Answer:
economic services.
Explanation:
An economy is a function of how money, means of production and resources (raw materials) are carefully used to facilitate the demands and supply of goods and services to meet the unending needs or requirements of the consumers.
Hence, a region's or country's economy is largely dependent on how resources are being allocated and utilized, how many goods and services are to be produced, what should be produced, for whom they are to be produced for and how much money are to be spent by the consumers to acquire these goods and services.
Basically, there are four (4) main types of economy and these are;
I. Mixed economy.
II. Free market economy.
III. Traditional economy.
IV. Command economy.
A service provided by a business to the final user is known as economic services.
Basically, economic services are considered to be intangible, inconsistent and perishable in nature. Thus, some examples of economic services are banking, hospitality, transportation, telecommunication, marketing, legal, rentals, insurance, security, public relations, etc.
Scampini Technologies is expected to generate $175 million in free cash flow next year, and FCF is expected to grow at a constant rate of 4% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 10%. If Scampini has 55 million shares of stock outstanding, what is the stock's value per share
Answer:
the stock value per share is $53
Explanation:
The computation of the stock value per share is shown below:
Value of operations = Free cash flows ÷ ( Capitalization Rate - growth rate )
= $175 Million ÷ ( (10% - 4%)
= $2,917
Now stock value per share is
= $2,917 ÷ 55 million shares
= $53 per share
Hence, the stock value per share is $53
Doug Allen has decided to go into the insect extermination business and to operate as Doug's Extermination Service. The following transactions were completed during the first month of operations, May, 20--.
1. Doug invested $35,000 cash in the business.
2. Purchased extermination equipment for $17,000 in cash.
3. Paid $700 rent for garage and office quarters.
4. Purchased chemicals (expense) for $1,100 from Low Glow Chem Co. on account.
5. Received $1,600 revenue for extermination service.
6. Paid telephone bill, $120
7. Paid assistant's salary, $700.
8. Earned $980 revenue for extermination service, on account.
9. Paid electric bill, $230.
10. Paid for truck repairs (expense), $145.
11. Paid $600 to Low Glow Chem Co., on account.
12. Paid $131 for gas and oil for truck (expense).
13. Received $1,400 revenue for extermination service.
14. Received $500 for services previously earned on account in transaction (8).
15. Paid assistant's salary, $900.
Required:
Write the transactions in the T accounts, then write the total of each column. If an account has entries on both sides, determine the balance and enter it on the side with the larger total.
Answer:
Doug's Extermination Service
T-accounts:
Cash
Account Titles Debit Credit
Common stock $35,000
Extermination equipment $17,000
Rent 700
Extermination Revenue 1,600
Utilities Expense 120
Salary Expense 700
Utilities Expense 230
Truck Expenses 145
Accounts Payable (Low Glow) 600
Truck Expense 131
Extermination service 1,400
Accounts Receivable 500
Salary Expense 900
Balance $17,974
Common Stock
Account Titles Debit Credit
Cash $35,000
Extermination equipment
Account Titles Debit Credit
Cash $17,000
Rent Expense
Account Titles Debit Credit
Cash $700
Supplies Expense
Account Titles Debit Credit
Accounts payable $1,100
Accounts Payable (Low Glow Chem Co.)
