Scope changes are deviations in functionality, layout, quality, budget, timeline, responsibilities, or other aspects of a project. Typically, scope changes result from careful decisions from a project manager or stakeholder.
Scope change managementScope change management means after your initial project scope has been authorized, which is executed at the completion of your project charter phase, you must manage, control, and document any changes to your scope.
Therefore, any exception to the above is will not be a reason.
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The Coughlin Company retails twoâ products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is asâ follows:
Standard Carrier Deluxe carrier Total
Units sold 187,500 62,500 250,000
Revenues at $28 and $50 per unit 5250000 3125000 8375000
Variable costs at $18 and $3 per unit 3375000 1875000 5250000
Contribution margins at $10 and $20 per unit 1875000 1250000 3125000
Fixed costs 2250000
Operating income 875,000
Requirement:
a. Compute the breakeven point inâ units, assuming that the company achieves its planned sales mix.
b. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold.
c. Suppose 250,000 units are sold but only 50,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units.
Answer:
Please see answers as attached.
Explanation:
Please find attached detailed explanation for the questions above.
At the end of April, Cavy Company had completed Jobs 766 and 765. The individual job cost sheets reveal the following information: Job Direct Materials Direct Labor Machine Hours Job 765 $5,670 $3,500 27 Job 766 8,900 4,775 44 Job 765 produced 152 units, and Job 766 consisted of 250 units. Assuming that the predetermined overhead rate is applied by using machine hours at a rate of $200 per hour. a. Determine the balance on the job cost sheets for each job. Job 765 $ Job 766 $ b. Determine the cost per unit at the end of April. Round your answers to the nearest cent. Job 765 $ Job 766 $
Answer:
Job 765 Job 766
Direct material $5,670 $8,900
Direct labor $3,500 $4,775
Overhead $5,400 $8,800
(27*200) (44*200)
Total Job cost $14,570 $22,475
b) Cost per unit = Total job cost/unit produced
Job 765 = $14,570/152 units
Job 765 = 95.86
Job 766 = $22,475/250 units
Job 766 = 89.90
Max bought 700 shares of an oil company's stock for $15.60 per share. How much did Max spend?
Answer:
$10,920
Explanation:
15.6 * 700 = 10,920
Why might a consumer want to know the estimated yearly energy cost for operating an appliance?
Answer:
So they know how much they have too spend on it
Suppose the inflation rate is 3% when a 15-year mortgage loan is given at a fixed rate of 4.5%. Five years later the inflation rate rises to 4%. What impact does this change have on the nominal interest rate and the real interest rate on the mortgage loan
As a result of the inflation, the nominal interest rate decreases and the real interest rate does not change.
What is nominal interest rate and real interest rate?Interest rate is the cost of taking out a loan. Interest rate could be real or nominal. Nominal interest rate is real interest rate plus inflation rate. Real interest rate is interest rate that has been adjusted for inflation.
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Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, who is also an employee. Aleshia is in the 24% tax bracket, and Rover is subject to a 21% rate. Because Aleshia's contribution to the business is substantial, Rover believes that a $145,200 bonus in the current year is reasonable compensation and should be deductible by the corporation. However, Rover is considering paying Aleshia a $145,200 dividend because the tax rate on dividends is lower than the tax rate on compensation.
Required:
a. Regarding taxes, which would benefit Aleshia the most?
b. The $135,600 dividend because after taxes she would have $__________ from the dividend and $_______ from the bonus.
c. Regarding taxes, which would benefit Rover Corporation the most?
d. Considering the two parties together, which alternative would provide the most overall tax savings? The $135,600 bonus because when the overall effect to both the corporation and the shareholder are considered the net tax savings is $_______.
a. Regarding taxes, Aleshia would have the most benefit from the dividend.
b. The $145,200 dividend because after taxes she would have $116,160 from the dividend and $110,352 from the bonus.
c. Regarding taxes, which would benefit Rover Corporation the most is the bonus compensation, which is tax-deductible.
d. The $145,200 bonus would provide the most overall tax savings for the two parties because when the overall effect to both the corporation and the shareholder is considered the net tax savings is $81,312.
