Answer: A. Debit Income Summary $41,300; credit Expense accounts $41,300.
Explanation:
The Income summary account allows for closing entries to be done related to the company income. Revenue is to be credited to the account so that it increases at the end of the period.
Expenses are to be debited to reflect that they are reducing the balance on the Income summary account and should be credited to the expenses account to show that the expenses are being transferred from the expense account to the income summary account.
If fixed costs are $750,000 and variable costs are 60% of sales, what is the break-even point in sales dollars?
Answer:
$1,875,000
Explanation:
Break even point in sales = Fixed cost / Contribution margin ratio
When Contribution margin ratio = 100% - Variable cost ratio
Contribution margin ratio = 100% - 60%
Contribution margin ratio = 40%
Break even point in sales = $750,000 / 40%
= $1,875,000
Peter's Audio has a yield to maturity on its debt of 7.8 percent, a cost of equity of 12.4 percent, and a cost of preferred stock of 8 percent. The firm has 105,000 shares of common stock outstanding at a market price of $22 a share. There are 25,000 shares of preferred stock outstanding at a market price of $45 a share. The bond issue has a total face value of $1.5 million and sells at 98 percent of face value. If the tax rate is 34 percent, what is the weighted average cost of capital?
Answer:
WACC = 9.22%
Explanation:
after tax cost of debt = 7.8% x (1 - 34%) = 5.148%
Re = 12.4%
cost of preferred stock = 8%
total value:
105,000 common stocks x $22 = $2,310,000
25,000 preferred stocks x $45 = $1,125,00
$1,500,000 bonds x 0.98 = $1,470,000
total value = $4,905,000
capital structure:
common stocks = $2,310 / $4,905 = 47.09%
preferred stocks = $1,125,00 / $4,905 = 22.94%
debt = $1,470,00 / $4,905 = 29.97%
WACC = (47.09% x 0.124) + (22.94% x 0.08) + (29.97% x 0.05148) = 9.22%
According to the technical approach, what matters in exchange rate determination is:____________.
A. the past behavior of exchange rates.
B. the velocity of money.
C. the future behavior of exchange rates.
D. the beta.
A _____ is an alternative method to cash dividends that is used to distribute a firm's earnings to shareholders.
Answer:
"Share Repurchase " would be the correct one.
Explanation:
Application whereby a company is buying back one's free-market stock. Typically it occurs whenever the shares are oversold or overvalued. Even though repurchase decreases the number of common shares and therefore also raises the return on equity, it helps in enhancing the equity value of the investment investors and shareholders kept.Bramble Corp. is planning to sell 1300 boxes of ceramic tile, with production estimated at 1270 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.50 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $18 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Bramble has 4600 pounds of clay mix in beginning inventory and wants to have 4500 pounds in ending inventory. What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?
Answer:
Purchases= 55,780 pounds
Explanation:
Giving the following information:
Production= 1270 boxes
Each box of tile requires 44 pounds of clay mix
Bramble has 4,600 pounds of clay mix in beginning inventory and wants to have 4500 pounds in ending inventory.
To calculate the purchase required, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 1,270*44 + 4,500 - 4,600
Purchases= 55,780 pounds
Ben &Jerry's Ice Cream buys keywords for a search marketing campaign such as "Ben &Jerry's Chunky Monkey" and "Ben &Jerry's Cherry Garcia." What type of keywords is the firm buying? Group of answer choices
Complete Question:
Ben & Jerry’s Ice Cream buys keywords for a search marketing campaign such as “Ben & Jerry’s Chunky Monkey” and “Ben & Jerry’s Cherry Garcia.” What type of keywords is the firm buying?
Group of answer choices
A. Negative keywords
B. Organic keywords
C. Native keywords
D. Generic keywords
E. Branded keywords
Answer:
E. Branded keywords.
Explanation:
In this scenario, Ben & Jerry's Ice Cream buys keywords for a search marketing campaign such as "Ben & Jerry's Chunky Monkey" and "Ben & Jerry's Cherry Garcia." The type of keywords that the firm is buying is generally referred to as branded keywords.
A branded keyword can be defined as any query of a database through a search engine such as Google which includes the name of the business firm or company.
This ultimately implies that, a branded keyword is any query or search phrases that combines the name of a firm or brand and other branded terms associated with the firm such as product name, type, motto etc. Branded keywords is a strategic marketing process or approach which helps to make business firms or brands available to online customers and the target market or audience.