Account Titles Debit Credit
Supplies Expense $1,100
Cash $600
Balance $500
Extermination Service Revenue
Account Titles Debit Credit
Cash $1,600
Accounts Receivable 980
Cash 1,400
Balance $3,980
Utilities Expense
Account Titles Debit Credit
Cash $120
Cash 230
Balance $350
Salary Expense
Account Titles Debit Credit
Cash $700
Cash 900
Balance $1,600
Accounts Receivable
Account Titles Debit Credit
Extermination Service Revenue $980
Cash $500
Balance $480
Truck Expenses
Account Titles Debit Credit
Cash $145
Cash 131
Balance $276
Explanation:
a) Data and Analysis:
1. Cash $35,000 Common Stock $35,000
2. Extermination equipment $17,000 Cash $17,000
3. Rent $700 Cash $700
4. Supplies Expense $1,100 Accounts Payable (Low Glow Chem Co.) $1,100
5. Cash $1,600 Extermination Service Revenue $1,600
6. Utilities Expense $120 Cash $120
7. Salary Expense $700 Cash $700
8. Accounts Receivable $980 Extermination Service Revenue $980
9. Utilities Expense $230 Cash $230
10. Truck Expenses $145 Cash $145
11. Accounts Payable (Low Glow Chem Co.) $600 Cash $600
12. Truck Expense $131 Cash $131
13. Cash $1,400 Extermination Service Revenue $1,400
14. Cash $500 Accounts Receivable $500
15. Salary Expense $900 Cash $900
Selected current year company information follows: Net income $ 16,753 Net sales 720,855 Total liabilities, beginning-year 91,932 Total liabilities, end-of-year 111,201 Total stockholders' equity, beginning-year 206,935 Total stockholders' equity, end-of-year 133,851 The total asset turnover is: (Do not round intermediate calculations.)
Answer:
the total asset turnover is 2.65 times
Explanation:
The computation of the total asset turnover is shown below;
As we know that
Total assets turnover is
= Net sales ÷ average of total assets
= $720,855 ÷ ($91,932 + $206,935 + $111,201 + $133,851) ÷ 2
= $720,855 ÷ $271,959.50
= 2.65 times
Hence, the total asset turnover is 2.65 times
Explain the concept of a Pereto Chart - provide an example - explain how the concept of the Pereto Chart might be used in making decisioins about handling negative risks which could impact a project or organization.
Answer:
a. A Pareto Chart is a graph that shows the frequency of flaws and their overall impact.
b. For instance, by using Pareto Charts, you might discover that putting in 13% of the effort yields 87% of the results. Alternatively, 30% of underlying causes might be addressed to solve 70% of problems.
c. Pareto charts are important for deciding which defects or negative risks should be prioritized in order to achieve the best overall results.
Explanation:
a. Explain the concept of a Pereto Chart
A Pareto Chart is a graph that shows the frequency of flaws and their overall impact. A Pareto chart is a fundamental quality tool that can be used to identify the most common problems, complaints, or any other countable and categorizeable factor. A Pareto chart is a form of graph that includes both bars and a line graph, with bars representing individual values in descending order and a line representing the cumulative total.
b. Provide an example
The Pareto Principle explains how there is frequently a lack of symmetry between the labor you do and the outcomes you get. For instance, by using Pareto Charts, you might discover that putting in 13% of the effort yields 87% of the results. Alternatively, 30% of underlying causes might be addressed to solve 70% of problems.
b. Explain how the concept of the Pereto Chart might be used in making decisioins about handling negative risks which could impact a project or organization.
A Pareto diagram is used to distinguish between the important and inconsequential components of a problem. It frequently shows the most common sources of defects, the most common type of fault, the most common grounds for customer complaints, and so on in quality control.
Therefore, Pereto Chart might be used in making decisioins about handling negative risks which could impact a project or organization as it allows a project team or an organisation to know where to focus their improvement efforts by graphically distinguishing the parts of an issue. Pareto charts are therefore important for deciding which defects or negative risks should be prioritized in order to achieve the best overall results.
Over a certain period, large-company stocks had an average return of 12.94 percent, the average risk-free rate was 2.65 percent, and small-company stocks averaged 17.73 percent. What was the risk premium on small-company stocks for this period
Answer:
15.08 percent
Explanation:
Calculation to determine What was the risk premium on small-company stocks for this period
Using this formula
Risk premium =Average risk-free rate -small-Company stocks averaged
Let plug in the formula
Risk premium=2.65 percent-17.73 percent
Risk premium=15.08 percent
Therefore the risk premium on small-company stocks for this period is 15.08 percent
The ledger of Mai Company includes the following accounts with normal balances: D. Mai, Capital $9,000; D. Mai, Withdrawals $800; Services Revenue $13,000; Wages Expense $8,400; and Rent Expense $1,600. Prepare the necessary closing entries from the available information at December 31.
