The aggregate demand aggregate supply mode is quite useful tool for us to understand the economy. So far, we saw only one change at a time, however, in reality, there can be multiple shocks at the same time. The economy was in long run equilibrium. Assuming all else equal, world scientists collaborated to invent a vaccine for everyone to be safe from deadly virus, raising productivity. This makes consumers and businesses optimist about the economy. At the same time, commodity market, namely oil market is calm, maintaining a stable supply.
1. Given above scenario, what do you think will happen to the LRAS, SRAS and AD curves in each in short run?
2. And what would happen to price level and output in the economy?
3. What about in long run?
Answers
Answer:
Explained below
Explanation:
1) From the question, we can deduce that in the short run, there will likely be news of the discovery/invention of a super vaccine which will make the consumers and the businesses to be optimistic about the future of the economy. Therefore, this will in turn lead to an increase in consumption by consumers and thus also lead to an producers making an increase in investment.
2) From answer 1 above, since there is an increase in consumption as well as investment, this will in turn also lead to an increase in the aggregate demand of the economy. Whereas, we are told that the oil market is calm and therefore we can say it does not have an effect on the supply curve.
From the first image attached, increase in the aggregate demand led to an increase in price level from point P to P1 on the y-axis while output output level increased from point Y to point Y1 on the x-axis.
3) In the long run, due to the increase in demand in the short run that makes the supply curve shift to its right, it means the producers will have more of the goods produced. This will in turn reduce the price to its initial level and also increase the output level. From the second diagram, this will lead to a shift long run aggregate supply from LRAS to LRAS1 on the x-axis.
Related Questions
After changes to the copyright law in 1978, for how long is intellectual property protected?
A.
the lifetime of the artist plus 70 years
B.
100 years
C.
for the lifetime of the artist
D.
in perpetuity
Answers
The balance sheet provides a snapshot of the financial condition of a company. Investors and analysts use the information given on the balance sheet and other financial statements to make several interpretations regarding the company’s financial condition and performance.
Cold Goose Metal Works Inc. is a hypothetical company. Suppose it has the following balance sheet items reported at the end of its first year of operation. For the second year, some parts are still incomplete. Use the information given to complete the balance sheet.
Cold Goose Metal Works Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars)
Year 2 Year 1 Year 2 Year 1
Assets Liabilities and equity
Current assets: Current liabilities:
Cash and equivalents $4,612 Accounts payable $0 $0
Accounts receivable 2,109 1,688 Accruals 293 0
Inventories 6,187 4,950 Notes payable 1,660 1,562
Total current assets $14,062 $11,250 Total current liabilities $1,562
Net fixed assets: Long-term debt 5,859 4,688
Net plant and equipment $13,750 Total debt $7,812 $6,250
Common equity:
Common stock 15,235 12,188
Retained earnings 6,562
Total common equity $23,438 $18,750
Total assets $31,250 $25,000
Total liabilities and equity $31,250 $25,000
Given the information in the preceding balance sheet—and assuming that Cold Goose Metal Works Inc. has 50 million shares of common stock outstanding—read each of the following statements, then identify the selection that best interprets the information conveyed by the balance sheet.
Statement #1: Cold Goose’s pool of relatively liquid assets, which are available to support the company’s current and future sales, decreased from Year 1 to Year 2.
This statement is , because:
Cold Goose’s total current liabilities balance decreased by $2,812 million between Year 1 and Year 2
Cold Goose’s total current asset balance actually increased from $11,250 million to $14,062 million between Year 1 and Year 2
Cold Goose’s total current liabilities balance increased from $1,688 million to $2,109 million between Year 1 and Year 2
Statement #2: In Year 2, Cold Goose Metal Works Inc. was profitable.
