Answer:
Economical factors, company reasons, innovative leadership, business growth, and competitor actions are common causes of business change.
Explanation:
The economic factors influencing business activities
In a country concerned with the production, distribution, and use of goods and services, the economy includes all activities.
The economic environment has a major impact on companies. Consumer expenditure affects prices, investment decisions, and the number of employees employed by enterprises.
In four main ways, the economic climate affects companies:
unemploymentConsumer income change levelsRates of interestRate of taxationHunter's Hut is considering a project that will require additional inventory of $150,000 and will increase accounts payable by $125,000. Accounts receivable is currently $300,000 and is expected to increase by 10 percent if this project is accepted. What is the project's initial cash flow for net working capital
Answer:
Hnters
Explanation:
Hunter's Hut is considering a project that will require additional inventory of $150,000 and will increase accounts payable by $125,000. Accounts receivable is currently $300,000 and is expected to increase by 10 percent if this project is accepted. What is the project's initial cash flow for net working capital
Define the term creativity
Answer:
Creativity is defined as the tendency to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.
Answer:
Creativeness is defined as the tendency to generate or recognize ideas, alternatives, or opportunities which can be useful for problem-solving, communication, and for fun with others.
Explanation:
Examples include creative thinking: problem-solving, writing, visual art, communication skills, and openness.
In 2019, website and moving development, web production, user interface, and interaction design as well as design and visual design will be the main fields for creative grabbing.
Diamond Boot Factory normally sells its specialty boots for $35 a pair. An offer to buy 110 boots for $29 per pair was made by an organization hosting a national event in Norfolk. The variable cost per boot is $13 and special stitching will add another $1 per pair to the cost. Determine the differential income or loss per pair of boots from selling to the organization. Enter the amount as a positive number. The Diamond Boot Company is operating at less than capacity and could accept the offer without disrupting normal operations. Differential per pair of boots from accepting the special order is $fill in the blank 2 .
Answer:
Since there is no loss occur from these sales and rather $15 per pair is profit from the sale of boots. So it should be accepted.
Explanation:
Now the calculation of differential income or loss per pair of boots from selling to the organization,
Problems and Applications Q8 Suppose subway ridership in New York City declined by 4.3 percent after a fare increase of 25 cents to $1.50. Using the midpoint method, an estimate of the price elasticity of demand for subway rides is . True or False: According to your estimate, the Transit Authority's revenue rises when the fare increases. True False
Answer:
Price elasticity of demand = Percentage in quantity demanded / Percentage change in price
We already have the percentage change in quantity demanded as -4.3%.
We need to find the percentage change in price using the midpoint method.
= (New price - Old price) ÷ ((New Price + Old price) / 2)
Old price = 1.50 - 0.25 = $1.25
Percentage change in price = (1.50 - 1.25) ÷ ((1.50 + 1.25) / 2)
= 18.18%
Price elasticity of demand = -4.3% / 18.18%
= -0.24
According to your estimate, the Transit Authority's revenue rises when the fare increases. TRUE.
The statement is true because the price elasticity of demand here is Inelastic and when this is the case, revenue rises when the price of the good or service increases.
The price elasticity of demand is inelastic when it is less than 1 which is the case here.
XYZ Industries makes heavy construction equipment. The standard for a crane calls for 20 direct labor-hours at $24 per direct labor-hour. During a recent period 875 cranes were made. The labor efficiency variance was $1,200 Unfavorable. How many actual direct labor-hours were worked
Answer:
17,550
Explanation:
Labor efficiency variance = Standard rate * (Actual hours - Standard hours)
$1200 = $24 * (Actual hours - 875*20)
50 = Actual hours - 17,500
Actual hours = 17,500 + 50
Actual hours = 17,550
So, the actual direct labor-hours which were worked is 17,550.
The following information was available for the year ended December 31, 2016
Sales $260,000
Net income 38,340
Average total assets 560,000
Average total stockholders' equity 315,000
Dividends per share 1.23
Earnings per share 3.00
Market price per share at year-end 24.60
Required:
a. Calculate margin, turnover, and ROl for the year ended December 31, 2016.
b. Calculate ROE for the year ended December 31, 2016.
