Answer:
True
Explanation:
Trust me ;)
what is a small business?
Small businesses are privately owned corporations, partnerships, or sole proprietorships that have fewer employees and/or less annual revenue than a regular-sized business or corporation.
Mason Company manufactures four products in a single production facility. The company uses activity-based costing. The following activities have been identified through the company's activity analysis: (a) inventory control, (b) machine setups, (c) employee training, (d) quality inspections, (e) materials orderings, (f) drilling operations, and (g) building maintenance.
Answer and Explanation:
The cost driver are as follows;
a. Inventory control - value of material
b. Machine setup - number of setups
c. Employee training - number of employees
d. Quality inspections - number of inspections
e. Material orderings - number of orders
f. Drilling operations - number of machine hours
g. Building maintenance - others
In this way it could be allocated
Fatty foods are best for slowing down the rate of alcohol absorption
Answer:
Rich in heart-healthy monounsaturated fats, avocados are one of the best foods you can eat before drinking alcohol. That's because fat takes much longer to digest than protein or carbs, which can help slow the absorption of alcohol into your bloodstream.
Explanation:
Fatty foods are best for slowing down the rate of alcohol absorption as Oily, greater, and added fats are the best for reducing intoxicated since they take longer to process and linger in the belly.
What is absorption?Alcohol is absorbed and transported into the system by your body at a certain rate, or systemic absorption. Alcohol is ingested when you drink through the small and large intestines. Your blood alcohol (BAC) increases as soon as it reaches the system, and you start to feel inebriated.
Although fat digests more slowly than muscle or carbohydrates, eating fat can help delay the entrance of beer into your circulation. Alcohol is taken more slowly when food is consumed while drink it, with effervescent alcoholic beverages being absorbed more quickly. Avocados are among the best foods to eat before consuming alcohol since they are high in soul-monounsaturated fats.
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As a new controller, reply to this comment by a plant manager: "As I see it, our accountants may be needed to keep records for shareholders and Uncle Sam, but I don't want them sticking their noses in my day-to-day operations. I do the best I know how. No bean counter knows enough about my responsibilities to be of any use to me." Why are accountants valuable to the organization? What responsibilities do managers have in understanding financial information?
Answer: Accountants play major role in firms in handling financial records and auditing. Managers know financial information based on either background knowledge or learning on the job
Explanation:
The accountants are valuable to the organization because they monitor the monetary information that concerns the firm, they handle how cash come in and keep track of how they are spent, all these makes them valuable even to the extent of auditing information as regarding the firm. Managers might understand financial information either based on how they monitor what occurs in the organization or what they learnt in from college. But it's unsafe for the managers to handle financial situation without the aid of a professional accountant.
A company's bond has a coupon rate of 4.00% and has 16 years remaining until maturity. The company's bonds pay interest semi-annually. Due to a cash flow problem, the company will be unable to pay the interest payments for periods 8, 9, and 10. These missed payments will be repaid in one lump sum when the bond matures, without interest. If the Yield to Maturity (YTM) on similar bonds is 11%, what is the intrinsic value of this bond?
Answer:
I used an excel spreadsheet to calculate the bond's value (see attached image). the bond's intrinsic value using a 11% discount rate is $452.08
Explanation:
The 2020 accounting records of Skysong, Inc. reveal these transactions and events.
Payment of interest $10,800 Collection of accounts receivable $189,200
Cash sales 50,900 Payment of salaries and wages 56,900
Receipt of dividend revenue 19,000 Depreciation expense 16,100
Payment of income taxes 15,700 Proceeds from sale of vehicles 12,100
Net income 38,000 Purchase of equipment for cash 21,900
Payment of accounts payable Loss on sale of vehicles 3,100
For merchandise 115,600 Payment of dividends 14,700
Payment for land 73,700 Payment of operating expenses 27,600
Required:
Prepare the cash flows from operating activities section using the direct method.