This statement is , because:
The cash and equivalents account increased between Years 1 and 2
Cold Goose’s retained earnings account increased between the end of Years 1 and 2
Cold Goose’s total assets increased between Years 1 and 2
Answers
Answer:
A. Total assets $31,250 $25,000
Total abilities and equity $31,250 $25,000
B. Statement 1 is FALSE
Statement 2 is TRUE
Explanation:
A . Using the information given to complete the balance sheet
Cold Goose Metal Works Inc Balance Sheet For Year Ending December 31 (Millions of Dollars)
Year 1 Year 2
ASSETS
Current assets:
Cash and equivalents
$5,766 $4,612
(14,062 – 6,187-2,109 = $5766)
Accounts receivable
2,109 1,688
Inventories
6,187 4,950
Total current assets
$14,062 $11,250
Net fixed assets:
Net plant and equipment
$17,188 $13750
( 31,250-14,062 = $17,188)
Total assets $31,250 $25,000
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$0 $0
Accruals
293 0
Notes payable
1,660 1,562
Total current abilities
$1,953 $1,562
(0+293+1,660 = $1,953)
Long-term debt
5,859 4,688
Total debt
$7,812 $6,250
Common equity
Common stock
15,235 12,188
Retained earnings
$8,203 6,562
(23,438-15,235 = $8,203)
Total abilities and equity $31,250 $25,000
Net Plant and Equipment= 31250-14062
Net Plant and Equipment = $17188
Cash and Equivalents = 14062 – 6187-2109
Cash and Equivalents= $5766
Total Current liabilities = 0+293+1660
Total Current liabilities = $1953
Retained earnings = 23438-15235
Retained earnings= $8203
B. To identify the selection that best interprets the information conveyed by the balance sheet.
Based on the information given STATEMENT 1 is FALSE reason been that Cold Goose’s total current asset balance increased from the amount of $11,250 million to the amount of $14,062 million between Year 1 and Year 2.
Based on the information given STATEMENT 2 is TRUE reason been that their was increased in retained earnings account between the end of Years 1 and year 2.
You plan to purchase a house for $180,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 10 percent of the purchase price. You will not pay off the mortgage early. Assume the homeowner will remain in the house for the full term and ignore taxes in your analysis. a. Your bank offers you the following two options for payment. Which option should you choose? b. Your bank offers you the following two options for payments. Which option should you choose?
Answers
Answer:
choose the first one
Explanation:
get the debt over faster
how important is the value of a product for a customer
Answers
Answer:
very important
Explanation:
If the product is bad, they won’t come back and they will most likely not buy it again. Therefore, you would get less business.
define hedge fund economics.
Answers
Answer:
Hedge fund are financial partnerships that use pooled funds and employ different strategies to earn active returns for thier investors.. Hedge fund include long-short equity, market neutral, volatility arbitrage and merger arbitrage. They are generally only accessible to accredited investors
How are wages for a particular job determined?
by the federal Wage and Hour Department
by the amount of inflation in the economy
by the equilibrium between supply and demand for workers
by advertisements in the newspaper or online
Answers
Answer:
by the equilibrium between supply and demand for workers
Explanation:
Wages are the amount to pay workers for a particular job when employed. Therefore, determining the wages for a particular job is mostly dependent "on the equilibrium between supply and demand for workers, " and sometimes location.
This is because the higher the number of workers available, the lesser the employers would be willing to increase the wage level of employees given the fact that they can easily find another employee. However, where there is a lesser number of employees for a particular job, the employers would be willing to increase the employees' wages to entice them.
According to the labor market equilibrium, The wages for a particular job are determined by the equilibrium between supply and demand for workers. Thus, the correct answer is option (c).
The term "labor market," sometimes referred to as the "job market," describes the supply and demand for labor, with employers meeting the demand and employees meeting the supply.
The supply and demand of labor, which are met by employees and employers respectively, are referred to as the labor market.Both macroeconomic and microeconomic perspectives on the labor market are important because they provide useful information on employment and the state of the economy as a whole.Two crucial macroeconomic indicators are labor productivity rates and unemployment rates.Therefore, The wages for a particular job are determined by the equilibrium between supply and demand for workers. Thus, the correct answer is option (c).
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The management of Lanzilotta Corporation is considering a project that would require an investment of $263,000 and would last for 8 years. The annual net operating income from the project would be $99,000, which includes depreciation of $31,000. The scrap value of the project's assets at the end of the project would be $15,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest
Answers
Answer: 2 years
Explanation:
Firstly, we need to calculate the annual cash inflow which will be:
= Net Operating Income + Depreciation
= $99,000 + 31,000
= $130,000
Payback period = Initial Investment / Annual cash inflow
= $263,000 / 130,000
= 2.02Years
= 2 years approximately
The payback period is 2 years.