Answer: See explanation
Explanation:
The necessary closing entries from the available information at December 31 will be calculated thus:
1. Dec 31
Dr Services Revenue $13000
Cr Income Summary $13000
2. Dec 31
Dr Income Summary $10000
Cr Wages expense $8400
Cr Rent expense $1600
3. Dec 31
Dr Income Summary = $13000 - $10000 = $3000
Cr D. Mai, Capital $3000
4. Dec 31
Dr D. Mai, Capital $800
Cr D. Mai, Withdrawals $800
EBI Solar uses a high-tech process to turn silicon wafers into tiny solar panels. These efficient and inexpensive panels are used to power low-energy hand-held electronic devices. Last year, EBl Solar turned their inventory 3.7 times and had a cost of goods sold of $2.8 million. Assume 52 business weeks per year.
a. Express last years average inventory in weeks of supply.
b. After several supply chain improvement initiatives, inventory investment has dropped across all inventory categories. While EBl's cost of goods sold is not expected to change from last year's level, the value of raw materials has dropped to $95,000; work-in-process to $26,000; and finished goods to $15,800. Assuming 52 business weeks per year, express EBl's current total inventory level in weeks of supply and inventory turns.
Answer:
EBI Solar
a. Weeks of supply = 14.05 weeks
b. Inventory turnover = 20.5x
Weeks of supply = 2.5 weeks
Explanation:
a) Data and Calculations:
Inventory turnover = 3.7 x
Cost of goods sold = $2.8 million
Average inventory = $756,757 ($2,800,000/3.7)
Current value of inventory:
Raw materials = $95,000
Work-in-process 26,000
Finished goods 15,800
Total = $136,800
a. Weeks of supply = 14.05 weeks (52/3.7)
b. Inventory turnover = 20.5x ($2,800,000/$136,800)
Weeks of supply = 2.5 weeks (52/20.5)
The following events apply to Guiltf Seafood for the 2018 fiscal year 1.
a. The company started when it acquired $17,000 cash by issuing common stock.
b. Purchased a new cooktop that cost $16,900 cash. Earned $22,500 in cash revenue.
c. Paid $10,300 cash for salaries expense.
d. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2,200. Use straight-line depreciation. The adjustment was made as of December 31, Year 1.
Required:
Record the above transactions in a horizontal statements model.
Answer:
Gulf Seafood
Horizontal Statements Model:
Balance Sheet Income Statement Cash Flows
Assets = Liabilities + Equity Revenue - Expenses = Income
a. $17,000 0 + $17,000 FA
b. $16,900 ($16,900) IA
$22,500 $22,500 $22,500 OA
c. ($10,300) ($10,300) ($10,300) OA
d. ($3,675) ($3,675) ($3,675) None
$25,525 = 0 + $25,525 $22,500 - $13,675 = $8,825
Explanation:
a) Data and Analysis:
a. Cash $17,000 Common stock $17,000
b. Equipment $16,900 Cash ($16,900)
Cash $22,500 Revenue $22,500
c. Cash ($10,300) Salaries Expense ($10,300)
d. Accumulated Depreciation ($3,675) Depreciation Expense ($3,675)
Non-Market Strategy (NMS) is defined most accurately by which of the following (choose all accurate responses)?
a. NMS is related to Triple Bottom Line concerns.
b. NMS, exclusively, is not related to economic concerns.
c. NMS considers how managers anticipate and preempt, respond and react to actors, influencers, issues and actions from the social, political and regulatory arenas in society.
d. NMS is relevant to mostly social enterprises and infrequently involves large MNES.
e. NMS recognizes that businesses are social, political and ethical entities.
f. NMS is only a trend that is generally lost in "green washing" where MNEs pursuc causes to make it look like they are concerned when they are not
Answer:
Non-Market Strategy (NMS) is defined most accurately by the following:
a. NMS is related to Triple Bottom Line concerns.
c. NMS considers how managers anticipate and preempt, respond and react to actors, influencers, issues and actions from the social, political and regulatory arenas in society.
e. NMS recognizes that businesses are social, political and ethical entities.
