Answer:
NELSON COMPANY
A. Current Ratio = Current Assets/Current Liabilities
= $38,500/$13,000
= 2.96 : 1
B. Acid-test Ratio = Current Assets - Inventory/Current Liabilities
= $24,600/$13,000
= 1.89 : 1
C. Gross margin ratio = Gross margin/Net Sales x 100
= $70,750/$110,950 x 100
= 63.77%
Explanation:
a) Data and Calculations:
NELSON COMPANY
1. Unadjusted Trial Balance as of January 31, 2013
Debit Credit
Cash $ 24,600
Merchandise inventory 12,500
Store supplies 5,900
Prepaid insurance 2,300
Store equipment 42,900
Accumulated depreciation—
Store equipment $ 19,950
Accounts payable 13,000
J. Nelson, Capital 39,000
J. Nelson, Withdrawals 2,100
Sales 115,200
Sales discounts 2,000
Sales returns and allowances 2,250
Cost of goods sold 38,000
Depreciation expense—
Store equipment 0
Salaries expense 31,300
Insurance expense 0
Rent expense 14,000
Store supplies expense 0
Advertising expense 9,300
Totals $ 187,150 $ 187,150
2. Adjusted Trial Balance as of January 31, 2013
Debit Credit
Cash $ 24,600
Merchandise inventory 10,300
Store supplies 2,800
Prepaid insurance 800
Store equipment 42,900
Accumulated depreciation—
Store equipment $ 21,625
Accounts payable 13,000
J. Nelson, Capital 39,000
J. Nelson, Withdrawals 2,100
Sales 115,200
Sales discounts 2,000
Sales returns and allowances 2,250
Cost of goods sold 40,200
Depreciation expense—
Store equipment 1,675
Salaries expense 31,300
Insurance expense 1,500
Rent expense 14,000
Store supplies expense 3,100
Advertising expense 9,300
Totals $ 188,825 $ 188,825
3. NELSON COMPANY
Income Statement for the year ended January 31, 2013:
Sales Revenue $110,950
Cost of goods sold 40,200
Gross profit $70,750
Depreciation expense—
Store equipment 1,675
Salaries expense 31,300
Insurance expense 1,500
Rent expense 14,000
Store supplies expense 3,100
Advertising expense 9,300 60,875
Net Income $ 9,875
4. Sales Revenue $115,200
Sales discount & allowances (4,250)
Net Sales Revenue $110,950
5. NELSON COMPANY
Balance Sheet as of January 31, 2013:
Assets:
Cash $ 24,600
Merchandise inventory 10,300
Store supplies 2,800
Prepaid insurance 800
Current Assets: 38,500
Store equipment 42,900
Accumulated depreciation—
Store equipment (21,625) 21,275
Total Assets $ 59,775
Liabilities + Equity:
Accounts payable $13,000
J. Nelson, Capital 39,000
J. Nelson, Withdrawals (2,100 )
Net Income $ 9,875
Total Liabilities + Equity $ 59,775
a) Nelson Company's current ratio is the measure of the company's ability to settle maturing short-term liabilities with short-term financial resources. It is is measured as the relationship between current assets and current liabilities.
b) Nelson's acid-test ratio takes away the encumbrances that can slow the conversion of current assets into cash for the settlement of current liabilities. In this case, the inventory, stores supplies, and prepaid insurance are excluded.
c) Nelson has a robust gross margin ratio of more than 60%. This means that it is able to limit the cost of goods sold to below 40%. However, management of Nelson Company is unable to control its periodic costs in order to generate reasonable net income, as it can only turn less than 9% of the sales into returns for J. Nelson.