Categorize each of the following items as an S-strength, W-weakness, O-opportunity, or T-threat. " WALMART SWOT ANALYSIS"
Established Name Brand
Low Prices-Low Cost Leadership
Unfair Employment Practices
Pressures Suppliers on Cost
Recession
Other big box retailers-Target
Small Towns
International Markets
Products Made in China
Product Safety
Large Purchases –Buy in Bulk
Internet Retailing
Customer Base
No Urban Locations
Health Care for Employees
Global Presence
Price Competition
Product Quality
Customer service
Distribution/Logistics System
One Stop Shop
In 15 Countries—not in Europe except for United Kingdom
Sam’s Club
Minimum Wage Laws
Rising Labor Costs in China
Healthcare Costs
12% Lower Grocery Prices
Litigation by employees
Target Superior Merchandising Capability
Community Resistance
Home Delivery of Goods
Growth of Aldi Food Chain-Europe/North America
Poor Working Conditions
Dollar stores
Online Retailers
Answers
Answer:
Established Name Brand - S - Brings in more customers
Low Prices(Low Cost Leadership ) - S - Retaining customers
Unfair Employment Practices - T - Negatively affects the brand image
Pressures Suppliers on Cost - S - Have bargaining power on suppliers
Recession - T - Can bring down customer spending
Other big box retailers(Target) - T - Competition
Small Towns - O - Not many players
International Markets - O - Growth prospects
Products Made in China - O - Lower prices
Product Safety - S - Retaining customers
Large Purchases (Buy in Bulk) - S - Cost savings
Internet Retailing - O - New growth opportunity
Customer Base - S - Large customer base
No Urban Locations - O - Opportunity to expand
Health Care for Employees - S - Employee satisfaction
Global Presence - S - Large customer base
Price Competition - O - Best in industry
Product Quality - Retaining customers
Customer service- S - Retaining customers
Distribution/Logistics System - S - Lower costs
One Stop Shop - S - Retaining customers
In 15 Countries—not in Europe except for United Kingdom - Opportunity to grow in Europe
Sam’s Club - O - Customer loyalty
Minimum Wage Laws - T - Higher costs
Rising Labor Costs in China - T - Higher costs
Healthcare Costs - T - Higher costs
12% Lower Grocery Prices - S - Cost leadership
Litigation by employees - T - Negatively affects the brand image
Target Superior Merchandising Capability - O - Competition
Community Resistance - T - Negatively affects the brand image
Home Delivery of Goods - O - Growth prospects
Growth of Aldi Food Chain-Europe/North America - T - Competition
Poor Working Conditions - T - Negatively affects the brand image
Dollar stores - T - Competition
Online Retailers - T - Competition
express 75 kobo as a decimal of 1 naira 50 kobo
Answers
Exercise 6-11A Record transactions using a perpetual system (LO6-5) DS Unlimited has the following transactions during August. August 6 Purchases 60 handheld game devices on account from GameGirl, Inc., for $150 each, terms 3/10, n/60. August 7 Pays $350 to Sure Shipping for freight charges associated with the August 6 purchase. August 10 Returns to GamerGirl four game devices that were defective. August 14 Pays the full amount due to GameGirl. August 23 Sells 40 game devices purchased on August 6 for $170 each to customers on account. The total cost of the 40 game devices sold is $6,070.00.
Answers
Answer and Explanation:
The journal entries are shown below:
On Aug 6
Inventory (60 × $150) $9,000
To Accounts Payable $9,000
(being inventory purchased on account is recorded)
On Aug 7
Inventory Dr $350
To Cash $350
(Being freight charges paid in cash)
On Aug 10
Accounts Payable $600 (4 × $150)
To Inventory $600
(Being returned inventory is recorded)
On Aug 14
Accounts Payable ($9,000 - $600) $8,400
To Inventory ($8,400 × 3%) $252
To Cash $8,148
(Being cash paid is recorded)
On Aug 23
Accounts Receivable ($170 × 40) $6,800
To Sales revenue $6,800
(Being sales is recorded)
Cost of goods sold $6,070
To Inventory $6,070
(Being cost is recorded)
Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $100 Units in beginning inventory 0 Units produced 8,800 Units sold 8,400 Units in ending inventory 400 Variable costs per unit: Direct materials $ 15 Direct labor $ 57 Variable manufacturing overhead $ 3 Variable selling and administrative expense $ 7 Fixed costs: Fixed manufacturing overhead $132,000 Fixed selling and administrative expense $ 8,500 What is the net operating income (loss) for the month under variable costing
Answers
Answer:
$10,700
Explanation:
The unit product cost = $15 + $57 + $3 = $75
Sale revenue = $100 × 8,400 = $840,000
Less :Variable cost
Variable cost of goods sold = 8,400 × $75 = $630,000
Variable selling and administrative = 8,400 × $7 = $58,800
Contribution margin = $151,200
Fixed manufacturing overhead = $132,000
Fixed selling and administrative expenses = $8,500
Net operating income = $10,700
The comparative statements of Carla Vista Co. are presented here.
