for immediate delivery at the time of the quote. This value is then determined by the price that buyers are prepared to pay and the price that sellers are willing to accept. These two values are often determined by a combination of variables, such as the present market value and the anticipated future market value.
Spot prices are location- and time-specific, but in a global economy, when exchange rates are taken into consideration, the spot price of the majority of securities or commodities tends to be fairly consistent across the board.
The dollar must be the base currency in order to determine a percentage forward premium or discount for the US currency. We must convert the spot and forward quotes provided to U.S. dollars per British pound (GBP/USD).
The spot GBP/USD price = 1 / 1.533 = 0.6523
and the forward GBP/USD price = 1 / 1.508 = 0.6631.
Because the forward price is greater than the spot price, we say the dollar is at a forward premium of
= 0.6631 / 0.6523 - 1 = 1.66%.
Alternatively, we can calculate this premium with the given quotes as spot/forward - 1 to get 1.533 / 1.508 - 1 = 1.66%.
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2 cSuppose that the South African interest rate is 5% and the U.S. interest rate is 3%. If the expected future spot exchange rate one year from now is 12.00 Rand per dollar and uncovered interest rate parity holds, what must the current spot exchange rate be in order to clear the foreign exchange market
The current spot exchange rate needed to clear the foreign exchange market, given the South African interest rate at 5%, the U.S. interest rate at 3%, and the expected future spot exchange rate at 12.00 Rand per dollar, is 11.64 Rand per dollar.
1. Uncovered interest rate parity (UIP) states that the difference in interest rates between two countries equals the expected change in exchange rates.
2. In this case, the difference in interest rates is 5% (South Africa) - 3% (U.S.) = 2%.
3. To find the expected change in exchange rates, use the formula: (Future Spot Rate - Current Spot Rate) / Current Spot Rate.
4. Rearrange the formula to find the Current Spot Rate: Current Spot Rate = Future Spot Rate / (1 + Expected Change).
5. Convert the 2% difference in interest rates to a decimal: 2% = 0.02.
6. Calculate the Current Spot Rate: 12.00 Rand per dollar / (1 + 0.02) = 11.64 Rand per dollar.
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Jasper makes a $42,000, 90-day, 9% cash loan to Clayborn Company. Jasper's entry to record the collection of the note and interest at maturity should be
Jasper's entry to record the collection of the note and interest at maturity should be a debit to Cash for the amount collected, which includes the principal amount of $42,000 and the interest earned of $945 (calculated as $42,000 x 9% x 90/360), for a total of $42,945.
Additionally, Jasper should credit Notes Receivable for the principal amount of $42,000 and Interest Revenue for the interest earned of $945. This entry reflects the fact that Jasper has collected the amount due from Clayborn Company, and has earned interest revenue from the loan.
It's important to note that Jasper would have initially recorded the loan when it was made by debiting Notes Receivable for $42,000 and crediting Cash for $42,000. Throughout the 90-day period, Jasper would have accrued interest revenue by debiting Interest Receivable and crediting Interest Revenue at the end of each accounting period. At maturity, Jasper would have received the payment and recorded the entry outlined above.
In summary, when collecting the note and interest at maturity, Jasper's entry should include a debit to Cash for the total amount collected, a credit to Notes Receivable for the principal amount, and a credit to Interest Revenue for the interest earned.
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The stock currently sells for $50 per share and the dividend per share will probably be about $5. Tom argues, ""It will cost us $5 per share to use the stockholders’ money this year, so the cost of equity is equal to 10 percent (= $5/$50)."" What’s wrong with this conclusion?
The calculation of the cost of equity, where the stock currently sells for $50 per share, and the dividend per share is about $5.
Tom argues that the cost of equity is 10 percent, calculated as $5 (dividend) divided by $50 (stock price). However, this conclusion is incorrect because it does not consider the expected growth rate in dividends, which is an essential component in calculating the cost of equity using the Dividend Discount Model (DDM).
Here's a step-by-step explanation of the correct method to calculate the cost of equity using the DDM:
1. Identify the dividend per share (D1): In this case, the dividend per share is $5.
2. Identify the current stock price (P0): In this case, the current stock price is $50.
3. Estimate the expected growth rate in dividends (g): This information is not provided in the question, so we cannot proceed with the calculation.
4. Calculate the cost of equity (Ke) using the DDM formula: Ke = (D1/P0) + g
As we do not have the expected growth rate in dividends (g), we cannot accurately calculate the cost of equity using the Dividend Discount Model. Tom's conclusion of a 10 percent cost of equity is incorrect because it omits the expected growth rate in dividends, which is a crucial factor in the calculation.
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A company pays its sales force with a straight salary compensation plan. In this situation, what kind of cost is the salary
The salary paid to the sales force is a fixed cost for the company.
A straight salary compensation plan means that the sales force receives a fixed amount of money as their compensation, regardless of their performance or sales results.
This salary is a predetermined cost for the company, as it does not fluctuate with changes in sales or revenue. Therefore, the salary paid to the sales force is a fixed cost, which is also known as an overhead cost.
Fixed costs are important for businesses to consider when creating budgets and forecasting financial performance, as they can have a significant impact on the company's profitability. By contrast, variable costs, such as commissions or bonuses, are directly tied to sales or revenue and fluctuate accordingly.
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