Explanation:
Non-Market Strategy (NMS) is a business strategy that recognizes and evaluates the environmental, financial, and social performances of corporate entities. It emphasizes the use of soft power to achieve competitive economic goals by targeting political, institutional, and social influencers. Non-Market Strategy encourages wider interactions outside the market to encompass and carter for the interests of individuals, social institutions, and government entities.
Porter Corp. purchased its own par value stock on January 1, 2014 for $20,000 and debited the treasury stock account for the purchase price. The stock was subsequently sold for $12,000. The $8,000 difference between the cost and sales price should be recorded as a deduction from
a. additional paid-in capital to the extent that previous net "gains" from sales of the same class of stock are included therein; otherwise, from retained earnings.
b. additional paid-in capital without regard as to whether or not there have been previous net "gains" from sales of the same class of stock included therein.
c. retained earnings.
d. net income.
Answer: a. additional paid-in capital to the extent that previous net "gains" from sales of the same class of stock are included therein; otherwise, from retained earnings.
Explanation:
When a stock is sold for higher than its par value, the additional value is recorded in the additional paid-in capital account as a gain to equity.
If a treasury stock is sold for less than its cost, the difference between the selling price and the cost will be deducted from the additional paid in capital account but the only amount that is deductible is the gain that the company has made so far from selling stock above their par value.
If the loss from the treasury stock is more than this gain, the remainder will be deducted from the retained earnings account.
In order to update a production process, a company can spend money now or four years from now. If the amount now would be $20,000, what equivalent amount could the company spend four years from now at a compound interest rate of 15% per year?(All the alternatives presented below were calculated using compound interest factor tables including all decimal places
Answer: $34,980.13
Explanation:
The amount that the company will spend 4 years from now is simply the future value of the amount that it can spend today.
The amount to be spent today is $20,000 so the amount to be spent 4 years from now is the future value of $20,000:
= Amount * (1 + rate) ^ number of years
= 20,000 * ( 1 + 15%)⁴
= $34,980.13
You have just started a new job and plan to save $5,200 per year for 36 years until you retire. You will make your first deposit in one year. How much will you have when you retire if you earn an annual interest rate of 9.54 percent?
a. $1,331,411.17
b. $1,394,509.68
c. $1,346,423.14
d. $1,268,312.65
e. $1,333,878.83
Answer:
$1,394,509.68
Explanation:
Savings amount = $5200
Period = 36 years
Interest = 9.54 percent
We solve for the future value of the annuity
= $5200[(1+0.0954)³⁶-1/0.0954]
= 5200 x [1.0954³⁶-1/0.0954]
= 5200 x 268.1749
= 1,394,509.681 dollars
Therefore after retirement and at an interest rate of 9.54 percent, you would be earning 1,394,509.681 dollars.
Option b.
The government of Velovia made progress in its efforts to bring rapid inflation under control. Although prices are still rising, the rate of increase has slowed considerably. This suggests that Velovia is experiencing disinflation.
a. True
b. False
Answer:
a. True
Explanation:
At the time when the velvovia government made the efforts in its progress in order to control the increased inflation but at the same time the price is also still increasing but the increase rate would be falled down so here it is recommended that the velovia experienced the disinflation where the inflation is considerably slowing and the rate of inflation is also slow down
Therefore the given statement is true
bartleby Clayborn Corporation's net cash provided by operating activities was $118,800; its net income was $106,100; its income taxes were $46,900; its capital expenditures were $96,300; and its cash dividends were $30,200. Required: Determine the company's free cash flow. (Negative amounts should be indicated by a minus sign.)