According to the NELSON COMPANY
Current ratioA. The Current Ratio = Current Assets/Current Liabilities
Then = $38,500/$13,000
now = 2.96 : 1
B. After that Acid-test Ratio = Current Assets - Inventory/Current Liabilities
Then = $24,600/$13,000
Now = 1.89 : 1
C. When the Gross margin ratio = Gross margin/Net Sales x 100
Then = $70,750/$110,950 x 100
Now = 63.77%
1. when Unadjusted Trial Balance as of January 31, 2013
Debit Credit
Cash $ 24,600
Merchandise inventory 12,500
Store supplies 5,900
Prepaid insurance 2,300
Store equipment 42,900
Accumulated depreciation—
Store equipment $ 19,950
Accounts payable 13,000
J. Nelson, Capital 39,000
J. Nelson, Withdrawals 2,100
Sales 115,200
Sales discounts 2,000
Sales returns and allowances 2,250
Cost of goods sold 38,000
Depreciation expense—
Store equipment 0
Salaries expense 31,300
Insurance expense 0
Rent expense 14,000
Store supplies expense 0
Advertising expense 9,300
Totals $ 187,150 $ 187,150
2. when Adjusted Trial Balance as of January 31, 2013
Debit Credit
Cash $ 24,600
Merchandise inventory 10,300
Store supplies 2,800
Prepaid insurance 800
Store equipment 42,900
Accumulated depreciation—
Store equipment $ 21,625
Accounts payable 13,000
J. Nelson, Capital 39,000
J. Nelson, Withdrawals 2,100
Sales 115,200
Sales discounts 2,000
Sales returns and allowances 2,250
Cost of goods sold 40,200
Depreciation expense—
Store equipment 1,675
Salaries expense 31,300
Insurance expense 1,500
Rent expense 14,000
Store supplies expense 3,100
Advertising expense 9,300
Totals $ 188,825 $ 188,825
3. NELSON COMPANY
Income Statement for the year ended January 31, 2013:
Sales Revenue $110,950
Cost of goods sold 40,200
Gross profit $70,750
Depreciation expense—
Store equipment 1,675
Salaries expense 31,300
Insurance expense 1,500
Rent expense 14,000
Store supplies expense 3,100
Advertising expense 9,300 60,875
Net Income $ 9,875
4. Sales Revenue $115,200
Sales discount & allowances (4,250)
Net Sales Revenue $110,950
5. NELSON COMPANY
Balance Sheet as of January 31, 2013:
Assets:
Cash $ 24,600
Merchandise inventory 10,300
Store supplies 2,800
Prepaid insurance 800
Current Assets: 38,500
Store equipment 42,900
Accumulated depreciation—
Store equipment (21,625) 21,275
Total Assets $ 59,775
Liabilities + Equity:
Accounts payable $13,000
J. Nelson, Capital 39,000
J. Nelson, Withdrawals (2,100 )
Net Income $ 9,875
Total Liabilities + Equity $ 59,775
When the Nelson Company's current ratio is the measure of the company's ability to settle maturing short-term liabilities with short-term financial resources. also, It is measured as the relationship between current assets and also current liabilities.
Although when Nelson's acid-test ratio takes away the encumbrances that can slow the conversion of current assets into cash for the settlement of current liabilities. Thus, In this case, the inventory, stores supplies, and also prepaid insurance are excluded.
When Nelson has a robust gross margin ratio of more than 60%. This means that it can limit the cost of goods sold to below 40%. Thus, the management of Nelson Company is unable to control its periodic costs to generate reasonable net income, also as it can only turn less than 9% of the sales into returns for J. Nelson.
Find out more information about Current ratio here:
https://brainly.com/question/18371489
On August 1, 2010, a company issues bonds with a par value of $600,000. The bonds mature in 10 years and pay 6% annual interest, payable each February 1 and August 1. The bonds sold at $592,000. The company uses the straight-line method of amortizing bond discounts. The company's year-end is December 31. Prepare the general journal entry to record the interest accrued at December 31, 2010.
Answer:
Dr Discount on BP 8,000
Cr Cash 592,000
Cr Bond payable 600,000
Dr Interest expense 15,333.33
Cr Interest payable 15,000
Cr Discount on BP 333.33
Dr Interest payable 15,000
Dr interest expense 3,066.67
Cr Cash 18,000
Cr Discount on BP 333.33
Explanation:
Preparation of the general journal entry to record the interest accrued at December 31, 2010.
Based on the information given we were told that the company issues bonds with a par value of the amount of $600,000 in which the bonds mature in 10 years with a 6% annual interest and sold at the amount of $592,000 this means that the transaction will be recorded as:
Dr Discount on BP 8,000
(600,000-592,000)
Cr Cash 592,000
Cr Bond payable 600,000
(To record issuance of the bonds)
Dr Interest expense 15,333.33
Cr Interest payable 15,000 (600,000 x 6% x 5/12 )
Cr Discount on BP 333.33
(8,000 / (10years* 2 payment =400*5/6=333.33)
(To record year end adjustment entry)
Dr Interest payable 15,000
(600,000 x 6% x 5/12 )
Dr interest expense 3,066.67
(600,000 x 6% x 1/12=3,000)
(400 - 333.33= 66.67)
(3,000+66.67=3,066.67)
Cr Cash 18,000
(600,000 x 6% x 6/12)
Cr Discount on BP 333.33
(8,000 / (10years* 2 payment =400*5/6=333.33)
(To record first interest payment to bondholders)
To be effective, your goals must be balanced in the following areas:a. Career, Fun, Health, Relationship, Spiritualityb. Environmental, Spirituality, Organicc. Career, Financial, Health and Fitness, Relationships, Spirituality
Answer:
Career , Financial , Health and Fitness, Relationships, Spirituality
Explanation:
Goals are what one plan to achieve within a specified period of time. Goal could be short term , usually one year or long term goal, which is more than a year. People that want to succeed must set goals because setting goal gives direction. When people set goals, it gives them the opportunity to work harder towards achieving that goal and also provides benchmark for determining if one is actually succeeding or on the right path.
