The four main sections of a credit report are:
Personal Information: This section includes your personal details such as your name, date of birth, social security number, current and previous addresses, and employment history.Credit History: This section provides a detailed account of your credit accounts, including credit cards, loans, mortgages, and lines of credit. It includes information about the opening date, credit limits, balances, payment history, and any delinquencies or defaults.Public Records: This section contains information about any public records related to your financial history, such as bankruptcies, tax liens, judgments, and court-ordered payments.
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Consider an investment that has cash flows of $600 for the first year and $500 for the next four years. If your opportunity cost is 10%, how much is this investment worth to you?
Discounted Cash Flow Model:
The discounted cash flow model (DCF) is a valuation method to determine how future cash flows are worth of today's dollars. Theoretically, this method will discount all expected cash flows at the investor's required rate of return.
The investment is worth $2,669.74 to the investor, considering a discount rate of 10% and the future cash flows provided.
To determine the value of the investment using the discounted cash flow model, we need to discount the future cash flows to their present value. The discounted cash flow model assumes that the value of cash flows received in the future is lower than the value of the same amount of cash received today due to the time value of money.
In this case, the cash flows are $600 for the first year and $500 for the next four years. The opportunity cost, which represents the required rate of return or discount rate, is given as 10%. To calculate the present value of each cash flow, we use the formula:
PV = CF / (1 + r)^n
Where PV is the present value, CF is the cash flow, r is the discount rate, and n is the number of periods.
Using this formula, we can calculate the present value of each cash flow and then sum them up to determine the total value of the investment. Applying the formula to the cash flows provided and discounting them at a rate of 10%, the investment is worth approximately $2,669.74.
Therefore, the investment is worth $2,669.74 to the investor, considering a discount rate of 10% and the future cash flows provided.
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identify a source of cash: (select only one alternative) group of answer choices dividend is paid accounts receivablle goes up accounts payable goes down bank loan is repaid machinery is sold
One source of cash is when accounts payable goes down. When a company pays off its outstanding accounts payable, it reduces its liabilities and increases its available cash.
One source of cash is when machinery is sold. When a company sells its machinery, it receives cash from the buyer in exchange for transferring ownership of the equipment. This transaction results in a cash inflow for the company. Selling machinery can occur for various reasons, such as upgrading to newer equipment, downsizing operations, or generating additional funds for investment or debt repayment. The cash received from selling machinery can be used for various purposes, including covering operating expenses, funding expansion projects, paying off liabilities, or distributing dividends to shareholders. It represents a direct injection of cash into the company's financial resources.
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Respond to the following in a minimum of 175 words:
Consider the "control environment." Asses why it is important for auditors to understand a client’s control environment. What are some limitations of internal controls?
Now consider "segregation of duties." Determine why it is important in an IT environment. What are some advantages of using IT and audit software when conducting an audit?
Control environment: Auditors must understand a client's control environment to ensure the effectiveness of internal controls. The control environment sets the tone for an organization's control system, including management's commitment to integrity, ethical values, and competence. By assessing the control environment, auditors can gain insight into the reliability of financial reporting and identify potential risks. This understanding helps auditors tailor their audit procedures and evaluate the adequacy of controls to mitigate risks of material misstatement in financial statements.
Limitations of internal controls include the potential for management override, human error, collusion, and cost constraints. Management can bypass controls and manipulate financial information, compromising the control system's effectiveness. Human error, despite well-designed controls, can lead to mistakes or omissions. Collusion among employees can circumvent controls and perpetrate fraud. Additionally, implementing comprehensive control procedures can be costly, requiring a balance between control benefits and associated costs.
Segregation of duties: In an IT environment, segregation of duties is essential to prevent fraud, errors, and unauthorized activities. By dividing tasks and responsibilities among different individuals, organizations establish checks and balances to minimize the risk of fraudulent acts and errors going undetected. Segregation of duties ensures that no single individual has sole control over critical processes, such as authorization, custody, and recording of transactions, enhancing accountability and reducing the potential for fraud or mistakes.
Using IT and audit software provides advantages in conducting audits. These tools enable efficient data analysis, automating tasks, identifying anomalies or patterns, and highlighting areas of potential risk or non-compliance. Real-time monitoring capabilities allow auditors to access and review information promptly. IT and audit software enhance audit efficiency, reduce manual errors, and improve the overall effectiveness of the audit process.
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Sunland Clark opened Sunland's Cleaning Service on July 1, 2022. During July, the following transactions were completed. July 1 Sunland invested $20,200 cash in the business. 1 Purchased used truck for $9.000, paying $3,800 cash and the balance on account. 3 Purchased cleaning supplies for $2.100 on account. 5 Paid $1,680 cash on a 1-year insurance policy effective July 1. Billed customers $4,400 for cleaning services. 18 Paid $1,400 cash on amount owed on truck and $1.300 on amount owed on cleaning supplies. 20 Paid $2,400 cash for employee salaries 21 Collected $3,300 cash from customers billed on July 12. 25 Billed customers $6,100 for cleaning services. 31 Paid $360 for the monthly gasoline bill for the truck. 31 Withdraw $5,600 cash for personal use. 12 Date Account Titles and Explanation (To record cash invested in business) (To record truck purchased) Debit 100 Credit (To record gasoline expensel (To record drawings)
Sunland Clark has opened Sunland's Cleaning Service on July 1, 2022. A variety of activities were completed in July. On July 1, Sunland invested $20,200 cash in the business. On the same day, Sunland purchased a used truck for $9,000, paying $3,800 cash, and the remainder on account.