Answer: -$7,700
Explanation:
The Free Cash Flow is the amount of after tax income that a company has that can go to both its shareholders and debt holders.
When using cash from operating activities, taxes have already been accounted for so it is calculated as:
= Net cash provided by operating activities - Capital expenditure - Cash Dividends
= 118,800 - 96,300 - 30,200
= -$7,700
A corporate bond returns 12 percent of its cost (in PV terms) in the first year, 11 percent in the second year, 10 percent in the third year and the remainder in the fourth year. What is the bond's duration in years?
Answer: 3.32 years
Explanation:
The remainder return in the fourth year will be calculated as:
= 1 - 0.12 - 0.11 - 0.10
= 0.67
Year 1:
Return = 12% = 0.12
Year × Return = 1 × 0.12 = 0.12
Year 2
Return = 11% = 0.11
Year × Return = 2 × 0.11 = 0.22
Year 3
Return = 10% = 0.10
Year × Return = 0.30
Year 4
Return = 0.67
Year × Return = 2.68
Bond's duration = 0.12 + 0.22 + 0.30 + 2.68 = 3.32 years
First Class, Inc., expects to sell 28,000 pool cues for $14 each. Direct materials costs are $3, direct manufacturing labor is $5, and manufacturing overhead is $0.82 per pool cue. The following inventory levels apply to 2019: Beginning inventory Ending inventory Direct materials 26,000 units 26,000 units Work-in-process inventory units O units Finished goods inventory 1,300 units 2,800 units
How many pool cues need to be produced in 2019?
Select one:
a. 29,500 cues
b. 30,800 cues
c. 29,300 cues
d. 26,500 cues
Answer:
a. 29,500 cues
Explanation:
Calculation to determine How many pool cues need to be produced in 2019
Using this formula
Pool cues needed =Budgeted sales +Budgeted ending inventory-Beginning inventory
Let plug in the formula
Pool cues needed=28,000 units + 2,800- 1,300 Pool cues needed= 29,500 cues
Therefore pool cues need to be produced in 2019 is 29,500 cues
In regards to a Construction Management Class:
Leadership for strong management can influence the ____________________ of a project.
In Myanmar, six laborers, each making the equivalent of $3.00 per day, can produce 40 units per day. In China, ten laborers, each making the equivalent of $2.00 per day, can produce 45 units. In Billings, Montana, two laborers, each making $60.00 per day, can make 100 units. Based on labor cost per unit only, the most economical location to produce the item is
Answer:
China
Explanation:
Calculation to determine which location would be most economical to produce the item
Using this formula
LaborCost per Unit=Labor Cost per Day/Production(units per day)
Let plug in the formula
Myanmar = 6 Laborers x $3/day = $18/day
Myanmar=$18/day/ 40 units
Myanmar= $0.45/unit
China = 10 Laborers x $2/day = $20/day
China= $20/day/ 45 units
China= $0.444/unit
Montana = 2 Laborers x $60/day = $120/day
Montana= $120/day/100 units
Montana = $1.20/unit
Therefore the location that would be most economical to produce the item is CHINA
The purpose of managerial accounting is to provide useful information to management and other internal decision makers. It does this by collecting, managing, and reporting both monetary and nonmonetary information in a manner useful to internal users. Major characteristics of managerial accounting include (1) focus on internal decision makers, (2) emphasis on planning and control, (3) flexibility, (4) timeliness, (5) reliance on forecasts and estimates, (6) focus on segments and projects, and (7) reporting both monetary and nonmonetary information. Ethics are beliefs that distinguish right from wrong. Ethics can be important in reducing fraud in business operations.