People set goals on daily basis. The question is; how effective are those goals. It therefore means that for a goal to be effective, it must touch or cover the following areas ; career, financial, health and fitness, relationships, spirituality.
Dvorak Company produces a product that requires 5 standard pounds per unit. The standard price is $2.50 per pound. If 1,000 units required 4,500 pounds, which were purchased at $3.00 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) total direct materials cost variance
Answer:
Direct material price variance= $2,250 unfavorable
Direct material quantity variance= $1,250 favorable
Total variance= $1,000 unfavorable
Explanation:
To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (2.5 - 3)*4,500
Direct material price variance= $2,250 unfavorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Standard quantity= 5*1,000= 5,000
Direct material quantity variance= (5,000 - 4,500)*2.5
Direct material quantity variance= $1,250 favorable
Total variance= 1,250 - 2,250= $1,000 unfavorable
Suppose that when your income increases by $300, your consumption expenditures increases by $240.
Your marginal propensity to consume (MPC) is _________ .
If your MPC was the same as the MPC for the economy as a whole, the expenditure multiplier for the economy would be ______________ .
Thus, a $4 million investment project would increase income by $ _________ million in total.
Answer:
The MPC is 0.8
The multiplier or k is 5
The increase in income would be $20 million.
Explanation:
The marginal propensity to consume (MPC) is the proportion of increased disposable income that consumers spend. It is a metric to quantify the induced consumption and how an increase in consumer spending occurs as a result of increase in income.
MPC is calculated as follows,
MPC = Change in consumer spending / change in income
MPC = 240 / 300
MPC = 0.8 or 80%
To calculate the multiplier, we simply use the following formula,
Multiplier or k = 1 / (1 - MPC)
k = 1 / (1 - 0.8)
k = 5
So, the expenditure multiplier for the economy would be 5.
To calculate the increase in income, we will multiply the investment amount by the expenditure multiplier.
Income increase = 4000000 * 5
Income increase = $20000000 or 20 million
Kray Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 6,000 Variable costs per unit: Direct materials $ 40 Direct labor $ 19 Variable manufacturing overhead $ 8 Variable selling and administrative expense $ 2 Fixed costs: Fixed manufacturing overhead $ 144,000 Fixed selling and administrative expense $ 198,000 There were no beginning or ending inventories. The variable costing unit product cost was:
Answer:
The variable costing unit product cost was $69.
Explanation:
Variable Product Costing is a situation whereby only the variable costs of production is taking into account to estimating the cost per unit of a product. This implies that none of the fixed cost will be included in the cost of the product.
Based on the explanation above, the variable costing unit product cost to produce a single product by Kray Inc. can be calculated as follows:
Kray Inc.
Calculation of Variable Costing Unit Product Cost
Particulars Amount ($)
Direct materials 40
Direct labor 19
Variable manufacturing overhead 8
Variable selling and administrative expense 2
Variable cost per unit 69
Therefore, the variable costing unit product cost was $69.
If the price that determined where marginal revenue equaled marginal cost were below the bottom of the average variable cost curve, then the profit-maximizing, monopolistically competitive firm would
Answer: c. shut down because it would cost more to produce and sell output than it would to shut down and lose all fixed costs.
Explanation:
The profit maximizing, monopolistically competitive firm maximises profit at the point where marginal revenue equals marginal costs.
If this point is below Average variable costs then that means that the company is not making enough to cover its variable costs. Should this be the case then the company should shutdown operations because variable costs are only there when the company is producing. If they shutdown then they will no longer incur them which would be the cheaper option.
They would take losses on the fixed costs but these have already been incurred so it would be better to lose the fixed costs than continue to make losses on variable costs.