What are net tax savings?Net tax savings are allowable deductions enjoyed by the corporation less the amount of taxes paid by the workers and shareholders whose incomes are taxed per the allowable deductions.
Data and Calculations:Aleshia's tax bracket = 24%
Corporation tax rate = 21%
Proposed bonus compensation = $145,200
Proposed dividend = $145,200
Maximum dividend tax rate = 20%
Dividend received by Aleshia after tax = $116,160 ($145,200 x 1 - 20%)
Bonus received by Aleshia after tax = $110,352 ($145,200 x 1 - 24%)
Benefits to corporation (tax-deductible) = $145,200
Tax on both dividend and bonus to Aleshia = $63,888 ($29,040 +$34,848)
Net benefit to both parties = $81,312 ($145,200 - $63,888)
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A company in the growth phase of its product life cycle will normally have which of the following patterns of cash flows? Select one: a. Negative or positive cash flows from operations, negative cash flows from investing and negative cash flows from financing b. Positive cash flows from operations, positive cash flows from investing and positive cash flows from financing c. Negative cash flows from operations, negative cash flows from investing and positive cash flows from financing d. Negative or positive cash flows from operations, negative cash flows from investing and positive cash flows from financing
Answer:
The correct answer to the question is OPTION D (Negative or positive cash flows from operations, negative cash flows from investing, and positive cash flow from financing).
Explanation:
The product life cycle of a company generally talks about the marketing aspect of a product and strategies to ensure the product from manufacturing excel in the market. There are for phase: Introduction, growth, maturity, and decline.
After the product is unveiled to the public, the growth phase is the next as it shows how the product gain in the market. In this phase, the company has been able to win a lot of trust from consumers, this is evident with an increase in sales of the product and overall profit registered by the company.
The cash flow from a product is either positive or negative depending on the stage the product is in the growth phase. However, positive cash flow will occur as soon as sales start to peak and overall acceptance of the product.
Running operations could either have a positive or negative cash flows depends on the differences in revenue, expenses, and how the company finance operations.
Negative cash flows from investing occur during the growth phase because the company continues to invest, buy assets, pay loans, and do other activities.
Positive cash flows from financing during the growth phase of the new product means the company is gaining more asset and gaining more money than they are spending.
buying a $50 Bouquet of roses for Valentine’s Day is an example of a(n) ____ purchase. (fill in blank)
————-
a-esteem
b-physiological
c-security
d-self actualization
which of the following is placed in the credit column of the trial balance
a.purchases
b. rent expenses
furniture
sales
Answer:
(d)rent received is the answer
Explanation:
Which statement best describes the current price for the good shown in this
graph of supply and demand schedules?
Supply and Demand Graph
Price of pizza
Demand curve Supply curve
$12.50
$10.00
$7.50
$5.00
$3.00
Current price
0
100 200 300 400 500
Quantity
O A. The current price equals the equilibrium price for the good.
B. The current price is higher than the equilibrium price for the good.
C. The current price will result in a low supply for the good
D. The current price will result in a low demand for the good.
Answer:
The Current price will result in a low supply for the good.
Explanation:
Answer above
The statement that most appropriately describes the current price for the goods displayed in the provided graph of demand and supply would be:
C). The current price will result in a low supply for the good.
The supply for a specific good depends on its price in the market. If the price is high, the firms like to supply more.While when the price of a good is low, the profit-making ability of the firms reduces significantly due to the reduction in price. As a result, the quantity supplied faces a fall. In the context of the given situation, since the price of Pizza is lower than the equilibrium price i.e. $3.00, the firms are not willing to supply more, and thus, the supply will become low.Thus, option C is the correct answer.
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Ultimately, the responsibility of the project manager is to: _____________
a. make sure the customer is satisfied.
b. finish the project as quickly as possible.
c. finish the project as cost effectively as possible.
d. make independent decisions.
The responsibility of the project manager is simply to A. make sure the customer is satisfied.
Who is a project manager?It should be noted that a project manager simply means an individual who oversees a project and ensure that the goals of the project are achieved.
In this case, this implies that the responsibility of the project manager is to make sure the customer is satisfied.