On July 3, Sunland acquired cleaning supplies worth $2,100 on account. On July 5, Sunland paid $1,680 in cash on a 1-year insurance policy effective July 1. Sunland charged customers $4,400 for cleaning services on the same day. On July 18, Sunland paid $1,400 cash on the amount owed on the truck and $1,300 on the amount owed on cleaning supplies. On July 20, Sunland paid $2,400 in cash for employee salaries.
On July 21, Sunland received $3,300 cash from customers who were billed on July 12. Sunland charged customers $6,100 for cleaning services on July 25. On July 31, Sunland paid $360 for the monthly gasoline bill for the truck and withdrew $5,600 cash for personal use.
In conclusion, during July, Sunland's Cleaning Service had $11,600 in revenue from cleaning services billed and $3,300 in cash collections from customers billed.
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In the short run, if a firm is having
economic losses, but the profit is greater than the average
variable cost, then the firm should-----------------.
In the short run, if a firm is having economic losses, but the profit is greater than the average variable cost, then the firm should continue to operate at a loss as long as they can bear it. This is because the average variable cost is the minimum amount of money the firm needs to pay to continue operating in the short run.
In the short run, firms can only adjust their output levels but not their fixed costs. This means that even if the firm is facing economic losses, they cannot just easily shut down their operations and avoid the costs of their fixed inputs. These inputs include things like rent, equipment, salaries, and more.
Since these costs cannot be adjusted in the short run, the firm must determine if they can still bear the losses without going bankrupt.If the profit is less than the average variable cost, then the firm should shut down its operations to minimize the losses.
This is because the firm is not even earning enough money to cover the minimum variable cost, so it is better to stop producing altogether. In this case, the firm should wait until market conditions improve before resuming its operations.In conclusion, a firm should continue to operate in the short run if it is facing economic losses but earning more than the average variable cost.
On the other hand, it should shut down its operations if it is earning less than the average variable cost to minimize the losses.
Therefore, if the firm is earning enough money to cover this cost, it is still better to continue operating and minimizing the losses rather than shutting down completely.
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horton industries’ shareholders’ equity included 150 million shares of $1 par common stock and a balance in paid-in capital - excess of par of $1,350 million.
Horton Industries' shareholders' equity consists of two components: common stock and paid-in capital - excess of par. The company has 150 million shares of $1 par common stock, indicating that the total value of the common stock is $150 million (150 million shares multiplied by $1 par value per share).
The balance in paid-in capital - excess of par is $1,350 million. This represents the amount of money that shareholders have invested in the company above the par value of the common stock. It indicates the additional capital that has been contributed by shareholders, typically through the issuance of shares at a premium.
Therefore, the total shareholders' equity of Horton Industries is the sum of the common stock and the paid-in capital - excess of par:
Shareholders' Equity = Common Stock + Paid-in Capital - Excess of Par
Shareholders' Equity = $150 million + $1,350 million = $1,500 million.
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In contrasting the reporting procedures of employees and self-employed persons regarding job-related transactions, which of the following items involve people who are self-employed?
a) Form W-4.
b) Schedule A (Form 1040).
c) Form W-2.
d) Schedule C (Form 1040).
The item that involves people who are self-employed is d) Schedule C (Form 1040).
Explanation:
Form W-4: Form W-4 is used by employees to determine the amount of federal income tax to be withheld from their paychecks. It is not specific to self-employed individuals.
Schedule A (Form 1040): Schedule A (Form 1040) is used by employees to claim itemized deductions such as medical expenses, charitable contributions, and mortgage interest. This form is not exclusive to self-employed individuals.
Form W-2: Form W-2 is used by employers to report wages paid to employees. It includes information on federal income tax withheld from the employee's paycheck. Self-employed individuals do not receive Form W-2 as they are not employees.
Schedule C (Form 1040): Schedule C (Form 1040) is used by self-employed individuals to report income or loss from a business. This form is specifically designed for self-employed individuals and includes information on gross receipts, expenses, and net profit or loss. The net profit or loss from Schedule C is then transferred to Form 1040 to calculate the individual's federal income tax liability.
Therefore, the correct answer is d) Schedule C (Form 1040), which involves people who are self-employed. This form is used by self-employed individuals to report their business income or loss.
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Grady Service Company Inc. was organized by Chris Grady and five other investors. The following events occurred during the year: a. Received $70,200 cash from the investors; each was issued 1,560 shares. b. Purchased equipment for use in the business at a cost of $19,200; one- fourth was paid in cash, and the company signed a note for the balance, payable in six months. c. Signed an agreement with a cleaning service to pay it $360 per week for cleaning the corporate offices. d. Lent $4,100 to one of the investors, who signed a note due in six months. e. Issued shares to additional investors, who contributed $7,600 in cash and a lot of land valued at $16,600. f. Paid the amount of the note payable in (b). g. Chris Grady borrowed $11,600 for personal use from a local bank and signed a note payable in one year. Required: 1. Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
The journal entries record the transactions that occurred during the year for Grady Service Company Inc.
Prepare journal entries for each transaction:
a. Received $70,200 cash from the investors; each was issued 1,560 shares.
Cash 70,200
Common Stock 70,200
b. Purchased equipment for use in the business at a cost of $19,200; one-fourth was paid in cash, and the company signed a note for the balance, payable in six months.
Equipment 19,200
Cash 4,800
Notes Payable 14,400
c. Signed an agreement with a cleaning service to pay it $360 per week for cleaning the corporate offices.
Cleaning Expense 360
Accounts Payable 360
d. Lent $4,100 to one of the investors, who signed a note due in six months.