Answer:
A. Margin 14.75%
Turnover 0.46 times
ROI 6.85%
B. ROE 12.17%
Explanation:
A. Calculation to determine the margin, turnover, and ROl for the year ended December 31, 2016.
Calculation for MARGIN
Using this formula
Margin=Net income/Sales
Let plug in the formula
Margin=$38,340/$260,000
Margin=0.1475*100
Margin=14.75%
Calculation for TURNOVER
Using this formula
Turnover=Sales /Average total assets
Let plug in the formula
Turnover=$260,000/$560,000
Turnover=0.46 times
Calculation for ROI
Using this formula
ROI=Net income/Average total assets
Let plug in the formula
ROI=$38,340/$560,000
ROI=0.0685*100
ROI=6.85%
Therefore the margin is 14.75%, turnover is 0.46 times and ROl is 6.85% for the year ended December 31, 2016.
B. Calculation to determine the ROE for the year ended December 31, 2016.
Using this formula
ROE=Net income /Average total stockholders' equity
Let plug in the formula
ROE=$38,340/$315,000
ROE=0.1217*100
ROE=12.17%
Therefore the ROE for the year ended December 31, 2016 is 12.17%
What are the purchase goods for cash Rs. 12,000 and for credit Rs. 8,000 (journal entries)?
Explanation:
Journal entries
Books of (----- LTD)
Particular Amount Amount
Purchase A/c Debit 20,000
Cash A/c Credit 12,000
Creditor A/c Credit 8,000
(Being goods purchase on cash and credit)
In its first year of operations, Sunland Company recognized $33,800 in service revenue, $6,700 of which was on account and still outstanding at year-end. The remaining $27,100 was received in cash from customers. The company incurred operating expenses of $19,600. Of these expenses, $12,640 were paid in cash; $6,960 was still owed on account at year-end. In addition, Sunland prepaid $3,250 for insurance coverage that would not be used until the second year of operations.
(a) Calculate the first year's net earnings under the cash basis of accounting, and calculate the first year's net earnings under the accrual basis of accounting. Cash Basis Accrual Basis Net Income $ GA
(b) Which basis of accounting (cash or accrual) provides more useful information for decision-makers? Accrual basis Cash basis Media
Answer:
A. Cash basis of accounting $11,110
Accrual basis of accounting $13,870
B. Cash basis of accounting
Explanation:
a. Calculation of the first year net earnings under the cash basis of accounting, and the first year net earnings under the accrual basis of accounting.
CASH BASIS OF ACCOUNTING
Revenue $27,100
Less Expenses ($12,640)
Less Prepaid Assets ($3,250)
Total $11,110
ACCRUAL BASIS OF ACCOUNTING
Revenue $33,800
Less Expenses ($19,600)
Less Prepaid Asset ($3,250)
Total $10,950
Therefore the first year net earnings under the cash basis of accounting is $11,110 and the first year net earnings under the accrual basis of accounting is $10,950
(b) Based on the above Calculation the basis of accounting that provides more useful information for decision-makers will be CASH basis of accounting of the amount of $11,110 because it help to show the complete company financial considerations.
Which subscription level(s) in QuickBooks Online include the Receipt Capture feature?
which activity would a consumer most likely preform
Explanation:
Consumer are individuals who buys products or services for personal use and not for manufacture or resale. Buying goods best describes the role of a consumer. Correct answer: A Because of this, consumers can be influenced by marketing and advertisements and they play a huge role in the marketing process.
Furthermore, what is one way economics can influence your daily life? by forcing a decision on a career path. by limiting your ability to save money. by helping you understand that every choice has a tradeoff.
please mark me as brain list
The case explains that newly-hired CEO Ron Johnson quickly ordered the alteration of all stores to remove discount racks and add premium items. According to the case, that change and others signaled the move from a _________ strategy to a ________ strategy.
