The answer is False. The gain or loss from disposal of a business segment is reported net of income taxes, not gross.
This means that the gain or loss reported takes into consideration the tax implications, resulting in a more accurate representation of the financial impact of the disposal.
The gain or loss would be shown in the firm's income statement under operations that have been discontinued.
If the cash or trade-in allowance received exceeds the asset's book value, the corporation records a gain on the transaction.
If the money or trade-in allowance received for a fixed asset is less than its book value, a loss is incurred during disposal.
Hence, the statement is false.
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Consider a closed economy with output Y=2000. Government purchases are G=200. Desired consumption and desired investment are determined by the functions Cd = 1100 - 800 r + 0.2 Y Id = 400 - 1200 r What are the equilibrium values of the interest rate, r, national saving, S, and consumption, C?
The equilibrium values of the interest rate, national saving, and consumption are r = 0.05, S = 500, and C = 1300, respectively.
In a closed economy, the national income identity is:
Y = C + I + G
where Y is output, C is consumption, I is investment, and G is government purchases.
We can also write national saving, S, as:
S = Y - C - G
Equating investment to saving, we get:
I = S
Therefore,
S = Y - C - G
I = 400 - 1200r
Setting I = S, we get:
Y - C - G = 400 - 1200r
Substituting the consumption function into the national saving equation, we get:
Y - (1100 - 800r + 0.2Y) - 200 = 400 - 1200r
Simplifying and rearranging, we get:
0.8Y - 800r = 700
Substituting Y = 2000 and G = 200, we get:
0.8(2000) - 800r = 700 - 200
Solving for r, we get:
r = 0.05
Substituting r = 0.05 into the consumption function, we get:
C = 1100 - 800(0.05) + 0.2(2000) = 1300
Finally, substituting r = 0.05 into the saving function, we get:
S = Y - C - G = 2000 - 1300 - 200 = 500
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Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then
Illya's right to the $1,000 is extinguished.
When Illya assigned his rights in the deal with Kasey to Jenny, he effectively transferred his right to receive the $1,000 to her. Therefore, Illya no longer has any right to the $1,000 owed by Kasey.
Instead, that right now belongs to Jenny, and it is up to Kasey to pay her directly. Illya's debt to Jenny, however, remains unaffected by the separate deal with Kasey, and he is still obligated to pay her the $1,000 he owes.
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The balanced scorecard describes performance from four perspectives, including financial, learning and growth, customer and ____________.
The fourth perspective in the balanced scorecard is internal business processes. This perspective focuses on the performance of the organization's internal operations and processes.
It involves measuring and monitoring the efficiency and effectiveness of the various systems and processes that the organization has in place to deliver products and services to customers. By monitoring this perspective, organizations can identify areas for improvement in their internal processes, which can lead to better performance in other areas, such as customer satisfaction and financial performance. Therefore, a well-balanced scorecard should include all four perspectives: financial, learning and growth, customer, and internal business processes. By measuring and monitoring performance across all four perspectives, organizations can gain a more comprehensive understanding of their overall performance and make informed decisions to improve their business outcomes.
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Both traditional investors and socially responsible investors increasingly demand the information produced by the sustainability reporting system. Group startsTrue or FalseTrue, selectedFalse, unselectedGroup ends
True. Both traditional investors and socially responsible investors are showing an increasing demand for the information produced by the sustainability reporting system.
Both traditional and socially responsible investors are increasingly interested in the information produced by sustainability reporting, as they recognize the importance of sustainable business practices and the impact they can have on long-term financial performance. Sustainability reporting is the practice of measuring, disclosing, and being accountable for an organization's social, environmental, and economic performance. This type of reporting provides stakeholders with information on an organization's sustainable business practices and helps them make informed decisions about the organization's financial and environmental performance.
Traditional investors, who focus primarily on financial performance, have begun to recognize the importance of sustainability reporting because it can provide insights into the long-term viability of a company. Investors are becoming more aware that sustainable practices can help a company operate more efficiently, reduce costs, manage risks, and improve their brand reputation. As a result, investors are increasingly factoring sustainability into their investment decisions.