Notes Receivable 4,100
Cash 4,100
e. Issued shares to additional investors, who contributed $7,600 in cash and a lot of land valued at $16,600.
Cash 7,600
Land 16,600
Common Stock 24,200
f. Paid the amount of the note payable in (b).
Notes Payable 14,400
Cash 14,400
g. Chris Grady borrowed $11,600 for personal use from a local bank and signed a note payable in one year.
Cash 11,600
Notes Payable 11,600
The entries reflect the issuance of shares to investors, the purchase of equipment, the signing of agreements, lending money, the issuance of additional shares, the repayment of a note payable, and personal borrowing by Chris Grady. Properly recording these transactions in the journal ensures accurate financial records for the company.
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asap thankss
Define the four parts of a system, and give an example of each using a business as an example.
A system comprises inputs, processing, outputs, and feedback. In a business, inputs are resources, processing involves activities, outputs are products or services, and feedback informs system improvement.
A system can be defined as a set of components that work together to achieve a common goal. The four parts of a system are the inputs, processing, outputs, and feedback.Inputs refer to the resources that a system needs to operate. These resources can be raw materials, labor, capital, energy, or information. In a business, inputs can include capital, raw materials, labor, and information.
Processing refers to the activities that a system performs on the inputs to transform them into outputs. In a business, processing can include manufacturing, marketing, accounting, and management. Outputs are the products, services, or information that a system produces. In a business, outputs can include goods, services, financial reports, and customer feedback.Feedback refers to the information that a system receives about its outputs. This information can be used to improve the system's performance. In a business, feedback can include customer feedback, financial reports, and market research.
For example, a manufacturing company can be used to illustrate the four parts of a system. The inputs for the manufacturing company are raw materials, labor, and capital. The processing involves the manufacturing process, which transforms the raw materials into finished goods. The outputs are the finished goods that are sold to customers. Finally, the feedback is obtained from the customers in the form of sales data and customer feedback, which can be used to improve the company's products and services.
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If the demand for money is perfectly interest elastic,will the expansionary monetary policy will be effective in raising GDP according to the IS-LM model?
If the demand for money is perfectly interest elastic, then the expansionary monetary policy will not be effective in raising GDP according to the IS-LM model. When the demand for money is perfectly interest elastic, it implies that any change in interest rate would lead to an equivalent change in money demand.
In this situation, any increase in money supply, which is a feature of expansionary monetary policy, would lead to a proportional fall in interest rate. This, in turn, would lead to a corresponding increase in money demand as the money demanded would always be equal to the money supplied.
The increase in money supply and demand would have no effect on GDP, as all it would do is change the interest rate to the equilibrium level, and any equilibrium change would be without any increase in production, output, or income.In summary, if the demand for money is perfectly interest elastic, then the effectiveness of expansionary monetary policy would be zero, and it would have no effect on raising GDP according to the IS-LM model.
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when desoto water works purchased equipment at the end of 2020 at a cost of $75,000, the company debited buildings and credited cash $75,000. the error was discovered in 2021.
Based on the information provided, it appears that Desoto Water Works made an error in recording the purchase of equipment in 2020. Instead of debiting the correct account (such as Equipment or Machinery), they mistakenly debited the Buildings account and credited Cash for the same amount of $75,000.
The error was discovered in 2021, which means that it was not identified or rectified immediately after it occurred. Discovering an error in the subsequent accounting period requires corrective action to be taken to rectify the mistake and ensure accurate financial reporting.
To correct this error, Desoto Water Works should make an adjusting entry in 2021 to debit the Buildings account and credit the correct account (such as Equipment or Machinery) for the $75,000. This adjustment will properly allocate the cost of the equipment to the appropriate asset account and reflect the accurate financial position of the company. It is important to correct errors promptly to maintain the integrity and accuracy of the financial statements.
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Allen Company acquired 100 percent of Bradford Company's voting stock on January 1, 2017, by issuing 10,000 shares of its $10 par value common stock (having a fair value of $14.50 per share). As of that date, Bradford had stockholders' equity totaling $104,800. Land shown on Bradford's accounting records was undervalued by $12,300 Equipment (with a five-year remaining life) was undervalued by $7,300. A secret formula developed by Bradford was appraised at $20,600 with an estimated life of 20 years. The following are the separate financial statements for the two companies for the year ending December 31, 2021. There were no intra-entity payables on that date. Credit balances are indicated by parentheses. Bradford Company $ (227,500) 85,000 57,800 ces Allen Company $ (740,000) 245,000 156,750 (83,010) $ (421,260) S (726,000) (421,260) 175,500 $ (971,760) $ 340,000 255,850 Revenues Cost of goods sold Depreciation expense Subsidiary earnings Net income Retained earnings, 1/1/21 Net income (above) Dividends declared Retained earnings ,12/31/21 Current assets Investment in Bradford Company Land Buildings and equipment (net) Total assets Current liabilities Common stock Additional paid-in capital Retained earnings, 12/31/21 Total liabilities and equity $ (85,500) $ (117,600) (85,500) 40.000 $ (163,100) $ 84,000 492,000 808,000 $ 1,895,850 