Projectized organizations are especially effective at helping team members to maintain their discipline-specific competencies. Group of answer choices
Answer: False
Explanation:
A projectized organization is a form of organization structure is that is designed such that it is hierarchical and headed by the project manager who is typically involved in every decision that is made regarding the project as he or she is the one that team members report to.
Therefore, projectized organizations are not effective at helping team members to maintain their discipline-specific competencies.
A company has a merit pay plan based on the relative performances of workers teams. Each worker is a team gets the same wage as other team members, but those in more productive teams get higher wages. Which of the following would NOT explain why this incentive might be better than other methods for motivating workers to work harder?
A) If a worker works harder, it increases the productivity of other team members.
B) If a team works harder, it does not affect the productivity of other teams.
C) One worker can easily sabotage the productivity of other workers.
D) One team can easily sabotage the productivity of other teams.
Answer:
C) One worker can easily sabotage the productivity of other workers.
Explanation:
This is a form of compensation by merit that comprises the performance of a team as a whole, so this is a way of motivating both group work and individual work.
In the scenario above, we can see that this compensation plan would be effective in leveraging the performance of individual workers, and of teams, because if each member of the team is more productive, it will benefit the team as a whole. And this method will not affect the productivity of other teams, as each team will be encouraged and engaged to do the best job possible to achieve merit pay.
The alternative that does not correspond to the question that this incentive may be better than other methods to motivate workers to work harder, is the one that says that a worker can sabotage the productivity of other workers, as that worker is also likely to be engaged in not sabotaging the work of other team members, as the remuneration bonuses depend on the effort of the entire team to work together, and not just one employee.
If the government wants to minimize the deadweight loss of taxation, which of the following items are good candidates for an excise tax? (select all that apply)A. emergency plumber servicesB. Coca-ColaC. insulinD. food at restaurants
Answer:
A. emergency plumber services and C.insulin.
Explanation:
From the list provided the best candidates for this would be emergency plumber services and insulin. That is because these are items or services that have a high supply but low demand due to the population of customers being a minority. This, therefore, causes market inefficiency which leads to deadweight loss. Other items like Coca-Cola and food mostly stay in equilibrium because products are made depending on the current demand and the customer population is the vast majority.
Division ABC has $750,000 invested in assets and earned $200,000 in income. Division XYZ has $800,000 invested in assets and earned $210,000 in income. The company's target rate is 10%. Which division has the highest residual income
The division that has the highest residual income is:.Division XYZ.
Residual incomeResidual income for ABC
Residual income=200,000-(0.10×750,000)
Residual income=200,000-75,000
Residual income=$125,000
Residual income for XYZ
Residual income=210,000 -(0.10×80,000)
Residual income=210,000-80,000
Residual income=$130,000
Inconclusion the division that has the highest residual income is:.Division XYZ.
Learn more about residual income here:https://brainly.com/question/22985922
Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 9 percent, has a YTM of 7 percent, and has 15 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 7 percent, has a YTM of 9 percent, and also has 15 years to maturity. The bonds have a $1,000 par value. What is the price of each bond today
Answer:
Bond Price today
Bond X = $1183.920454 rounded off to $1183.92
Bond Y = $837.1111146 rounded off to $837.11
Explanation:
To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,
For Bond X
Coupon Payment (C) = 0.09 * 1/2 * 1000 = $45
Total periods (n)= 15 * 2 = 30
r or YTM = 7% * 1/2 = 3.5% or 0.035
The formula to calculate the price of the bonds today is attached.
Bond Price = 45 * [( 1 - (1+0.035)^-30) / 0.035] + 1000 / (1+0.035)^30
Bond Price = $1183.920454 rounded off to $1183.92
For Bond Y
Coupon Payment (C) = 0.07 * 1/2 * 1000 = $35
Total periods (n)= 15 * 2 = 30
r or YTM = 9% * 1/2 = 4.5% or 0.045
Bond Price = 35 * [( 1 - (1+0.045)^-30) / 0.045] + 1000 / (1+0.045)^30
Bond Price = $837.1111146 rounded off to $837.11
Comparing payback period and discounted payback period. Nielsen, Inc. is switching from the payback period to the discounted payback period for small-dollar projects. The cutoff period will remain at three years. Given the following four projects' cash flows, LOADING..., and using a discount rate of %, determine which projects it would have accepted under the payback period and which it will now reject under the discounted payback period. Which projects that would have been accepted under payback period method will now be rejected under the discounted payback period method?