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Would you buy a product that costs more because ethical business practices are a part of production costs? If so, how much and for what causes are you willing to spend more? If not, argue why lower priced goods make more sense.
EcoFabrics has budgeted overhead costs of $1,001,700. It has allocated overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 477,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $381,600 and $620,100 is allocated to the design cost pool. Additional information related to these pools is as follows.
Wool Cotten Total
Machine hours 114,000 114,000 228,000
No of Setups 1,140 570 1710
Required:
a. Calculate the overhead rate using activity based costing.
b. Determine the amount of overhead allocated to the wool product line and the cotton product line using activity-based costing.
c. What amount of overhead would be allocated to the wool and cotton product lines using the traditional approach, assuming direct labor hours were incurred evenly between the wool and cotton?
Answer and Explanation:
a. The computation of overhead rate using activity-based costing is shown below:-
Cutting = Cost ÷ Machine Hours
Cutting = $381,600 ÷ 228,000
= $1.67 Per Machine Hours
Design = Cost ÷ No. of Setup
Design = $620,100 ÷ 1,710
= $362.63 per set up
The computation of the amount of Overhead Allocated is shown below:-
Wool:
114,000 × $1.67
= $190,380
= 1,140 × $362.63
= $413,398
Total = $603,778
Cotton:
114,000 × $1.67
= $190,380
= 570 × $362.63
= $206,669
Total = $397,049
The computation of amount allocated using traditional approach is shown below:- = $1,001,700 ÷ 2
= $500,850
Overhead Allocated to Wool = $500,850
Cotton = $500,850
Planning to HireHuman resource planning cannot be done in a vacuum. The HR department needs to understand the company's strategic plan and be able to hire or shed jobs as necessary. As you read the following case, think about how Alicia Brooks, HR manager at Edu-Films, needs to take a balanced approach to hiring the right amount of staff for the company's next big project. In this exercise, please read the mini-case and answer the questions that follow. Edu-Films is a small design company that writes and produces videos for the elementary and high school education market. The company is in the final stages of negotiating a new contract with a U.S. publisher to create 40 videos for a new K-12 math series, and the videos need to be available by the spring of 2017. Business for Edu-Films has been slow over the past three years, and the company has kept staff levels to a minimum. Mindful of the company's flat fiscal results over the last couple of years but understanding that new hires must be ready to go once the agreement is signed, HR manager Alicia Brooks must put together a cohesive hiring plan.1). What should be Alicia's first step?A). Check with her colleagues in the industry for possible new hires.B). Get together with company execs for a planning session.C). Set goals for hiring new staff.D). Forecast labor supply and demand within the company once video work starts.E). Take out a recruitment ad in the local newspaper.2). Forecasting can use statistical or __________ methods.A). experimentalB). historicalC). scientificD). judgmentalE). experiential3). Statistical methods are excellent for capturing what type of data?A). Subjective dataB). Scientific dataC). Historical trendsD). Expert dataE). Instinctive data4). After forecasts of labor demand and supply are known, what comes next in the planning process?A). Budget reviewB). Program implementationC). Program evaluationD). Employee appraisalsE). Goal setting and strategic planning
answer:
I added each answer under the it question. The answers are in bold letters.
1. What should be Alicia’s first step?
her first step should be to Forecast labor supply and demand within the company once video work starts
. Which is option d. Which will help to meet the demand and supply,
2. Forecasting can use statistical methods or:
Judgment. option d
forecasting is done usimg qualitative methods. these methods are judgmental tools.
3. Statistical methods are excellent for capturing what type of data?
c. Historical trends
we can use data from the past in determining trends.
4. After forecasts of labor demand and supply are known, what comes next in the planning process?
e, Goal setting and strategic planning
after demand and supply has been predicted, the next focus should be on setting goals and strategic planning
Margin of Safety Comer Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $15.98 per string. The variable costs per string are as follows: Direct materials $1.87 Direct labor 1.70 Variable factory overhead 0.57 Variable selling expense 0.42 Fixed manufacturing cost totals $745,726 per year. Administrative cost (all fixed) totals $527,604. Comer expects to sell 239,900 strings of light next year.