5 (234,090) (600,000) (90,000) (971,760 $(1,895,850) 65,700 174,000 $ 323,700 $(95,600) (60,000) (5,000) (163, 100) $ (323,700) a-1. Complete the table to show the allocation of the fair value in excess of book value. a-2. Complete the table to show the computation for Subsidiary Earnings. b. Complete the worksheet by consolidating the financial information for these two companies. Complete this question by entering your answers in the tabs below. Req A1 Reg A2 Req B Complete the table to show the allocation of the fair value in excess of book value. Accounts Amount Life Annual Excess Amortizations years years years years years Total $ 0 0 Reg A1 Req A2 > < Prey 13 of 13 I Nex a-1. Complete the table to show the allocation of the fair value in excess of book value. a-2. Complete the table to show the computation for Subsidiary Earnings. b. Complete the worksheet by consolidating the financial information for these two companies. Complete this question by entering your answers in the tabs below. Reg A1 Roda Az Req B Complete the table to show the computation for Subsidiary Earnings. (Negative amounts should be indi sign.) Amounts Equity earnings $ 0 < Req A1 ReqB > ALLEN AND SUBSIDIARY Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Accounts Allen Co. Bradford Co. Debit Credit Consolidated Totals Income Statement Revenues Cost of goods sold Depreciation expense Amortization expense Equity in subsidiary earnings Net income $ (740,000) $ (227,500) 245,000 85,000 156,750 57,000 0 0 0 (83,010) $ (421,260) $ (85,500) Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 (726,000) (421,260) 175,500 $ (971,760) $ (117,600) (85,500) 40,000 (163 100) $ 84,000 Balance Sheet Current assets Investment in Bradford Co. Land Buildinas and equipment (net) 0 340,000 $ 255,850 492,000 808.000 65 700 174.0001 < Prey 13 of 13 HE . Next Statement of Retained Earnings Retained earnings 1/1 Net income (above) Dividends declared Retained earnings 12/31 (726,000) (117,600) (421,260) (85,500) 175,500 40,000 $ (971,760) $ (163, 100) $ Balance Sheet Current assets Investment in Bradford Co. Land Buildings and equipment (net) Formula 340,000 $ 255,850 492,000 808,000 84,000 0 65,700 174,000 0 323,700 0 Total assets $ 1,895,850 $ Current liabilities Common stock Additional paid-in capital Retained earnings 12/31 Total liabilities and equity (234,090) (95,600) (600,000) (60,000) (90,000) (5,000) (971,760) (163, 100) $ (1,895,850) $ (323,700) $ 0 $ 0 < Req A2 RegB
Hre is the consolidated financial statement for Allen and Subsidiary as requested
The Financial StatementAllen Company acquired 100% of Bradford Company on January 1, 2021.
The acquisition was valued at $14. 50 for each share, translating to a goodwill worth $84,000.
The worth of Bradford's land was underestimated by a sum of $12,300, while the value of their equipment was underrated by $7,300. However, an undisclosed formula owned by the company was appraised at a substantial $20,600.
In the fiscal year that concluded on December 31, 2021, Allen Corporation and its subordinate company recorded $1,067,500 in revenues, incurred $572,500 as cost of goods sold, charged $412,500 for depreciation and $57,000 for amortization, and managed to generate $85,500 of net profits.
As of December 31, 2021, the balance sheet presents a unification of financial statements with a tally of $1,895,850 worth of assets, $323,700 worth of liabilities, and $1,572,150 worth of equity.
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a preferred stock pays a dividend of $1 every year. what is the annual rate of return on this investment if the price of the preferred stock is $50? group of answer choices 5% 6% 2% 4%
The annual rate of return on the preferred stock investment is 2%. This means that for every $50 invested, the investor will receive $1 in dividends, resulting in a 2% return on their investment each year
The annual rate of return on an investment can be calculated by dividing the annual dividend by the price of the stock and then multiplying by 100. In this case, the preferred stock pays a dividend of $1 every year, and the price of the stock is $50. So, the rate of return is calculated as follows:
Annual rate of return = (Dividend / Price) * 100
= ($1 / $50) * 100
= 0.02 * 100
= 2%
Therefore, the annual rate of return on this preferred stock investment is 2%. This means that for every $50 invested, the investor will receive $1 in dividends, resulting in a 2% return on their investment each year.
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The details of a non-cancelable long-term lease are summarized below:It does not have a purchase option.The fair value of the asset is equal to its cost.Title is not transferred to the tenant at the end of the lease.The residual value is guaranteed by an insurer and not by the lessee.The term of the contract is less than 25% of the useful life of the asset.The present value of all lease payments from the lessee is 35% of the fair value of the asset.The present value of all lease payments plus the present value of the guaranteed residual value is 100% of the fair value of the asset.Collection of lease payments is more than likely.How should the lessor classify this contract?
Based on the provided details, the lessor should classify this contract as an operating lease. Several factors contribute to this classification:
1. Absence of a purchase option: The lease agreement does not include a provision for the lessee to purchase the asset, indicating it is likely an operating lease.
2. Fair value equal to cost: The fair value of the asset is equivalent to its cost, which suggests the lessor retains ownership and economic control over the asset.
3. Title not transferred: As the title is not transferred to the lessee at the end of the lease, it further supports the classification of an operating lease.
4. Insurer's guarantee of the residual value: The residual value is guaranteed by an insurer, meaning the lessor bears the risk associated with the asset's value. This aligns with the characteristics of an operating lease.
5. Lease term compared to asset's useful life: The lease term is less than 25% of the useful life of the asset, indicating it does not cover a significant portion of the asset's economic life, which is a characteristic of an operating lease. Considering these factors, the lessor should appropriately classify this contract as an operating lease, where the lessor retains ownership and the lessee enjoys the use of the asset for a specific period.