Question Completion:
Given the following four projects' cash flows, and using a discount rate of 10%, ...
project 1 project 2 project 3 project 4
Cost $10,000 $15,000 $8,000 $18,000
Cash Flow Year 1 4,000 7,000 3,000 10,000
Cash Flow Year 2 4,000 5,500 3,500 11,000
Cash Flow Year 3 4,000 4,000 4,000 0
Answer:
Nielsen, Inc.Determination of Projects Acceptance under Payback Period and NPV:
Payback Period NPV
Project 1 Accepted Rejected
Project 2 Accepted Rejected
Project 3 Accepted Accepted
Project 4 Accepted Accepted
Explanation:
1. Data and Calculations:
project 1 project 2 project 3 project 4
Cost $10,000 $15,000 $8,000 $18,000
Cash Flow Year 1 4,000 7,000 3,000 10,000
Cash Flow Year 2 4,000 5,500 3,500 11,000
Cash Flow Year 3 4,000 4,000 4,000 0
Total inflows $12,000 $16,500 $10,500 $21,000
Discount rate = 10%
Payback period Year 3 Year 3 Year 3 Year 2
2. Discount factors: Year 1 = 0.909; Year 2 = 0.826; and Year 3 = 0.751
3. PV of Cash Flows:
project 1 project 2 project 3 project 4
Cost $10,000 $15,000 $8,000 $18,000
Cash Flow Year 1 3,636 6,363 2,727 9,090
Cash Flow Year 2 3,304 4,543 2,891 9,086
Cash Flow Year 3 3,004 3,004 3,004 0
Total PV inflow $9,944 $13,910 $8,622 $18,176
4. NPV ($56) ($1,090) $622 $176
5. Nielsen, Inc.'s payback period is the number of years (or length of time) it takes an investment to reach its break-even point (the point where there is no gain or loss). Nielsen's NPV is the difference between total cash inflows and cash outflows over some periods. A positive NPV for Nielsen shows that the projects should be accepted, while a negative NPV points to some underlying problems with the projects, especially with respect to cash inflows and outflows.
Income Statement Debit and Credit columns of an end-of-period spreadsheet are $27,000 and $29,000, respectively, after all account balances have been extended, the amount of the net loss is $2,000.
a. True
b. False
Answer: False
Explanation:
Revenues are an equity entry and as such are credited when they increase therefore the credit side of an income statement contains revenue. Expenses on the other hand are debited to remove them from revenue.
A credit of $29,000 and a debit of $27,000 means that there was a net income of $2,000 not a net loss. If the debits are less than the credits then that means that there are less expenses than revenue which would bring about a profit.
When a company makes a $1,000 sale for cash, and incorrectly debits sales and credits cash for that amount. How much will total assets be off by?
The total assets should be off by $0.
The journal entry for recording the sale made in cash is
Cash Dr $1,000
To Sales $1,000
(Being sale is made in cash is recorded)
Here the cash is debited as it increased the assets and the sale is credited as the sales are also increased.
But as per the question, the journal entry isSales $1,000 Dr
To Cash $1,000
(Being sale is made in cash is recorded)
Therefore we can conclude that The total assets should be off by $0.
Learn more about the asset here: brainly.com/question/13848560
During 2021, Deluxe Leather Goods issued 797,000 coupons which entitles the customer to a $4.50 cash refund when the coupon is submitted at the time of any future purchase. Deluxe estimates that 75% of the coupons will be redeemed. 420,000 coupons had been processed during 2021. Deluxe recognizes coupon expense in the period coupons are issued. At December 31, 2021, Deluxe should report a liability for unredeemed coupons of:
Answer:
Deluxe should report a liability for un-redeemed coupons of 799,875
Explanation:
Estimated coupons to be redeemed 597,750
(797,000 * 75%)
Less: Coupons redeemed 420,000
Coupons un-redeemed 177,750
X Cost per Coupon 4.50
Liability for un-redeemed Coupons 799,875
Match the Appropriate Items to the numbers associated with them Question 69 options: Federal Reserve Banks OPEC Oil Embargo begins in 19xx Federal Deposit Insurance Corporation is founded in 19xx Effective Reserve Requirement Ratio Unemployment during the Great Depression reached a height of xx% NAFTA was signed in 19xx Board of Governor's members The stock market crash that was a leading cause of the Great Depression occurs in 19xx
1. 7
2. 71
3. 79
4. 10
5. 29
6. 94
7. 12
8. 33
9. 20
10. 3
11. 8
12. 30
13. 36
14. 73
15. 25
16. 98
Answer:
1. 12
2. 73
3. 33
4. 10
5. 25
6. 94
7. 7
8. 29
Explanation:
1. Federal Reserve Banks is made up of 12 banks.
2. OPEC Oil Embargo begins in 1973.
3. Federal Deposit Insurance Corporation is founded in 1933.
4. Effective Reserve Requirement Ratio is 10
5. Unemployment during the Great Depression reached a height of 25%
6. NAFTA was signed in 1994.
7. Board of Governor's members is 7.
8. The stock market crash that was a leading cause of the Great Depression occurs in 1929.
Additional workers will increase a company's to a certain point until gains frombegin to decline. At this point, will continue to increase, but ___________ will diminish with each additional worker. Eventually there will be too many workers and not enoughto keep them busy inevitably slowing down production.
Answer:
Marginal product
Explanation:
There would be an increase in the marginal product of labour. more workers would result in more specialization in skilled areas. As workers increase, it is expected that work done would rise also.
Such that a time would come when the workers would be enough and no more gains would be accrued from specialization. We refer to this as the point of diminishing marginal product. capital would be fixed such that as more workers are used capital declines for each worker.
To initiate a strategic move that allows a firm to open up new and uncontested market space through value innovation, managers must address four key questions when formulating a blue ocean business strategy.
a. True
b. False
4. Giving specific examples of global companies, discuss the following concepts which are contemporary issues of concern to Global Businesses: a) Corporate Social Responsibility b) Off-shoring c) Business Sustainability
Answer:
a) Corporate Social Responsibility
This is a type of international private business that is self-regulated which helps a company to become socially responsible, that is, giving back to the society through philanthropic activities which may include volunteer work or environmental activism.
b) Off-Shoring
Offshoring is simply taking advantage of difference in the cost of production or labor to relocate a business to another country in order to get cheaper labor for manufacturing operations.
Typically, it moves the production of materials from a country where such materials are expensive to another country where the materials are cheap in order to save costs.
c) Business Sustainability
This is simply taking care of all the major facets of a business in order to ensure that the success they have enjoyed in the past is sustained.
These facets could include management of social and economic demands to ensure optimal performance.
A business that is sustainable has a very little negative impact, rather it impacts its immediate environment positively.
If a company has the following data, is the budget variance favorable or unfavorable? Budgeted Sales $10,000 Actual Sales. $8,000
Answer:
$2,000 unfavorable
Explanation:
The computation of the budget variance is shown below:
Budget variance is
= Budgeted sales - actual sales
where,
Budgeted sales is $10,000
And the actual sales is $8,000
Now placing these values to the above formula
So, the budget variance is
= $10,000 - $8,000
= $2,000 unfavorable
Since the actual sales is less than the budgeted sales so the same is to be unfavorable else it is favorable
Which of the following statements is CORRECT? a. Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate. b. Short-term debt is favored by firms because, while it is generally more expensive than long-term debt, it exposes the borrowing firm to less risk than long-term debt. c. Commercial paper is a form of short-term financing that is primarily used by large, strong, financially stable companies. d. Trade credit is provided only to relatively large, strong firms. e. Commercial paper is typically offered at a long-term maturity of at least five years.
Answer: Commercial paper is a form of short-term financing that is primarily used by large, strong, financially stable companies.
Explanation:
Commercial papers a promissory notes which are issued by companies on a short term basis that are unsecured. It should be noted that that they are used by the strong, large, and financially stable companies.
Commercial paper are issued in order to finance payroll, and also meet a company's short-term liabilities.
Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 2,600 units are planned to be sold in March. The variable selling and administrative expense is $3.10 per unit. The budgeted fixed selling and administrative expense is $35,760 per month, which includes depreciation of $4,100 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be:________.a. $40,210.b. $44,410.c. $31,570.
Answer:
$39,720
Explanation:
Total fixed costs that represent current cash flows = $35,760 - $4,100
Total fixed costs that represent current cash flows = $31,660
Variable costs = 2,600 units * $3.10
Variable costs = $8,060
The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget will be
= $31,660 + $8,060
= $39,720
Income statement.
Use the data from the following financial statement in the popup window, Complete the partial income statement if the company paid interest expense of $18,100 for 2014 and had an overall tax rate of 40% for 2014. Complete the income statement below:
(Round to the nearest dollar.)