CARLA VISTA CO.
Income Statements
For the Years Ended December 31
2017 2016
Net sales $1,897,540 $1,757,500
Cost of goods sold 1,065,540 1,013,000
Gross profit 832,000 744,500
Selling and administrative expenses 507,000 486,000
Income from operations 325,000 258,500
Other expenses and losses
Interest expense 24,000 22,000
Income before income taxes 301,000 236,500
Income tax expense 94,000 75,000
Net income $ 207,000 $ 161,500
CARLA VISTA CO.
Balance Sheets
December 31
Assets 2017 2016
Current assets
Cash $ 60,100 $ 64,200
Debt investments (short-term) 74,000 50,000
Accounts receivable 124,800 109,800
Inventory 128,000 117,500
Total current assets 386,900 341,500
Plant assets (net) 659,000 530,300
Total assets $1,045,900 $871,800
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 167,000 $152,400
Income taxes payable 45,500 44,000
Total current liabilities 212,500 196,400
Bonds payable 230,000 210,000
Total liabilities 442,500 406,400
Stockholders’ equity
Common stock ($5 par) 290,000 300,000
Retained earnings 313,400 165,400
Total stockholders’ equity 603,400 465,400
Total liabilities and stockholders’ equity $1,045,900 $871,800
All sales were on account. Net cash provided by operating activities for 2017 was $251,000. Capital expenditures were $135,000, and cash dividends were $59,000.
Compute the following ratios for 2017. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%.)
(a) Earnings per share $
(b) Return on common stockholders’ equity
(c) Return on assets
(d) Current ratio
(e) Accounts receivable turnover
(f) Average collection period
(g) Inventory turnover
(h) Days in inventory
(i) Times interest earned
(j) Asset turnover
(k) Debt to assets ratio
(l) Free cash flow
Answers
Answer:
Carla Vista Co.
(a) Earnings per share = $3.57
(b) Return on common stockholders’ equity = 34.31%
(c) Return on assets = 19.79%
(d) Current ratio = 1.82
(e) Accounts receivable turnover = Net Sales/Average Receivable = 16.18 times
(f) Average collection period = 365 Days /Average Receivable Turnover ratio = 22.56 days
(g) Inventory turnover = Cost of goods sold/Average Inventory = 8.68 times
(h) Days in inventory = 42.05 days
(i) Times interest earned = 3.46 times
(j) Asset turnover = 1.81
(k) Debt to assets ratio = Total Debt/Total Assets = 42.31%
(l) Free cash flow = Cash from Operations - Capital Expenditures = $116,000
Explanation:
a) Data and Calculations:
CARLA VISTA CO.
Income Statements
For the Years Ended December 31
2017 2016
Net sales $1,897,540 $1,757,500
Cost of goods sold 1,065,540 1,013,000
Gross profit 832,000 744,500
Selling and administrative expenses 507,000 486,000
Income from operations 325,000 258,500
Other expenses and losses:
Interest expense 24,000 22,000
Income before income taxes 301,000 236,500
Income tax expense 94,000 75,000
Net income $ 207,000 $ 161,500
CARLA VISTA CO.
Balance Sheets
December 31
Assets 2017 2016
Current assets
Cash $ 60,100 $ 64,200
Debt investments (short-term) 74,000 50,000
Accounts receivable 124,800 109,800
Inventory 128,000 117,500
Total current assets 386,900 341,500
Plant assets (net) 659,000 530,300
Total assets $1,045,900 $871,800
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 167,000 $152,400
Income taxes payable 45,500 44,000
Total current liabilities 212,500 196,400
Bonds payable 230,000 210,000
Total liabilities 442,500 406,400
Stockholders’ equity
Common stock ($5 par) 290,000 300,000
Retained earnings 313,400 165,400
Total stockholders’ equity 603,400 465,400
Total liabilities and
stockholders’ equity $1,045,900 $871,800
Net cash provided by operating activities for 2017 = $251,000
Capital expenditures = $135,000,
2017 Ratios:
(a) Earnings per share = $207,000 ($ /58,000 shares) = $3.57
(b) Return on common stockholders’ equity = $207,000/$603,400 * 100 = 34.31%
(c) Return on assets = $207,000/$1,045,900 * 100 = 19.79%
(d) Current ratio = $386,900/212,500 = 1.82
Average Receivable = ($124,800 + 109,800)/2 = $117,300
(e) Accounts receivable turnover = Net Sales/Average Receivable
= $1,897,540/$117,300 = 16.18 times
(f) Average collection period = 365 Days /Average Receivable Turnover ratio. = 365/16.18 = 22.56 days
Average Inventory = ($128,000 + 117,500)/2 = $122,750
(g) Inventory turnover = Cost of goods sold/Average Inventory = $1,065,540/122,750 = 8.68 times
(h) Days in inventory = 365/8.68 = 42.05 days
(i) Times interest earned = Earnings before interest & taxes / Tax expense = $325,000/$94,000 = 3.46 times
(j) Asset turnover = Net Sales/Assets = $1,897,540/$1,045,900 = 1.81
(k) Debt to assets ratio = Total Debt/Total Assets = $442,500/$1,045,900 * 100 = 42.31%
(l) Free cash flow = Cash from Operations - Capital Expenditures = $251,000 - $135,000 = $116,000
g Kally goes to the grocery store each week looking to purchase items that will give her as much utility as possible, given her $100 budget. Last week apples were priced at $4.50 each, and Kally purchased 3 apples. This week apples are on sale for $2.50 each, while all other prices have remained the same, and Kally chooses to purchase 7 apples. Given this information, plot Kally's demand curve for apples.