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Check Brokeback Towing Company is at the end of its accounting year, December 31, 2021. The following data that must be considered were developed from the company's records and related documents: a. On July 1, 2021, a two-year insurance premium on equipment in the amount of $600 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1 b. At the end of 2021, the unadjusted balance in the Supplies account was $1,000. A physical count of supplies on December 31, 2021 indicated supplies costing $300 were still on hand. c On December 31, 2021, YY's Garage completed repairs on one of Brokeback's trucks at a cost of $800. The amount is not yet recorded. It will be paid during January 2022 d. On December 31, 2021, the company completed a contract for an out-of-state company for $7.950 payable by the customer within 30 days. No cash has been collected and no journal entry has been made for this transaction e On July 1, 2021, the company purchased a new hauling van. Depreciation for July-December 2021, estimated to total $2,750, has not been recorded. f. As of December 31, the company owes interest of $500 on a bank loan taken out on October 1, 2021. The interest will be paid when the loan is repaid on September 30, 2022. No interest has been recorded yet. g. Assume the income after the preceding adjustments but before income taxes was $30,000. The company's federal income tax rate is 30%. Compute and record income tax expense. Required: Indicate the accounting equation effects (amount and direction) of each adjusting Journal entry. Provide an appropriate account name for any revenue and expense effects. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) Required: Indicate the accounting equation effects (amount and direction) of each adjusting journal entry. Provid for any revenue and expense effects. (Enter any decreases to Assets, Liabilities, or Stockholders' Ec Transaction Assets = Liabilities + Stockholders' Equity Insurance Expense a. + Б. + C - + d + e е + f. + + a Journal entry worksheet < 1 2 3 4 5 6 7 Record the entry for insurance expense if, on July 1, 2021, a two-year insurance premium on equipment in the amount of $600 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1. Note: Enter debits before credits. Transaction General Journal Debit Credit a Record entry Clear entry View general journal
Adjusting entries are journal entries that are made at the end of the accounting period to adjust accounts to their current balances before the preparation of financial statements.
The accounting equation effects of each adjusting journal entry are provided below:
a) Insurance expense debit for $150 and prepaid insurance credit for $150.
Insurance expense $150
Prepaid insurance $150
b) Supplies expense debit for $700 and supplies credit for $700.
Supplies expense $700Supplies $700
c) Accounts payable debit for $800 and repair expense credit for $800.
Repair expense $800
Accounts payable $800
d) Accounts receivable debit for $7,950 and sales revenue credit for $7,950.
Accounts receivable $7,950
Sales revenue $7,950
e) Depreciation expense debit for $2,750 and accumulated depreciation credit for $2,750.
Depreciation expense $2,750
Accumulated depreciation $2,750
f) Interest expense debit for $500 and interest payable credit for $500.
Interest expense $500
Interest payable $500
g) Income tax expense debit for $9,000 and income tax payable credit for $9,000.
Income tax expense $9,000
Income tax payable $9,000
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with respect to estimate changes in pension assumptions, an investment return increase will have what probable effect?
An increase in the assumed investment return for pension assets is likely to have a favorable effect on pension plan estimates.
When estimating changes in pension assumptions, the assumed investment return refers to the expected rate of return on the pension plan's assets. A higher assumed investment return means that the pension plan anticipates earning a higher return on its investments over time.
The probable effect of an investment return increase is that it would reduce the projected pension liability. A higher assumed investment return implies that the pension plan expects its assets to grow at a faster rate, which can offset a portion of the future pension obligations. As a result, the projected funding shortfall or pension expense may be lower, and the financial health of the pension plan may appear stronger.
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Which of the following statements is true of a corporate strategy? Select one.
a)It refers to a management strategy that focuses solely on the professional behavior and attitudes of a company’s employees.
b)It involves competing in a core industry or business and operating in adjacent businesses or markets.
c)It entails competing exclusively with large and well-established firms to increase competitive advantage.
d)It refers to the overall strategy that helps a company recruit the right type of employees for the right type of job.
The correct answer is (b).
A corporate strategy is a long-term plan that outlines how a company will compete in its chosen market. It typically includes decisions about the company's core business, its target markets, and its competitive advantages.
A corporate strategy may involve competing in a core industry or business and operating in adjacent businesses or markets. For example, a company that makes cars may also make car parts or provide car insurance. A corporate strategy may also involve competing exclusively with large and well-established firms to increase competitive advantage. For example, a small company that makes a new type of software may choose to compete directly with a large, established software company.
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Great Bhd is a company that specialises in manufacturing forklifts which headquarter office located at Kuchai lama, Kuala Lumpur. Great Bhd purchased a property for RM1.6 million on 1 January 2021 for its investment potential and the land element of the cost is RM560,000. The property is expected to have a useful life of 50 years. At 31 December 2021, the fair value of the property has risen to RM1.9 million. The finance manager of Great Bhd would like to know the measurement method permitted under the accounting standard. Although the disclosure of the fair value of investment properties enhances the ability of investors to compare this entity with entities that use fair value model, it should be noted that the fair value of the investment properties has been estimated using a judgmental methodology and without the use of an independent expert-this may mean that the valuation is more susceptible to bias and manipulation.
a. Propose recommendation to Great Bhd for the accounting treatment of the property in the financial statement for the year ended 31 December 2021, with the relevant accounting standards.
b. Critically evaluate the issues in fair value measurement.
a. Based on the information provided, it is recommended that Great Bhd accounts for the property as an investment property using the fair value model. This is in accordance with the accounting standard IAS 40 - Investment Property. Under this standard, investment properties are initially measured at cost, and subsequently, their fair values are disclosed in the financial statements. The increase in fair value will be recognized as a gain in the income statement.
b. Fair value measurement can present certain challenges and issues. Some of these include subjectivity in estimating fair values, potential biases and manipulation in the valuation process, and reliance on judgment rather than independent expert opinions. It is important for companies to have robust internal controls and governance procedures to mitigate these risks and ensure the fair value measurement is reliable and transparent. Regular reassessment and monitoring of fair values are also crucial to reflect changes in market conditions accurately.