Answer:
cost-leadership; blue ocean
Explanation:
From the question we are informed about the case explains that newly-hired CEO Ron Johnson quickly ordered the alteration of all stores to remove discount racks and add premium items. According to the case, that change and others signaled the move from a cost-leadership strategy to a blue ocean strategy.
Cost leadership can be regarded as strategy where there is establishment of a competitive advantage as a result of having the lowest cost of operation in a particular the industry by a firm, in this case, it is possible for a firm to be
lowest cost producer but at same time it doesn't offer lowest-priced products or services.
Blue Ocean Strategy can be regarded as a strategy used in a market in a case whereby where there exist no competition or there is very less competition for a particular product market. This strategy involves searching for a business whereby few firms operate it and pricing pressure is minimal or doesn't exist.
Decruitment is the planned elimination of ________ in an organization. A) jobs
B) managerial hierarchy C) cross-functional teams D) departments
Answer:
C) cross-functional teams
Explanation:
Human resources management (HRM) can be defined as an art of managing, controlling and improving the number of people (employees or workers), functions, activities which are being used effectively and efficiently by an organization.
Hence, human resources managers are saddled with the responsibility of recruiting, downsizing, decruiting, managing and improving the welfare and working conditions of the employees working in an organization.
A cross-functional team can be defined as a group that comprises of employees from different functional areas within an organization.
Decruitment is the planned elimination of cross-functional teams in an organization.
This ultimately implies that, decruitment is a method adopted by human resource managers to reduce the number of various employees (workforce) working in an organization.
Similarly, downsizing refers to the planned elimination of jobs (job positions) existing in an organization.
A company had the following information taken from various accounts at the end of the year:
Sales discounts $ 41,000
Deferred revenues $ 32,000
Total revenues $ 459,000
Purchase discounts $ 15,000
Sales allowances $ 35,000
Accounts receivable $ 205,000
What was the company's net revenues for the year?
Answer:
Net Revenue = $383000
Explanation:
Below is the calculation for net revenue:
Net revenue = Total revenue - Sales discount - sales allowances
Given Total revenue = 459000
Sales discount = 41000
Sales allowances = 35000
Net Revenue = 459000 - 41000 - 35000
Net revenue = 459000 - 76000
Net Revenue = $383000
The net revenue of the company for the year is $383000.
Each of these items must be considered in preparing a statement of cash flows for Flint Corporation. for the year ended December 31, 2022.For each item, state how it should be shown in the statement of cash flows for 2022.a. Issued bonds for $150,000 cash.
b. Purchased equipment for $200,000 cash.
c. Sold land costing $50,000 for $50,000 cash.
d. Declared and paid a $20,000 cash dividend.
Answer and Explanation:
The classification is as follows:
a. Financing activity inflow of cash
b. INvesting activity outflow of cash
c. Investing activity inflow of cash
d. Financing activity outflow of cash
The inflow of cash shows the positive sign while on the other hand the outflow of cash shows the negative sign
And, the same should be relevant
Come and Go Bank offers your firm a discount interest loan with an interest rate of 9 percent for up to $21 million, and in addition requires you to maintain a 2 percent compensating balance against the face amount borrowed.
What is the effective annual interest rate on this lending arrangement? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Effective annual rate= %
Answer: 10.11%
Explanation:
The effective annual interest rate on this lending arrangement will be calculated thus:
Interest Paid will be:
= 9% × $21 million
= 0.09 × $21 million
= $1.89 million
Amount Received will then be:
= (21million - 1.89million) - (21million)(0.02)
= $19.11 million - $0.42 million
= $18.69 million
Then, the effective annual rate will be:
= 1.89/18.69
= 10.11%
Therefore, the effective annual interest rate on this lending arrangement is 10.11%.
Consider the case of Cranked Coffee Company:
Cranked Coffee Company is a mature firm that has a stable flow of business. The following data was taken from its financial statements last year:
Annual sales $10,200,000
Cost of goods sold $6,630,000
Inventory $3,200,000
Accounts receivable $2,200,000
Accounts payable $2,400,000
Cranked Coffee’s CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.)