Answer:
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Tamar Co. manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process. Conversion costs are added evenly throughout the process. During May, the Forming department started 23,850 units and transferred 24,700 units of product to the Assembly department. Its 3,500 units of beginning work in process consisted of $20,300 of direct materials and $244,440 of conversion costs. It has 2,650 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $636,100 of direct materials costs and $2,276,640 of conversion costs were charged to the Forming department.
Prepare the company’s process cost summary for May using the FIFO method. (Round "Cost per EUP" to 2 decimal places.)
Answer:
Forming department
Process cost summary for May using the FIFO method
units $
INPUTS
Beginning WIP 3,500 $264,740
Started 23,850 $2,912,740
Total 27,350 $3,177,480
OUTPUTS
Transferred to Assembly 24,700 $1,312,805
Ending WIP 2,650 $126,813
Total 27,350 $1,439,618
Explanation:
Equivalent units of production
Materials = 3,500 x 0% + 21,200 x 100% + 2,650 x 100% = 23,850
Conversion Cost = 3,500 x 20% + 21,200 x 100% + 2,650 x 80% = 24,020
Cost per equivalent units of production
Materials = $636,100 ÷ 23,850 = $26.67
Conversion Cost = $636,100 ÷ 24,020 = $26.48
Total = $26.67 + $26.48 = $53,15
Cost allocated to units transferred and to those still in process
Transferred to Assembly = 24,700 x $53,15 = $1,312,805
Ending WIP = 2,650 x $26.67 + 2,120 x $26.48 = $126,813
Insurance company A and B both are life insurance companies that pay claims to a designated beneficiary upon death of an insured life. Company A insures 10,000 lives and expects to receive 525 claims this year. Company B insures 8,700 lives and expects to receive 410 claims this year. The actual number of claims for company A will range 500 < 550. The actual number of claims for company B will range from 369 < 451. Who faces the most objective risk
Answer:
Company B will faces the most objective risk
Explanation:
Company A: As Company A, insures 10,000 lives and expects to receive 525 claims this year.
They will end up saving 947,500,000 and paying 52,500,000 (525 claims*100,000), considering each claim value to be 100,000. Here goes the calculation:
10,000 x 100,000 = 1,000,000,000
1,000,000,000 - 52,500,000 = 947,500,000.
Company B: As Company B, insures 8,700 lives and expects 410 claims this year.
They will end up saving 829,000,000 and paying 41,000,000 (410 claims x 100,000), considering each claim value to be 100,000. Here goes the calculation:
8700 x 100,000 = 870,000,000
870,000,000 - 41,000,000 = 829,000,000.
Hence, the margin of profit is good for company A. Company B will have the face the risk more.
Ortega Industries manufactures 15,000 components per year. The manufacturing cost of the components was determined to be as follows: Direct materials $150,000 Direct labor 240,000 Variable manufacturing overhead 90,000 Fixed manufacturing overhead 120,000 Total $600,000 An outside supplier has offered to sell the component to Ortega for $34. Assume that the the fixed manufacturing overhead is common fixed overhead. Which means that the fixed overhead would remain the same even if the company decides to buy the component from an outside supplier. If Ortega Industries purchases the component from the outside supplier, the effect on income would be a: $30,000 increase. $30,000 decrease. $90,000 increase. $90,000 decrease.
Answer:
$30,000 decrease
Explanation:
The computation is shown below:
In the case when the production is done from Chetak's Factory
Number of Components produced 15000 15000
Total cost incurred $600,000
In the case when the production is done from outside
Number of Components produced 15,000
Total cost spend $630,000 ((15,000 × 34) + $120,000)
S the difference is
= $600,000 - $630,000
= -$30,000
Therefore the second option is correct
At the beginning of December, Altro Corporation had $26,000 of raw materials on hand. During the month, the Corporation purchased an additional $76,000 of raw materials. During December, $72,000 of raw materials were requisitioned from the storeroom for use in production. The credits entered in the Raw Materials account during the month of December total:_________a. $26,000b. $102,000c. $76,000d. $72,000
Answer:
d. $72000
Explanation:
Raw material account is an asset account and a part of inventory. Addition in this account will be depicted by a debit to the raw material account and a credit to either cash or accounts payable. This account is credited when raw material is requisitioned for use in production. Thus the credits that will be entered during December will be the amount of raw material requisitioned which is $72000.