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Identify a SOURCE of cash: (select only one alternative) Group of answer choices Dividends are paid Accounts Receivable goes down Inventory is purchased Accounts Payable goes down Long-term Debt is retired
Accounts Payable goes down: When a company pays its outstanding debts to suppliers, it is a use of cash rather than a source of cash, as the company is spending cash to pay its bills..
Dividends are paid: When a company pays dividends to its shareholders, it is a distribution of profits to owners, which is a source of cash for the company.
Accounts Receivable goes down: When customers pay their outstanding debts to the company, it is a source of cash for the company and reduces the accounts receivable balance.
Inventory is purchased: This is actually a use of cash rather than a source of cash, as the company is spending cash to purchase inventory to sell.
Long-term Debt is retired: When a company pays off its long-term debt, it is a use of cash rather than a source of cash, as the company is using cash to reduce its debt obligations
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The risk-free rate of interest is 8% per annum with continuous compounding, and the dividend yield on a stock index is 3% per annum. The current value of the index is 1450. What is the fourmonth futures price?
To calculate the four-month futures price of the stock index, we can use the cost of carry model, which states that the futures price is equal to the spot price adjusted for the cost of carrying the underlying asset to the delivery date.
The cost of carry is the sum of the risk-free interest rate and the storage cost minus the income earned on the underlying asset (i.e., the dividend yield).
In this case, the risk-free rate of interest is 8% per annum with continuous compounding, and the dividend yield on the stock index is 3% per annum.
We need to find the four-month futures price, which is the price of the stock index for delivery in four months.
Assuming that the storage cost is negligible, the cost of carry is:
Cost of Carry = Risk-free Rate - Dividend Yield
Cost of Carry = 0.08 - 0.03
Cost of Carry = 0.05 or 5%
The four-month delivery date is 4/12 or 1/3 of a year from now. Therefore, the time to delivery is 1/3.
Using the cost of carry model, the futures price is:
Futures Price = Spot Price x e^(Cost of Carry x Time to Delivery)
Substituting the given values, we get:
Futures Price = 1450 x e^(0.05 x 1/3)
Futures Price = 1450 x e^(0.0167)
Futures Price = 1450 x 1.0169
Futures Price = 1476.77
Therefore, the four-month futures price of the stock index is 1476.77.
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In compensation, a ______ is a lump sum payment, typically given to an individual at the end of a time period. a. variable pay b. perquisites c. bonus d. merit
In compensation, a bonus is a lump sum payment, typically given to an individual at the end of a time period. The Correct option is C
Variable pay refers to any form of compensation that is contingent upon meeting certain performance goals or benchmarks, and may include bonuses, commissions, or other incentives.
Perquisites, or "perks," refer to non-financial benefits provided to employees, such as company cars, expense accounts, or executive housing.
Merit pay is a compensation system that rewards employees based on their individual performance or contributions to the organization, and may be in the form of salary increases or bonuses.
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Busch Stadium in St. Louis charges different prices for seats in different areas of the ball park, even though each seat costs the same for the owners of the stadium. What is this form of pricing called
The form of pricing that Busch Stadium in St. Louis is using is called "variable pricing." This means that the prices for seats are varied based on the demand for certain areas or games, rather than a set price for all seats.
The main aim of variable pricing is to optimize revenue and maximize profits. This explanation means that the owners of the stadium can charge more for seats in high demand areas, while still keeping the overall cost of each seat the same for themselves.
Price discrimination occurs when a seller charges different prices for the same product or service to different consumers, based on their willingness to pay. In this case, Busch Stadium charges different prices for seats in various areas of the ballpark, even though the cost of each seat is the same for the stadium owners. This allows them to maximize revenue by capturing more consumer surplus.
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The communications effects pyramid used for advertising and promotion identifies the type of communication tasks and promotion al objectives to be accomplished to draw consumers to the brand. The fourth stage of the pyramid retaining about 25% of the original consumer base is
The fourth stage of the communications effects pyramid is retention, where the primary objective is to retain about 25% of the original consumer base.