Answers
Answer:
Please check the attached image for the graph
Explanation:
The demand curve is a curve that shows the various quantities of a good that is purchased at different prices.
The demand curve is downward sloping due to the inverse relationship between price and quantity demanded. The higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded. This is known as the law of demand.
It can be seen that the quantity demanded of apples increased from 3 to 7 when price reduced to $2.50
On the demand curve, price is on the vertical axis, while quantity demanded is on the horizontal axis
Tyler Hawes and Piper Albright formed a partnership, investing $210,000 and $70,000, respectively. Determine their participation in the year's net income of $104,000 under each of the following independent assumptions. No agreement concerning division of net income. Divided in the ratio of original capital investment. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3. Salary allowances of $36,000 and $45,000, respectively, and the balance divided equally. Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $45,000, respectively, and the remainder divided equally.
Hawes Albright
(a) $ $
(b) $ $
(c) $ $
(d) $ $
(e) $ $
Answers
Answer:
No agreement concerning division of net income.
Hawes = $52,000
Albright = $52,000
Divided in the ratio of original capital investment.
Hawes = (210/280) x $104,000 = $78,000
Albright = (70/280) x $104,000 = $26,000
Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.
Hawes = ($210,000 x 5%) + $36,000 = $46,500
Albright = ($70,000 x 5%) + $54,000 = $57,500
Salary allowances of $36,000 and $45,000, respectively, and the balance divided equally.
Hawes = $36,000 + $11,500 = $47,500
Albright = $45,000 + $11,500 = $56,500
Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $45,000, respectively, and the remainder divided equally.
Hawes = ($210,000 x 5%) + $36,000 + $4,500 = $51,000
Albright = ($70,000 x 5%) + $45,000 + $4,500 = $53,000
CAN SOMEONE PLEASE ACTUALLY HELP AND NOT USE THIS JUST FOR POINTS. I REALLY NEED THE HELP.
What are ?
Business Description
Marketing Strategies
Competitive Analysis
Marketing Plan
Operations and Management Plan
Financial Plan
Answers
Marketing strategies is basically the methods used by a business to promote their products such as public relations advertisement etc.
The marketing plan is basically a strategy that is set by the business to attract customers.
Operations and management plan is basically listing the organizational structure in the business and the activity those individuals will carry out.
The financial plan of a business is basically a financial strategy to determine how much money/monetary capital is required for the daily operations of the business.
which of the following is an example of greenwashing
Answers
Answer:
An example of greenwashing is the American multinational oil and gas corporation ExxonMobil indicating they were reducing greenhouse gas emissions while they were actually increasing
Explanation:
The example of greenwashing is a food company changes its packaging to look more natural in order to sell more.
In greenwashing, company do creates a small product that is eco-friendly to draw customers into their store.
Example: A doormat company sells one product made out of recycled material. The recycled material is overpriced but still makes them look good.
Unilever is also one type of business going green with an eco friendly strategy.
Conclusively, Greenwashing is simply the use of deceptive marketing techniques to persuade consumers that an organization's products and vision are environmentally-friendly.
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The full question is below
Which of the following is an example of greenwashing
A. A large office starts a recycling campaign to cut down on waste.
B. An event company uses recycled paper products instead of plastic
products.