Value
Inventory conversion period 46.93; 41.71; 176.71; or 39.11
Average collection period 27.25; 78.73; 24.38; or 22.94
Payables deferral period 32.50; 41.07; 33.24; or 132.13
Cash conversion cycle 39.62; 122.77; 37.54; 45.88
B: Both the inventory conversion period and payables deferral period use the average daily COGS in their denominators, whereas the average collection period uses average daily sales in its denominator. Why do these measures use different inputs?
Inventory and accounts payable are carried at cost on the balance sheet, whereas accounts receivable are recorded at the price at which goods are sold.
Current assets should be divided by sales, but current liabilities should be divided by the COGS.
C. Is there generally a positive or negative relationship between net working capital and the cash conversion cycle?(In other words, if a firm has a high level of net working capital, is it likely to have a high or low cash conversion cycle?)
There is a positive relationship between net working capital and the cash conversion cycle.
There is a negative relationship between net working capital and the cash conversion cycle.
D. What are the four key factors in a firm’s credit policy?
Credit terms, discounts, credit standards, and collection policy
Credit period, discounts, credit standards, and collection policy
E. If the credit terms as published by a firm were 2/15, net 60, this means the firm will:
allow a 2% discount if payment is received within 15 days of the purchase, and if the discount is not taken the full amount is due in 60 days.
allow a 15% discount if payment is received within 2 days of the purchase, and if the discount is not taken the full amount is due in 60 days.
F. The management at Cranked Coffee Company wants to continue its internal discussions related to its cash management. One of the finance team members presents the following case to his cohorts:
Case in Discussion
Cranked Coffee Company’s management plans to finance its operations with bank loans that will be repaid as soon as cash is available. The company’s management expects that it will take 40 days to manufacture and sell its products and 35 days to receive payment from its customers. Cranked Coffee’s CFO has told the rest of the management team that they should expect the length of the bank loans to be approximately 75 days.
Which of the following responses to the CFO’s statement is most accurate?
The CFO is not taking into account the amount of time the company has to pay its suppliers. Generally, there is a certain length of time between the purchase of materials and labor and the payment of cash for them. The CFO can reduce the estimated length of the bank loan by this amount of time.
The CFO’s approximation of the length of the bank loans should be accurate, because it will take 75 days for the company to manufacture, sell, and collect cash for its goods. All these things must occur for the company to be able to repay its loans from the bank.
Setting and implementing a credit policy is important for three main reasons:
It has a minor effect on sales, it influences the amount of funds tied up in receivables, and it affects bad debt losses.
It has a major effect on sales, it influences the amount of funds tied up in receivables, and it affects bad debt losses.
Answer:
Cranked Coffee Company
A. Cash conversion cycle = 122.77 days.
B. The measures use different inputs because:
Inventory and accounts payable are carried at cost on the balance sheet, whereas accounts receivable are recorded at the price at which goods are sold.
C. There is a negative relationship between net working capital and the cash conversion cycle.
D. Credit period, discounts, credit standards, and collection policy
E. If the credit terms as published by a firm were 2/15, net 60, this means the firm will:
allow a 2% discount if payment is received within 15 days of the purchase, and if the discount is not taken the full amount is due in 60 days.
F. The most accurate response to the CFO's statement is:
The CFO’s approximation of the length of the bank loans should be accurate, because it will take 75 days for the company to manufacture, sell, and collect cash for its goods. All these things must occur for the company to be able to repay its loans from the bank.
G. Setting and implementing a credit policy is important for three main reasons:
It has a major effect on sales, it influences the amount of funds tied up in receivables, and it affects bad debt losses.