This stage is crucial in sustaining the brand's success, as retaining customers is more cost-effective than acquiring new ones. The communication tasks at this stage include building customer loyalty, enhancing customer satisfaction, and encouraging repeat purchases.
Promotional objectives involve creating incentives for existing customers, such as loyalty programs, special offers, and personalized communications, to reinforce the brand's value proposition and maintain customer engagement.
Effective retention strategies not only help to retain customers but also encourage them to advocate for the brand through word-of-mouth and referrals, thereby increasing the brand's visibility and credibility in the market.
Therefore, marketers must prioritize retention efforts to create a loyal customer base, drive repeat sales, and foster brand advocacy.
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A customer charges a treadmill at Annie's Sport Shop. The price is $4,000 and the financing charge is 6% per annum if the bill is not paid in 30 days. The customer fails to pay the bill within 30 days and a finance charge is added to the customer's account. What is the amount of the finance charge?
The amount of the finance charge on the customer's treadmill purchase from Annie's Sport Shop can be calculated using the formula for simple interest is $19.67.
The price of the treadmill is $4,000 and the financing charge is 6% per annum (or per year) if the bill is not paid in 30 days. This means that for every year that the bill is not paid, an additional 6% of the original price will be charged.
Since the bill was not paid within 30 days, the finance charge will be for a portion of a year, which can be calculated as follows:
Finance charge = (principal x rate x time) / 365
where:
- principal = $4,000
- rate = 6% per annum = 0.06
- time = 30 days = 30/365 years
Plugging these values into the formula, we get:
Finance charge = ($4,000 x 0.06 x 30/365) = $19.67 (rounded to the nearest cent)
Therefore, the amount of the finance charge on the customer's treadmill purchase is $19.67.
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Now suppose Congress passes a tax cut that increases the income of Philadelphia residents. If hot dogs are a normal good, this will cause the demand for hot dogs to
If Congress passes a tax cut that increases the income of Philadelphia residents, and hot dogs are a normal good, this will cause the demand for hot dogs to increase.
This is because when people have more disposable income, they tend to spend more on normal goods, leading to a higher demand for such products. If Congress passes a tax cut that increases the income of Philadelphia residents, the demand for hot dogs is likely to increase if hot dogs are a normal good. This is because a tax cut that increases disposable income will generally increase consumer purchasing power and enable people to buy more goods and services, including hot dogs.
As a normal good, hot dogs are a product that people tend to consume more of as their income increases. Therefore, when consumers have more disposable income due to the tax cut, they are likely to spend more on normal goods like hot dogs. This can lead to an increase in demand for hot dogs.
However, it's important to note that other factors can also influence the demand for hot dogs, such as changes in consumer preferences, prices of other goods, and availability of substitutes. Additionally, the degree to which the demand for hot dogs will increase due to the tax cut depends on the size of the tax cut and how much it increases disposable income.
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How should managers motivate employees to do their part in executing strategy in a weak-culture company
To motivate employees in a weak-culture company, managers should establish clear expectations, set achievable goals, and provide regular feedback.
What is weak culture company?A weak culture company is an organization that lacks a strong and consistent set of shared values, beliefs, and practices, leading to a lack of direction, cohesion, and motivation among employees.
What is motivation?Motivation refers to the psychological factors that drive an individual's behavior towards achieving a goal or satisfying a need, and the energizing and directing of behavior towards a desired outcome.
According to the given information:
In a weak-culture company, motivating employees to execute strategy can be challenging for managers. However, there are some approaches they can take to encourage their team members.
Firstly, managers should clearly communicate the goals and objectives of the strategy and explain how each employee's role contributes to achieving those goals.
Secondly, managers can offer incentives such as bonuses or promotions to employees who excel in executing the strategy.
Thirdly, managers can foster a culture of collaboration and teamwork where employees feel valued and supported in their efforts.
Finally, managers can provide regular feedback and recognition to employees who are making progress towards the goals. By taking these steps, managers can motivate employees to do their part in executing strategy in a weak-culture company.