XYZ Corp. recorded service revenues of $150,000 in 2016, of which $80,000 were on credit and $70,000 were for cash. Moreover, of the $80,000 credit sales for 2016, XYZ collected $35,000 cash on those receivables before year-end 2016. The company also paid $30,000 cash for 2016 wages. Its employees also earned another $20,000 in wages for 2016, which were not yet paid at year-end 2016. How much net cash inflow did the company generate in 2016
Answer: $75,000
Explanation:
Net Cash inflow refers to the actual cash that came into the company less the cash that went out.
Net cash inflow = Cash inflow - Cash outflow
= Cash from sales + Cash from receivables collection - cash wages
= 70,000 + 35,000 - 30,000
= $75,000
Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only per year and variable costs of per unit. The second process has fixed costs of but variable costs of only per unit.
What is the break-even quantity, beyond which the second process becomes more attractive than the first?
the volume at which the second process becomes more attractive is ..... units
Answer:
Hello your question is incomplete below is the complete question
Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only $49,700 per year and variable costs of $740 per unit. The second process has fixed costs of $391,000 but variable costs of only $160 per unit. a. What is the break-even quantity, beyond which the second process becomes more attractive than the first? the volume at which the second process becomes more attractive is ..... units
answer : At ≥ 589 units the second process becomes more attractive
Explanation:
A) Determine the breakeven quantity that makes the second process more attractive
the second process has a higher fixed cost of $391000
x = volume of sales that makes process 1 as profitable as process 2
sales = fixed cost + Total variable cost
profit = (( selling price ) * X ) - (variable cost * X ) - fixed cost
Assuming the profit made from process 1 = process 2
((selling price * X ) - ( variable cost of process 1 * X ) - fixed cost of process 1 =((selling price * X ) - ( variable cost of process 2 * X ) - fixed cost of process 2
hence ;
x = ( fixed cost of process 2 - fixed cost of process 1 ) / ((variable cost of process 1) - (variable cost of process 2 ))
= ( 391000 - 49700 ) / ( 740 - 160 )
= 588.44 units ≈ 588 units ( both process will yield same profitability
At ≥ 589 units the second process becomes more attractive
Explain two potential advantages to an airline of outsourcing inflight catering
Answer: See explanation
Explanation:
In-flight catering simply has to do with the delivery of food that have been already prepared and packaged for consumption while a particular airplane is in flight.
The two potential advantages to an airline of outsourcing inflight catering is that it helps in the reduction and of cost in the part of the airline. Outsourcing will help the airline cut costs.
Also, another reason is that the airline can focus on other aspects which are more important and work towards achieving organizational goals.
Determine whether each of the following is true or false:
1. In the short run, insurance on your property is a fixed cost.
2. In the short run, the heating of your warehouse is a fixed cost.
3. In the long run, there are more fixed costs than in the short run.
Assume that you run a concession stand at a small movie theater selling popcorn. Each day you must pay the theater management $50, so this is your fixed cost. If you are able to sell 100 boxes of popcorn each day, the variable cost per box is $0.15. Use these figures to determine average fixed cost, average variable cost, and average total cost.
Based on the following table, where do diminishing marginal returns begin to set in? Explain.