C. A hair product company cuts back on certain chemicals.
D. A food company changes its packaging to look more natural in order to sell more.
What does O + A + C = K stand for and mean in the legal "Formula" for contracts?
please helpppp
Answers
Answer:
O Stands for offer , A stands for acceptance , C stands for consideration , K stands for contract . An offer requirement, a contract and acceptance have it’s own thing.
Explanation:
Canliss Mining Company borrowed money from a local bank. The note the company signed requires five annual installment payments of $11,000 beginning one year from today. The interest rate on the note is 6%.(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.) What amount did Canliss borrow
Answers
Answer:
$46,336
Explanation:
The amount Canliss borrowed can be determined by calculating the present value of the instalment payments
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow each year from year 1 to 5 = $11,000
I = 6%
PV = $46,336
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
N Force, a U.S. car manufacturing company, has expanded its business operations to China. Unlike their U.S. colleagues, many Chinese employees are reluctant to address senior colleagues by their first names because Chinese culture emphasizes respect for elders. To create an organizational culture that is common for all its employees, management at N Force headquarters has decided to assign titles to the senior staff. Which of the following methods would be best suited in China's top-down hierarchical culture to spread the message of the new organizational culture?
a. Assigning a team of junior staff to conduct a presentation on a list of code names for senior employees
b. Requesting employees to spread the message to peers
c. Requesting leaders to impart the message to employees
d. Creating a video starring junior staff to create awareness about the new organizational culture
Answers
Answer:
c. Requesting leaders to impart the message to employees
Explanation:
As the culture of an organization that suits to china in terms of elders here the best way to pass the message i.e. from the leaders to the employees
The option c would represent the same and considered to be best suited in China with respect to the top-down hierarchical culture so that the message could be spreaded
Many employment contracts have mandatory arbitration clauses.
False
True
Answers
On December 31, 2020, Oriole Company sold for $153000 an old machine having an original cost of $266000 and a book value of $113000. The terms of the sale were as follows: $40000 down payment $56500 payable on December 31 each of the next two years The agreement of sale made no mention of interest; however, 7% would be a fair rate for this type of transaction. What should be the amount of the notes receivable net of the unamortized discount on December 31, 2020 rounded to the nearest dollar? (The present value of an ordinary annuity of 1 at 7% for 2 years is 1.80802.)
Answers
Answer:
$102,153.13
Explanation:
Amount payable on December 31 each of the next two years = $56,500
The PV of ordinary annuity of ($1,7%,2 years) is 1.80802
The amount of the notes receivable net of the unamortized discount = Amount Payable * PV($1, 7%, 2)
= $56,500 * 1.80802
= $102,153.13
So, the amount of the notes receivable net of the unamortized discount on December 31, 2020 will be $102,153.13.
Direct materials $10 Direct labor $6 Variable manufacturing overhead $4 Fixed manufacturing overhead per year $220,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $6 Fixed selling and administrative expense per year $61,000 Year 1 Year 2 Units in beginning inventory 0 1,000 Units produced during the year 11,000 10,000 Units sold during the year 10,000 7,000 Units in ending inventory 1,000 4,000 The net operating income (loss) under variable costing in Year 1 is closest to:
Answers
Answer:
Results are below.
Explanation:
I will assume a selling price per unit of $60.
First, we need to calculate the total unitary variable cost:
Total unitary variable cost= direct material + direct labor + varaiboe overhead + variable selling and administrative expense
Total unitary variable cost= 10 + 6 + 4 + 6
Total unitary variable cost= $26
Now, we can structure the income statement:
Sales= 10,000*60= 600,000
Total variable cost= 10,000*26= ( 260,000)
Contribution margin= 340,000
Fixed manufacturing overhead per year= (220,000)
Fixed selling and administrative expense per year= (61,000)
Net operating income= 59,000
Clearsound uses Alpha Electronics and La Paz Company to buy two electronic components used in the manufacture of its cell phones: Component 125X and Component 30Y. Consider two activities: testing components and reordering components. After the two components are inserted, testing is done to ensure that the two components in the phones are working properly. Reordering occurs because one or both of the components have failed the test and it is necessary to replenish component inventories. Activity cost information and other data needed for supplier costing are as follows:
I. Activity Costs Caused by Suppliers (testing failures and reordering as a result)
Activity Costs
Testing components $1,200,000
Reordering components 300,000
II. Supplier Data
Alpha Electronics La Paz Company
125X 30Y 125X 30Y
Unit purchase price $10 $26 $12 $28
Units purchased 120,000 84,400 15,000 15,000
Failed tests 1,500 780 10 10
Number of reorders 60 40 0 0
Required:
Determine the cost of each supplier by using ABC. Round Test and Reorder rates to the nearest dollar, and final answers to the nearest cent.