1. Calculate the break-even point in units.
2. Calculate the margin of safety in units.
3. Calculate the margin of safety in dollars.
1. The calculation of the break-even point in units for Comer Company is as follows:
= Fixed costs/Contribution margin per unit
= 111,500 units ($1,273,330/$11.42)
2. The calculation of the margin of safety in units for Comer Company is as follows:
= current sales minus the breakeven point sales units
= 128,400 units (239,900 - 111,500)
3. The calculation of the margin of safety in dollars for Comer Company is as follows:
= total budgeted sales revenue and break-even sales in dollars
= $2,051,832 (128,400 x $15.98)
What is the break-even point?The break-even point is the point at which the total revenue equals total costs (including variable and fixed costs).
At the break-even point, both in units and in dollars, the organization records no profit or loss.
The margin of safety shows the total number of sales (in units or dollars) above the breakeven point.
Data and Calculations:Selling price per string = $15.98
Variable costs:
Direct materials $1.87
Direct labor 1.70
Variable factory overhead 0.57
Variable selling expense 0.42
Total variable cost per unit = $4.56 ($1.87 + $1.70 + $0.57 + $0.42)
Contribution margin per unit = $11.42
Contribution margin ratio = 71.46% ($11.42/$15.98 x 100)
Fixed manufacturing cost totals $745,726 per year
Administrative cost (all fixed) totals $527,604
Total fixed costs = $1,273,330 ($745,726 + $527,604)
Expected sales units next year = 239,900 strings
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U.S. Robotics Inc. is considering changing its capital structure to 60% debt and 40% equity. Increasing the firm’s level of debt will cause its before-tax cost of debt to increase to 10%. Use the Hamada equation to unlever and relever the beta for the new level of debt. What will the firm’s weighted average cost of capital (WACC) be if it makes this change in its capital structure? (Hint: Do not round intermediate calculations.) The optimal capital structure is the one that the WACC and the firm’s stock price. Higher debt levels the firm’s risk. Consequently, higher levels of debt cause the firm’s cost of equity to .
Answer:
Missing question at inception is also below "US Robotics has a current capital structure of 30% debt and 70% equity. Its current before-tax cost of debt is 6%, and it's tax rate is 35%. It currently has a levered beta of 1.15. The risk free rate is 3% and the risk premium on the market is 7%"
Unlevered beta = Levered Beta / [1+(1-Tax) (D/E)
= 1.15/[1+(1-0.35)(0.3/0.7)
= 1.15/1.27857
= 0.90
Levered Beta = Unlevered beta *[1+(1-Tax)(D/E)
= 0.90 * {1+(1-0.35)(1.6/0.4)
= 0.90*1.975
= 1.78
Cost of equity = Risk free return + Levered Beta*Market risk premium
= 0.03 + 1.78 * 0.07
= 0.1546
= 15.46%
WACC = (Weight of equity * Cost of equity) + (Weight of debt*Cost of debt *(1-Tax)
= (40% * 15.46%) + 60% * 10% * (1-0.35)
= 0.06184 + 0.039
= 6.18% + 3.9
= 10.08%
The new WACC of the company is 10.08%
The optimal capital structure is the one that the WACC and the firm’s stock price. Higher debt levels the firm’s risk. Consequently, higher levels of debt cause the firm’s cost of equity to increase.
If the marginal utility from consuming the ninth unit of a product is 3 and the total utility from all nine units is 115, then the total utility from consuming eight units must be Multiple Choice 112. 118. 38.
The total utility from consuming eight units given the marginal utility and total utility of the ninth unit must be 112.
What is marginal and total utility?Marginal utility is the additional utility derived from consuming one more unit of a good. Total utility is the total satisfaction that is derived from the consumption of a good or service.
Total utility of consuming the 8th unit = total utility of consuming the ninth unit - marginal utility of the ninth unit
115 - 3 = 112
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Which of the following is a TRUE statement on service areas?
a. Service areas will be the same for different organizations.
b. Hospitals in rural areas have ill-defined service areas for their particular services.
c. The service areas for public health departments are homogenous within a state, without regard to whether they are metropolitan or rural.
d. Determining the geographic boundaries of the service area may be highly subjective and is usually based on patient histories, the reputation of the organization, and available technology
The answer is d (determine the geographic boundaries...