The purposes of managerial accounting are to provide useful information to aid in: __________
a. Renewing pest activities,
b. Determining costs of products and services.
c. Determining costs of employee wages and "lanes
d. Comparing actual to planned
Answer:
d. Comparing actual to planned
Explanation:
The purpose of managerial accounting are to provide useful information to aid managers. It is important to remember that managerial accounting is for internal use only whilst financial accounting is for external use (reporting purposes).
Since one of the characteristics of managerial accounting is planning and control, this is made possible by comparing actual to planned.
East Valve Distributors distributes industrial valves and control devices. The Eastern control device has an annual demand of 9,375 units and sells for $100 per unit. The cost of ordering is $40 per order and the average carrying cost per unit per year is $0.75. Determine the economic order quantity.
Answer:
1000
Explanation:
Given:
Annual DEMAND, D = 9375
Holding cost, H = 0.75
Cost per order, S = 40
The Economic order quantity :
EOQ = √[(2 * D * S) / H]
EOQ = √[(2 * 9375 * 40) / 0.75]
EOQ = √[(750000) / 0.75]
EOQ = √1000000
EOQ = 1000
Lin Corporation has a single product whose selling price is $134 per unit and whose variable expense is $67 per unit. The company’s monthly fixed expense is $31,750. Required: 1. Calculate the unit sales needed to attain a target profit of $8,450. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $9,700.
Answer:
Results are below.
Explanation:
Giving the following information:
Fixed cost= $31,750
Unitary contribution margin= 134 - 67= $67
To calculate the number of units to be sold, we need to use the following formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Desired profit= $8,450
Break-even point in units= (31,750 + 8,450) / 67
Break-even point in units= 600
Now, the desired profit is $9,700; we need to use the following formula:
Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio
Break-even point (dollars)= (31,750 + 9,700) / (67/134)
Break-even point (dollars)= 41,450 / 0.5
Break-even point (dollars)= $82,900
A stock has an average expected return of 9.7 percent for the next year. The beta of the stock is 1.34. The T-Bill rate is 5.2% and the T-Bond rate is 3%. What is the market risk premium
Answer:
3.4%
Explanation:
According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)
9.7 = 5.2 + 1.34(x - 5.2)
9.7 - 5.2 = 1.34(x - 5.2)
3.35 = x - 5.2
please who can help with this
its very urgent
Answer:
_______________________
Five individuals organized Miami Music Corporation on January 1. At the end of January 31, the following monthly financial data are available:
Total Revenues…………………………....... $131,000
Operating Expenses………………………… 90,500
Cash…………………………………………...........30,800
Accounts Receivable……………………… .25,300
Supplies……………………………………..........40,700
Accounts Payable…………………………... 25,700
Common Stock………………………………...30,600
Required:
a. Did Miami Music Corporation generate a profit? Which financial statement indicates this?
c. Does Miami Music Corporation have sufficient resources to pay its liabilities? Which financial statement indicates this?
Answer:
a. Profit(loss) = Total revenue - Total expenses
= 131,000 - 90,500
= $41,000
The company did in fact generate profit of $41,000 and this can be shown from the Income Statement which is where profit or loss is calculated.
b. A company uses its assets to pay off its liabilities so if the liabilities are less than the assets then the company is capable of paying off its liabilities:
Assets = Cash + Accounts Receivable + Supplies
= 30,800 + 25,300 + 40,700
= $96,800
Liabilities are just the Accounts Payable of $25,700.
Liabilities are less than Assets so Miami Music does indeed have sufficient resources to pay its liabilities.
This information comes from the Balance Sheet which is where assets and liabilities are shown.
what is the effect on the market when suppliers under invest in their business
The most important function of the Fed is to A. buy and sell government securities. B. collect taxes. C. provide a system for collecting and clearing checks. D. regulate the money supply.
Answer:
D. regulate the money supply.
Explanation:
The Federal Reserve System (popularly referred to as the 'Fed') was created by the Federal Reserve Act, passed by the U.S Congress on the 23rd of December, 1913. The Fed began operations in 1914 and just like all central banks, the Federal Reserve is a United States government agency.