Machines Daily Output
1 300
2 700
3 1,000
4 1,200
5 1,300
6 1,300
Answer:
True
true
false
$0.50
$0.15
$0.65
3 machines. It is at this point that marginal output starts to decline
Explanation:
The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and low levels of resource usage occurred in September and March for three different resources associated with materials handling. The number of moves is the driver. The total costs of the three resources and the activity output, as measured by moves for the two different levels, are presented as follows:
Resource Number of Moves Total Cost
Forklift depreciation:
Low 4,000 $3,200
High 15,000 3,200
Indirect labor:
Low 4,000 $83,200
High 15,000 147,000
Fuel and oil for forklift:
Low 4,000 $ $3,550
High 16,000 11,360
Required:
If required, round your answers to two decimal places. Enter a "0" if required.
1. Determine the cost behavior formula of each resource. Use the high-low method to assess the fixed and variable components.
Forklift depreciation:
V $
F $
Y $
Indirect labor:
V $
F $
Y $ + $X
Fuel and oil for forklift:
V $
F $
Y $X
2. Using your knowledge of cost behavior, predict the cost of each item for an activity output level of 11,000 moves.
Forklift depreciation $
Indirect labor $
Fuel and oil for forklift $
Answer:
Results are below.
Explanation:
To calculate the variable and fixed costs, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= LAC - (Variable cost per unit* LAU)
Forklift depreciation:
Low 4,000 $3,200
High 15,000 3,200
Depreciation is a fixed cost. It doesn't vary with the number of units produced.
Indirect labor:
Low 4,000 $83,200
High 15,000 147,000
Variable cost per unit= (147,000 - 83,200) / (15,000 - 4,000)
Variable cost per unit= $5.8
Fixed costs= 147,000 - (5.8*15,000)
Fixed costs= $60,000
Fixed costs= 83,200 - (5.8*4,000)
Fixed costs= $60,000
Fuel and oil for forklift:
Low 4,000 $ $3,550
High 16,000 11,360
Variable cost per unit= (11,360 - 3,550) / (16,000 - 4,000)
Variable cost per unit= $0.651
Fixed costs= 11,360 - (0.651*16,000)
Fixed costs= $944
Fixed costs= 3,550 - (0.651*4,000)
Fixed costs= $944
Now, the cost for 11,000 moves:
Depreciation= $3,200
Indirect labor= 60,000 + 5.8*11,000
Indirect labor= $123,800
Fuel and oil for forklift= 944 + 0.651*11,000
Fuel and oil for forklift= $8,105
More and more companies have adopted written codes of ethics. Although these codes vary greatly, they can be put into two categories: compliance-based and integrity-based. Compliance-based ethics codes emphasize preventing unlawful behavior by increasing control and penalizing wrongdoers. Integrity-based ethics codes define the organization's guiding values, create an environment that supports ethically sound behavior, and stress shared accountability.
Write the features to the correct type of Ethics Code. Match with the ideal, objective, leader type and methods.
Features of Compliance- Features of Integrity-
Based Ethics Codes Based Ethics Codes
Ideal
Obective
Leader
Methods
Avoid criminal misconduct
Education, reduced employee discretion
Enable responsible employee conduct
Lawyers
Managers
Conform to outside standards and chosen internal standards
Accountability, decision processes, controls
Conform to outside standards
Answer:
Ethics Code and Features
Ethics Codes
Features Integrity- Based Ethics Codes Based Ethics Codes
Ideal: Accountability, decision Education, reduced employee
processes, controls discretion
Objective: Enable responsible employee Avoid criminal misconduct
conduct
Leader: Managers Lawyers
Methods: Conform to outside standards Conform to outside standards
and chosen internal standards
Explanation:
Codes of ethics refer to the governing principles and expectations that regulate the behavior of individuals and organizations in the conduct of their professional responsibilities and business activities. Two broad categories have been identified for written codes of ethics. They are compliance-based (rules-based) codes and integrity-based (principles-based) codes. Rules-based or compliance-based codes emphasize prevention, while principles-based or integrity-based codes provide guidance.