The true statement "Determining the geographic boundaries of the service area may be highly subjective and is usually based on patient histories, the reputation of the organization, and available technology". The correct option is D.
Service areas can vary widely between different organizations, making them unique to each entity. Hospitals in rural areas often face challenges in defining their service areas for specific services due to limited resources and access.
Public health departments service areas within a state may not be homogenous as they may differ based on factors such as population distribution and health needs.
Therefore, the correct option is D.
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The Company has prepared a sales budget of finished units for a 3-month period. The company has an inventory of units of finished goods on hand at December 31 and has a target finished goods inventory of units at the end of the succeeding quarter. It takes gallons of direct materials to make one unit of finished product. The company has inventory of gallons of direct materials at December 31 and has a target ending inventory of gallons at the end of the succeeding quarter. How many gallons of direct materials should Company purchase during the 3 months ending March 31? Select the labels and enter the amounts to calculate the direct materials (gallons) to be purchased.
Complete Question:
The Company has prepared a sales budget of 42,000 finished units for a 3-month period. The company has an inventory of 13,000 units of finished goods on hand at December 31 and has a target finished goods inventory of 15,000 units at the end of the succeeding quarter. It takes 3 gallons of direct materials to make one unit of finished product. The company has inventory of 61,000 gallons of direct materials at December 31 and has a target ending inventory of 53,000 gallons at the end of the succeeding quarter. How many gallons of direct materials should Company purchase during the 3 months ending March 31? Select the labels and enter the amounts to calculate the direct materials (gallons) to be purchased.
Answer:
The Company
Direct materials (gallons) to be purchased = 124,000 gallons.
Explanation:
Data and Calculations:
Budgeted Sales = 42,000 units
Beginning Finished unit Inventory = 13,000 units
Target Ending Inventory = 15,000 units
Production = Budgeted Sales + Ending Inventory - Beginning Inventory
= 42,000 + 15,000 - 13,000
= 44,000 units
To produce 44,000 units require 3 gallons each, i.e. a total of 132,000 (44,000 * 3) gallons
There are 61,000 gallons of materials in Beginning Inventory.
Desired Ending Inventory of materials = 53,000 gallons
Therefore, Purchases of direct materials = Required Production Materials + Ending Inventory (materials) - Beginning Inventory (materials)
= 132,000 + 53,000 - 61,000
= 124,000
Bagsâ (PB) is a designer ofâ high-quality backpacks and purses. Each design is made in small batches. Eachâ spring, PB comes out with new designs for the backpack and for the purse. The company uses these designs for a year and then moves on to the next trend. The bags are all made on the same fabrication equipment that is expected to operate at capacity. The equipment must be switched over to a new design and set up to prepare for the production of each new batch of products. Whenâ completed, each batch of products is immediately shipped to a wholesaler. Shipping costs vary with the number of shipments. Budgeted information for the year is asâ follows:
Direct materialsâpurses 319155
Direct materialsâbackpacks 454995
Direct manufacturing laborâpurses 99000
Direct manufacturing laborâbackpacks 113000
Setup 64000
Shipping 73000
Design 169000
Plant utilities and administration 221000
Total 1513150
Backpacks Purse Total
Number of bags 6175 3075 9250
Hours of production 1665 2585 4250
Number of batches 120 80 200
Number of designs 2 2 4
Required:
a. Identify the cost hierarchy level for each cost category.
b. Identify the most appropriate cost driver for each cost category. Explain briefly your choice of cost driver.
c. Calculate the budgeted cost per unit of cost driver for each cost category.
d. Calculate the budgeted total costs and cost per unit for each product line.
e. Explain how you could use the information in requirement 4 to reduce costs.
Answer:
a. Identify the cost hierarchy level for each cost category.
Direct materials purses ⇒ Output unit-level cost
Direct materials backpacks ⇒ Output unit-level cost
Direct manufacturing labor purses ⇒ Output unit-level cost
Direct manufacturing labor backpacks ⇒ Output unit-level cost
Setup ⇒ Batch-level cost
Shipping ⇒ Batch-level cost
Design ⇒ Product-sustaining cost
Plant utilities and administration ⇒ Facility-sustaining cost
b.