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kennedy company acquired all of the outstanding common stock of hastie company of canada for u.s. $350,000 on january 1, 2021, when the exchange rate for the canadian dollar (cad) was u.s. $0.70. the fair value of the net assets of hastie was equal to their book value of cad 450,000 on the date of acquisition. any acquisition consideration excess over fair value was attributed to an unrecorded patent with a remaining life of five years. the functional currency of hastie is the canadian dollar. for the year ended december 31, 2021, hastie's trial balance net income was translated at u.s. $25,000. the average exchange rate for the canadian dollar during 2021 was u.s. $0.68, and the 2021 year-end exchange rate was u.s. $0.65. compute the amount of the patent reported in the consolidated balance sheet at december 31, 2021.
The amount of the patent reported in the consolidated balance sheet at December 31, 2021, is $22,750, calculated based on the excess acquisition consideration and the year-end exchange rate.
To compute the amount of the patent reported in the consolidated balance sheet at December 31, 2021, we need to consider the initial acquisition and subsequent translation. The initial acquisition occurred on January 1, 2021, when the exchange rate was U.S. $0.70 for 1 Canadian dollar (CAD). The acquisition consideration exceeded the fair value of the net assets, and the excess amount was attributed to the unrecorded patent.
The acquisition consideration in U.S. dollars was $350,000, and the fair value of the net assets in Canadian dollars was CAD 450,000. Therefore, the excess acquisition consideration allocated to the patent is:
Excess acquisition consideration = Acquisition consideration - Fair value of net assets
Excess acquisition consideration = $350,000 - CAD 450,000
Excess acquisition consideration = $350,000 - ($450,000 * $0.70)
Excess acquisition consideration = $350,000 - $315,000
Excess acquisition consideration = $35,000
Now, let's calculate the translated value of the patent at December 31, 2021, using the average exchange rate and the year-end exchange rate.
Average exchange rate for 2021 = U.S. $0.68
Year-end exchange rate for 2021 = U.S. $0.65
Translated value of the patent at December 31, 2021 = Excess acquisition consideration * Year-end exchange rate
Translated value of the patent at December 31, 2021 = $35,000 * $0.65
Translated value of the patent at December 31, 2021 = $22,750
Therefore, the amount of the patent reported in the consolidated balance sheet at December 31, 2021, is $22,750.
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You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years. You expect that the drug's profits will be $4 million in its first year and that this amount will grow at a rate of 4% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero. What is the present value of the new drug if the interest rate is 12% per year? The present value of the new drug is $ 4 million. (Round to three decimal places.) You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years. You expect that the drug's profits will be $4 million in its first year and that this amount will grow at a rate of 6% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero. What is the present value of the new drug if the interest rate is 11% per year? The present value of the new drug is $ million. (Round to three decimal places.)
The present value (PV) is the current value of a future stream of cash flows, discounted at a specific interest rate. It represents the amount of money that needs to be invested today to equal the value of those future cash flows.
The present value of the new drug, considering a 12% interest rate per year, can be calculated using the formula for the present value of a growing annuity. Given the expected profits of $4 million in the first year, growing at a rate of 4% per year for 17 years, we can determine the present value. By plugging in the values into the formula and solving, the present value of the new drug is approximately $43.128 million.
[tex]PV = \frac{CF}{(1 + r)} + \frac{CF \cdot (1 + g)}{(1 + r)^2} + \ldots + \frac{CF \cdot (1 + g)^{n-1}}{(1 + r)^n}[/tex]
In this equation, PV represents the present value, CF denotes the cash flow, r represents the interest rate, g signifies the growth rate, and n corresponds to the number of years. In this case, CF = $4 million, r = 12%, g = 4%, and n = 17 years. Plugging in these values into the formula, we get the present value as approximately $43.128 million.
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a manager is intrigued as to why some people seem to derive joy from work and get energized by it, whileothers find it troublesome and frustrating.
The different reactions to work, where some people derive joy and energy while others find it troublesome and frustrating, can be attributed to various factors, including individual preferences, job fit, intrinsic motivation, and work environment.
People's experiences and attitudes towards work can be influenced by their personal preferences, such as their inherent interests and strengths. Additionally, the fit between individuals and their job roles, including the alignment of skills, values, and tasks, plays a significant role in determining their level of satisfaction and fulfillment. Intrinsic motivation, which stems from a sense of autonomy, mastery, and purpose, can greatly impact one's enjoyment and energy levels at work. Moreover, the work environment, including factors such as organizational culture, leadership, and work-life balance, can contribute to either positive or negative experiences.
The varied responses to work can be attributed to a combination of individual factors, job fit, intrinsic motivation, and the work environment. Understanding these factors can help managers create a conducive and engaging work environment that promotes joy and energy for their employees. By considering individual preferences, providing meaningful and challenging tasks, and fostering a supportive culture, organizations can enhance employee satisfaction, motivation, and overall well-being.
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one beneficial feature of a structured lease agreement is the deductions that can provide greater tax deductions than otherwise might be available if cca was being claimed on a purchase option.
T/F
The statement is true, one beneficial feature of a structured lease agreement is the potential for greater tax deductions compared to claiming capital cost allowance (CCA) on a purchase option.
Structured lease agreements can offer tax advantages in the form of greater deductions compared to claiming capital cost allowance (CCA) on a purchase option. In a structured lease agreement, the lessee does not own the asset but rather leases it for a specified period. This arrangement allows the lessee to deduct lease payments as operating expenses, which can result in higher tax deductions.