Client #007 has a portfolio valued at $ 1,100,000 and wants to increase the value to $1,200,000 in 5
years. An analysis of the client's non-portfolio inflows and outflows shows the client will need $15,000
from the portfolio in one year and this amount is estimated to rise by 3% inflation per year. What is the
client's calculated return need?
Fy07
Returns
Answer:
Client #007
The client's calculated return need is:
= $
Explanation:
a) Data and Calculations:
Value of portfolio = $1,100,000
Estimated value of portfolio in 5 years = $1,200,000
Expected returns in 5 years = $100,000 ($1,200,000 = $1,100,000)
This translates to 9.1% ($100,000/$1,100,000 * 100)
Annual rate of return = 1.82% (9.1/5)
Client's need = $15,000
Client's need after considering inflation rate of 3%
The client's calculated return need = $1,100,000 * 9.1% * 1.16
= $116,116
Moath Company reports the following for the month of June.
Date Explanation Units Unit Cost Total Cost
June 1 Inventory 200 $5 $1,000
12 Purchase 400 6 2,400
23 Purchase 300 7 2,100
30 Inventory 100
Assume a sale of 440 units occurred on June 15 for a selling price of $8 and a sale of 360 units on June 27 for $9.
Required:
Calculate cost of goods available for sale.
Answer: $5,500
Explanation:
The Cost of Goods available for sale is the price of the inventory and purchases that the company intends to sell.
June 1 Inventory = $1,000
June 12 Purchase = $2,400
June 23 Purchase = $2,100
Cost of goods available for sale = 1,000 + 2,400 + 2,100
= $5,500
A Union worker is to see an increase in pay of 2.5% per year next year. Her salary is $41,000 yr. If inflation was predicted
to be 1.9% for the upcoming year, how much more purchasing power would she have in dollars next year?
= 41,000 USD * 1+(2.5%-1.9%)
= 41,000 USD * 1.60
= 65,600
Net change 65,600 - 41,000 = $24,600
INCREASE IN HIS PURCHASING POWER!!!
OR 60% MORE IN HIS POCKET CHA-CHING!!Good luck!
#JmackTheInstructor
Net change in purchasing power next year is $24,600
Given:
Increase pay per year = 2.5% per year
Current salary = $41,000
Predicted inflation = 1.9%
Find:
Net change in purchasing power next year
Computation:
Value of money next year = 41,000[1+(2.5%-1.9%)]
Value of money next year = 41,000[1.60%]
Value of money next year = 65,600
Net change in purchasing power next year = 65,600 - 41,000
Net change in purchasing power next year = $24,600
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Hello. I’m looking for help with parts 2 and 3 on this worksheet, mostly part 2 though. Any help is appreciated!
Please select the word from the list that best fits the definition
Represents information using percentages
HELP ONLY HAVE 30 MINS
Answer:
Pie Graph
Explanation:
Trust :)
Martinez Corp. has the following transactions during August of the current year.
Aug. 1 Issues shares of common stock to investors in exchange for $10,930.
4 Pays insurance in advance for 3 months, $1,760.
16 Receives $810 from clients for services rendered.
27 Pays the secretary $570 salary.
Journalize the transactions.
Answer:
Aug 1
Cash $10930 Dr
Common Stock $10930 Cr
Aug 4
Prepaid Insurance $1760 Dr
Cash $1760 Cr
Aug 16
Cash $810 Dr
Service Revenue $810 Cr
Aug 27
Salary Expense $570 Dr
Cash $570 Cr
Explanation:
Aug 1
The receipt of cash in exchange of common stock is recorded as a debit to cash which is an asset and a credit to common stock which is capital
Aug 4
Prepayment of any expense is recorded as a current asset. Thus, prepaid insurance is debited as asset increases and cash is credited as cash decreases.
Aug 16
The receipt of cash in exchange of service provision is recorded as a credit to service revenue and a debit to cash
Aug 27
Payment of salary is an expense and is recorded as a debit to salary expense and a credit to cash.