Income Statement Year Ending 2014
Sales revenue $360,000
Cost of goods sold $150,000
Fixed costs $42,900
Selling, general, and administrative expenses $27,200
Depreciation $45,900 EBIT $
Interest expense $ 18100
Taxable income $
Taxes $
Net income $
Find the accumulated depreciation for 2014 first.
The accumulated depreciation for 2014 is:_____(Round to the nearest dollar.)
Answer:
Income Statement Year Ending 2014
Sales revenue $360,000
Cost of goods sold $150,000
Gross profit $210,000
Fixed costs $42,900
Selling, general, and
administrative expenses $27,200
Depreciation $45,900
EBIT $94,000
Interest expense $18,100
Taxable income $ 75,900
Taxes $ 30,360
Net income $ 45,540
Find the accumulated depreciation for 2014 first.
The accumulated depreciation for 2014 is:_$45,900____(Round to the nearest dollar.)
Explanation:
A company's income statement is one of the three financial statements prepared by the entity at the end of its fiscal period. The statement compares the company's revenue with the expenses. After deducting the total expenses from the total revenue, the net income or loss is obtained. But before arriving at the net income or loss, there are other profit points that are usually calculated. The first is the gross profit, which is the difference between the sales revenue and the cost of goods sold. It shows the ability of the management to generate enough revenue to cover the cost of goods sold and make a profit from its trading or primary activities.
The next profit point is the Earnings before Interests and Taxes (EBIT). This is an important index for checking the financial performance of a company. The next is the Taxable Income on which the tax rate is determined and paid to government as Company Income Tax. After deducting the tax expense from the pre-tax income, the final profit point is the After-Tax Income or the Net Income. This determines the dividends policy and the share of retained earnings of the entity.
The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20 percent a year for the next 4 years and then decreasing the growth rate to 5 percent per year. The company just paid its annual dividend in the amount of $2.00 per share. What is the current value of one share of this stock if the required rate of return is 5.70 percent
Answer:
Current market value =$40.6
Explanation:
The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.
PV of dividend from year 1 to 4
Year Present Value
1 2 × (1.2) ×(1.057)^(-1) = 2.27
2 2 × (1.2)^2×(1.057)^(-2)= 2.58
3 2 × (1.2)^3×(1.057)^(-3) = 2.93
4 2 × (1.2)^4×(1.057)^(-4) = 3.32
Total PV = 11.10
PV of dividend from year 1 to 4 = 11.10
PV of dividend from year 5 and beyond
This will be done in two steps:
Step 1: PV (in year 4 terms) of dividends
( 2 × (1.2)^4× (1-0.05) )/(0.057--(0.05)) = 36.82
Step 2 : PV( in year 0 terms) of dividends
=PV in (year 4 terms)× (1+r)^-4
=36.82 × 1.057^(-4) = 29.50
PV of dividend from year 5 and beyond =29.50
Current market value = Total PV of dividend = 11.10 + 29.50 = $40.6
Current market value =$40.6
Often the life of a whistleblower involves tremendous ridicule and scrutiny from others, despite doing the "right thing." Describe your views as to why whistleblowers face tremendous obstacles as a result of bringing the inappropriate actions of otehrs to light.
Answer:
Find the explanation below.
Explanation:
Whistleblowing is the act of raising an alarm over unethical or illegal acts committed by people holding political or public service positions. The whistleblower is most times motivated by the quest to end the injustice or negative impact suffered by the disadvantaged group. Whistleblowers suffer tremendous obstacles from the people they have exposed because;
1. The offender's source of illegal income has been withdrawn. Just like humans fight for survival when their source of livelihood is taken away, so would a person fight against whatever that tends to take away their illegal source of wealth.
2. Fear of being seen in a negative light by others. The person committing a crime usually puts up an act of innocence, thus presenting himself as a morally upright person. When the whistleblower tries to expose their true identity, it is only expected that they would try to shut him up.
Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par value bonds have a quoted annual interest rate of 8 percent and the interest is paid semiannually. The yield to maturity on the bonds is 12 percent annual interest. There are 10 years to maturity.Required:Compute the price of the bonds based on semiannual analysis.