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Rue offers to pay Sari to deliver certain documents within thirty minutes. Sari can accept the offer only by completing the task within the deadline. If she does, Rue and Sari will have
Sari completes the task within thirty minutes, a valid contract will be formed between Rue and Sari, and Rue will be obligated to pay Sari the agreed-upon amount. However, if Sari fails to complete the task within the deadline, there will be no contract formed, and Rue will not be obligated to pay Sari.
This scenario presents an offer and acceptance situation, where Rue offers to pay Sari to deliver certain documents within thirty minutes, and Sari can accept the offer only by completing the task within the deadline. If Sari completes the task within the deadline, Rue and Sari will have a valid contract. For a contract to be valid, it must have certain elements, including an offer, acceptance, consideration, legality, and capacity.
In this scenario, the offer is the payment that Rue offers to Sari for delivering the documents within thirty minutes. Sari can accept this offer by completing the task within the deadline, which indicates acceptance. Furthermore, the consideration in this scenario is the payment that Rue offers, and the legality is the delivery of the documents. Both parties have the capacity to enter into a contract, as they are of legal age and sound mind.
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Analysts at Sky West Airlines did a 3 year projection of expenses. They calculated that the company will need $15,300 at the beginning of each 6 month period to buy fuel, oil, lube, and parts for aircraft operations and maintenance. Sky West can get 8% interest compounded semiannually from its bank. How much (in $) should Sky West deposit now to support the next 3 years of operations and maintenance expenses
Sky West should deposit approximately $75,225.09 now to support the next 3 years of operations and maintenance expenses, given the 8% interest rate compounded semiannually.
Sky West Airlines needs to determine the present value of their expenses to calculate the required deposit for the next 3 years of operations and maintenance costs. The company will have a series of semiannual expenses of $15,300, with an 8% annual interest rate compounded semiannually.
To find the present value (PV) of the future expenses, we can use the Present Value of an Ordinary Annuity formula:
PV = P * [(1 - (1 + r)^(-n)) / r]
where P is the semiannual payment ($15,300), r is the interest rate per period (8% per year compounded semiannually equals 0.08/2 = 0.04 or 4% per period), and n is the total number of periods (3 years with two periods per year gives 3*2 = 6 periods).
PV = 15,300 * [(1 - (1 + 0.04)^(-6)) / 0.04]
PV = 15,300 * [(1 - (1.04)^(-6)) / 0.04]
PV ≈ 15,300 * [4.9173]
PV ≈ $75,225.09
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A banquet department's annual budgeted sales revenue was based on 45,000 guests at an average check of $10.00. Actual figures were 47,500 guests at a $9.50 average check. The price variance, volume variances, and total variance of revenue respectively are:
The price variance is -$23,750, the volume variance is $25,000, and the total variance of revenue is $1,250.
The price variance, volume variance, and total variance of revenue for the banquet department can be calculated as follows:
Price variance: This is the difference between the actual average check and the budgeted average check, multiplied by the actual number of guests.
Price variance = (Actual average check - Budgeted average check) * Actual number of guests
Price variance = ($9.50 - $10.00) * 47,500
Price variance = -$0.50 * 47,500
Price variance = -$23,750
Volume variance: This is the difference between the actual number of guests and the budgeted number of guests, multiplied by the budgeted average check.
Volume variance = (Actual number of guests - Budgeted number of guests) * Budgeted average check
Volume variance = (47,500 - 45,000) * $10.00
Volume variance = 2,500 * $10.00
Volume variance = $25,000
Total variance: This is the sum of the price variance and the volume variance.
Total variance = Price variance + Volume variance
Total variance = -$23,750 + $25,000
Total variance = $1,250
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Bryce Co. sales are $867,000, variable costs are $469,100, and operating income is $257,000. What is the contribution margin ratio
The contribution margin ratio is calculated by dividing the contribution margin by the total sales. The contribution margin is the difference between the sales revenue and the variable costs.