The following errors took place in journalizing and posting transactions:
Insurance of $18,800 paid for the current year was recorded as a debit to Insurance Expense and a credit to Prepaid Insurance. Dividends of $18,000 were recorded as a debit to Wages Expense and a credit to Cash. Journalize the entries to correct the errors.
Answer:
Journal 1
Debit : Prepaid Expense $37,600
Credit : Cash $18,800
Credit : Insurance Expense $18,800
Journal 2
Debit : Dividends $18,000
Credit : Wages $18,000
Explanation:
Journal 1
The first error has to be corrected by debiting the Prepaid Expenses by twice the amount paid to cancel the effect of a credit entry made to that account. Cash is credited to show the correct credit entry that was supposed to be made. Insurance expense is credited to cancel the debit entry made to this account in error.
Journal 2
The error made is called error of principle. This is were the transaction is recorded in the wrong class of accounts. Simply, Debit the Dividends and credit the Wages Account to record and reverse the error out of the Wages Account into the Dividends Account.
Overhead information for Cran-Mar Company for October follows:
Total overhead incurred $30,000
Budgeted fixed overhead $7,125
Total standard overhead rate per machine-hour (MH) $4.90
Standard variable overhead rate per MH $3.00
Standard MHs allowed for the units manufactured 3,600
1. What is the standard fixed factory overhead rate per machine-hour?
2. What is the denominator activity level that was used to establish the fixed overhead application rate?
3. Prepare a diagram, to calculate the following overhead variances for October:
a. Total flexible-budget variance for factory overhead.
b. Fixed overhead production volume variance.
c. Total factory overhead cost variance.
Answer:
1. Standard Fixed factory overhead rate per machine hour = 1.9
Explanation:
1. Standard OH rate per MH $4.90
Less: Standard Variable OH rate $3.0
Fixed OH rate is 1.90
2. Denominator activity level : $3,750
Budgeted Fixed factory OH $7,125
Standard fixed overhead rate $1.90
3. a. Total flexible Budget variance:
Standard Variable Overhead (3,600 * $3.0) = $10,800
Budgeted Fixed Overhead $7,125
Total Overhead = $17,925
Actual Overheads $30,000
Variance $12,075 Unfavorable
b. Production Volume Variance :
Overheads based on Flexible budget $17,925
Standard Cost applied (3,600 hours * $4.90) $17,640
Variance $285 Favorable
c. Total factory overhead cost variance :
Actual overheads incurred $30,000
Standard cost applied to production $17,640
Variance $12,360 Unfavorable
The following comparative balance sheets and income statement are available for AddieMae Inc.. Prepare a statement of cash flows for 2016 using the indirect method and analyze the statement.
Balance Sheet as of December 31 in US$ Thousands
2016 2015
Assets Cash $3,300 $1,000
Accounts receivable (net) 1,100 600
Inventory 11,200 4,300
Total Current Assets 15,600 5,900
Plant and Equipment 3,000 2,300
Less accumulated depreciation 1,300 800
Plant and equipment (net) 1,700 1,500
Long term investments 1,200 900
Total assets $18,500 $8,300
Liabilities and Equity Accounts payable $3,300 $2,500
Accrued liabilities 700 600
Income taxes payable 400 100
Total current liabilities 4,400 3,200
Long term debt 200 -
Total liabilities 4,600 3,200
Common stock 9,900 7,300
Retained earnings 4,000 (2,200)
Total liabilities and equity $18,500 $8,300
Answer:
AddieMae Inc.
Statement of Cash flows for the year ended December 31,2016
Cash flow from Operating Activities
Profit for the period 6,800
Adjustment of Working Capital items ;
Increase in Accounts receivable (2,300)
Increase in Inventory (6,900)
Increase in Accounts Payable 800
Increase in Accrued Liabilities 100
Net Cash from Operating Activities ($1,500)
Cash flows from Investing Activities
Purchase of Equipment 700
Purchase of Lon term investments 300
Net Cash from Investing Activities 1,000
Cash flow from Financing Activities
Long term debt issued 200
Issue of Common Stock 2,600
Net Cash from financing Activities 2,800
Movement in Cash and Cash equivalents 2,300
Cash and Cash Equivalents at Beginning 1,000
Cash and Cash Equivalents at the End 3,300
Explanation:
Cashflow statement shows the movement in the cash and cash equivalent balances. It only accounts for cash related transactions and events.