Answer:
Price of bond = $770.60
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond for Heather Smith can be worked out as follows:
Step 1
PV of interest payments
Semi annul interest payment
= 8%× 1000 × 1/2 =40
Semi-annual yield = 12/2 = 6% per six months
Total period to maturity (in months) = (2 ×10) = 20 periods
PV of interest =
40 × (1- (1+0.06)^(-20)/0.06) = 458.796
Step 2
PV of Redemption Value
= 1,000 × (1.06)^(-20) = 311.80
Step 3 :Price of bond
= 458.796 + 311.80 = 770.60
Price of bond = $770.60
What is the total stockholders' equity based on the following account balances? Common Stock $375,000 Paid-in-capital in excess of Par 90,000 Retained earnings 190,000 Treasury Stock 15,000
Answer: $640,000
Explanation:
The total Stockholders Equity for a company is calculated by;
= Common Stock + Paid-in-capital in excess of Par + Retained Earnings - Treasury Stock
Treasury Stock reduces stockholder equity as the company bought the shares back from the stockholders.
= 375,000 + 90,000 + 190,000 - 15,000
= $640,000
On January 15, the end of the first pay period of the year, North Company’s employees earned $40,000 of sales salaries. Withholdings from the employees’ salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $3,100 of federal income taxes, $593 of medical insurance deductions, and $230 of union dues. No employee earned more than $7,000 in this first period. Prepare the journal entry to record North Company’s January 15 salaries expense and related liabilities.
Answer:
Dr Salaries expense 40,000
Cr FICA - Social security taxes payable 2,480
Cr FICA - medicare taxes payable 580
Cr Employee medical insurance deduction 593
Cr Union dues 230
Cr Salaries payable 33,017
Cr Federal income taxes payable 3,100
Explanation:
Preparation of the journal entry to record North Company’s January 15 salaries expense and related liabilities
Jan 15
Dr Salaries expense 40,000
Cr FICA - Social security taxes payable 2,480 (6.2%*40,000)
Cr FICA - medicare taxes payable 580
(1.45%*40,000)
Cr Employee medical insurance deduction 593
Cr Union dues 230
Cr Salaries payable 33,017
Cr Federal income taxes payable 3,100
Salaries payable is calculated as:
Salaries expense 40,000
Less: FICA - Social security taxes payable (2,480)
FICA - medicare taxes payable (580)
Employee medical insurance deduction (593)
Union dues (230)
Federal income taxes payable (3,100)
=$33,017
Here, we are to prepare the journal entry to record North Company’s January 15 salaries expense and related liabilities.
Salaries payable = Salaries expense - FICA - Social security taxes payable - FICA - medicare taxes payable - Employee medical insurance deduction - Union dues - Federal income taxes payable
Salaries payable = $40,000 - $2,480 - $580 - $593 - $230 - $3,100
Salaries payable = $33,017
Date Account titles and Explanation Debit Credit
Jan 15 Salaries expense $40,000
FICA - Social security taxes payable $2,480
(6.2%*40,000)
FICA - medicare taxes payable $580
(1.45%*40,000)
Employee medical insurance deduction $593
Union dues $230
Salaries payable $33,017
Federal income taxes payable $3,100
(To record salaries expense and related liabilities)
See similar solution here
brainly.com/question/16928960
A company’s common stock has a market value of $63.18 per share and its next dividend is expected to be $3.26 per share. The stock’s beta is 1.2, the tax rate is 35%, and the market risk premium is 6.1% per year. The yield to maturity for the company’s long-term debt is 6.4% per year. If the riskiness of the company’s equity requires that it provide a risk premium of 3.2% per year over the yield on its long-term debt, what is the company’s annual cost of internal equity financing?
Answer:
Cost of equity = 9.6%
Explanation:
The cost of equity is the return a firm theoretically pays to its equity investors, In order to calculate the cost of equity here we need to add up the yield to maturity for the company's long term debt and the risk premium per year over the yield on its long term debt.
Solution
Cost of equity = Yield to maturity + Risk premium
Cost of equity = 6.4% + 3.2%
Cost of equity = 9.6%
Your textbook discussed a model of a simple economy with four markets: labor, capital, energy, and food. Which of the following statements is inconsistent with a general equilibrium for this simple economy?
A. The household demand for energy equals the industry supply of energy.
B. The household demand for food equals the industry supply of food.
C. The household demand for labor equals the industry supply of labor.
D. The household supply of capital equals the industry demand for capital.
Answer:
The correct answer is the option C: The household demand for labor equals the industry supply of labor
Explanation:
To begin with, when it comes to the microeconomics theory the market of labor is considered to be as a factor of production market and from that point of view the labor is demanded by the companies to the households who are the ones who offered the labor due to the fact that the workers are the one who put their force to disposition of the companies. And that is why that it would be inconsistent to say that the household demand for labor will equals the industry supply of labor, because it is all the way around, the household supply of labor will equals the industry demand of it.