Alpha Electronics La Paz Company
125X 30Y 125X 30Y
Unit cost: $ $ $ $
Answers
Answer:
Clearsound
The cost of each supplier, using ABC:
Alpha Electronics La Paz Companyl
125X 30Y 125X 30Y
Unit cost $18.02 $32.24 $12.35 $28.35
Explanation:
a) Data and Calculations:
Activity Costs
Testing components $1,200,000
Reordering components $300,000
Total costs = $1,500,000
II. Supplier Data
Alpha Electronics La Paz Company Total
125X 30Y 125X 30Y
Unit purchase price $10 $26 $12 $28
Units purchased 120,000 84,400 15,000 15,000
Total costs of units $1,200,000 $2,194,400 $180,000 $420,000
Failed tests 1,500 780 10 10 2,300
Number of reorders 60 40 0 0 100
Activity Rates:
Failed tests $1,200,000/2,300 = $521.74
Reordering $300,000/100 = $3,000
Alpha Electronics La Paz Companyl
125X 30Y 125X 30Y
Unit purchase price $10 $26 $12 $28
Units purchased 120,000 84,400 15,000 15,000
Total costs of units $1,200,000 $2,194,400 $180,000 $420,000
Testing components 782,610 406,957 5,217 5,217
Reordering 180,000 120,000
Total costs $2,162,610 $2,721,357 $185,217 $425,217
Unit cost $18.02 $32.24 $12.35 $28.35
Sunland, Inc. had pre-tax accounting income of $2100000 and a tax
rate of 40% in 2018, its first year of operations. During 2018 the company had the following transactions:
Received rent from Jane, Co. for 2019 $90000
Municipal bond income $114000
Depreciation for tax purposes in excess of book depreciation $54000
Installment sales profit to be taxed in 2019 $156000
At the end of 2018, which of the following deferred tax accounts and balances exist at December 31, 2018?
a. Deferred tax asset $57600
b. Deferred tax asset $36000
c. Deferred tax liability $57600
d. Deferred tax liability $36000
Answers
Answer:
b. Deferred tax asset $36000
Explanation:
The computation of the deferred tax is shown below:
= Rent received from Jane for the year 2019 × tax rate in 2018
= $90,000 × 40%
= $36,000
Here the rent received on 2019 but the tax should be paid on 2018 so this represent the deferred tax asset
Therefore the option b is correct
Alpaca Corporation had revenues of $200,000 in its first year of operations. They have not collected on $20,000 of their sales, and still owe $25,000 on $70,000 of merchandise they purchased. The company had no inventory on hand at the end of the year. The company paid $15,000 in salaries. Owners invested $20,000 in the business and $20,000 was borrowed on a five-year note. The company paid $2,000 in interest that was the amount owed for the year, and paid $6,000 for a two-year insurance policy on the first day of business. Alpaca has an effective income tax rate of 40%.
Compute the cash balance at the end of the first year for Alpaca Corporation.
Answers
Answer:
Closing balance $110000
Explanation:
The computation of the cash balance at the end of the first year is shown below:
Funds raised from owners $20000
Less: Funds borrowed $20,000
Collection from debtors $180,000 ($200,000 - $20,000 )
Less: Payment for merchandise $45000
Salaries paid $15000
Interest paid $2000
Insurance policy paid $6000
Income tax at 40% $42000
Closing balance $110000
Working note:
Calculation of tax paid
Sales 200000
Less: purchases 75000
salary 15000
interest 2000
insurance(50% of 6000) 3000
Income 105000
Tax at 40% 42000
Your broker is selling you an investment scheme in which you will receive $5,000 four years from now, $6,000 five years from now and $7,000 six years from now. The broker is asking you to pay $15,000 for this investment scheme. Your required rate of return is 12%. If you were to pay $15,000 for this scheme, what is the annual rate of return you would earn
Answers
Answer:
IRR = 3.64%
Explanation:
using a financial calculator or excel spreadsheet we can determine the IRR of this investment:
year 0 = -$15,000
year 1 = $0
year 2 = $0
year 3 = $0
year 4 = $5,000
year 5 = $6,000
year 6 = $7,000
IRR = 3.64%
Since your required rate of return is 12%, you should pay a maximum of $10,128.57
Precision Company estimates its machine-hour requirements for the four quarters to be 35,000 hours, 20,000 hours, 15,000 hours, and 30,000 hours respectively. The variable manufacturing overhead rate is $4 per machine-hour. The fixed manufacturing overhead is $50,000 per quarter, which includes $20,000 of depreciation expense. Knowledge Check 01 What is the budgeted variable manufacturing overhead for the year
Answers
Answer:
Total estimated overhead costs for the period= $400,000
Explanation:
Giving the following information:
Total machine-hours= 35,000 + 20,000 + 15,000 + 30,000
Total machine-hours= 100,000
Predetermined variable overhead rate= $4 per machine hour
To calculate the estimated variable overhead for the period, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
4 = total estimated overhead costs for the period / 100,000
total estimated overhead costs for the period= 100,000*4
total estimated overhead costs for the period= $400,000
Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 35 billion bottles of wine were sold every year at a price of $7 per bottle. After the tax, 29 billion bottles of wine are sold every year; consumers pay $8 per bottle (including the tax), and producers receive $4 per bottle. The amount of the tax on a bottle of wine is $1 per bottle. Of this amount, the burden that falls on consumers is $ per bottle, and the burden that falls on producers is $ per bottle. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on producers.