At the start of 2071 Cowboy Corp. purchased 25% of Bebop Tech Inc. for $45 million. At the time of purchase, the carrying value of Bebop Tech's net assets was $75 million. The fair value of Bebop Tech's depreciable assets (5 year useful life remaining) was $25 million in excess of their book value. For this year, Bebop Tech reported a net income of $50 million and declared and paid $25 million in dividends. What amount will Cowboy Corp. recognize as additional depreciation at the end of 2071?
A. $6.25 Million
B. $5 Million
C. $1 Million
D. $125 Million
Answer:
B. $5 Million
Explanation:
The amount of additional depreciation that Cowboy Corp. would recognize in the year 2071 is the excess of Bebop Tech Inc.'s fair value of assets over the book value divided by the useful life remaining which is 5 years
The excess of fair value of assets over book value was $25 million
The remaining useful in respect of the assets was 5 years
The additional depreciation recognizable=$25 milion
The additional depreciation =$25 million/5
The additional depreciation=$5 million
According to McGregor which of the following characterizes the assumptions of a Theory X manager?
(a) Workers are lazy.
(b) Workers dislike responsibility.
Answer:
All of the above
Explanation:
This theory is one of the theories of work and motivation as it pertains to certain workers. The theory is by Douglas MacGregor
These are the assumptions
1.that many people hate anything work and would do anything they can to avoid working.
2.people are not ambitious. They would rather avoid responsibility
3. People have to be forced to work, so they must be directed.
When a municipal bond has a net revenue pledge, what is the first item that gets paid from the revenue received
Answer: Operations and maintenance
Explanation:
A municipal bond, is simply a bond that is issued by a either a territory, its agency or the local government, to help finance public projects like infrastructure, airports, roads, schools, and seaports.
Therefore, when a municipal bond has a net revenue pledge, the first item that gets paid from the revenue received will be for Operations and maintenance.
On November 1, 2018, Mason Corp. sold $700,000 of its 10% term bonds dated October 1, 2018. The bonds were sold to yield 8%, with total proceeds of $800,000 plus accrued interest. Interest is paid every April 1 and October 1.
What amount should Mason report for interest payable in its December 31, 2018 balance sheet?
Answer:
$16,000
Explanation:
The computation of the amount reported for the interest payable is shown below:
= Principal × rate of interest × number of months ÷ (total number of months in a year)
= $800,000 × 8% × (3 months ÷ 12 months)
= $16,000
The three months should be taken from October 1 To November 1 and November 1 to December 31
We simply applied the above formula so that the interest payable amount could come
A firm sells two products, Regular and Ultra. For every unit of Regular the firm sells, two units of Ultra are sold. The firm's total fixed costs are $2,242,500. Selling prices and cost information for both products follow. What is the firm's break-even point in units of Regular and Ultra?unit sales price variable cost per unitproductregular 27 $8ultra 30 $7a) 34,500 Regular units and 34,500 Ultra units.b) 34,500 Regular units and 69,000 Ultra units.c) 11,500 Regular units and 23,000 Ultra units.d) 40,250 Regular units and 80,500 Ultra units.e) 69,000 Regular units and 34,500 Ultra units.
Answer:
b) 34,500 Regular units and 69,000 Ultra units
Explanation:
The computation of the firm break even point in units for Regular and Ultra is shown below:
Weighted average contribution margin per unit is
= (19 × 1 ÷ 3 + 23 × 2 ÷ 3)
= 21.6666 per unit
Now Break even point unit is
= 2242500 ÷ 21.666
= 103500 unit
Now
Regular = 103500 ÷ 3 = 34500
And Ultra = 103500 - 34500 = 69000
So the correct option is b
A stock paying $5 in annual dividends sells now for $80 and has an expected return of 10%. What would be the stock price eight years from now
Answer:
P8 = $105.5994 rounded off to $105.60
Explanation:
The constant growth model of DDM is used to calculate the price of a stock whose dividend growth rate is constant. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for the price of stock today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
D0 * (1+g) is the dividend for the next period of D1r is the required rate of returng is the growth rate in dividends80 = 5 * (1+g) / (0.1 - g)
80 * (0.1 - g) = 5 * (1+g)
8 - 80g = 5 + 5g
8 - 5 = 5g + 80g
3 = 85g
3/85 = g
g = 0.03529 or 3.529% rounded off to 3.53%
To calculate the price today, we use D1. Thus, to calculate the price 8 years from now or P8, we will use D9
P8 = 5 (1+0.0353)^9 / (0.1 - 0.0353)
P8 = $105.5994 rounded off to $105.60
McKerley Corp. has preferred stock outstanding that will pay an annual dividend of $4.00 per share with the first dividend exactly 10 years from today. If the required return is 3.66 percent, what is the current price of the stock?