Contribution Margin = Sales Revenue - Variable Costs
Contribution Margin = $867,000 - $469,100
Contribution Margin = $397,900
Contribution Margin Ratio = Contribution Margin / Total Sales
Contribution Margin Ratio = $397,900 / $867,000
Contribution Margin Ratio = 0.4586 or 45.86%
Therefore, the contribution margin ratio for Bryce Co. is 45.86%.
What do you mean by contribution margin ratio?
The contribution margin ratio is a financial ratio that indicates the proportion of sales revenue that is available to cover fixed costs and generate profit. It is calculated by dividing the contribution margin (total sales revenue minus total variable costs) by total sales revenue.
The contribution margin is the amount of revenue that remains after deducting all variable costs associated with producing and selling a product or service. It stands for the sum of money that is accessible to pay for fixed expenses and make a profit.
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n May 17, Jane took out a loan for $33,000 at 6% to open her law practice office. The loan will mature the following year on January 16. Using the ordinary interest method (360 days), what is the maturity value due on January 16
The maturity value due on January 16 is $34,131.84. Using the ordinary interest method (360 days), we can calculate the maturity value as:
Interest = Principal x Rate x Time
Time = Number of days ÷ 360
Jane's loan is for $33,000 at 6% interest. The interest rate can be converted to a decimal by dividing by 100, so the rate is 0.06. The loan is for 244 days, calculated as follows:
January 16 - May 17 = 244 days
Using the formula for time:
Time = 244 ÷ 360 = 0.6778
Now we can calculate the interest:
Interest = $33,000 x 0.06 x 0.6778 = $1,131.84
Finally, we can find the maturity value by adding the interest to the principal:
Maturity Value = $33,000 + $1,131.84 = $34,131.84
The maturity value due on January 16 is $34,131.84.
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In general, when describing the characteristics of equity index annuities and variable annuities, each of the following would be a true statement EXCEPT A) only the variable annuity is considered a security B) both are issued by life insurance companies C) both offer an opportunity for unlimited gain D) only the EIA has a minimum guaranteed return
Both equity index annuities( EIA) and VA are issued by life insurance companies and offer potential for unlimited gain, but only the VA is considered a security, and only the EIA has a minimum guaranteed return. Option D is correct.
In general, when describing the characteristics of equity index annuities (EIA) and variable annuities (VA), both are typically issued by life insurance companies and offer an opportunity for unlimited gain. However, there are differences between the two types of annuities.
One key difference is that only the VA is considered a security, while the EIA is not. This is because the VA allows the annuity holder to invest in a variety of securities such as stocks, bonds, and mutual funds, while the EIA's return is based on the performance of an underlying index like the S&P 500.
Another difference is that only the EIA has a minimum guaranteed return, while the VA does not. This means that with an EIA, the annuity holder is guaranteed to receive a certain minimum return, even if the underlying index performs poorly. However, with a VA, the return is dependent on the performance of the selected securities and there is no minimum guaranteed return.
In summary, both EIA and VA are issued by life insurance companies and offer potential for unlimited gain, but only the VA is considered a security, and only the EIA has a minimum guaranteed return. Option D is correct.
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What other suggestions would you have for Tesla relative to ensuring the quality of its new Model 3 car
To ensure the quality of its new Model 3 car, Tesla should consider implementing a number of measures. Firstly, Tesla should conduct extensive testing of the car before it is released to the public.
This could involve simulating a range of driving conditions, including different weather conditions, road surfaces, and traffic scenarios. The testing should be thorough and rigorous, with a focus on identifying any potential issues or defects that could impact the car's performance or safety.
Secondly, Tesla should invest in the training and development of its staff. This could involve providing regular training sessions to ensure that employees are up-to-date with the latest technological advancements and safety standards. In addition, Tesla could encourage its staff to report any potential issues or defects that they encounter during the production process.
Thirdly, Tesla should consider introducing a quality assurance system that monitors and tracks the production process. This could involve implementing a set of standard procedures and processes that must be followed during the manufacturing process. In addition, Tesla could use data analytics tools to monitor the performance of individual components and identify any potential issues or defects.