Explanation:
a) Data and Calculations:
Annual sales $10,200,000
Cost of goods sold $6,630,000
Inventory $3,200,000
Accounts receivable $2,200,000
Accounts payable $2,400,000
Inventory conversion period = Inventory ÷ (Cost of sales ÷ 365)
= $3,200,000/$6,630,000 * 365
= 176.17 days
Average collection period = Accounts receivable/Sales * 365
= $2,200,000/$10,200,000 * 365
= 78.73 days
Payables deferral period = Accounts payable/Cost of goods sold * 365
= $2,400,000/$6,630,000 * 365
= 132.13 days
Cash conversion cycle = Inventory conversion period + Average collection - Payables deferral period
= 176.17 + 78.73 - 132.13
= 122.77
Star Corp., an accrual-method C corporation, incurred the following expenses in 2020 (all of which are ordinary and neccessary unless the facts indicate otherwise): Office rent: $50,000 CEO compensation: $1,500,000 Salary paid to janitor $250,000 Business meals: $60,000 (100% of the amount paid) Client entertainment $100,000 (100% of the amount paid) Traffic fines: $5,000 Advertising $70,000 Taxes & licenses (state, local & payroll) $30,000 Life insurance policy on CEO - premiums: $12,000 Average office rents in the area run $50,000-$55,000/year for similar office space. Star Corp's janitor is the CEO's sister. Reasonable salary for a janitor with similar experience, job description and work hours is $20,000/year. The CEO often runs late to important meetings, and he has a tendency to speed (and get speeding tickets) on his way. Star Corp. pays the speeding tickets. Star Corp. is the beneficiary on the life insurance policy. What is Star Corp.'s total deductible business expenses for the year?
Answer:
$1,842,000
Explanation:
Calculation to determine Star Corp.'s total deductible business expenses for the year
STAR CORP.'S total deductible business expenses
Office rent $50,000
CEO Compensation $1,500,000
Salary paid to Janitor $20,000
Business meals $60,000
Client entertainment $100,000
Advertising $70,000
Taxes & Licenses $30,000
Life insurance policy on CEO-Premium $12,000
Total $1,842,000
Therefore Star Corp.'s total deductible business expenses for the year is $1,842,000
1. Brodrick Company expects to produce 20,000 units for the year ending December 31. A flexible budget for 20,000 units of production reflects sales of $400,000; variable costs of $80,000; and fixed costs of $150,000. If the company instead expects to produce and sell 26,000 units for the year, calculate the expected level of income from operations.
2. Refer to information QS 1. Assume that actual sales for the year are $480,000, actual variable costs for the year are $112,000, and actual fixed costs for the year are $145,000 Prepare a flexible budget performance report for the year.
Answer:
Brodrick Company
1. The expected level of income from operations is:
= $266,000.
2. Flexible Budget Performance Report for the year
Flexible Actual Variance
Budget Budget
Sales revenue $480,000 $480,000 $0
Variable costs 96,000 112,000 $16,000 U
Fixed costs 150,000 145,000 5,000 F
Net operating income $234,000 $223,000 $11,000 U
Explanation:
a) Data and Calculations:
Expected production units = $20,000
Expected sales based on 20,000 units = $400,000 at $20 per unit
Variable costs = $80,000 at $4 per unit
Fixed costs = $150,000
Expected sales based on 26,000 units
Expected level of income from operations:
Sales revenue = $520,000 ($20 * 26,000)
Variable cost = 104,000 ($4 * 26,000)
Fixed cost = 150,000
Net income = $266,000
Actual sales revenue for the year = $480,000 (24,000 * $20)
Actual variable costs = 112,000 (24,000 * $4.67)
Actual fixed costs = 145,000
Net operating income = $223,000
Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had operating income of $1,215,000 and net assets with a fair value of $5,400,000. Takeover Co. pays $8,100,000 for Target Co.’s net assets and business activities.
Required:
a. How much goodwill will result from this transaction?
b. Calculate the ROI for Target Co. based on its present operating income and the fair value of its net assets.
c. Calculate the ROI that Takeover Co. will earn if the operating income of the acquired net assets continues to be $180,000.
d. What reasons can you think of to explain why Takeover Co. is willing to pay $300,000 more than fair value for the net assets acquired from Target Co.?