By choosing a structured lease agreement instead of claiming CCA on a purchase option, businesses can benefit from larger tax deductions in the short term. This is because the lease payments are considered as ongoing operating expenses, which can be fully deductible in the year they are incurred. On the other hand, claiming CCA on a purchase option involves capitalizing the asset and deducting a portion of its cost over time. It is important to note that the specific tax implications of a structured lease agreement can vary based on jurisdiction and the terms of the lease. Consulting with a tax professional is recommended to fully understand the potential tax benefits and implications of such agreements.
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Branch Corp. uses a standard cost system to account for the costs of its one product Variable overhead is applied using direct lobor hours. Standards allowed for each unit are 2.9 hours of labor at a variable overhead rate of $10. During November, Branch Corp produced 2.200 units. Payroll totaled $97,800 for 7120 hours worked. Variable overhead incurred totaled $73,890. a. Calculate the variable overhead rate variance. (Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (ie, zero variance).) Rate Variance .......b. Calculate the variable overhead efficiency variance. (Indicate the effect of variance by selecting "Favorable". "Unfavorable", or "None" for no effect (I.e., zero variance).) Efficiency Varianco ..............
a. The variable overhead rate variance is $3,090 favorable and
b. The variable overhead efficiency variance is $1,740 unfavorable.
In a standard cost system, the variable overhead rate variance measures the difference between the actual variable overhead rate and the standard variable overhead rate, multiplied by the actual labor hours. In this case, the standard variable overhead rate is $10 per labor hour, and the actual labor hours worked are 7,120. The variance is calculated by subtracting the standard cost from the actual cost: (Actual Variable Overhead Rate - Standard Variable Overhead Rate) * Actual Labor Hours = ($73,890 - $10 * 7,120).
The variable overhead rate variance is $3,090 favorable, indicating that the actual variable overhead rate was lower than the standard rate. This can be attributed to efficient utilization of labor or cost-saving measures in overhead expenses.
The variable overhead efficiency variance, on the other hand, measures the difference between the actual labor hours worked and the standard labor hours allowed, multiplied by the standard variable overhead rate. The variance is calculated by subtracting the standard cost from the actual cost: (Actual Labor Hours - Standard Labor Hours) * Standard Variable Overhead Rate.
The variable overhead efficiency variance is $1,740 unfavorable, suggesting that more labor hours were used than what was allowed by the standard. This could be due to factors such as inefficiencies in production or increased complexity in the manufacturing process.
Therefore, the favorable variable overhead rate variance indicates cost savings in variable overhead expenses, while the unfavorable efficiency variance suggests a need for improvement in labor utilization or process efficiency. These variances provide valuable insights for management to identify areas of concern and make informed decisions to improve operational efficiency and control costs.
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If the economy is at the natural rate of unemployment with the level of real GDP at potential output, what would expansionary fiscal or monetary policy do to the economy? How would the economy be effected in the short run and long run? Does the Phillips Curve theory explain what happens?
When the economy reaches its potential output level and an expansionary monetary or fiscal policy is implemented, the economy experiences demand pull inflation. It causes an increase in AD in the short run and shifts the AD curve to the right. It widens the economy's expansionary gap. The price level rises here as well. The unemployment rate also falls below the natural rate of unemployment.
However, it raises the cost of production and causes the AS curve to shift to the left in the long run. As a result, the economy eventually returns to its potential output level. However, the price level rises further and reaches a new high. The unemployment rate also approaches the natural rate of unemployment.
The Phillips curve can also help to explain it. Price to the SR Phillips curve will rise in the short run as a result of expansionary policy. The route will follow the SR Phillips curve. It raises inflation while lowering the unemployment rate. However, even if the price level rises, the LR Phillips curve will shift to the left in the long run to achieve the natural rate of unemployment.
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New Alchemy Income Statement 20X1 Sales $40 Net Income $1.80 New Alchemy Balance Sheet 20X0 and 20X1 20X0 20X1 20X0 20X1 Assets $30 $50 Liabilities $10 $20 Equity $20 $30 Total $30 $50 Total $30 $50 The sustainable growth rate for 20X1 based on beginning balance sheet values is: 6.3% 5.4% 7.7% 4.5% 8.6%
The sustainable growth rate for New Alchemy in 20X1, based on the beginning balance sheet values, is 5.4%.
The sustainable growth rate (SGR) is a measure of how much a company can grow its sales and income while maintaining a stable financial structure. It is calculated using the formula: SGR = Retention Ratio * Return on Equity (ROE). To find the SGR, we need to calculate the retention ratio and ROE.
The retention ratio is the proportion of net income that is retained in the business, which can be calculated as (Net Income - Dividends) / Net Income. In this case, the net income is $1.80, and there is no information provided about dividends, so we assume that dividends are zero. Therefore, the retention ratio is (1.80 - 0) / 1.80 = 1. The ROE can be calculated as Net Income / Equity. Using the given values, the ROE is 1.80 / 20 = 0.09. Finally, we multiply the retention ratio (1) by the ROE (0.09) to get the SGR: 1 * 0.09 = 0.09 or 9%. However, the answer choices provided do not include 9% as an option. The closest option is 5.4%, which suggests that there may be an error in the answer choices provided.
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if sandisk demonstrates the benefits of using its flash memory storage/usbs for data storage in addition to music storage as a way to encourage its current customers to buy more of its existing product offering, it is using a diversification growth strategy. question 24 options: true false
The statement "if sandisk demonstrates the benefits of using its flash memory storage/usbs for data storage in addition to music storage as a way to encourage its current customers to buy more of its existing product offering, it is using a diversification growth strategy" is false (because a diversification growth strategy is a business approach that involves expanding the company's operations into new markets, products, or services).