Generally, it comprises of twelve (12) Federal Reserve Bank regionally across the United States of America, which are commonly referred to as Federal Reserve District Bank.
Like all central banks, the Federal Reserve is a government agency that is saddled with the following responsibilities;
I. The Fed controls the issuance of currency in United States of America: it promotes public goals such as economic growth, low inflation, and the smooth operation of financial markets.
II. It provides banking services to all the commercial banks in the country because the Federal Reserve is the "lender of last resort."
III. It regulates banking activities in the United States of America: it has the power to supervise and regulate banks.
Additionally, the Fed is saddled with the responsibility of selling government securities such as treasury bills to the public.
However, the most important function of the Fed is to regulate the money supply through the establishment of monetary policies.
Monetary policy can be defined as the actions (macroeconomic policies) adopted and undertaken by the central bank of a particular country to control the money supply and interest rates so as to boost or enhance economic growth. The central bank (Fed) uses monetary policies to manage inflation, economic growth through long-term interest rates and level of unemployment in a country.
Delta airlines is consider purchase of two alternative planes. Plane A has an expected life of 5 years, will cost $100 million and will produce net cash flow of $30 million per year. Plane B has a life of 10 years, will cost $132 million, and will produce net cash flows of $25 million per year. Delta plans to serve the route for only 10 years. Delta's cost of capital is 12% and the inflation is expected to be zero. what is the equivalent annual annuity of plane A
Answer:
$2.26 million
Explanation:
Plane A:
Initial outlay = $100 million
Annual cash flows = $30 million
Expected life = 5 years
Cost of capital = 12%
EAW = (r x NPV) / [1 - (1 + r)⁻ⁿ]
Using a financial calculator: NPV = $8.14 million
EAW = (12% x $8.14) / [1 - (1 + 12%)⁻⁵] = $0.9768 / 0.432573 = $2.2581 ≈ $2.26 million
June:
1 James Co. purchased merchandise on account from O’Leary Co., $90,000, terms n/30. The cost of merchandise sold was $54,000.
30 James Co. issued a 60-day, 5% note for $90,000 on account.
Aug. 29 James Co. paid the amount due.
Required:
Journalize the above transaction, 90,000 assuming a 360-day year is used for interest calculations.
Answer:
James Co. (Borrower)
June 1
Debit Merchandise Inventory $90,000
Credit Accounts Payable $90,000
June 30
Debit Accounts Payable $90,000
Credit Notes Payable $90,000
August 29
Debit Notes Payable $90,000
Debit Interest on Notes $750
Credit Cash Account $90,750
O’Leary Co. (Creditor)
June 1
Dr Accounts Receivable $90,000
Cr Sales $90,000
30
Dr Notes Receivable $90,000
Cr Accounts Receivable $90,000
Aug. 29
Dr Cash $90,750
Cr Notes Receivable $90,000
Cr Interest Revenue $750
Explanation:
Preparation of the journal entries
James Co. (Borrower)
June 1
Debit Merchandise Inventory $90,000
Credit Accounts Payable $90,000
(To record the purchase of merchandise on account)
June 30
Debit Accounts Payable $90,000
Credit Notes Payable $90,000
(To record the issue of a 60-day, 5% note)
August 29
Debit Notes Payable $90,000
Debit Interest on Notes $750
($90,000 * 5% * 60/360)
Credit Cash Account $90,750
($90,000+$750)
(To record the payment of the notes plus interest)
O’Leary Co. (Creditor)
June 1
Dr Accounts Receivable $90,000
Cr Sales $90,000
30
Dr Notes Receivable $90,000
Cr Accounts Receivable $90,000
Aug. 29
Dr Cash $90,750
($90,000+$750)
Cr Notes Receivable $90,000
Cr Interest Revenue $750
($90,000 * 5% * 60/360)
The following transactions were completed by the company.
a. The owner invested $17,200 cash in the company in exchange for its common stock.
b. The company purchased supplies for $1,050 cash.
c. The owner invested $11,100 of equipment in the company in exchange for more common stock.
d. The company purchased $310 of additional supplies on credit.
e. The company purchased land for $10,100 cash.