Answer:
A. $2,700,000
B. 22.5%
C. 2.22%
D. Target Co was a profit making company
Explanation:
a. Calculation to determine How much goodwill will result from this transaction
Goodwill=$8,100,000- $5,400,000
Goodwill=$2,700,000
Therefore the goodwill that will result from this transaction is $2,700,000
b. Calculation to determine the ROI for Target Co.
Using this formula
Return on investment = Operating income / Net assets * 100
Let plug in the formula
Return on investment=$ 1,215,000 /$5,400,000 * 100
Return on investment= 22.5%
Therefore the ROI for Target Co is 22.5%
c. Calculation to determine the ROI that Takeover Co.
Using this formula
Return on investment = Operating income / Net assets * 100
Let plug in the formula
Return on investment= $180,000 / 8,100,000 * 100
Return on investment=2.22%
Therefore the ROI that Takeover Co is 2.22%
d. Based on the information given the reason
why TAKEOVER CO. is willing to pay the amount of $300,000 more than the FAIR VALUE for the NET ASSETS that was ACQUIRED from Target co., was because Target Co was a profit making company.
A student borrows $90,000 for business school at 9.0% stated annual interest with equal monthly payments over 9 years. Consider this as a loan with no payments or interest during school so that the problem structure is equivalent to a standard loan received one period before the first payment. How much is the monthly payment
Answer:
the monthly payment is $1,218.86
Explanation:
The computation of the monthly payment is shown below;
Given that
RATE = 9% ÷ 12 = 0.75%
NPER = 9 × 12 = 108
PV = -$90,000
FV = $0
The formula is shown below;
=PMT(RATE,NPER,PV,FV,TYPE)
After applying the above formula, the monthly payment is $1,218.86
barcain credit corp. wants to earn an effective annual return on its consumer loans of 12 percent per year. the bank uses daily compounding on its loans. What interest rate is the bank required by law to report to potential borrowers
Answer:
11.17%
Explanation:
Calculation to determine What interest rate is the bank required by law to report to potential borrowers
Required Effective Annual Rate = 12%
APR(Daily) = 365[(1.12)^1/365 - 1]
APR(Daily) = 365[(1.12)^0.0027-1]
APR(Daily) = 11.17%
Trevor heard a burglar entering through a living room window.He grinned as he picked up his gun. Crouching behind the sofa in his darkened home,he ambushed and killed the intruder with several well placed shots.He then added another notch in his trusty side-arm.Trevor most probably:____________
a. has exercised his constitutional right of self-defense.
b. has acted legally,because the shooting took place inside his home.
c. has acted legally if,but only if,the burglar was armed with a gun.
d. is guilty of a homicide,or at least voluntary manslaughter.
Answer: D. guilty of a homicide, or at least voluntary manslaughter.
Explanation:
Homicide is the act whereby a human being kills another person. A homicide can be reckless or accidental. Voluntary manslaughter is when someone else is killed unlawfully such as for self-defense.
Therefore, Trevor most probably be guilty of a homicide, or at least voluntary manslaughter.
The predicted 2017 costs for Gamma Motors are as follows: Manufacturing Costs Selling and Administrative Costs Variable $250,000 Variable $600,000 Fixed 450,000 Fixed 300,000 Average total assets for 2017 are predicted to be $5,000,000. If the company desires a 10 percent rate of return on total assets, what is the markup percentage on total manufacturing costs for the desired profit
Answer: 200%
Explanation:
First find the return required.
= 10% of total assets
= 10% * 5,000,000
= $500,000
The total manufacturing costs are:
= 250,000 + 450,000
= $700,000
We need to know the amount to increase the manufacturing costs by so that it covers both the desired return and the admin costs:
= (Desired return + Admin costs) / Manufacturing costs * 100%
= (500,000 + 600,000 + 300,000) / 700,000 * 100%
= 200%
What are the types of model risk
At the quantity of 682 orders of Crispy Chicken Sandwich Tacos from Taco Bell, the marginal social benefit of a Crispy Chicken Sandwich Taco is $3.45 and the marginal social cost is $2.60. To produce the efficient quantity of Crispy Chicken Sandwich Tacos:_________
a. fewer Crispy Chicken Sandwich Tacos should be produced.
b. there should be no change in the amount of Crispy Chicken Sandwich Tacos produced.
c. More information on production costs is needed to determine the efficient level of Crispy Chicken Sandwich Tacos.
d. more Crispy Chicken Sandwich Tacos should be produced.