The primary goal of a diversification strategy is to increase the company's revenue by entering a new market or developing a new product or service that complements its current business. The strategy can take many forms, such as conglomerate diversification, vertical integration, or horizontal integration.
SanDisk is an American multinational corporation that provides flash memory storage solutions. Sandisk's product offering is diverse and includes products such as USB flash drives, memory cards, and solid-state drives.
It is essential to note that Sandisk is not demonstrating diversification growth strategy by encouraging its current customers to buy more of its existing product offering, including flash memory storage/USBs for data storage in addition to music storage.
Instead, Sandisk is leveraging a sales promotion strategy, which aims to increase sales of its existing products by offering incentives to its current customers.Sales promotions are techniques used by businesses to encourage their customers to buy more of their products.
Sandisk's focus on promoting its existing products to its current customers is an example of a sales promotion strategy. As a result, the statement is false.
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kubin company’s relevant range of production is 28,000 to 31,500 units. when it produces and sells 29,750 units, its average costs per unit are as follows:
To calculate the average cost per unit for Kubin Company when it produces and sells 29,750 units, we need to consider the relevant cost components and their respective amounts.
The relevant cost components in this case are:
Direct materials: $8.80 per unitDirect labor: $5.80 per unitVariable manufacturing overhead: $3.30 per unitFirst, let's calculate the total variable cost per unit by summing up the relevant cost components:
Variable cost per unit = Direct materials + Direct labor + Variable manufacturing overhead
Variable cost per unit = $8.80 + $5.80 + $3.30 = $18.90
Next, we'll calculate the total fixed cost per unit by summing up the fixed cost components:
Fixed cost per unit = Fixed manufacturing overhead + Fixed selling expense + Fixed administrative expense + Sales commissions + Variable administrative expense
Fixed cost per unit = $6.80 + $5.30 + $4.30 + $2.80 + $2.30 = $21.50
Finally, we can calculate the average cost per unit by adding the variable cost per unit and the fixed cost per unit:
Average cost per unit = Variable cost per unit + Fixed cost per unit
Average cost per unit = $18.90 + $21.50 = $40.40
Therefore, when Kubin Company produces and sells 29,750 units, its average cost per unit is $40.40.
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Quizbooks LLC is a limited liability company. Like any other LLC, which of the following are
characteristics of the LLC business form:
Aa€¢ Members are not personally liable for debts/obligations of the LLC.
Ba€¢ Articles of Organization must be filed.
Ca€¢ LLC's can choose "pass-through" taxation.
Da€¢ All of the provided answer are correct.
All of the provided answers are correct. Characteristics of the LLC business form include limited personal liability for members, the requirement to file Articles of Organization, and the option for "pass-through" taxation.
The LLC (Limited Liability Company) business form encompasses several characteristics that distinguish it from other forms of business entities. First, members of an LLC enjoy limited personal liability for the debts and obligations of the company. This means that their personal assets are generally protected, and they are not personally responsible for the LLC's financial obligations.
Second, the formation of an LLC requires the filing of Articles of Organization. These documents provide essential information about the company, such as its name, purpose, management structure, and registered agent. Filing the Articles of Organization is a necessary step in establishing the legal existence of the LLC.
Third, LLCs have the option to choose "pass-through" taxation. This means that the company's profits and losses are passed through to the individual members' personal tax returns, and the LLC itself is not subject to separate taxation. This avoids the issue of double taxation that can occur with certain other business forms.
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mountain excursions issues a bond due in 10 years with a stated interest rate of 7% and a face amount of $200,000. interest payments are made semiannually. the market rate for this type of bond is 6%. what is the issue price of the bond (rounded to nearest whole dollar)? (use pv of $1 and pva of $1) multiple choice $186,410 $163,200 $200,000 $214,878
The issue price of the bond is given as $214,878
How to solve for the issue price of the bondPresent Value of the semi-annual interest payments:
The semi-annual interest rate is 7% / 2 = 3.5%.
The market semi-annual rate is 6% / 2 = 3%.
The number of periods is 10 years * 2 (for semi-annual) = 20.
The semi-annual payment is $200,000 * 3.5% = $7,000.
200000 x 0.55 + 7000 * 14.877
= $214,878
Hence the he issue price of the bond is given as $214,878
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Riverbed Corporation purchased debt investments for $54,200 on January 1, 2017. On July 1, 2017, Riverbed received cash interest of $2,300. Journalize the purchase and the receipt of interest. Assume no interest has been accrued. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
To journalize the purchase of debt investments and the receipt of cash interest, we need to record the transactions separately.
1. Journal entry for the purchase of debt investments on January 1, 2017:
Date Account Debit Credit
------------------------------------------------------------------
Jan 1, 2017 Debt Investments $54,200
Cash $54,200
Explanation:
The purchase of debt investments increases the Debt Investments account as an asset. Cash is decreased by the same amount since it is used to acquire the investments.
2. Journal entry for the receipt of cash interest on July 1, 2017:
Date Account Debit Credit
------------------------------------------------------------------
Jul 1, 2017 Cash $2,300
Interest Revenue $2,300
The receipt of cash interest increases the Cash account as an asset. Interest Revenue is recorded as income, reflecting the amount received as interest.
Please note that no interest accrual was mentioned in the problem, so we are assuming that the interest received is for the period since the purchase of debt investments on January 1, 2017, to July 1, 2017.
These are the journal entries to record the purchase of debt investments and the receipt of cash interest for Riverbed Corporation based on the information provided.
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