Answer: $79.08
Explanation:
From the question, we are informed that McKerley Corp. has preferred stock outstanding that will pay an annual dividend of $4.00 per share with the first dividend exactly 10 years from today and that the required return is 3.66 percent.
The current price of the stock will be calculated thus:
At the end of year 9, the price will be:
= 4/3.66%
= 4/0.0366
= 109.29
The Price Today will be:
= 109.29/1.0366^9
= 79.08
Which of the following is not a recommended guideline for designing an effective incentive compensation system?
a) Making generous across-the-board wage and salary increases for all company personnel the cornerstone of monetary rewards and having a reward system that consists of at least 50 percent non-monetary rewards and incentives
b) Keeping the time between achieving the target performance outcome and the payment of the reward as short as possible
c) Making sure the performance targets each individual or team is expected to achieve involve outcomes that the individual or team can personally affect
d) Administering the reward system with scrupulous objectivity and fairness
e) Strictly avoid rewarding people who have tried hard, gone the extra mile, and yet fallen short of achieving their assigned performance targets (even if the shortfall might be due to circumstances beyond their control)
Answer: Strictly avoid rewarding people who have tried hard, gone the extra mile, and yet fallen short of achieving their assigned performance targets (even if the shortfall might be due to circumstances beyond their control
Explanation:
Out of the options given, the one which is not is not a recommended guideline for designing an effective incentive compensation system is strictly avoid rewarding people who have tried hard, gone the extra mile, and yet fallen short of achieving their assigned performance targets (even if the shortfall might be due to circumstances beyond their control).
Bay Company acquires 60, 8%, 5 year, $1,000 Community bonds on January 1, 2014 for $60,000. The journal entry to record this investment includes a debit to
Answer: Interest revenue for $2400
Explanation:
From the question, we are informed that Bay Company acquires 60, 8%, 5 year, $1,000 Community bonds on January 1, 2014 for $60,000. The journal entry to record this investment includes a debit for Interest revenue for $2400.
This was calculated in the following way:
= $60,000 × 8% × 1/2
= $60,000 × 0.08 × 0.5
= $2400 interest revenue
Answer:
The options are missing, so I will just write down the complete journal entry that Bay Company should use to record this investment:
January 1, 2014, investment in Community bonds
Dr Investment in Community bonds 60,000
Cr Cash 60,000
Since no other transaction has taken place, all you need to record is the asset (investment account) and decrease the cash used to purchase the asset.
The applied overhead is compared to the actual overhead, with any discrepancy going into one of the following three accounts: goods in process inventory, finished goods inventory, or cost of goods sold.
a) true
b) false
Answer:
b) false
Explanation:
There are 2 methods of allocating under-applied / over-applied overheads under of the methods any discrepancy is allocated to all of the three accounts, that is finished goods, work-in-progress and cost of goods sold. Under the other method, all of it is allocated to cost of goods sold. Hence, given statement is false
_____________ are sunk costs because the company will have to pay the cost no matter production or other variables in operations.
Answer:
E. Fixed Costs
Explanation:
Here are the options to this question :
A. Variable Costs
B. Labor Costs
C. Total Costs
D. Raw material Costs
E. Fixed Costs
Sunk costs are costs that have already been incurred and cannot be recovered. They should not be considered when making future economic decisions.
Fixed cost is cost that do not vary with production. e.g. rent
Most companies pay rent per year. if due to unforeseen contingencies, sales and profit of the company declines and the company decides to shut down production, the company has already paid for rent, this amount cannot be recovered even though the company would not be using the space for sometime. So, rent is an example of sunk cost
What does it mean for a product to have inelastic demand? A small change in the price has very little effect on the quantity of that product demanded. There is particularly high competition with the product, and an increase in price has a big impact on demand. The price for the product will increase as demand for the product increases. More of the product will be demanded at a lower price than for a higher price.
Answer:
I believe your answer will be (A price increase does not have a significant impact on buying habits)
Explanation:
A small change in the price has very little effect on the quantity of that product demanded, is it mean for a product to have inelastic demand. Hence, option A is correct.
What is the effect of a change in price on quantity?When non-price variables are eliminated, it follows that higher prices lead to lower volumes demanded and lower prices lead to higher quantities demanded. As a result, according to the rule of demand, there is an inverse relationship between a product's price and the quantity that is demanded for it.
An increase in price has a relatively slight influence on quantity demanded; the equilibrium quantity percentage growth is less than the price change percentage change, and the resulting price elasticity has an absolute value below 1.
Thus, option A is correct.