Lastly, Tesla should prioritize customer feedback and work to address any issues that arise quickly and effectively. This could involve setting up a dedicated customer service team that can respond to queries and concerns promptly. Additionally, Tesla could encourage customers to provide feedback on the Model 3 car, and use this feedback to identify any areas for improvement.
In summary, ensuring the quality of its new Model 3 car will require a detailed and long-term approach that focuses on testing, training, quality assurance, and customer feedback. By taking these measures, Tesla can help to ensure that its new car meets the high standards that its customers expect.
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An investor purchased 200 Intel put options for $1.87 each in June, with an expiration date in September and a strike price of $138. Attempt 1/4 for 10 pts. Part 1 What is the maximum profit the investor can make (in $)
Since the investor holds 200 put options, they can sell 20,000 Intel shares, resulting in a total profit of $122,600 ($6.13 x 20,000).
The maximum profit an investor can make on a put option is calculated by subtracting the strike price from the current market price of the underlying asset and then subtracting the cost of the option. In this case, the investor purchased 200 Intel put options for $1.87 each, with an expiration date in September and a strike price of $138.
Assuming that the market price of Intel stock drops below the strike price of $138, the investor will make a profit on the put options. Let's say the market price of Intel stock drops to $130 by the expiration date. The investor can exercise their put options, selling 20,000 Intel shares at $138 per share, resulting in a profit of $8 per share.
The maximum profit that the investor can make can be calculated as follows:
Profit per share = Strike price - Market price - Option cost
Profit per share = $138 - $130 - $1.87
Profit per share = $6.13
Since the investor holds 200 put options, they can sell 20,000 Intel shares, resulting in a total profit of $122,600 ($6.13 x 20,000). However, it is important to note that this is the maximum profit the investor can make. If the market price of Intel stock does not drop below the strike price, the investor may not make a profit and could even lose the entire cost of the options.
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On the Production Possibilities Curve, possible production levels are represented: A. at any point on the curve. B. at any point above the curve. C. at any point on or below the curve.
On the Production Possibilities Curve, possible production levels are represented at any point on the curve (option A).
The Production Possibilities Curve represents the different combinations of two goods that a country or an economy can produce using its resources efficiently. The curve shows the maximum possible production levels of one good that can be produced for every level of production of the other good, assuming that all resources are being used efficiently.
Therefore, any point on the curve represents a possible combination of production levels for the two goods that can be produced efficiently, and any point above or below the curve represents a combination that is either inefficient or unattainable given the current resources and technology.
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Unfair restrictions on opportunities for certain groups of people through corporate policies, structural power relations, and formal laws is called:
Unfair restrictions on opportunities for certain groups of people through corporate policies, structural power relations, and formal laws is called: institutional discrimination.
Institutional discrimination is the unfair treatment of an individual or group of persons by institutions such as governments or educational institutions. These unjust and covert forms of discrimination are frequently present in an organization's policies, rules, regulations, and goals. The prejudice may be based on socioeconomic class, gender, caste, race, or ethnicity.
American communities of heritage, are far more likely to experience certain kinds of sociostructural disadvantage. Increased rates, stifled wealth accumulation, and restricted access to healthcare are just a few of the serious and long-lasting negative repercussions of institutionalised prejudice on impacted people.
Systemic , sometimes referred to as institutional racism, is a type of racism that permeates society or an organisation and is accepted as standard procedure. It may result in problems including discrimination in the criminal justice system, the workplace, housing, and health care systems, among others.
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John Smith works 40 hours for ABC Corp. for $15 per hour. Required payroll deductions are: Social Security $37.20; Medicare $8.70; Federal Income Tax $58; and State Income Tax $10. Assuming the payroll deductions are paid in the following month, ABC would record John's pay with a journal entry that includes a ______. (Check all that apply.)
ABC Corp. would record John's pay with a journal entry that includes a debit to Salaries Expense, a credit to Social Security Payable, a credit to Medicare Payable, a credit to Federal Income Tax Payable, a credit to State Income Tax Payable, and a credit to Cash or Salaries Payable.