Note also that the Indirect method has been used for preparation of the Cashflow Statement as required.
A television assembly plant has a variable production output ranging from 200 sets to 850 sets a day. The building for both manufacturing and warehousing has an area of 80,000 square feet and is leased from a real estate firm at an annual rate of $7.95 per square foot. It employs 250 people and their wage cost is, in large part, a function of the number of televisions produced. Most of the components that go into the assembly are also produced in the plant with in-house equipment that is operated based on production requirements. The most likely example of fixed cost in this plant is ______________.
Answer:
Annual rental rate
$636,000
Explanation:
Fixed cost is cost that does not vary with output. An example of fixed cost is rent
The annual rental rate is a fixed cost because it does not vary with output.
Variable cost is cost that varies with output. If output is zero, no variable cost would be incurred. An example of variable cost is wages
The wages paid to labour is a variable cost
Plumber Corporation acquired all of Socket Corporation's voting shares on January 1, 20X2, for $482,000. At that time, Socket reported common stock outstanding of $92,000 and retained earnings of $130,000. The book values of Socket's assets and liabilities approximated fair values, except for land, which had a book value of $92,000 and a fair value of $112,000, and buildings, which had a book value of $225,000 and a fair value of $410,000. Land and buildings are the only noncurrent assets that Socket holds.
Required:
a. Compute the amount of goodwill at the date of acquisition Goodwill
b. Prepare the consolidating entry or entries required immediately.
Answer:
Part a
$55,000
Part b
Debit : Common Stock $92,000
Debit : Retained Earnings $130,000
Debit : Revaluation Reserve ($20+ $185) $205,000
Debit : Goodwill $55,000
Credit : Investment in Subsidiary - Socket Corporation $482,000
Explanation:
Goodwill is the excess of Purchase price over the Net Assets Taken over at acquisition date.
The Net Assets taken over can be presented by the Equity of the Investee. That is the sum of Common Stock, Retained Earnings and Revaluation Reserves made to reflect fair value adjustments at acquisition date.
Note how the Revaluation Reserve ended with $205,000 following increase of $20,000 on value of land and $185,000 on value of buildings to reflect fair values.
The elimination journal needs to be prepared at consolidation to eliminate common items as reflected by Part b above.
Taylor Swift Corporation purchases a patent from Salmon Company on January 1, 2020, for $54,000. The patent has a remaining legal life of 16 years. Taylor Swift feels the patent will be useful for 10 years. Prepare Taylor Swift's journal entries to record the purchase of the patent and 2020 amortization.
Assume that at January 1, 2019, the carrying amount of the patent on Taylor Swift's books is $43, 200. In January, Taylor Swift spends $24,000 successfully defending a patent suit. Taylor Swift still feels the patent will be useful until the end of 2026. Prepare the journal entries to record the $24,000 expenditure and 2019 amortization.
Answer:
Taylor Swift Corporation
a Journal Entries:
Jan. 1, 2020:
Debit Patent $54,000
Credit Cash $54,000
To record the purchase of patent purchased from Salmon Company.
December 31, 2020:
Debit Amortization Expense $5,400
Credit Accumulated Amortization - Patent $5,400
To record the amortization expense for the year.
b) Journal Entries:
January 1, 2019:
Debit Patent $24,000
Credit Cash $24,000
To record cash for defending the patent.
December 31, 2019:
Debit Amortization Expense $8,400
Credit Accumulated Amortization - Patent $8,400
To record the amortization expense for the year.