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The tax basis for an investor in a limited partnership that establishes the maximum loss deduction is:
Answer: . I, II, III, IV
Explanation:
Here is the completed question:
The tax basis for an investor in a limited partnership that establishes the maximum loss deduction includes:
I original investment
II partnership debt assumed
III distributive share of partnership gains
IV distributive share of partnership losses
A. I only
B. I and II only
C. III and IV only
D. I, II, III, IV
It should be noted that an investor that is in a limited partnership will out forward a "tax basis" whereby there's limit limit for tax deductions that are allowed.
Therefore, the tax basis for an investor in a limited partnership that establishes the maximum loss deduction is original investment, partnership debt assumed, distributive share of partnership gains and the distributive share of partnership losses.
The labor supply curve shows how many workers are willing to work at the minimum wage. in a particular industry. in order to maximize the firm's profit. at any given wage. at any given time.
Answer:
The labor supply curve shows how many workers are willing to work
at any given wage.
Explanation:
The labor supply curve shows the number of workers who are willing and able to work in an occupation at different wages. The supply curve of labor for the economy as a whole will be upward sloping or backward sloping. The economy's supply curve of labor depends on the number of individuals with upward sloping supply curves and those with backward sloping supply curves of labor.
World-class businesses attempt to meet the needs of:_________.A) their customers, even if it comes at the expense of employees and other stakeholders in the business.B) their employees, even if it means shortchanging customers by charging higher prices.C) all of their stakeholders.D) exclusively their owners, since they are ultimately the ones who pay the bills.
World-class businesses attempt to meet the needs of all of their stakeholders. The correct option is C.
Why is it important to meet needs?Because not meeting our needs causes our emotional suffering, it is crucial to do so. It's possible that you're in pain without understanding why or what needs aren't being met. We feel content, appreciative, safe, loved, playful, attentive, and calm when our needs are met.
A company can ask customers additional questions to determine what other products might pique their interest once they have a better understanding of their needs and wants. Your business will be able to tell if the customer is interested in exploring more options or if they have exhausted their buying options by listening carefully.
Thus, the ideal selection is option C.
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BI delivery can be done in a structured way because the business environment is very static.
a) true
b) false
Answer:
False
Explanation:
The correct answer is "False". In BI delivery, the business environment is NOT static.
Business Intelligence (BI) is key when carrying out strategic planning of organizations. It is used in measuring performance progress when working towards business goals.
BI is used to deliver business value and to identify customer insights.
Which of the following costs are variable? Cost 10,000 Units 30,000 Units 1. $100,000 $300,000 2. 40,000 240,000 3. 90,000 90,000 4. 50,000 150,000
Answer:
Only costs 1 and 4 are variable costs.
Explanation:
Note: The data in this question are merged together. They are therefore sorted before answering the question as follows:
Which of the following costs are variable?
Cost 10,000 Units 30,000 Units
1. $100,000 $300,000
2. 40,000 240,000
3. 90,000 90,000
4. 50,000 150,000
Explanation of the answer are now given as follows:
Variable costs refer to per unit cost that remains the same at every level of activity. Variable cost can be calculated as follows:
Variable cost per unit = Total cost / Number of unit ………… (1)
For this question, the variable costs can be determined using the following rules:
Rule 1. When per unit cost are the same, they are variable cost.
Rule 2. When per unit cost are different, they are not variable cost.
Rule 3. When the total cost is the same, they are fixed costs.
These rules are then applied by using equation (1) as follows:
For Cost 1:
Cost per unit of 10,000 units = $100,000 / 10,000 units = $10
Cost per unit of 30,000 units = $300,000 / 30,000 units = $10
Based on Rule 1, Cost 1 is a variable cost.
For Cost 2:
Cost per unit of 10,000 units = $40,000 / 10,000 units = $4
Cost per unit of 30,000 units = $240,000 / 30,000 units = $8
Based on Rule 2, Cost 2 is not a variable cost.
For Cost 3:
Since the two total costs are $90,000 each, Cost 3 is therefore fixed cost based on Rule 3.
For Cost 4:
Cost per unit of 10,000 units = $50,000 / 10,000 units = $5
Cost per unit of 30,000 units = $150,000 / 30,000 units = $5
Based on Rule 1, Cost 3 is a variable cost.
Based on the calculation above, only costs 1 and 4 are variable costs.