The total payroll deductions are $114.90 ($37.20 + $8.70 + $58 + $10). John's gross pay is $600 (40 hours x $15 per hour), and his net pay is $485.10 ($600 - $114.90).
The journal entry reflects the company's expense for John's salary and the amounts owed to various authorities for taxes and deductions.
Summary: The journal entry for John Smith's pay at ABC Corp. includes a debit to Salaries Expense for $600, credits to Social Security Payable, Medicare Payable, Federal Income Tax Payable, and State Income Tax Payable for their respective amounts, and a credit to Cash or Salaries Payable for $485.10, reflecting the net pay after deductions.
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Make-or-buy options often arise when a manufacturer has excess productive capacity in the form of unused equipment, space, and labor. Group of answer choices True False
True, Make-or-buy options are commonly considered by manufacturers who have excess productive capacity in the form of unused equipment, space, and labor.
When a manufacturer has excess capacity, they can choose to use it to produce additional products or services, or they can sell the capacity to another company. This decision is known as a make-or-buy decision.
By selling their excess capacity, the manufacturer can generate additional revenue without having to invest in additional equipment or labor.
On the other hand, if they choose to use their excess capacity to produce additional products, they may be able to increase their revenue and market share. Ultimately, the decision to make or buy depends on a variety of factors, including cost, quality, and the availability of resources.
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5. You purchase one Microsoft December $140 put contract for a premium of $5.30. What is your maximum possible profit
Your maximum possible profit from purchasing one Microsoft December $140 put contract for a premium of $5.30 is the strike price minus the premium paid.
In this case, the strike price is $140 and the premium paid is $5.30, so your maximum possible profit would be $134.70 per share. However, it's important to note that this profit is only realized if the stock price drops below the strike price by expiration in December. If the stock price remains above the strike price, the contract expires worthless and you would lose the entire premium paid.
Step 1: Identify the strike price, which is $140.
Step 2: Subtract the premium from the strike price: $140 - $5.30 = $134.70.
Step 3: Remember that one contract represents 100 shares, so multiply $134.70 by 100: $134.70 * 100 = $13,470.
Your maximum possible profit for this Microsoft December $140 put contract is $13,470.
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ABC buys back the bonds for $196,000 immediately after the interest payment on 12/31/2018 and retires them. What gain or loss, if any, would ABC record on this date (use a minus sign in front of the number if it is a loss)
If ABC buys back the bonds for $196,000 immediately after the interest payment on 12/31/2018 and retires them, they would record a loss of $4,000 on this date.
What is the reason?The reason for this is that the original bond value was $200,000, but ABC bought them back for $196,000, which means they paid less than the original value.
This difference of $4,000 is considered a loss for ABC. It is important to note that this loss is recorded as an expense on ABC's income statement, which will reduce their net income for the year.
However, by retiring the bonds, ABC is also reducing their overall debt and interest payments, which can have a positive impact on their financial health in the long run.
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Larry is a developer. His current project involves him taking a large parcel of land, dividing it into hundreds of lots and building single family homes on those lots then selling the properties to home buyers. What is Larry developing?
Larry is developing a residential real estate development, which involves the construction of single-family homes on a large parcel of land.
The process of dividing the land into smaller lots and building homes on them is known as land subdivision and is a common practice in residential real estate development. Once the homes are built, they will be sold to home buyers, generating revenue for the developer.
Larry is developing a residential real estate project. Specifically, he is involved in the process of land development, where he is subdividing a large parcel of land into smaller lots and building single-family homes on those lots. This type of real estate development involves a wide range of activities, including land acquisition, site planning and design, zoning and permitting, construction, marketing, and sales.
The ultimate goal of this type of project is to create new housing units for potential buyers or renters. By developing a residential real estate project, Larry is not only contributing to the local housing market but also generating a source of income for himself and potentially creating job opportunities for others in the construction and real estate industry.