Setup $64,000 ⇒ number of batches (it's a batch level cost)
Shipping $73,000 ⇒ number of batches (it's a batch level cost)
Design $169,000 ⇒ number of designs (it's logical, design costs must be allocated based on the number of designs)
Plant utilities and administration $221,000 ⇒ hour of production (it involves the whole manufacturing process)
c.
Setup $64,000 / 200 batches = $320 per batch
Shipping $73,000 / 200 batches = $365 per batch
Design $169,000 / 4 designs = $42,250 per design
Plant utilities and administration $221,000 / 4,250 production hours = $52 per production hour
backpacks purses total
Setup $38,400 $25,600 $64,000
Shipping $43,800 $29,200 $73,000
Design $84,500 $84,500 $169,000
Plant U&A $86,580 $134,420 $221,000
totals $253,280 $273,720 $527,000
d.
total production costs for backpacks = $454,995 + $113,000 + $253,280 = $821,275
production costs per unit = $821,275 / 6,175 = $133 per backpack
total production costs for purses = $319,155 + $99,000 + $273,720 = $691,875
production costs per unit = $691,875 / 3,075 = $225 per purse
e. in order to reduce setup and shipping costs, the company needs to produce in larger batches so the total number of batches decreases.
How technological change affect retail business industry?
How does diversity help companies have a competive advantage?
Answer:
In a diverse workplace, competitive advantage is realized not by merely acknowledging diversity but also by creating an environment of inclusion, where employees work toward a common objective while feeling supported—resulting in greater productivity and employee commitment.
Explanation:
hope it helps......
Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment.
Nash's Trading Post, LLC Balance Sheet December 31, 2022
Cash $185000 Accounts payable $195000
Accounts receivable 140000 Salaries and wages payable 25000
Inventory 150000 Mortgage payable 225000
Prepaid insurance 85000 Total liabilities $445000
Stock investments 250000
Land 250000
Buildings $300000 Common stock $335000
Less: Accumulated
depreciation (55000) 245000 Retained earnings 725000
Goodwill 200000 Total stockholders' equity $1060000
Total assets $1505000 Total liabilities and stockholders' equity $1505000
Answer:
$495,000
Explanation:
Calculation to determine the total dollar amount of assets to be classified as property, plant, and equipment
Land $250,000
Add:Buildings less accumulated depreciation $245,000
($300,000-$55,000)
Total $495,000
Therefore the total dollar amount of assets to be classified as property, plant, and equipment will be $495,000
Khanam Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $97 Units in beginning inventory 500 Units produced 8,400 Units sold 8,500 Units in ending inventory 400 Variable costs per unit: Direct materials $20 Direct labor $37 Variable manufacturing overhead $1 Variable selling and administrative $11 Fixed costs: Fixed manufacturing overhead $67,200 Fixed selling and administrative $161,500 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. What is the net operating income for the month under variable costing
Answer: $9,300
Explanation:
Variable Costing net operating Income = Contribution Margin - Fixed costs
Contribution Margin = (Selling price - Direct materials - Direct labor - Variable manufacturing overhead - Variable selling and administrative) * Units sold
= (97 - 20 - 37 - 1 - 11) * 8,500
= $238,000
Variable Costing net operating income = 238,000 - 67,200 - 161,500
= $9,300
Assume that on December 31, 2019, Kimberly-Clark Corp. signs a 10-year, non-cancelable lease agreement to lease a storage building from Sheffield Storage Company. The following information pertains to this lease agreement.
1. The agreement requires equal rental payments of $66,699 beginning on December 31, 2019.
2. The fair value of the building on December 31, 2019 is $487,529.
3. The building has an estimated economic life of 12 years, a guaranteed residual value of $9,000, and an expected residual value of $6,400. Kimberly-Clark depreciates similar buildings on the straight-line method.
4. The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.
5. Kimberly-Clarkâs incremental borrowing rate is 8% per year. The lessorâs implicit rate is not known by Kimberly-Clark.