Answer:
Hence the correct option is D. more Crispy Chicken Sandwich Tacos should be produced.
Explanation:
Since the marginal benefit is greater than marginal social cost, Therefore more output can be produced.
D. more Crispy Chicken Sandwich Tacos should be produced.
Buying Paint April is at the hardware store and must decide whether to buy paint in 11 individual quart cans or to buy it in both gallon and quart cans. Here are the facts:
4 quarts
1 gallon
1 quart costs $4.39
1 gallon costs $13.99
What should April do?
1. Find the cost.
2. Find out how many gallons to buy 2 Gallons.
3. Find the cost. of 4 quarts.
Answer:
a) $41.15
b) Two gallons
c) $48.29
Explanation:
Total individual quarts to be purchased = 11
Number of gallons in 11 quarts = 11/4 = 2
Hence there are 2 gallons and 3 quarts in 11 individual quarts
a) Total price
2 * $ 13.99 + 3 * $4.39 = $41.15
b) Two gallons
c) Cost of 4 quarts
11 * $ 4.39 = $48.29
Blue Inc. uses LIFO inventory costing. At January 1, 2020, inventory was $217,208 at both cost and market value. At December 31, 2020, the inventory was $287,675 at cost and $261,060 at market value. Use an allowance account. Prepare the necessary December 31 entry under (a) the cost-of-goods-sold method (b) Loss method.
Answer:
A. Dr Cost of Goods Sold $26,615
Cr Allowance to Reduce Inventory to Market $26,615
B.Dr Loss Due to Market Decline of Inventory $26,615
Cr Allowance to Reduce Inventory to Market $26,615
Explanation:
(a) Preparation of the necessary December 31 entry under the cost-of-goods-sold method
COST-OF-GOODS-SOLD METHOD
Dr Cost of Goods Sold $26,615
Cr Allowance to Reduce Inventory to Market $26,615
($287,675 - $261,060)
(b) Preparation of the necessary December 31 entry under Loss method
LOSS METHOD
Dr Loss Due to Market Decline of Inventory $26,615
Cr Allowance to Reduce Inventory to Market $26,615
($287,675 - $261,060)
Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost.
A. True
B. False
Answer:
B. False
Explanation:
The period cost is that cost that indirectly related to the process of the production. The sales, general and admin cost should be considerd as the period cost
So as per the given situation, the factory overhead that charged for an expense as incurred so this does not represent the period cost
Therefore the given statement is false
The supplies account had a beginning balance of $1,693. Supplies purchased during the period totaled $4,413. At the end of the period before adjustment, $445 of supplies were on hand. Prepare the adjusting entry for supplies. If an amount box does not require an entry, leave it blank.
Answer:
Debit Supplies expense $5,661
Credit Supplies account $5,661
Explanation:
At the time of purchasing supplies, the entries includes a debit to supplies accounts, and a credit to cash or accounts payable which is dependent on whether the cash purchased was done via cash or an account
For supplies used, debit supplies expense and credit supplies account. The movement in supplies account over a period is due to purchases and its expressed as;
Opening balance + Purchases - Supplies used = closing balance
$1,693 + $4,413 - Supplies used = $445
$6,106 - Supplies used = $445
Supplies used = $6,106 + $445
Supplies used = $5,661
You own a bond that has a duration of 7 years. Interest rates are currently 8%, but you believe the Fed is about to increase interest rates by 28 basis points. Your predicted price change on this bond is ________.
a. +1.81%
b. +6.48%
c. −6.48%
d. −1.81%