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Use this information to answer the question. Security Expected Return Beta 1 16.0% 1.12 2 12.5% 0.94 Assume you want to construct a portfolio from the securities. What is the expected return on your portfolio if you invest $800,000 in Security 1 and $200,000 in Security 2
The expected return on the portfolio would be 15.3% if we invest $800,000 in Security 1 and $200,000 in Security 2.
To calculate the expected return on your portfolio consisting of Security 1 and Security 2, you need to follow these steps:
1. Determine the proportion of each security in the portfolio.
2. Multiply the proportion of each security by their respective expected returns.
3. Add the results from step 2 to find the overall expected return.
Here's the step-by-step calculation:
1. Proportion of each security:
- Security 1: $800,000 / ($800,000 + $200,000) = 0.8
- Security 2: $200,000 / ($800,000 + $200,000) = 0.2
2. Multiply the proportion by the expected return:
- Security 1: 0.8 * 16.0% = 0.128 or 12.8%
- Security 2: 0.2 * 12.5% = 0.025 or 2.5%
3. Add the results to find the overall expected return:
- Expected return on the portfolio = 12.8% + 2.5% = 15.3%
The expected return on your portfolio if you invest $800,000 in Security 1 and $200,000 in Security 2 is 15.3%.
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CH 10 AP. Open Doors Manufacturing expects to make purchases of $65,000 in January; $80,000 in February; $50,000 in March; and $90,000 in April. Purchases are paid 30% in the month of purchase and 70% in the month after purchase. How much is budgeted accounts payable at March 31
The budgeted accounts payable at March 31 is $35,000.
The budgeted Manufacturing accounts payable at March 31, we need to determine the total amount of purchases made before March, the amount of payments made before March, and the amount of payments due at the end of March.
The purchases made before March are $65,000 (January) + $80,000 (February) + $50,000 (March) = $195,000.
30% of the purchases made in January, February, and March are paid in the month of purchase, so the payments made before March are:
January purchases: 30% x $65,000 = $19,500
February purchases: 30% x $80,000 = $24,000
March purchases: 30% x $50,000 = $15,000
Total payments made before March: $19,500 + $24,000 + $15,000 = $58,500
70% of the purchases made in January and February are paid in the month after purchase, so the payments due at the end of March are:
January purchases: 70% x $65,000 = $45,500
February purchases: 70% x $80,000 = $56,000
Total payments due at the end of March: $45,500 + $56,000 = $101,500
Therefore, the budgeted accounts payable at March 31 is:
Total purchases made before March - Total payments made before March - Total payments due at the end of March
$195,000 - $58,500 - $101,500 = $35,000
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Journal entries that are needed in order to update account balances for internal business transactions (such as supplies and prepaid rent) at the end of the period are:
The journal entries that are needed in order to update account balances for internal business transactions at the end of the period include adjusting entries. These entries are used to record any transactions that have occurred but have not yet been recorded in the general ledger, such as supplies used or prepaid rent that has expired. The specific adjusting entries will depend on the nature of the transaction but may include debiting an expense account and crediting a corresponding asset account, or vice versa. The goal of adjusting entries is to ensure that the financial statements accurately reflect the company's financial position and performance for the period.
1. Identify the accounts that need adjustment: Look at the trial balance and check for accounts that may require adjustments, such as supplies and prepaid rent.
2. Determine the adjustment amount: Calculate the amount to be adjusted for each account by considering the transactions during the period and the remaining balances.
For supplies:
a) Determine the supplies used during the period by comparing the beginning and ending balances of the supplies account.
b) Record the adjusting entry by debiting Supplies Expense and crediting Supplies.
For prepaid rent:
a) Determine the rent expense for the period by dividing the total prepaid rent by the number of periods it covers.
b) Record the adjusting entry by debiting Rent Expense and crediting Prepaid Rent.
3. Record the adjusting entries: Update the general journal with the necessary adjusting entries.
4. Post the adjusting entries: Transfer the adjusting entries to the general ledger accounts to update their balances.
5. Prepare an adjusted trial balance: Create a new trial balance that includes the adjusted balances of all accounts after recording the adjusting entries.
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