Required:
a. Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2019, 2020, and 2021.
b. Suppose the same facts as above, except that Kimberly-Clark incurred legal fees resulting from the execution of the lease of $5,000, and received a lease incentive from Sheffield to enter the lease of $1,000. How would the initial measurement of the lease liability and right-of-use asset be affected under this situation?
c. Suppose that in addition to the $66,699 annual rental payments, Kimberly-Clark is also required to pay $5,000 for insurance costs each year on the building directly to the lessor, Sheffield Storage. How would this executory cost affect the initial measurement of the lease liability and right-of-use asset?
Answer:
a) the journal entry to record the signing of the lease agreement:
December 31, 2019, lease agreement signed
Dr Right of use 483,360
Cr Lease liability 483,360
the lease liability must record the present value of the 10 annual lease payments: $68,099 and 8% discount rate:
present value of an annuity due = payment + {payment x [1 - (1 + r)⁻⁽ⁿ⁻¹⁾]/r}
payment = 66,699r = 8% n - 1 = 10 - 1 = 9PV annuity due = 66,699 + {66,699 x [1 - (1 + 0.08)⁻⁹]/0.08} = 66,699 + 416,661 = $483,360
the journal entries to record the annual lease payments:
December 31, 2019, first annual lease payment
Dr Lease liability 66,699
Cr Cash 66,699
December 31, 2020, second annual lease payment
Dr Lease liability 33,366
Dr Interest expense 33,333
Cr Cash 66,699
interest expense = $416,661 x 8% = $33,333
December 31, 2020, depreciation expense
Dr Depreciation expense - leased building 48,336
Cr Accumulated depreciation - leased building 48,336
December 31, 2021, third annual lease payment
Dr Lease liability 36,035
Dr Interest expense 30,664
Cr Cash 66,699
interest expense = $383,295 x 8% = $30,664
December 31, 2021, depreciation expense
Dr Depreciation expense - leased building 48,336
Cr Accumulated depreciation - leased building 48,336
b) this would increase the right to use asset and lease liability by:
= -$5,000 + $1,000 = $4,000
c) this would increase the right to use asset and lease liability by:
= 5,000 + {5,000 x [1 - (1 + 0.08)⁻⁹]/0.08} = $36,234
For each of the following transactions for the Sky Blue Corporation, give the accounting equation effects of the adjustments required at the end of the month on October 31.
a. Collected $2,250 rent for the period October 1 to December 31, which was credited to Unearned Revenue on October 1.
b. Paid $1,080 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount.
c. Used a machine purchased on October 1 for $42,000. The company estimates annual depreciation of $4,200
Answer and Explanation:
Please find answer and explanation attached
Describe the importance of the global market and the roles of comparative advantage and absolute advantage in global trade.
Answer:
wish i could help,,,,,,,,,,,,,
Explanation:
What big announcement at the Consumer Electronics Show in Las Vegas in January 2008 shifted this format war in Sony's favor
Warner Brothers announcing that it would no longer support the HD-DVD standard was the big announcement.
What is HD-DVD standard?This is defined as a discontinued high-density optical disc format for storing data and playback of high-definition video.
At the Consumer Electronics Show in Las Vegas in January 2008, Warner Brothers which were bigger suppliers of HD DVD titles announced it will be discontinued. This therefore shifted the war in Sony's favor and supported the use of Blu-ray.
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"the difference between market price and the higher price that some individuals in the market would be willing to pay is"
Answer:
Consumer Surplus
Explanation:
Consumer surplus is the difference between the highest price a consumer is willing to pay and the actual price they do pay for the good, or the market price.
On April 1, 2017 the Reba Company purchased 10%, $800,000 bonds of the Trading Up Company at par plus accrued interest. These bonds were classified as an investment in trading securities. The bonds pay interest on June 30 and December 31 each year. The entry by Reba on April 1, 2017, would include a: _________
The entry by Reba Company on April 1, 2017, would include a debit to Bonds Receivable and a credit to Cash account of $800,000, respectively.
What is the journal entry for the purchase of bonds?The journal entry for the purchase of bonds is to debit the Bonds Receivable account and credit the Cash account with the amount paid unless the bonds' prices were higher or fewer than the face value.
Data Analysis:April 1, 2017:
10%, Bonds Receivable $800,000
Cash $800,000
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