Answers
Answer:
1. The amount of tax on a bottle of wine is $4.
2. The tax burden on consumers is $1.
3. The tax burden on producers is $3.
4. The effect on the tax on the quantity sold would have been smaller if the tax had been levied on producers.
False.
Explanation:
a) Data and Calculations:
Before the tax, the number of bottles of wine sold every year at $7 per bottle = 35 billion bottles
After the tax, the number of bottles of wine sold every year at $8 per bottle = 29 billion bottles
Therefore, there is a reduction of 6 billion bottles as a result of the increased price of $1 per bottle (from $7 to $8).
The price received by producers = $4 per bottle
Therefore, there is a total tax of $4 ($8 - $4)
Consumers bear $1 ($8 - $7)
Producers bear $3 ($7 - $4)
The effect of the tax would have still increased the price to $8 or more. Thus, if the tax had been levied on producers, the quantity of bottles sold would have reduced drastically.
Suppose recent regulatory reforms relating to credit rating agencies are perceived to improve the reliability and accuracy of credit ratings of corporate bonds. Imagine further that you manage a corporation interested in issuing new bonds, in addition to past issues by the firm that already trade in the market. Identify one way in which your firm might lose and one way in which it might gain from these regulatory reforms. Explain.
Answers
Answer:
If the new reforms bring increase confidence of the investors then the company will have to incur lower borrowing costs as the investor will be available and vice versa.
Explanation:
Suppose that previously our company's credit rating was overrated. Due to recent regulatory reforms, my company achieved a lower credit rating and hence the investor confidence in our company dropped significantly. Now the investor is not interested to invest in my company and to urge them to invest in the company, they will be offered higher interest. If the reforms are going to impact our credit rating adversely then the borrowing cost will increase and vice versa.
Furthermore, Core Principle 3 says that the decsion making of the investor is based on the information that is readily available to him. This means if the reforms increase the access of the borrower through improved credit rating then it will be favourable for the company in terms of lower borrowing costs. If the reforms decrease the access of the borrower through depreciating credit rating then it will adversely affect the company in terms of lower borrowing costs and lower investment access.
Suppose the town of Boone has a total population of 70,000 people. Of those, 65,000 people are employed. There are 1,000 full-time students who are not employed or actively seeking work. The rest of the people are out of work but have been actively seeking work within the past four weeks.
Instructions: In part a, round your answer to 1 decimal place. In part b, enter your answer as a whole number.
a. What is Boone’s unemployment rate?
percent
b. Suppose there are 1,000 people who are unemployed as a result of frictional unemployment and 2,000 people who are unemployed as a result of cyclical unemployment. How many people are unemployed as a result of structural unemployment?
Answers
Answer:
A. 5.8%
B. 1,000
Explanation:
Calculation for Boone’s unemployment rate
Unemployment rate=[(70,000-1,000)-65,000]/(70,000-1,000)*100
Unemployment rate=(69,000-65,000)/69,000*100
Unemployment rate=4,000/69,000*100
Unemployment rate=5.8%
Therefore Boone’s unemployment rate will be 5.8%
B. Calculation for How many people are unemployed as a result of structural unemployment
Unemployed people=[(70,000-1,000)-65,000]-1,000-2,000
Unemployed people= 4,000 - 1,000 - 2,000
Unemployed people=1,000
Therefore the numbers of people that are are unemployed as a result of structural unemployment will be 1,000