Explanation:
a) Data and Calculations:
January 1, 2020 Purchased Patent from Salmon Company = $54,000
Estimated useful life = 10 years
Annual amortization expense - $5,400 ($54,000/10)
b) Carrying amount of Patent on January 1, 2019 = $43,200
Amount spent to successfully defend the patent 24,000
Total value of patent = $67,200
Estimated useful life = 8 years (January 1, 2019 to December 31, 2026)
Annual amortization expense = $8,400 ($67,200/8)
b) The $24,000 spent for the successful defense of the patent will be capitalized. This means that the carrying balance of the Patent changes from $43,200 to $67,200. Amortization is calculated based on $67,200 on a straight-line basis for 8 years.
Journal Entry is the 1st step of the accounting cycle that records only the monetary business transactions. It uses a double-entry bookkeeping system as it provides the dual effect of each transaction in the books of accounts. These entries are used further to prepare books of accounts.
Find the attachment for the given Journal Entry.
(a) Data and calculations:
January 1, 2020 - Purchases done by Salmon Company = [tex]\[/tex] 54, 000.
Useful Life Estimated = 10 years
Amortization Expese Annually = [tex]\dfrac{54, 000}{10}[/tex] = [tex]\[/tex] 5,400.
(b) Carrying Amount Patent on Jan 1, 2019 = [tex]\[/tex] 43, 200.
Amount Spent Successfully to defend the patent = [tex]\[/tex] 24, 000.
Total Value = [tex]\[/tex] 67, 200.
Estimated Useful Life = 8 years
Amortization Expense Annually = [tex]\dfrac{67, 200}{8}[/tex] = [tex]\[/tex] 8, 400.
Hence, the [tex]\[/tex] 24, 000 will be spent for the successful defense of the patent will be capitalized. This means that the carrying balance of the Patent Changes from dollar 43, 200 to 67, 200. The amortization for straight 8-years is calculated at $67,200.
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Sheridan Company reported the following year-end information: Beginning work in process inventory$1080000 Beginning raw materials inventory300000 Ending work in process inventory900000 Ending raw materials inventory480000 Raw materials purchased950000 Direct labor850000 Manufacturing overhead820000 Sheridan Company's cost of goods manufactured for the year is
Answer:
$1,800,000
Explanation:
Calculation for what Sheridan Company's cost of goods manufactured for the year is
First step is to calculate Direct material used
Direct material used = 300,000 + 950,000 - 480,000
Direct material used= 770,000
Now let calculate cost of goods manufactured for the year using this formula
Cost of Goods Manufactured for the year= Direct Material Used + Direct Labor + Manufacturing Overhead + Opening Work - Closing Work
Cost of Goods Manufactured for the year= 770,000 + 850,000 + 820,000 + 1,080,000 - 900,000
Cost of Goods Manufactured for the year= $1,800,000
Therefore Sheridan Company's cost of goods manufactured for the year is $1,800,000
From the interest tables in Appendix B, determine the values of the following factors by interpolation and compare your results with those obtained from evaluating the A/P and P/A interest formulas.
1. The capital-recovery factor for 38 periods at 6.25% interest.
2. The equal-payment series present-worth factor for 85 periods at 9.25% interest.
Answer:
When compared with results obtained using Interpolation there is a variance of more than 1/3 of a point ( for both A and B )
Results obtained via A/P and P/A interest formulas
A) 0.0694
B) 10.8049
Explanation:
A) calculating The capital recovery factor for 38 periods at 6.25%
using the A/P interest formula
where ;
p = present value , i = annual interest rate, n = number of years
hence CRF ( capital recovery factor ) = 0.0694
B) Calculating the equal-payment series PWF
using the P/A interest formula
where ; p = present value , i = annual interest rate, n = number of years
hence PWF ( present worth factor ) = 10.8049
attached below is the detailed solution
When compared with results obtained using Interpolation there is a variance of more than 1/3 of a point ( for both A and B )