The holder of a $1,000 face value bond can exchange the bond any time for 25 shares of stock. Then the conversion ratio:
Answer:
Conversion ratio is 25:1
Explanation:
Conversion ratio explains the number of shares that you can get for one bond. Here the number of shares that you are getting for 1 $1000 face value bond is 25 shares. Therefore, the conversion ratio is 25:1
The conversation ratio can also be calculated by dividing the par value of a bond for a share's price. As we do not have the price of 1 share, we will use the quantity to decide the conversion ratio.
Through social media connections, marketers and customers share information by Multiple Choice media buying. connecting customers with ways to buy media time. connecting customers online to share personal information. connecting people to financial advisors. uploading pictures, music, and videos.
Answer: Uploading pictures, music, and videos.
Explanation:
Social Media has made connections between marketers and customers easier and more widespread. They are able to share information amongst themselves through various means such as discussions on products as well as uploading pictures, music and videos.
Through these uploads of pictures, music and videos, marketers and consumers can share information relating to new products, product performance and the like. For instance, in the movie industry, trailers are frequently uploaded on social media sites to enable the movie gain traction before it is released and this method has worked wonders for movie premiers.
Which one of the following would not be considered an advantage of the corporate form of organization?a. Limited liability of ownersb. Separate legal existencec. Continuous lifed. Government regulation
Answer:
Disadvantage of Corporate Form of Organization:
d. Government regulation
Explanation:
In recent times, government regulation of businesses appears to be regarded as a disadvantage of the corporate form of organizations. Governments intervene and regulate corporate entities whenever they fail to be self-regulatory. But, the regulations may appear to be so much that the corporate form of organization now looks like a disadvantage. Given the many corporate scandals, collapses, and misapplications of resources by corporate entities that have become the order of the day, government regulation is very important. Without government regulation, many corporate bodies will not be acting in the public interest. This is more so with public entity corporate organizations with diverse stakeholders and corporate managers who act as if they were running their own autonomous governments.
Shelton, Inc., has sales of $18 million, total assets of $16.5 million, and total debt of $9.4 million. Assume the profit margin is 8 percent.Required:a. What is the company's net income?b. What is the company's ROA?c. What is the company's ROE?
Answer:
a.
Net Income = $1,440,000 or $1.44 million
b.
ROA = 0.0873 or 8.73%
c.
ROE = 0.2028 or 20.28%
Explanation:
a.
The net income of the company can be calculated by multiplying the profit margin by the value of total sales.
Net Income = 18,000,000 * 0.08
Net Income = $1,440,000 or $1.44 million
b.
The return of assets or ROA is the value of Net Income expressed as a percentage of Total Assets. Thus, the formula for ROA is,
ROA = Net Income / Total Assets
ROA = 1.44 / 16.5
ROA = 0.08727272 rounded off to 0.0873 or 8.73%
c.
The ROE or return on equity is the profit or net income expressed as a percentage of total equity.
ROE = Net Income / Shareholders' Equity
First we need to calculate the value of total equity using the basic accounting equation.
Total Assets = Total Liabilities + Total Equity
16.5 = 9.4 + Total Equity
16.5 - 9.4 = Total Equity
Total Equity = $7.1 million
ROE = 1.44 / 7.1
ROE = 0.20281 or 20.281% rounded off to 0.2028 or 20.28%
The relationship between the passage of time and the value of assets is called:_________
Answer:
Depreciation
Explanation:
Depreciation is the decrease in value of an asset as time goes by. Depreciation is a method used in expensing the cost of an asset.
As time goes on, the value of an asset reduces as a result of wear and tear. this is known as depreciation.
Why is it difficult for most small business owners to raise the capital needed to start, operate, or expand their ventures?
Answer:
1. It is not easy to get funds for a start up, as many banks do not consider it as a successful decision to provide loan to a start up, as the feasibility of recovery of loan cannot be identified and guaranteed.
2. Venture capitalists also faces the same issue as of bank, also they are large equity investors and tend to invest in even larger project.
3. Private investors do not blindly invest and rather are more cautious then banks or venture capitalists, as because they do not huge funds to invest, and with less amount of investment they need even higher assurance.
4. Public stock is never available for a start up as for public stock issue you need great credibility, and good previous record.
The Estimated Revenues account of a government is debited when:a. The account is closed to fund balance-unassigned at the end of the year.b. Property taxes are recorded.c. Property taxes are collected.d. The budget is recorded at the beginning of the year.
Answer: a. The account is closed to fund balance-unassigned at the end of the year.
Explanation:
The Unassigned fund balance is the amount left in the Government's general fund that was not assigned to any undertaking or funds during the year. This balance is as well not restricted or committed to any undertaking.
It will therefore be debited to close off the account at the end of the period not unlike a balance carried down in a ledger account that is used to close off the account and is then sent forward to the next period.