Required:
Write the impact of each transaction on individual items of the accounting equation.
Answer:
Account Equation Impact:
Assets = Liabilities + Equity
a. Cash $17,200 Common stock $17,200
b. Supplies $1,050 Cash ($1,050)
c. Equipment $11,100 Common stock $11,100
d. Supplies $310 Accounts Payable $310
e. Land $10,100 Cash ($10,100)
Total assets $48,610 = $310 + $28,300
Explanation:
a) Data and Analysis According to Accounting Equation Impact:
a. Cash $17,200 Common stock $17,200
b. Supplies $1,050 Cash ($1,050)
c. Equipment $11,100 Common stock $11,100
d. Supplies $310 Accounts Payable $310
e. Land $10,100 Cash ($10,100)
Cartwell Inc. makes picture frames which are sold in a local retail store and through various websites.
$ 19,500 4,900 WOod for frames Rent for retail store Depreciation on office equipment Assembly worker wages CEO's salary Glue and nails 780 2,950 4,450 1,150 2,400 7,800 1,550 Online sales commissions Glass for frames Depreciation on factory equipment Factory utilities Stain for frames 850 900 Required:
1. Determine the cost of direct material
2. Determine the cost of direct labor
3. Determine the cost of manufacturing overhead.
4. Determine the total manufacturing cost
5. Determine the total period cost.
6. Determine the total variable cost.
7. Determine the total fixed cost.
8. Determine the total prime cost.
9. Determine the total conversion cost
Answer:
Cartwell Inc.
1. Cost of direct material = $27,300
2. Cost of direct labor = $2,950
3. Cost of manufacturing overhead = $4,450
4. Total manufacturing cost = $34,700
5. Total period costs = $12,530
6. Total variable cost = $34,700
7. Total fixed cost = $12,530
8. Total prime cost = $30,250
9. Total conversion cost = $7,400
Explanation:
a) Data and Calculations:
Wood for frames $ 19,500
Rent for retail store 4,900
Depreciation on office equipment 780
Assembly worker wages 2,950
CEO's salary 4,450
Glue and nails 1,150
Online sales commissions 2,400
Glass for frames 7,800
Depreciation on factory equipment 1,550
Factory utilities 850
Stain for frames 900
1. Cost of direct materials:
Wood for frames $ 19,500
Glass for frames 7,800
Cost of direct materials = $27,300
2. Cost of direct labor:
Assembly worker wages $2,950
3. Cost of manufacturing overhead:
Glue and nails $1,150
Depreciation on factory equipment 1,550
Factory utilities 850
Stain for frames 900
Cost of manufacturing overhead = $4,450
4. Total manufacturing cost:
Cost of direct materials = $27,300
Cost of direct labor = 2,950
Manufacturing overhead = 4,450
Total manufacturing cost = $34,700
5. Total period costs:
Rent for retail store 4,900
Depreciation on office equipment 780
CEO's salary 4,450
Online sales commissions 2,400
Total period costs = $12,530
6. Total variable cost:
Wood for frames $ 19,500
Assembly worker wages 2,950
Glue and nails 1,150
Online sales commissions 2,400
Glass for frames 7,800
Stain for frames 900
Total variable cost = $34,700
7. Total fixed cost:
Rent for retail store 4,900
Depreciation on office equipment 780
CEO's salary 4,450
Depreciation on factory equipment 1,550
Factory utilities 850
Total fixed cost = $12,530
8. Total prime cost:
Cost of direct materials = $27,300
Cost of direct labor = 2,950
Total prime cost = $30,250
9. Total conversion cost:
Cost of direct labor = 2,950
Manufacturing overhead = 4,450
Total conversion cost = $7,400